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the conduct of corporate business, not inconsistent with

law, but no authority shall be granted to sell, mortgage, or

lease for a period exceeding ten years any of the land

included in the limits of the reservation. Any charter so

issued shall not be revoked or surrendered except by Act

of Congress.

Sec. 18. This Act shall not apply to any reservation

wherein a majority of the adult Indians, voting at a special

election duly called by the Secretary of the Interior, shall

vote against its application. It shall be the duty of the Sec-

retary of the Interior, within one year after the passage and

approval of this Act, to call such an election, which election

shall be held by secret ballot upon thirty days’ notice.

Sec. 19. The term “Indian” as used in this Act shall

include all persons of Indian descent who are members of

any recognized Indian tribe now under Federal jurisdic-

tion, and all persons who are descendants of such mem-

bers who were, on June 1, 1934, residing within the

present boundaries of any Indian reservation, and shall

further include all other persons of one-half or more

Indian blood. For the purposes of this Act, Eskimos and

other aboriginal peoples of Alaska shall be considered

Indians. The term “tribe” wherever used in this Act shall

be construed to refer to any Indian tribe, organized band,

pueblo, or the Indians residing on one reservation. The

words “adult Indians” wherever used in this Act shall be

construed to refer to Indians who have attained the age of

twenty-one years.

Source:

United States Statutes at Large, Vol. 48, pp. 984–988.

Federal Communications Act, 1934

Federal legislation enacted on June 19, 1934, creating the Fed-

eral Communications Commission (FCC) to regulate interstate

and foreign communications by telegraph, cable, and radio.

The FCC replaced the Federal Radio Commission and consol-

idated regulatory powers formerly vested in the Interstate

Commerce Commission and the Postal and Commerce

Departments. The commission was to consist of seven mem-

bers appointed by the president, with the consent of the Sen-

ate. The act authorized new regulations to control the radio

broadcasting industry. The act eventually also applied to tele-

vision but was considered inadequate regarding electronic

computer transmissions. As a result, the Communications Act

of 1986 was passed to cover these newer methods of commu-

nication.

Note the provisions concerning free and obscene speech

(Section 326) and that foreshadowing the establishment of the

Emergency Broadcast System (Section 606), used during the

cold war in case of a nuclear attack but today it primarily

warns of impending tornadoes or floods.

Of special significance for the future of law enforcement

and counterintelligence was Section 605 that apparently out-

lawed federal eavesdropping on telephone communications. It

responded to the 1928

Olmstead

decision, which did not con-

sider off-sight eavesdropping a violation of the Fourth Amend-

ment, by restricting law enforcement use of wiretaps. Civil

libertarians at the time and thereafter have emphasized the

“unauthorized use” provisions that appear to require the

sender’s permission. At the time the Federal Communications

Act was passed, the FBI permitted wiretaps only in life-threat-

ening instances like kidnappings, and only with director J.

Edgar Hoover’s personal authorization. In 1937, in the case of

Nardone v. United States

(302 U.S. 379), the Supreme Court

held that evidence from interstate wiretaps could not be used

in court. The Department of Justice advised Hoover that it con-

sidered interstate wiretaps permissible as long as the evidence

was not “divulged” in federal court; intrastate wiretaps, how-

ever, could be used without violating the act. Nevertheless,

Hoover advised that the FBI’s policy would remain the same:

He had to approve all wiretaps, and they could be used only

for intelligence purposes. Hoover continued thereafter to

approve wiretaps as long as the results were not used in court.

This policy prevailed until 1966.

________________________

_______________________

An Act

To provide for the regulation of interstate and foreign

communication by wire or radio, and for other purposes.

Be it enacted by the Senate and House of Represen-

tatives of the United States of America in Congress assem-

bled,

Title I—General Provisions

Purposes of Act; Creation of Federal Communications

Commission

Section 1. For the purpose of regulating interstate and

foreign commerce in communication by wire and radio so

as to make available, so far as possible, to all the people of

the United States a rapid, efficient, Nation-wide, and

world-wide wire and radio communication service with

adequate facilities at reasonable charges, for the purpose

of the national defense, and for the purpose of securing a

more effective execution of this policy by centralizing

authority heretofore granted by law to several agencies and

by granting additional authority with respect to interstate

and foreign commerce in wire and radio communication,

there is hereby created a commission to be known as the

“Federal Communications Commission,” which shall be

constituted as hereinafter provided, and which shall exe-

cute and enforce the provisions of this Act.

