“If, as our Constitution tells us, our Federal
Government was established ...
‘to promote the general welfare,’ it is our plain duty to provide for that security upon which welfare depends.”
Franklin D. Roosevelt
Message to Congress June 8, 1934

Social Security is America’s biggest social program, providing benefits to over 59 million people. It is one of the largest single items in the federal budget, representing over 24 percent of all spending.

On August 14, 1935, President Franklin D. Roosevelt signed the Social Security Act, a monumental piece of legislation that forever changed the relationship between the federal government and the American people.

The Committee on Economic Security, headed by Secretary of Labor Frances Perkins, had presented its report to the President on January 15, 1935. Two days later FDR transmitted its recommendations to Congress. For the next seven months legislators and interest groups struggled to find the appropriate mix of benefits, fundings, and coverage that would secure passage of the legislation. FDR had referred to the benefits provided by the bill as “our plain duty” to the elderly, infirm, and widowed mothers with children. In the course of the debate, large blocs of workers—including farm and domestic workers—were excluded. Many of them were minorities. But Social Security as it was enacted was an important beginning and in subsequent years, Congress enacted legislation to enroll virtually all workers. With the passage of Medicare and Medicaid under President Lyndon Johnson, the nation took the first steps toward national medical coverage, which was originally envisioned by the Committee on Economic Security. Seventy-five years later, with the Affordable Care Act of 2010, Congress has passed national medical insurance for all Americans.

Other measures created in 1935 —the National Labor Relations Act, also known as the Wagner Act (July 5), the Rural Electrification Administration (May 11), and the Works Progress Administration (April 8), redefined the peoples’ relationship to their government by providing the right to collective barganing for workers and the blessings of electricity for farmers. Americans from coast to coast benefited from the flourishing of human labor that gave us 650,000 miles of roads, 78,000 bridges, 125,000 new buildings, 800 airports, 475,000 works of art, 276 books and concerts and plays that were performed for many millions.

It is with all these New Deal landmarks in mind that we salute the most enduring of them all in offering ‘Our Plain Duty’: FDR and America’s Social Security.

This application, along with additional primary sources online gives educators and students the story of this society changing legislation.

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“Long before ... the depression descended on the nation, millions of our people were living in wastelands of want and fear.”
FDR's statement upon signing an amended
Social Security Act, August 11, 1939

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The dark months before FDR’s inauguration had been the bleakest of the Great Depression. The banking system was near collapse, one in four workers was unemployed, and prices and production were down by a third from their 1929 levels. Prior to Social Security, the elderly, unemployed and infirm lived lives shadowed by insecurity.

Almost half of America’s senior citizens could not support themselves. Millions lived in poverty. Most had no access to private pension plans, and the limted state-run programs had paltry benefits and difficult age and residence requirements. Older Americans also faced age-discrimination, as younger workers were often able to perform jobs more quickly.

The unemployed also lived on the razor’s edge. By 1933, one in four workers was out of work. With no federal safety net of unemployment benefits, a layoff notice could swiftly lead to poverty. Sudden illness or accident could bring disaster.

Jobless men outside a San Francisco soup kitchen, 1933.

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By 1933, at least one in five Americans survived on charity and state and local relief.

Depression: Unemployed men walking in front of sign.

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Jobless in New York, New York at employment agency on Sixth Avenue.

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Jobless in New York, New York at employment agency on Sixth Avenue.

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Almost half of America’s senior citizens could not support themselves. Millions lived in poverty. Most had no access to private pension plans, and the limited state-run programs that existed had paltry benefits and stringent age and residence requirements.

An elderly woman scavenges through trash during the Great Depression.

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Older jobseekers struggled with the added burden of age discrimination. They worked until they couldn’t any longer or were fired, sought help from families or charities, and tapped whatever savings they had. But in the depths of the Great Depression, jobs and family assistance became harder to secure.

During the Great Depression, older jobseekers faced the added burden of age discrimination. Laws barring such discrimination did not exist.

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In the absence of substantial government relief programs, free food was distributed with private funds in some urban centers to large numbers of the unemployed.

Conditions worsened as the Great Depression took hold of the nation. Sparked by the stock market crash of 1929, Americans faced an endless battle against high unemployment, poverty, and plunging farm incomes.

Breadline on Sixth Avenue and 42nd Street, New York, New York. February 1932.

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Men waiting in a breadline in the hope of getting a five cent meal.

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Breadline near St. Peter’s Mission.

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Breadlines: long line of people waiting to be fed, New York City. In the absence of substantial government relief programs during 1932, free food was distributed with private funds in some urban centers to large numbers of the unemployed.

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Meal time at the Homeless Men’s Bureau (for unattached men) in Sioux city, Iowa. Photo by Russell Lee for the Farm Security Administration (FSA), 1936.

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Photo by Vachon for the Farm Security Administration(FSA), 1936.

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Unemployed men eating in Volunteers of America soup kitchen, Washington, D.C.

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Unemployed men eating in Volunteers of America soup kitchen, Washington, D.C.

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In rural areas—where almost half of Americans lived—sharply falling crop prices brought disaster. Farmers defaulted on bank loans and lost their land. Tenant farmers and sharecroppers faced eviction. Farm laborers’ wages were slashed.

In the 1930s, much of the south western Great Plains experienced frequent dust storms and loss of agricultural income.

Man Walking Near Shacks in 1935.

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Click play to view a short video clip of the Depression-era Dust Bowl film The Plow That Broke the Plains, directed by Pare Lorentz. To view the complete film on YouTube, click here: The Plow that Broke the Plains

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Many were forced to pick up their lives and move west in the hope for finding other work.

Migrant Worker on California Highway, 1935.

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Arkansas squatter, third year in California, near Bakersfield.

Photo by Dorothea Lange.

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Families on the road. Photo by Dorothea Lange.

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Eighteen year old Oklahoma mother, now a California migrant. Photo by Dorothea Lange for the Farm Security Administration, March, 1937.

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18 year old Oklahoma mother stranded in Imperial Valley, California. Photo by Dorothea Lange for the Farm Security Administration, March, 1937.

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This town, Logan, Illinois, is typical of a number of abandoned mining towns in southern Illinois. Photo by Wilson for the Works Progress Administration.

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In the weeks before FDR took office in March 1933, conditions went from bad to worse. During the winter of 1932-1933, the country’s banking system began to collapse. In January and February, 4,000 banks were forced out of business. Since bank accounts were not government-insured, millions lost their life savings.

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During the banking crisis, many people resorted to privately printed currency called “scrip.”

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As the nation suffered, its government seemed paralyzed. President Herbert Hoover had tried to combat the Depression, but he believed through limited government and relief through private charity. Though he eventually approved credit assistance for banks and businesses and some public construction spending, Hoover was reluctant to fund massive public works projects, provide extensive federal relief money to the unemployed, or increase government regulation of the economy. By 1933, he was reviled and exhausted.

Homeless man.

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A New President, A New Deal

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“This great nation will endure as it has endured,
will revive and will prosper ...”
FDR, Inaugural Address, March 4, 1933

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FDR opened his inaugural address with these words of reassurance. Then, in bold language that reverberates in our public memory, he proclaimed, “So first of all, let me assert my firm belief that the only thing we have to fear is fear itself…”

FDR delivers first Inaugural Address, Washington, D.C. March 4, 1933.

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This now famous line got little reaction.

The greatest applause came near the end of Roosevelt’s speech,
when he declared that if Congress didn’t act, he would ask for
“broad Executive power to wage a war against the emergency,
as great as the power that would be given to me if we were
in fact invaded by a foreign foe.”

Americans were ready to grant FDR sweeping power. As he asserted, “This nation asks for action, and action now.”

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Inauguration artifacts, including this distinctive pair of pince-nez glasses used by FDR during the ceremony.

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INAUGURAL ADDRESS OF PRESIDENT FRANKLIN D. ROOSEVELT

(with handwritten edits by FDR)

March 4, 1933

This is a day of consecration. I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.

In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the

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means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.

More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of

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profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.

Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small

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wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.

Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.

Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.

Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith

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on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.

Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order: there must be a strict supervision of all banking and credits and investments, so that there will be an end to speculation with other people's money; and there must be provision for an adequate but sound currency.

These are the lines of attack. I shall presently urge upon a new Congress, in special session, detailed measures for their fulfillment, and I shall seek the immediate assistance of the several States.

Through this program of action we address ourselves to putting our own national house in order and making income balance outgo. Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first.

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I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment.

The basic thought that guides these specific means of national recovery is not narrowly nationalistic. It is the insistence, as a first considerations, upon the interdependence of the various elements in and parts of the United States—a recognition of the old and permanently important manifestation of the American spirit of the pioneer. It is the way to recovery. It is the immediate way. It is the strongest assurance that the recovery will endure.

In the field of world policy I would dedicate this Nation to the policy of the good neighbor—the neighbor who resolutely respects himself and, because he does so, respects the rights of others—the neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors.

If I read the temper of our people correctly, we now realize as we have never realized before our interdependence on each other; that we cannot merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is

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made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.

With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems.

Action in this image and to this end is feasible under the form of government which we have inherited from our ancestors. Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.

It is to be hoped that the normal balance of Executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need

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for undelayed action may call for temporary departure from that normal balance of public procedure.

I am prepared under my constitutional duty to recommend the measures that a stricken Nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.

But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.

For the trust reposed in me I will return the courage and the devotion that befit the time. I can do no less.

We face the arduous days that lie before us in the warm courage of national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the stern

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performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life.

We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.

In this dedication of a Nation we humbly ask the blessing of God. May He protect each and every one of us. May He guide me in the days to come.

Franklin D. Roosevelt

This is the original reading copy I used March 4th.

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Immediately after the inaugural ceremonies, FDR confronted the
banking crisis that threatened to destroy the nation’s economy.
On his first day in office he called Congress into special session
to pass emergency banking legislation. The next day FDR issued a
proclamation temporarily closing every bank in the nation. Treasury
officials, assisted by holdover members of Hoover Administration,
feverishly began work on a bank bill. Rushed to Congress on March 9,
the Emergency Banking Act was approved within hours. The bill gave
the government authority to examine bank finances and
determine which banks were stable enough to reopen.

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All of the healthy banks would reopen on March 13, but would people trust them? FDR decided to go on nationwide radio on March 12 to convince Americans to return their money to the banks. America’s economic recovery depended upon their response.

FDR broadcasting his first fireside chat on the banking crisis from the White House, Washington, D.C. March 12, 1933.

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Roosevelt’s radio address made a powerful impression. Instead of an oration, he used a relaxed speaking style that made people feel as if he were sitting in their homes speaking directly to them. “I can assure you,” he said, “that it is safer to keep your money in a reopened bank than it is to keep it under the mattress.”

Franklin D. Roosevelt used this RCA carbon condenser microphone to deliver some of his Fireside Chats.

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Sixty million Americans listened to FDR’s speech, and the reaction was overwhelming. The next day, newspapers around the country reported long lines of people waiting to put their money back into the banks. The immediate crisis had passed.

Couple getting ready to listen to broadcast, man turning the radio.

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Three elderly people prepare to listen to radio broadcast.

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Couple seated next to radio, man turning to broadcast.

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1933 - Elderly lady tuning radio to listen to broadcast.

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1933 - Gentleman sitting in rocking chair listening to radio.

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Roosevelt had quickly forged a bond with the public. The press labeled his speech a “Fireside Chat.” It became the first of many informal radio addresses FDR made during his presidency.

Mail flooded the White House. Before 1933, relatively few people wrote to the president. Herbert Hoover’s mail averaged 5,000 letters a week. Under FDR that number exploded to 50,000. Roosevelt had begun to revolutionize the public’s relationship with the presidency, and Americans now felt comfortable communicating directly with their president.

Here is the transcript of one letter to FDR, written by G.T. Channing of Mercer Island, Washington. Channing wrote on March 12, 1933, right after hearing the President’s first Fireside Chat.

Dear Mr. President: My wife + I want to thank you for your radio talk this evening. While we don't know much about banking your talk made us feel we have a Big Brother in the White House that going to do real things for all of us. It made us feel at last our President + us common people are able to get together directly. Wish you'd do it right along. By the way, we have put your picture up in the kitchen where we can look at it, hopefully, when those darn interest payments, we can't pay now, worry us too much. We feel sure Big Pal (I'll be calling you 'Del' next) that you are going to do something to protect we small home owners. After all it is from our home life that the progress is generated that we need. We feel as we can bring God into our homes, in that proportion is created the spirit of real love + of real brotherhood. I say this because we feel sure from your radio talk of March 4th that you are not only a student of the bible, but one who puts the spiritual power into practice. What you said about the 'plague of locusts' we felt sure referred to the Pharaoh's of our financial system. And it's certainly time, too the money changers are driven out of the temple, especially the temple of the home owner. We feel that you are going to do this--+ make the spiritual 'word' a living force in our national life. That is the Real Remedy after all! Plus America's goal!

