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17 November 1939
Czechoslovak National Committee set up in Paris
Britain and France agree to pool their economic resources during the war
The Last Time the Stalinists Peddled That “Radical” Line, the Nazis Took Power .
From Socialist Appeal, Vol. III No. 88, 17 November 1939, p.ق.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
When a medicine man “makes a pitch,” as they say in the circus vernacular, his one hope is that the crowd has changed from the day before. After all, the poor sucker who purchased a bottle of colored water to cure diabetes or an Indian herb to cure a skin infection, is not likely to give the fakir a friendly reception, certainly he won’t bite the second time.
But when the greatest medicine man in the history of our times, the Stalinist leadership, brazenly set up shop at the same old stand for a second time, a lot of people either through ignorance or through design pass off his wares as the real article. And the commodity being peddled here is not some harmless patent medicine, but a poisonous policy that has delivered the workers into capitalist slavery on every continent of this planet.
We are not addressing ourselves here to the officials and leaders of the Communist party. They know better. They not only know what the policy was before this recent turn and before that change of line, but they know what the policy of the Communist International was under Lenin and Trotsky, when the International was revolutionary. These Stalinist officials are cynical and corrupt. They are bought off at so much a week and they know how to serve the boss. They try to alibi a defeat into a glorious victory they seek to make the foulest of treachery look like heroic revolutionary action. We won’t waste our time with the pitchman, but we’d like to talk to his audience.
Thousands of revolutionary workers in the Communist Party sincerely believe that after Molotov’s speech in Moscow and Browder’s speech in Boston, the Communist International has made a genuine turn toward a revolutionary policy. They believe that now the Communists will wage an uncompromising struggle against capitalism and for socialism.
The “New Line” Is Old Stuff
What most of the new followers of the Communist Party do not know is that the current wares of Stalinism were peddled once before to the workers of Europe and America – with fatal consequences.
The year 1929 marked a complete gyration in the line of the Stalinist International. Capitalism, they announced, had entered its “third period,” and was breathing its last gasp. The workers were engaged in a vast “revolutionary upsurge.” The task of the Communist Parties was set forth as the conquest of power.
Germany, it was declared, was at the very center of this revolutionary struggle. An official resolution declared that “of exceptional importance to the fate of the revolution in Europe and the whole world is the revolutionary upsurge in Germany.”
And that was a true enough statement. The new economic crisis that broke loose in 1929 hit Germany most of all. German economy had never fully recovered from the depression it had sunk into following the war. Millions were unemployed. The middle class was discontented and restive. Cabinets were made and remade in quick order. The labor organizations, the Social Democratic and the Communist parties, piled up huge votes running into six and seven millions each for the workers’ parties. Each election saw a greater swing to the left. It was true – there was a revolutionary situation in Germany. How did the Stalinist party meet this situation?
What Stalin Did to the German Workers
The fate of the German workers was clearly in the hands of the Communist Party. No class conscious worker expected anything but compromise, betrayal and defeat from the Social Democratic Party.
But still millions of workers followed the Social Democratic Party. Their party numbered a million members. The trade unions under their control almost 5,000,000. They polled up to 7,000,000 votes in the elections. Before the workers could establish their own rule in Germany, it was indispensable that the influence of these corrupt leaders over the labor movement be broken.
The issue was at hand. German labor was menaced with destruction by the rising fascist hordes of Hitlerism. The workers clamored for unity and for a struggle to the death against this menace. The Social Democratic leaders had nothing to offer but the pious hope that “Germany was not Italy” and an armful of resolutions “deploring,” and “viewing with alarm.”
The Communist leaders had the magnificent opportunity to force the bureaucrats of the labor unions and the Social Democrats to the wall with a concrete program for united action against the fascist gangs. The course of this struggle on the immediate issues would have soon brought the whole labor movement squarely before the issue of who was to rule in Germany. It would have smashed the Fascists like an eggshell – as Goebbels later admitted could have been done without difficulty.
But the Communist leaders did nothing of the kind. Everything they did was designed to divide the workers, to pit communist workers against social democratic workers. In no case to unite communist and social democratic workers against the fascists.
They began with the insane theory that social democracy was the twin-brother of fascism. From that it followed that the main enemy of the workers was not the fascists but the social democrats. They pronounced Trotsky’s program of united front “counter-revolutionary,” and expelled from the party anyone who advocated it.
The “United Front Only from Below”
In the trade unions, the workers were abandoned to the tender mercies of the bureaucrats. All of the militants were withdrawn into a pure “revolutionary” trade union organization dominated by the Communist Party. The inevitable result was the division of the labor movement, the Social Democracy dominating the trade unions and therefore the employed workers in the factories. Only the unemployed followed the Communist Party.
On the streets and in the actions against the Brown Shirts, the movement was divided as with a knife. The social-democratic workers were called upon to quit their organizations and join a “red united front from below.” (Dimitrov now revives this slogan.) Naturally they did nothing of the kind although they would have eagerly. entered a common front that respected their organizations.
Then, as if deliberately intended to enhance the distrust and suspicion of social democratic workers in Communist leadership, the Stalinist gang joined with the fascists in 1931 in Prussia in what came to be known as the infamous “red referendum” to oust the social-democratic Prussian government.
While the Fascists grew in numbers and in boldness, the Stalinists continued to play into their hands by their divisive tactics of “Social fascism.” The Social-Democratic leaders could hamstring the struggle of the workers against fascism by citing the record of the Communists. And the record was rotten. In the Reichstag, Remmele, the Communist fraction leader, made his notorious speech: “We are not afraid of the fascist gentlemen. They will shoot their bolt quicker than any other government.” Let the fascist take power, we will come next! This was how the loud “revolutionary” line of Stalin worked out in practice.
