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Federal credit unions play a crucial role in providing access to essential financial services, including savings accounts, checking accounts, loans (such as mortgages, auto loans, and personal loans), and credit cards. They often serve individuals and communities that may have limited access to traditional banking services, including low-income households and underserved areas.

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The Federal Credit Unions are similar to banks in many ways, but they are owned and operated by their members rather than by shareholders. This ownership structure often allows them to offer more competitive rates on savings and loans compared to traditional banks. Additionally, Federal Credit Unions are non-profit organizations, so any profits they generate are typically returned to their members in the form of dividends or lower fees.

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How the Gold Reserve Act Effects California

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How the Gold Reserve Act Effects California

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California's agriculture, particularly its large-scale fruit and vegetable farming, was significantly affected. The devaluation of the dollar against gold made California produce more competitive in international markets, leading to increased exports.

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The Gold Reserve Act of 1934 was signed by President Roosevelt on January 30, 1934. The purpose of the law was, "To protect the currency system of the United States, to provide for the better use of the monetary gold stock of the United States, and for other purposes" [1]. It ended the free use of gold as money domestically and effectively devalued the dollar internationally.

In the 19th century, Britain, the leading economic and political power of the age, adopted a "gold standard" and many other countries followed suit. This meant that national currencies were valued in relation to gold, and that coins and paper money could officially be redeemed for an equivalent amount of gold. The history of the gold standard in America and the nation's monetary system is complex and often fought over (e.g., the Free Silver movement of the 1880s). A true gold standard only existed in the U.S. between 1879 and 1933. At other times, the nation has relied on a mixture of gold and silver coins, the use of gold for international settlements, and, during wars, printing paper currency not backed by precious metals [2].

With the onset of the Great Depression and collapsing international trade, the gold situation facing the United States grew dire. Large quantities of gold were flowing out from the vaults of the Federal Reserve Bank, both domestically and internationally. This occurred because in a financial crisis, most people, companies and governments prefer hard currency over bank deposits or paper, which can suddenly lose their value. By March 1933, when "...the Federal Reserve Bank of New York could no longer honor its commitment to convert currency to gold, President Franklin Roosevelt declared a national banking holiday" [3]. (See the Emergency Banking Relief Act of 1933)

The Gold Reserve Act of 1934 came later, following a series of other attempts to stop the financial bleeding, including the bank holiday, suspension of international gold payments, and an increase in gold purchases by the Treasury. The Gold Reserve Act ended all private holding and use of gold as money. The government called in gold held by private hands and thereafter prohibited the Treasury from redeeming dollars for gold. It then "authorized the president to establish the gold value of the dollar by proclamation" [4]. This signaled the end of the classic Gold Standard and the beginning of a long period in which the United States would be the principal arbiter of international money.

Ending the old gold standard was controversial. Nonetheless, economists ranging from Milton Friedman to Ben Bernanke to Christina Romer credit the New Deal's drastic monetary reforms with stabilizing the banking system, making American goods more competitive through devaluation of the dollar, and reflating the economy [5]. After World War II, the U.S. dollar would become the effective "reserve currency" for the world, in place of gold, and most of the world's stock of gold would sit in the vaults of Fort Knox, Kentucky. But pressure gradually built up from a huge outflow of dollars, and in the early 1970s President Nixon ended domestic redemption of dollars for silver and international settlements in gold. International currencies were allowed to 'float'. In 1976, Congress made it official, and "the definition of the dollar in terms of gold was removed from statute" [6].

Sources: (1) "Public Law 73-87, 73d Congress, H.R. 6976," Federal Reserve Archive, https://fraser.stlouisfed.org/scribd/?title_id=1085&filepath=/docs/historical/congressional/goldreserveact1934.pdf#scribd-open, accessed May 1, 2015. (2) Craig K. Elwell, "Brief History of the Gold Standard in the United States," Congressional Research Service, June 23, 2011, pp. 9-11 (based on earlier work by G. Thomas Woodward and available to read or download at https://fas.org/sgp/crs/misc/R41887.pdf). (3) Gary Richardson, "Roosevelt's Gold Program," Federal Reserve History, https://www.federalreservehistory.org/Events/DetailView/24, accessed May 1, 2015. (4) Gary Richardson, "Gold Reserve Act of 1934," Federal Reserve History, https://www.federalreservehistory.org/Events/DetailView/13, accessed May 2, 2015. (5) See note 3, and also Barry Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, New York: Oxford University Press, 1992. (6) See note 2 at p. 13.

