Fighting Foreclosure: The Blaisdell Case, the Contract Clause, and the Great Depression

by John A. Fliter, Derek S. Hoff

Overview

In the depths of the Great Depression, when foreclosure rates skyrocketed across the United States, more than two dozen states passed mortgage-extension or -adjustment laws to help farmers and homeowners keep their properties. One such statute in Minnesota led to the most important property law case of its time and still casts a long shadow upon constitutional debates and our own era's severe economic downturn.

Fighting Foreclosure marks the first book-length study of the landmark 1934 Supreme Court decision in Home Building and Loan Association v. Blaisdell, which, by a 5-4 vote, upheld the Minnesota Mortgage Moratorium Act. On the one hand, Blaisdell validated efforts by states to offer legislative relief to citizens struggling to keep their farms and homes. On the other, it caused an outcry among banking interests and conservative legal theorists, who argued that these laws violated the Contract Clause of the Constitution and interfered with our free market system.

In his majority opinion, Chief Justice Charles Evans Hughes argued that the reasonable and limited nature of the law and the unusual severity of the emergency it addressed placed it firmly within the "police powers" of the states to protect the health and safety of the people. In a strongly worded dissent, Justice George Sutherland argued for a consistent and strict interpretation of the Contract Clause regardless of economic exigency.

John Fliter and Derek Hoff provide a concise history and analysis of not only this landmark case and the reasoning behind its sharply divided decision but also of the entire history of the Contract Clause. They trace closely the agricultural crisis, political pressures, and farmer-protest movement that produced the Minnesota law. And their study contributes to scholarly debate about the origins of the Constitutional Revolution of 1937, by which the Supreme Court accepted the New Deal, as well as to public debates about constitutional interpretation and the role that government should play in providing relief to distressed citizens.

In the midst of our nation's ongoing suffering from massive foreclosures and bankruptcies, Fighting Foreclosure also offers a potent reminder that the High Court's decisions often revolve around lives at risk as much as abstract legal debates.

Product Details

ISBN-13:	9780700618729
Publisher:	University Press of Kansas
Publication date:	09/05/2012
Series:	Landmark Law Cases and American Society
Pages:	232
Product dimensions:	5.50(w) x 8.40(h) x 0.70(d)

About the Author

John A. Fliter and Derek S. Hoff are associate professors at Kansas State University in political science and history, respectively. Fliter is author of Prisoners' Rights: The Supreme Court and Evolving Standards of Decency; Hoff is author of The State and the Stork: The Population Debate and Policy Making in U.S. History.

Table of Contents

Editors' Preface vii

Acknowledgments ix

Introduction 1

1 Origins of the Contract Clause 9

2 The Supreme Court and the Contract Clause Prior to Blaisdell 27

3 "And We Don't Mean Maybe": Farmers Demand a Holiday 47

4 Passing the Minnesota Mortgage Moratorium Act 68

5 The Minnesota Mortgage Moratorium Act in State Court 86

6 The Hughes Court: Four Horsemen, Three Musketeers, and Two Swingers 109

7 The Supreme Court Decides: A "Rational Compromise between Individual Rights and Public Welfare" 123

8 Reaction to the Blaisdell Decision 143

9 The Death of the Contract Cause? 157

Postscript on the Great Recession's Mortgage Crisis 178

Relevant Cases 189

Chronology 193

Bibliographical Essay 197

Index 207

Editorial Reviews

"A detailed account of a foundational Supreme Court case that is also a very readable historical narrative. Deftly intertwining legal, social, and political history, Fliter and Hoff illuminate the groundbreaking depression-era case of Home Building and Loan Association v. Blaisdell, with ended the long hold of the United States Constitution's Contract Clause on legislative mortgage relief."—Agricultural History

"A comprehensive study of a particular case in US constitutional law. In this instance, the case is Home Building and Loan Association v. Blaisdell, in which the US Supreme Court upheld the Minnesota Mortgage Moratorium Act of 1933 against a challenge by businesses and banks that it violated the US Constitution's contract clause. By placing this case within the context of the Great Depression and the politics cleaving the nation at the time, Fliter and Hoff bring the case to life and provide a greater understanding to its relevance by adding a postscript on the mortgage crisis afflicting the US in 2012. Highly recommended."—Choice

"A noteworthy contribution. . . . Will be especially useful for educators who are non-specialists in constitutional history. The authors’ clear organization, vivid description of the events that led to the Blaisdell case, discussion of relevant pre- and post-Blaisdell jurisprudence, and concise prose make the book a valuable resource for students, scholars, and general readers."—Kansas History

"...an interesting, timely piece of scholarship...If you are in search of an original and fresh was to introduce politics and law in the Great Depression or to introduce students to broader tensions between individual rights and the public interest and historical controversies over the meaning of the Constitution, this book has a lot to offer." —Perspectives on Politics

“I recommend Fighting Foreclosure to economic historians of property rights and institutions, as well as those who study mortgage markets and the Great Depression. The book is highly readable and informative."—EH.Net, Economic History Association

“An engaging and wide-ranging history and doctrinal analysis of an important case that also explains why Blaisdell is relevant to the present mortgage foreclosure crisis.”—William G. Ross, author of The Chief Justiceship of Charles Evans Hughes

“A case study in constitutional history as it ought to be written, with a keen eye to the political and social setting, the often-neglected role of lawyers and lower-court jurists, and the ironies and limits of litigation.”—Michael Parrish, author of The Hughes Court: Justices, Rulings, and Legacy

“A very readable and extremely timely study of a key Great Depression-era case.”—Paul Kens, author of Lochner v. New York: Economic Regulation on Trial

From the Publisher