1372 ERA 8: The Great Depression and World War II

Application of Act

Sec. 2. (a) The provisions of this Act shall apply to all

interstate and foreign communication by wire or radio and

all interstate and foreign transmission of energy by radio,

which originates and/or is received within the United

States, and to all persons engaged within the United States

in such communication or such transmission of energy by

radio, and to the licensing and regulating of all radio sta-

tions as hereinafter provided. . . .

(b) Subject to the provisions of section 301, nothing in

this Act shall be construed to apply or to give the Com-

mission jurisdiction with respect to (1) charges, classifica-

tions, practices, services, facilities, or regulations for or in

connection with intrastate communication service of any

carrier, or (2) any carrier engaged in interstate or foreign

communication solely through physical connection with

the facilities of another carrier not directly or indirectly

controlling or controlled by, or under direct or indirect

common control with, such carrier; [with exceptions].

Definitions

Sec. 3. For the purposes of this Act, unless the context

otherwise requires—

(a) “Wire communication” or “communication by

wire” means the transmission of writing, signs, signals, pic-

tures, and sounds of all kinds by aid of wire, cable, or other

like connection between the points of origin and reception

of such transmission, including all instrumentalities, facili-

ties, apparatus, and services (among other things, the

receipt, forwarding, and delivery of communications) inci-

dental to such transmission.

(b) “Radio communication” or “communication by

radio” means the transmission by radio of writing, signs,

signals, pictures, and sounds of all kinds, including all

instrumentalities, facilities, apparatus, and services (among

other things, the receipt, forwarding, and delivery of com-

munications) incidental to such transmission.

license granted or continued in force under authority of

this Act.

* * *

(e) “Interstate communication” or “interstate trans-

mission” means communication or transmission (1) from

any State, Territory, or possession of the United States

(other than the Philippine Islands and the Canal Zone), or

the District of Columbia, to any other State, Territory, or

possession of the United States (other than the Philippine

Islands and the Canal Zone), or the District of Columbia,

(2) from or to the United States to or from the Philippine

Islands or the Canal Zone, insofar as such communication

or transmission takes place within the United States, or (3)

between points within the United States but through a for-

eign country; but shall not include wire communication

between points within the same State, Territory, or posses-

sion of the United States, or the District of Columbia,

through any place outside thereof, if such communication

is regulated by a State commission.

(f) “Foreign communication” or “foreign transmis-

sion” means communication or transmission from or to any

place in the United States to or from a foreign country, or

between a station in the United States and a mobile station

located outside the United States.

(g) “United States” means the several States and Ter-

ritories, the District of Columbia, and the possessions of

the United States, but does not include the Philippine

Islands or the Canal Zone.

* * *

(k) “Radio station” or “station” means a station

equipped to engage in radio communication or radio trans-

mission of energy.

* * *

(o) “Broadcasting” means the dissemination of radio

communications intended to be received by the public,

directly or by the intermediary of relay stations.

* * *

(v) “State” includes the District of Columbia and the

Territories and possessions.

Provisions Relating to the Commission

Sec. 4. (a) The Federal Communications Commission

(in this Act referred to as the “Commission”) shall be com-

posed of seven commissioners appointed by the President,

by and with the advice and consent of the Senate, one of

whom the President shall designate as chairman.

(b) Each member of the Commission shall be a citizen

of the United States. No member of the Commission or

person in its employ shall be financially interested in the

manufacture or sale of radio apparatus or of apparatus for

wire or radio communication; in communication by wire or

radio or in radio transmission of energy; in any company

furnishing services or such apparatus to any company

engaged in communication by wire or radio or to any com-

pany manufacturing or selling apparatus used for commu-

nication by wire or radio; or in any company owning stocks,

bonds, or other securities of any such company; nor be in

the employ of or hold any official relation to any person

subject to any of the provisions of this Act, nor own stocks,

bonds, or other securities of any corporation subject to any

of the provisions of this Act. Such commissioners shall not

engage in any other business, vocation, or employment.

Not more than four commissioners shall be members of

the same political party.

The New Deal 1373

shall continue in office for the terms of one, two, three, four,

five, six, and seven years, respectively, from the date of the

taking effect of this Act, the term of each to be designated

by the President, but their successors shall be appointed for

terms of seven years; except that any person chosen to fill a

vacancy shall be appointed only for the unexpired term of

the commissioner whom he succeeds. No vacancy in the

Commission shall impair the right of the remaining com-

missioners to exercise all the powers of the Commission.

