Sick Chickens and Blue Buzzards

Economist Steven Horwitz has a great post at Liberty & Power telling the remarkable story of the Schechter brothers, the Kosher butchers who fought FDR's New Deal all the way to the Supreme Court and won:

As part of its legislation, the [National Recovery Administration] 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 [Amity] 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 repeatedly 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."

Thankfully, the Supreme Court saw things differently, holding in Schechter Poultry Corp. v. United States (1935), that, "It is not the province of the Court to consider the economic advantages or disadvantage of such a centralized system. It is sufficient to say that the Federal Constitution does not provide for it."

For more on why the New Deal wasn't so great after all, see here, here, and here.