American economy was soon relieved of the burden of some of the New Deal's
worst excesses when the Supreme Court outlawed the NRA in 1935 and the AAA in
1936, earning Roosevelt's eternal wrath and derision. Recognizing much of what
Roosevelt did as unconstitutional, the "nine old men" of the Court also threw
out other, more minor acts and programs which hindered recovery.
Freed from the worst of the New
Deal, the economy showed some signs of life. Unemployment dropped to 18 percent
in 1935, 14 percent in 1936, and even lower in 1937. But by 1938, it was back
up to nearly 20 percent as the economy slumped again. The stock market crashed
nearly 50 percent between August 1937 and March 1938. The "economic stimulus"
of Franklin Delano Roosevelt's New Deal had achieved a real "first": a depression within a depression!