We feel that you are going to help to give us a better ideal than that of accumulating (+ hoarding) gold, to work for. We've needed a big brother like yourself to wake us up because it's our own fault. We have glorified the 'Big Hoarder' + exploiter until they have squeezed us dry of money + confidence. We feel now they have too, an organization of 'Big Brains' that can by subtle means (even apparent friendship) direct legislation + even our President--unless he co-operates with God + helps us also to be on His side. We need each other. Can't you talk to us every Sunday eve for a few minutes? (I almost said 'Del'). It would be something to look forward to. Something that would help us to start the new week right--and you could tell us how to help in the work. We want to back you up. We want to make this America something God can be proud of - now.

Yours, sincerely,
GT Channing.

Letter from G.T. Channing of Mercer Island, WA to FDR.

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FDR’s quick action to save the nation’s banks was the crucial first step in meeting the crisis of the Great Depression, but it was only the opening act to the busiest period of presidential activity in American history.

During the next one hundred days, Roosevelt issued proclamations and executive orders and pushed a steady stream of legislation through Congress to relieve economic hardship, stimulate recovery, and forge lasting reforms. In one hundred days, he built the foundation for the New Deal and fundamentally changed the role of the federal government in the lives of the American people.

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Voices for Change

“It is probably our only chance in
twenty-five years to get a bill like this.”
Secretary of Labor Frances Perkins to
Franklin D. Roosevelt on April 17, 1934

The Great Depression provided reformers with an unprecedented opportunity for national action.

The administration was spurred on by pressure from powerful grassroots movements that emerged during the 1930s. However the cause for old age pensions is as old as the American republic.

Among its earliest advocates was Thomas Paine. In a 1795 pamphlet titled "Agrarian Justice," Paine proposed pensions for everyone age 50 or older (funded by an inheritance tax). The program included old age, disability, and survivors benefits.

The Civil War Pension System

An important precursor to Social Security was the extensive pension system Congress created for Civil War veterans and their widows and orphans. It included old age, disability, and survivors’ benefits.

In Europe, German Chancellor Otto van Bismarck pioneered government-sponsored old-age, unemployment, and health insurance in the 1880s. By the mid-1930s, nearly 30 nations around the world had enacted similar legislation.

But in America, despite calls for action by progressive era figures like Theodore Roosevelt, only workers compensation laws and very limited state-level pension and unemployment reforms were enacted.

By the 1930s, powerful grassroots movements gained popularity as they called for national action. In California, an unemployed 66-year-old doctor named Francis Townsend devised the Townsend Old Age Revolving Pension Plan.

He proposed that the federal government provide a $200 per month pension (around $3,300 in 2010) to every person age 60 or older. The pension would be funded by a national sales tax. Pensioners had to spend their monthly checks within 30 days. Townsend argued his program would revive the economy by stimulating consumer spending.

Critics of the Townsend Plan claimed it would simply transfer purchasing power from the young to the old, while doubling the national tax burden.

By 1935, thousands of Townsend Clubs boasted over two million members. The Townsend movement drew wide media attention. Time magazine reported on its first national convention in 1935. Millions of Americans signed petitions supporting Townsend’s pension plans.

Louisiana Senator Huey Long championed his “Share our Wealth” program which promised steep taxes on the rich to fund pensions and guarantee a minimum income of $2,500 ($40,000 in 2010 dollars) for everyone.

While reformers pushed for change by creating legislation and grassroots movements, many Americans directly wrote to FDR to plea for assistance and change. With FDR’S Fireside Chats, people viewed Roosevelt as someone they could talk to. Below are some of the messages Roosevelt received.

“It is hard to be old and not have anything. I do not own as much as one cent to my name, so I know God would bless you, if you could help us to get more money for pensions, so we would have enough to eat.”

“I am an old citizen of West Point and I am about 75 or 6 years old and Have Labored Hard all My days until depression Came on.and I Had No Job in three years... Please Sir do what you Can for me. I am to old to be turned out of doors... I aint got Nothing and Cant get Nothing.”

“We are Old and down and out of no reason of our own, would it be asking to much of our Government and the young generation to do by us as we have tried our best to do by them... We have been honorable citizens all along our journey, calamity and old age has forced its self upon us. Please do not send us to the Poor Farm.”

“Kindly allow me to write you this letter to let you know how hard it is for my husband and I to get along. We are both aged now and feeble. My husband is 67 years old and I am 71 years old. My husband is blind in one eye and has been ruptured for the last 10 years and is unable to work. Myself I am crippled up with rheumatism and I can hardly walk. I try hard to make an honest living selling fruit and vegetables in a little baby carriage around the streets in New Orleans. But it is now getting dangerous for me to go in the streets because I walk so slow on account of the pains of my rheumatism.”

“I haven’t had paying work in 6 months. My money is all gone. I am 70 years old. I was born in the year of 1862. Will you pleas grant me a old age pinchen... I am deaf and all alone in the world. I wouldn’t ask for pinchen if I could get work. I am well and able to work.”

“I am a Widow Lady no one to depend on I am loosing my home I will have no Where to stay and not able at the Present time to do any Work on account of my health... I have worked hard all my life put all my earnings in a home and now having to give it up and no Where to stay it almost break my heart.”

“Just imagine an old couple poverty striken thru no fault of their own, the man told that he had only four months to live, suffering all that time, no money to go to a hospital, cared for day and night by his old wife, knowing that their last cent must go to pay the doctors and funeral expenses, worrying, saying over and over to her, ‘Oh, my dear, what will become of you?’ Not being able to die in peace, knowing she would be penniless and alone. Now, my dear friend, that is my own experience.”

“I write to ask your assistance in securing an old age pension for my mother. She is helpless, suffering from Sugar Diabetes, which has affected her mind... She is out of funds completely. Her son whom she used to keep house for is in a hospital in Waco, Texas—no compensation for either himself or her. I am a widow: have spent all my savings in caring for her... I appeal to you to place your dear mother in my dear mother’s place—with no money and no place to go unless to the poor house.”

“Mr. Presitdent in Regard to the old [age] pension. I am 68 years old an not able to Work. So 3 doctors said... I appeal to you for a pension of $1.00 per day. I have not got any thing an to old to get a job on Roads or any wheres else an so I ask for a Pension... Mr. Franklin D. Roosevelt Please don’t forget me.”

“Mr. President my father and mother’s home will be taken away from them the first of January if I can’t get up $50.00. My father is 83 years of age and my mother is 64 years of age, and I am all the dependents they have. I am a poor girl my salary is $3.00 per week and I have to feed myself out of that. I just can’t raise it, for my wages is so small - can you help me some — please oh please Mr. President don’t say no.”

“There are thousands of aged women in this great and rich country who are facing poor house or suicide, it is not their fault that they are poor nor that they are too old to work... Now there are a lot of us will choose suicide in preference to being herded into the poorhouse.”

“We are an old couple. My husband 79—I 75... Please help us. We do not have the food that we should not one cent to our name. No income and oh how an aged couple feels, when in former years have had plenty, and to help others... My husband works in his garden far to hard and that is all we have. I say some times, Oh can it be possible.”

FDR ACTS: The Bill Goes To Congress

“Today a hope of many years standing is in large part fulfilled... If the Senate and the House of Representatives in this long and arduous session had done nothing more than pass this Bill, the session would be regarded as historic for all time.”
Franklin D. Roosevelt, statement on
signing the Social Security Act, August 14, 1935

Franklin D. Roosevelt was the first sitting president to support government-sponsored old-age, unemployment, and health insurance. FDR wanted to enact a national program to address the broad problems of economic insecurity, but he recognized he would face political, economic, and constitutional challenges. The new President chose to delay tackling long-term economic security as he focused on battling the immediate crises of hunger and joblessness.

While Roosevelt delayed, he was pushed to act by his Secretary of Labor, Frances Perkins. The first woman to serve in a presidential cabinet, Perkins was deeply committed to creating a permanent social safety net for Americans.

Perkins, Frances (1880-1965)

When FDR selected Frances Perkins as Secretary of Labor in 1933 he set an important precedent— she was the first woman to serve in a presidential cabinet. Perkins remained in FDR’s cabinet throughout his entire administration and played a pivotal role in framing some of the most enduring social and labor legislation of the New Deal, especially the Social Security Act and the Fair Labor Standards Act.

A graduate of Mount Holyoke College and Columbia University, where she earned a master’s degree in sociology, Perkins worked extensively in settlement house and other social reform work during the Progressive Era. She got her start in government serving on the committee that investigated the infamous Triangle Shirtwaist Factory fire in 1911 and later worked for New York Governor Al Smith. Roosevelt and Perkins enjoyed a close working relationship that dated to FDR’s Governorship years, when she served as New York State’s Industrial Commissioner. Her effectiveness in Washington came, in part, from the strong support she received from the President.

After it was sent to Congress, Secretary of Labor Frances Perkins worked to build public support for the Social Security bill. This flyer promoted her February 25, 1935 appearance on a nationwide radio broadcast to discover “Social Insurance for U.S.”

On June 29, 1934, FDR issued an executive order creating
a cabinet level Committee on Economic Security
to prepare legislation for Congress.

FDR selected Secretary of Labor Frances Perkins to lead the Committee on Economic Security. The other members of the committee included Secretary of Treasury Henry Morgenthau, Attorney General Homer Cummings, FERA director Harry Hopkins, and Secretary of Agriculture Henry Wallace.

Cummings, Homer S. (1870-1956)

Homer S. Cummings was the attorney general during the first half of Franklin D. Roosevelt’s administration. A lawyer who began practicing in Stamford, Connecticut, Cummings first entered national politics as a Democratic committeeman from Connecticut from 1900 to 1924. In 1932, he rallied support behind FDR for his nomination for the presidency. Cummings was originally chosen to be the governor-general of the Philippines, but after the sudden death of FDR’s first choice for attorney general in March 1933, Cummings was named to the post.

During his tenure as attorney general, Cummings improved the practices and procedures of the federal courts, expanded federal criminal jurisdiction and strengthened the Federal Bureau of Investigation. An advocate for FDR’s New Deal programs, Cummings’s time as attorney general was dominated by the Supreme Court overturning much of that legislation. After the 1936 presidential election, FDR instructed Cummings to draft a proposal which became known as the Court-Packing Plan. He retired in 1939 and entered private practice.

Hopkins, Harry L. (1890-1946)

New Deal administrator, friend and wartime advisor to Franklin D. Roosevelt, Harry L. Hopkins was a key player in FDR’s inner circle. Throughout the 1930s, Hopkins headed the key New Deal work relief programs, including the Federal Emergency Relief Administration (FERA), the Civil Works Administration (CWA), and the Works Progress Administration (WPA). These positions led him to employ millions of workers, spending billions of dollars at a scale greater than any previous individual in history.

As the Roosevelt administration turned its eyes to war, Hopkins became special assistant to FDR, his closest diplomatic advisor responsible for executing Lend-Lease operations and acting as unofficial emissary to Winston Churchill and Joseph Stalin. In declining heath, Hopkins and his young daughter lived at the White House, spending ample time with the President and Mrs. Roosevelt. He died in 1946 following his long battle with stomach cancer.

Morgenthau, Henry, Jr. (1891 – 1967)

Henry Morgenthau, Jr., was a Dutchess County neighbor and close friend to FDR. Morgenthau, only son of New York City real estate mogul and diplomat, Henry Morgenthau, Sr., attended Cornell University, studying agriculture. In 1915, he began his enduring friendship with Roosevelt through their common interests in increasing rural representation in the Democratic Party in opposition to New York City dominance.

In 1928, this relationship led to Morgenthau’s appointments as chairman of the New York State Agricultural Advisory Commission and state Conservation Commissioner in Roosevelt’s administration as governor. Then, as president, FDR first appointed Morgenthau chairman of the Federal Farm Bureau, later the Farm Credit Administrator, and finally, as Secretary of the Treasury, from January 1934 through July 1945. During this tenure Morgenthau played a key role in the design and financing the New Deal program. In the wake of revelations about Hitler’s extermination of European Jews, Morgenthau convinced FDR to create the War Refugee Board in 1944 and proposed the controversial “Morgenthau Plan” to turn postwar Germany into an agrarian state.

Wallace, Henry A. (1888-1965)

As editor of Wallaces’ Farmer, a leading farm journal of the time, Henry A. Wallace was an influential voice for farm relief and tariff reform. In 1933, FDR chose Wallace as his Secretary of Agriculture. Possessing strong administrative and scientific skills, Wallace implemented a host of revolutionary farm programs, including the Agricultural Adjustment Administration, the Soil Conservation Service, the Farm Credit Administration, federal crop insurance, and food stamp and school lunch programs.

In 1940, Roosevelt selected Wallace to be his running mate. One of America’s most effective Vice Presidents, Wallace helped lead the nation’s war mobilization effort and played a key role in planning for the post-war peace. But he was unpopular with many Democratic leaders, who argued he was too idealistic. The 1944 vice presidential nomination went to Harry S Truman. After FDR’s death, Wallace became a leading advocate for post-war cooperation with the Soviet Union and a prominent critic of the Cold War. He ran an unsuccessful third-party campaign for the presidency in 1948. Wallace retired to his beloved farm in upstate New York, where he devoted himself to his first love - scientific farming. He died on November 18, 1965

Aided by teams of experts, the President’s Committee on Economic Security designed a program of old-age pensions funded by payroll taxes on workers and employers. They grappled with thorny problems, including how to provide for Americans who were already old. The Committee recommended a state old age assistance program for them, funded, in part, with federal grants.

