Rosenfeld Susan. Encyclopedia of American Historical Documents

Sec. 802. (a) 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.

Deductibility from Income Tax

Sec. 803. 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 sec-

tion 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

Sec. 804. In addition to other taxes, every employer

shall pay an excise tax, with respect to having individuals in

his employ. . . .

Collection and Payment of Taxes

Sec. 807. (a) 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. . . .

* * *

Title IX—Tax on Employers of Eight or More

* * *

Unemployment Trust Fund

Sec. 904. (a) There is hereby established in the Trea-

sury 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.

(b) 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 guaran-

teed as to both principal and interest by the United

States. . . .

* * *

Title X—Grants to States for Aid to the Blind

Appropriation

Section 1001. 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 appropri-

ated 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.

* * *

Title XI—General Provisions

Definitions

Section 1101. (a) When used in this Act—

(1) The term “State” (except then used in section 531)

includes Alaska, Hawaii, and the District of Columbia.

(2) The term “United States” when used in a geo-

graphical 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 cor-

poration.

(b) 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.

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.

(d) Nothing in this Act shall be construed as authoriz-

ing any Federal official, agent, or representative, in carry-

ing 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

Sec. 1102. The Secretary of the Treasury, the Secre-

tary of Labor, and the Social Security Board, respectively,

1382 ERA 8: The Great Depression and World War II

shall make and publish such rules and regulations, not

inconsistent with this Act, as may be necessary to the effi-

cient administration of the functions with which each is

charged under this Act.

Source:

United States Statutes at Large, Vol. 48, pp. 620–647.

Revenue Act, 1935

New Deal legislation enacted on August 30, 1935, that

increased estate, gift, and capital stock tax rates, levied an

excess profits tax, and raised the surtax rate on individual

incomes over $50,000 to the highest rates in U.S. history. It

established a modest graduated tax on corporations in place of

the existing uniform tax, lowering the rate for small corpora-

tions and raising the rates for corporations with incomes above

$50,000. It raised federal taxes by $250 million. The act rep-

resented a watered-down version of President Franklin D.

Roosevelt’s controversial proposed program to redistribute

wealth and economic power.

________________________

_______________________

An Act

To provide revenue, equalize taxation, 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, That this Act may be cited as the “Revenue Act of

1935.”

Title I—Income and Excess-Profits Taxes

Sec. 101. Surtaxes on Individuals

* * *

“$7,700 upon surtax net incomes of $50,000; and upon sur-

tax net incomes in excess of $50,000 and not in excess of

$56,000, 31 per centum in addition of such excess.

“$9,560 upon surtax net incomes of $56,000; and upon

surtax net incomes in excess of $56,000 and not in excess

of $62,000, 35 per centum in addition of such excess.

“$11,660 upon surtax net incomes of $62,000; and

upon surtax net incomes in excess of $62,000 and not in

excess of $68,000, 39 per centum in addition of such

excess.

“$14,000 upon surtax net incomes of $68,000; and

upon surtax net incomes in excess of $68,000 and not in

excess of $74,000, 43 per centum in addition of such

excess.

“$16,580 upon surtax net incomes of $74,000; and

upon surtax net incomes in excess of $74,000 and not in

excess of $80,000, 47 per centum in addition of such

excess.

“$19,400 upon surtax net incomes of $80,000; and upon

surtax net incomes in excess of $80,000 and not in excess of

$90,000, 51 per centum in addition of such excess.

“$24,500 upon surtax net incomes of $90,000; and

upon surtax net incomes in excess of $90,000 and not in

excess of $100,000, 55 per centum in addition of such

excess.

* * *

“$286,000 upon surtax net incomes of $500,000; and upon

surtax net incomes in excess of $500,000 and not in excess

of $750,000, 70 per centum in addition of such excess.

“$461,000 upon surtax net incomes of $750,000; and

upon surtax net incomes in excess of $750,000 and not in

excess of $1,000,000, 72 per centum in addition of such

excess.

“$641,000 upon surtax net incomes of $1,000,000; and

upon surtax net incomes in excess of $1,000,000 and not in

excess of $2,000,000, 73 per centum in addition of such

excess.

“$1,371,000 upon surtax net incomes of $2,000,000;

and upon surtax net incomes in excess of $2,000,000 and

not in excess of $5,000,000, 74 per centum in addition of

such excess.

“$3,591,000 upon surtax net incomes of $5,000,000;

and upon surtax net incomes in excess of $5,000,000, 75

per centum in addition of such excess.”

Sec. 102. Income Taxes on Corporations

(a) Section 13(a) of the Revenue Act of 1934 is

amended to read as follows:

“(a) Rate of Tax.—There shall be levied, collected, and

paid for each taxable year upon the net income (in excess

of the credit against net income provided in section 26) of

every corporation, a tax as follows:

“Upon net incomes not in excess of $2,000, 12 1/2 per

centum.

“$250 upon net incomes of $2,000; and upon net

incomes in excess of $2,000 and not in excess of $15,000,

13 per centum in addition of such excess.

