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article number 284
article date 10-31-2013
copyright 2013 by Author else SaltOfAmerica
The President, Congress and the Supreme Court at Odds … also a Severe Recession, 1937
by James Truslow Adams

From the 1942 book, The March of Democracy, The Record of 1933-1941.

THE YEAR 1937, with its episodes and contrasts, was one of the most dramatic and important which we have had to record and discuss.

The constitutional controversy over the President’s unexpected plan for changing the Supreme Court would alone have distinguished it among the important years in our history, but there were also unusual labor troubles, international complications, and the contrast between the prosperity with which it began and the deep economic gloom and anxiety in which it ended.

The major topics with which we have to deal are politics (with the story of the Court including its decisions interwoven); labor conditions; the international situation; and business.

Congress, the 75th, met on January 3. It was overwhelmingly Democratic, there being 76 Democrats out of a total membership in the Senate of 96, and 334 in the House out of a total of 435. But the very size of the majority made it unwieldy, and because the party was to become hopelessly divided, the entire year was to prove singularly lacking in the enactment of any major Administration policies.

The President read his Message in person to the joint session of the two Houses, announcing, among other points, that the nation had kept out of war in spite of provocations which in earlier times might have brought it on but that there was need for stronger national defence; that the permanent ordinary expenses of government could not in future be cut much below $7,000,000,000 a year; and that labor must co-operate with capital because “the organization of thousands of workers creates a heavy obligation of public service” just as does the ownership of great properties and enterprises.

According to the newspapers the President appeared in happy mood, the legislative year started auspiciously against a cheerful background of improving business and rising earnings and employment.

The following day the Supreme Court unanimously reversed the conviction and seven-year jail sentence of an Oregon Communist, asserting that the right of peaceable assembly was as fundamental as those of free speech and press. The decision, unanimous as it was, may be noted because in the controversy which later was to rage around the Court, it was often ignored that the Court is the final guardian of individual liberty against the possible tyranny of local laws or local court decisions due to the passions of the place and moment.

On the 6th, Mr. Roosevelt again addressed Congress in a speech which was perhaps one of the most restrained and conciliatory in his career. He claimed, reasonably, that the main objectives of the New Deal were still seen to be desirable but that the NRA had failed because too much had been attempted all at once; that it was to the interest of the nation to help business attain higher and sound price levels; that we should develop intelligently a social-security system; that the administrative machinery needed overhauling; and that “means must be found to adapt our legal forms and our judicial action into closer harmony,” although we “do not ask the courts to bring non-existent powers into being.”


He also looked forward, he said, to close co-operation with Congress on the basis of “mutual respect for each other’s proper sphere of functioning in a democracy.” The address was extremely well received throughout the country and press, and even such a bitterly hostile anti-Administration paper as The New York Herald Tribune praised it highly.

On the 8th in another Message, the President reported on the budget situation. After saying that the programs inaugurated to combat depression had been very costly but worth-while, he stated that “we shall soon be reaping the full benefits” and “shall have a balanced budget that will also include provision for the reduction of the public debt.”

It was indicated that the rise in government debt would be stopped at the figure of $35,000,000,000, but even at that figure the Federal debt (not counting the huge amounts of state and other local debts) was $270 per capita, including all those on relief, as compared with about $13 per capita in 1916, and $130 in 1930.

Even to attain partial balancing, the President counted on a large decrease in relief and an increase in Federal income from $4,000,000,000 to $7,000,000,000. But perhaps the most alarming feature was that he considered the necessary cost of government permanently stabilized at over $$7,000,000,000 though all during the post-war period up to the crash it had been only somewhat over half that figure.

Fear of inflation and higher living costs was not lessened by the action of Congress on the 19th in extending the power of the President to June 30, 1939, to further devalue the dollar to 50 cents and to use the $2,000,000,000 fund, resulting from the previous devaluation, solely at his own discretion and that of his appointee, the Secretary of the Treasury.

The next day, in a downpour of rain, the President was inaugurated for the second time, being the first Chief Executive to have his term begin on January 20 instead of March 4 in accordance with the “lame duck” amendment to the Constitution.


The Inaugural Address contained no detailed outline of policies to be pursued but was rather a generalized expression of the President’s political creed and humanitarian aspirations. He spoke of “one-third of a nation ill-housed, ill-clad, ill-nourished,” and of what he hoped to do for them.