Executive Order

Establishing the Committee on Economic Security and the Advisory Council on Economic Security

By virtue of and pursuant to the authority vested in me by the National Industrial Recovery Act (ch. 90, 48 Stat. 195), I hereby establish (1) the Committee on Economic Security (hereinafter referred to as the Committee) consisting of the Secretary of Labor, chairman, the Secretary of the Treasury, the Attorney General, the Secretary of Agriculture, and the Federal Emergency Relief Administrator, and (2) the Advisory Council on Economic Security (hereinafter referred to as the Advisory Council), the original members of which shall be appointed by the President and additional members of which may be appointed from time to time by the Committee.

The Committee shall study problems relating to the economic security of individuals and shall report to the President not later than Decemeber 1, 1934, its recommendations concerning proposals which in its judgment will promote greater economic security

The Advisory Council shall assist the Committee in the consideration of all matters coming within the scope of its investigations.

The Committee shall appoint (1) a Techincal Board on Economic Security consisting of qualified representatives selected from various departments and agencies of the Federal Government, and (2) an executive director who shall have immediate charge of studies and investigations to be carried out under the general direction of the Technical Board, and who shall, with the approval of the Technical Board, appoint such additional staff as may be necessary to carry out the provisions of this order.

Franklin D. Roosevelt

The White House

June 23,1934

On January 15, 1935 the Committee
on Economic Security presented its
final report to President Roosevelt.

Two days later FDR unveiled the Social
Security program and sent it to Congress.

A Letter from the President's Committee on Economic Security

January 17, 1935

Dear Mr. President:

In your message of June 8, 1934, to the Congress you directed attention to certain fundamental objectives in the great task of reconstruction, an indistinguishable and essential aspect of the immediate task of recovery. You stated, in language that we cannot improve upon:

"Our task of reconstruction does not require the creation of new and strange values. It is rather the finding of the way once more to known, but to some degree forgotten, ideals and values. If the means and details are in some instances new, the objectives are as permanent as human nature.

"Among our objectives I place the security of the men, women, and children of the Nation first.

"This security for the individual and for the family concerns itself primarily with three factors. People want decent homes to live in; they want to locate them where they can engage in productive work; and they want some safeguard against misfortunes which cannot be wholly eliminated in this man-made world of ours.

Subsequent to this message, you created, by Executive Order, this Committee on Economic Security to make recommendations to you on the third of the aspects of security which you outlined-that of safeguards "against misfortunes which cannot be wholly eliminated in this man-made world of ours."

In the brief time that has intervened, we have sought to analyze the hazards against which special measures of security are necessary, and have tried to bring to bear upon them the world experience with measures designed as safeguards against these hazards. We have analyzed all proposed safeguards of this kind which have received serious consideration in this country. On the basis of all these considerations, we have tried to formulate a program which will represent at least a substantial beginning toward the realization of the objective you presented.

We have had in our employ a small staff which included some of the outstanding experts in this field. This staff has prepared many valuable studies giving the factual background, summarizing American and foreign experience, presenting actuarial calculations, and making detailed suggestions for legislation and administration.

We have also had the assistance of the Technical Board on Economic Security, provided for in your Executive Order, and composed Of 20 people in the Government service, who have special interest and knowledge in some or all aspects of the problem you directed us to study. The Technical Board, functioning as a group, through subcommittees, and as individuals, has aided the staff and the Committee during the entire investigation. Many of the members have devoted much time to this work and have made very important contributions. Plus these, many other people in the Government service have unstintingly aided the Committee in special problems on which their advice and assistance have been sought.

The Advisory Council on Economic Security, appointed by you and constituted of citizens outside of the Government service, chosen from employers, employees, and the general public, has assisted the Committee in weighing the proposals developed by the staff and the Technical Board, and in arriving at a judgment as to their practicability. All members of the Council were people who have important private responsibilities, and many of them also other public duties, but they took time to come to Washington on four separate occasions for meetings extending over several days.

In addition to the Council, this Committee found it advisable to create seven other advisory groups: A committee of actuarial consultants, a medical advisory board, a dental advisory committee., a hospital advisory committee, a public health advisory committee., a child welfare committee., and an advisory committee on employment and relief. All of these committees have contributed suggestions which have been incorporated in this report. The medical advisory board., the dental advisory committee, and the hospital advisory committee are still continuing their consideration of health insurance, but have joined with the public health advisory committee in endorsement of the program for extended public health services which we recommend.

Finally, many hundreds of citizens and organizations in all parts of the country have contributed ideas and suggestions. Three hundred interested citizens, representing practically every State, at their own expense, attended the National Conference on Economic Security, held in Washington on November 14, which was productive of many very good suggestions.

The responsibility for the recommendations we offer is our own. As was inevitable in view of the wide differences of opinion which prevail regarding the best methods of providing protection against the hazards leading to destitution and dependency, we could not accept all of the advice and suggestions offered, but it was distinctly helpful to have all points of view presented and considered.

To all who assisted us or offered suggestions, we are deeply grateful.

In this report we briefly sketch the need for additional safeguards against "the major hazards and vicissitudes of life." We also present recommendations for making a beginning in the development of safeguards against these hazards, and with this report submit drafts of bills to give effect to these recommendations. We realize that some of the measures we recommend are experimental and, like nearly all pioneering legislation, will, in course of time, have to be extended and modified. They represent, however, our best judgment as to the steps which ought to be taken immediately toward the realization of what you termed in

your recent message to the Congress "the ambition of the individual to obtain for him and his a proper security, a reasonable leisure, and a decent living throughout life."

Respectfully submitted,

Frances E. Perkins
Secretary of Labor (Chairman)

H. Morgenthau, Jr.
Secretary of the Treasury

Homer Cummings
Attorney General

H. A. Wallace
Secretary of Agriculture

Harry Hopkins
Federal Emergency Relief Administrator

FDR devoted part of his April 28, 1935 Fireside Chat to the importance of passing social security. Roosevelt reserved his fireside chats for key messages he wanted to deliver directly to the public.

Fireside Chat 7: On the Works Relief Program and Social Security Act (April 28, 1935)

Franklin D. Roosevelt

Transcript

Since my annual message to the Congress on January fourth, last, I have not addressed the general public over the air. In the many weeks since that time the Congress has devoted itself to the arduous task of formulating legislation necessary to the country's welfare. It has made and is making distinct progress.

Before I come to any of the specific measures, however, I want to leave in your minds one clear fact. The Administration and the Congress are not proceeding in any haphazard fashion in this task of government. Each of our steps has a definite relationship to every other step. The job of creating a program for the Nation's welfare is, in some respects, like the building of a ship. At different points on the coast where I often visit they build great seagoing ships. When one of these ships is under construction and the steel frames have been set in the keel, it is difficult for a person who does not know ships to tell how it will finally look when it is sailing the high seas.

It may seem confused to some, but out of the multitude of detailed parts that go into the making of the structure the creation of a useful instrument for man ultimately comes. It is that way with the making of a national policy. The objective of the Nation has greatly changed in three years. Before that time individual self-interest and group selfishness were paramount in public thinking. The general good was at a discount. Three years of hard thinking have changed the picture. More and more people, because of clearer thinking and a better understanding, are considering the whole rather than a mere part relating to one section or to one crop, or to one industry, or to an individual private occupation. That is a tremendous gain for the principles of democracy. The overwhelming majority of people in this country know how to sift the wheat from the chaff in what they hear and what they read. They know that the process of the constructive rebuilding of America cannot be done in a day or a year, but that it is being done in spite of the few who seek to confuse them and to profit by their confusion. Americans as a whole are feeling a lot better -- a lot more cheerful than for many, many years.

The most difficult place in the world to get a clear open perspective of the country as a whole is Washington. I am reminded sometimes of what President Wilson once said: " So many people come to Washington who know things that are not so, and so few people who know anything about what the people of the United States are thinking about." That is why I occasionally leave this scene of action for a few days to go fishing or back home to Hyde Park, so that I can have a chance to think quietly about the country as a whole. "To get away from the trees", as they say, "and to look at the whole forest. " This duty of seeing the country in a long-range perspective is one which, in a very special manner, attaches to this office to which you have chosen me. Did you ever stop to think that there are, after all, only two positions in the Nation that are filled by the vote of all of the voters -- the President and the Vice-President? That makes it particularly necessary for the Vice-President and for me to conceive of our duty toward the entire country. I speak, therefore, tonight, to and of the American people as a whole.

My most immediate concern is in carrying out the purposes of the great work program just enacted by the Congress. Its first objective is to put men and women now on the relief rolls to work and, incidentally, to assist materially in our already unmistakable march toward recovery. I shall not confuse my discussion by a multitude of figures. So many figures are quoted to prove so many things. Sometimes it depends upon what paper you read and what broadcast you hear. Therefore, let us keep our minds on two or three simple, essential facts in connection with this problem of unemployment. It is true that while business and industry are definitely better our relief rolls are still too large. However, for the first time in five years the relief rolls have declined instead of increased during the winter months. They are still declining. The simple fact is that many million more people have private work today than two years ago today or one year ago today, and every day that passes offers more chances to work for those who want to work. In spite of the fact that unemployment remains a serious problem here as in every other nation, we have come to recognize the possibility and the necessity of certain helpful remedial measures. These measures are of two kinds. The first is to make provisions intended to relieve, to minimize, and to prevent future unemployment; the second is to establish the practical means to help those who are unemployed in this present emergency. Our social security legislation is an attempt to answer the first of these questions. Our work relief program the second.

The program for social security now pending before the Congress is a necessary part of the future unemployment policy of the government. While our present and projected expenditures for work relief are wholly within the reasonable limits of our national credit resources, it is obvious that we cannot continue to create governmental deficits for that purpose year after year. We must begin now to make provision for the future. That is why our social security program is an important part of the complete picture. It proposes, by means of old age pensions, to help those who have reached the age of retirement to give up their jobs and thus give to the younger generation greater opportunities for work and to give to all a feeling of security as they look toward old age.

The unemployment insurance part of the legislation will not only help to guard the individual in future periods of lay-off against dependence upon relief, but it will, by sustaining purchasing power, cushion the shock of economic distress. Another helpful feature of unemployment insurance is the incentive it will give to employers to plan more carefully in order that unemployment may be prevented by the stabilizing of employment itself.

Provisions for social security, however, are protections for the future. Our responsibility for the immediate necessities of the unemployed has been met by the Congress through the most comprehensive work plan in the history of the Nation. Our problem is to put to work three and one-half million employable persons now on the relief rolls. It is a problem quite as much for private industry as for the government.

We are losing no time getting the government's vast work relief program underway, and we have every reason to believe that it should be in full swing by autumn. In directing it, I shall recognize six fundamental principles:

(1) The projects should be useful.

(2) Projects shall be of a nature that a considerable proportion of the money spent will go into wages for labor.

(3) Projects which promise ultimate return to the Federal Treasury of a considerable proportion of the costs will be sought.

(4) Funds allotted for each project should be actually and promptly spent and not held over until later years.

(5) In all cases projects must be of a character to give employment to those on the relief rolls.

(6) Projects will be allocated to localities or relief areas in relation to the number of workers on relief rolls in those areas.

I next want to make it clear exactly how we shall direct the work.

(1) I have set up a Division of Applications and Information to which all proposals for the expenditure of money must go for preliminary study and consideration.

(2) After the Division of Applications and Information has sifted those projects, they will be sent to an Allotment Division composed of representatives of the more important governmental agencies charged with carrying on work relief projects. The group will also include representatives of cities, and of labor, farming, banking and industry. This Allotment Division will consider all of the recommendations submitted to it and such projects as they approve will be next submitted to the President who under the Act is required to make final allocations.

(3) The next step will be to notify the proper government agency in whose field the project falls, and also to notify another agency which I am creating -- a Progress Division. This Division will have the duty of coordinating the purchases of materials and supplies and of making certain that people who are employed will be taken from the relief rolls. It will also have the responsibility of determining work payments in various localities, of making full use of existing employment services and to assist people engaged in relief work to move as rapidly as possible back into private employment when such employment is available. Moreover, this Division will be charged with keeping projects moving on schedule.

(4) I have felt it to be essentially wise and prudent to avoid, so far as possible, the creation of new governmental machinery for supervising this work. The National Government now has at least sixty different agencies with the staff and the experience and the competence necessary to carry on the two hundred and fifty or three hundred kinds of work that will be undertaken. These agencies, therefore, will simply be doing on a somewhat enlarged scale the same sort of things that they have been doing. This will make certain that the largest possible portion of the funds allotted will be spent for actually creating new work and not for building up expensive overhead organizations here in Washington.