Disoriented by the tactics of Stalinism, the workers remained passive and quiescent in face of the fascist threat. Hitler’s Brown Shirts grew in strength, unmolested, like a snowball rolling downhill. They became more arrogant, more ruthless. Until on a fateful day in January 1933, Hindenburg – the hero of the social democrats – called Hitler to the chancellery.
The Fascists had arrived. This was the last chance for the “revolutionary” action the Stalinists had prated so loudly about. Soon the fascists would ride over the skulls and bones of the German workers. But the Stalinists lifted not a finger of resistance! The leaders had their passports. The workers were abandoned to the fate of concentration camps. The Communist Party collapsed like a house of cards.
The cold fact was that Stalin had helped Hitler to power. As Trotsky put it: “Stalin held the stirrup for Hitler to mount the white horse.”
Now the medicine man is back again with the same kind of poison in his bottle. Yesterday’s poison with a revolutionary label on the bottle gave the German workers the worst reaction history has ever known. Today’s poison, label the same, will give the workers, if they swallow it, reaction on a world scale.
From Socialist Appeal, Vol. III No. 88, 17 November 1939, p.ل.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The dead end which imperialism has reached is shown with striking clarity by the inability of any of the warring powers to state its “war aims.” All the rhetoric of all the propagandists is unable to hide the fact that they cannot tell the people of the world, in simple and concrete terms, what they are fighting
Germany, in line with its “peace offensive,” declared that there was nothing to fight about. What this meant, of course, was that Germany wanted to preserve its conquests while it got ready for new ones. The older Nazi talk about “re-uniting the German race” no longer makes sense, with Czechs and Poles and Slovaks now under Nazi rule.
Chamberlain has been trying to get by with the expressed goal of “wiping out Hitlerism.” This was good for a speech or two, but it wears thin with repetition. Everyone is compelled to ask: what will take the place of Hitlerism? What will guarantee against worse than Hitlerism? Who will do the wiping out and how?
The moral weakness in this inability to state war aims is already being widely felt in the belligerent countries. A clamor is arising – especially, it seems, in England – for something more definite in the way of a perspective and goal. A modest enough request, surely: if we are to die, we should at least be told what we are dying for.
Here and there, publicists, journalists and even statesmen are trying to put some sort of goal into words.
The Federal States of Europe
It is of very great interest to observe that, in almost every case, when imaginations get going they reach out toward the notion of a “federated Europe.” Even before the war began, Clarence Streit’s essay along these lines (Union Now) gained considerable popularity and a society has been formed to propagate his plan. In recent weeks, several British writers have presented their varieties of similar schemes.
In his Armistice Day address at Swarthmore College, no less a figure than the Marquess of Lothian, new British Ambassador to Washington, came out for the same slogan. True enough, Lord Lothian is hardly yet a fiery crusader. Nobody, he remarked, had offered any practical scheme of Federation” and a “large-scale European federation” was not yet in sight but, according to the Times, the Ambassador foresaw the eventual application to Europe of the federal principle tried first on the American Continent a century and a half ago.
True enough, also, Lord Lothian found that “one necessary preliminary is the defeat of totalitarian imperialism.” The British are always careful not to clutter up their wars with ideals ideals are always a matter for an indefinite future.
But we cannot dismiss this spreading talk about a federated Europe as mere casual daydreaming. There is more to it than that, and we shall find it cropping up more and more prominently. We must be sure to understand what is at issue.
The Paralysis of Nationalism
It is a fact that the political organization of Europe into its madhouse of “sovereign” nations makes impossible a free secure and expanding life for the peoples of Europe. And, when today we listen to the Lord Lothians, let us remember that it was the victors of Versailles who fastened on Europe these political lines, without regard to the economic, social or cultural needs of the peoples.
National states, the political form under which a young and vigorous capitalism pushed through the structure of feudalism, have become a most terrible obstacle to mankind. What an overpowering burden it is to Europe: these thousands of customs houses the blood-sucking tariffs the dozens of swarming bureaucracies the border lines of billions of dollars worth of forts, with all the national armies and guns and planes to accompany them the passports and identity cards and work cards. No rational organization of economic and human resources as a whole is even conceivable under such circumstances. And immeasurable human energies are squandered daily, even in peace-time, to sustain this mad national structure.
And, though these things are most conspicuously true of Europe, they hold for the entire world. Under the conditions of modern science, technique and production, the national state everywhere paralyzes the progress of mankind.
But Whose Federation?
This is why we, as socialists, agree a thousand times with the perspective of a federated Europe – we go much further, and call for a federated world.
But the question does not end with the bare concept of a federation. We must ask: who will do the federating?
It is not at all improbable that, whoever wins the war, some sort of federal plan for Europe will be set up. Too many persons have come to realize the impossibility of the nationalist structure that structure has been proved too dangerously unstable.
Hitler, in his own way, has proved himself something of a federalist. If he has the chance, he will, undoubtedly show great talents along federal lines. He has already constructed a federation out of Germany, the Saar, Austria, Czechoslovakia, western Poland. It was, among other things, precisely the insane Versailles-born national structure that permitted him to do so.
And Hitler’s federation of Europe would mean, exactly, the reduction of the national states of Europe to Nazi provinces.
Lord Lothian is now looking forward to a federation. It would differ from Hitler’s only in having it’s capital at London (or possibly Paris) instead of Berlin, and in the reduction of the national states to provinces of Anglo-British instead of German imperialism.
For Lord Lothian and for Hitler, a federated Europe means merely a new name for an advanced type of imperialist tyranny.
If federation is to mean freedom and peace and progress for the peoples of Europe, there is only one basis on which it can be constructed: on the basis of socialism. And there is only one force that can set up such a federation: the workers and peasants of Europe struggling against their imperialist governments and against their war. In that struggle German workers fight not against but alongside of the workers of France and England.