(d) Each commissioner shall receive an annual salary

of $10,000, payable in monthly installments.

* * *

(i) The Commission may perform any and all acts,

make such rules and regulations, and issue such orders,

not inconsistent with this Act, as may be necessary in the

execution of its functions.

* * *

Title III—Special Provisions Relating to Radio

License for Radio Communication or Transmission of

Energy

Section 301. It is the purpose of this Act, among other

things, to maintain the control of the United States over all

the channels of interstate and foreign radio transmission;

and to provide for the use of such channels, but not the

ownership thereof, by persons for limited periods of time,

under licenses granted by Federal authority, and no such

license shall be construed to create any right, beyond the

terms, conditions, and periods of the license. No person

shall use or operate any apparatus for the transmission of

energy or communications or signals by radio (a) from one

place in any Territory or possession of the United States or

in the District of Columbia to another place in the same

Territory, possession, or District; or (b) from any State,

Territory, possession of the United States, or from the Dis-

trict of Columbia to any other State, Territory, or posses-

sion of the United States; or (c) from any place in any

State, Territory, or possession of the United States, or in

the District of Columbia, to any place in any foreign coun-

try or to any vessel; or (d) within any State when the effects

of such use extend beyond the borders of said State, or

when interference is caused by such use or operation with

the transmission of such energy, communications, or sig-

nals from within said State to any place beyond its borders,

or from any place beyond its borders to any place within

said State, or with the transmission or reception of such

energy, communications, or signals from and/or to places

beyond the borders of said State; or (e) upon any vessel or

aircraft of the United States; or (f) upon any other mobile

stations within the jurisdiction of the United States, except

under and in accordance with this Act and with a license in

that behalf granted under the provisions of this Act.

* * *

General Powers of Commission

Sec. 303. Except as otherwise provided in this Act, the

Commission from time to time, as public convenience,

interest, or necessity requires, shall—

(a) Classify radio stations;

(b) Prescribe the nature of the service to be rendered

by each class of licensed stations and each station within

any class;

of stations, and assign frequencies for each individual sta-

tion and determine the power which each station shall use

and the time during which it may operate;

(d) Determine the location of classes of stations or

individual stations;

(e) Regulate the kind of apparatus to be used with

respect to its external effects and the purity and sharpness

of the emissions from each station and from the apparatus

therein;

(f) Make such regulations not inconsistent with law as

it may deem necessary to prevent interference between

stations and to carry out the provisions of this Act: Pro-

vided, however, That changes in the frequencies, autho-

rized power, or in the times of operation of any station,

shall not be made without the consent of the station

licensee unless, after a public hearing, the Commission

shall determine that such changes will promote public con-

venience or interest or will serve public necessity, or the

provisions of this Act will be more fully complied with;

(g) Study new uses for radio, provide for experimental

uses of frequencies, and generally encourage the larger

and more effective use of radio in the public interest;

* * *

Censorship; Indecent Language

Sec. 326. Nothing in this Act shall be understood or

construed to give the Commission the power of censorship

over the radio communications or signals transmitted by

any radio station, and no regulation or condition shall be

promulgated or fixed by the Commission which shall inter-

fere with the right of free speech by means of radio com-

munication. No person within the jurisdiction of the

United States shall utter any obscene, indecent, or profane

language by means of radio communication.

* * *

Title VI—Miscellaneous Provisions

Transfer to Commission of Duties, Powers, and Functions

under Existing Law

1374 ERA 8: The Great Depression and World War II

Section 601. (a) All duties, powers, and functions of

the Interstate Commerce Commission under the Act of

August 7, 1888 (25 Stat. 382), relating to operation of tele-

graph lines by railroad and telegraph companies granted

Government aid in the construction of their lines, are

hereby imposed upon and vested in the Commission: Pro-

vided, That such transfer of duties, powers, and functions

shall not be construed to affect the duties, powers, func-

tions, or jurisdiction of the Interstate Commerce Commis-

sion under, or to interfere with or prevent the enforcement

of, the Interstate Commerce Act and all Acts amendatory

thereof or supplemental thereto.

(b) All duties, powers, and functions of the Postmaster

General with respect to telegraph companies and tele-

graph lines under any existing provision of law are hereby

imposed upon and vested in the Commission.

Repeals and Amendments

Sec. 602. (a) The Radio Act of 1927, as amended, is

hereby repealed.