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Gold Reserve Act (1934) - Living New Deal

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The Gold Reserve Act of 1934 was signed by President Roosevelt on January 30, 1934. The purpose of the law was, "To protect the currency system of the United States, to provide for the better use of the monetary gold... read more

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The RRB was established to administer retirement and unemployment benefits for railroad workers. California, with its extensive railroad networks and significant railway workforce, saw a direct impact on its railroad workers. The establishment of the RRB provided a social safety net for these workers, ensuring they had access to retirement benefits and assistance during periods of unemployment.

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The Railroad Retirement Board (RRB) is an independent, executive branch agency that administers retirement, survivor, unemployment, disability, sickness, and health benefits for the nation's rail workers [1]. It was created between 1934 and 1937, in the midst of several legislative acts and court battles.

During the early part of the 20 th century, railroad retirement programs were inadequate or, for some rail workers, did not exist at all. When the Great Depression hit, these inadequacies created financial turmoil for railroad retirees [2]. Fortunately, President Franklin Roosevelt and his New Deal policy team arrived in 1933. "For years the railroad brotherhoods had lobbied in Congress for a federal retirement program, but not until the New Deal did they find a sympathetic administrative and legislative ear" [3]. The result was the Railroad Retirement Act of 1934 - the nation's first federal retirement system for non-government workers [4].

As was often the case in the New Deal, business executives were aghast at the federal government's attempts to help workers and found allies in the federal courts, especially the Supreme Court. The latter held that the Railroad Retirement Act of 1934 was an unconstitutional taking of private property (i.e., the railroad owners' money) [5]. Subsequent legislation, the Railroad Retirement Act of 1935, was similarly stymied by a lower federal court ruling "that neither the employees nor their employers could be compelled to pay railroad retirement taxes" (the mechanism by which railroad retirements were to be funded) [6].

Not until the Railroad Retirement Act of 1937, "which provided for an income tax levied on carriers and employees," did the RRB and its services become firmly established [7]. Yet, the funding model of the original act of 1934 was successfully applied in the much broader Social Security Act of 1935, which passed muster in the courts.

Murray Latimer was the first Chairman of the RRB, serving until 1946. Latimer was also one of the chief architects of the Social Security Act, in his role as "chairman of the old-age security subcommittee of Roosevelt's Committee on Economic Security" [8].

After a few years experience and with better economic conditions in the railroad industry, the RRB reported sound finances: "the rising level of railroad employment and pay rolls during the fiscal year 1941 resulted in higher income, smaller obligations, and a larger increase in reserve under the railroad retirement system" [9]. Although the RRB's programs have needed legislative adjustments over the decades, they continue to provide important benefits for retirees today [10].

In 1940, a new building was constructed for the RRB in Washington, DC (facing its twin, the Social Security Administration building). Ironically, the RRB never occupied it, due to the Second World War and other circumstances (the RRB is now headquartered in Chicago). The "Railroad Retirement Building" was eventually renamed the "Mary E. Switzer Building" [11]. Interestingly, there are two railroad-themed artworks on the building, harkening back to its original intent: "Railroad Employment" and "Railroad Retirement." These granite bas-reliefs above the building entrances were created by Robert Kittredge and commissioned by the New Deal's Treasury Section of Fine Arts [12].

The RRB was just one of several New Deal programs, policies, and projects to help the rail industry and its workers. For example, Works Progress Administration (WPA) workers filled railroad track jobs where needed [13] and the Public Works Administration (PWA) used its vast resources to fund new locomotives, electrify rail lines, and eliminate dangerous grade crossings (i.e., train and automobile intersections). These WPA and PWA programs created or saved tens of thousands of railroad jobs during the 1930s and early 1940s [14].

SOURCES

(1) " Agency Overview," U.S. Railroad Retirement Board (accessed September 19, 2021). (2) Kevin Whitman, " An Overview of the Railroad Retirement Program," Social Security Bulletin, Vol. 68, No. 2, 2008 (accessed September 20, 2021). (3) "Railroad Retirement Act of 1934," in James S. Olsen (ed.), Historical Dictionary of the New Deal: From Inauguration to Preparation for War, Westport, CT: Greenwood Press, 1985, p. 401. (4) " Railroad Retirement Acts of the 1930s," U.S. Railroad Retirement Board (accessed September 19, 2021). (5) " Railroad Retirement Board v. Alton Railroad Co., 295 U.S. 330 (1935)," Justia (accessed September 19, 2021). (6) See note 4. (7) "Railroad Retirement Act of 1937," in James S. Olsen (ed.), Historical Dictionary of the New Deal: From Inauguration to Preparation for War, Westport, CT: Greenwood Press, 1985, p. 402 (emphasis added). (8) "Murray Latimer dies; helped draft Social Security Act," The Baltimore Sun, October 3, 1985, p. 6C. (9) Annual Report of the Railroad Retirement Board, For The Fiscal Year Ended June 30, 1941, Washington, DC: U.S. Government Printing Office, 1942, p. 1. (10) See, e.g., " What is the Railroad Retirement Program?" Yahoo! November 9, 2020 (accessed September 20, 2021). (11) " Mary E. Switzer Building History," General Services Administration (accessed September 20, 2021). (12) See, e.g., " Switzer Memorial Building: Kittredge Reliefs - Washington, DC," Living New Deal (accessed September 20, 2021). (13) Federal Works Agency, Final Report on the WPA Program, 1935-43, Washington, DC: U.S. Government Printing Office, 1947, p. 93. (14) See, e.g., Public Works Administration, America Builds: The Record of PWA, Washington, DC: U.S. Government Printing Office, 1939, pp. 188-189; and "PWA-Railroad Jobs," Fort Worth Star-Telegram (Fort Worth, Texas), December 21, 1934, p. 14.