A federated Europe? Yes: this is what we call for as the solution to the war. And we sum up that goal in our great slogan: For a Socialist United States of Europe!
Behind the Lines
From Socialist Appeal, Vol. III No. 88, 17 November 1939, p. ف.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Adolf Hitler was recently credited with saying: “If you wish to conquer by force, you must be strong. If you seek to conquer by negotiation, you must be stronger.”
Because he could not fulfill the conditions of this shrewd maxim of power politics, Stalin has failed in his attempted squeeze play on Finland.
As in the case of his diplomatic failure with Turkey, Stalin’s threats have dwindled, for the time being at least, to newspaper bluster in the most approved Hitlerian style.
With the immediate backing of the three Scandinavian countries and the not inconsiderable moral, support of Roosevelt, Finland was able to put up more resistance to Stalin than the Baltic states could muster.
The result was a judicious climb-down by the Kremlin. Its demand for a “mutual assistance pact” was dropped as were several of its territorial proposals. But the continued demand for a naval base on the north coast of the Gulf of Finland, presumably at Hangoe, was refused by the Finns.
The negotiations were consequently broken off and the oft-threatened bolts of Stalinist lightning ricocheted harmlessly across the pages of Pravda instead of descending upon the Finns.
In Moscow the correspondents predict a lengthy campaign of pressure, military economic and journalistic, similar in style and tempo to the press wars waged by Germany prior to the absorption of Austria and Czechoslovakia. Actually, what the Kremlin now waits for is a new turn in events which will enable it to resume its crude aping of Hitlerite diplomatic blackmail without risk of war.
For Stalin, unlike his ally in Berlin, is compelled to shy like a frightened mare from such a risk, even when it comes from so tiny a foe as Finland. His strategy is designed to weaken the other powers to his own level of insecurity in hopes then of becoming relatively strong.
So while the Finnish pot continues to simmer, Stalin may turn his attention once more to the Balkans where the interplay of British, Italian, and German influences offer a fruitful field for inexpensive intervention.
The only bar here is now the Anglo-Franco-Turkish pact which opens the Dardanelles to the British in case Rumania is attacked. This the Russians were unable to prevent, because the Turks shrewdly withdrew their bets from the Russian board and placed them on the British fleet instead.
But what the Kremlin may try, in collusion with the Reich or without it, is a bloodless advance into the Balkans which will fall just short of forcing Allied intervention. Similarly, the negotiations with Japan are likely to proceed at a faster tempo.
But right now, sitting silent behind the Kremlin walls, Stalin knows he is nothing but a papier-mache Sphinx. He doesn’t want to let anybody get near him with a match.
Sparks in the News
From Socialist Appeal, Vol. III No. 88, 17 November 1939, p.ل.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Food Stamp Plan Again
When I wrote in the New International several months ago about the Government’s ingenious orange and blue stamp plan for feeding the unemployed on Federal “surplus commodities”, I looked long and earnestly into the mouth of that particular gift horse.
There was at that time a plan to extend the sale of food stamps to families not on relief whose income was less than $19.50 a week. As I pointed out then, this move, although it meant an immediate gain in living standards for these non-relief poor families, had some dangerous long-range implications.
One of these was that it tended to extend the stamp plan as a substitute for relief, since in many communities local officials, regardless of the intentions of Washington, would so use the plan. Another, which applies to the whole food stamp plan despite the raptures with which the liberal press has greeted it, is that the substitution of food stamps for cash relief is a step backward towards the old food basket relief of Hooverian days. Finally, this extension of Government control over the consumption habits of those on relief – and, in this latest development of the non-relief poorer families – was one more step in the process of tying down the masses with bureaucratic regulations.
Too Many Guinea Pigs!
The WPA’s plan was to try out the new extension of the food stamp idea first in Pottawatomie County, Oklahoma. Recently, “after considerable delay”, this initial test experiment got under weigh. A report in the N.Y. Times explains the reasons for this delay. At first, all non-relief families with an income of under $19.50 a week were declared eligible for food stamps. “A survey of the county, however, showed that such a maximum would place on the eligibility list almost half the families in the county.”
Thus the social breakdown of American capitalism has already gone so far – hail the American Standard of Living, at $19.50 per family per week! – that it is now found impossible to increase the income of the masses even in the niggardly and bureaucratic way proposed by the food stamp plans. The WPA officials temporarily avoided this difficulty by arbitrarily restricting the test experiment to four hundred families. But the other thousands of families with incomes of $19.50 a week down still exist in Pottawatomie County. And they must still be reckoned with once the new plan gets out of the test tube stage.
Footnote on Girdler
If the Supreme Court upholds the recent decision of the Third Circuit Court of Appeals, Tom Girdler’s Republic Steel Company will have to rehire 5,000 employees fired during the 1937 steel strike. It will also have to pay each of them back wages for the entire period since the strike, an act of enforced philanthropy which will probably cost Republic in the vicinity of $7,500,000.
Republic, which was put together just before the 1929 crash by the high-flying Cyrus Baton, has never been able to accumulate the fat cash reserves of the other big steel companies. Financially, Republic has always been the weak link in the chain of the steel industry. If it actually has to pay out any such sum as $7,500,000, Republic may be crippled or even put out of business.
This would be tough on Tom Girdler. But I must admit that this particular human tragedy leaves me unmoved. If ever there is a fascist drive to power in this country, Girdler will be one of the ringleaders. Even in the steel industry, Girdler stands out for his personal ruthlessness and barbarism. There is something warped and subhuman about his personality. He is a great hunter and horseman, and he makes it clear that he infinitely prefers horses to men. The only time I ever saw him, years ago, long before the Little Steel Strike and the Massilon and Memorial Day massacres, I received an unforgettable impression of inhumanity and even positive malevolence.