He also stressed the need for additional power, stating that in a democracy, safety depended not “upon the absence of power but upon lodging it with those whom the people can change or continue.”

A week earlier he had presented a plan to Congress for the reorganization of the government, which included placing all the 105 independent or semi-independent Boards, Commissions and so forth, such as the Interstate Commerce Commission and others, directly under control of the Executive, who was also to have six confidential assistants.

The plan startled Washington because of the great increase and concentration of powers in the hands of the President, who had already been granted vaster powers than any other President, certainly in peace times, had ever dreamed of. The minds of many went back to Mr. Roosevelt’s own words in his Inaugural Address of only a year before when he said that “in thirty-four months we have built up new instruments of public power” which in wrong hands “would provide shackles for the liberty of the people.”

Every one had long recognized the need for reorganizing the governmental machinery, which under Roosevelt had assumed a vastness and complexity unknown before, but although prompt passage of the Bill was asked, it was evident that debate would largely center about the advisability of so greatly enlarging the power of the Executive, already overshadowing that of the Legislature.

It is possible, however, that the President might have had his way, with some modifications, had it not been for the bombshell which he exploded little more than two weeks after his inauguration.


On the morning of Friday, February 4, the usual morning for his weekly press conference, the President called an emergency meeting of the Cabinet shortly after ten o’clock, and among those present were also included the chairmen of the House and Senate Judiciary Committees. What transpired is not known, but it appears that then for the first time, the Cabinet was made acquainted with the President’s Court plan.

When the representatives of the press were admitted, a half hour later, the President read to them the message which he was sending to Congress. He then sent the Message, together with a letter from the Attorney General, Cummings, and a bill for the reorganization of the Judiciary, to the Capitol.

Few, if any, bills submitted have so suddenly thrown the nation into turmoil and heated discussion. It provided for the addition of fifty Federal judges in the lower courts, for the speeding up of decisions and various other minor matters, but the chief point, one quickly realized by Congress and the country, was the section which permitted an increase in the membership of the Supreme Court, fixed at nine, to a maximum of fifteen if judges reaching the age of 70 did not care to resign.

In that case the President was empowered to appoint one new judge for each over that age sitting on the Bench, of whom there were six, including the oldest and perhaps most liberal of all, Justice Brandeis. Leaving out the side issues it was at once recognized that if the bill were passed, a President might pack the Court by placing six judges in it whose favorable opinions he could reasonably count upon.

The nation was stunned by both the suddenness and the secrecy of the move. Apparently Roosevelt had consulted only three persons, the Attorney General, and two others guessed at but unnamed. Neither his official advisers, the members of the Cabinet, nor the leaders of his party in Congress had been approached.

The Supreme Court which Roosevelt inherited.

Roosevelt had not hinted at the measure during the campaign the preceding fall, and in fact, the Party Platform had promised that legislation would be “within the letter and the spirit of the Constitution,” and that if legislation not lying within these was desired, an amendment to the Constitution would be sought.

Up to the November election the Supreme Court had been called upon to decide on the constitutionality of thirteen laws enacted by the New Deal.

It may be noted here that the Court has no power to “veto,” as it has been said, acts of Congress. It can only pass on the legal questions involved in certain kinds of cases which are permitted to reach it, and in doing so it has to decide, like any other court, whether the plaintiff or defendant has the law on his side.

With our forty-eight state legislatures and the Federal Congress grinding out thousands of laws annually, the vast majority of cases before the Supreme Court do not involve constitutional questions or the validity of any Act of Congress. But it is stated in the Constitution (Art. VI, I) that “this Constitution and the laws of the United States which shall be made in pursuance thereof and all treaties made, or which shall be made, . . . shall be the supreme law of the land, and the judges in every State shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.”

As it is thus clear that the Constitution is the “supreme law of the land” it is evident that the Supreme Court, like others, if a plaintiff claims that some particular law is not in harmony with the supreme law, must decide whether it is or not. Such cases, however, are usually very rare, and in its whole history, dealing with thousands of cases, the Court had declared only 77 laws to be unconstitutional, although Presidents had vetoed over 1100 acts of Congress.