“$1,940 upon net incomes of $15,000; and upon net

incomes in excess of $15,000 and not in excess of $40,000,

14 per centum in addition of such excess.

“$5,440 upon net incomes of $40,000; and upon net

incomes in excess of $40,000, 15 per centum in addition of

such excess.”

* * *

deductions from gross income) is amended by adding at

the end thereof a new subsection as follows:

The New Deal 1383

“(r) Charitable and Other Contributions by Corpora-

tions.— In the case of a corporation, contributions or gifts

made within the taxable year to or for the use of a domes-

tic corporation, or domestic trust, or domestic community

chest, fund, or foundation, organized and operated exclu-

sively for religious, charitable, scientific, literary, or educa-

tional purposes or the prevention of cruelty to children. . .

no part of the net earnings of which inures to the benefit

of any private shareholder or individual, and no substantial

part of the activities of which is carrying on propaganda, or

otherwise attempting, to influence legislation; to an

amount which does not exceed 5 per centum of the tax-

payer’s net income as computed without the benefit of this

subsection. Such contributions or gifts shall be allowable

as deductions only if verified under rules and regulations

prescribed by the Commissioner, with the approval of the

Secretary.”

* * *

Sec. 105. Capital Stock Tax

(a) For each year ending June 30, beginning with the

year ending June 30, 1936, there is hereby imposed upon

every domestic corporation with respect to carrying on or

doing business for any part of such year an excise tax of

$1.40 for each $1,000 of the adjusted declared value of its

capital stock.

(b) For each year ending June 30, beginning with the

year ending June 30, 1936, there is hereby imposed upon

every foreign corporation with respect to carrying on or

doing business in the United States for any part of such

year an excise tax equivalent to $1.40 for each $1,000 of

the adjusted declared value of capital employed in the

transaction of its business in the United States.

* * *

Sec. 106. Excess-Profits Tax

(a) There is hereby imposed upon the net income of

every corporation for each income-tax taxable year ending

after the close of the first year in respect of which it is tax-

able under section 105, an excess-profits tax equal to the

sum of the following:

6 per centum of such portion of its net income for

such income-tax taxable year as is in excess of 10 per cen-

tum and not in excess of 15 per centum of the adjusted

declared value;

12 per centum of such portion of its net income for

such income-tax taxable year as is in excess of 15 per cen-

tum of the adjusted declared value.

* * *

Sec. 109. Personal Holding Companies

“(a) Imposition of Tax.—There shall be levied, col-

lected, and paid, for each taxable year, upon the undis-

tributed adjusted net income of every personal holding

company a surtax equal to the sum of the following:

“(1) 20 per centum of the amount thereof not in excess

of $2,000; plus

“(2) 30 per centum of the amount thereof in excess of

$2,000 and not in excess of $100,000; plus

“(3) 40 per centum of the amount thereof in excess of

$100.000 and not in excess of $500,000; plus

“(4) 50 per centum of the amount thereof in excess of

$500,000 and not in excess of $1,000,0000; plus

“(5) 60 per centum of the amount thereof in excess of

1,000,000.”

* * *

Title II—Amendments to Estate Tax

Sec. 201. Estate Tax Rates

“Upon net estates not in excess of $10,000, 2 per cen-

tum.

“$200 upon net estates of $10,000; and upon net

estates in excess of $10,000 and not in excess of $20,000, 4

per centum in addition of such excess.

“$600 upon net estates of $20,000; and upon net

estates in excess of $20,000 and not in excess of $30,000, 6

per centum in addition of such excess.

“$1,200 upon net estates of $30,000; and upon net

estates in excess of $30,000 and not in excess of $40,000, 8

per centum in addition of such excess.

“$2,000 upon net estates of $40,000; and upon net

estates in excess of $40,000 and not in excess of $50,000,

10 per centum in addition of such excess.

“$3,000 upon net estates of $50,000; and upon net

estates in excess of $50,000 and not in excess of $70,000,

12 per centum in addition of such excess.

* * *

“$112,600 upon net estates of $600,000; and upon net

estates in excess of $600,000 and not in excess of $800,000,

26 per centum in addition of such excess.

* * *

“$222,600 upon net estates of $1,000,000; and upon net

estates in excess of $1,000,000 and not in excess of

$1,500,000, 32 per centum in addition of such excess.

* * *

“$1,922,600 upon net estates of $5,000,000; and upon net

estates in excess of $5,000,000 and not in excess of

$6,000,000, 56 per centum in addition of such excess.

* * *

“$4,962,600 upon net estates of $10,000,000; and

upon net estates in excess of $10,000,000 and not in

1384 ERA 8: The Great Depression and World War II

excess of $20,000,000, 67 per centum in addition of such

excess.

* * *

“$32,362,600 upon net estates of $50,000,000; and upon

net estates in excess of $50,000,000, 70 per centum in

addition of such excess.”

* * *

Title III—Amendments to Gift Tax

Sec. 301. Gift Tax Rates

“Upon net gifts not in excess of $10,000, 1 1/2 per

centum.