Like Shooting Rabbits .
Republic had just taken over the Corrigan-McKinney steel plant in Cleveland, and was “rationalizing” it – that is, firing about half the employees. In describing this operation, Girdler dwelt with evident pleasure on the hundreds of Corrigan-McKinney workers he had been able to eliminate. He told how he and four or five other top executives made a tour of the entire plant the day Republic took over, constituting themselves a sort of firing squad to “execute” on the spot the superfluous workers. “We’d see five or six men working around a blast furnace,” he reminisced pleasantly. “We’d go up to them and point out three or four – ‘You . you . you . get your pay check. You’re through!’” This seemed to amuse him. With a grin he summed up what the episode had meant to him: “It was some slaughter! Like shooting rabbits sitting!”
In the Labor Unions
From Socialist Appeal, Vol. III No. 88, 17 November 1939, p.ق.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The importance of labor unity is emphasized every time any kind of a meeting between CIO and AFL officials is reported in the press by the prominence given to those reports.
And when President Roosevelt’s conference with John L. Lewis and William Green was announced it naturally was given widest publicity. For this was a very important meeting.
Each week that brings Roosevelt’s determination to participate in the second world war to a stronger conviction, also emphasizes that the continued rivalry and struggle between the labor organizations disrupts the plans of the war machine. This has often been explained in previous columns in the Socialist Appeal.
Since “unofficial” intervention by Roosevelt through Madame Perkins brought no results, Roosevelt took the bull by the horns and summoned Lewis and Green to a conference.
Will Lewis Agree?
Proposals from the War Department to the CIO and the AFL on the role of unions in war time had been studied by the labor chieftains. A general picture of these proposals is given by Robert Bendiner in the current issue of The Nation.
“In the M-Day preview now showing before an exclusive audience of trade union executives, the program for labor is reliably held to look something like this: First an emergency period will be proclaimed, even before the declaration of war, during which the President will suspend the provisions of the Walsh-Healy Act, which requires the maintenance of specific labor standards in the manufacture of products bought by the federal government. During this period, and subsequently, the Employment Service, now removed from the jurisdiction of the Labor, Department and placed under the supervision of Paul V. McNutt, will become a key agency, geared to distribute and furnish adequate supplies of skilled labor to all war industries and to prevent its diversion into armed forces.”
Outright capitulation to these totalitarian – and shocking although not surprising – proposals of the War Department would sound the death knell of union independence, and expose Lewis and Green beyond all repair.
However, already a section of the AFL and the CIO leaders have accepted in principle the ideas of the militarists. The blast of the Navy Department against the CIO reflects its aggravation at the resistance it has thus far met from part of the top CIO circle.
Is it a wonder that Lewis entered the White House with trepidation? And that he was very silent after the conference, in marked contrast to his bombastic utterances after the conference last Spring with Roosevelt and Green?
Roosevelt talked cold turkey to the labor leaders at the conference last week. Last Spring he tried to use a big stick but it didn’t have much weight behind it. For that was in the pre-war period. Now Lewis and Green understand, if they had any doubts, the deadly seriousness of the Roosevelt demand for labor unity behind his war program.
Clubbing was not necessary for Green. He has indicated often enough that he is ready to serve as an agent of the war machine at any time. But Lewis has been a bad actor, as his Labor Day speech indicated. Lewis is more subject to rank and file pressure. His coolness and reluctance to the Roosevelt program has been obvious.
Now comes the big test. Will Lewis try to outdo Green? Seek to utilize the plans of the War Department to establish himself as the chief lieutenant of the Army within the labor movement? Or can the ranks of the CIO put on more pressure and force Lewis to resist the reactionary proposals of Roosevelt. Can the CIO call for labor unity against the war program, instead of being forced into a unity behind the program? This is the vital issue before the American labor movement today.
The future of the labor movement rests on its accepting the road of struggle against the Roosevelt war plans, uniting behind a program of militant action to preserve its liberties, advance Its organization, and obtain its rights in collective bargaining.
The Communist Party seized power on 25 February 1948. No official opposition parties operated thereafter. Dissidents (notably Charter 77 and Civic Forum) created Music Clubs (on a limited basis as only allowed NGOs) and published home-made periodicals (samizdat). Charter 77 was quashed by the government and its signed members were persecuted until the fall of the regime in Czechoslovakia. Later, with the advent of the Civic Forum, independence could truly be seen on the horizon. Until Independence Day on 17 November 1989, the populace faced persecution by the authorities from the secret police. Thus, the general public did not openly support the dissidents for fear of dismissal from work or school. Writers or filmmakers could have their books or films banned for a "negative attitude towards the socialist regime". They also didn't allow Czechs and Slovaks to travel to other non-communist countries. Following this they banned music from foreign countries. This blacklisting included children of former entrepreneurs or non-Communist politicians, having family members living in the West, having supported Alexander Dubček during the Prague Spring, opposing Soviet military occupation, promoting religion, boycotting (rigged) parliamentary elections or signing Charter 77 or associating with those who did. These rules were easy to enforce, as all schools, media and businesses belonged to the state. They were under direct supervision and often were used as accusatory weapons against rivals.
The nature of blacklisting changed gradually after the introduction of Mikhail Gorbachev's policies of Glasnost (openness) and Perestroika (restructuring) in 1985. The Czechoslovak Communist leadership verbally supported Perestroika, but made few changes. Speaking about the Prague Spring of 1968 was taboo. The first anti-government demonstrations occurred in 1988 (the Candle Demonstration, for example) and 1989, but these were dispersed and participants were repressed by the police.