During the Roosevelt administration, however, up to November 1936 when he was re-elected, the Court had been called upon to decide on the constitutionality of laws thirteen times, and in eleven had decided adversely, though only twice, in less important cases, by a five-to-four vote. In the three cases before it after election it had decided favorably.

There had been much talk about the number of adverse decisions and the reason for them—whether the Court was out of touch with the times, whether the members were too old (although, as has been noted, Brandeis was both the oldest and most liberal), and what to do about it.

Many thought that the reason was the hasty and careless way in which many of the laws had been drawn, or that in reality we were trying to legislate in ways not permitted by the Constitution.

The overwhelming vote against some of the laws, such as the NRA, the first and second AAA cases and others, in which the poll of the Court showed 9-0 in five cases, 8-0 in two, 8-1 in two, and so on, would indicate that if we desired to keep the Constitution and the legislation both we should have to amend the former or perhaps draw the laws more carefully.


Discussion over the President’s proposal raged until June in Congress and throughout the country. The only immediate legislative effect of the President’s Court message was the passage in the House, later also in the Senate, of a bill permitting the Justices to retire, if they so desired, on full pay when reaching seventy years of age.

But, what was much more important, it was evident that the proposal to enlarge the Court had split both the country and the Democratic party wide open, and engendered an amount of bitterness which was to wreck the President’s program.

The question was recognized to be non-partisan, fundamental, constitutional, and party lines were ignored, such leading Democratic Senators as Burke of Nebraska, Byrd and Glass of Virginia, Clark of Missouri, Connally of Texas, King of Utah, Van Nuys of Indiana and Wheeler of Montana, swinging into line at once against the President and leading the fight which he was to lose.

The Republicans refrained from taking any party stand, and the question was fought out in a great national debate without the contamination of party politics.

Before temporarily passing from this topic we may note that a Supreme Court with power of judicial review is not a peculiarity of our American system, as sometimes claimed. There are Supreme Courts, with similar functions, in all the British Dominions—Canada, Australia and the others—and a committee of the Privy Council in England acts in the same way for the entire Empire.

Such a body is imperative in any country or federal group having written constitutions. There must be some court of last resort able to determine whether particular legislation is in accord with the basic law.


On March 29, the Supreme Court handed down three important decisions in favor of the Administration, the same number it had so given before the controversy had started. In a 9-0 vote it ruled that the Federal government, in the Railway Labor Act, had authority to regulate industrial relations of a carrier engaged in interstate business.

The earlier 9-0 decision against the NRA had been based on the ground that it could not regulate intrastate business, and the unanimous decision in each case made it clear the problem was not that of the age or conservatism of certain possible judges but of the nature of our federal government with its dual relationship between national and state powers and rights.

Another decision upheld a revised Farm Mortgage Moratorium Law. The earlier one, which had been very hastily and carelessly drawn—even the President had said it was “loosely worded”—had been declared unconstitutional in 1935. Had it been properly drawn in the first place it would have been accepted then.

In the third case, the Court to a considerable extent reversed its own opinion of fourteen years earlier, although the point it had to pass on was in some respects different. This was the New York State Minimum Wage Law. The Court agreed that a state has the constitutional right to deal with the problem of minimum wages, and so obliterated the “no man’s land” which the President had complained of as belonging to the jurisdiction of neither the state nor Federal governments.

In all, the government had had seven favorable decisions since the election.

On April 29 both houses of Congress passed the Neutrality Bill, which had been opposed by such high authorities in international law as John Bassett Moore and others as being much more likely to get us into a war than to keep us out, however pacific the intention of the framers might be, and to give the Executive such new powers to undertake measures which would be considered “coercive” internationally as largely to transfer the real power to bring on war from Congress to the President.

Meanwhile the Supreme Court had handed down another decision favorable to the Administration in upholding the Wagner Act in four cases which had come before it, and the President had signed the Vincent-Guffey Coal Bill designed to set up a sort of little NRA in soft-coal mining, putting the industry under Federal regulation and heavily taxing such mine owners as might refuse to accept the code prescribed.

In May the Supreme Court upheld the Louisiana Chain Store Act basing the tax levied not on the number of stores in a state but in the entire national chain, and later in the month approved the Social Security Act affecting over 26,000,000 workers and 2,700,000 employers.