* * *

“$1,500 upon net gifts of $40,000; and upon net gifts in

excess of $40,000 and not in excess of $50,000, 7 1/2 per

centum in addition of such excess.

“$2,250 upon net gifts of $50,000; and upon net gifts

in excess of $50,000 and not in excess of $70,000, 9 per

centum in addition of such excess.

* * *

“$7,200 upon net gifts of $100,000; and upon net gifts in

excess of $100,000 and not in excess of $200,000, 12 3/4

per centum in addition of such excess.

* * *

“$84,450 upon net gifts of $600,000; and upon net gifts in

excess of $600,000 and not in excess of $800,000, 19 1/2

per centum in addition of such excess.

* * *

“$166,950 upon net gifts of $1,000,000; and upon net gifts

in excess of $1,000,000 and not in excess of $1,500,000, 24

per centum in addition of such excess.

* * *

“$1,441,950 upon net gifts of $5,000,000; and upon net

gifts in excess of $5,000,000 and not in excess of

$6,000,000, 42 per centum in addition of such excess.

* * *

“$3,721,950 upon net gifts of $10,000,000; and upon net

gifts in excess of $10,000,000 and not in excess of

$20,000,000, 50 1/4 per centum in addition of such excess.

* * *

“$24,271,950 upon net gifts of $50,000,000; and upon net

gifts in excess of $50,000,000, 52 1/2 per centum in addi-

tion of such excess.”

* * *

Title IV—Miscellaneous Provisions

* * *

Sec. 406. Failure to File Returns

In the case of a failure to make and file an internal-

revenue tax return required by law, within the time pre-

scribed by law or prescribed by the Commissioner in

pursuance of law, if the last date so prescribed for filing the

return is after the date of the enactment of this Act, if a 25

per centum addition to the tax is prescribed by existing

law, then there shall be added to the tax, in lieu of such 25

per centum; 5 per centum if the failure is for not more

than 30 days, with an additional 5 per centum for each

additional 30 days or fraction thereof during which failure

continues, not to exceed 25 per centum in the aggregate.

* * *

Title V—General Provisions

Sec. 501. Definitions

(a) When used in this Act—

(1) The term “person” means an individual, a trust or

estate, a partnership, or a corporation.

(2) The term “corporation” includes associations,

joint-stock companies, and insurance companies.

(3) The term “domestic” when applied to a corpora-

tion or partnership means created or organized in the

United States or under the law of the United States or of

any State or Territory.

(4) The term “foreign” when applied to a corporation

or partnership means a corporation or partner which is not

domestic.

(5) The term “stock” includes the share in an associa-

tion, joint-stock company, or insurance company.

(6) The term “shareholder” includes a member in an

association, joint-stock company, or insurance company.

(7) The term “United States” when used in a geo-

graphical sense includes only the States, the Territories of

Alaska and Hawaii, and the District of Columbia.

* * *

Sec. 502. Separability Clause

If any provision of this Act, or the application thereof

to any person or circumstances, is held invalid, the remain-

der of the Act, and the application of such provisions to

other persons or circumstances, shall not be affected

thereby.

Sec. 503. Effective Date of Act

Except as otherwise provided, this Act shall take effect

upon its enactment.

Approved, August 30, 1935, at 6 p.m.

Source:

United States Statutes at Large, vol. 48, pp. 1,014–1,028.

The New Deal 1385

Neutrality Act of 1937

Federal legislation enacted on May 1, 1937, to keep the

United States from becoming embroiled in international con-

flicts, particularly the Spanish civil war (1936–39). That war

pitted the government loyalists against rebel fascists under

Francisco Franco. Because Nazi leader Adolf Hitler and Ital-

ian dictator Benito Mussolini supported Franco, many North

Americans and Europeans considered the war an opportunity

to stop fascism from spreading. However, Great Britain,

France, and the United States refused to get involved. Only

the Soviet Union sent troops against Franco, assisted by sev-

eral “international brigades,” which were under communist

leadership. A number of American antifascists, regardless of

whether they were party members, joined the Abraham Lin-

coln Brigade. During the cold war, their participation in the

Spanish civil war would brand them as communists or com-

munist sympathizers.

The act strengthened earlier congressional resolutions

(1935–37) by placing an embargo on the export of arms,

ammunition, and other war materials to belligerents in civil

wars or wars between two or more foreign powers; by prohi-

biting loans or credit to belligerents; by forbidding American

vessels to carry arms to belligerents; and by restricting the use

of U.S. ports as a base of supply by such nations. American

merchant vessels were prohibited from being armed. The act

created the National Munitions Control Board to enforce its

provisions.

The U.S. Neutrality Act of November 4, 1939, repealed

the arms embargo. Passed after the eruption of World War II in

Europe, the act restated a U.S. policy of neutrality but allowed

Great Britain and France to buy arms and munitions on a

“cash and carry” basis; they would have to pay cash and trans-

port the war materials themselves. The act prohibited U.S. cit-

izens from sailing on belligerent ships and U.S. ships from

sailing to belligerent ports; it authorized the president to forbid

ships to enter combat zones. It also prohibited the arming of

merchant vessels. In November 1941 Congress repealed the

restrictions on the arming of merchant vessels and allowed

such ships to carry cargoes to belligerent ports.