By the late 1980s, discontent with living standards and economic inadequacy gave way to popular support for economic reform. Citizens began to challenge the system more openly. By 1989, citizens who had been complacent were willing to openly express their discontent with the regime. Numerous important figures as well as ordinary workers signed petitions in support of Václav Havel during his imprisonment in 1989. Reform-minded attitudes were also reflected by the many individuals who signed a petition that circulated in the summer of 1989 calling for the end of censorship and the beginning of fundamental political reform. 
The immediate impetus for the revolution came from developments in neighbouring countries and in the Czechoslovak capital. From August, East German citizens had occupied the West German Embassy in Prague and demanded exile to West Germany. In the days following 3 November, thousands of East Germans left Prague by train to West Germany. On 9 November, the Berlin Wall fell, removing the need for the detour.
By 16 November, many of Czechoslovakia's neighbours were beginning to shed authoritarian rule. The citizens of Czechoslovakia watched these events on TV through both foreign and domestic channels. The Soviet Union also supported a change in the ruling elite of Czechoslovakia, [ citation needed ] although it did not anticipate the overthrow of the Communist regime.
16 November Edit
On the eve of International Students Day (the 50th anniversary of Sonderaktion Prag, the 1939 storming of Prague universities by the Nazis), Slovak high school and university students organised a peaceful demonstration in the centre of Bratislava. The Communist Party of Slovakia had expected trouble, and the mere fact that the demonstration was organised was viewed as a problem by the Party. Armed forces were put on alert before the demonstration. In the end, however, the students moved through the city peacefully and sent a delegation to the Slovak Ministry of Education to discuss their demands.
17 November Edit
New movements led by Václav Havel surfaced, invoking the idea of a united society where the state would politically restructure.  The Socialist Youth Union (SSM/SZM, proxy of Communist Party of Czechoslovakia) organised a mass demonstration on 17 November to commemorate International Students Day and the fiftieth anniversary of the murder of student Jan Opletal  by the Nazi government. 
Most members of SSM were privately opposed to the Communist leadership, but were afraid of speaking up for fear of persecution. This demonstration gave average students an opportunity to join others and express their opinions. By 16:00, about 15,000 people joined the demonstration. They walked (per the strategy of founders of Stuha movement, Jiří Dienstbier and Šimon Pánek) to Karel Hynek Mácha's grave at Vyšehrad Cemetery and — after the official end of the march — continued into the centre of Prague,  carrying banners and chanting anti-Communist slogans.
At about 19:30, the demonstrators were stopped by a cordon of riot police at Národní Street. They blocked all escape routes and attacked the students. Once all the protesters dispersed, one of the participants, secret police agent Ludvík Zifčák, [ citation needed ] was lying on the street. Zifčák was not physically hurt or pretending to be dead he was overcome by emotion. Policemen carried his motionless body to an ambulance.
The atmosphere of fear and hopelessness gave birth to a hoax about a dead student named Martin Šmíd. The story was made up by Dragomíra Dražská as she awaited treatment after she was hurt during the riot. Dražská worked at the college and shared her hoax with several people the next day, including the wife of journalist Petr Uhl [cs] , a correspondent for Radio Free Europe/Radio Liberty. This incident mobilised the people and triggered the revolution. [ citation needed ] That same evening, students and theatre actors agreed to go on strike.
18 November Edit
Two students visited Prime Minister Ladislav Adamec at his private residence and described to him what happened on Národní Street. The strike at the Realistic Theatre was declared and other theatres quickly followed. The theaters opened their stages only for public discussions.
At the initiative of students from the Academy of Performing Arts in Prague, the students in Prague went on strike. This strike was joined by university students throughout Czechoslovakia. Theatre employees and actors in Prague supported the strike. Instead of going on stage, actors read a proclamation by the students and artists to the audience, calling for a general strike on 27 November.
Home-made posters and proclamations were posted. As all media (radio, TV, newspapers) were strictly controlled by the Communist Party (see Mass media in Communist Czechoslovakia), this was the only way to spread the message.
In the evening, Radio Free Europe reported that a student (named as Martin Šmíd) was killed by the police during the previous day's demonstration. Although the report was false, it heightened the feeling of crisis, and persuaded some hesitant citizens to overcome their fear and join the protests. 
19 November Edit
Theatres in Bratislava, Brno, Ostrava and other towns went on strike. Members of artistic and literary associations as well as organisations and institutions joined the strike.
Members of a civic initiative met with the Prime Minister, who told them he was twice prohibited from resigning his post and that change requires mass demonstrations like those in East Germany (some 250,000 students). He asked them to keep the number of "casualties" during the expected change to a minimum.
About 500 Slovak artists, scientists and leaders met at the Art Forum (Umelecká beseda) in Bratislava at 17:00. They denounced the attack against the students in Prague on 17 November and formed Public Against Violence, which would become the leading force behind the opposition movement in Slovakia. Its founding members included Milan Kňažko, Ján Budaj and others.
Actors and members of the audience in a Prague theatre, together with Václav Havel and other prominent members of Charter 77 and other dissident organisations, established the Civic Forum (Občanské fórum, an equivalent of the Slovak Public Against Violence for the territory of the Czech Republic) as a mass popular movement for reforms. They called for the dismissal of top officials responsible for the violence, and an independent investigation of the incident and the release of all political prisoners.
College students went on strike. On television, government officials called for peace and a return to the city's normal business. An interview with Martin Šmíd was broadcast to persuade the public that nobody had been killed, but the quality of the recording was low and rumours continued. It would take several more days to confirm that nobody was killed, and by then the revolution had gained further momentum.