For many months preparations have been under way. The allotment of funds for desirable projects has already begun. The key men for the major responsibilities of this great task already have been selected. I well realize that the country is expecting before this year is out to see the "dirt fly", as they say, in carrying on the work, and I assure my fellow citizens that no energy will be spared in using these funds effectively to make a major attack upon the problem of unemployment.

Our responsibility is to all of the people in this country. This is a great national crusade to destroy enforced idleness which is an enemy of the human spirit generated by this depression. Our attack upon these enemies must be without stint and without discrimination. No sectional, no political distinctions can be permitted. It must, however, be recognized that when an enterprise of this character is extended over more than three thousand counties throughout the Nation, there may be occasional instances of inefficiency, bad management, or misuse of funds. When cases of this kind occur, there will be those, of course, who will try to tell you that the exceptional failure is characteristic of the entire endeavor. It should be remembered that in every big job there are some imperfections. There are chiselers in every walk of life; there are those in every industry who are guilty of unfair practices, every profession has its black sheep, but long experience in government has taught me that the exceptional instances of wrong-doing in government are probably less numerous than in almost every other line of endeavor. The most effective means of preventing such evils in this work relief program will be the eternal vigilance of the American people themselves. I call upon my fellow citizens everywhere to cooperate with me in making this the most efficient and the cleanest example of public enterprise the world has ever seen. It is time to provide a smashing answer for those cynical men who say that a democracy cannot be honest and efficient. If you will help, this can be done. I, therefore, hope you will watch the work in every corner of this Nation. Feel free to criticize. Tell me of instances where work can be done better, or where improper practices prevail. Neither you nor I want criticism conceived in a purely fault-finding or partisan spirit, but I am jealous of the right of every citizen to call to the attention of his or her government examples of how the public money can be more effectively spent for the benefit of the American people. I now come, my friends, to a part of the remaining business before the Congress. It has under consideration many measures which provide for the rounding out of the program of economic and social reconstruction with which we have been concerned for two years. I can mention only a few of them tonight, but I do not want my mention of specific measures to be interpreted as lack of interest in or disapproval of many other important proposals that are pending.

The National Industrial Recovery Act expires on the sixteenth of June. After careful consideration, I have asked the Congress to extend the life of this useful agency of government. As we have proceeded with the administration of this Act, we have found from time to time more and more useful ways of promoting its purposes. No reasonable person wants to abandon our present gains -- we must continue to protect children, to enforce minimum wages, to prevent excessive hours, to safeguard, define and enforce collective bargaining, and, while retaining fair competition, to eliminate so far as humanly possible, the kinds of unfair practices by selfish minorities which unfortunately did more than anything else to bring about the recent collapse of industries. There is likewise pending before the Congress legislation to provide for the elimination of unnecessary holding companies in the public utility field.

I consider this legislation a positive recovery measure. Power production in this country is virtually back to the 1929 peak. The operating companies in the gas and electric utility field are by and large in good condition. But under holding company domination the utility industry has long been hopelessly at war within itself and with public sentiment. By far the greater part of the general decline in utility securities had occurred before I was inaugurated. The absentee management of unnecessary holding company control has lost touch with and has lost the sympathy of the communities it pretends to serve. Even more significantly, it has given the country as a whole an uneasy apprehension of over concentrated economic power.

A business that loses the confidence of its customers and the good will of the public cannot long continue to be a good risk for the investor. This legislation will serve the investor by ending the conditions which have caused that lack of confidence and good will. It will put the public utility operating industry on a sound basis for the future, both in its public relations and in its internal relations.

This legislation will not only in the long run result in providing lower electric and gas rates to the consumer, but it will protect the actual value and earning power of properties now owned by thousands of investors who have little protection under the old laws against what used to be called frenzied finance. It will not destroy values.

Not only business recovery, but the general economic recovery of the Nation will be greatly stimulated by the enactment of legislation designed to improve the status of our transportation agencies. There is need for legislation providing for the regulation of interstate transportation by buses and trucks, to regulate transportation by water, new provisions for strengthening our Merchant Marine and air transport, measures for the strengthening of the Interstate Commerce Commission to enable it to carry out a rounded conception of the national transportation system in which the benefits of private ownership are retained, while the public stake in these important services is protected by the public's government.

Finally, the reestablishment of public confidence in the banks of the Nation is one of the most hopeful results of our efforts as a Nation to reestablish public confidence in private banking. We all know that private banking actually exists by virtue of the permission of and regulation by the people as a whole, speaking through their government. Wise public policy, however, requires not only that banking be safe but that its resources be most fully utilized, in the economic life of the country. To this end it was decided more than twenty years ago that the government should assume the responsibility of providing a means by which the credit of the Nation might be controlled, not by a few private banking institutions, but by a body with public prestige and authority. The answer to this demand was the Federal Reserve System. Twenty years of experience with this system have justified the efforts made to create it, but these twenty years have shown by experience definite possibilities for improvement. Certain proposals made to amend the Federal Reserve Act deserve prompt and favorable action by the Congress. They are a minimum of wise readjustment of our Federal Reserve system in the light of past experience and present needs.

These measures I have mentioned are, in large part, the program which under my constitutional duty I have recommended to the Congress. They are essential factors in a rounded program for national recovery. They contemplate the enrichment of our national life by a sound and rational ordering of its various elements and wise provisions for the protection of the weak against the strong. Never since my inauguration in March, 1933, have I felt so unmistakably the atmosphere of recovery. But it is more than the recovery of the material basis of our individual lives. It is the recovery of confidence in our democratic processes and institutions. We have survived all of the arduous burdens and the threatening dangers of a great economic calamity. We have in the darkest moments of our national trials retained our faith in our own ability to master our destiny. Fear is vanishing and confidence is growing on every side, renewed faith in the vast possibilities of human beings to improve their material and spiritual status through the instrumentality of the democratic form of government. That faith is receiving its just reward. For that we can be thankful to the God who watches over America.

The Act contained a program of
national unemployment insurance.

Facing concerns about state’s rights and potential constitutional challenges, the Committee made unemployment insurance a joint federal-state responsibility, despite objections that this would lead to widely varying benefits in different states. The insurance benefits would be funded by a payroll tax on employers.

Though Democrats had a nearly 3 to 1 majority in the House and Senate, Congressional passage was not swift or easy. Congress made significant changes. Most importantly, it dropped many large labor categories, including farm and domestic workers. In the House some favored more radical proposals like the Townsend Plan. In the Senate, the bill’s supporters fought an effort to let businesses with pension plans opt out of Social Security. A Senate-House committee worked out differences between the two versions of the bill and, in early August, Congress sent the Social Security Act to the President.

“We can never insure one hundred percent
of the population against one hundred percent
of the hazards and vicissitudes of life, but we have
tried to frame a law which will give some
measure of protection to the average citizen and
to his family against the loss of a job and
against poverty-ridden old age.”
Franklin Roosevelt's Statement on Signing
the Social Security Act August 14, 1935

On August 14, 1935 legislators and advisors crowded into the White House Cabinet Room to witness the signing of the Social Security Act. News photographers and film crews recorded the moment for history as FDR put his signature on the bill. Standing directly behind the President was the person most responsible for it—Secretary of Labor Frances Perkins.

Baltimore Sun article. August 15, 1935.

Click to view a clip of FDR's remarks upon signing the Social Security Act.

Preamble
Grants to States for Old-Age Assistance
Federal Old-Age Benefits
Grants to States for Unemployment Compensation Administration
Grants to States for Aid to Dependant Children
Grants to States for Maternal and Child Welfare
Public Health Work
Social Security Board
Taxes with Respect to Employment
Tax on Employers of Eight or More
Grants to States for Aid to the Blind
General Provisions

The Social Security Act of 1935

The Social Security Act (Act of August 14, 1935) [H. R. 7260]

An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Grants to States for Old-Age Assistance

Appropriation

For the purpose of enabling each State to furnish financial assistance, as far as practicable under the conditions in such State, to aged needy individuals, there is hereby authorized to be appropriated for the fiscal year ended June 30, 1936, the sum of $49,750,000, and there is hereby authorized to be appropriated for each fiscal year thereafter a sum sufficient to carry out the purposes of this title. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Social Security Board established by Title VII (hereinafter referred to as the Board), State plans for old-age assistance.

State Old-Age Assistance Plans

A State plan for old-age assistance must
1. provide that it shall be in effect in all political subdivisions of the State, and, if administered by them, be mandatory upon them;
2. provide for financial participation by the State;
3. either provide for the establishment or designation of a single State agency to administer the plan, or provide for the establishment or designation of a single State agency to supervise the administration of the plan;
4. provide for granting to any individual, whose claim for old-age assistance is denied, an opportunity for a fair hearing before such State agency;
5. provide such methods of administration (other than those relating to selection, tenure of office, and compensation of personnel) as are found by the Board to be necessary for the efficient operation of the plan;
6. provide that the State agency will make such reports, in such form and containing such information, as the Board may from time to time require, and comply with such provisions as the Board may from time to time find necessary to assure the correctness and verification of such reports; and
7. provide that, if the State or any of its political subdivisions collects from the estate of any recipient of old-age assistance any amount with respect to old-age assistance furnished him under the plan, one-half of the net amount so collected shall be promptly paid to the United States. Any payment so made shall be deposited in the Treasury to the credit of the appropriation for the purposes of this title.
The Board shall approve any plan which fulfills the conditions specified in subsection (a), except that it shall not approve any plan which imposes, as a condition of eligibility for old-age assistance under the plan
1. An age requirement of more than sixty-five years, except that the plan may impose, effective until January 1, 1940, an age requirement of as much as seventy years; or
2. Any residence requirement which excludes any resident of the State who has resided therein five years during the nine years immediately preceding the application for old-age assistance and has resided therein continuously for one year immediately preceding the application; or
3. Any citizenship requirement which excludes any citizen of the United States.

Payment to States

From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for old-age assistance, for each quarter, beginning with the quarter commencing July 1, 1935,
1. an amount, which shall be used exclusively as old-age assistance, equal to one-half of the total of the sums expended during such quarter as old-age assistance under the State plan with respect to each individual who at the time of such expenditure is sixty-five years of age or older and is not an inmate of a public institution, not counting so much of such expenditure with respect to any individual for any month as exceeds $30, and
2. 5 per centum of such amount, which shall be used for paying the costs of administering the State plan or for old-age assistance, or both, and for no other purpose: Provided, That the State plan, in order to be approved by the Board, need not provide for financial participation before July 1, 1937, by the State, in the case of any State which the Board, upon application by the State and after reasonable notice and opportunity for hearing to the State, finds is prevented by its constitution from providing such financial participation.
The method of computing and paying such amounts shall be as follows:
1. The Board shall, prior to the beginning of each quarter, estimate the amount to be paid to the State for such quarter under the provisions of clause (1) of subsection (a), such estimate to be based on
  1. a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such clause, and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than one-half of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived,
  2. records showing the number of aged individuals in the State, and
  3. such other investigation as the Board may find necessary.
2. The Board shall then certify to the Secretary of the Treasury the amount so estimated by the Board, reduced or increased, as the case may be, by any sum by which it finds that its estimate for any prior quarter was greater or less than the amount which should have been paid to the State under clause (1) of subsection (a) for such quarter, except to the extent that such sum has been applied to make the amount certified for any prior quarter greater or less than the amount estimated by the Board for such prior quarter.
3. The Secretary of the Treasury shall thereupon, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Board, the amount so certified, increased by 5 per centum.

Operation of State Plans

In the case of any State plan for old-age assistance which has been approved by the Board, if the Board, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of such plan, finds

that the plan has been so changed as to impose any age, residence, or citizenship requirement prohibited by section 2 (b), or that in the administration of the plan any such prohibited requirement is imposed, with the knowledge of such State agency, in a substantial number of cases; or
that in the administration of the plan there is a failure to comply substantially with any provision required by section 2 (a) to be included in the plan;

the Board shall notify such State agency that further payments will not be made to the State until the Board is satisfied that such prohibited requirement is no longer so imposed, and that there is no longer any such failure to comply. Until it is so satisfied it shall make no further certification to the Secretary of the Treasury with respect to such State.

Administration

There is hereby authorized to be appropriated for the fiscal year ending June 30, 1936, the sum of $250,000, for all necessary expenses of the Board in administering the provisions of this title.

Definition

When used in this title the term old age assistance means money payments to aged individuals.

Federal Old-Age Benefits Old-Age

Reserve Account

There is hereby created an account in the Treasury of the United States to be known as the Old-Age Reserve Account hereinafter in this title called the Account. There is hereby authorized to be appropriated to the Account for each fiscal year, beginning with the fiscal year ending June 30, 1937, an amount sufficient as an annual premium to provide for the payments required under this title, such amount to be determined on a reserve basis in accordance with accepted actuarial principles, and based upon such tables of mortality as the Secretary of the Treasury shall from time to time adopt, and upon an interest rate of 3 per centum per annum compounded annually. The Secretary of the Treasury shall submit annually to the Bureau of the Budget an estimate of the appropriations to be made to the Account.
It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired
1. on original issue at par, or
2. by purchase of outstanding obligations at the market price.
The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the Account. Such special obligations shall bear interest at the rate of 3 per centum per annum. Obligations other than such special obligations may be acquired for the Account only on such terms as to provide an investment yield of not less than 3 per centum per annum.
Any obligations acquired by the Account (except special obligations issued exclusively to the Account) may be sold at the market price, and such special obligations may be redeemed at par plus accrued interest.
The interest on, and the proceeds from the sale or redemption of, any obligations held in the Account shall be credited to and form a part of the Account.
All amounts credited to the Account shall be available for making payments required under this title.
The Secretary of the Treasury shall include in his annual report the actuarial status of the Account.

