1. MESSAGE TO CONGRESS REVIEWING THE BROAD OBJECTIVES AND ACCOMPLISHMENTS OF THE ADMINISTRATION. JUNE 8, 1934.

You are completing a work begun in March 1933, which will be regarded for a long time as a splendid justification of the vitality of representative government. I greet you and express once more my appreciation of the cooperation which has proved so effective. Only a small number of the items of our program remain to be enacted and I am confident that you will pass on them before adjournment. Many other pending measures are sound in conception, but must, for lack of time or of adequate information, be deferred to the session of the next Congress. In the meantime, we can well seek to adjust many of these measures into certain larger plans of governmental policy for the future of the Nation.

You and I, as the responsible directors of these policies and actions, may, with good reason, look to the future with confidence, just as we may look to the past fifteen months with reasonable satisfaction.

On the side of relief we have extended material aid to millions of our fellow citizens.

On the side of recovery we have helped to lift agriculture and industry from a condition of utter Prostration.

But, in addition to these immediate tasks of relief and of recovery we have properly, necessarily and with overwhelming approval determined to safeguard these tasks by rebuilding many of the structures of our economic life and reorganizing it in order to prevent a recurrence of collapse.

It is childish to speak of recovery first and reconstruction afterward. In the very nature of the processes of recovery we must avoid the destructive influences of the past. We have shown the world that democracy has within it the elements necessary to its own salvation.

Less hopeful countries where the ways of democracy are very new may revert to the autocracy of yesterday. The American people can be trusted to decide wisely upon the measures taken by the Government to eliminate the abuses of the past and to proceed in the direction of the greater good for the greater number.

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

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

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

In a simple and primitive civilization homes were to be had for the building. The bounties of nature in a new land provided crude but adequate food and shelter. When land failed, our ancestors moved on to better land. It was always possible to push back the frontier, but the frontier has now disappeared. Our task involves the making of a better living out of the lands that we have.

So, also, security was attained in the earlier days through the interdependence of members of families upon each other and of the families within a small community upon each other. The complexities of great communities and of organized industry make less real these simple means of security. Therefore, we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it.

With the full cooperation of the Congress we have already made a serious attack upon the problem of housing in our great cities. Millions of dollars have been appropriated for housing projects by Federal and local authorities, often with the generous assistance of private owners. The task thus begun must be pursued for many years to come. There is ample private money for sound housing projects; and the Congress, in a measure now before you, can stimulate the lending of money for the modernization of existing homes and the building of new homes. In pursuing this policy we are working toward the ultimate objective of making it possible for American families to live as Americans should.

In regard to the second factor, economic circumstances and the forces of nature themselves dictate the need of constant thought as the means by which a wise Government may help the necessary readjustment of the population. We cannot fail to act when hundreds of thousands of families live where there is no reasonable prospect of a living in the years to come. This is especially a national problem. Unlike most of the leading Nations of the world, we have so far failed to create a national policy for the development of our land and water resources and for their better use by those people who cannot make a living in their present positions. Only thus can we permanently eliminate many millions of people from the relief rolls on which their names are now found.

The extent of the usefulness of our great natural inheritance of land and water depends on our mastery of it. We are now so organized that science and invention have given us the means of more extensive and effective attacks upon the problems of nature than ever before. We have learned to utilize water power, to reclaim deserts, to recreate forests and to redirect the flow of population. Until recently we have proceeded almost it random, making mistakes.

These are many illustrations of the necessity for such planning. Some sections of the Northwest and Southwest which formerly existed as grazing land, were spread over with a fair crop of grass. On this land the water table lay a dozen or twenty feet below the surface, and newly arrived settlers put this land under the plow. Wheat was grown by dry farming methods. But in many of these places today the water table under the land has dropped to fifty or sixty feet below the surface and the top soil in dry seasons is blown away like driven snow. Falling rain, in the absence of grass roots, filters through the soil, runs off the surface, or is quickly reabsorbed into the atmosphere. Many million acres of such land must be restored to grass or trees if we are to prevent a new and man-made Sahara.

At the other extreme, there are regions originally arid, which have been generously irrigated by human engineering. But in some of these places the hungry soil has not only absorbed the water necessary to produce magnificent crops, but so much more water that the water table has now risen to the point of saturation, thereby threatening the future crops upon which many families depend.

Human knowledge is great enough today to give us assurance of success in carrying through the abandonment of many millions of acres for agricultural use and the replacing of these acres with others on which at least a living can be earned.

The rate of speed that we can usefully employ in this attack on impossible social and economic conditions must be determined by business-like procedure. It would be absurd to undertake too many projects at once or to do a patch of work here and another there without finishing the whole of an individual project. Obviously, the Government cannot undertake national projects in every one of the 435 Congressional districts, or even in every one of the 48 States. The magnificent conception of national realism and national needs that this Congress has built up has not only set an example of large vision for all time, but has almost consigned to oblivion our ancient habit of pork-barrel legislation; to that we cannot and must not revert. When the next Congress convenes I hope to be able to present to it a carefully considered national plan, covering the development and the human use of our natural resources of land and water over a long period of years.

In considering the cost of such a program it must be clear to all of us that for many years to come we shall be engaged in the task of rehabilitating many hundreds of thousands of our American families. In so doing we shall be decreasing future costs for the direct relief of destitution. I hope that it will be possible for the Government to adopt as a clear policy to be carried out over a long period, the appropriation of a large, definite, annual sum so that work may proceed year after year not under the urge of temporary expediency, but in pursuance of the well-considered rounded objective.

The third factor relates to security against the hazards and vicissitudes of life. Fear and worry based on unknown danger contribute to social unrest and economic demoralization. If, as our Constitution tells us, our Federal Government was established among other things, "to promote the general welfare," it is our plain duty to provide for that security upon which welfare depends.

Next winter we may well undertake the great task of furthering the security of the citizen and his family through social insurance.

This is not an untried experiment. Lessons of experience are available from States, from industries and from many Nations of the civilized world. The various types of social insurance are interrelated; and I think it is difficult to attempt to solve them piecemeal. Hence, I am looking for a sound means which I can recommend to provide at once security against several of the great disturbing factors in life--especially those which relate to unemployment and old age. I believe there should be a maximum of cooperation between States and the Federal Government. I believe that the funds necessary to provide this insurance should be raised by contribution rather than by an increase in general taxation. Above all, I am convinced that social insurance should be national in scope, although the several States should meet at least a large portion of the cost of management, leaving to the Federal Government the responsibility of investing, maintaining and safeguarding the funds constituting the necessary insurance reserves. I have commenced to make, with the greatest of care, the necessary actuarial and other studies for the formulation of plans for the consideration of the 74th Congress.

These three great objectives the security of the home, the security of livelihood, and the security of social insurance--are, it seems to me, a minimum of the promise that we can offer to the American people. They constitute a right which belongs to every individual and every family willing to work. They are the essential fulfillment of measures already taken toward relief, recovery and reconstruction.

This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion.

Ample scope is left for the exercise of private initiative. In fact, in the process of recovery, I am greatly hoping that repeated promises of private investment and private initiative to relieve the Government in the immediate future of much of the burden it has assumed, will be fulfilled. We have not imposed undue restrictions upon business. We have not opposed the incentive of reasonable and legitimate private profit. We have sought rather to enable certain aspects of business to regain the confidence of the public. We have sought to put forward the rule of fair play in finance and industry.

It is true that there are a few among us who would still go back. These few offer no substitute for the gains already made, nor any hope for making future gains for human happiness. They loudly assert that individual liberty is being restricted by Government, but when they are asked what individual liberties they have lost, they are put to it to answer.

We must dedicate ourselves anew to a recovery of the old and sacred possessive rights for which mankind has constantly struggled homes, livelihood, and individual security. The road to these values is the way of progress. Neither you nor I will rest content until we have done our utmost to move further on that road.

2. FIRESIDE CHAT -- June 28, 1934

It has been several months since I have talked with you concerning the problems of government. Since January, those of us in whom you have vested responsibility have been engaged in the fulfillment of plans and policies which had been widely discussed in previous months. It seemed to us our duty not only to make the right path clear but also to tread that path.

As we review the achievements of this session of the Seventy-third Congress, it is made increasingly clear that its task was essentially that of completing and fortifying the work it had begun in March, l933. That was no easy task, but the Congress was equal to it. It has been well said that while there were a few exceptions, this Congress displayed a greater freedom from mere partisanship than any other peace-time Congress since the Administration of President Washington himself. The session was distinguished by the extent and variety of legislation enacted and by the intelligence and good will of debate upon these measures.

I mention only a few of the major enactments. It provided for the readjustment of the debt burden through the corporate and municipal bankruptcy acts and the farm relief act. It lent a hand to industry by encouraging loans to solvent industries unable to secure adequate help from banking institutions. It strengthened the integrity of finance through the regulation of securities exchanges. It provided a rational method of increasing our volume of foreign trade through reciprocal trading agreements. It strengthened our naval forces to conform with the intentions and permission of existing treaty rights. It made further advances towards peace in industry through the labor adjustment act. It supplemented our agricultural policy through measures widely demanded by farmers themselves and intended to avert price destroying surpluses. It strengthened the hand of the Federal Government in its attempts to suppress gangster crime. It took definite steps towards a national housing program through an act which I signed today designed to encourage private capital in the rebuilding of the homes of the Nation. It created a permanent Federal body for the just regulation of all forms of communication, including the telephone, the telegraph and the radio. Finally, and I believe most important, it reorganized, simplified and made more fair and just our monetary system, setting up standards and policies adequate to meet the necessities of modern economic life, doing justice to both gold and silver as the metal bases behind the currency of the United States. In the consistent development of our previous efforts toward the saving and safeguarding of our national life, I have continued to recognize three related steps. The first was relief, because the primary concern of any Government dominated by the humane ideals of democracy is the simple principle that in a land of vast resources no one should be permitted to starve. Relief was and continues to be our first consideration. It calls for large expenditures and will continue in modified form to do so for a long time to come. We may as well recognize that fact. It comes from the paralysis that arose as the after-effect of that unfortunate decade characterized by a mad chase for unearned riches and an unwillingness of leaders in almost every walk of life to look beyond their own schemes and speculations. In our administration of relief we follow two principles: First, that direct giving shall, wherever possible, be supplemented by provision for useful and remunerative work and, second, that where families in their existing surroundings will in all human probability never find an opportunity for full self-maintenance, happiness and enjoyment, we will try to give them a new chance in new surroundings.

The second step was recovery, and it is sufficient for me to ask each and every one of you to compare the situation in agriculture and in industry today with what it was fifteen months ago.

At the same time we have recognized the necessity of reform and reconstruction --reform because much of our trouble today and in the past few years has been due to a lack of understanding of the elementary principles of justice and fairness by those in whom leadership in business and finance was placed -- reconstruction because new conditions in our economic life as well as old but neglected conditions had to be corrected. Substantial gains well known to all of you have justified our course. I could cite statistics to you as unanswerable measures of our national progress -- statistics to show the gain in the average weekly pay envelope of workers in the great majority of industries --statistics to show hundreds of thousands reemployed in private industries and other hundreds of thousands given new employment through the expansion of direct and indirect government assistance of many kinds, although, of course, there are those exceptions in professional pursuits whose economic improvement, of necessity, will be delayed. I also could cite statistics to show the great rise in the value of farm products -- statistics to prove the demand for consumers' goods, ranging all the way from food and clothing to automobiles and of late to prove the rise in the demand for durable goods -- statistics to cover the great increase in bank deposits and to show the scores of thousands of homes and of farms which have been saved from foreclosure.

But the simplest way for each of you to judge recovery lies in the plain facts of your own individual situation. Are you better off than you were last year? Are your debts less burdensome? Is your bank account more secure? Are your working conditions better? Is your faith in your own individual future more firmly grounded?

