Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
New Deal Programs Social Security Act(Aug. 14, 1935), original U.S. legislation establishing a permanent national old-age pension system through employer and employee contributions; the system was later extended to include dependents, the disabled, and other groups. Responding to the economic impact of the Great Depression, five million old people in the early 1930s joined nationwide Townsend clubs, promoted by Francis E. Townsend to support his program demanding a $200 monthly pension for everyone over the age of 60. In 1934 Pres. Franklin D. Roosevelt set up a committee on economic security to consider the matter; after studying its recommendations, Congress in 1935 enacted the Social Security Act, providing old-age benefits to be financed by a payroll tax on employers and employees. Railroad employees were covered separately under the Railroad Retirement Act of 1934. The Social Security Act has been periodically amended, expanding the types of coverage, bringing progressively more workers into the system, and adjusting both taxes and benefits in an attempt to keep pace with inflation. Securities and Exchange CommissionThe Securities and Exchange Commission was established in 1934 to regulate the commerce in stocks, bonds, and other securities. After the October 29, 1929, stock market crash, reflections on its cause prompted calls for reform. Controls on the issuing and trading of securities were virtually nonexistent, allowing for any number of frauds and other schemes. Further, the unreported concentration of controlling stock interests in a very few hands led to the abuses of power that the free exchange of stock supposedly eliminated. To bring order out of chaos, Congress passed three major acts creating the Securities and Exchange Commission, SEC, and defining its responsibilities. The Securities Act of 1933 required public corporations to register their stock sales and distribution and make regular financial disclosures. The Securities Exchange Act of 1934 created the SEC to regulate exchanges, brokers, and over-the-counter markets, as well as to monitor the required financial disclosures. The 1935 Public Utility Holding Company Act did away with holding companies more than twice removed from the utilities whose stocks they held. This “death sentence” ended the practice of using holding companies to obscure the intertwined ownership of public utility companies. Further, the act authorized the SEC to break up any unnecessarily large utility combinations into smaller, geographically based companies and to set up federal commissions to regulate utility rates and financial practices. The business community, wary of New Deal reforms, was mollified by the efficient chairmanships of Joseph P. Kennedy and William O. Douglas. Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation, or FDIC, is an independent U.S. government corporation created under authority of the Banking Act of 1933 (also known as the Glass-Steagall Act), with the responsibility to insure bank deposits in eligible banks against loss in the event of a bank failure and to regulate certain banking practices. It was established after the collapse of many American banks during the initial years of the Great Depression. Although earlier state-sponsored plans to insure depositors had not succeeded, the FDIC became a permanent government agency through the Banking Act of 1935 The FDIC's income is derived from assessments on insured banks and from investments. Insured banks are assessed on the basis of their average deposits; they are currently allowed pro-rata credits totaling two-thirds of the annual assessments after deductions for losses and corporation expenses. The corporation is authorized to insure bank deposits in eligible banks up to a specified maximum amount that has been adjusted through the years. Having begun in 1934 with deposit insurance of $5,000 per account, in 1980 the FDIC had raised that amount to $100,000 for each deposit. From 1933, all members of the Federal Reserve System were required to insure their deposits, while nonmember banks—about half the United States total—were allowed to do so if they met FDIC standards. Almost all incorporated commercial banks in the United States participate in the plan. The FDIC is managed by a board of five directors who are appointed by the U.S. president; the five board positions are chairman, vice chairman, director, comptroller of the currency, and director of the Office of Thrift Supervision. National Recovery Administration The cornerstone of President Franklin D. Roosevelt's New Deal program, the National Recovery Administration (NRA) allowed companies to draw up trade "codes of fair competition." This resulted in extensive, cross-industrial regulation that enraged the public even as it achieved its goal of strengthening the depression-stricken national economy. When the NRA was created in 1933, Roosevelt called the measure "the most important and far-reaching . . . ever enacted by Congress." Under the NRA, businesses were allowed to regulate prices, plant construction, wages, working conditions, and terms of credit as long as they had presidential approval. Businesses that obeyed the codes were exempt from the government's strict antitrust (antimonopoly) laws, which were designed to promote competition and free trade. The NRA persuaded all the major industries to participate voluntarily, and soon the program began to have its intended effect on the economy. However, consumers began to notice higher prices and less availability of merchandise, and small-business owners complained that big companies had all the say in developing government policy. Meanwhile, workers who had been guaranteed the right to organize unions under the NRA provisions discovered that they had been betrayed. The Supreme Court brought a sudden end to the NRA when it decided the case Schechter Poultry Corporation v. United States in May 1935. The court unanimously ruled that the NRA was unconstitutional because its code-drafting process violated the legal extent of the legislative branch's powers.