Now this may be old hat to the historians here, but I'm going to retell it through my own eyes.
The Schechters ran two kosher butcher shops, poultry specifically, in Brooklyn. They were Jewish immigrants in the 1930s. Running a kosher butcher shop is a complicated affair, as the Laws of Kashrut are far more than a “dietary” code. Normally, keeping Kosher is thought of as just a set of rules about what food observant Jews cannot eat (e.g., pork, shellfish, scavengers, etc and no mixing milk with meat), but it is at least as much an ethical code. And that ethical code involves both how humans are to treat the animals they kill (humanely, as kosher butchers must follow specific rules about how animals are killed) as well as how they must treat their customers. For observant Jews such as the Schechters, the Laws of Kashrut were both a matter of religious observance and good business.
Enter FDR and the NRA. The National Recovery Administration was part of the early New Deal and was Roosevelt’s attempt to cartelize American industry to prevent it from suffering the consequences of too much competition. The thinking was that too much competition was keeping prices too low, which was undermining incomes and purchasing power, and dragging the economy down. Matched with Hoover’s and FDR’s attempts to keep wages up, the NRA’s similar attempt with prices made for a highly misguided combination that contributed to the length and depth of the Great Depresssion. As part of its legislation, the NRA had all kinds of detailed codes for individual industries, describing to the letter how firms must do their business. The Schechters fell under the “Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and About the City of New York” (and you thought Atlas Shrugged was fiction….). Among the things the code prohibited was “straight killing” which meant that customers could buy a whole or half coop of chickens, but did not have the right to make any selection of particular birds (such individual selecction was “straight killing”).
This last rule was in direct conflict with Kashrut laws, which also served as an informal health code in the Jewish community. As Shlaes points out, the phrase “glatt kosher” referred to the fact that the lungs of the animal were smooth (which is what “glatt” means) and therefore free of tuberculosis. Inspecting the lungs was part of the official process of conferring Kosher status on a butcher shop. Removing unhealthy animals from the stock was one of the core principles of keeping Kosher, and the rabbinical inspectors were fanatic about doing this. But so were customers. As Shlaes points out, individual customers, both retailers and their customers, had the right to refuse individual animals. This minimized the risk of an unhealthy animal getting through when both seller and buyer did such inspections. And it ensured that the kosher laws served as a health code, or perhaps something more like the Underwriters Laboratory or Good Housekeeping seal.
The Schechters, as you may have guessed, were targeted by the NRA enforcement crew. They were inspected repeatedlly during the summer of 1934, which forced them to violate their own Kashrut practices, telling customers that they could not reject individual birds as keeping Kosher allowed. Not surprisingly, their deeply religious customer base began to dwindle. The constant inspection turned up a variety of violations, including allegations that they had, in fact, sold sick chickens (not surprising, if true, given that part of their own internal inspection process was negated by the NRA code itself!). They were also accused of “competing too hard” and keeping prices “too low.” Shlaes recounts a couple of hilarious exchanges between the government lawyers and the Schechters where the knowledge of the actor is much greater than the knowledge of the expert.
Eventually, the lower courts found them guilty of 60 different violations and they all served a little bit of jail time. But more important, the Schecters’ lawyer continued to appeal and the case made it all the way to the Supreme Court, where the Roosevelt Administration saw it as the perfect test case of the constitutionality of the NRA, and perhaps the whole New Deal. Coverage of the case, Shlaes shows, was highly tinged with the standard anti-Semitism of the time, especially because the Schechters were right out of Jewish central casting, being immigrants with their Eastern Eurpoean cadences and traditional Jewish dress. It was the Jewish rubes of Brooklyn against the high powered WASP lawyers of the northeast corridor.
In the end, the Court ruled invalidated the NRA codes on a unanimous decision, including Justice McReynolds, one of the great defenders of liberty of contract and the Constitution in the early 20th century – he wrote the Meyer and Pierce decisions that now define the right to marry and parent – who was reported to be quite the anti-Semite. (He put his constitutional principles before his prejudices in this case though.) The four Jewish poultry butchers from Brooklyn had won over FDR and the fascist NRA codes. This was the first of several Court decisions that invalidated the first New Deal, and it was the Schechters’ willingness to fight this all the way to the top that was partially responsible. As Shlaes notes, the real insult of the accusations against the Schechters, in their eyes, was not that they had broken the NRA code, but that they were accused of violating, and forced to behave in ways that actually did violate, the Laws of Kashrut, which mattered more to them.
There are two fascinating elements to this story. First, there’s a terrific dissertation waiting to be written that explores the Laws of Kashrut as a set of informal institutions that serve as a non-governmental health code. It would be a project complementary to Lisa Bernstein’s work on the informal norms of the diamond industry. That story is only made better by the role the NRA played in overriding the, arguably superior, private sector arrangements within the Jewish community. The NRA’s attempt at cartelizing and planning all of these industries destroyed the indigenous institutions that functioned better.
The other fascinating element is what this says about the relationship between Roosevelt and the Jews. The other night I happened to catch for the second time the episode of PBS’s terrific series on “The Jewish Americans” that covers the Depression era and the Holocaust. It notes how much the Jews loved Roosevelt, but also notes the criticism he took for not acting more aggressively to save Eastern Eurpoean Jews (only his friend Morgenthau’s intervention finally pushed FDR to act by giving Morgenthau the authority to start rescuing people – about 20,000 altogther - which was better than nothing but still a drop in the bucket.) And it’s certainly true that FDR remains iconic among Jews, especially my parents’ and grandparents’ generation. But with the Schechters, we have a case where the Administration targeted Jewish merchants/middlemen for the dual sins of being good capitalists and observant Jews, both of which didn’t fit the NRA’s plans. And the way in which the prosecution was conducted and was covered by the newspapers put a whole bunch of anti-Semitic stereotypes into play. Why didn’t this sour more Jews on FDR? And why, when you take this case and FDR’s too little, too late approach to the Holocaust, is FDR still viewed so positively by so many Jews? I can offer a few answers to that question, many of them obvious I think, but it remains interesting that his sins were, and are, overlooked by many Jews.
Finally, I consider myself to be fairly familiar with the history of Jews in America, but nowhere in my Jewish education or in the aforementioned PBS series had I ever heard of the Schechter brothers. A quick email exchange with the lay-rabbi at my synagogue indicates he hadn’t either. The PBS series devotes, and rightly so, significant attention to the trial of Julius and Ethel Rosenberg, but not a word about the Schechters. Again, one can speculate as to why this is the case, but whatever the explanation, it’s a shame that an important part of Jewish history, including a victory for Jewish law over civil law (implicitly anyway), has been, as far as I can tell, ignored by modern day Jews. It’s also a story that, also as far as I know, hasn’t been told in any detail by classical liberals until Shlaes’ book. I’d happily be corrected on that.
In keeping with Shlaes’ theme of the “forgotten man,” the Schechters have indeed been forgotten by Jews and by classical liberals, both of whom have every reason to rescue them from the dustbin of history and recognize both their heroism and the fascinating questions of political economy their case raises.