Meanwhile, owing to the Supreme Court debate and the increasing mistrust and animosity engendered in many members of Congress, that body had been making no progress in passing any of the Administration measures. In especial, the President’s bill for the reorganization of the government departments was severely criticized in the light of his attack on the Supreme Court.

It was pointed out by Senator Byrd (Democrat) who was chairman of the Senate Committee to draft a plan of reorganization, the independent Brookings Institution, and others that the President’s plan would give immense added powers to the Executive and reduce those of Congress.

Among other points, the bill would have enabled the President (any President, it must be remembered and not simply Mr. Roosevelt) to alter a large part of the government at will and whenever he chose without consulting Congress.

It was also felt by many that the diminished powers of the independent Comptroller General’s office might much reduce the control of Congress over the purse strings, and the changing attitude of that body was indicated in the difficulty the President had in securing a $1,500,000,000 appropriation for relief to be expended at his sole discretion.

Two other points tended to increase the restiveness of many who had favored the relief and expenditure policies which the Administration had been pursuing during the depression. The nation appeared to have definitely emerged from that condition.

Business was prospering, yet the number of persons on the government payroll was increasing. According to the Civil Service Commission’s figures these numbered 824,259 (not counting those in the CCC, or persons on relief), as compared with 719,440 the preceding year and only 583,196 in 1932. If we add the legislative, judicial and military departments (but not the CCC nor those on relief), we had on April 1, over 1,100,000 in government jobs, a figure never equalled before, save in the World War.

Moreover the government debt was approaching an all-time high of $35,000,000,000.

The theory of government spending in bad times to replace the decrease in private expenditure had been adopted by the Administration from the ideas of the English economist, John Maynard Keynes, but it had been a very essential part of his theory that as business improved the government should lessen expenditure, reduce its debt, and so restore its credit and resources to be used on some other occasion. This was not being done.

1937 Baseball All Stars: Lou Gehrig, Joe Cronin, Bill Dickey, Joe DiMaggio, Charlie Gehringer, Jimmie Foxx, Hank Greenberg.

We may now come back to the dispute over the President’s plan for changing the Court, which was rending the country. Few public questions in the past generation have caused so much discussion or aroused so much interest and passion.

It was everywhere discussed in conversation, the press, on the air, while the Judiciary Committee of the Senate held public hearings for many weeks at which appeared scores of some of the best-known men and women in the nation, in favor of or opposed to the plan.

We need not here reopen the discussion, but in the course of it certain facts emerged. For example, the statement made by Justices Hughes, Brandeis and Van Devanter, at the request of the Committee, disproved completely the claim that the Court was behind in its work. Every case before it either had been, or would be, disposed of before the end of the term. Some of the congestion in some of the lower Federal courts was elsewhere shown to be due in part to the failure of the President to appoint judges to eight existing vacancies.

Others, again, pointed to the danger of the government being able to send judges into certain courts and so perhaps influence such courts in its favor. Moreover, if one administration could appoint six judges to change the policy of the Supreme Court, other administrations could do the same, and the Supreme Court could thus be made completely subservient to the Executive and the Congress.

It was pointed out that if the Court could be packed so as to alter parts of the Constitution, none of it might be safe, and personal liberties, such as freedom of speech, religion and the press, might also be altered by some later administration hostile to them.

The claim made that the right of the Court to “veto” legislation by Congress had been three times voted down in the Constitutional Convention of 1787 and that therefore it had no right to pass on the constitutionality of laws was shown to be an historical error.

What had happened in the Constitutional Convention was that it had been decided that the members of the Court should not be allowed to have a concurrent vote with the President because if this were done it would allow them not only to pass on the constitutionality of legislation, which it was expected as judges they would have to do, but also on the policy of legislation, which would properly be within the province of the Executive and not the Judicial department of government.

Meanwhile, a vacancy was created on the Bench by the resignation, May 18, of Justice Van Devanter, and the President thus had a chance to appoint a judge. Mr. Roosevelt had also come out bitterly against the Court, making support of his plan a test of party loyalty, and Mr. Farley had openly warned those members of Congress who opposed the plan that the party would not tolerate bolting.


Every aspect of the matter had been threshed out in the public discussions and before the Senate Committee in open hearings, when on June 14 the Committee gave its Report to the Senate, with a summary at the end which, in view of the great historical importance of the constitutional controversy, may be quoted in full.