Also, let me put to you another simple question: Have you as an individual paid too high a price for these gains? Plausible self-seekers and theoretical die-hards will tell you of the loss of individual liberty. Answer this question also out of the facts of your own life. Have you lost any of your rights or liberty or constitutional freedom of action and choice? Turn to the Bill of Rights of the Constitution, which I have solemnly sworn to maintain and under which your freedom rests secure. Read each provision of that Bill of Rights and ask yourself whether you personally have suffered the impairment of a single jot of these great assurances. I have no question in my mind as to what your answer will be. The record is written in the experiences of your own personal lives.

In other words, it is not the overwhelming majority of the farmers or manufacturers or workers who deny the substantial gains of the past year. The most vociferous of the doubting Thomases may be divided roughly into two groups: First, those who seek special political privilege and, second, those who seek special financial privilege. About a year ago I used as an illustration the 90% of the cotton manufacturers of the United States who wanted to do the right thing by their employees and by the public but were prevented from doing so by the 10% who undercut them by unfair practices and un-American standards. It is well for us to remember that humanity is a long way from being perfect and that a selfish minority in every walk of life -- farming, business, finance and even Government service itself -- will always continue to think of themselves first and their fellow-being second.

In the working out of a great national program which seeks the primary good of the greater number, it is true that the toes of some people are being stepped on and are going to be stepped on. But these toes belong to the comparative few who seek to retain or to gain position or riches or both by some short cut which is harmful to the greater good. In the execution of the powers conferred on it by Congress, the Administration needs and will tirelessly seek the best ability that the country affords. Public service offers better rewards in the opportunity for service than ever before in our history -- not great salaries, but enough to live on. In the building of this service there are coming to us men and women with ability and courage from every part of the Union. The days of the seeking of mere party advantage through the misuse of public power are drawing to a close. We are increasingly demanding and getting devotion to the public service on the part of every member of the Administration, high and low.

The program of the past year is definitely in operation and that operation month by month is being made to fit into the web of old and new conditions. This process of evolution is well illustrated by the constant changes in detailed organization and method going on in the National Recovery Administration. With every passing month we are making strides in the orderly handling of the relationship between employees and employers. Conditions differ, of course, in almost every part of the country and in almost every industry. Temporary methods of adjustment are being replaced by more permanent machinery and, I am glad to say, by a growing recognition on the part of employers and employees of the desirability of maintaining fair relationships all around.

So also, while almost everybody has recognized the tremendous strides in the elimination of child labor, in the payment of not less than fair minimum wages and in the shortening of hours, we are still feeling our way in solving problems which relate to self-government in industry, especially where such self-government tends to eliminate the fair operation of competition.

In this same process of evolution we are keeping before us the objectives of protecting on the one hand industry against chiselers within its own ranks, and on the other hand the consumer through the maintenance of reasonable competition for the prevention of the unfair sky-rocketing of retail prices.

But, in addition to this our immediate task, we must still look to the larger future. I have pointed out to the Congress that we are seeking to find the way once more to well-known, long-established but to some degree forgotten ideals and values. We seek the security of the men, women and children of the Nation.

That security involves added means of providing better homes for the people of the Nation. That is the first principle of our future program.

The second is to plan the use of land and water resources of this country to the end that the means of livelihood of our citizens may be more adequate to meet their daily needs. And, finally, the third principle is to use the agencies of government to assist in the establishment of means to provide sound and adequate protection against the vicissitudes of modern life -- in other words, social insurance.

Later in the year I hope to talk with you more fully about these plans. A few timid people, who fear progress, will try to give you new and strange names for what we are doing. Sometimes they will call it "Fascism", sometimes "Communism", sometimes "Regimentation", sometimes "Socialism". But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical.

I believe in practical explanations and in practical policies. I believe that what we are doing today is a necessary fulfillment of what Americans have always been doing -- a fulfillment of old and tested American ideals.

Let me give you a simple illustration:

While I am away from Washington this summer, a long needed renovation of and addition to our White House office building is to be started. The architects have planned a few new rooms built into the present all too small one-story structure. We are going to include in this addition and in this renovation modern electric wiring and modern plumbing and modern means of keeping the offices cool in the hot Washington summers. But the structural lines of the old Executive Office Building will remain. The artistic lines of the White House buildings were the creation of master builders when our Republic was young. The simplicity and the strength of the structure remain in the face of every modern test. But within this magnificent pattern, the necessities of modern government business require constant reorganization and rebuilding.

If I were to listen to the arguments of some prophets of calamity who are talking these days, I should hesitate to make these alterations. I should fear that while I am away for a few weeks the architects might build some strange new Gothic tower or a factory building or perhaps a replica of the Kremlin or of the Potsdam Palace. But I have no such fears. The architects and builders are men of common sense and of artistic American tastes. They know that the principles of harmony and of necessity itself require that the building of the new structure shall blend with the essential lines of the old. It is this combination of the old and the new that marks orderly peaceful progress -- not only in building buildings but in building government itself.

Our new structure is a part of and a fulfillment of the old.

All that we do seeks to fulfill the historic traditions of the American people. Other nations may sacrifice democracy for the transitory stimulation of old and discredited autocracies. We are restoring confidence and well-being under the rule of the people themselves. We remain, as John Marshall said a century ago, "emphatically and truly, a government of the people." Our government "in form and in substance ... emanates from them. Its powers are granted by them, and are to be exercised directly on them, and for their benefits."

Before I close, I want to tell you of the interest and pleasure with which I look forward to the trip on which I hope to start in a few days. It is a good thing for everyone who can possibly do so to get away at least once a year for a change of scene. I do not want to get into the position of not being able to see the forest because of the thickness of the trees.

I hope to visit our fellow Americans in Puerto Rico, in the Virgin Islands, in the Canal Zone and in Hawaii. And, incidentally, it will give me an opportunity to exchange a friendly word of greeting to the Presidents of our sister Republics: Haiti, Colombia and Panama.

After four weeks on board ship, I plan to land at a port in our Pacific northwest, and then will come the best part of the whole trip, for I am hoping to inspect a number of our new great national projects on the Columbia, Missouri and Mississippi Rivers, to see some of our national parks and, incidentally, to learn much of actual conditions during the trip across the continent back to Washington.

While I was in France during the War our boys used to call the United States "God's country". Let us make it and keep it "God's country".

3. THE INITIATION OF STUDIES TO ACHIEVE A PROGRAM OF NATIONAL SOCIAL AND ECONOMIC SECURITY. EXECUTIVE ORDER NO. 6757. JUNE 29, 1934

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

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

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

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

4. FIRESIDE CHAT-- SUNDAY, SEPTEMBER 30, 1934

Three months have passed since I talked with you shortly after the adjournment of the Congress. Tonight I continue that report, though, because of the shortness of time, I must defer a number of subjects to a later date.

Recently the most notable public questions that have concerned us all have had to do with industry and labor and with respect to these, certain developments have taken place which I consider of importance. I am happy to report that after years of uncertainty, culminating in the collapse of the spring of 1933, we are bringing order out of the old chaos with a greater certainty of the employment of labor at a reasonable wage and of more business at a fair profit. These governmental and industrial developments hold promise of new achievements for the nation.

Men may differ as to the particular form of governmental activity with respect to industry and business, but nearly all are agreed that private enterprise in times such as these cannot be left without assistance and without reasonable safeguards lest it destroy not only itself but also our processes of civilization. The underlying necessity for such activity is indeed as strong now as it was years ago when Elihu Root said the following very significant words:

"Instead of the give and take of free individual contract, the tremendous power of organization has combined great aggregations of capital in enormous industrial establishments working through vast agencies of commerce and employing great masses of men in movements of production and transportation and trade, so great in the mass that each individual concerned in them is quite helpless by himself. The relations between the employer and the employed, between the owners of aggregated capital and the units of organized labor, between the small producer, the small trader, the consumer, and the great transporting and manufacturing and distributing agencies, all present new questions for the solution of which the old reliance upon the free action of individual wills appear quite inadequate. And in many directions, the intervention of that organized control which we call government seems necessary to produce the same result of justice and right conduct which obtained through the attrition of individuals before the new conditions arose."

It was in this spirit thus described by Secretary Root that we approached our task of reviving private enterprise in March, 1933. Our first problem was, of course, the banking situation because, as you know, the banks had collapsed. Some banks could not be saved but the great majority of them, either through their own resources or with government aid, have been restored to complete public confidence. This has given safety to millions of depositors in these banks. Closely following this great constructive effort we have, through various Federal agencies, saved debtors and creditors alike in many other fields of enterprise, such as loans on farm mortgages and home mortgages; loans to the railroads and insurance companies and, finally, help for home owners and industry itself. In all of these efforts the government has come to the assistance of business and with the full expectation that the money used to assist these enterprises will eventually be repaid. I believe it will be.

The second step we have taken in the restoration of normal business enterprise has been to clean up thoroughly unwholesome conditions in the field of investment. In this we have had assistance from many bankers and businessmen, most of whom recognize the past evils in the banking system, in the sale of securities, in the deliberate encouragement of stock gambling, in the sale of unsound mortgages and in many other ways in which the public lost billions of dollars. They saw that without changes in the policies and methods of investment there could be no recovery of public confidence in the security of savings. The country now enjoys the safety of bank savings under the new banking laws, the careful checking of new securities under the Securities Act and the curtailment of rank stock speculation through the Securities Exchange Act. I sincerely hope that as a result people will be discouraged in unhappy efforts to get rich quick by speculating in securities. The average person almost always loses. Only a very small minority of the people of this country believe in gambling as a substitute for the old philosophy of Benjamin Franklin that the way to wealth is through work.

In meeting the problems of industrial recovery the chief agency of the government has been the National Recovery Administration. Under its guidance, trades and industries covering over ninety percent of all industrial employees have adopted codes of fair competition, which have been approved by the President. Under these codes, in the industries covered, child labor has been eliminated. The work day and the work week have been shortened. Minimum wages have been established and other wages adjusted toward a rising standard of living. The emergency purpose of the N. R. A. was to put men to work and since its creation more than four million persons have been re-employed, in great part through the cooperation of American business brought about under the codes.

Benefits of the Industrial Recovery Program have come, not only to labor in the form of new jobs, in relief from over-work and in relief from under-pay, but also to the owners and managers of industry because, together with a great increase in the payrolls, there has come a substantial rise in the total of industrial profits - a rise from a deficit figure in the first quarter of 1933 to a level of sustained profits within one year from the inauguration of N. R. A.

Now it should not be expected that even employed labor and capital would be completely satisfied with present conditions. Employed workers have not by any means all enjoyed a return to the earnings of prosperous times; although millions of hitherto under- privileged workers are today far better paid than ever before. Also, billions of dollars of invested capital have today a greater security of present and future earning power than before. This is because of the establishment of fair, competitive standards and because of relief from unfair competition in wage cutting which depresses markets and destroys purchasing power. But it is an undeniable fact that the restoration of other billions of sound investments to a reasonable earning power could not be brought about in one year. There is no magic formula, no economic panacea, which could simply revive over-night the heavy industries and the trades dependent upon them.

Nevertheless the gains of trade and industry, as a whole, have been substantial. In these gains and in the policies of the Administration there are assurances that hearten all forward-looking men and women with the confidence that we are definitely rebuilding our political and economic system on the lines laid down by the New Deal - lines which as I have so often made clear, are in complete accord with the underlying principles of orderly popular government which Americans have demanded since the white man first came to these shores. We count, in the future as in the past, on the driving power of individual initiative and the incentive of fair private profit, strengthened with the acceptance of those obligations to the public interest which rest upon us all. We have the right to expect that this driving power will be given patriotically and whole-heartedly to our nation.

We have passed through the formative period of code making in the National Recovery Administration and have effected a reorganization of the N. R. A. suited to the needs of the next phase, which is, in turn, a period of preparation for legislation which will determine its permanent form.

In this recent reorganization we have recognized three distinct functions. First, the legislative or policy making function. Second, the administrative function of code making and revision and, third, the judicial function, which includes enforcement, consumer complaints and the settlement of disputes between employers and employees and between one employer and another.

We are now prepared to move into this second phase, on the basis of our experience in the first phase under the able and energetic leadership of General Johnson.