(b) The provisions of the Interstate Commerce Act, as

amended, insofar as they relate to communication by wire

or wireless, or to telegraph, telephone, or cable companies

operating by wire or wireless, except the last proviso of

section 1(5) and the provisions of this section 1(7), are

hereby repealed.

* * *

appropriations available for expenditure by the Federal

Radio Commission shall be available for expenditure by

the Commission for any and all objects of expenditure

authorized by this Act in the discretion of the Commission,

without regard to the requirement of apportionment

under the Antideficiency Act of February 27, 1906.

Effect of Transfer, Repeals, and Amendments

Sec. 604. (a) All orders, determinations, rules, regula-

tions, permits, contracts, licenses, and privileges which

have been issued, made, or granted by the Interstate Com-

merce Commission, the Federal Radio Commission, or

the Postmaster General, under any provision of law

repealed or amended by this Act or in the exercise of

duties, powers, or functions transferred to the Commission

by this Act, and which are in effect at the time this section

takes effect, shall continue in effect until modified, termi-

nated, superseded, or repealed by the Commission or by

operation of law.

* * *

Unauthorized Publication of Communications

Sec. 605. No person receiving or assisting in receiving,

or transmitting, or assisting in transmitting, any interstate

or foreign communication by wire or radio shall divulge or

publish the existence, contents, substance, purport, effect,

or meaning thereof, except through authorized channels of

transmission or reception, to any person other than the

addressee, his agent, or attorney, or to a person employed

or authorized to forward such communication to its desti-

nation, or to proper accounting or distributing officers of

the various communicating centers over which the com-

munication may be passed, or to the master of a ship under

whom he is serving, or in response to a subpena issued by

a court of competent jurisdiction, or on demand of other

lawful authority; and no person not being authorized by

the sender shall intercept any communication and divulge

or publish the existence, contents, substance, purport,

effect, or meaning of such intercepted communication to

any person; and no person not being entitled thereto shall

receive or assist in receiving any interstate or foreign com-

munication by wire or radio and use the same or any infor-

mation therein contained for his own benefit or for the

benefit or another not entitled thereto; and no person hav-

ing received such intercepted communication or having

become acquainted with the contents, substance, purport,

effect, or meaning of the same or any part thereof, know-

ing that such information was so obtained, shall divulge or

publish the existence, contents, substance, purport, effect,

or meaning of the same or any part thereof, or use the

same or any information therein contained for his own

benefit or for the benefit or another not entitled thereto:

Provided, That this section shall not apply to the receiving

divulging, publishing, or utilizing the contents of any radio

communication broadcast, or transmitted by amateurs or

others for the use of the general public, or relating to ships

in distress.

War Emergency—Powers of President

Sec. 606. (a) During the continuance of a war in

which the United States is engaged, the President is

authorized, if he finds it necessary for the national

defense and security, to direct that such communications

as in his judgment may be essential to the national

defense and security shall have preference or priority with

any carrier subject to this Act. He may give these direc-

tions at and for such times as he may determine, and may

modify, change, suspend, or annual them and for any such

purpose he is hereby authorized to issue orders directly,

or through such person or persons as he designates for the

purpose, or through the Commission. Any carrier comply-

ing with any such order or direction for preference or pri-

ority herein authorized shall be exempt from any and all

provisions in existing law imposing civil or criminal penal-

ties, obligations, or liabilities upon carriers by reason of

giving preference or priority in compliance with such

order or direction.

* * *

The New Deal 1375

HORT

ITLE

Sec. 609. This Act may be cited as the “Communications

Act of 1934.”

Approved, June 19, 1934.

Source:

United States Statutes at Large, Vol. 48, pp. 1,064–1,105.

Securities Exchange Act, 1934

Federal legislation enacted on June 6, 1934, that established

the Securities and Exchange Commission (SEC) to regulate

American stock exchanges and to enforce the U.S. Securities

Act enacted May 27, 1933. The latter act was designed to

ensure full disclosure to purchasers of all stocks and bonds

offered for public sale (with the exception of certain govern-

ment bonds, railroad securities, and securities of some non-

profit institutions). The securities were to be registered with the

U.S. Federal Trade Commission, and such registration had to

include accurate and complete financial and other relevant

information, as well as a prospectus. The prospectus was

required to be given to every potential investor. The act

imposed stiff penalties for the sale of misrepresented or unreg-

istered securities.

