1935 - Commerce
Commerce
"We must quit this business of relief" and create 3½ million jobs for employables, says President Roosevelt January 7 in an address to a joint session of Congress.
Former Supreme Court justice Oliver Wendell Holmes dies at Washington March 6, just 2 days short of his 94th birthday, leaving the bulk of his $260,000-plus estate to the U.S. Government—the largest unrestricted gift ever made to the American people; the money will lay idle for more than 20 years, not even collecting interest.
The Bank of Canada begins operations March 11 to regulate credit and currency for the Ministry of Finance. Founded by the Canadian Parliament at Ottawa last year, it serves as the government's fiscal agent and has sole authority to issue paper money.
An Emergency Relief Appropriation Act passed by Congress April 8 authorizes nearly $5 billion to provide "work relief and to increase employment by providing useful projects."
A Works Progress Administration (WPA) created by executive order May 6 is headed by Harry L. Hopkins. A National Youth Administration (NYA) created June 26 as a division of the WPA is to provide jobs for 4.2 million young people seeking work.
The National Industrial Recovery Act (NIRA) of 1933 is unconstitutional, the Supreme Court rules May 27 in Schechter Poultry Corp. v. United States. The "sick chicken" case involves some New York wholesale kosher slaughterhouse operators (called "market men"), who have been found guilty of violating the NIRA's "live poultry code" (promulgated under Section 3 of the NIRA), fined $5,000, and given 3-month jail sentences. The Court concedes that "extraordinary conditions may call for extraordinary remedies" but rules unanimously that by setting maximum hours and minimum wages the code violates not only the commerce clause in the Constitution but also the separation of powers clause, since Congress may not delegate legislative power to the president and give him "an unfettered discretion to make whatever laws he thinks may be needed or advisable for the rehabilitation and expansion of trade or industry." The ruling is a setback for organized labor, whose leaders have been pushing for a 30-hour week to ease unemployment, and it infuriates President Roosevelt, who says the high court is composed of "nine old men."
The Railway Pension Act of 1934 is unconstitutional, the Supreme Court rules June 27 in the case of Railroad Retirement Board v. Alton Railway Co., but Congress passes a Railway Retirement Act to replace the 1934 law. Railroads and their employees are each to contribute 3.5 percent of the first $300 earned each month to build a retirement fund.
The National Labor Relations Act (Wagner-Connery Act) passed by Congress July 5 creates a National Labor Relations Board and reasserts the right of workers to organize and bargain collectively. The right was contained in section 7a of the NLRA code of 1933 that the Supreme Court has struck down, but although the new law bars employers from dismissing a worker simply for joining, or wanting to join, a union it will be weakened in years to come by court decisions, administrative rulings, and the growing willingness of employers to be ruthless (see Taft-Hartley Act, 1947).
The Social Security Act signed into law August 14 provides a system of old-age annuities and unemployment insurance benefits (see Canada, 1927). Drafted by Eastman Kodak treasurer Marion B. (Bayard) Folsom, 41, the act provides for state aid to be matched by federal aid of up to $15 per month for needy retirees over age 65, with employers and employees taxed equally to support the program by means of payroll deductions (railroad employees are covered separately under terms of the Railroad Retirement Act). The tax is to begin in 1937 at 1 percent and rise by steps to 3 percent in 1949; qualified employees are to be able to retire at age 65 beginning January 1, 1942, and receive payments of $10 to $15 per month for the rest of their lives. Title IV A of the act provides financial assistance to families with dependent children (Aid to Families with Dependent Children, or AFDC) and will be the law of the land until 1996, despite charges that it creates a permanent "underclass." President Roosevelt appoints former New Hampshire governor John G. (Gilbert) Winant, 47, chairman of the Social Security Board. The Social Security Act provides for a fund to help states pay allowances to workers who have lost their jobs. Beginning with 1936 payrolls, employers are to set aside for this purpose a 1 percent tax in the first year, 2 percent the second, and 3 percent the year after, with employees contributing half the amount set aside (see 1939).
Chicago entrepreneur John D. MacArthur, 38, buys the bankrupt Bankers Life & Casualty Corp. for $2,500.
President Roosevelt reports Internal Revenue Service figures for the year in a monopoly message: one-tenth of 1 percent of U.S. corporations own 52 percent of all corporate assets reported and earn 50 percent of all corporate income. Less than 5 percent own 87 percent of all corporate assets, and less than 4 percent earn 87 percent of all net profits reported by all U.S. corporations.
The Banking Act signed into law August 23 reorganizes the Federal Reserve System created in 1913 and increases its authority. The new law establishes an open market committee to buy and sell government securities held by the Federal Reserve Banks and thus control the nation's money supply; it also regulates checking accounts and requires that banks contribute to the support of a Federal Deposit Insurance Corp. that protects depositors from default or theft.
Fort Knox is established in Kentucky to serve as a repository for U.S. gold bullion. The army guards the gold and the government assures foreign bankers that they can redeem every $35 in U.S. paper currency for an ounce of gold from Treasury Department stores at Fort Knox (which do not approach those held for the accounts of various nations in the vaults of the Federal Reserve Bank at New York).
A Revenue Act passed by Congress August 30 seeks to achieve some diffusion of wealth. The law provides for inheritance and gift taxes; critics protest that the law means double taxation for recipients of stock dividends and clippers of bond coupons.
The United Automobile Workers (UAW) founded at Detroit August 26 finds a warm reception from employees who have had no job security, no grievance procedures, no protective equipment, no work standards, no overtime pay after 8 hours, no shift preferences, no paid holidays, and no real union representation (see 1932). Wheeling W. Va.-born organizer Walter P. (Philip) Reuther, 27, has been a Ford Motor Company foreman and has brought together several small locals; he forms Local 174 and makes himself president. The union receives a charter from the AFL and by next year will have 27,058 members (see 1936).
The Committee for Industrial Organization (CIO) is founded November 9 by dissidents within the American Federation of Labor who advocate industrial unionism but have been outvoted by craft union advocates at the AFL's November convention at Washington, D.C. The dissidents elect United Mine Workers (UMW) president John L. Lewis chairman and Scottish-born UMW vice president Philip Murray, 39, chairman of the Steel Workers Organizing Committee (see 1936).
Dutch economist Jan Tinbergen, 32, co-authors a plan for coping with Europe's high rate of unemployment.
Britain and Ireland conclude a cattle and coal agreement that enables the Irish to ship some of their meat surplus, but the disastrous Anglo-Irish tariff war will not end until February of next year when Dublin agrees to pay land annuities (see 1932; 1938).
Josef Stalin urges productivity increases in November and encourages individual initiative with extra pay for notable efficiency, giving official recognition to the Stakhanovite movement based on the achievement of coal miner Aleksei Grigorievich Stakhanov, 29. Working at a coal face in the Donets Basin the night of August 30, Stakhanov and his crew reportedly mined 102 tons of coal in a single shift of 5 hours 45 minutes—14 times the normal rate. Virtually illiterate, the stocky miner has used other members of the crew to shore up the shaft with timbers while he hewed the coal, departing from the previous time-consuming process of alternating between cutting coal and erecting timbers. But most workers live by the motto, "As long as the bosses pretend they are paying us a decent wage we will pretend that we are working"; productivity will remain low.
Wall Street's Dow Jones Industrial Average closes December 31 at 144.13, up from 104.04 at the end of 1934.
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