We shall watch carefully the working of this new machinery for the second phase of N. R. A., modifying it where it needs modification and finally making recommendations to the Congress, in order that the functions of N. R. A. which have proved their worth may be made a part of the permanent machinery of government.

Let me call your attention to the fact that the National Industrial Recovery Act gave businessmen the opportunity they had sought for years to improve business conditions through what has been called self-government in industry. If the codes which have been written have been too complicated, if they have gone too far in such matters as price fixing and limitation of production, let it be remembered that so far as possible, consistent with the immediate public interest of this past year and the vital necessity of improving labor conditions, the representatives of trade and industry were permitted to write their ideas into the codes. It is now time to review these actions as a whole to determine through deliberative means in the light of experience, from the standpoint of the good of the industries themselves, as well as the general public interest, whether the methods and policies adopted in the emergency have been best calculated to promote industrial recovery and a permanent improvement of business and labor conditions. There may be a serious question as to the wisdom of many of those devices to control production, or to prevent destructive price cutting which many business organizations have insisted were necessary, or whether their effect may have been to prevent that volume of production which would make possible lower prices and increased employment. Another question arises as to whether in fixing minimum wages on the basis of an hourly or weekly wage we have reached into the heart of the problem which is to provide such annual earnings for the lowest paid worker as will meet his minimum needs. We also question the wisdom of extending code requirements suited to the great industrial centers and to large employers, to the great number of small employers in the smaller communities.

During the last twelve months our industrial recovery has been to some extent retarded by strikes, including a few of major importance. I would not minimize the inevitable losses to employers and employees and to the general public through such conflicts. But I would point out that the extent and severity of labor disputes during this period has been far less than in any previous, comparable period.

When the businessmen of the country were demanding the right to organize themselves adequately to promote their legitimate interests; when the farmers were demanding legislation which would give them opportunities and incentives to organize themselves for a common advance, it was natural that the workers should seek and obtain a statutory declaration of their constitutional right to organize themselves for collective bargaining as embodied in Section 7 (a) of the National Industrial Recovery Act. Machinery set up by the Federal government has provided some new methods of adjustment. Both employers and employees mast share the blame of not using them as fully as they should. The employer who turns away from impartial agencies of peace, who denies freedom of organization to his employees, or fails to make every reasonable effort at a peaceful solution of their differences, is not fully supporting the recovery effort of his government. The workers who turn away from these same impartial agencies and decline to use their good offices to gain their ends are likewise not fully cooperating with their government.

It is time that we made a clean-cut effort to bring about that united action of management and labor, which is one of the high purposes of the Recovery Act. We have passed through more than a year of education. Step by step we have created all the government agencies necessary to insure, as a general rule, industrial peace, with justice for all those willing to use these agencies whenever their voluntary bargaining fails to produce a necessary agreement.

There should be at least a full and fair trial given to these means of ending industrial warfare; and in such an effort we should be able to secure for employers and employees and consumers the benefits that all derive from the continuous, peaceful operation of our essential enterprises.

Accordingly, I propose to confer within the coming month with small groups of those truly representative of large employers of labor and of large groups of organized labor, in order to seek their cooperation in establishing what I may describe as a specific trial period of industrial peace.

From those willing to join in establishing this hoped-for period of peace, I shall seek assurances of the making and maintenance of agreements, which can be mutually relied upon, under which wages, hours and working conditions may be determined and any later adjustments shall be made either by agreement or, in case of disagreement, through the mediation or arbitration of state or federal agencies. I shall not ask either employers or employees permanently to lay aside the weapons common to industrial war. But I shall ask both groups to give a fair trial to peaceful methods of adjusting their conflicts of opinion and interest, and to experiment for a reasonable time with measures suitable to civilize our industrial civilization.

Closely allied to the N. R. A. is the program of Public Works provided for in the same Act and designed to put more men back to work, both directly on the public works themselves, and indirectly in the industries supplying the materials for these public works. To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order. Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed just as other countries have had them for over a decade. What may be necessary for those countries is not my responsibility to determine. But as for this country, I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return. I do not want to think that it is the destiny of any American to remain permanently on relief rolls.

Those, fortunately few in number, who are frightened by boldness and cowed by the necessity for making decisions, complain that all we have done is unnecessary and subject to great risks. Now that these people are coming out of their storm cellars, they forget that there ever was a storm. They point to England. They would have you believe that England has made progress out of her depression by a do-nothing policy, by letting nature take her course. England has her pecularities and we have ours but I do not believe any intelligent observer can accuse England of undue orthodoxy in the present emergency.

Did England let nature take her course? No. Did England hold to the gold standard when her reserves were threatened? No. Has England gone back to the gold standard today? No. Did England hesitate to call in ten billion dollars of her war bonds bearing 5% interest, to issue new bonds therefore bearing only 3 1/2% interest, thereby saving the British Treasury one hundred and fifty million dollars a year in interest alone? No. And let it be recorded that the British bankers helped. Is it not a fact that ever since the year 1909, Great Britain in many ways has advanced further along lines of social security than the United States? Is it not a fact that relations between capital and labor on the basis of collective bargaining are much further advanced in Great Britain than in the United States? It is perhaps not strange that the conservative British press has told us with pardonable irony that much of our New Deal program is only an attempt to catch up with English reforms that go back ten years or more.

Nearly all Americans are sensible and calm people. We do not get greatly excited nor is our peace of mind disturbed, whether we be businessmen or workers or farmers, by awesome pronouncements concerning the unconstitutionality of some of our measures of recovery and relief and reform. We are not frightened by reactionary lawyers or political editors. All of these cries have been heard before. More than twenty years ago, when Theodore Roosevelt and Woodrow Wilson were attempting to correct abuses in our national life, the great Chief Justice White said:

"There is great danger it seems to me to arise from the constant habit which prevails where anything is opposed or objected to, of referring without rhyme or reason to the Constitution as a means of preventing its accomplishment, thus creating the general impression that the Constitution is but a barrier to progress instead of being the broad highway through which alone true progress may be enjoyed."

In our efforts for recovery we have avoided on the one hand the theory that business should and must be taken over into an all-embracing Government. We have avoided on the other hand the equally untenable theory that it is an interference with liberty to offer reasonable help when private enterprise is in need of help. The course we have followed fits the American practice of Government - a practice of taking action step by step, of regulating only to meet concrete needs - a practice of courageous recognition of change. I believe with Abraham Lincoln, that "The legitimate object of Government is to do for a community of people whatever they need to have done but cannot do at all or cannot do so well for themselves in their separate and individual capacities."

I still believe in ideals. I am not for a return to that definition of Liberty under which for many years a free people were being gradually regimented into the service of the privileged few. I prefer and I am sure you prefer that broader definition of Liberty under which we are moving forward to greater freedom, to greater security for the average man than he has ever known before in the history of America.

5. ADDRESS TO ADVISORY COUNCIL OF THE COMMITTEE ON ECONOMIC SECURITY ON THE PROBLEMS OF ECONOMIC AND SOCIAL SECURITY. NOVEMBER 14, 1934.

I am glad to welcome you to the White House and tell you that I am happy that there is so much interest in the problem of economic security. Last June I said that this winter we might well make a beginning in the great task of providing social insurance for the citizen and his family. I have not changed my opinion. I shall have recommendations on this subject to present to the incoming Congress.

Many details are still to be settled. The Committee on Economic Security was created to advise me on this matter. It will bring to me, not any preconceived views, but a mature judgment after careful study of the problem and after consultation with the Advisory Conference and the cooperating committees.

On some points it is possible to be definite. Unemployment insurance will be in the program. I am still of the opinion expressed in my message of June eighth that this part of social insurance should be a cooperative Federal-State undertaking. It is important that the Federal Government encourage States which are ready to take this progressive step. It is no less important that all unemployment insurance reserve funds be held and invested by the Federal Government, so that the use of these funds as a means of stabilization may be maintained in central management and employed on a national basis. Unemployment insurance must be set up with the purpose of decreasing rather than increasing unemployment. It is, of course, clear that because of their magnitude the investment and liquidation of reserve funds must be within control of the Government itself.

For the administration of insurance benefits, the States are the most logical units. At this stage, while unemployment insurance is still untried in this country and there is such a great diversity of opinion on many details, there is room for some degree of difference in methods, though not in principles. That would be impossible under an exclusively national system. And so I can say to you who have come from all parts of the country that not only will there have to be a Federal law on unemployment insurance, but State laws will also be needed. In January the great majority of the State Legislatures will convene, as well as Congress. You who are interested in seeing that unemployment insurance is established on a nationwide basis should make your plans accordingly.

We must not allow this type of insurance to become a dole through the mingling of insurance and relief. It is not charity. It must be financed by contributions, not taxes.

What I have said must not be understood as implying that we should do nothing further for the people now on relief. On the contrary, they must be our first concern. We must get them back into productive employment and as we do so we can bring them under the protection of the insurance system. Let us profit by the mistakes of foreign countries and keep out of unemployment insurance every element which is actuarially unsound.

There are other matters with which we must deal before we shall give adequate protection to the individual against the many economic hazards. Old age is at once the most certain, and for many people the most tragic of all hazards. There is no tragedy in growing old, but there is tragedy in growing old without means of support.

As Governor of New York, it was my pleasure to recommend passage of the Old-Age Pension Act which, I am told, is still generally regarded as the most liberal in the country. In approving the bill, I expressed my opinion that full solution of this problem is possible only on insurance principles. It takes so very much money to provide even a moderate pension for everybody, that when the funds are raised from taxation only a "means test" must necessarily be made a condition of the grant of pensions.

I do not know whether this is the time for any Federal legislation on old-age security. Organizations promoting fantastic schemes have aroused hopes which cannot possibly be fulfilled. Through their activities they have increased the difficulties of getting sound legislation; but I hope that in time we may be able to provide security for the aged--a sound and a uniform system which will provide true security.

There is also the problem of economic loss due to sickness--a very serious matter for many families with and without incomes, and therefore, an unfair burden upon the medical profession. Whether we come to this form of insurance soon or later on, I am confident that we can devise a system which will enhance and not hinder the remarkable progress which has been made and is being made in the practice of the professions of medicine and surgery in the United States.

In developing each component part of the broad program for economic security, we must not lose sight of the fact that there can be no security for the individual in the midst of general insecurity. Our first task is to get the economic system to function so that there will be a greater general security. Everything that we do with intent to increase the security of the individual will, I am confident, be a stimulus to recovery.

At this time, we are deciding on long-time objectives. We are developing a plan of administration into which can be fitted the various parts of the security program when it is timely to do so. We cannot work miracles or solve all our problems at once. What we can do is to lay a sound foundation on which we can build a structure to give a greater measure of safety and happiness to the individual than any we have ever known. In this task, you can greatly help.

6. MESSAGE TO CONGRESS ON SOCIAL SECURITY. JANUARY 17,1935

In addressing you on June eighth, 1934, I summarized the main objectives of our American program. Among these was, and is, the security of the men, women, and children of the Nation against certain hazards and vicissitudes of life. This purpose is an essential part of our task. In my annual message to you I promised to submit a definite program of action. This I do in the form of a report to me by a Committee on Economic Security, appointed by me for the purpose of surveying the field and of recommending the basis of legislation.

I am gratified with the work of this Committee and of those who have helped it: The Technical Board on Economic Security drawn from various departments of the Government, the Advisory Council on Economic Security, consisting of informed and public spirited private citizens and a number of other advisory groups, including a committee on actuarial consultants, a medical advisory board, a dental advisory committee, a hospital advisory committee, a public health advisory committee, a child welfare committee and an advisory committee on employment relief. All of those who participated in this notable task of planning this major legislative proposal are ready and willing, at any time, to consult with and assist in any way the appropriate Congressional committees and members, with respect to detailed aspects.

It is my best judgment that this legislation should be brought forward with a minimum of delay. Federal action is necessary to, and conditioned upon, the action of States. Forty-four legislatures are meeting or will meet soon. In order that the necessary State action may be taken promptly it is important that the Federal Government proceed speedily.

