Today in 1943: FDR freezes prices, wages, and employment

April 8, 2011

Today in Legal HistoryToday, you may see everything from mass protest to political commentaries to sound bites of rhetoric decrying the expansive power of the federal government invading individuals’ lives.

However, any real or perceived expansion of federal power seen today is extraordinarily trivial compared to the kind of power exercised by the federal government during World War II.

An example of such power is Executive Order 9328, signed by President Franklin D. Roosevelt on April 8, 1943, which was implemented in an effort to control wartime inflation.

The order froze prices nationwide on anything that could affect the cost of living (which was effectively everything).  It also prohibited wage increases and employment changes except in special circumstances.

In short, it allowed the federal government to control the price of everything you buy, where you worked, and how much you made.

The order was part of a suite of regulations such as the Stabilization Act of 1942 and the First and Second War Powers Acts that conferred broad powers on the Executive Branch.

FDRFor example, they allowed the acquisition of land for military or naval purposes, using condemnation if necessary; allowed for rationing of gasoline; and canceled the confidentiality of census data, thereby allowing the FBI to identify and collect Japanese-Americans into internment camps.

While this may seem shocking to today’s observers, the regulations saw virtually no constitutional challenges at the time (save, of course, for challenges to Japanese internment such as Korematsu v. U.S., which nonetheless failed).

The reason that the public, and arguably the courts, were willing to essentially “look the other way” on constitutional issues was the massive threat that World War II posed to the nation.

Most of the powers allocated to the executive greatly assisted its ability to effectively and efficiently wage war, and was probably instrumental in the U.S.’s success.

Does this change the fact that some of these powers may have been (and that some definitely were) unconstitutional?

The answer to the question is, at most, purely academic, since courts are notoriously loathe to impinge on the powers of the executive during times of national crisis, as the U.S. found itself during World War II.

However, another question is much more relevant:

Should a national crisis on a similar scale ever arise again, would the federal government find itself able to afford itself necessary powers to address it?

The answer to that question depends on a host of factors, and we really can’t determine the answer based on what we know today.

There is, though, one factor we can assess now.

For better or worse, citizens during World War II were willing to forgo certain individual rights in exchange for advancing the betterment of the country as a whole.

This kind of national unity seems completely foreign in today’s political environment, which hosts a bitterly divided landscape.

Should a crisis arise, would the people of the U.S. come together to solve the problem, or would one side simply see it as an opportunity to gain a political advantage over the other?

We can only hope it’s the former, but we can’t know until the time comes.