________________________

_______________________

Joint Resolution

To amend the joint resolution entitled “Joint resolution

providing for the prohibition of the export of arms, ammu-

nition, and implements of war to belligerent countries; the

prohibition of the transportation of arms, ammunition, and

implements of war by vessels of the United States for the

use of belligerent states; for the registration and licensing

of persons engaged in the business of manufacturing,

exporting, or importing arms, ammunition, or implements

of war; and restricting travel by American citizens on bel-

ligerent ships during war,” approved August 31, 1935, as

amended.

Resolved by the Senate and House of Representatives

of the United States of America in Congress assembled,

That the joint resolution entitled “Joint resolution provid-

ing for the prohibition of the export or arms, ammunition,

and implements of war to belligerent countries; the prohi-

bition of the transportation of arms, ammunition, and

implements of war by vessels of the United States for the

use of belligerent states; for the registration and licensing

of persons engaged in the business of manufacturing,

exporting, or importing arms, ammunition, or implements

of war; and restricting travel by American citizens on bel-

ligerent ships during war,” approved August 31, 1935, as

amended, is amended to read as follows:

“Export of Arms, Ammunition, and

Implements of War

“Section 1. (a) Whenever the President shall find that

there exists a state of war between, or among, two or more

foreign states, the President shall proclaim such fact, and

it shall thereafter be unlawful to export, or attempt to

export, or cause to be exported, arms, ammunition, or

implements of war from any place in the United States to

any belligerent state named in such proclamation, or to any

neutral state for transshipment to, or for the use of, any

such belligerent state.

“(b) The President shall, from time to time, by procla-

mation, extend such embargo upon the export of arms,

ammunition, or implements of war to other states as and

when they may become involved in such war.

“(c) Whenever the President shall find that a state of

civil strife exists in a foreign state and that such civil strife

is of a magnitude or is being conducted under such condi-

tions that the export of arms, ammunition, or implements

of war from the United States to such foreign state would

threaten or endanger the peace of the United States, the

President shall proclaim such fact, and it shall thereafter

be unlawful to export, or attempt to export, or cause to be

exported, arms, ammunition, or implements of war from

any place in the United States to such foreign state, or to

any neutral state for transshipment to, or for the use of,

such foreign state.

“(d) The President shall, from time to time by procla-

mation, definitely enumerate the arms, ammunition, and

implements of war, the export of which is prohibited by

this section. The arms, ammunition, and implements of

war so enumerated shall include those enumerated in the

President’s proclamation Numbered 2163, of April 10,

1936, but shall not include raw materials or any other arti-

cles or materials not of the same general character as those

enumerated in the said proclamation, and in the Conven-

1386 ERA 8: The Great Depression and World War II

tion for the Supervision of the International Trade in Arms

and Ammunition and in Implements of War, signed at

Geneva June 17, 1925.

“(e) Whoever, in violation of any of the provisions of

this Act, shall export, or attempt to export, or cause to be

exported, arms, ammunition, or implements of war from

the United States shall be fined not more than $10,000, or

imprisoned not more than five years, or both, and the

property, vessel, or vehicle containing the same shall be

subject to the provisions of sections 1 to 8, inclusive, title

6, chapter 30, of the Act approved June 15, 1917 (40 Stat.

223-225; U.S.C., 1934 ed., title 22, secs. 238-245).

“(f) In the case of the forfeiture of any arms, ammuni-

tion, or implements of war by reason of a violation of this

Act, no public or private sale shall be required; but such

arms, ammunition, or implements of war shall be deliv-

ered to the Secretary of War for such use or disposal

thereof as shall be approved by the President of the United

States.

“(g) Whenever, in the judgment of the President, the

conditions which have cause him to issue any proclamation

under the authority of this section have ceased to exist, he

shall revoke the same, and the provisions of this section

shall thereupon cease to apply with respect to the state or

states named in such proclamation, except with respect to

offenses committed, or forfeitures incurred, prior to such

revocation…

“Financial Transactions

“Sec. 3. (a) Whenever the President shall have issued a

proclamation under the authority of section 1 of this Act, it

shall thereafter be unlawful for any person within the

United States to purchase, sell, or exchange bonds, securi-

ties, or other obligations of the government of any bel-

ligerent state or of any state wherein civil strife exists,

named in such proclamation, or of any political subdivision

of any such state, or of any person acting for or on behalf

of the government of any such state, or of any faction or

asserted government within any such state wherein civil

strife exists, or of any person acting for or on behalf of any

faction or asserted government within any such state

wherein civil strife exists, issued after the date of such

proclamation, or to make any loan or extend any credit to

any such government, political subdivision, faction,

asserted government, or person, or to solicit or receive any

contribution for any such government, political subdivi-

sion, faction, asserted government, or person: Provided,

That if the President shall find that such action will serve

to protect the commercial or other interests of the United

States or its citizens, he may, in his discretion, and to such

extent and under such regulations as he may prescribe,

except from the operation of this section ordinary com-

mercial credits and short-time obligations in aid of legal

transactions and of a character customarily used in normal

peacetime commercial transactions. Nothing in this sub-

section shall be construed to prohibit the solicitation or

collection of funds to be used for medical aid and assis-

tance, or for food and clothing to relieve human suffering,

when such solicitation or collection of funds is made on

behalf of and for use by any person or organization which

is not acting for or on behalf of any such government,

political subdivision, faction, or asserted government, but

all such solicitations and collections of funds shall be sub-

ject to the approval of the President and shall be made

under such rules and regulations as he shall prescribe.