The leaders of the Democratic Initiative presented several demands, including the resignation of the government, effective 25 November, and the formation of a temporary government composed of non-compromised members of the current government. 
20 November Edit
Students and theatres went on "permanent" strike. Police stopped a demonstration from continuing toward Prague Castle, which would have entered the striking theatres. 
Civic Forum representatives negotiated unofficially with Adamec without Havel, and Adamec was sympathetic to the students' demands. However, he was outvoted in a special cabinet meeting the same day. The government, in an official statement, made no concessions.
Civic Forum added a demand: the abolition of the "ruling position" of the Communist Party from the Constitution. Non-Communist newspapers published information that contradicted the Communist interpretation. The first mass demonstration in Prague (100,000 people) and the first demonstrations in Bratislava occurred.
21 November Edit
The first official meeting of the Civic Forum with the Prime Minister took place. The Prime Minister agreed to personally guarantee that no violence would be used against the people however he would "protect socialism, about which no discussion is possible".  An organised mass demonstration took place in Wenceslas Square in central Prague (demonstrations recurred there throughout the following days). Actors and students travelled to factories inside and outside Prague to gain support for their colleagues in other cities.
A mass demonstration erupted in Hviezdoslav Square in downtown Bratislava (in the following days, it moved to the Square of the Slovak National Uprising). The students presented demands and asked the people to participate in the general strike planned for Monday, 27 November. A separate demonstration demanded the release of the political prisoner Ján Čarnogurský (later Prime Minister of Slovakia) in front of the Palace of Justice. Alexander Dubček addressed this demonstration—his first appearance during the Velvet Revolution. As a result, Čarnogurský was released on 23 November. Further demonstrations followed in all major cities of Czechoslovakia.
Cardinal František Tomášek, the Roman Catholic primate of the Bohemian lands, declared his support for the students and issued a declaration criticising the current government's policies. For the first time during the Velvet Revolution, the "radical" demand to abolish the article of the Constitution establishing the "leading role" of the Communist Party was expressed by Ľubomír Feldek at a meeting of Public Against Violence.
In the evening, Miloš Jakeš, the chairman of the Communist Party of Czechoslovakia, gave a special address on Federal Television. He said that order must be preserved, that socialism was the only alternative for Czechoslovakia, and criticised protest groups. Government officials, especially the Head of the Communist Party Miloš Jakeš, kept their hard-line position. During the night, they had summoned 4,000 members of the "People's Militias" (Lidové milice, a paramilitary organisation subordinated directly to the Communist Party) to Prague to crush the protests, but called them off.
22 November Edit
Civic Forum announced a two-hour general strike for Monday, 27 November. The first live reports from the demonstration in Wenceslas Square appeared on Federal Television (and were quickly cut off, after one of the participants denounced the present government in favour of Alexander Dubček).
Striking students forced the representatives of the Slovak government and of the Communist Party of Slovakia to participate in a dialogue, in which the official representatives were immediately put on the defensive. Employees of the Slovak section of the Federal Television required the leaders of the Federal Television to provide true information on the events in the country otherwise they would initiate a strike of TV employees. Uncensored live reports from demonstrations in Bratislava began.
23 November Edit
The evening news showed factory workers heckling Miroslav Štěpán, the Prague Communist Secretary. The military informed the Communist leadership of its readiness to act (ultimately, it was never used against demonstrators). The military and the Ministry of Defense were preparing for actions against the opposition. Immediately after the meeting, however, the Minister of Defence delivered a TV address announcing that the army would never undertake action against the people and called for an end to demonstrations.
24 November Edit
The entire Presidium, including General Secretary Miloš Jakeš, resigned, and Karel Urbánek, a more moderate Communist, was named General Secretary. Federal Television showed pictures from 17 November for the first time and presented the first television address of Václav Havel, dealing mostly with the planned general strike.  Czechoslovak TV and Radio announced that they would join the general strike. A discussion with representatives of the opposition was broadcast by the Slovak section of Federal Television.  The opposition was represented by Ján Budaj, Fedor Gál and Vladimír Ondruš, while the Communists were represented by Štefan Chudoba (director of Bratislava automotive company), Peter Weiss (secretary of the Institute of Marx-Leninism of the Communist party of Slovakia) and the director of Steelworks Kosice. It was the first free discussion on Czechoslovak television since its inception. As a result, the editorial staff of Slovak newspapers started to join the opposition.
25 November Edit
The new Communist leadership held a press conference, including Miroslav Štěpán while excluding Ladislav Adamec, but did not address the demands of the demonstrators. Later that day, Štěpán resigned as Prague Secretary. The number of participants in the regular anti-government demonstration in Prague-Letná reached an estimated 800,000 people. Demonstrations in Bratislava peaked at around 100,000 participants.
26 November Edit
Prime Minister Adamec met with Havel for the first time. The editorial staff of Slovakia's Pravda, the central newspaper of the Communist Party of Slovakia, joined the opposition.
27 November Edit
A successful two-hour general strike led by the civic movements strengthened what were at first a set of moderate demands into cries for a new government.  The strike took place throughout the country between 12:00 and 14:00, supported by a reported 75% of the population. The Ministry of Culture released anti-Communist literature for public checkouts in libraries, effectively ending decades of censorship. Civic Forum demonstrated its capacity to disrupt the political order and thereby establish itself as the legitimate voice of the nation in negotiations with the state.  The civic movements mobilised support for the general strike. 
29 November Edit
The Federal Assembly deleted the provision in the constitution referring to the "leading role" of the Communist Party, officially ending Communist rule in Czechoslovakia.
10 December Edit
President Gustáv Husák swore in the first government in 41 years that was not dominated by the Communist Party. He resigned shortly afterward.