Old-Age Benefit Payments

Every qualified individual (as defined in section 210) shall be entitled to receive, with respect to the period beginning on the date he attains the age of sixty-five, or on January 1, 1942, whichever is the later, and ending on the date of his death, an old-age benefit (payable as nearly as practicable in equal monthly installments) as follows:
1. If the total wages (as defined in section 210) determined by the Board to have been paid to him, with respect to employment (as defined in section 210) after December 31, 1936, and before he attained the age of sixty- five, were not more than $3,000, the old-age benefit shall be at a monthly rate of one-half of 1 per centum of such total wages;
2. If such total wages were more than $3,000, the old-age benefit shall be at a monthly rate equal to the sum of the following:
  1. One-half of 1 per centum of $3,000; plus
  2. One-twelfth of 1 per centum of the amount by which such total wages exceeded $3,000 and did not exceed $45,000; plus
  3. One-twenty-fourth of 1 per centum of the amount by which such total wages exceeded $45,000.
In no case shall the monthly rate computed under subsection (a) exceed $85.
If the Board finds at any time that more or less than the correct amount has theretofore been paid to any individual under this section, then, under regulations made by the Board, proper adjustments shall be made in connection with subsequent payments under this section to the same individual.
Whenever the Board finds that any qualified individual has received wages with respect to regular employment after he attained the age of sixty-five, the old-age benefit payable to such individual shall be reduced, for each calendar month in any part of which such regular employment occurred, by an amount equal to one month s benefit. Such reduction shall be made, under regulations prescribed by the Board, by deductions from one or more payments of old-age benefit to such individual.

Payments Upon Death

If any individual dies before attaining the age of sixty-five, there shall be paid to his estate an amount equal to 3 « per centum of the total wages determined by the Board to have been paid to him, with respect to employment after December 31, 1936.
If the Board finds that the correct amount of the old-age benefit payable to a qualified individual during his life under section 202 was less than 3 « per centum of the total wages by which such old-age benefit was measurable, then there shall be paid to his estate a sum equal to the amount, if any, by which such 3 « per centum exceeds the amount (whether more or less than the correct amount) paid to him during his life as old-age benefit.
If the Board finds that the total amount paid to a qualified individual under an old-age benefit during his life was less than the correct amount to which he was entitled under section 202, and that the correct amount of such old-age benefit was 3 « per centum or more of the total wages by which such old-age benefit was measurable, then there shall be paid to his estate a sum equal to the amount, if any, by which the correct amount of the old- age benefit exceeds the amount which was so paid to him during his life.

Payments to Aged Individuals Not Qualified for Benefits

There shall be paid in a lump sum to any individual who, upon attaining the age of sixty-five, is not a qualified individual, an amount equal to 3 « per centum of the total wages determined by the Board to have been paid to him, with respect to employment after December 31, 1936, and before he attained the age of sixty-five.
After any individual becomes entitled to any payment under subsection (a), no other payment shall be made under this title in any manner measured by wages paid to him, except that any part of any payment under subsection (a) which is not paid to him before his death shall be paid to his estate.

Amounts of $500 or Less Payable to Estates

If any amount payable to an estate under section 203 or 204 is $500 or less, such amount may, under regulations prescribed by the Board, be paid to the persons found by the Board to be entitled thereto under the law of the State in which the deceased was domiciled, without the necessity of compliance with the requirements of law with respect to the administration of such estate.

Overpayments During Life

If the Board finds that the total amount paid to a qualified individual under an old-age benefit during his life was more than the correct amount to which he was entitled under section 202, and was 3 « per centum or more of the total wages by which such old-age benefit was measurable, then upon his death there shall be repaid to the United States by his estate the amount, if any, by which such total amount paid to him during his life exceeds whichever of the following is the greater:

Such 3 « per centum, or
the correct amount to which he was entitled under section 202.

Method of Making Payments

The Board shall from time to time certify to the Secretary of the Treasury the name and address of each person entitled to receive a payment under this title, the amount of such payment, and the time at which it should be made, and the Secretary of the Treasury through the Division of Disbursement of the Treasury Department, and prior to audit or settlement by the General Accounting Office, shall make payment in accordance with the certification by the Board.

Assignment

The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

Penalties

Whoever in any application for any payment under this title makes any false statement as to any material fact, knowing such statement to be false, shall be fined not more than $1,000 or imprisoned for not more than one year, or both.

Definitions

When used in this title

The term wages means all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash; except that such term shall not include that part of the remuneration which, after remuneration equal to $3,000 has been paid to an individual by an employer with respect to employment during any calendar year, is paid to such employer with respect to employment during such calendar year.
The term employment means any service, of whatever nature, performed within the United States by an employee for his employer, except
1. Agricultural labor;
2. Domestic service in a private home;
3. Casual labor not in the course of the employer s trade or business;
4. Service performed as an officer or member of the crew of a vessel documented under the laws of the United States or of any foreign country;
5. Service performed in the employ of the United States Government or of an instrumentality of the United States;
6. Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions;
7. Service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual.
The term qualified individual means any individual with respect to whom it appears to the satisfaction of the Board that
1. He is at least sixty-five years of age; and
2. The total amount of wages paid to him, with respect to employment after December 31, 1936, and before he attained the age of sixty-five, was not less than $2,000; and
3. Wages were paid to him, with respect to employment on some five days after December 31, 1936, and before he attained the age of sixty-five, each day being in a different calendar year.

Grants to States for Unemployment Compensation Administration

Appropriation

For the purpose of assisting the States in the administration of their unemployment compensation laws, there is hereby authorized to be appropriated, for the fiscal year ending June 30, 1936, the sum of $4,000,000, and for each fiscal year thereafter the sum of $49,000,000, to be used as hereinafter provided.

Payments to States

The Board shall from time to time certify to the Secretary of the Treasury for payment to each State which has an unemployment compensation law approved by the Board under Title IX, such amounts as the Board determines to be necessary for the proper administration of such law during the fiscal year in which such payment is to be made. The Board's determination shall be based on
1. the population of the State;
2. an estimate of the number of persons covered by the State law and of the cost of proper administration of such law; and
3. such other factors as the Board finds relevant. The Board shall not certify for payment under this section in any fiscal year a total amount in excess of the amount appropriated therefor for such fiscal year.
Out of the sums appropriated therefor, the Secretary of the Treasury shall, upon receiving a certification under subsection (a), pay, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, to the State agency charged with the administration of such law the amount so certified.

Provisions of State Laws

The Board shall make no certification for payment to any State unless it finds that the law of such State, approved by the Board under Title IX, includes provisions for
1. Such methods of administration (other than those relating to selection, tenure of office, and compensation of personnel) as are found by the Board to be reasonably calculated to insure full payment of unemployment compensation when due; and
2. Payment of unemployment compensation solely through public employment offices in the State or such other agencies as the Board may approve; and
3. Opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied; and
4. The payment of all money received in the unemployment fund of such State, immediately upon such receipt, to the Secretary of the Treasury to the credit of the Unemployment Trust Fund established by section 904; and
5. Expenditure of all money requisitioned by the State agency from the Unemployment Trust Fund, in the payment of unemployment compensation, exclusive of expenses of administration; and
6. The making of such reports, in such form and containing such information, as the Board may from time to time require, and compliance with such provisions as the Board may from time to time find necessary to assure the correctness and verification of such reports; and
7. Making available upon request to any agency of the United States charged with the administration of public works or assistance through public employment, the name, address, ordinary occupation, and employment status of each recipient of unemployment compensation, and a statement of such recipient's rights to further compensation under such law.
Whenever the Board, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law finds that in the administration of the law there is
1. a denial, in a substantial number of cases, of unemployment compensation to individuals entitled thereto under such law; or
2. a failure to comply substantially with any provision specified in subsection (a);
the Board shall notify such State agency that further payments will not be made to the State until the Board is satisfied that there is no longer any such denial or failure to comply. Until it is so satisfied it shall make no further certification to the Secretary of the Treasury with respect to such State.

Grants to States for Aid to Dependent Children

Appropriation

For the purpose of enabling each State to furnish financial assistance, as far as practicable under the conditions in such State, to needy dependent children, there is hereby authorized to be appropriated for the fiscal year ending June 30, 1936, the sum of $24,750,000, and there is hereby authorized to be appropriated for each fiscal year thereafter a sum sufficient to carry out the purposes of this title. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Board, State plans for aid to dependent children.

State Plans for Aid to Dependent Children

A State plan for aid to dependent children must
1. provide that it shall be in effect in all political subdivisions of the State, and, if administered by them, be mandatory upon them;
2. provide for financial participation by the State;
3. either provide for the establishment or designation of a single State agency to administer the plan, or provide for the establishment or designation of a single State agency to supervise the administration of the plan;
4. provide for granting to any individual, whose claim with respect to aid to a dependent child is denied, an opportunity for a fair hearing before such State agency;
5. provide such methods of administration (other than those relating to selection, tenure of office, and compensation of personnel) as are found by the Board to be necessary for the efficient operation of the plan; and
6. provide that the State agency will make such reports, in such form and containing such information, as the Board may from time to time require, and comply with such provisions as the Board may from time to time find necessary to assure the correctness and verification of such reports.
The Board shall approve any plan which fulfills the conditions specified in subsection (a) except that it shall not approve any plan which imposes as a condition of eligibility for aid to dependent children, a residence requirement which denies aid with respect to any child residing in the State
1. who has resided in the State for one year immediately preceding the application for such aid or
2. who was born within the State within one year immediately preceding the application, if its mother has resided in the State for one year immediately preceding the birth.

Payment to States

From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for aid to dependent children, for each quarter, beginning with the quarter commencing July 1, 1935, an amount, which shall be used exclusively for carrying out the State plan, equal to one-third of the total of the sums expended during such quarter under such plan, not counting so much of such expenditure with respect to any dependent child for any month as exceeds $18, or if there is more than one dependent child in the same home, as exceeds $18 for any month with respect to one such dependent child and $12 for such month with respect to each of the other dependent children.
The method of computing and paying such amounts shall be as follows:
1. The Board shall, prior to the beginning of each quarter, estimate the amount to be paid to the State for such quarter under the provisions of subsection (a), such estimate to be based on
  1. a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsection and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than two-thirds of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived;
  2. records showing the number of dependent children in the State; and
  3. such other investigation as the Board may find necessary.
2. The Board shall then certify to the Secretary of the Treasury the amount so estimated by the Board, reduced or increased, as the case may be, by any sum by which it finds that its estimate for any prior quarter was greater or less than the amount which should have been paid to the State for such quarter, except to the extent that such sum has been applied to make the amount certified for any prior quarter greater or less than the amount estimated by the Board for such prior quarter.
3. The Secretary of the Treasury shall thereupon, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Board, the amount so certified.

Operation of State Plans

In the case of any State plan for aid to dependent children which has been approved by the Board, if the Board, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of such plan, finds

that the plan has been so changed as to impose any residence requirement prohibited by section 402 (b), or that in the administration of the plan any such prohibited requirement is imposed, with the knowledge of such State agency, in a substantial number of cases; or
that in the administration of the plan there is a failure to comply substantially with any provision required by section 402 (a) to be included in the plan;

Administration

There is hereby authorized to be appropriated for the fiscal year ending June 30, 1936, the sum of $250,000 for all necessary expenses of the Board in administering the provisions of this title.

Definitions

When used in this title

The term dependent child means a child under the age of sixteen who has been deprived of parental support or care by reason of the death, continued absence from the home, or physical or mental incapacity of a parent, and who is living with his father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, or aunt, in a place of residence maintained by one or more of such relatives as his or their own home;
The term aid to dependent children means money payments with respect to a dependent child or dependent children.

Grants to States for Maternal and Child Welfare

Part 1 – Maternal and Child Health Services

Appropriation

For the purpose of enabling each State to extend and improve, as far as practicable under the conditions in such State, services for promoting the health of mothers and children, especially in rural areas and in areas suffering from severe economic distress, there is hereby authorized to be appropriated for each fiscal year, beginning with the fiscal year ending June 30, 1936, the sum of $3,800,000. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Chief of the Children s Bureau, State plans for such services.

