ly set forth: "When industry is grievously hurt, when producing
concerns fail, when unemployment mounts and communities dependent upon
profitable production are prostrated, the wells of commerce go
dry."[443]

THE NATIONAL INDUSTRIAL RECOVERY ACT

The initial effort of Congress to deal with this situation was embodied
in the National Industrial Recovery Act of June 16, 1933.[444] The
opening section of the act asserted the existence of "a national
emergency productive of widespread unemployment and disorganization of
industry which" burdened "interstate and foreign commerce," affected
"the public welfare," and undermined "the standards of living of the
American people." To effect the removal of these conditions the
President was authorized, upon the application of industrial or trade
groups, to approve "codes of fair competition," or to prescribe the same
in cases where such applications were not duly forthcoming. Among other
things such codes, of which eventually more than 700 were promulgated,
were required to lay down rules of fair dealing with customers and to
furnish labor certain guarantees respecting hours, wages and collective
bargaining. For the time being business and industry were to be
cartelized on a national scale.

THE SCHECHTER CASE

In the case of Schechter Corp. _v._ United States,[445] one of these
codes, the Live Poultry Code, was pronounced unconstitutional. Although
it was conceded that practically all poultry handled by the Schechters
came from outside the State, and hence via interstate commerce, the
Court held, nevertheless, that once the chickens came to rest in the
Schechters' wholesale market interstate commerce in them ceased. The
act, however, also purported to govern business activities which
"affected" interstate commerce. This, Chief Justice Hughes held, must be
taken to mean "directly" affect such commerce: "the distinction between
direct and indirect effects of intrastate transactions upon interstate
commerce must be recognized as a fundamental one, essential to the
maintenance of our constitutional system. Otherwise, * * *, there would
be virtually no limit to the federal power and for all practical
purposes we should have a completely centralized government."[446] In
short, the case was governed by the ideology of the Sugar Trust Case,
which was not mentioned in the Court's opinion.[447]

THE AGRICULTURAL ADJUSTMENT ACT

Congress' second attempt to combat the Depression