The detailed report of the Committee sets forth a series of proposals that will appeal to the sound sense of the American people. It has not attempted the impossible, nor has it failed to exercise sound caution and consideration of all of the factors concerned: the national credit, the rights and responsibilities of States, the capacity of industry to assume financial responsibilities and the fundamental necessity of proceeding in a manner that will merit the enthusiastic support of citizens of all sorts.

It is overwhelmingly important to avoid any danger of permanently discrediting the sound and necessary policy of Federal legislation for economic security by attempting to apply it on too ambitious a scale before actual experience has provided guidance for the permanently safe direction of such efforts. The place of such a fundamental in our future civilization is too precious to be jeopardized now by extravagant action. It is a sound idea--a sound ideal. Most of the other advanced countries of the world have already adopted it and their experience affords the knowledge that social insurance can be made a sound and workable project.

Three principles should be observed in legislation on this subject. First, the system adopted, except for the money necessary to initiate it, should be self-sustaining in the sense that funds for the payment of insurance benefits should not come from the proceeds of general taxation. Second, excepting in old-age insurance, actual management should be left to the States subject to standards established by the Federal Government. Third, sound financial management of the funds and the reserves, and protection of the credit structure of the Nation should be assured by retaining Federal control over all funds through trustees in the Treasury of the United States.

At this time, I recommend the following types of legislation looking to economic security:

1. Unemployment compensation.

2. Old-age benefits, including compulsory and voluntary annuities.

3. Federal aid to dependent children through grants to States for the support of existing mothers' pension systems and for services for the protection and care of homeless, neglected, dependent, and crippled children.

4. Additional Federal aid to State and local public health agencies and the strengthening of the Federal Public Health Service. I am not at this time recommending the adoption of so called “health insurance,” although groups representing the medical profession are cooperating with the Federal Government in the further study of the subject and definite progress is being made.

With respect to unemployment compensation, I have concluded that the most practical proposal is the levy of a uniform Federal payroll tax, ninety per cent of which should be allowed as an offset to employers contributing under a compulsory State unemployment compensation act. The purpose of this is to afford a requirement of a reasonably uniform character for all States cooperating with the Federal Government and to promote and encourage the passage of unemployment compensation laws in the States. The ten per cent not thus offset should be used to cover the costs of Federal and State administration of this broad system. Thus, States will largely administer unemployment compensation, assisted and guided by the Federal Government. An unemployment compensation system should be constructed in such a way as to afford every practicable aid and incentive toward the larger purpose of employment stabilization. This can be helped by the intelligent planning of both public and private employment. It also can be helped by correlating the system with public employment so that a person who has exhausted his benefits may be eligible for some form of public work as is recommended in this report. Moreover, in order to encourage the stabilization of private employment, Federal legislation should not foreclose the States from establishing means for inducing industries to afford an even greater stabilization of employment.

In the important field of security for our old people, it seems necessary to adopt three principles: First, non-contributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps thirty years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.

The amount necessary at this time for the initiation of unemployment compensation, old-age security, children's aid, and the promotion of public health, as outlined in the report of the Committee on Economic Security, is approximately one hundred million dollars.

The establishment of sound means toward a greater future economic security of the American people is dictated by a prudent consideration of the hazards involved in our national life. No one can guarantee this country against the dangers of future depressions but we can reduce these dangers. We can eliminate many of the factors that cause economic depressions, and we can provide the means of mitigating their results. This plan for economic security is at once a measure of prevention and a method of alleviation.

We pay now for the dreadful consequence of economic insecurity—and dearly. This plan presents a more equitable and infinitely less expensive means of meeting these costs. We cannot afford to neglect the plain duty before us. I strongly recommend action to attain the objectives sought in this report.

7. PRESIDENTIAL STATEMENT SIGNING THE SOCIAL SECURITY ACT. AUGUST 14,1935

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

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

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

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

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

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

8. A RECOMMENDATION FOR LEGISLATION AMENDING THE SOCIAL SECURITY ACT- DECEMBER 14, 1937.

My Dear Senator:

Mr. Altmeyer, Chairman of the Social Security Board, has submitted to me some non-controversial amendments to the Social Security Act. In brief, they cover the points listed in the attached memorandum. I feel they are of sufficient importance to warrant their passage at the earliest possible date.

As these amendments will considerably improve the effectiveness of this important Act, I have asked Chairman Altmeyer to discuss this matter with you personally.

Best wishes to you.
Very Sincerely yours,

Honorable Pat Harrison,
United States Senate,
Washington, D.C.

(A similar letter was sent to Congressman Robert L. Doughton.)

Summary of Amendments to the Social Security Act, forwarded with the foregoing letter.

1. To pay death claims direct to the wife or dependent children and save expense of probating estates--as in veterans' laws. This would save real money to the widow and to the Board.

2. To change "wages payable" in unemployment compensation to "wages paid" as in old-age insurance and permit a duplicate list of wage payments and so complete our efforts greatly to simplify employers' wage reports.

3. To enable "merit rating" to work by making technical changes. It becomes effective in Wisconsin, January 1, 1938.

4. To permit earlier payment of unemployment compensation in states that passed their laws late. For two years funds have been built up in these states. With increasing unemployment this will get money earlier to those laid off.

5. To permit persons now 60 and over to continue working through 1941 to qualify upon retirement for monthly old-age annuities instead of receiving small lump sum payments. A great gain all around.

6. To increase coverage.
a. To seamen on American vessels. Approved by Maritime Commission and the International Seamen's Union and the National Maritime Union.
b. To employees of national banks, state banks that are members of the Federal Reserve System, institutions that are members of the Home Loan Bank system, and the like. The American Bankers Association approves.

NOTE: In signing the Social Security Act on August 14, 1935, I stated that it "represents a cornerstone in a structure which is being built but is by no means complete" (see Item 107, 1935 volume). The Act constituted a pioneer effort on the part of the Federal Government, but although it was comprehensive in scope we recognized that it would have to be developed with experience.

After over two years of operation of the Social Security Act, we concluded that it should be expanded in certain directions. Accordingly, I urged Senator Harrison, the Chairman of the Finance Committee of the Senate, and Representative Doughton, the Chairman of the Ways and Means Committee of the House of Representatives, to consider the changes in the Act outlined by Chairman Altmeyer of the Social Security Board in the foregoing summary.

During 1938, Senator Harrison and Representative Doughton held frequent conferences with Chairman Altmeyer. Meanwhile, several new amendments to the Act seemed advisable and on April 28, 1938, I wrote to Chairman Altmeyer advocating that the old-age insurance system be revised and extended to provide for earlier payments. I also recommended that further liberalizing changes be made in the old-age insurance provisions of the Act (see Item 56, 1938 volume).

Inasmuch as several additional substantive amendments were being developed by the Social Security Board, it was decided to postpone congressional hearings upon all amendments until the final report of the Board was submitted. By the close of 1938, this report had been completed, and I transmitted it to the Congress on January 16, 1939 (see Item 11, 1939 volume).

After the report was submitted, hearings were held upon the amendments outlined in the foregoing letter and also upon the later suggestions of the Social Security Board. Many of these recommendations were enacted and approved by me on August 10, 1939 (Public No. 379, 76th Congress; 53 Stat. 1360).

(For a discussion of the nature of these amendments, see Item 109 and note, 1939 volume.)

My Dear Mr. Chairman:

I am very anxious that in the press of administrative duties the Social Security Board will not lose sight of the necessity of studying ways and means of improving and extending the provisions of the Social Security Act.

The enactment of the Social Security Act marked a great advance in affording more equitable and effective protection to the people of this country against widespread and growing economic hazards. The successful operation of the Act is the best proof that it was soundly conceived. However, it would be unfortunate if we assumed that it was complete and final. Rather, we should be constantly seeking to perfect and strengthen it in the light of our accumulating experience and growing appreciation of social needs.

I am particularly anxious that the Board give attention to the development of a sound plan for liberalizing the old-age insurance system. In the development of such a plan I should like to have the Board give consideration to the feasibility of extending its coverage, commencing the payment of old-age insurance annuities at an earlier date than January 1, 1942, paying larger benefits than now provided in the Act for those retiring during the earlier years of the system, providing benefits for aged wives and widows, and providing benefits for young children of insured persons dying before reaching retirement age. It is my hope that the Board will be prepared to submit its recommendations before Congress reconvenes in January.

Very truly yours,
(The President)

Mr. Arthur J. Altmeyer,
Chairman,
Social Security Board,
Washington, D.C.

NOTE: The Social Security Act (Public No. 271, 74th Congress; 49 Stat. 620) expressly provides that the Social Security Board shall conduct studies and make recommendations related to the most effective methods of providing economic security through social insurance.

Pursuant to the foregoing request, the Board made a thorough survey of those proposals which I suggested in my letter to Chairman Altmeyer, along with various other changes which it appeared advisable to make. The Board submitted its report and recommendations; and I transmitted it to the Congress on January 16, 1939 (see Item 11, 1939 volume).

The report of the Board advocated the adoption of all the suggestions which I had asked in the above letter to be considered. Subsequently, these recommendations were written into law when the amendments to the Social Security Act were adopted on August 11, 1939 (see Item 109, 1939 volume).

For example:

1. Extending the coverage of the old-age insurance system. Under the 1939 amendments, the old-age insurance provisions of the Social Security Act were extended to include about 1,100,000 additional persons. The additional groups covered were seamen, bank employees, and employed persons, age sixty-five and over.

2. Commencing the payment of old-age insurance annuities at an earlier date than January 1, 1942. The 1939 amendments advanced the date for beginning monthly old-age insurance benefit payments to January 1, 1940.

3. Paying larger benefits than now provided in the Act for those retiring during the earlier years of the system. Under the original Act, the basic amount paid in old-age retirement benefits was computed from the total accumulated wages of the person retiring. Thus, an individual who reached sixty-five within a short time after the passage of the Act would not have a very large annuity because the wages accumulated would be small. Under the amendments adopted in 1939, the basis for paying benefits was changed from accumulated wages to average wages. In this way, a person retiring in the early years of the system would receive more than a paltry amount.

4. Providing benefits for aged wives and widows. The 1939 amendments to the Act granted supplemental benefits to the wife, age sixty-five or over, of an insured individual. The total amount of the wife's benefit equals one half of the husband's.

Additional provision was made for widows' old-age insurance benefits. Since the adoption of the 1939 amendments, when the widow of a fully insured individual reaches 65 she is eligible for a total benefit of three-fourths of that of her late husband. Regardless of age, a widow with one or more children now also receives a total benefit equal to three-fourths of that of her late husband.

5. Providing benefits for young children of insured persons dying before reaching retirement age. Under the 1939 amendments, monthly insurance benefits equal to one-half of the amount due to the parent are made available to unmarried dependent orphans who have not yet reached eighteen years of age.

10. "A Social Security Program Must Include All Those Who Need Its Protection." RADIO ADDRESS ON THE THIRD ANNIVERSARY OF THE SOCIAL SECURITY ACT. AUGUST 15, 1938

You, my friends, in every walk of life and in every part of the Nation, who are active believers in Social Security:

The Social Security Act is three years old today. This is a good vantage point from which to take a long look backward to its beginnings, to cast an appraising eye over what it has accomplished so far, and to survey its possibilities of future growth.

Five years ago the term "social security" was new to American ears. Today it has significance for more than forty million men and women workers whose applications for old-age insurance accounts have been received; this system is designed to assure them an income for life after old age retires them from their jobs.

It has significance for more than twenty-seven and a half million men and women wage earners who have earned credits under State unemployment insurance laws which provide half wages to help bridge the gap between jobs.

It has significance for the needy men, women and children receiving assistance and for their families--at least two million three hundred thousand all told; with this cash assistance one million seven hundred thousand old folks are spending their last years in surroundings they know and with people they love; more than six hundred thousand dependent children are being taken care of by their own families; and about forty thousand blind people are assured of peace and security among familiar voices.

It has significance for the families and communities to whom expanded public health and child welfare services have brought added protection. And it has significance for all of us who, as citizens, have at heart the Security and the well-being of this great democracy.