The Senate Committee had numbered eighteen, of whom five-sixths were Democrats, and the Majority Report was signed by ten, of whom seven were not only Democrats but had voted for practically every major policy of Roosevelt during their terms, except this issue of the Court. The Report stated that:

We recommend the rejection of this bill as a needless, futile, utterly dangerous abandonment of constitutional principle.

-It was presented to the Congress in a most intricate form and for reasons that obscured its real purpose.
-It would not banish age from the bench nor abolish divided decisions.
-It would not affect the power of any court to hold laws unconstitutional nor withdraw from any judge the power to issue injunctions.
-It would not reduce the expense of litigation nor speed the decision of cases.
-It is a proposal without precedent and without justification. It would subjugate the courts to the will of Congress and the President and thereby destroy the independence of the judiciary, the only certain shield of individual rights.
-It contains the germ of a system of centralized administration of law that would enable an executive so minded to send his judges into every judicial district in the land to sit in judgment on controversies between the Government and the citizen.
-It points the way to the evasion of the Constitution and establishes the method whereby the people may be deprived of their right to pass upon all amendments of the fundamental law.
-It stands now before the country, acknowledged by its proponents as a plan to force judicial interpretation of the Constitution, a proposal that violates every sacred tradition of American democracy.
-Under the form of the Constitution it seeks to do that which is unconstitutional.
-Its ultimate operation would be to make this Government one of men rather than one of law, and its practical operation would be to make the Constitution what the executive or legislative branches of the Government choose to say it is—an interpretation to be changed with each change of administration.
-It is a measure which should be so emphatically rejected that its parallel will never again be presented to the free representatives of the free people of America.

The names of the Democratic Senators who by signing the Report took their political lives in their hand to save the constitution were King, Van Nuys, McCarran, Hatch, Burke, Connally and O’Mahoney.

Although the Judiciary Committee had thus reported adversely, the debate had to continue until a final vote might be taken. It was thought that it might be close and there was intense excitement. On July 13, Representative Sumners, chairman of the Judiciary Committee of the House, Texas Democrat and ordinarily a Roosevelt supporter, strongly denounced the measure.


On the 14th Senator Robinson, Democratic leader of the Senate, and trusted lieutenant of the President, died suddenly, and the situation became more confused. On the 20th Lehman, Democratic Governor of New York and one of the President’s strongest supporters, came out against the Court plan, but Roosevelt still insisted on a fight to the finish.

On July 21, the vote in the Senate was taken, the administration leaders admitted complete defeat, and the bill was killed by a vote of 70-20, the 70 including 5 Democrats, and only 16 Republicans with one Farmer-Laborite. Amid cheering galleries the bill was sent back to the hostile Committee and permanently killed.

Another court bill, drafted by the Committee, but having nothing to do with the Supreme Court and dealing only with certain minor improvements in the lower courts, was later passed and signed by the President.

The last matter concerning the Supreme Court at this momentous session was the nomination by the President and confirmation by the Senate, 63-16, of Senator Hugo Black of Alabama to fill the vacant seat on the bench. Questions were raised as to Black’s fitness for the post and especially as to his possible connection with the Ku Klux Klan but the Senate was assured that he had no such connection.

On August 21 Congress adjourned after, in some respects, one of the most remarkable records in our history.

Notwithstanding the enormous popular majority given to the President in the election of the previous year, and the great majority of his party in Congress, not a single one of the major measures urged by him was passed.

These, which were to build up a new “New Deal” or round out the old one, were five in number, namely those for reorganizing the government departments; the Supreme Court Bill; an Act embodying Wallace’s plan for an “ever normal granary” as aid to the farmers; the Black-Connery Wages and Hours proposal; and one expanding the TVA idea to seven regional planning areas throughout the country.

The measures which Congress did pass were not of the “must” sort, and included a housing Act; the amended Neutrality Act, and a few others. Meanwhile, the government debt had again climbed to a new high of $37,000,000,000.


On October 12, Mr. Roosevelt issued a call for Congress to assemble in special session on November 15, announcing over the radio to the nation that he wanted quick passage of bills providing for wages and hours regulation; the curbing of trusts; crop control; regional planning; and his government reorganization measure.

Although Congress met and remained in session until the end of the year, again not a single one of these measures was passed.