Allotments to States

Out of the sums appropriated pursuant to section 501 for each fiscal year the Secretary of Labor shall allot to each State $20,000, and such part of $1,800,000 as he finds that the number of live births in such State bore to the total number of live births in the United States, in the latest calendar year for which the Bureau of the Census has available statistics.
Out of the sums appropriated pursuant to section 501 for each fiscal year the Secretary of Labor shall allot to the States $980,000 (in addition to the allotments made under subsection (a)), according to the financial need of each State for assistance in carrying out its State plan, as determined by him after taking into consideration the number of live births in such State.
The amount of any allotment to a State under subsection (a) for any fiscal year remaining unpaid to such State at the end of such fiscal year shall be available for payment to such State under section 504 until the end of the second succeeding fiscal year. No payment to a State under section 504 shall be made out of its allotment for any fiscal year until its allotment for the preceding fiscal year has been exhausted or has ceased to be available.

Approval of State Plans

A State plan for maternal and child-health services must
1. provide for financial participation by the State;
2. provide for the administration of the plan by the State health agency or the supervision of the administration of the plan by the State health agency;
3. provide such methods of administration (other than those relating to selection, tenure of office, and compensation of personnel) as are necessary for the efficient operation of the plan;
4. provide that the State health agency will make such reports, in such form and containing such information, as the Secretary of Labor may from time to time require, and comply with such provisions as he may from time to time find necessary to assure the correctness and verification of such reports;
5. provide for the extension and improvement of local maternal and child-health services administered by local child health units;
6. provide for cooperation with medical, nursing, and welfare groups and organizations; and
7. provide for the development of demonstration services in needy areas and among groups in special need.
The Chief of the Children s Bureau shall approve any plan which fulfills the conditions specified in subsection (a) and shall thereupon notify the Secretary of Labor and the State health agency of his approval.

Payment to States

From the sums appropriate therefor and the allotments available under section 502 (a), the Secretary of the Treasury shall pay to each State which has an approved plan for maternal and child-health services, for each quarter beginning with the quarter commencing July 1935, an amount, which shall be used exclusively for carrying out the State plan, equal to one-half of the total sum expended during such quarter for carrying out such plan.
The method of computing and paying such amounts shall be as follows:
1. The Secretary of Labor shall, prior the beginning of each quarter, estimate the amount to be paid to the State for such quarter under the provisions of subsection (a), such estimate to be based on
  1. a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsection and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than one-half of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived, and
  2. such investigation as he may find necessary.
2. The Secretary of Labor shall then certify the amount so estimated by him to the Secretary of the Treasury, reduced or increased, as the case may be, by any sum by which the Secretary of Labor finds that his estimate for any prior quarter was greater or less than the amount, which should have been paid to the State for such quarter, except to the extent that such sum has been applied to make the amount certified for any prior quarter greater or less than the amount, estimated by the Secretary of Labor for such prior quarter.
3. The Secretary of the Treasury shall thereupon, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Secretary of Labor, the amount so certified.
The Secretary of Labor shall from time to time certify to the Secretary of the Treasury the amounts to be paid to the States from the allotments available under section 502 (b), and the Secretary of the Treasury shall, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, make payments of such amounts from such allotments at the time or times specified by the Secretary of Labor.

Operation of State Plans

In the case of any State plan for maternal and child-health services which has been approved by the Chief of the Children s Bureau, if the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of such plan, finds that in the administration of the plan there is a failure to comply substantially with any provision required by section 503 to be included in the plan, he shall notify such State agency that further payments will not be made to the State until he is satisfied that there is no longer any such failure to comply. Until he is so satisfied he shall make no further certification to the Secretary of the Treasury with respect to such State.

Part 2 – Services for Crippled Children

Appropriation

For the purpose of enabling each State to extend and improve (especially in rural areas and in areas suffering from severe economic distress), as far as practicable under the conditions in such State, services for locating crippled children and for providing medical, surgical, corrective, and other services and care, and facilities for diagnosis, hospitalization, and aftercare, for children who are crippled or who are suffering from conditions which lead to crippling, there is hereby authorized to be appropriated for each fiscal year beginning with the fiscal year ending June 30, 1936, the sum of $2,850,000. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Chief of the Children s Bureau, State plans for such services.

Allotments to States

Out of the sums appropriated pursuant to section 511 for each fiscal year the Secretary of Labor shall allot to each State $20,000, and the remainder to the States according to the need of each State as determined by him after taking into consideration the number of crippled children in such State in need of the services referred to section 511 and the cost of furnishing such service to them
The amount of any allotment to a State under subsection (a) for any fiscal year remaining unpaid to such State at the end of such fiscal year shall be available for payment to such State under section 514 until the end of the second succeeding fiscal year. No payment to a State under section 514 shall be made out of its allotment for any fiscal year until its allotment for the preceding fiscal year has been exhausted or has ceased to be available.

Approval of State Plans

A State plan for services for crippled children must
1. provide for financial participation by the State;
2. provide for the administration of the plan by a State agency or the supervision of the administration of the plan by a State agency;
3. provide such methods of administration (other than those relating to selection, tenure of office, and compensation of personnel) as are necessary for the efficient operation of the plan;
4. provide that the State agency will make such reports, in such form and containing such information, as the Secretary of Labor may from time to time require, and comply with such provisions as he may from time to time find necessary to assure the correctness and verification of such reports;
5. provide for carrying out the purposes specified in section 511; and
6. provide for cooperation with medical, health, nursing, and welfare groups and organizations and with any agency in such State charged with administering State laws providing for vocational rehabilitation of physically handicapped children.
The Chief of the Children s Bureau shall approve any plan which fulfills the conditions specified in subsection (a) and shall thereupon notify the Secretary of Labor and the State agency of his approval.

Payment to States

From the sums appropriated therefor and the allotments available under section 512, the Secretary of the Treasury shall pay to each State which has an approved plan for services for crippled children, for each quarter, beginning the quarter commencing July 1, 1935, an amount which shall be used exclusively for carrying out the State plan, equal to one-half of the total sum expended during such quarter for carrying out such plan.
The method of computing and paying such amounts shall be as follows:
1. The Secretary of Labor shall, prior the beginning of each quarter, estimate the amount to be paid to the State for such quarter under the provisions of subsection (a), such estimate to be based on
  1. a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsection and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter and if such amount is less than one-half of the total sum of such estimated expenditures the source or sources from which the difference is expected to be derived, and
  2. such investigation as he may find necessary.
2. The Secretary of Labor shall then certify the amount so estimated by him to the Secretary of the Treasury, reduced or increased as the case may be, by any sum by which the Secretary of Labor finds that his estimate for any prior quarter was greater or less than the amount which should have been paid to the State for such quarter, except to the extent that such sum has been applied to make the amount certified for any prior quarter greater or less than the amount estimated by the Secretary of Labor for such prior quarter.
3. The Secretary of the Treasury shall thereupon, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Secretary of Labor, the amount so certified.

Operation of State Plans

In the case of any State plan for services for crippled children which has been approved by the Chief of the Children s Bureau, if the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of such plan finds that in the administration of the plan there a failure to comply substantially with any provision required by section 513 to be included in the plan, he shall notify such State agency that further payments will not be made to the State until he is satisfied that there is no longer any such failure to comply. Until he is so satisfied he shall make no further certification to the Secretary of the Treasury with respect to such State.

Part 3 – Child Welfare Services

For the purpose of enabling the United States, through the Children s Bureau, to cooperate with State public-welfare agencies establishing, extending, and strengthening, especially in predominantly rural areas, public-welfare services (hereinafter in this section referred to as child-welfare services) for the protection and care of homeless, dependent, and neglected children, and children in danger of becoming delinquent, there is hereby authorized to be appropriated for each fiscal year, beginning with the year ending June 30, 1936, the sum of $1,500,000. Such amount shall be allotted by the Secretary of Labor for use by cooperating State public- welfare agencies on the basis of plans developed jointly by the State agency and the Children's Bureau, to each State, $10,000, and the remainder to each State on the basis of such plans, not to exceed such part of the remainder as the rural population of such State bears to the total rural population of the United States. The amount so allotted shall be expended for payment of part of the cost of district, county or other local child-welfare services in areas predominantly rural, and for developing State services for the encouragement and assistance of adequate methods of community child-welfare organization in areas predominantly rural and other areas of special need. The amount of any allotment to a State under this section for any fiscal year remaining unpaid to such State at the end of such fiscal year shall be available for payment to such State under this section until the end of the second succeeding fiscal year. No payment to a State under this section shall be made out of its allotment for any fiscal year until its allotment for the preceding fiscal year has been exhausted or has ceased to be available.
From the sums appropriated therefor and the allotments available under subsection (a) the Secretary of Labor shall from time to time certify to the Secretary of the Treasury the amounts to be paid to the States, and the Secretary of the Treasury shall, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, make payments of such amounts from such allotments at the time or times specified by the Secretary of Labor.

Part 4 – Vocational Rehabilitation

In order to enable the United States to cooperate with the States and Hawaii in extending and strengthening their programs of vocational rehabilitation of the physically disabled, and to continue to carry out the provisions and purposes of the Act entitled An Act to provide for the promotion of vocational rehabilitation of persons disabled in industry or otherwise and their return to civil employment, approved June 2, 1920, as amended (U.S.C., title 29, ch. 4; U.S.C., Supp. VII title 29, secs. 31, 32, 34, 35, 37, 39, and 40), there is hereby authorized to be appropriated for the fiscal years ending June 30, 1936, and June 30, 1937, the sum of $841,000 for each such fiscal year in addition to the amount of the existing authorization, and for each fiscal year thereafter the sum of $1,938,000. Of the sums appropriated pursuant to such authorization for each fiscal year, $5,000 shall be apportioned to the Territory of Hawaii and the remainder shall be apportioned among the several States in the manner provided in such Act of June 2, 1920, as amended.
For the administration of such Act of June 2, 1920, as amended, by the Federal agency authorized to administer it, there is hereby authorized to be appropriated for the fiscal years ending June 30, 1936, and June 30, 1937, the sum of $22,000 for each such fiscal year in addition to the amount of the existing authorization, and for each fiscal year thereafter the sum of $102,000.

Part 5 – Administration

There is hereby authorized to be appropriated for the fiscal year ending June 30, 1936, the sum of $425,000, for all necessary expenses of the Children s Bureau in administering the provisions of this title, except section 531.
The Children s Bureau shall make such studies and investigations as will promote the efficient administration of this title, except section 531.
The Secretary of Labor shall include in his annual report to Congress a full account of the administration of this title, except section 531.

Public Health Work

Appropriation

For the purpose of assisting States, counties, health districts, and other political subdivisions of the States in establishing and maintaining adequate public-health services, including the training of personnel for State and local health work, there is hereby authorized to be appropriated for each fiscal year, beginning with the fiscal year ending June 30,1936, the sum of $8,000,000 to be used as hereinafter provided.

State and Local Public Health Services

The Surgeon General of the Public Health Service, with the approval of the Secretary of the Treasury, shall, at the beginning of each fiscal year, allot to the States the total of
1. the amount appropriated for such year pursuant to section 601; and
2. the amounts of the allotments under this section for the preceding fiscal year remaining unpaid to the States at the end of such fiscal year.
The amounts of such allotments shall be determined on the basis of
1. the population;
2. the special health problems; and
3. the financial needs;
of the respective States. Upon making such allotments the Surgeon General of the Public Health Service shall certify the amounts thereof to the Secretary of the Treasury.
The amount of an allotment to any State under subsection (a) for any fiscal year, remaining unpaid at the end of such fiscal year, shall be available for allotment to States under subsection (a) for the succeeding fiscal year, in addition to the amount appropriated for such year.
Prior to the beginning of each quarter of the fiscal year, the Surgeon General of the Public Health Service shall, with the approval of the Secretary of the Treasury, determine in accordance with rules and regulations previously prescribed by such Surgeon General after consultation with a conference of the State and Territorial health authorities, the amount to be paid to each State for such quarter from the allotment to such State, and shall certify the amount so determined to the Secretary of the Treasury. Upon receipt of such certification, the Secretary of the Treasury shall, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, pay in accordance with such certification.
The moneys so paid to any State shall be expended solely in carrying out the purposes specified in section 601, and in accordance with plans presented by the health authority of such State and approved by the Surgeon General of the Public Health Service.

Investigations

There is hereby authorized to be appropriated for each fiscal year, beginning with the fiscal year ending June 30, 1936, the sum of $2,000,000 for expenditure by the Public Health Service for investigation of disease and problems of sanitation (including the printing and binding of the findings of such investigations), and for the pay and allowances and traveling expenses of personnel of the Public Health Service, including commissioned officers, engaged in such investigations or detailed to cooperate with the health authorities of any State in carrying out the purposes specified in section 601: Provided, That no personnel of the Public Health Service shall be detailed to cooperate with the health authorities of any State except at the request of the proper authorities of such State.
The personnel of the Public Health Service paid from any appropriation not made pursuant to subsection (a) may be detailed to assist in carrying out the purposes of this title. The appropriation from which they are paid shall be reimbursed from the appropriation made pursuant to subsection (a) to the extent of their salaries and allowances for services performed while so detailed.
The Secretary of the Treasury shall include in his annual report to Congress a full account of the administration of this title.