The SEC, consisting of five members appointed by the

president and approved by the Senate, was authorized to

license stock exchanges and regulate securities trading. To

prevent unfair and deceptive practices, the act required that

current information about corporations whose securities were

traded be made available to investors and that each security

traded be registered with the SEC. The Federal Reserve Board

was authorized to regulate margin requirements in securities

trading so as to reduce speculation. Roosevelt appointed

financier and speculator Joseph P. Kennedy, father of the future

president, as the SEC’s first chair, because “he knew the tricks

of the trade.”

Congress designed both acts to curb the problems that led

to the stock market crash of 1929. While recessions occurred

periodically after the 1930s, the country did not suffer a major

depression again in the 20th century. However, a number of

securities regulations were modified or abrogated during the

prosperity of the 1990s. By taking advantage of loopholes the

changes had opened, and through downright corruption, cor-

porate executives contributed to a severe downturn in the

stock markets of the first years of the 21st century.

________________________

_______________________

An Act

To provide for the regulation of securities exchanges and of

over-the-counter markets operating in interstate and for-

eign commerce and through the mails, to prevent

inequitable and unfair practices on such exchanges and

markets, and for other purposes.

Be it enacted by the Senate and House of Representa-

tives of the United States of America in Congress assem-

bled,

Title I—Regulation of Securities Exchanges

HORT

ITLE

Section 1. This Act may be cited as the “Securities

Exchange Act of 1934.”

ECESSITY FOR

EGULATION AS

ROVIDED IN

HIS

ITLE

Sec. 2. For the reasons hereinafter enumerated, transac-

tions in securities as commonly conducted upon securities

exchanges and over-the-counter markets are affected with

a national public interest which makes it necessary to pro-

vide for regulation and control of such transactions and of

practices and matters related thereto, including transac-

tions by officers, directors, and principal security holders,

to require appropriate reports, and to impose require-

ments necessary to make such regulation and control rea-

sonably complete and effective, in order to protect

interstate commerce, the national credit, the Federal tax-

ing power, to protect and make more effective the national

banking system and Federal Reserve System, and to insure

the maintenance of fair and honest markets in such trans-

actions:

(1) Such transactions (a) are carried on in large vol-

ume by the public generally and in large part originate

outside the States in which the exchanges and over-the-

counter markets are located and/or are effected by means

of the mails and instrumentalities of interstate commerce;

(b) constitute an important part of the current of interstate

commerce; (c) involve in large part the securities of issuers

engaged in interstate commerce; (d) involve the use of

credit, directly affect the financing of trade, industry, and

transportation in interstate commerce, and directly affect

and influence the volume of interstate commerce; and

affect the national credit.

(2) The prices established and offered in such transac-

tions are generally disseminated and quoted throughout

the United States and foreign countries and constitute a

basis for determining and establishing the prices at which

securities are bought and sold, the amount of certain taxes

owning to the United States and to the several States by

owners, buyers, and sellers of securities, and the value of

collateral for bank loans.

(3) Frequently the prices of securities on such

exchanges and markets are susceptible to manipulation

and control, and the dissemination of such prices gives rise

to excessive speculation, resulting in sudden and unrea-

1376 ERA 8: The Great Depression and World War II

sonable fluctuations in the prices of securities which (a)

cause alternately unreasonable expansion and unreason-

able contraction of the volume of credit available for trade,

transportation, and industry in interstate commerce, (b)

hinder the proper appraisal of the value of securities and

thus prevent a fair calculation of taxes owing to the United

States and to the several States by owners, buyers, and sell-

ers of securities, and (c) prevent the fair valuation of col-

lateral for bank loans and/or obstruct the effective

operation of the national banking system and Federal

Reserve System.

(4) National emergencies, which produce widespread

unemployment and the dislocation of trade, transporta-

tion, and industry, and which burden interstate com-

merce and adversely affect the general welfare, are

precipitated, intensified, and prolonged by manipulation

and sudden and unreasonable fluctuations of security

prices and by excessive speculation on such exchanges

and markets, and to meet such emergencies the Federal

Government is put to such great expense as to burden the

national credit.

Source:

United States Statutes at Large, Vol. 48, pp. 881–909.

National Labor Relations Act, 1935

New Deal legislation, enacted on July 5, 1935, that created

the National Labor Relations Board (NLRB) and guaranteed

workers the right to organize and to bargain collectively

through their chosen representatives. It represented a major

landmark in the history of the labor movement.