These accomplishments of three years are impressive, yet we should not be unduly proud of them. Our Government in fulfilling an obvious obligation to the citizens of the country has been doing so only because the citizens require action from their Representatives. If the people, during these years, had chosen a reactionary Administration or a "do nothing" Congress, Social Security would still be in the conversational stage--a beautiful dream which might come true in the dim distant future.

But the underlying desire for personal and family security was nothing new. In the early days of colonization and through the long years following, the worker, the farmer, the merchant, the man of property, the preacher and the idealist came here to build, each for himself, a stronghold for the things he loved. The stronghold was his home; the things he loved and wished to protect were his family, his material and spiritual possessions.

His security, then as now, was bound to that of his friends and his neighbors.

But as the Nation has developed, as invention, industry and commerce have grown more complex, the hazards of life have become more complex. Among an increasing host of fellow citizens, among the often intangible forces of giant industry, man has discovered that his individual strength and wits were no longer enough. This was true not only of the worker at shop bench or ledger; it was true also of the merchant or manufacturer who employed him. Where heretofore men had turned to neighbors for help and advice, they now turned to Government.

Now this is interesting to consider. The first to turn to Government, the first to receive protection from Government, were not the poor and the lowly--those who had no resources other than their daily earnings--but the rich and the strong. Beginning in the nineteenth century, the United States passed protective laws designed, in the main, to give security to property owners, to industrialists, to merchants and to bankers. True, the little man often profited by this type of legislation; but that was a by-product rather than a motive.

Taking a generous view of the situation, I think it was not that Government deliberately ignored the working man but that the working man was not sufficiently articulate to make his needs and his problems known. The powerful in industry and commerce had powerful voices, both individually and as a group. And whenever they saw their possessions threatened, they raised their voices in appeals for government protection.

It was not until workers became more articulate through organization that protective labor legislation was passed. While such laws raised the standards of life, they still gave no assurance of economic security. Strength or skill of arm or brain did not guarantee a man a job; it did not guarantee him a roof; it did not guarantee him the ability to provide for those dependent upon him or to take care of himself when he was too old to work.

Long before the economic blight of the depression descended on the Nation, millions of our people were living in wastelands of want and fear. Men and women too old and infirm to work either depended on those who had but little to share, or spent their remaining years within the walls of a poorhouse. Fatherless children early learned the meaning of being a burden to relatives or to the community. Men and women, still strong, still young, but discarded as gainful workers, were drained of self-confidence and self-respect.

The millions of today want, and have a right to, the same security their forefathers sought--the assurance that with health and the willingness to work they will find a place for themselves in the social and economic system of the time.

Because it has become increasingly difficult for individuals to build their own security single-handed, Government must now step in and help them lay the foundation stones, just as Government in the past has helped lay the foundation of business and industry. We must face the fact that in this country we have a rich man's security and a poor man's security and that the Government owes equal obligations to both. National security is not a half and half manner: it is all or none.

The Social Security Act offers to all our citizens a workable and working method of meeting urgent present needs and of forestalling future need. It utilizes the familiar machinery of our Federal-State government to promote the common welfare and the economic stability of the Nation.

The Act does not offer anyone, either individually or collectively, an easy life--nor was it ever intended so to do. None of the sums of money paid out to individuals in assistance or in insurance will spell anything approaching abundance. But they will furnish that minimum necessity to keep a foothold; and that is the kind of protection Americans want.

What we are doing is good. But it is not good enough. To be truly national, a social security program must include all those who need its protection. Today many of our citizens are still excluded from old-age insurance and unemployment compensation because of the nature of their employment. This must be set aright; and it will be.

Some time ago I directed the Social Security Board to give attention to the development of a plan for liberalizing and extending the old-age insurance system to provide benefits for wives, widows and orphans. More recently, a National Health Conference was held at my suggestion to consider ways and means of extending to the people of this country more adequate health and medical services and also to afford the people of this country some protection against the economic losses arising out of ill health.

I am hopeful that on the basis of studies and investigations now under way, the Congress will improve and extend the law. I am also confident that each year will bring further development in Federal and State social security legislation--and that is as it should be. One word of warning, however. In our efforts to provide security for all of the American people, let us not allow ourselves to be misled by those who advocate short cuts to Utopia of fantastic financial schemes.

We have come a long way. But we still have a long way to go. There is still today a frontier that remains unconquered--an America unclaimed. This is the great, the nationwide frontier of insecurity, of human want and fear. This is the frontier--the America--we have set ourselves to reclaim.

This Third Anniversary would not be complete if I did not express the gratitude of the Nation to those splendid citizens who so greatly helped me in making social security legislation possible and to those patriotic men and women, both employers and employees, who in their daily activities are today hearing social security work.

First of all, to the first woman who has ever sat in the Cabinet of the United States--Miss Frances Perkins--then and now the Secretary of Labor. Then to the unselfish Commission of men and women who, in 1934, devoted themselves to the almost superhuman task of studying all manner of American problems, of examining legislation already attempted in other nations, and of coordinating the whole into practical recommendations for legislative action.

Finally, I thank publicly, as I have so often thanked them privately, four men who have had long and distinguished careers in the public service--Congressman David J. Lewis of Maryland, who is known as one of the Americas pioneers in the cause of Social Security; Senator Robert F. Wagner of New York, who also was long its advocate; Senator Harrison of Mississippi and Congressman Doughton of North Carolina, who carried the bill successfully through the Senate and the House of Representatives. They deserve and have the gratitude of all of us for this service to mankind!

NOTE: The idea of Social Security, which some reactionaries used to label as alien to the American tradition, has become so firmly rooted here in America that business, labor, finance, and all political parties now accept it as a permanent system. During the years since the passage of the original Social Security Act in 1935, we have been constantly studying the system in operation. As the result of many investigations and surveys, we have been able to strengthen the original act and to extend it to cover additional activities (see Item 163, 1937 volume; Item 56, this volume; Items 11 and 109, 1939 volume, and accompanying notes).

When I signed the Social Security Act, I stated what I conceived to be the basic purposes of the legislation (see Item 107 and note, 1935 volume, for a more detailed analysis of how the various phases of the Act actually operate). The program attempts to deal with many of the factors which make for economic insecurity among our people.

The first threat against security--that of spending one's aged years in the poor house is dispelled in two ways. In the first place, an old-age insurance system is established, enabling retirement at sixty-five on a pension. The amount of the pension depends upon wages received and taxes paid by both employers and employees. At present (1941), payrolls and wages are taxed 2 percent in order to raise the funds to pay the statutory benefits to workers and their wives who are over sixty-five. Survivors' benefits are now also available for aged widows or aged dependent parents, young widows with dependent children, and unmarried dependent orphans under eighteen.

In the second place, an old-age assistance program has been established, independent of the old-age insurance system. The assistance is in the form of federal grants-in-aid to the states to provide funds for the pensioning and relief of old people. When the federal government has approved the assistance plan of a particular state, it contributes with the states on a 50-50 basis up to a total of $40 per month per individual, with a little extra for administrative purposes.

The other great threat to security is the spectre of unemployment. Unemployment insurance has been set up largely on a state-administered basis in cooperation with the Federal Government. The federal payroll tax for this purpose is merely nominal, employers being freed from 90 percent of this tax if they contribute an equal amount to state unemployment insurance plans approved by the Social Security Board.

The United States Employment Service also maintains employment offices in the states to facilitate ready placement of job applicants where needed.

In addition to these forms of assistance, federal grants are made by the Social Security Board in varying amounts to assist the states in aiding dependent children, and needy blind persons. Under the Social Security Act, the Children's Bureau of the Department of Labor administers grants to states for maternal and child welfare and the aid of crippled children; the United States Public Health Service administers grants to states to develop state health programs; and the Office of Education administers grants to states for vocational rehabilitation.

With the exception of the Children's Bureau, all the above offices and bureaus have been placed within the Federal Security Agency since the adoption of Reorganization Plan No. 1 (see Item 66, 1939 volume). From the standpoint of effective coordination of the social security program, this is of great importance inasmuch as closer working relationships have been established among the Social Security Board, the United States Public Health Service, the Office of Education, the National Youth Administration, and the Civilian Conservation Corps.

Administratively, the Social Security Board is composed of three members, appointed by the President by and with the consent of the Senate. Not more than two of the members may be of one political party; and the President designates the chairman. Administrative and executive action is in the hands of the executive director, who also supervises and coordinates the work of the various bureaus. The actuary of the Board performs the important function of planning the various phases of the program on a long-range basis to determine the adequacy of funds available, benefits which can be paid, etc.

There are three operating bureaus and three service bureaus within the Social Security Board.

The operating bureaus are:

1. The Bureau of Old-Age and Survivors' Insurance, which administers the monthly benefits which are paid to aged workers, their wives, or survivors and dependent children, under the old-age insurance scheme.

2. The Bureau of Employment Security, which administers the unemployment compensation features of the Social Security Act; analyzes and certifies the adequacy of state unemployment compensation laws; furnishes technical aid to the states in drafting their legislation; assists the states in developing their administrative policies and specifications; supervises the functions of the former United States Employment Service; aids farmers, veterans and District of Columbia residents to obtain employment; and assists public employment offices throughout the country.

3. The Bureau of Public Assistance, which supervises federal grants for old-age assistance, aid to dependent children, and aid to the needy blind. It advises and assists the states in initiating or amending state public assistance laws, consults with the states on technical problems, acts as a clearing house for information gathered from the various states, and analyzes and develops standards and procedures.

The service bureaus within the Social Security Board consist of the Bureau of Research and Statistics, the Bureau of Accounts and Audits, and the Informational Service. These three service bureaus work in close conjunction with the operating bureaus.

The Bureau of Research and Statistics investigates such problems as the factors causing insecurity, the adequacy of existing legislation, and the problems caused by the application of the program to various population groups. It plans and conducts the statistical service, and advises the states on the statistical reports required by the Board. The Bureau publishes a record of the volume and trend of general relief in the United States, in collaboration with other government and private agencies.

The Bureau of Accounts and Audits maintains the accounting and auditing records of the Board. It has charge of an administrative audit and also a field audit of states receiving federal grants. It examines financial insufficiency of state plans submitted, and assists the states in improving their accounting procedures. It also advises the Board on governmental fiscal programs.

The Informational Service keeps the public posted, and answers inquiries about rights, benefits and responsibilities under the Act. It also cooperates with the states in planning and conducting their informational programs.

In the fiscal year ending June 30, 1940, individuals participating in the Social Security Act and related state legislation received a total of $1,085,800,000 in comparison with $897,000,000 for the preceding year. The amount for 1939-40 was distributed as follows:

Public assistance....................$587,700,000
Unemployment benefits................$482,500,000
Old-age and Survivors insurance......$17,600,000

The above amounts do not include the funds allotted to the states to cover administrative expenses, nor do they include expenditures by other federal agencies for public health, welfare and vocational rehabilitation services under the Social Security Act.

Since the United States Employment Service has been consolidated into the Social Security Board, the employment security program of the Board has been expanded and strengthened. The state employment offices maintained by federal funds filled more than 3,500,000 jobs during the past year, and were instrumental in making 1,100,000 supplementary placements. By the end of the fiscal year 1940, there were close to 1,500 employment offices and more than 3,000 itinerant service facilities provided throughout the country. Having the information drawn from state unemployment compensation systems at its disposal, the Board is now in a strategic position to help to bring workers and jobs together.

By June, 1940, approximately 28 million workers had wage credits under state unemployment compensation laws. At the same date, more than 40 million had received wages counting toward old age benefits. During the fiscal year, benefits were advanced to more than 5 million different persons unemployed in that period, totaling nearly $500,000,000, and the weekly average of workers receiving such benefits exceeded $73,000. In addition, under the Railroad Unemployment Insurance Act, administered by the Railroad Retirement Board, 161,000 workers received benefits totaling $14,800,000.

In the brief period since January 1, 1940 that the old-age and survivors' insurance system has been in operation, nearly 109,000 persons have received monthly benefits. When this program reaches its peak level, it will involve a larger number of persons and a larger amount of funds than any phase of the social security scheme. Although the amount already made available is small in dollars, it has been invaluable in restoring faith in the future.