Social Security Board

Establishment

There is hereby established a Social Security Board (in this Act referred to as the Board ) to be composed of three members to be appointed by the President, by and with the advice and consent of the Senate. During his term of membership on the Board, no member shall engage in any other business, vocation, or employment. Not more than two of the members of the Board shall be members of the same political party. Each member shall receive a salary at the rate of $10,000 a year and shall hold office for a term of six years, except that

any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed, shall be appointed for the remainder of such term; and
the terms of office of the members first taking office after the date of the enactment of this Act shall expire, as designated by the President at the time of appointment, one at the end of two years, one at the end of four years, and one at the end of six years, after the date of the enactment of this Act.

The President shall designate one of the members as the chairman of the Board.

Duties of the Social Security Board

The Board shall perform the duties imposed upon it by this Act and shall also have the duty of studying and making recommendations as to the most effective methods of providing economic security through social insurance, and as to legislation and matters of administrative policy concerning old-age pensions, unemployment compensation, accident compensation, and related subjects.

Expenses of the Board

The Board is authorized to appoint and fix the compensation of such officers and employees, and to make such expenditures, as may be necessary for carrying out its functions under this Act. Appointments of attorneys and experts may be made without regard to the civil-service laws.

Reports

The Board shall make a full report to Congress, at the beginning of each regular session, of the administration of the functions with which it is charged.

Taxes with Respect to Employment

Income Tax on Employees

In addition to other taxes, there shall be levied, collected, and paid upon the income of every individual a tax equal to the following percentages of the wages (as defined in section 811) received by him after December 31, 1936, with respect to employment (as defined in section 811) after such date:

With respect to employment during the calendar years 1937, 1938, and 1939, the rate shall be 1 per centum.
With respect to employment during the calendar years 1940, 1941, and 1942, the rate shall 1 « per centum.
With respect to employment during the calendar years 1943, 1944, and 1945, the rate shall be 2 per centum.
With respect to employment during the calendar years 1946, 1947, and 1948, the rate shall be 2 « per centum.
With respect to employment after December 31, 1948, the rate shall be 3 per centum.

Deduction of Tax from Wages

The tax imposed by section 801 shall be collected by the employer of the taxpayer by deducting the amount of the tax from the wages as and when paid. Every employer required so to deduct the tax is hereby made liable for the payment of such tax, and is hereby indemnified against the claims and demands of any person for the amount of any such payment made by such employer.
If more or less than the correct amount of tax imposed by section 801 is paid with respect to any wage payment, then, under regulations made under this title, proper adjustments, with respect both to the tax and the amount to be deducted, shall be made, without interest, in connection with subsequent wage payments to the same individual by the same employer.

Deductibility from Income Tax

For the purposes of the income tax imposed by Title I of the Revenue Act of 1934 or by any Act of Congress in substitution therefor, the tax imposed by section 801 shall not be allowed as a deduction to the taxpayer in computing his net income for the year in which such tax is deducted from his wages.

Excise Tax on Employers

In addition to other taxes, every employer shall pay an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 811) paid by him after December 31, 1936, with respect to employment (as defined in section 811) after such date:

With respect to employment during the calendar years 1937, 1938, and 1939, the rate shall be 1 per centum.
With respect to employment during the calendar years 1940, 1941, and 1942, the rate shall be 1 « per centum.
With respect to employment during the calendar years 1943, 1944, and 1945, the rate shall be 2 per centum.
With respect to employment during the calendar years 1946, 1947, and 1948, the rate shall be 2 « per centum.
With respect to employment after December 31, 1948, the rate shall be 3 per centum.

Adjustment of Employers Tax

If more or less than the correct amount of tax imposed by section 804 is paid with respect to any wage payment, then, under regulations made under this title, proper adjustments with respect the tax shall be made, without interest, in connection with subsequent wage payments to the same individual by the same employer.

Refunds and Deficiencies

If more or less than the correct amount of tax imposed by section 801 or 804 is paid or deducted with respect to any wage payment and the overpayment or underpayment of tax cannot be adjusted under section 802 (b) or 805 the amount of the overpayment shall be refunded and the amount of the underpayment shall be collected in such manner and at such times (subject to the statutes of limitations properly applicable thereto) as may be prescribed by regulations made under this title.

Collection and Payment of Taxes

The taxes imposed by this title shall be collected by the Bureau of Internal Revenue under the direction of the Secretary of the Treasury and shall be paid into the Treasury of the United States as internal- revenue collections. If the tax is not paid when due, there shall be added as part of the tax interest (except in the case of adjustments made in accordance with the provisions of sections 802 (b) and 805) at the rate of one-half of 1 per centum per month from the date the tax became due until paid.
Such taxes shall be collected and paid in such manner, at such times, and under such conditions, not inconsistent with this title (either by making and filing returns, or by stamps, coupons, tickets, books, or other reasonable devices or methods necessary or helpful in securing a complete and proper collection and payment of the tax or in securing proper identification of the taxpayer), as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury.
All provisions of law, including penalties, applicable with respect to any tax imposed by section 600 or section 800 of the Revenue Act of 1926 and the provisions of section 607 of the Revenue Act of 1934, shall, insofar as applicable and not inconsistent with the provisions of this title, be applicable with respect to the taxes imposed by this title.
In the payment of any tax under this title a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent.

Rules and Regulations

The Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make and publish rules and regulations for the enforcement of this title.

Sale of Stamps by Postmasters

The Commissioner of Internal Revenue shall furnish to the Postmaster General without prepayment a suitable quantity of stamps, coupons, tickets, books, or other devices prescribed by the Commissioner under section 807 for the collection or payment of any tax imposed by this title, to be distributed to, and kept on sale by, all post offices of the first and second classes, and such post offices of the third and fourth classes as

are located in county seats, or
are certified by the Secretary of the Treasury to the Postmaster General as necessary to the proper administration of this title.

The Postmaster General may require each such postmaster to furnish bond in such increased amount as he may from time to time determine, and each such postmaster shall deposit the receipts from the sale of such stamps, coupons, tickets, books, or other devices, to the credit of, and render accounts to, the Postmaster General at such times and in such form as the Postmaster General may by regulations prescribe. The Postmaster General shall at least once a month transfer to the Treasury, as internal revenue collections all receipts so deposited together with a statement of the additional expenditures in the District of Columbia and elsewhere incurred by the Post Office Department in performing the duties imposed upon said Department by this Act, and the Secretary of the Treasury is hereby authorized and directed to advance from time to time to the credit of the Post Office Department from appropriations made for the collection of the taxes imposed by this title, such sums as may be required for such additional expenditures incurred by the Post Office Department.

Penalties

Whoever buys, sells, offers for sale, uses, transfers, takes or gives in exchange, or pledges or gives in pledge, except as authorized in this title or in regulations made pursuant thereto, any stamp, coupon, ticket, book, or other device, prescribed by the Commissioner of Internal Revenue under section 807 for the collection or payment of any tax imposed by this title, shall be fined not more than $1,000 or imprisoned for not more than six months, or both.
Whoever, with intent to defraud, alters, forges, makes, or counterfeits any stamp, coupon, ticket, book, or other device prescribed by the Commissioner of Internal Revenue under section 807 for the collection or payment of any tax imposed by this title, or uses, sells, lends, or has in his possession any such altered, forged, or counterfeited stamp, coupon, ticket, book, or other device, or makes, uses, sells, or has in his possession any material in imitation of the material used in the manufacture of such stamp, coupon, ticket, book, or other device, shall be fined not more than $5,000 or imprisoned not more than five years, or both.

Definitions

When used in this title

The term wages means all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash; except that such term shall not include that part of the remuneration which, after remuneration equal to $3,000 has been paid to an individual by an employer with respect to employment during any calendar year, is paid to such individual by such employer with respect to employment during such calendar year.
The term employment means any service, of whatever nature, performed within the United States by an employee for his employer, except-
1. Agricultural labor;
2. Domestic service in a private home;
3. Casual labor not in the course of the employer s trade or business;
4. Service performed by an individual who has attained the age of sixty-five;
5. Service performed as an officer or member of the crew of a vessel documented under the laws of the United States or of any foreign country;
6. Service performed in the employ of the United States Government or of an instrumentality of the United States;
7. Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions;
8. Service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual.

Tax on Employers of Eight or More

Imposition of Tax

On and after January 1, 1936, every employer (as defined in section 907) shall pay for each calendar year an excise tax, with respect to having individuals in his employ, equal to the following percentages of the total wages (as defined in section 907) payable by him (regardless of the time of payment) with respect to employment (as defined in section 907) during such calendar year:

With respect to employment during the calendar year 1936 the rate shall be 1 per centum;
With respect to employment during the calendar year 1937 the rate shall be 2 per centum;
With respect to employment after December 31, 1937, the rate shall be 3 per centum.

Credit Against Tax

The taxpayer may credit against the tax imposed by section 901 the amount of contributions, with respect to employment during the taxable year, paid by him (before the date of filing of his return for the taxable year) into an unemployment fund under a State law. The total credit allowed to a taxpayer under this section for all contributions paid into unemployment funds with respect to employment during such taxable year shall not exceed 90 per centum of the tax against which it is credited, and credit shall be allowed only for contributions made under the laws of States certified for the taxable year as provided in section 903.

Certification of State Laws

The Social Security Board shall approve any State law submitted to it, within thirty days of such submission, which it finds provides that
1. All compensation is to be paid through public employment offices in the State or such other agencies as the Board may approve;
2. No compensation shall be payable with respect to any day of unemployment occurring within two years after the first day of the first period with respect to which contributions are required;
3. All money received in the unemployment fund shall immediately upon such receipt be paid over to the Secretary of the Treasury to the credit of the Unemployment Trust Fund established by section 904;
4. All money withdrawn from the Unemployment Trust Fund by the State agency shall be used solely in the payment of compensation, exclusive of expenses of administration;
5. Compensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions:
  1. If the position offered is vacant due directly to a strike, lockout, or other labor dispute;
  2. if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality;
  3. if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona-fide labor organization;
6. All the rights, privileges, or immunities conferred by such law or by acts done pursuant thereto shall exist subject to the power of the legislature to amend or repeal such law at any time. The Board shall, upon approving such law, notify the Governor of the State of its approval.
On December 31 in each taxable year the Board shall certify to the Secretary of the Treasury each State whose law it has previously approved, except that it shall not certify any State which, after reasonable notice and opportunity for hearing to the State agency, the Board finds has changed its law so that it no longer contains the provisions specified in subsection (a) or has with respect to such taxable year failed to comply substantially with any such provision.
If, at any time during the taxable year, the Board has reason to believe that a State whose law it has previously approved, may not be certified under subsection (b), it shall promptly so notify the Governor of such State.

Unemployment Trust Fund

There is hereby established in the Treasury of the United States a trust fund to be known as the Unemployment Trust Fund, hereinafter in this title called the Fund. The Secretary of the Treasury is authorized and directed to receive and hold in the Fund all moneys deposited therein by a State agency from a State unemployment fund. Such deposit may be made directly with the Secretary of the Treasury or with any Federal reserve bank or member bank of the Federal Reserve System designated by him for such purpose.
It shall be the duty of the Secretary of the Treasury to invest such portion of the Fund as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired
1. on original issue at par, or
2. by purchase of outstanding obligations at the market price.
The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the Fund. Such special obligations shall bear interest at a rate equal to the average rate of interest, computed as of the end of the calendar month next preceding the date of such issue, borne by all interest-bearing obligations of the United States then forming part of the public debt; except that where such average rate is not a multiple of one eighth of 1 per centum, the rate of interest of such special obligations shall be the multiple of one-eighth of 1 per centum next lower than such average rate. Obligations other than such special obligations may be acquired for the Fund only on such terms as to provide an investment yield not less than the yield which would be required in the case of special obligations if issued to the Fund upon the date of such acquisition.
Any obligations acquired by the Fund (except special obligations issued exclusively to the Fund) may be sold at the market price, and such special obligations may be redeemed at par plus accrued interest.
The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to and form a part of the Fund.
The Fund shall be invested as a single fund, but the Secretary of the Treasury shall maintain a separate book account for each State agency and shall credit quarterly on March 31, June 30, September 30, and December 31, of each year, to each account, on the basis of the average daily balance of such account, a proportionate part of the earnings of the Fund for the quarter ending on such date.
The Secretary of the Treasury is authorized and directed to pay out of the Fund to any State agency such amount as it may duly requisition, not exceeding the amount standing to the account of such State agency at the time of such payment.

