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United States Congress

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

The United States Congress appears in the account as both a vehicle for regulating concentrated economic power and a constraint on a president seeking to weaken judicial independence. Its response to Franklin D. Roosevelt’s court-packing plan becomes a test of whether pluralistic institutions can protect their own continuation, even when members might benefit in the short term from greater presidential power.

Regulation and Organized Opposition

From the late nineteenth century, farmers and other opponents of monopolistic business practices helped press the federal government to regulate industry. The Interstate Commerce Act of 1887 created the Interstate Commerce Commission and began federal industry regulation; the Sherman Antitrust Act followed in 1890 and became a basis for attacks on trusts. Nearly all of the fifty-nine petitions concerning trusts sent to Congress before the Sherman Act came from farming states and organizations, reflecting farmers’ shared interest in countering monopolistic practices.

Congress’s role in this campaign developed alongside a broader political mobilization. The agrarian crisis that began in the Midwest in the late 1860s spurred the Grangers and other farmers’ organizations to challenge discriminatory business practices. Their pressure, followed by the Populist and Progressive movements, helped shift political attitudes toward federal oversight. The account presents Congress not as acting in isolation, but as a national institution responding to organized constituencies seeking limits on concentrated corporate power.

The Federal State and Corporate Oversight

The case for federal supervision gained force under Theodore Roosevelt, who argued that corporations engaged in interstate business—especially those benefiting from monopolistic tendencies—should be subject to national oversight. He proposed a federal agency empowered to investigate large corporations. Congress’s regulatory role was strengthened through measures including the Hepburn Act of 1906, which expanded the Interstate Commerce Commission’s authority, including its ability to inspect railway financial accounts.

Congress also became the arena for conflict over the reach of the presidency. Roosevelt used the Sherman Act against the Northern Securities Company in 1902, and subsequent suits targeted Du Pont, the American Tobacco Company, and Standard Oil. Under William Taft, the Standard Oil Company was broken up in 1911. The Sixteenth Amendment, ratified in 1913, enabled a federal income tax. Together, these developments show federal institutions gaining tools to regulate major corporations and raise revenue, while also placing those tools within a political system in which Congress and the presidency shared authority.

Resistance to Court-Packing

The sharpest test of Congress’s checking function came in 1937, when Roosevelt proposed the Judiciary Reorganization Bill. He sought compulsory retirement for judges at seventy and authority to appoint as many as six new justices. Although he presented the plan as a response to an overburdened Supreme Court and as a way to overcome judicial opposition to New Deal legislation, the proposal would have allowed him to alter the Court’s composition.

The House of Representatives largely refused to take up the bill. Roosevelt then turned to the Senate, where the Senate Judiciary Committee held contentious hearings and returned the proposal with a negative report, calling it a needless and dangerous abandonment of constitutional principle. The Senate voted 70 to 20 to send it back for revision; the court-packing provisions were removed. Louis Brandeis, though sympathetic to much of Roosevelt’s legislation, also opposed efforts to erode the Court’s power and the claim that its justices were overworked. Public support was limited as well: polls indicated that only about 40 percent favored the plan.

Institutional Significance

Congress’s refusal to approve court-packing mattered beyond the fate of the bill. The account argues that legislators had immediate reasons to help Roosevelt ensure the survival of his New Deal program, but recognized that weakening judicial independence could upset the balance of power protecting Congress itself. The episode thus illustrates a political constraint operating even when a president had large majorities in both houses.

The contrast with Peru and Venezuela in the 1990s clarifies the stakes: presidents there appealed to popular mandates to close uncooperative congresses and rewrite constitutions to strengthen executive power. In the United States, Congress did not endorse Roosevelt’s attempt to reshape the Court. The Supreme Court’s constraints on presidential authority remained in place, while it upheld the Social Security Act and the National Labor Relations Act. In this account, congressional resistance helps sustain pluralism by preventing a short-term legislative advantage from becoming a lasting concentration of power.