The amendments to the Social Security Act passed in 1939 stimulated the states to participate actively in the public assistance plans under the Act. About 2,200,000 needy aged persons, 55,000 blind persons, and 1 million children in over 400,000 families were assisted under the terms of the Act during the fiscal year 1939-1940. It is interesting to note that whereas during the fiscal year 1938-1939 public assistance to the needy aged, blind and children constituted 14.4 percent of the aggregate expenditures for public aid, in the year ending June 30, 1940, similar assistance represented 18.3 percent of the aggregate expenditures of $3,300,000,000 by the Federal Government for public aid.

The Social Security Board and the machinery set up under the program have played an important role in meeting the requirements of national defense. In April 1940, an inventory was made of the active file of those who had registered at public employment offices. With the work histories of 5 million job seekers available, it was easier to determine what the existing labor reserves were and where they existed.

In June 1940, the Social Security Board assembled the Federal Advisory Council for Employment Security to consider defense problems. This body, consisting of representatives of employers, employees and the public, was originally appointed to advise the Board on questions arising in connection with the public employment offices. After a two-day conference, the Advisory Council presented an eight-point program which was accepted on June 28, 1940, by the Advisory Commission to the Council of National Defense.

This plan urged employers and employees to communicate their immediate and prospective employment requirements promptly to the local public employment office, and to depend upon this machinery to fulfill their needs. The employment offices were directed to recatalog the skills available, and take steps to institute training programs where there was a shortage. It was further recommended that the decentralized features of this program be preserved, that preference be accorded to citizens, and that in the event of universal registration for defense an inventory of employment qualifications be made.

Under the Second Deficiency Appropriation Act, approved June 27, 1940, $2,000,000 was appropriated to assist and supervise state employment services in selecting and placing workers in national defense industries. Funds were also provided for the Office of Education to cooperate with the Social Security Board in providing vocational training for workers selected from public employment registers.

Since the speeding up of the defense program, there has been very close cooperation with the National Defense Advisory Commission and the Office of Production Management, the War and Navy Departments, the Selective Service System, and Civil Service Commission.

The public employment offices, as of October 31, 1940, have registered a total of 192,129 workers equipped with skill or experience in about 500 different industries, including such essential defense activities as aircraft, machine shop work and machine tool manufacturing, foundry work, construction, ship building, metal working, electrical equipment, radio, telephone and telegraph.

The employment offices have aided measurably in furthering the defense program through placing men in these industries. There is special cooperation with the Civil Service Commission in the maintenance of an adequate supply of men for placement in arsenals and navy yards. In order to maintain adequate labor reserves and to guide the transfer of workers from point to point, thirteen regional clearance offices have been established.

The Board has aided the War Department in analyzing army jobs, and has helped local selective service boards in assembling information to be used for classification or deferment of workers. As the result of visits to 20,000 defense plants, the Board has compiled estimates of defense labor requirements to be supplied to all of the defense agencies. These estimates are very significant summaries of employment conditions, changes in labor demand and supply, and trends in hiring practices.

In my message to the Congress on September 14, 1940, I called attention to the need for additional legislation to protect the social insurance of those called into military service (see Item 96, 1940 volume). The Board has participated actively in developing plans for taking care of those who joined the armed forces.

There is, of course, still room for improvement in our social security system. I have repeatedly recommended that it be extended to cover many of the occupations now specifically exempted under the Act (see Item 163, 1937 volume; Item 56, this volume; Items 11 and 109, 1939 volume). Also, the health provisions of the Social Security Act are now inadequate to cover the costs of medical care and provide for temporary or permanent disability.] There are other changes which have been suggested from time to time by the Board, the most pressing of which concerns the plight of those states financially incapable of matching federal grants for public assistance. In 1939, the Board recommended that the grants be placed upon a different basis in order to take care of the varying economic capacities of the states; but the Congress failed to pass this proposal.

Yet the program has gone a long way toward eliminating one of the most fearsome evils of our economic system--insecurity. It has provided new life and hope for millions of our citizens, and has bolstered the mechanisms of our economy to help it withstand the dislocations of war as well as the shock of great economic cycles of disaster in peace-time.

11. A MESSAGE TRANSMITTING TO THE CONGRESS A REPORT OF THE SOCIAL SECURITY BOARD RECOMMENDING CERTAIN IMPROVEMENTS IN THE LAW. -- JANUARY 16, 1939.

To the Congress:

Four years ago I sent to the newly convened Congress a message transmitting a report of the Committee on Economic Security. In that message I urged that Congress consider the enactment into law of the program of protection for our people outlined in that report. The Congress acted upon that recommendation and today we have the Social Security Act in effect throughout the length and breadth of our country.

This Act has amply proved its essential soundness. More than two and one half million needy old people, needy blind persons, and dependent children are now receiving systematic and humane assistance to the extent of a half billion dollars a year.

Three and a half million unemployed persons have received out-of-work benefits amounting to $400,000,000 during the last year.

A Federal old-age insurance system, the largest undertaking of its kind ever attempted, has been organized and under it there have been set up individual accounts covering 42,500,000 persons who may be likened to the policy holders of a private insurance company.

In addition there are the splendid accomplishments in the field of public health, vocational rehabilitation, maternal and child welfare and related services, made possible by the Social Security Act.

We have a right to be proud of the progress we have made in the short time the Social Security Act has been in operation. However, we would be derelict in our responsibility if we did not take advantage of the experience we have accumulated to strengthen and extend its provisions.

I submit for your consideration a report of the Social Security Board, which, at my direction and in accordance with the congressional mandate contained in the Social Security Act itself, has been assembling data, and developing ways and means of improving the operation of the Social Security Act.

I particularly call attention to the desirability of affording greater old age security. The report suggests a two-fold approach which I believe to be sound. One way is to begin the payment of monthly old-age insurance benefits sooner, and to liberalize the benefits to be paid in the early years. The other way is to make proportionately larger Federal grants-in-aid to those states with limited fiscal capacities, so that they may provide more adequate assistance to those in need. This result can and should be accomplished in such a way as to involve little, if any, additional cost to the Federal Government. Such a method embodies a principle that may well be applied to other Federal grants-in-aid.

I also call attention to the desirability of affording greater protection to dependent children. Here again the report suggests a two-fold approach which I believe to be sound. One way is to extend our Federal old-age insurance system so as to provide regular monthly benefits not only to the aged but also to the dependent children of workers dying before reaching retirement age. The other way is to liberalize the Federal grants-in-aid to the states to help finance assistance to dependent children.

As regards both the Federal old-age insurance system and the Federal-State unemployment compensation system, equity and sound social policy require that the benefits be extended to all of our people as rapidly as administrative experience and public understanding permit. Such an extension is particularly important in the case of the Federal old-age insurance system. Even without amendment the old-age insurance benefits payable in the early years are very liberal in comparison with the taxes paid. This is necessarily so in order that these benefits may accomplish their purpose of forestalling dependency. But this very fact creates the necessity of extending this protection to as large a proportion as possible of our employed population in order to avoid unfair discrimination.

Much of the success of the Social Security Act is due to the fact that all of the programs contained in this act (with one necessary exception) are administered by the states themselves, but coordinated and partially financed by the Federal Government. This method has given us flexible administration, and has enabled us to put these programs into operation quickly. However, in some states incompetent and politically dominated personnel has been distinctly harmful. Therefore, I recommend that the states be required, as a condition for the receipt of Federal funds, to establish and maintain a merit system for the selection of personnel. Such a requirement would represent a protection to the states and citizens thereof rather than an encroachment by the Federal Government, since it would automatically promote efficiency and eliminate the necessity for minute Federal scrutiny of state operations.

I cannot too strongly urge the wisdom of building upon the principles contained in the present Social Security Act in affording greater protection to our people, rather than turning to untried and demonstrably unsound panaceas. As I stated in my message four years ago: "It is overwhelmingly important to avoid any danger of permanently discrediting the sound and necessary policy of Federal legislation for economic security by attempting to apply it on too ambitious a scale before actual experience has provided guidance for the permanently safe direction of such efforts. The place of such a fundamental in our future civilization is too precious to be jeopardized now by the extravagant action."

We shall make the most orderly progress if we look upon social security as a development toward a goal rather than a finished product. We shall make the most lasting progress if we recognize that social security can furnish only a base upon which each one of our citizens may build his individual security through his own individual efforts.

NOTE: Back in 1934, I created an Advisory Council on Economic Security to assist the Committee on Economic Security in its investigations which eventually led to the formulation and adoption of the Social Security Act in 1935 (see Items 117 and 179, 1934 volume). The Act was based upon the careful research and the thorough studies and surveys made by both the Advisory Council and the Committee.

Since the passage of the basic statute, we have had considerable experience in the administration of the social security program. We had an opportunity to test the operation of its various features, in order to determine the directions in which it might be plausible to expand the Act.

In May 1937, another Advisory Council on Social Security was appointed by the Social Security Board and by a subcommittee of the Senate Committee on Finance. This body was similar in some respects to the old Advisory Council which I had created in 1934. It was composed of twenty-five members, representing employers, employees, and the public; and it concentrated its attention upon the problems arising out of the operation of the old-age insurance program.

Throughout 1937 and 1938, the Advisory Council investigated the ways in which the old-age insurance provisions of the Act could be improved. At the same time, the Social Security Board itself was carrying on surveys, and on December 14, 1937, Chairman Altmeyer submitted to me a list of suggested improvements (see Item 163, and note, 1937 volume). On April 28, 1938, I wrote to Chairman Altmeyer requesting that the Board study some additional changes in the old-age insurance provisions (see Item 56, and note, 1938 volume).

The "Final Report of the Advisory Council on Social Security," dated December 10, 1938, was before the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives when they started their deliberations on the Act. The report of the Social Security Board on the proposed changes in the Act was also referred to the congressional committees concerned, along with the foregoing message which I sent to the Congress.

From February 1 until April 7, 1939, the House Ways and Means Committee held hearings on possible amendments to the Act, and over ninety social security bills were referred to the Committee. H.R. 6635 finally passed the House of Representatives on June 10, 1939, by a vote of 361 to 2, and the bill as amended passed the

Senate on July 13, 1939, by a vote of 57-8. After the adoption of the conference report, I signed H.R. 6635 on August 10, 1939 as 53.Stat. 1360 (see Item 109, this volume).

Most of the reforms recommended by the Social Security Board were embodied in the amendments which were passed by the Congress. The following account outlines changes which the Board advocated, and the extent to which their suggestions were followed by the Congress:

1. Federal Old-Age Insurance

a. Benefits
The Board recommended that monthly benefit payments start in 1940 instead of on January 1, 1942, as scheduled. The amendments advanced the date for beginning payments to January 1, 1940.

Because those retiring in the early years of the operation of the system would receive very small amounts, the Board suggested that supplementary benefits be provided for aged wives, and that average wages instead of total wages be used as a basis for computing benefits. Both these reforms were carried into effect when the amendments were passed, with aged wives being granted supplementary benefits totaling one-half of the old-age insurance benefit of their husbands.

Under the Social Security Act of 1935, single lump-sum cash payments amounting to 3 ½ percent of the worker's total wages were made at the time of his death. The Board felt that monthly benefits to widows and orphans would be preferable. These recommendations were carried out by the 1939 amendments, which granted monthly benefits to widows who had reached 65, unmarried dependent orphans under 18, younger widows with children, and aged dependent parents.

b. Coverage
The Social Security Board recommended that the old-age insurance system be extended to cover employees in large-scale farming operations, and that eventually agricultural labor be covered completely. Likewise, it was advocated that the following groups be covered into the operation of the Act: domestic service, maritime employment (with the exception of foreign crews on American vessels engaged in foreign trade), services performed for religious, educational, charitable and non-profit organizations, services performed for the federal and state governments or their instrumentalities, those workers employed after they passed the age of 65, and those workers performing personal service who did not fall within the term "employee" as used in this Act.

