Forgotten Man, The (28 page)

And the NRA’s price-fixing rule was destructive to smaller business. Their customer base was fragile: “Our business is not steady for
every week,” as one brother had testified in the fall. The market was fickle. “Every wholesaler,” Martin Schechter explained to the Brooklyn Court, “has chicken dealers who go around, they are not steady customers.” And: “Chicken dealers will walk into my place and wouldn’t like my price, and he would go out again.”

In fact, if there was anger in the city in those years about the price of meat, it was anger that the price was so high. Customers of kosher meat were among the most vociferous and organized of those angry people. The new A & P supermarket was selling fryers at 19 cents a pound, whereas the market price of live birds was something like 21 cents—competitive. This was the productivity the economists had studied in the 1920s. The next year, 1935, Jewish wives in Brighton Beach and Coney Island would boycott kosher meat with the demand that prices come down. Of course the live markets had to consider such facts.

Yet the prosecutors had not. “Your price is not very stable, is it?” a prosecutor asked Martin Schechter at one point, seeking to draw out evidence that Schechter was violating the code by undercutting with low prices. “The market isn’t stable,” Schechter replied. It might be 15 cents today, the market quotation, and tomorrow 18 cents. “We got our prices according to what the market might be,” answered Martin.

The attorney, Walter Rice, accused the Schechters of competing too hard. And again, Martin Schechter struggled to grasp what to a businessman seemed an ungraspable concept.

RICE:
You are in very keen competition with your competitors?

SCHECHTER:
I do not understand that question.

RICE:
Do you know what competition means?

SCHECHTER:
I do.

RICE:
There is a lot of competition between you and your competitors, is there not?

SCHECHTER:
There is a lot of competition in every other business, the same thing.

RICE:
Yes, and the competition in the whole slaughterhouse business is very keen, is it not?

SCHECHTER:
Well it is keen in every other business in the same way.

It was not merely the word “keen” that Schechter had trouble with. It was also the difference between the language of law on the one hand and the language of economics on the other. Walter Rice was saying that the economy must operate one way because the law said so. Schechter was saying it could not. The market had its own natural laws, the laws of chicken blood, competition, and profits. It was neither good nor evil.

The Schechters especially resisted the notion that they were as immoral as the prosecution was trying to make them out to be. Their business was a small one: Martin was secretary; Alex, president; Aaron, treasurer. They were assisted by Shochet Gershon and Shochet Weisman. They paid themselves $35 a week, a wage that was less than that of the staff of the code authority who investigated them. The prosecutors repeatedly asked them about stockholders, and encountered incomprehension: there were no stockholders, other than the brothers. There was not even a formal business agreement.

And when the prosecutors ignored all this logic, it only made the Schechters and their friends move from resentment to outrage. They had seen that there was a kind of intellectual bigotry to the way the prosecutors were proceeding, and found it impossible to refrain from objecting. Walter Rice aimed to discredit as ignorant a long-standing member of the trade, a broker, Louis Spatz. He asked him: “You are against the code, aren’t you?” “Certainly,” Spatz replied. Next Rice moved onto the topic of Spatz’s qualifications for such statements.

RICE:
You are an expert?

SPATZ:
I am experienced but not an expert.

RICE:
You are not an expert on the effect of competitive conditions upon the prices of live poultry?

SPATZ:
I am experienced—

RICE:
Are you an expert?…

SPATZ:
I am not an expert about anything.

Later Rice went on: “You have not studied agricultural economics.” Spatz: “No, sir.” Rice: “Or any sort of economics?” “No, sir.” Rice: “What is your education?” Spatz: “None. Very little.” But Spatz got past the intimidation, and struck back: “In my business, I am the best economist.” Rice parried: “What is that?” And Spatz now qualified: “In my business I am the best economizer.”

Rice thought he had gained a small advantage in the case by making Spatz betray his lack of education through the inappropriate use of a word. More generally, both Rice and the judge had sought to use the Schechters’ social class against them. The prosecutor announced that he wished to “have that word spelled in the minutes, just as he stated it,” so that the error might go on the record.

The uneducated Joseph had often digressed on the stand to talk about a broken leg he suffered at the time of the investigation—“the only thing I can move around is with sticks or crutches.” Eventually, Rice grew impatient: “Now if your Honor please, I object to this constant repetition of his physical condition.” Schechter: “Well it was that way.” The Court: “Don’t argue.”

The four brothers could not have been entirely aware of it, but in other courts, far from Brooklyn, a similar debate over government regulation of the market was taking place. All across the country, the NRA was being litigated. The prosecution of the various illegal traders of “hot oil” was coming along. Ickes had assiduously tracked illegal sales of oil, but more had continued to pop up. Ickes told a lawmaker, “I have moved heaven and earth on the matter”—stopping the “hot oil” boys. The
Belcher
case was being prosecuted before a federal judge in Birmingham, though it was becoming clear that a fact about William Belcher—he was blind—made it hard to make him seem the exploiter.

Nonetheless, as the Schechter case moved forward, the scale of the prosecution’s ambitions had come to look grotesquely large. The Schechters were accused of selling unfit chickens, but this accusa
tion, in the end, was based on the selection of ten chickens, which was then reduced to three suspect chickens, which, upon autopsy by the health authorities, turned out to include only one unhealthy chicken. It was an “eggbound” chicken—eggs, upon its slaughter, were discovered to have lodged inside it, something that would have been hard for the Schechters to detect before sale. That they had knowingly planned to sell an unfit chicken was hard to prove.