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Railroad Retirement Board (1934) - Living New Deal

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The Railroad Retirement Board (RRB) is an independent, executive branch agency that administers retirement, survivor, unemployment, disability, sickness, and health benefits for the nation's rail workers [1]. It was created between 1934 and 1937, in the midst of several legislative... read more

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The RFC was created to provide financial support to banks, industries, and agriculture during the Great Depression. It aimed to stabilize the economy by providing loans to struggling businesses, thereby preventing widespread bankruptcies and economic collapse. By injecting liquidity into the economy, the RFC helped stem the tide of bank failures and business closures.

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The NIRA included provisions to protect workers' rights, such as the right to organize and bargain collectively. It encouraged the formation of labor unions and established the National Labor Board to oversee labor disputes and ensure compliance with labor standards. This helped improve working conditions and provided greater bargaining power to workers.

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The NIRA aimed to help businesses and workers, create jobs, and regulate the economy during the Great Depression, but it faced challenges and was eventually discontinued.

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It created a system of social insurance to provide financial assistance to retired workers, the unemployed, individuals with disabilities, and families with dependent children.

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https://www.investopedia.com/terms/s/social-security-act.asp

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What is the 'Social Security Act'

The Social Security Act is a law enacted in 1935 to create a system of transfer payments in which younger, working people support older, retired people. Passed during the administration of President Franklin D. Roosevelt, the Social Security act established old-age benefits for workers and benefits for the jobless, as well as aid for dependent mothers and children, victims of work-related accidents, the blind, and physically disabled. Previously, such matters were not addressed at all by the federal government aside from pensions provided to veterans. Under the act, the U.S. government began collecting the Social Security tax from workers in 1937 and began making payments in 1940. It lays the groundwork for many aspects of U.S. labor law.

Breaking Down 'Social Security Act'

The social distress experienced during the Great Depression provided the impetus for The Social Security Act, part of Roosevelt's Second New Deal initiatives to help the United States manage the rapid social and economic changes brought on by industrialization and urbanization. Prior to Social Security many elderly Americans would slip into poverty in old age. Many scholars consider Social Security one of the more successful social programs in U.S. history, though it does receive some criticism for the complexity and inefficiency of its disability program component. The Social Security Act's rules are outlined in Title 42 of the U.S. Code under Chapter 7.

A key feature of the Social Security Act and Social Security as a social program is how it is funded - via a payroll tax. The Social Security tax combines with the Medicare tax to form what is known as FICA, or the payroll tax. As of 2018, the Social Security tax rate was 6.2% and the Medicare tax rate was 1.45%. The total payroll tax of 7.65% is deducted from the employee's paycheck; the employer must make a matching contribution of an additional 7.65%. The employee effectively pays the entire tax, as the employer's matching requirement reduces what he is able to pay his employees. Thus, Social Security represents a tax of 12.4% on the employee in addition to Medicare taxes, federal income taxes, state and local income taxes, sales taxes and numerous other less-noticed taxes.

In 1972, amendments to the Social Security Act created the Supplemental Security Income program and the Employment Retirement Income Security Act (ERISA).

Social Security Act: Key Sections

The Social Security Act has undergone many amendments and court challenges over the years. In its initial guise, it included the following key sections (out of 21 subchapters):

Title I: Old Age - Provides for federal money to be given to states for old-age benefits.

Title III: Unemployment - Provides for unemployment benefits via grants to states

Title IV: Child Aid - Provides for aid to families with dependent children

Title V: Child Welfare - Provides for maternal and child welfare via a block grant

Title X: Blindness - Provides for benefits for the blind

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The Social Security Act is a law enacted in 1935 to create a system of transfer payments in which younger, working people support older, retired people. Passed during the administration of President Franklin D.

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If you have family members who are retired, disabled, or unemployed, they may receive benefits under the Social Security Act. These benefits can help support your family financially, ensuring stability and security.