Meanwhile a sensation had been caused throughout the country by the publication of a series of articles in The Pittsburgh Post-Gazette purporting to show by reproduction of documentary evidence that Black had been a member of the Klan, resigned but had again become a member, and was so when placed on the Supreme Court.

Black, who was in England, refused to affirm or deny anything, and finally sailed for home on a small steamer to Norfolk, Va. After arrival Justice Black admitted in a nation-wide broadcast, that he had at one time been a member of the Klan but that he knew nothing of the later membership card issued to him. It also transpired that instead of taking the oath of office before the Chief Justice when taking his seat, he had taken it secretly, though legally, before a minor official prior to his sailing for Europe in the summer.


* * *

We now come to the story of business during the year, which may be briefly told. Business had improved considerably in the latter part of 1936 and this improvement carried over into the first half or so of 1937.


Both business men and investors, however, had received a very severe shock when the President presented unexpectedly, his plan for destroying the independence of the Supreme Court, and as the case was argued before the country in the ensuing months and both the dangers of the plan and the insistence of the President became more apparent, distrust deepened.

In addition, the international situation caused increasing uncertainty for those wishing to make long-term commitments. Moreover, the failure to reduce expenses or the number of persons in government employ, or the debt, in spite of rising prosperity also caused misgiving.

In April a committee appointed by the Twentieth Century Fund (an independent Foundation), which was composed of business men, economists and labor and agricultural leaders, found that the total governmental debt in the United States, counting those of the Federal, state and local governments, stood at about $90,000,000,000, “the largest that any nation has ever had,” and pointed out the serious danger which would result if this debt were not to be gradually reduced.

As the months went on, instead of reduction there came a steady increase. Once more, the constant strikes, as well as the higher wages demanded, and in many cases secured, in the face of rising costs of other sorts—notably increasing taxation—frightened both investors and those responsible for managing business.

Investors asked themselves also in view of the forced distribution of surpluses under the Surplus tax what would happen to income if business should decline in profit with no accumulated reserves to draw upon. The whole price structure had likewise got out of adjustment.


Although the aim of the administration had repeatedly been said to be to get prices up to the level of 1926, which they had not yet reached, the President announced on April 2 that they were too high, and that thenceforth government spending would be directed not at durable-goods industries, such as involved use of steel, copper, cement, etc., but at consumers’ goods.

The news was unexpected and stock prices dropped sharply.

In March, Mr. Eccles, Chairman of the Federal Reserve Bank, who had long been in favor of the deficit financing theory of the administration, announced that inflation, which all had dreaded, could be avoided only by increase of taxation and reduction of the government debt. Yet the end of the fiscal year in June found the government with a new deficit of about $2,500,000,000 instead of reducing the debt, and with no prospect of reducing expenses or of pursuing a reasonable tax policy.

Senator Robinson, Democratic leader of the Senate and trusted friend of the President, himself said in the Senate late in the month that “we spend and we spend and we spend, and there are some of us who vote for all appropriations and also vote against all taxes.”

“In the time of prosperity,” he added, “we ought to begin to put our house in order. Let me ask what would happen if another depression such as that which began in 1929 or 1930, and which has continued until recently should strike the people of the United States and their affairs next year or the year following?”

Unfortunately it was not to be “the next year or the year following” for the appearance of at least a very severe recession, whatever it may develop into.

By midsummer keen observers detected that business was slipping fast. Soon others began to realize it, and in the fall the market had a precipitate decline, after a fairly steady decline from February which had been considered only temporary.

By the end of the year stocks had fallen 30-40 per cent since August, and business profits had followed suit. The recession was particularly severe in the steel industry, which, beginning the year with the best figures since 1929, was operating at less than 30 per cent capacity, making heavy losses instead of profits.


Lewis of the ClO declared that the country was starting on another “tail spin,” a “matter of life and death.” Green of the A. F. of L. said that for labor the situation had “already assumed the proportions of a serious depression.”

Miss Perkins had to report, as quoted in The New York Sun, in November that 570,000 men had been laid-off in October, the sharpest decline in the history of the Department except the similar period of 1920.

Many economists looked back to 1907 for such a sudden and perpendicular drop in business. There was no sign of improvement at the end of the year, and on December 28, General Motors announced the laying off of 30,000 men.

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