Previously, in an act of March 23, 1932, Congress forbade

the use of federal court injunctions to preserve antiunion

employment contracts or to restrain strikes, boycotts, or pick-

eting, except where such strikes affected the public safety.

Sponsored by Senator George W. Norris of Nebraska and Rep-

resentative Fiorello LaGuardia of New York, it protected work-

ers’ rights to join a union by prohibiting “yellow dog”

contracts (agreements by which employers required their

workers not to join unions and not to participate in any strike

against the employers).

The National Labor Relations Act was also sponsored by

Senator Wagner joined by Representative William P. Connery

Jr. of Massachusetts. It authorized the NLRB to investigate

complaints, issue cease-and-desist orders against unfair labor

practices in interstate commerce, protect the right to collective

bargaining, and arbitrate labor disputes. It prohibited employ-

ers from interfering with workers’ rights to organize or to join

independent unions, from promoting company unions, from

discriminating in employment because of union membership,

from punishing employees who file charges or testify under the

act, and from refusing to negotiate with an elected union.

Its constitutionality was upheld 5-4 on April 12, 1937 in

NLRB v. Jones and Laughlin Steel Corporation

(301 U.S. 1).

________________________

_______________________

An Act

To diminish the causes of labor disputes burdening or

obstructing interstate and foreign commerce, to create a

National Labor Relations Board, and for other purposes.

Be it enacted by the Senate and House of Representa-

tives of the United States of America in Congress assem-

bled,

Findings and Policy

Section 1. The denial by employers of the right of employ-

ees to organize and the refusal by employers to accept the

procedure of collective bargaining lead to strikes and

other forms of industrial strife or unrest, which have the

intent or the necessary effect of burdening or obstructing

commerce by (a) impairing the efficiency, safety, or oper-

ation of the instrumentalities of commerce; (b) occurring

in the current of commerce; (c) materially affecting,

restraining, or controlling the flow of raw materials or

manufactured or processed goods from or into the chan-

nels of commerce, or the prices of such materials or goods

in commerce; or (d) causing diminution of employment

and wages in such volume as substantially to impair or dis-

rupt the market for goods flowing from or into the chan-

nels of commerce.

The inequality of bargaining power between employ-

ees who do not possess full freedom of association or

actual liberty of contract, and employers who are orga-

nized in the corporate or other forms of ownership associ-

ation substantially burdens and affects the flow of

commerce, and tends to aggravate recurrent business

depressions, by depressing wage rates and the purchasing

power of wage earners in industry and by preventing the

stabilization of competitive wage rates and working condi-

tions within and between industries.

Experience has proved that protection by law of the

right of employees to organize and bargain collectively

safeguards commerce from injury, impairment, or inter-

ruption, and promotes the flow of commerce by removing

certain recognized sources of industrial strife and unrest,

by encouraging practices fundamental to the friendly

adjustment of industrial disputes arising out of differences

as to wages, hours, or other working conditions, and by

restoring equality of bargaining power between employers

and employees.

It is hereby declared to be the policy of the United

States to eliminate the causes of certain substantial

The New Deal 1377

obstructions to the free flow of commerce and to mitigate

and eliminate these obstructions when they have

occurred by encouraging the practice and procedure of

collective bargaining and by protecting the exercise by

workers of full freedom of association, self-organization,

and designation of representatives of their own choos-

ing, for the purpose of negotiating the terms and condi-

tions of their employment or other mutual aid or

protection…

Rights of Employees

Sec. 7. Employees shall have the right to self-organization,

to form, join, or assist labor organizations, to bargain col-

lectively through representatives of their own choosing,

and to engage in concerted activities, for the purpose of

collective bargaining or other mutual aid or protection.

Sec. 8. It shall be an unfair labor practice for an

employer—

(1) To interfere with, restrain, or coerce employees in

the exercise of the rights guaranteed in section 7.

(2) To dominate or interfere with the formation or

administration of any labor organization or contribute

financial or other support to it: Provided, That subject to

rules and regulations made and published by the Board

pursuant to section 6(a), an employer shall not be prohib-

ited from permitting employees to confer with him during

working hours without loss of time or pay.