The victory of the revolution was topped off by the election of rebel playwright and human rights activist Václav Havel as President of Czechoslovakia on 29 December 1989. Within weeks, Havel negotiated the removal of all Soviet troops (approx. 73,500  ) from Czechoslovakia. As per the agreement, the Soviet troops departed within months. Free elections held in June 1990 legitimised this government and set the stage for addressing the remnants of the Communist party's power and the legacy of the Communist period.
The main threat to political stability and the success of Czechoslovakia's shift to democracy appeared likely to come from ethnic conflicts between the Czechs and the Slovaks, which resurfaced in the post-Communist period.  However, there was a general consensus to move toward a market economy, so in early 1990, the President and his top economic advisers decided to liberalise prices, push de-monopolisation and privatise the economy. The end of Communism meant the end of life-long employment, and a subsequent increase in unemployment.  To combat this, the government implemented unemployment benefits and a minimum wage.  The outcome of the transition to democracy and a market economy would depend on the extent to which developments outside the country facilitated or hindered the process of change. 
The term Velvet Revolution was coined by Rita Klímová, the dissidents' English translator  who later became the ambassador to the United States.  The term was used internationally to describe the revolution, although the Czechs also used the term internally. After the dissolution of Czechoslovakia in 1993, Slovakia used the term Gentle Revolution, the term that Slovaks used for the revolution from the beginning. The Czech Republic continues to refer to the event as the Velvet Revolution.
Theorists of revolutions, such as Jaroslav Krejčí, have argued that the "Velvet Revolution" was not, in fact, a true revolution because a revolution by definition accomplishes change by means of illegitimate violence. Contending theories of revolution argue that the Velvet Revolution is a legitimate revolution because it is a "revolutionary situation" of contested sovereignty that led to a transfer of power ("revolutionary outcome"). 
In the months leading up to and during the revolution, citizens dispersed ideas using flyers distributed en masse. Hundreds of discrete flyers with varying messages were printed, but most shared the same ideals. In the summer of 1989, one of the most widely circulated documents was "The Eight Rules of Dialogue," which advocated for truth, understanding and empathy, informed and respectful discussion, abstaining from ad hominem attacks, and an open mind. Other documents focused less on communication techniques and more on ideals. Democracy, freedom, nonviolence, fairness, and humanness were prevalent themes, as well as self-organisation, political representation, and improved working conditions. 
Some, including highly regarded KGB defector Anatoliy Golitsyn and Czech dissident Petr Cibulka, claim the revolution was a plot by the KGB and related groups and political figures. According to such critics, the KGB instigated and used the revolution both to expand its power and to move Czech society away from Communist rule in a controlled manner that preserved KGB control over it. [ citation needed ]
The events of November 1989 confirmed that outside factors were significant catalysts for the downfall of Communism in Czechoslovakia. Therefore, the transformations in Poland and Hungary and the collapse of the regime in East Germany, both of which could be traced to the new attitude of the Soviets toward East Europe, encouraged Czechs and Slovaks to take to the streets to win their freedom. However, national factors, including the economic and political crisis and the actions of groups and individuals working towards a transformation, destabilised support for the system. 
The State's reaction to the strikes demonstrated that while global isolation produced pressures for political, social, and economic change, the events that followed could not be predetermined. Hardly anyone thought that the Communist State could collapse so quickly. Striking students and theatres did not seem likely to intimidate a state that was able to suppress any sort of demonstration. This "popular" phase of the revolution, was followed by victories made possible by the Civic Forum's successful mobilisation for the general strike on 27 November, which established its legitimacy to speak for the nation in negotiations with the state.  The mass demonstrations that followed 17 November led to the resignation of the Party leadership of Miloš Jakeš, the removal of the Party from its leading role and the creation of the non-Communist government. Supporters of the revolution had to take instant responsibility for running the government, in addition to establishing essential reforms in political organisation and values, economic structure and policies and foreign policy. 
One element of the demonstrations of the Velvet Revolution was the jingling of keys to signify support. The practice had a double meaning—it symbolized the unlocking of doors   and was the demonstrators' way of telling the Communists, "Goodbye, it's time to go home." 
A commemorative 2 Euro coin was issued by Slovakia on 17 November 2009, to mark the twentieth anniversary. The coin depicts a bell with a key adjoining the clapper.  Ursula K. Le Guin wrote a short story, "Unlocking the Air", in which the jingling of keys played a central role in the liberation of a fictional country called Orsinia.
Today in World War II History—September 17, 1939 & 1944
80 Years Ago—September 17, 1939: Soviet troops (allied with Germany) invade Poland, surrounding Polish troops.
150 Polish military and civilian planes fly to Romania pilots will make way to Britain to fight again.
Off the Irish coast, U-boat U-29 sinks British aircraft carrier HMS Courageous, 518 killed.
US C-47 Skytrains towing Waco CG-4 gliders over Bergeijk, Holland en route the Operation Market Garden landings near Eindhoven, 17 September 1944 (US National Archives)
75 Years Ago—Sept. 17, 1944: Operation Market Garden begins: 20,000 US and British paratroopers land in Nijmegen, Eindhoven, and Arnhem in the Netherlands, with a British ground offensive designed to link with the airborne units.
July 17, 1936
Spurred to action by the assassination of extreme-right leader José Calvo Sotelo by government security forces, a cadre of right-wing military officers makes its move. An army mutiny begins in Spanish Morocco, and, at dawn the following day, Gen. Francisco Franco broadcasts a manifesto from his base in the Canary Islands, declaring that the rebellion has begun. Although Franco’s Nationalist forces quickly occupy a number of provincial capitals, they are unable to secure Madrid, and the coup attempt devolves into civil war.