Under the 1939 amendments, three of the above groups were placed within the system: maritime workers, those earning wages after they reached 65, and employees of federal instrumentalities, such as member banks in the Federal Reserve System.

Several other clarifying amendments were passed, such as the exemption of foreign governments and their instrumentalities, the exclusion of any instrumentality wholly state-owned or constitutionally tax-exempt, and the coverage of an employee performing both excluded and included types of employment where the latter predominates during a particular pay period.

c. Financing
The Board made no definite recommendations regarding the financing of the system, beyond stating that if additional funds were needed, they should be raised by taxes other than those on payrolls.

The 1939 amendments postponed until 1943 the increased taxes to be paid by employers and employees. Under the original terms of the Act, the 1 percent old-age insurance tax was to be stepped up to 1 ½ percent during the years 1940, 1941, and 1942. However, the amendments froze the rate of 1 percent until 1942, thus saving employers and workers about $275,000,000 in 1940 and $825,000,000 for the three years.

d. Administrative changes
The following recommendations of the Board were enacted in the 1939 amendments:

(1) Employers are now required to make a statement to employees showing the amount of taxes deducted from their wages under the old-age insurance system.

(2) The recovery by the Federal Government of incorrect payments to individuals has been rendered easier.

(3) Provisions have been made respecting the practice of attorneys and agents before the Board.

(4) Employers are not required to pay taxes on payments they make under any employer welfare plan providing for retirement benefits, disability benefits, medical and hospital expenses, etc.

2. Unemployment Compensation

a. Coverage
In general, the Board advocated that coverage be extended to the same groups which it suggested should be included under the old-age insurance provisions of the Act. With the passage of the amendments, about 200,000 additional persons, chiefly bank employees, were brought into the unemployment compensation branch of the system.

b. Financing
The Board felt that certain features of both the old-age insurance and unemployment compensation sections of the Act should be standardized. Since, under old-age insurance, only the first $3,000 paid to an employee is taxed, a similar recommendation was made for unemployment compensation, and it was embodied in the 1939 amendments. A suggestion that the tax provisions of the two systems be combined or made identical, in order to facilitate record-keeping, was not adopted. However, the Board asked that the taxes for unemployment compensation be imposed on "wages paid," instead of "wages payable," and when the Congress adopted this amendment it established the same basis as used in old-age insurance.

The Board proposed certain liberalizations in the time limit within which an employer could qualify for the 90 percent credit against the federal tax by contributing to state unemployment insurance funds. As asked by the Board, the time limit was extended where the employer has paid his tax on time, but to the wrong state. Also, the amendments of 1939 saved employers approximately $15,000,000 by providing that they would receive full credit for delinquent 1936, 1937 and 1938 taxes paid within sixty days after the passage of the amendments. Other minor changes eased the stringent provisions governing delinquent taxpayers.

c. Administrative changes
The following recommendations of the Board were subsequently enacted:

(1) As in the case of the old-age insurance provisions of the law, payments under employer welfare plans are made exempt from taxation.

(2) States are required to establish and maintain a merit system for the personnel in unemployment compensation agencies, in order to be eligible for federal grants.

(3) The Board recommended that the administration of unemployment compensation and of the United States Employment Service should be placed within a single federal bureau. Under Reorganization Plan No. 1, the United States Employment Service was transferred from the Department of Labor to the Federal Security Agency, and its functions were consolidated with the unemployment compensation functions of the Social Security Board (see Item 66, this volume).

(4) As in old-age insurance, the language excluding state instrumentalities is clarified to apply to any instrumentality wholly owned by the states or political subdivisions thereof, as well as those exempt from tax under the constitution.

(5) Exemption of foreign governments and their instrumentalities from the unemployment compensation tax.

(6) States are now required to enact laws providing that expenditures be in accordance with the provisions of the federal act.

(7) The provisions relating to "merit rating" or "individual employer experience rating" have been clarified in accordance with the recommendations of the Social Security Board.

3. Public Assistance

The Board recommended that the present uniform percentage grants be changed to a system which would take into account the varying economic capacities of the States. However, no action was taken by the Congress.

a. Old-age assistance, and aid to the blind.
The Board proposed that federal contributions for the administration of grants-in-aid to the states should be increased. In the 1939 amendments it was provided that the federal government contribute 50 percent of state assistance payments to needy aged and blind up to a maximum limit of $40 a month. Inasmuch as the previous limit was $30 a month, the maximum federal grant per aged or blind persons was thus increased from $15 to $20 per month.

b. Aid to dependent children. The following recommendations of the Board were subsequently embodied in the 1939 amendments to the Social Security Act:

(1) The contribution of the federal government toward state aid to dependent children was increased from one-third to one-half of the amount granted to each individual.

(2) Where a child is regularly attending school, the age limit is raised from 16 to 18 to enable most children to finish high school.

(3) Before the passage of the amendments, the federal government was limited to contributing $18 per month for the first child and $12 per month for each child thereafter. The Board suggested a liberalization of this amount, and now the federal government will pay one-half the amounts up to an average of $18 per child per month throughout the state.

c. Public assistance for Indians
The Board advocated that the Federal Government reimburse the states for the entire cost of public assistance to certain Indians. No action was taken by the Congress upon this recommendation.

d. Maternal and child health services, and services for crippled children.
Although the Social Security Board made no recommendations on these aspects of public assistance, which are administered by the Children's Bureau of the Department of Labor, testimony presented to the Senate Committee holding hearings upon the Wagner national health bill (see Item 17 and note, this volume) showed the immediate need for expanding assistance along these lines. Greater amounts of federal money, under the 1939 amendments, are authorized to be appropriated to assist the states in extending these services. The total amount authorized to be appropriated for maternal and child health grants was increased from $3,800,000 to $5,820,000, while that for crippled children was increased from $2,850,000 to $3,870,000.

The 1939 amendments to those titles of the Act covering aid to the needy aged, blind, dependent children, maternal and child health services and services for crippled children provided that approval of state plans was contingent upon the establishment of personnel standards on a merit basis.

c. Public health work
The Social Security Board urged the enactment of the National Health Program presented by the Interdepartmental Committee to Coordinate Health and Welfare Activities (see Item 17, and note, this volume). The amendments of 1939 stipulated that the amount authorized to be appropriated for federal aid to state public health programs should be increased from $8,000,000 to $11,000,000. Following this increase, particular emphasis has been placed upon developing control of tuberculosis, malaria, cancer, pneumonia, and industrial hygiene.

4. Vocational Rehabilitation

The Board made no additional recommendations regarding this phase of the Social Security Act, but the 1939 amendments increased the annual allotment from $1,938,000 to $4,000,000, to be divided among the states, Hawaii and Puerto Rico.

(For a discussion of the accomplishments of the Social Security Act, see Item 107 and note, 1935 volume; and Item 103 and note, 1938 volume.)

12. Message to Congress on the National Health Program - January 23, 1939

To the Congress:

In my annual message to the Congress I referred to problems of health security. I take occasion now to bring this subject specifically to your attention in transmitting the report and recommendations on national health prepared by the Interdepartmental Committee to Coordinate Health and Welfare Activities.

The health of the people is a public concern; ill health is a major cause of suffering, economic loss, and dependency; good health is essential to the security and progress of the Nation.

Health needs were studied by the Committee on Economic Security which I appointed in 1934 and certain basic steps were taken by the Congress in the Social Security Act. It was recognized at that time that a comprehensive health program was required as an essential link in our national defenses against individual and social insecurity. Further study, however, seemed necessary at that time to determine ways and means of providing this protection most effectively.

In August, 1935, after the passage of the Social Security Act, I appointed the Interdepartmental Committee to Coordinate Health and Welfare Activities. Early in 1938, this committee forwarded to me reports prepared by its technical experts. They had reviewed unmet health needs, pointing to the desirability of a national health program, and they submitted the outlines of such a program. These reports were impressive. I therefore suggested that a conference be held to bring the findings before representatives of the general public and of the medical, public health, and allied professions.

More than 200 men and women, representing many walks of life and many parts of our country, came together in Washington last July to consider the technical committee's findings and recommendations and to offer further proposals. There was agreement on two basic points: The existence of serious unmet needs for medical service; and our failure to make full application of the growing powers of medical science to prevent or control disease and disability.

I have been concerned by the evidence of inequalities that exist among the States as to personnel and facilities for health services. There are equally serious inequalities of resources, medical facilities and services in different sections and among different economic groups. These inequalities create handicaps for the parts of our country and the groups of our people which most sorely need the benefits of modern medical science.

The objective of a national health program is to make available in all parts of our country and for all groups of our people the scientific knowledge and skill at our command to prevent and care for sickness and disability; to safeguard mothers, infants and children; and to offset through social insurance the loss of earnings among workers who are temporarily or permanently disabled.

The committee does not propose a great expansion of Federal health services. It recommends that plans be worked out and administered by States and localities with the assistance of Federal grants-in-aid. The aim is a flexible program. The committee points out that while the eventual costs of the proposed program would be considerable, they represent a sound investment which can be expected to wipe out, in the long run, certain costs now borne in the form of relief.

We have reason to derive great satisfaction from the increase in the average length of life in our country and from the improvement in the average levels of health and well-being. Yet these improvements in the averages are cold comfort to the millions of our people whose security in health and survival is still as limited as was that of the Nation as a whole fifty years ago.

The average level of health or the average cost of sickness has little meaning for those who now must meet personal catastrophes. To know that a stream is four feet deep on the average is of little help to those who drown in the places where it is ten feet deep. The recommendations of the committee offer a program to bridge that stream by reducing the risks of needless suffering and death, and of costs and dependency, that now overwhelm millions of individual families and sap the resources of the Nation.

I recommend the report of the Interdepartmental Committee for careful study by the Congress. The essence of the program recommended by the Committee is Federal-State cooperation. Federal legislation necessarily precedes, for it indicates the assistance which may be made available to the States in a cooperative program for the Nation's health.

13. Presidential Statement on Signing Some Amendments to the Social Security Act --August 11, 1939

IT WILL be exactly four years ago on the fourteenth day of this month that I signed the original Social Security Act. As I indicated at that time and on various occasions since that time, we must expect a great program of social legislation, such as is represented in the Social Security Act, to be improved and strengthened in the light of additional experience and understanding. These amendments to the Act represent another tremendous step forward in providing greater security for the people of this country. This is especially true in the case of the federal old age insurance system which has now been converted into a system of old age and survivors' insurance providing life-time family security instead of only individual old age security to the workers in insured occupations. In addition to the worker himself, millions of widows and orphans will now be afforded some degree of protection in the event of his death whether before or after his retirement.

The size of the benefits to be paid during the early years will be far more adequate than under the present law. However, a reasonable relationship is retained between wage loss sustained and benefits received. This is a most important distinguishing characteristic of social insurance as contrasted with any system of flat pensions.

Payment of old age benefits will begin on January 1, 1940, instead of January 1, 1942. Increase in pay-roll taxes, scheduled to take place in January, 1940, is deferred. Benefit payments in the early years are substantially increased.

I am glad that the insurance benefits have been extended to cover workers in some occupations that have previously not been covered. However, workers in other occupations have been excluded. In my opinion, it is imperative that these insurance benefits be extended to workers in all occupations.

The Federal-State system of providing assistance to the needy aged, the needy blind, and dependent children, has also been strengthened by increasing the federal aid. I am particularly gratified that the Federal matching ratio to States for aid to dependent children has been increased from one-third to one-half of the aid granted. I am also happy that greater Federal contributions will be made for public health, maternal and child welfare, crippled children, and vocational rehabilitation. These changes will make still more effective the Federal-State cooperative relationship upon which the Social Security Act is based and which constitutes its great strength. It is important to note in this connection that the increased assistance the States will now be able to give will continue to be furnished on the basis of individual need, thus affording the greatest degree of protection within reasonable financial bounds.

As regards administration, probably the most important change that has been made is to require that State agencies administering any part of the Social Security Act coming within the jurisdiction of the Social Security Board and the Children's Bureau shall set up a merit system for their employees. An essential element of any merit system is that employees shall be selected on a non-political basis and shall function on a non-political basis.