(3) By discrimination in regard to hire or tenure of

employment or any term or condition of employment to

encourage or discourage membership in any labor organi-

zation: Provided, That nothing in this Act, or in the

National Industrial Recovery Act (U.S.C., Supp. VII, title

15, secs. 701-712), as amended from time to time, or in any

code or agreement approved or prescribed thereunder, or

in any other statute of the United States, shall preclude an

employer from making an agreement with a labor organi-

zation (not established, maintained, or assisted by any

action defined in this Act as an unfair labor practice) to

require as a condition of employment membership

therein, if such labor organization is the representative of

the employees as provided in section 9(a), in the appropri-

ate collective bargaining unit covered by such agreement

when made.

(4) To discharge or otherwise discriminate against an

employee because he has filed charges or given testimony

under this Act.

(5) To refuse to bargain collectively with the repre-

sentatives of his employees, subject to the provisions of

Section 9(a).

Source:

Statutes at Large, Vol. 48, pp. 449–457.

Social Security Act, 1935

New Deal legislation enacted by Congress on August 14,

1935, to provide old-age retirement insurance as an entitle-

ment (i.e., it was for everyone over a designated age regardless

of their means), unemployment insurance, survivors’ and dis-

ability insurance, and public assistance. It created the Social

Security Board to administer these programs. The act granted

federal subsidies to state assistance programs that aided the

needy elderly; it also created a federally administered annuity

for retired workers aged 65 and over, based on previous wages

and funded by payroll taxes paid by employers and employ-

ees. It set up a cooperative state-federal unemployment insur-

ance program financed by a payroll tax on employers. The act

also furnished grants to states for aid to dependent children,

maternal and child welfare, the blind, projects for vocational

rehabilitation, and public health work. The act originally cov-

ered only industrial and commercial workers, but it has been

amended many times to extend coverage and include new

programs.

On May 24, 1937, in

Steward Machine Company v.

Davis

(301 U.S. 548), the Supreme Court upheld the tax

provisions of the Social Security Act. The case challenged

provisions in the unemployment compensation section of

the act that established a federal payroll tax on employers,

to be paid into the federal treasury. The act allowed a credit,

up to 90 percent, for any amount paid into a federally ap-

proved state unemployment compensation system. The Stew-

ard Machine Company paid the tax but sued for a refund. In

its 5-4 decision, the Supreme Court denied the company’s

claim that the tax provisions were an unconstitutional

attempt by Congress to coerce the states or to usurp their

powers; it declared that the provisions merely gave the states

a compelling “inducement” to establish unemployment com-

pensation.

Note the occupations not covered by the Act (Title II: Def-

initions, Section 210b). Amendments to the act over the years

have brought domestic and some agricultural workers under

it. Employees of the federal government who joined the fed-

eral retirement system before 1983 were given a choice

whether or not to come under Social Security; for those hired

after that year, it was mandatory. The Social Security account

has been used to pay other federal expenses and keep down

the federal debt. Below are excerpts from the act.

________________________

_______________________

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

1378 ERA 8: The Great Depression and World War II

their unemployment compensation laws; to establish a

Social Security Board; to raise revenue; and for other

purposes.

Title I—Grants to States for Old-Age Assistance

Appropriation

Section 1. 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

ending 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. . . .

State Old-Age Assistance Plans

Sec. 2.

* * *

(b)The Board shall approve any plan which fulfills the

conditions specified in subsection (a), except that it shall

not approved any plan which imposes, as a condition of eli-

gibility 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;

(2) Any residence requirement which excludes any

resident of the State who has resided therein five years

during the nine years immediately preceding the applica-

tion for old-age assistance and has resided therein contin-

uously for one year immediately preceding the application;

(3) Any citizenship requirement which excludes any

citizen of the United States.

* * *

Definition

Sec. 6. When used in this title the term “old-age assis-

tance” means money payments to aged individuals.

Title II—Federal Old-Age Benefits

Old-Age Reserve Account

Section 201. (a) There is hereby created an account in

the Treasury of the United States to be known as the “Oil-

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 fis-

cal 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 princi-

ples, and based upon such tables of mortality as the Secre-

tary of the Treasury shall from time to time adopt, and

upon an interest rate of 3 per centum per annum com-

pounded annually. The Secretary of the Treasury shall sub-

mit annually to the Bureau of the Budget an estimate of

the appropriations to be made to the Account.

(b) 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 cur-

rent withdrawals. Such investment may be made only in

interest-bearing obligations of the United States or in obli-

gations guaranteed as to both principal and interest by the

United States. . . .

* * *

Old-Age Benefit Payments

Sec. 202. (a) 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 install-

ments). . .