Administration, Refunds, and Penalties

The tax imposed by this title shall be collected by the Bureau of Internal Revenue under the direction of the Secretary of the Treasury and shall be paid into the Treasury of the United States as internal- revenue collections. If the tax is not paid when due, there shall be added as part of the tax interest at the rate of one-half of 1 per centum per month from the date the tax became due until paid.
Not later than January 31, next following the close of the taxable year, each employer shall make a return of the tax under this title for such taxable year. Each such return shall be made under oath, shall be filed with the collector of internal revenue for the district in which is located the principal place of business of the employer, or, if he has no principal place of business in the United States, then with the collector at Baltimore, Maryland, and shall contain such information and be made in such manner as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may by regulations prescribe. All provisions of law (including penalties) applicable in respect of the taxes imposed by section 600 of the Revenue Act of 1926, shall, insofar as not inconsistent with this title, be applicable in respect of the tax imposed by this title. The Commissioner may extend the time for filing the return of the tax imposed by this title, under such rules and regulations as he may prescribe with the approval of the Secretary of the Treasury, but no such extension shall be for more than sixty days.
Returns filed under this title shall be open to inspection in the same manner, to the same extent, and subject to the same provisions of law, including penalties, as returns made under Title II of the Revenue Act of 1926.
The taxpayer may elect to pay the tax in four equal installments instead of in a single payment, in which case the first installment shall be paid not later than the last day prescribed for the filing of returns, the second installment shall be paid on or before the last day of the third month, the third installment on or before the last day of the sixth month, and the fourth installment on or before the last day of the ninth month, after such last day. If the tax or any installment thereof is not paid on or before the last day of the period fixed for its payment, the whole amount of the tax unpaid shall be paid upon notice and demand from the collector.
At the request of the taxpayer the time for payment of the tax or any installment thereof may be extended under regulations prescribed by the Commissioner with the approval of the Secretary of the Treasury, for a period not to exceed six months from the last day of the period prescribed for the payment of the tax or any installment thereof. The amount of the tax in respect of which any extension is granted shall be paid (with inter- est at the rate of one-half of 1 per centum per month) on or before the date of the expiration of the period of the extension.
In the payment of any tax under this title a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent.

Interstate Commerce

No person required under a State law to make payments to an unemployment fund shall be relieved from compliance therewith on the ground that he is engaged in interstate commerce, or that the State law does not distinguish between employees engaged in interstate commerce and those engaged in intrastate commerce.

Definitions

When used in this title

The term employer does not include any person unless on each of some twenty days during the taxable year, each day being in a different calendar week, the total number of individuals who were in his employ for some portion of the day (whether or not at the same moment of time) was eight or more.
The term wages means all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash.
The term employment means any service, of whatever nature, performed within the United States by an employee for his employer, except-

Agricultural labor;
Domestic service in a private home;
Service performed as an officer or member of a crew of a vessel on the navigable waters of the United States;
Service performed by an individual in the employ of his son, daughter, or spouse, and service performed by a child under the age of twenty-one in the employ of his father or mother;
Service performed in the employ of the United States Government or of an instrumentality of the United States;
Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions;
Service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual.

The term State agency means any State officer, board, or other authority, designated under a State law to administer the unemployment fund in such State.
The term unemployment fund means a special fund, established under a State law and administered by a State agency, for the payment of compensation.
The term contributions means payments required by a State law to be made by an employer into an unemployment fund, to the extent that such payments are made by him without any part thereof being deducted or deductible from the wages of individuals in his employ.
The term compensation means cash benefits payable to individuals with respect to their unemployment.

Rules and Regulations

The Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make and publish rules and regulations for the enforcement of this title, except sections 903, 904, and 910.

Allowance of Additional Credit

In addition to the credit allowed under section 902, a taxpayer may, subject to the conditions imposed by section 910, credit against the tax imposed by section 901 for any taxable year after the taxable year 1937, an amount, with respect to each State law, equal to the amount, if any, by which the contributions, with respect to employment in such taxable year, actually paid by the taxpayer under such law before the date of filing his return for such taxable year, is exceeded by whichever of the following is the lesser-
1. The amount of contributions which he would have been required to pay under such law for such taxable year if he had been subject to the highest rate applicable from time to time throughout such year to any employer under such law; or
2. Two and seven-tenths per centum of the wages payable by him with respect to employment with respect to which contributions for such year were required under such law.
If the amount of the contributions actually so paid by the taxpayer is less than the amount which he should have paid under the State law, the additional credit under subsection (a) shall be reduced proportionately.
The total credits allowed to a taxpayer under this title shall not exceed 90 per centum of the tax against which such credits are taken.

Conditions of Additional Credit Allowance

A taxpayer shall be allowed the additional credit under section 909, with respect to his contribution rate under a State law being lower, for any taxable year, than that of another employer subject to such law, only if the Board finds that under such law--
1. Such lower rate, with respect to contributions to a pooled fund, is permitted on the basis of not less than three years of compensation experience;
2. Such lower rate, with respect to contributions to a guaranteed employment account, is permitted only when his guaranty of employment was fulfilled in the preceding calendar year, and such guaranteed employment account amounts to not less than 7 « per centum of the total wages payable by him, in accordance with such guaranty, with respect to employment in such State in the preceding calendar year;
3. Such lower rate, with respect to contributions to a separate reserve account, is permitted only when
  1. compensation has been payable from such account throughout the preceding calendar year, and
  2. such account amounts to not less than five times the largest amount of compensation paid from such account within any one of the three preceding calendar years, and
  3. such account amounts to not less than 7 « per centum of the total wages payable by him (plus the total wages payable by any other employers who may be contributing to such account) with respect to employment in such State in the preceding calendar year.
Such additional credit shall be reduced, if any contributions under such law are made by such taxpayer at a lower rate under conditions not fulfilling the requirements of subsection (a), by the amount bearing the same ratio to such additional credit as the amount of contributions made at such lower rate bears to the total of his contributions paid for such year under such law.
As used in this section
1. The term reserve account means a separate account in an unemployment fund, with respect to an employer or group of employers, from which compensation is payable only with respect to the unemployment of individuals who were in the employ of such employer, or of one of the employers comprising the group.
2. The term pooled fund means an unemployment fund or any part thereof in which all contributions are mingled and undivided, and from which compensation is payable to all eligible individuals, except that to individuals last employed by employers with respect to whom reserve accounts are maintained by the State agency, it is payable only when such accounts are exhausted.
3. The term guaranteed employment account means a separate account, in an unemployment fund, of contributions paid by an employer (or group of employers) who
  1. guarantees in advance thirty hours of wages for each of forty calendar weeks (or more, with one weekly hour deducted for each added week guaranteed) in twelve months, to all the individuals in his employ in one or more distinct establishments, except that any such individuals guaranty may commence after a probationary period (included within twelve or less consecutive calendar weeks), and
  2. gives security or assurance, satisfactory to the State agency, for the fulfillment of such guaranties, from which account compensation shall be payable with respect to the unemployment of any such individual whose guaranty is not fulfilled or renewed and who is otherwise eligible for compensation under the State law.
4. The term year of compensation experience, as applied to an employer, means any calendar year throughout which compensation was payable with respect to any individual in his employ who became unemployed and was eligible for compensation.

Grants to States for Aid to the Blind

Appropriation

For the purpose of enabling each State to furnish financial assistance, as far as practicable under the conditions in such State, to needy individuals who are blind, there is hereby authorized to be appropriated for the fiscal year ending June 30, 1936, the sum of $3,000,000, and there is hereby authorized to be appropriated for each fiscal year thereafter a sum sufficient to carry out the purposes of this title. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Social Security Board, State plans for aid to the blind.

State Plans for Aid to the Blind

A State plan for aid to the blind must
1. provide that it shall be in effect in all political subdivisions of the State, and, if administered by them, be mandatory upon them;
2. provide for financial participation by the State;
3. either provide for the establishment or designation of a single State agency to administer the plan, or provide for the establishment or designation of a single State agency to supervise the administration of the plan;
4. provide for granting to any individual, whose claim for aid is denied, an opportunity for a fair hearing before such State agency;
5. provide such methods of administration (other than those relating to selection, tenure of office, and compensation of personnel) as are found by the Board to be necessary for the efficient operation of the plan;
6. provide that the State agency will make such reports, in such form and containing such information, as the Board may from time to time require, and comply with such provisions as the Board may from time to time find necessary to assure the correctness and verification of such reports; and
7. provide that no aid will be furnished any individual under the plan with respect to any period with respect to which he is receiving old-age assistance under the State plan approved under section 2 of this Act.
The Board shall approve any plan which fulfills the conditions specified in subsection (a), except that it shall not approve any plan which imposes, as a condition of eligibility for aid to the blind under the plan
1. Any residence requirement which excludes any resident of the State who has resided therein five years during the nine years immediately preceding the application for aid and has resided therein continuously for one year immediately preceding the application or
2. Any citizenship requirement which excludes any citizen of the United States.

Payment to States

From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for aid to the blind, for each quarter, beginning with the quarter commencing July 1, 1935,
1. an amount which shall be used exclusively as aid to the blind equal to one-half of the total of the sums expended during such quarter as aid to the blind under the State plan with respect to each individual who is blind and is not an inmate of a public institution not counting so much of such expenditure with respect to any individual for any month as exceeds $30, and
2. 5 per centum of such amount, which shall be used for paying the costs of administering the State plan or for aid to the blind, or both, and for no other purpose.
The method of computing and paying such amounts shall be as follows:
1. The Board shall, prior to the beginning of each quarter, estimate the amount to be paid to the State for such quarter under provisions of clause (1) of subsection (a), such estimate to be based on
  1. a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such clause, and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than one-half of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived,
  2. records showing the number of blind individuals in the State, and
  3. such other investigation as the Board may find necessary.
2. The Board shall then certify to the Secretary of the Treasury the amount so estimated by the Board, reduced or increased, as the case may be, by any sum by which it finds that its estimate for any prior quarter was greater or less than the amount which should have been paid to the State under clause (1) of subsection (a) for such quarter, except to the extent that such sum has been applied to make the amount certified for any prior quarter greater or less than the amount estimated by the Board for such prior quarter.
3. The Secretary of the Treasury shall thereupon, through the Division of Disbursement of the Treasury Department and prior to audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Board, the amount so certified, increased by 5 per centum.

Operation of State Plans

In the case of any State plan for aid to the blind which has been approved by the Board, if the Board, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of such a plan, finds

that the plan has been so changed as to impose any residence or citizenship requirement prohibited by section 1002 (b), or that in the administration of the plan any such prohibited requirement is imposed, with the knowledge of such State agency, in a substantial number of cases; or
that in the administration of the plan there is a failure to comply substantially with any provision required by section 1002 (a) be included in the plan;

the Board shall notify such State agency that further payments will not be made to the State until the Board is satisfied that such prohibited requirement is no longer so imposed, and that there is no longer any such failure to comply. Until it is satisfied it shall make no further certification to the Secretary of the Treasury with respect to such State.

Administration

There is hereby authorized to be appropriated for the fiscal year ending June 30, 1936 the sum of $30,000, for all necessary expenses of the Board in administering the provisions of this title.

Definition

When used in this title the term aid to the blind means money payments to blind individuals.

General Provisions

Definitions

When used in this Act
1. The term State (except when used in section 531) includes Alaska, Hawaii, and the District of Columbia.
2. The term United States when used in a geographical sense means the States, Alaska, Hawaii, and the District of Columbia.
3. The term person means an individual, a trust or estate, a partnership, or a corporation.
4. The term corporation includes associations, joint-stock companies, and insurance companies.
5. The term shareholder includes a member in an association, joint-stock company, or insurance company.
6. The term employee includes an officer of a corporation.
The terms includes and including when used in a definition contained in this Act shall not be deemed to exclude other things otherwise within the meaning of the term defined.
Whenever under this Act or any Act of Congress, or under the law of any State, an employer is required or permitted to deduct any amount from the remuneration of an employee and to pay the amount deducted to the United States, a State, or any political subdivision thereof, then for the purposes of this Act the amount so deducted shall be considered to have been paid to the employee at the time of such deduction.
Nothing in this Act shall be construed as authorizing any Federal official, agent, or representative, in carrying out any of the provisions of this Act, to take charge of any child over the objection of either of the parents of such child, or of the person standing in loco parentis to such child.

Rules and Regulations

The Secretary of the Treasury, the Secretary of Labor, and the Social Security Board respectively, shall make and publish such rules and regulations, not inconsistent with this Act, as may be necessary to the efficient administration of the functions with which each is charged under this Act.

Separability

If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances shall not be affected thereby.

Reservation of Power

The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.

Short Title

This Act may be cited as the Social Security Act.

Approved, August 14, 1935.

Statement on Signing the Social Security Act.

August 14, 1935

Today a hope of many years' standing is in large part fulfilled. The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last.

This social security measure gives at least some protection to thirty millions of our citizens who will reap direct benefits through unemployment compensation, through old-age pensions and through increased services for the protection of children and the prevention of ill health.

We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.

This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions. It will act as a protection to future Administrations against the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaks and valleys of deflation and of inflation. It is, in short, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.

I congratulate all of you ladies and gentlemen, all of you in the Congress, in the executive departments and all of you who come from private life, and I thank you for your splendid efforts in behalf of this sound, needed and patriotic legislation.

If the Senate and the House of Representatives in this long and arduous session had done nothing more than pass this Bill, the session would be regarded as historic for all time.

FDR Congratulates the Congress for passing this bill and making life more secure for citizens.

Ida May Fuller of Ludlow, Vermont was the first person to receive an old-age monthly benefit check.

Social Security posters spanning five decades.