“(b) The provisions of this section shall not apply to a

renewal or adjustment of such indebtedness as may exist

on the date of the President’s proclamation.

“(c) Whoever shall violate the provisions of this sec-

tion or of any regulations issued hereunder shall, upon

conviction thereof, be fined not more than $50,000 or

imprisoned for not more than five years, or both. Should

the violation be by a corporation, organization, or associa-

tion, each officer or agent thereof participating in the vio-

lation may be liable to the penalty herein prescribed.

“(d) Whenever the President shall have revoked any

such proclamation issued under the authority of section 1

of this Act, the provisions of this section and of any regula-

tions issued by the President hereunder shall thereupon

cease to apply with respect to the state or states named in

such proclamation, except with respect to offenses com-

mitted prior to such revocation.

Exceptions—American Republics

“Sec. 4. This Act shall not apply to an American republic

or republics engaged in war against a non-American state

or states, provided the American republic is not cooperat-

ing with a non-American state or states in such war.

“National Munitions Control Board

“Sec. 5. (a) There is hereby established a National Muni-

tions Control Board (hereinafter referred to as the ‘Board’)

to carry out the provisions of this Act. The Board shall con-

sist of the Secretary of State, who shall be chairman and

executive officer of the Board, the Secretary of the Trea-

sury, the Secretary of War, the Secretary of the Navy, and

the Secretary of Commerce. Except as otherwise provided

in this Act, or by other law, the administration of this Act

is vested in the Department of State. The Secretary of

State shall promulgate such rules and regulations with

regard to the enforcement of this section as he may deem

necessary to carry out its provisions. The Board shall be

convened by the chairman and shall hold at least one

meeting a year.

The New Deal 1387

“(b) Every person who engages in the business of

manufacturing, exporting, or importing any of the arms,

ammunition, or implements of war referred to in this Act,

whether as an exporter, importer, manufacturer, or dealer,

shall register with the Secretary of State his name, or busi-

ness name, principal place of business, and places of busi-

ness in the United States, and a list of the arms,

ammunition, and implements of war which he manufac-

tures, imports, or exports.

“(c) Every person required to register under this sec-

tion shall notify the Secretary of State of any change in the

arms, ammunition, or implements of war which he exports,

imports, or manufactures; and upon such notification the

Secretary of State shall issue to such person an amended

certificate of registration, free of charge, which shall

remain valid until the date of expiration of the original cer-

tificate. Every person required to register under the provi-

sions of this section shall pay a registration fee of $500,

unless he manufactured, exported, or imported arms,

ammunition, and implements of war to a total sales value

of less than $50,000 during the twelve months immediately

preceding his registration, in which case he shall pay a reg-

istration fee of $100. Upon receipt of the required regis-

tration fee, the Secretary of State shall issue a registration

certificate valid for five years, which shall be renewable for

further periods of five years upon the payment for each

renewal of a fee of $500 in the case of persons who manu-

factured, exported, or imported arms, ammunition, and

implements of war to a total sales value of more than

$50,000 during the twelve months immediately preceding

the renewal, or a fee of $100 in the case of persons who

manufactured, exported, or imported arms, ammunition,

and implements of war to a total sales value of less than

$50,000 during the twelve months immediately preceding

the renewal. The Secretary of the Treasury is hereby

directed to refund, out of any moneys in the Treasury not

otherwise appropriated, the sum of $400 to every person

who shall have paid a registration fee of $500 pursuant to

this Act, who manufactured, exported, or imported arms,

ammunition, and implements of war to a total sales value

of less than $50,000 during the twelve months immediately

preceding his registration.

“(d) It shall be unlawful for any person to export, or

attempt to export, from the United States to any other

state, any of the arms, ammunition, or implements of war

referred to in this Act, or to import, or attempt to import,

to the United States from any other state, any of the arms,

ammunition, or implements of war referred to in this Act,

without first having obtained a license therefor.

“(e) All persons required to register under this section

shall maintain, subject to the inspection of the Secretary of

State, or any person or persons designated by him, such

permanent records of manufacture for export, importa-

tion, and exportation of arms, ammunition, and imple-

ments of war as the Secretary of State shall prescribe.

“(f) Licenses shall be issued to persons who have reg-

istered as herein provided for, except in cases of export or

import licenses where the export of arms, ammunition, or

implements of war would be in violation of this Act or any

other law of the United States, or of a treaty to which the

United States is a party, in which cases such licenses shall

not be issued.