* * *

(d) Whenever the Board finds that any qualified indi-

vidual has received wages with respect to regular employ-

ment 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

Sec. 203. (a) If any individual dies before attaining the

age of sixty-five, there shall be paid to his estate an amount

equal to 3 1/2 per centum of the total wages determined by

the Board to have been paid to him, with respect to

employment after December 31, 1936.

Payments to Aged Individuals not Qualified for

Benefits

Sec. 204. (a) 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 1/2 per cen-

tum 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.

(b) After any individual becomes entitled to any pay-

ment 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

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subsection (a) which is not paid to him before his death

shall be paid to his estate.

* * *

Definitions

Sec. 210. When used in this title—

(a) 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 individ-

ual by an employer with respect to employment during any

calendar year, is paid to such individual to such employer

with respect to employment during such calendar year.

(b) 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 polit-

ical 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, lit-

erary, 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.

ual with respect to whom it appears to the satisfaction of

the Board that—

(1) He is at least sixty-five years of age. . . .

Title III—Grants to States for Unemployment

Compensation Administration

Appropriation

Section 301. 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.

* * *

Title IV—Grants to States for Aid to

Dependent Children

Appropriation

Section 401. 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 fis-

cal year thereafter a sum sufficient to carry out the pur-

poses 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.

* * *

Definitions

Sec. 406. When used in this title—

(a) The term “dependent child” means a child under

the age of sixteen who has been deprived of parental sup-

port or care by reason of the death, continued absence

from the home, or physical or mental incapacity of a par-

ent, and who is living with his father, mother, grandfather,

grandmother, brother, sister, stepfather, stepmother, step-

brother, stepsister, uncle, or aunt, in a place of residence

maintained by one or more of such relatives as his or their

own home;

* * *

Title V—Grants to States for Maternal and

Child Welfare

Part 1—Maternal and Child Health Services

Appropriation

Section 501. For the purpose of enabling each State to

extend and improve, as far as practicable under the condi-

tions 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, begin-

ning 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 Chil-

dren’s Bureau, State plans for such services.

* * *

Part 2—Services for Crippled Children

Appropriation

Sec. 511. 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 practi-

cable under the conditions in such State, services for locat-

1380 ERA 8: The Great Depression and World War II

ing 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 appro-

priated 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.

* * *

Part 3—Child-Welfare Services

Sec. 521. (a) For the purpose of enabling the United

States, through the Children’s Bureau, to cooperate with

State public-welfare agencies in 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 chil-

dren in danger of becoming delinquent, there is hereby

authorized to be appropriated for each fiscal year, begin-

ning with the fiscal 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 agen-

cies on the basis of plans developed jointly by the State

agency and the Children’s Bureau. . . . 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 ser-

vices for the encouragement and assistance of adequate

methods of community child-welfare organization in areas

predominantly rural and other areas of special need. . . .

Part 4—Vocational Rehabilitation

Sec. 531. (a) 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 . . . “An Act to provide for the

promotion of vocational rehabilitation of persons disabled

in industry or otherwise and their return to civil employ-

ment”. . . 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 fis-

cal year thereafter the sum of $1,938,000. . . .

Title VI—Public Health Work

Appropriation

Section 601. For the purpose of assisting States, coun-

ties, health districts, and other political subdivisions of the

States in establishing and maintaining adequate public-

health services, including the training or personnel for

State and local health work, there is hereby authorized to

be appropriated for each fiscal year, beginning with the fis-

cal year ending June 30, 1936, the sum of $8,000,000 to be

used as hereinafter provided.

* * *

Investigations

Sec. 603. (a) There is hereby authorized to be appro-

priated for each fiscal year, beginning with the fiscal year

ending June 30, 1936, the sum of $2,000,000 for expendi-

ture by the Public Health Service for investigation of dis-

ease 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 offi-

cers, engaged in such investigations or detailed to cooper-

ate 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.

* * *

Title VII—Social Security Board

Establishment

Section 701. 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 Sen-

ate. . . . The President shall designate one of the members

as the chairman of the Board.

Duties of Social Security Board

Sec. 702. 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 com-

pensation, accident compensation, and related subjects.

* * *

Sec. 704. The Board shall make a full report to Congress,

at the beginning of each regular session, of the administra-

tion of the functions with which it is charged.

Title VIII—Taxes with Respect to Employment

Income Tax on Employees

Section 801. In addition to other taxes, there shall

be levied, collected, and paid upon the income of every

individual. . . .

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