In 1934 I appointed a committee called the Committee on Economic Security made up of Government officials to study the whole problem of economic and social security and to develop a legislative program for the same. The present law is the result of its deliberations. That committee is still in existence and has considered and recommended the present amendments. In order to give reality and coordination to the study of any further developments that appear necessary I am asking the committee to continue its life and to make active study of various proposals which may be made for amendments or developments to the Social Security Act.

14. CAMPAIGN ADDRESS ON THE "ECONOMIC BILL OF RIGHTS." OCTOBER 28,1944

The American people are now engaged in the greatest war in history--and we are also engaged in a political campaign.

We are fighting this war and we are holding this election--both for the same essential reason: because we have faith in democracy.

And there is no force and there is no combination of forces powerful enough to shake that faith.

As you know, I have had some previous experience in war--and I have also had a certain amount of previous experience in political campaigning.

But--I must confess--this is the strangest campaign I have ever seen.

I have listened to the various Republican orators who are urging the people to throw the present Administration out and put them in. And what do they say?

Well, they say in effect, just this:

"Those incompetent bunglers in Washington have passed a lot of excellent laws about social security and labor and farm relief and soil conservation--and many others--and we promise if elected not to change any of them."

And they go on to say: "These same quarrelsome tired old men have built the greatest military machine the world has ever known, which is fighting its way to victory; and, if you elect us, we promise not to change any of that, either."

"Therefore," say these Republican orators, "it is time for a change."

They also say in effect: "Those inefficient and worn out crackpots have really begun to lay the foundations of a lasting world peace. If you elect us, we will not change of any of that either." "But," they whisper, "we'll do it in such a way that we won't lose the support even of Gerald Nye or Gerald Smith--and-and this is very important--we won't lose the support of any isolationist campaign contributor. We will even be able to satisfy the Chicago Tribune."

Tonight, I shall talk simply about the future of America--about this land of unlimited opportunity. I shall give the Republican campaign orators some more opportunities to say--"me too."

Today everything we do is devoted to the most important job before us--winning the war and bringing our men and women home as quickly as possible.

We have astonished the world and confounded our enemies with our stupendous war production, with the overwhelming courage and skill of our fighting men--with the bridge of ships carrying our munitions and men through the seven seas--with our gigantic Fleet which has pounded the enemy all over the Pacific and has just driven through for a touchdown.

The American people are prepared to meet the problems of peace in the same bold way that they have met the problems of war.

For the American people are resolved that when our men and women return home from this war, they shall come back to the best possible place on the face of this earth--to a place where all persons, regardless of race, color, creed or place of birth, can live in peace, honor and human dignity--free to speak, and pray as they wish--free from want--and free from fear.

Last January, in my Message to the Congress on the state of the Union, I outlined an Economic Bill of Rights on which "a new basis of security and prosperity can be established for all--regardless of station, race or creed":

I repeat them now:

"The right of a useful and remunerative job in the industries, or shops or farms or mines of the nation;

"The right to earn enough to provide adequate food and clothing and recreation;

"The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

"The right of every business man, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

"The right of every family to a decent home;

"The right to adequate medical care and the opportunity to achieve and enjoy good health;

"The right to adequate protection from the economic fears of old age, sickness, accident and unemployment;

"The right to a good education.

"All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being."

Some people have sneered at these ideals as well as the ideals of the Atlantic Charter and the Four Freedoms--saying they were the dreams of starry-eyed New Dealers--that it's silly to talk of them because we cannot attain these ideals tomorrow or the next day.

The American people have greater faith than that. I know that they agree with those objectives--that they demand them--that they are determined to get them--and that they are going to get them.

The American people have a habit of going right ahead and accomplishing the impossible.

And the people today who know that best are the Nazis and the Japs.

This Economic Bill of Rights is the recognition of the simple fact that, in America, the future of the worker and farmer lies in the well-being of private enterprise; and that the future of private enterprise lies in the well-being of the worker and farmer.

The well-being of the Nation as a whole is synonymous with the well-being of each and every one of its citizens.

Now, I have the possibly old fashioned theory that when you have problems to solve, objectives to achieve, you cannot get very far by just talking about them.

You have got to go out and do something!

To assure that full realization of the right to a useful and remunerative employment, an adequate program must provide America with close to sixty million productive jobs.

I foresee an expansion of our peacetime productive capacity which will require new facilities, new plants and new equipment--capable of hiring millions more men.

I propose that Government do its part in helping private enterprise to finance expansion of our private industrial plant through normal investment channels.

For example, business, large and small, must be encouraged by the Government to expand their plants and to replace their obsolete or worn out equipment with new equipment. And to that end, the rate of depreciation on these new plants and facilities for tax purposes should be accelerated. That means more jobs for the worker, increased profits for the business man, and lower cost to the consumer.

In 1933, when my Administration took office, vast numbers of our industrial workers were unemployed, our plants and businesses were idle, our monetary and banking system in ruins--our economic resources were running to waste.

By 1940--before Pearl Harbor--we had increased our employment by ten million workers. We had converted a corporate loss of five billion five hundred million dollars in 1932, to a corporate profit (after taxes) of nearly five billion dollars 1940.

Obviously, to increase jobs after this war, we shall have to increase demand for our industrial and agricultural production not only here at home, but also abroad.

I am sure that every man and woman in this vast gathering here tonight agree with me in my conviction that never again must we in the United States attempt to isolate ourselves from the rest of humanity.

I am confident that, with Congressional approval, tile foreign trade of the United States can be trebled after the war--providing millions of more jobs.

Such cooperative measures provide the soundest economic foundation for a lasting peace. And, after this war, we do not intend to settle for anything less than lasting peace.

When we think of the America of tomorrow, we think of many things.

One of them is American homes--in our cities, in our villages and on our farms. Millions of our people have never had homes worthy of American standards--well built homes with electricity and plumbing and air and sunlight.

The demand for homes and our capacity to build them call for a program of well over a million homes a year for at least ten years. Private industry can build and finance the vast majority of these homes. Government can and will assist and encourage private industry to do this, as it has for many years. For those very low income groups that cannot possibly afford decent homes, the Federal Government should continue to assist local housing authorities in meeting that need.

In the future America we think of new highways and parkways. We think of thousands of new airports to service the new commercial and private air travel which is bound to come after the war. We think of new airplanes, new cheap automobiles with low maintenance and operation costs. We think of new hospitals and new health clinics. We think of a new merchant marine for our expanded world trade.

Think of all these vast possibilities for industrial expansion--and you will foresee opportunities for more millions of jobs.

Our Economic Bill of Rights--like the sacred Bill of Rights of our Constitution itself--must be applied to all our citizens, irrespective of race, creed or color.

In 1941, I appointed a Fair Employment Practice Committee to prevent discrimination in war industry and Government employment. The work of the Committee and the results obtained more than justify its creation.

I believe that the Congress should by law make the Committee permanent.

America must remain the land of high wages and efficient production. Every full-time job in America must provide enough for a decent living. And that goes for jobs in mines, offices, factories, stores, canneries--and everywhere where men and women are employed.

During the war we have been compelled to limit wage and salary increases for one great objective--to prevent runaway inflation. You all know how successfully we have held the line by the way your cost of living has been kept clown.

However, at the end of the war there wilt be more goods available, and it is only good common sense to see to it that the working man is paid enough, and that the farmers earn enough, to buy these goods and keep our factories running. It is a simple fact that a greatly increased production of food and fibre on the forms can be consumed by the people who work in industry only if those people who work in industry have enough money to buy food and clothing. If industrial wages go down, farm prices will go down too. After the war, we shall of course remove the control of wages and leave their determination to free collective bargaining between trade unions and employers.

In this war, the American farmer has been called upon to do far and away the biggest food production job in history.

The American farmer has met that challenge triumphantly.

Despite all manner of wartime difficulties--shortage of farm labor and of new farm machinery--the American farmer has achieved a total of food production which is one of the wonders of the world.

The American farmer is a great producer; and he must have the means to be also a great consumer. For more farm income means more jobs everywhere in the nation.

Let us look back for a moment to 1932. All of us remember the spreading tide of farm foreclosures; we remember four-cent hogs, twenty-cent wheat, five-cent cotton.

I am going to give you some figures of recovery--and I am sure you will pardon me if I quote them correctly.

In 1932 the American farmers' net income was only two and a quarter billion dollars.

In 1940--a year before we were attacked--farm income was more than doubled to five and a half billion dollars.

This year--1944--it will be approximately thirteen and a half billion dollars.

Certainly the American farmer does not want to go back to a Government owned by the moguls of 1929--and let us bear it constantly in mind that those same moguls still control the destinies of the Republican Party.

We must continue this Administration's policy of conserving the enormous gifts with which an abundant Providence has blessed our country--our soil, our forests, our water.

The work of the Tennessee Valley Authority is closely

related to our national farm program, and we look toward the similar developments which I have recommended in the valley of the Missouri--in the valley of the Arkansas--and in the Columbia River Basin.

And accidentally--and as an aside--I cannot resist the temptation to point to the gigantic contribution to our war effort made by the power generated at TVA and Bonneville and Grand Coulee.

Do you remember when the building of these great public works was ridiculed as New Deal "boondoggling"? And we are now planning developments at Grand Coulee, which will provide irrigation for many thousands of acres--providing fertile firm land for settlement--I hope--by many of our returning soldiers and sailors.

More "boondoggling"!

This Administration has put into the law of the land the farmers' long dream of parity prices.

And we propose, too, that the Government will cooperate when the weather will not--by a genuine crop insurance program.

This Administration adopted--and will continue--the policy of giving so many farmers as possible the chance of owning their own farms.

That means something to those veterans who left their farms to fight for their country.

This time they can grow apples on their own farms instead of having to sell apples on street corners.

I believe in free enterprise--and always have.

I believe in the profit system--and always have.

I believe that private enterprise can give full employment to our people.

And if anyone feels that my faith in our ability to provide sixty million peacetime jobs is fantastic, let him remember that some people said the same thing about my demand in 1940 for fifty thousand airplanes.

I believe in exceptional rewards for innovation, skill, and risk-taking by business.

We shall lift production and price control as soon as they are no longer needed--encouraging private business to produce more of the things to which we are accustomed and also thousands of new things, in ever-increasing volume, under conditions of free and open competition.

This Administration has been mindful from its earliest days, and will continue to be mindful, of the problems of small business as well as large.

Small business played a magnificent part in producing thousands of items needed for our Armed Forces. When the war broke out, it was mobilized into war production. Money was loaned to them for machinery. Over one million prime and subcontracts have been distributed among sixty thousand smaller plants of the Nation.

We shall make sure that small business is given every facility to buy Government-owned plants, equipment and inventories. The special credit and capital requirements of small business will be met.

And small business will continue to be protected from selfish and cold-blooded monopolies and cartels. Beware of that profound enemy of the free enterprise system who pays lip-service to free competition--but also labels every antitrust prosecution as a "persecution."

This war has demonstrated that when the American business man and the American worker and the American farmer work together, they form an unbeatable team.

We know that--our Allies know that--and so do our enemies.

That winning team must keep together after the war, and it will win many more historic victories of peace for our country, and for the cause of security and decent standards of living throughout the world.

We owe it to our fighting men and to their families--we owe it to all of our people who have given so much in this war--we owe it to our children--to keep that winning team together.

The future of America, like its past, must be made by deeds--not words.

America has always been a land of action--a land of adventurous pioneering--a land of growing and building:

America must always be such a land.

The creed of our democracy is that liberty is acquired and kept by men and women who are strong and self-reliant, and possessed of such wisdom as God gives to mankind--men and women who are just, and understanding, and generous to others--men and women who are capable of disciplining themselves.

For they are the rulers and they must rule themselves.

I believe in our democratic faith and in the future of our country which has given eternal strength and vitality to that faith.

Here in Chicago you know a lot about that vitality.

And as I say good-night to you, I say it in a spirit of faith--a spirit of hope--a spirit of confidence.

We are not going to turn back the clock!

We are going forward--and--with the fighting millions of our fellow countrymen--we are going forward together.