When it came time for judgment at the end of October, Judge Campbell sensed that the jurors, New Yorkers all, might be compelled by the Schechters’ story and put off by the government’s prosecutorial zeal. He warned them, “Decide it on the evidence, and not on some views you may have.” He also did what he could to stop Heller, their lawyer, from making the jurors aware of the consequences of their action. Heller spelled it out in his summation: “Gentlemen of the jury, would you like to be put behind bars for a thing like this?” At which the judge intervened: “Now about the bars, they do not do that. The sentence rests upon my conscience, not theirs.” He had warned, a few moments earlier, that “you are trying to tell them what punishment is attached to any one of these offenses; that is not the province of the jury.”

Judge Campbell fined them $7,425, years of salary, and he sentenced them to jail: Joseph to three months, Alex to two, and the other brothers a month apiece. This last was particularly painful, since the Schechter brothers had families—Joseph’s wife felt humiliated. As they had testified in the case, they had never been in trouble before. The game of life seemed stacked against them. “First Felony Case Is Won under NRA,” the
New York Times
trumpeted; Walter Rice was quoted in the paper speaking of “a sweeping victory of immense importance.”

That winter, the circuit court rejected the Schechters’ appeal. But they determined to fight on. Columnists Drew Pearson and Robert Allen would later mock the Schechters’ persistence: Joe Heller, whom they described as speaking with a “Brooklyn Hebrew accent,” and looking “hawk nosed,” “labored over his lawbooks in Manhattan, determined to rank his name alongside of that of Daniel Webster.”
Still, though their case seemed improbable, they would go higher, even to the Supreme Court.

AND PERHAPS THE SCHECHTERS’ MOVE
was not so improbable, for now there was a shift in the country, one that Roosevelt could not entirely overwhelm, even through his radio bond with the people.

The shift started with the NRA itself and the discovery of its punitive side. The Schechters were not the only NRA violators headed for prison. In York, Pennsylvania, a former Cornell full-back named Fred Perkins had paid 20 cents an hour to a staff of ten who built lighting batteries for him. NRA officials had insisted that he pay the code rate—40 cents an hour. Perkins had showed his books to the officials—his profits for 1933 were only $2,531—and offered to raise the wage to 25 cents. Then he had asked for an exemption to the relevant code—he was denied. The government prosecuted,
Time
magazine reported. Not able to pull together the $5,000 required for bail, Perkins spent weeks in prison even before his autumn trial. He lost.

In Alabama, there was another, similarly ugly story. The day before the Schechters had lost their first case, the federal judge in Birmingham, William I. Grubb, dismissed code violation indictments against an Alabama lumberman. The judge had agreed with Belcher that his decision to allow his employees to work more than forty hours a week was not something that federal law could address.

Many economists were disturbed. Irving Fisher, in a letter to his son, quoted another professor who said the letters “NRA” stood for “National Retardation Affair.” Senator Huey Long of Louisiana, always eager to tilt with Roosevelt, was urging citizens to ignore the NRA codes. Long, more primitive than either Roosevelt or Hoover, saw similarities between the two presidents. At one point he would tell the Senate, “Hoover is a hoot owl. Roosevelt is a scrootch owl. A hoot owl bangs into the nest and knocks the hen clean out and catches her while she’s falling. But a scrootch oil slips into the roost
and scrootches up to the hen and talks softly to her. And the hen just falls in love with him. And the first thing you know—there ain’t no hen.” In the end, the Justice Department withdrew on
Belcher,
fearful of losing.

Some unions still liked the National Recovery Administration and hoped, of course, that its labor provisions might be preserved no matter what. That spring William Green of the AFL would call for a general strike by 18,000 New York clothing workers if Congress did not extend the NRA for two more years. But business was finding its voice on the topic. The man who sold that clothing, Percy Straus, the chairman of R. H. Macy, the department store, criticized the codes bitterly for the way they pushed up prices: at a time when no one had enough cash, “the consumer is forgotten.” It was rather the employer who was forgotten, alleged the executive director of a retailers group, the National Dress Manufacturers Association. Mortimer Lanzit told a crowd at the Hotel Astor in January that the industry’s code was hurting employers by giving them fewer rights than workers. Turning FDR’s phrase against him, Lanzit argued that it was the employer who was the “Forgotten Man,” and that the International Ladies Garment Workers Union placed so many demands on companies that they “blocked reemployment.”

In New York, Ray Moley was now playing broker between the administration and business, hosting what quickly became known as “Moley dinners.” In late January, Tugwell attended one. He wrote in his diary that he “was, so to speak, put on the spot. I spoke for about twenty minutes or half an hour respecting the administration.” Tugwell went on: “After I had spoken about fifteen of the businessmen spoke in turn. The general burden of their talks were rather querulous complaints about the unfriendliness of the administration and about the lack of confidence which businessmen have in the present administration. They rather indicated that until there was greater confidence, prosperity would not return.” He added that “Willkie was present and did a good deal more than his share of the complaining.”

Even within the NRA, there was disagreement. From the Consumers’ Advisory Board of the NRA, Paul Douglas wrote dissents to the codes. He was, after all, the same old Douglas, happy to point out something that seemed wrong, even if he was going against the group in doing so. It seemed wiser to Douglas that the administration spend its energy on unemployment insurance and the broader concept of what was sometimes called “social security.” Other critics on the left pointed out that the NRA helped big business at a cost to smaller businesses. This argument was valid. A price set to suit a big firm, with its economies of scale, was low enough to drive a smaller firm out of business; a wage set high enough to meet Washington’s goals might be tolerated by a larger firm, but it killed off a smaller one. The NRA institutionalized cartels. And cartels were perceived by most citizens as one of the principal reasons the average fellow now had so much trouble.

General Johnson and the NRA now occupied Hoover’s new Commerce Department. The task had expanded to fit the building. Nineteen thirty-five was the year when a new board game invented by a Philadelphia man was becoming a surprise best seller: its name was Monopoly.