“(g) Whenever the President shall have issued a

proclamation under the authority of section 1 of this Act,

all licenses theretofore issued under this Act shall ipso

facto and immediately upon the issuance of such procla-

mation, cease to grant authority to export arms, ammuni-

tion, or implements of war from any place in the United

States to any belligerent state, or to any state wherein civil

strife exists, named in such proclamation, or to any neutral

state for transshipment to, or for the use of, any such bel-

ligerent state or any such state wherein civil strife exists;

and said licenses, insofar as the grant of authority to export

to the state or states named in such proclamation is con-

cerned, shall be null and void.

“(h) No purchase of arms, ammunition, or implements

of war shall be made on behalf of the United States by any

officer, executive department, or independent establish-

ment of the Government from any person who shall have

failed to register under the provisions of this Act.

“(i) The provisions of the Act of August 29, 1916, relat-

ing to the sale of ordnance and stores to the Government

of Cuba (39 Stat. 619, 643; U.S.C., 1934 ed., title 50, sec.

72), are hereby repealed as of December 31, 1937.

“(j) The Board shall make an annual report to

Congress, copies of which shall be distributed as are other

reports transmitted to Congress. Such reports shall contain

such information and data collected by the Board as may

be considered of value in the determination of questions

connected with the control of trade in arms, ammunition,

and implements of war. The Board shall include in such

reports a list of all persons required to register under the

provisions of this Act, and full information concerning the

licenses issued hereunder

“(k) The President is hereby authorized to proclaim

upon recommendation of the Board from time to time a

list of articles which shall be considered arms, ammuni-

tion, and implements of war for the purposes of this sec-

tion.

“American Vessels Prohibited from Carrying Arms to

Belligerent States

“Sec. 6. (a) Whenever the President shall have issued

a proclamation under the authority of section 1 of this Act,

it shall thereafter be unlawful, until such proclamation is

1388 ERA 8: The Great Depression and World War II

revoked, for any American vessel to carry any arms, ammu-

nition, or implements of war to any belligerent state, or to

any state wherein civil strife exists, named in such procla-

mations, or to any neutral state for transshipment to, or for

the use of, any such belligerent state or any such state

wherein civil strife exists.

“(b) Whoever, in violation of the provisions of this sec-

tion, shall take, or attempt to take, or shall authorize, hire,

or solicit another to take, any American vessel carrying

such cargo out of port or from the jurisdiction of the

United States shall be fined not more than $10,000, or

imprisoned not more than five years, or both; and, in addi-

tion, such vessel, and her tackle, apparel, furniture, and

equipment, and the arms, ammunition, and implements of

war on board, shall be forfeited to the United States.

“Use of American Ports as Base of Supply

“Sec. 7. (a) Whenever, during any war in which the United

States is neutral, the President, or any person thereunto

authorized by him, shall have cause to believe that any ves-

sel, domestic or foreign, whether requiring clearance or

not, is about to carry out of a port of the United States,

fuel, men, arms, ammunition, implements of war, or other

supplies to any warship, tender, or supply ship of a bel-

ligerent state, but the evidence is not deemed sufficient to

justify forbidding the departure of the vessel as provided

for by section 1, title V, chapter 30, of the Act approved

June 15, 1917 (40 Stat. 217, 221; U.S.C., 1934 ed., title 18,

sec. 31), and if, in the President’s judgment; such action

will serve to maintain peace between the United States

and foreign states, or to protect the commercial interests

of the United States and its citizens, or to promote the

security or neutrality of the United States, he shall have

the power and it shall be his duty to require the owner,

master, or person in command thereof, before departing

from a port of the United States, to give a bond to the

United States, with sufficient sureties, in such amount as

he shall deem proper, conditioned that the vessel will not

deliver the men, or any part of the cargo, to any warship,

tender, or supply ship of a belligerent state.

“(b) If the President, or any person thereunto au-

thorized by him, shall find that a vessel, domestic or

foreign, in a port of the United States, has previously

cleared from a port of the United States during such war

and delivered its cargo or any part thereof to a warship,

tender, or supply ship of a belligerent state, he may pro-

hibit the departure of such vessel during the duration of

the war.

“Submarines and Armed Merchant Vessels

“Sec. 8. Whenever, during any war in which the United

States is neutral, the President shall find that special

restrictions placed on the use of the ports and territorial

waters of the United States by the submarines or armed

merchant vessels of a foreign state, will serve to maintain

peace between the United States and foreign states, or to

protect the commercial interests of the United States and

its citizens, or to promote the security of the United

States, and shall make proclamation thereof, it shall

thereafter be unlawful for any such submarine or armed

merchant vessel to enter a port or the territorial waters of

the United States or to depart therefrom, except under

such conditions and subject to such limitations as the

President may prescribe. Whenever, in his judgment, the

conditions which have caused him to issue his proclama-

tion have ceased to exist, he shall revoke his proclamation

and the provisions of this section shall thereupon cease

to apply.

“Travel on Vessels of Belligerent States

“Sec. 9. Whenever the President shall have issued a procla-

mation under the authority of section 1 of this Act it shall

thereafter be unlawful for any citizen of the United States

to travel on any vessel of the state or states named in such

proclamation, except in accordance with such rules and

regulations as the President shall prescribe: Provided,

however, That the provisions of this section shall not apply

to a citizen of the United States traveling on a vessel whose

voyage was begun in advance of the date of the President’s

proclamation, and who had no opportunity to discontinue

his voyage after that date: And provided further, That they

shall not apply under ninety days after the date of the Pres-

ident’s proclamation to a citizen of the United States

returning from a foreign state to the United States. When-

ever, in the President’s judgment, the conditions which

have caused him to issue his proclamation have ceased to

exist, he shall revoke his proclamation and the provisions

of this section shall thereupon cease to apply with respect

to the state or states named in such proclamation, except

with respect to offenses committed prior to such revoca-

tion.

“Arming of American Merchant Vessels Prohibited

“Sec. 10. Whenever the President shall have issued a

proclamation under the authority of section 1, it shall

thereafter be unlawful, until such proclamation is

revoked, for any American vessel engaged in commerce

with any belligerent state, or any state wherein civil strife

exists, named in such proclamation, to be armed or to

carry any armament, arms, ammunition, or implements of

war, except small arms and ammunition therefor which

the President may deem necessary and shall publicly

designate for the preservation of discipline aboard such

vessels.

The New Deal 1389

Source:

United States Statutes at Large, Vol. 49, pp. 121–128.

Franklin Roosevelt, Court-Packing Bill,

Fireside Chat, 1937

National radio address by President Franklin D. Roosevelt on

March 9, 1937, promoting his controversial legislative pro-

posal to reorganize the federal judiciary.

Beginning early in his first term, Roosevelt used these

radio lectures, dubbed “fireside chats,” to give them a homey,

personal air, to address and reassure the nation concerning

current problems during the Great Depression.

Roosevelt was frustrated by the Supreme Court’s decla-

ration of emergency New Deal legislation as unconstitu-

tional. The Court’s invalidation of early New Deal measures

persuaded FDR that the federal judiciary, unless tamed,

would derail his program for saving the country from the eco-

nomic and social ruin of the depression. Emboldened by his

landslide reelection in 1936, Roosevelt moved legislatively to

rein in the courts. He used a fireside chat to present to the

American people his plan, which he had formally presented

to Congress on February 5. It called for adding a justice for

each one who, having served at least 10 years, remained on

the bench for more than six months after he (they were all

men) turned 70. Dubbed “court-packing” by his critics, the

plan, according to them, reinforced by the message in the

fireside chat, simply sought to increase the Supreme Court’s

membership in order to pack it with sympathetic justices who

would uphold the New Deal. In the address, FDR suggested

that the federal courts in the previous generation had aggran-

dized power at the expense of Congress and the president,

wielding such power to frustrate the popular will. The

Supreme Court, he asserted, imperiled the national interest

by blocking his crisis program for restoring and stabilizing the

U.S. economic system. He masked his overt political purpose

by offering the plan as a necessary reform initiative for the

overburdened and inefficient federal judiciary.

________________________

_______________________

My friends, last Thursday I described in detail certain eco-

nomic problems which everyone admits now face the

Nation. For the many messages which have come to me

after that speech, and which it is physically impossible to

answer individually, I take this means of saying “Thank

you.”

Tonight, sitting at my desk in the White House, I

make my first radio report to the people in my second term

of office.

I am reminded of that evening in March, four years

ago, when I made my first radio report to you. We were

then in the midst of the great banking crisis.

Soon after, with the authority of the Congress, we

asked the Nation to turn over all of its privately held gold,

dollar for dollar, to the Government of the United States.

Today’s recovery proves how right that policy was.

But when, almost two years later, it came before the

Supreme Court, its constitutionality was upheld only by a

five-to-four vote. The change of one vote would have

thrown all the affairs of this great Nation back into hope-

less chaos. In effect, four Justices ruled that the right

under a private contract to exact a pound of flesh was more

sacred than the main objectives of the Constitution to

establish an enduring Nation.

In 1933 you and I knew that we must never let our eco-

nomic system get completely out of joint again—that we

could not afford to take the risk of another great depression.

We also became convinced that the only way to avoid

a repetition of those dark days was to have a government

with power to prevent and to cure the abuses and the

inequalities which had thrown that system out of joint.

We then began a program of remedying those abuses

and inequalities—to give balance and stability to our eco-

nomic system—to make it bomb-proof against the causes

of 1929.

Today we are only part-way through that program—

and recovery is speeding up to a point where the dangers

of 1929 are again becoming possible, not this week or

month perhaps, but within a year or two.

National laws are needed to complete that program.

Individual or local or state effort alone cannot protect us in

1937 any better than ten years ago.

It will take time—and plenty of time—to work out our

remedies administratively even after legislation is passed.

To complete our program of protection in time, therefore,

we cannot delay one moment in making certain that our

National Government has power to carry through.

Four years ago action did not come until the eleventh

hour. It was almost too late.

If we learned anything from the depression we will not

allow ourselves to run around in new circles of futile dis-

cussion and debate, always postponing the day of decision.

The American people have learned from the depres-

sion. For in the last three national elections an over-

whelming majority of them voted a mandate that the

Congress and the President begin the task of providing

that protection—not after long years of debate, but now.

The Courts, however, have cast doubts on the ability

of the elected Congress to protect us against catastrophe

by meeting squarely our modern social and economic

conditions.

1390 ERA 8: The Great Depression and World War II

We are at a crisis, a crisis in our ability to proceed with

that protection. It is a quiet crisis. There are no lines of

depositors outside closed banks. But to the far-sighted it is

far-reaching in its possibilities of injury to America.

I want to talk with you very simply tonight about the

need for present action in this crisis—the need to meet the

unanswered challenge of one-third of a Nation ill-nour-

ished, ill-clad, ill-housed.

Last Thursday I described the American form of Gov-

ernment as a three-horse team provided by the Constitu-

tion to the American people so that their field might be

plowed. The three horses are, of course, the Congress, the

Executive and the Courts. Two of the horses, the Congress

and the Executive, are pulling in unison today; the third is

not. Those who have intimated that the President of the

United States is trying to drive that team, overlook the sim-

ple fact that the President, as Chief Executive, is himself

one of the three horses.

It is the American people themselves who are in the

driver’s seat. It is the American people themselves who

want the furrow plowed.

It is the American people themselves who expect the

third horse to pull in unison with the other two.

I hope that you have re-read the Constitution of the

United States in these past few weeks. Like the Bible, it

ought to be read again and again.

It is an easy document to understand when you

remember that it was called into being because the Articles

of Confederation under which the original thirteen States

tried to operate after the Revolution showed the need of a

National Government with power enough to handle

national problems. In its Preamble, the Constitution states

that it was intended to form a more perfect Union and pro-

mote the general welfare; and the powers given to the

Congress to carry out those purposes can best be described

by saying that they were all the powers needed to meet

each and every problem which then had a national charac-

ter and which could not be met by merely local action.

But the framers went further. Having in mind that in

succeeding generations many other problems then

undreamed of would become national problems, they gave

to the Congress the ample broad powers “to levy taxes . . .

and provide for the common defense and general welfare

of the United States.”

That, may friends, is what I honestly believe to have

been the clear and underlying purpose of the patriots who

wrote a Federal Constitution to create a National Govern-

ment with national power, intended as they said, “to form

a more perfect union . . . for ourselves and our posterity.”

For nearly twenty years there was no conflict between

the Congress and the Court. Then, in 1803, Congress

passed a statute which the Court said violated an express

provision of the Constitution. The Court claimed the

power to declare it unconstitutional and did so declare it.

But a little later the Court itself admitted that it was an

extraordinary power to exercise and through Mr. Justice

Washington laid down this limitation upon it. He said: “It

is but a decent respect due to the wisdom, the integrity

and the patriotism of the Legislative body, by which any

law is passed, to presume in favor of its validity until its vio-

lation of the Constitution is proved beyond all reasonable

doubt.”

But since the rise of the modern movement for social

and economic progress through legislation, the Court has

more and more often and more and more boldly asserted

a power to veto laws passed by the Congress and by State

Legislatures in complete disregard of this original limita-

tion, which I have just read.

In the last four years the sound rule of giving statutes

the benefit of all reasonable doubt has been cast aside. The

Court has been acting not as a judicial body, but as a pol-

icy-making body.

When the Congress has sought to stabilize national

agriculture, to improve the conditions of labor, to safe-

guard business against unfair competition, to protect our

national resources, and in many other ways to serve our

clearly national needs, the majority of the Court has been

assuming the power to pass on the wisdom of these Acts of

the Congress—and to approve or disapprove the public

policy written into these laws.

That is not only my accusation. It is the accusation of

most distinguished Justices of the present Supreme Court.

I have not the time to quote to you all the language used

by dissenting Justices in many of these cases. But in the

case holding the Railroad Retirement Act unconstitu-

tional, for instance, Chief Justice Hughes said in a dissent-

ing opinion that the majority opinion was “a departure

from sound principles,” and placed “an unwarranted limi-

tation upon the commerce clause.” And three other Jus-

tices agreed with him.

In the case holding the Triple A unconstitutional, Jus-

tice Stone said of the majority opinion that it was a “tor-

tured construction of the Constitution.” And two other

Justices agreed with him.

In the case holding the New York Minimum Wage

Law unconstitutional, Justice Stone said that the majority

were actually reading into the Constitution their own “per-

sonal economic predilections,” and that if the legislative

power is not left free to choose the methods of solving the

problems of poverty, subsistence and health of large num-

bers in the community, then “government is to be ren-

dered impotent.” And two other Justices agreed with him.

In the face of these dissenting opinions, there is no

basis for the claim made by some members of the Court

The New Deal 1391

Rosenfeld Susan. Encyclopedia of American Historical Documents

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