Pre-Social Security Period
Traditional Sources of Economic Security
All peoples throughout all of human history have faced the uncertainties brought on by unemployment, illness, disability, death and old age. In the realm of economics, these inevitable facets of life are said to be threats to one's economic security .
For the ancient Greeks economic security took the form of amphorae of olive oil. Olive oil was very nutritious and could be stored for relatively long periods. To provide for themselves in times of need the Greeks stockpiled olive oil and this was their form of economic security.
In medieval Europe, the feudal system was the basis of economic security, with the feudal lord responsible for the economic survival of the serfs working on the estate. The feudal lord had economic security as long as there was a steady supply of serfs to work the estate, and the serfs had economic security only so long as they were fit enough to provide their labor. During the Middle Ages the idea of charity as a formal economic arrangement also appeared for the first time.
Family members and relatives have always felt some degree of responsibility to one another, and to the extent that the family had resources to draw upon, this was often a source of economic security, especially for the aged or infirm. And land itself was an important form of economic security for those who owned it or who lived on farms.
These then are the traditional sources of economic security: assets labor family and charity.
The Rise of Formal Systems of Economic Security
As societies grew in economic and social complexity, and as isolated farms gave way to cities and villages, Europe witnessed the development of formal organizations of various types that sought to protect the economic security of their members. Probably the earliest of these organizations were guilds formed during the Middle Ages by merchants or craftsmen. Individuals who had a common trade or business banded together into mutual aid societies, or guilds. These guilds regulated production and employment and they also provided a range of benefits to their members including financial help in times of poverty or illness and contributions to help defray the expenses when a member died.
Out of the tradition of the guilds emerged the friendly societies. These organizations began appearing in England in the 16th century. Again organized around a common trade or business, the friendly societies would evolve into what we now call fraternal organizations and were the forerunners of modern trade unions.
In addition to the types of economic security provided by the guilds, the fraternal organizations and some trade unions would begin the practice of providing actuarially-based life insurance to their members. The friendly societies and the fraternal organizations would grow dramatically following the Industrial Revolution. By the beginning of the 19th century one of out every nine Englishmen belonged to one of these organizations.
Among early U.S. fraternal organizations that we are familiar with even into the present day were: the Freemasons (which came to America in 1730) the Odd Fellows (1819) Benevolent and Protective Order of Elks (1868) Loyal Order of Moose (1888) and the Fraternal Order of Eagles (1898).
As the state began to assume responsibility for economic security, the English began the development of a series of "Poor Laws" adopted to provide help to the poor, as the problem of economic security was seen primarily as a problem afflicting the poor.
The English Poor Law of 1601 was the first systematic codification of English ideas about the responsibility of the state to provide for the welfare of its citizens. It provided for taxation to fund relief activities it distinguished between the "deserving" and the "undeserving" poor relief was local and community controlled and almshouses were eventually established to house those on relief. The law was at once both generous and harsh. Generous in that it acknowledged the government's duty to provide for the welfare of the poor, but harsh in that it viewed the poor as highly undesirable characters and treated them accordingly.
There were a series of changes and "reforms" of the "Poor Laws" over the years, but this essential structure was the tradition the pilgrims brought with them when they journeyed to the New World.
Economic Security in America
When the English-speaking colonists arrived in the New World they brought with them the ideas and customs they knew in England, including the "Poor Laws." The first colonial poor laws were fashioned after those of the Poor Law of 1601. They featured local taxation to support the destitute they discriminated between the "worthy" and the "unworthy" poor and all relief was a local responsibility. No public institutions for the poor or standardized eligibility criteria would exist for nearly a century. It was up to local town elders to decide who was worthy of support and how that support would be provided.
As colonial America grew more complex, diverse and mobile, the localized systems of poor relief were strained. The result was some limited movement to state financing and the creation of almshouses and poorhouses to "contain" the problem. For much of the 18th and 19th centuries most poverty relief was provided in the almshouses and poorhouses. Relief was made as unpleasant as possible in order to "discourage" dependency. Those receiving relief could lose their personal property, the right to vote, the right to move, and in some cases were required to wear a large "P" on their clothing to announce their status.
Support outside the institutions was called "outdoor relief" and was looked upon with distrust by most citizens. It was felt that "outdoor relief" made things too easy on the poor who should be discouraged from the habit of poverty in every way possible. Nevertheless, since it was expensive to build and operate the poorhouses, and since it was relatively easy to dispense cash or in-kind support, some outdoor relief did emerge. Even so, prevailing American attitudes toward poverty relief were always skeptical and the role of government was kept to the minimum. So much so that by as late as 1915 at most only 25% of the money spent on outdoor relief was from public funds.
Old Age in Colonial America
Although the need for economic security affects all ages and classes of society, one particularly acute aspect of this need is the problem of old age and the possibility of retirement after a long life of labor. Retirement, a feature of life we now take so much for granted, was not always readily available, and it was a struggle to develop adequate systems of retirement.
One of the first people to propose a scheme for retirement security that is recognizable as a forerunner of modern social insurance was Revolutionary War figure Thomas Paine. His last great pamphlet, published in the winter of 1795, was a controversial call for the establishment of a public system of economic security for the new nation. Entitled, Agrarian Justice , it called for the creation of a system whereby those inheriting property would pay a 10% inheritance tax to create a special fund out of which a one-time stipend of 15 pounds sterling would be paid to each citizen upon attaining age 21, to give them a start in life, and annual benefits of 10 pounds sterling to be paid to every person age 50 and older, to guard against poverty in old-age.
Civil War Pensions: America's First "Social Security" Program
Although Social Security did not really arrive in America until 1935, there was one important precursor, that offered something we could recognize as a social security program, to one special segment of the American population. Following the Civil War, there were hundreds of thousands of widows and orphans, and hundreds of thousands of disabled veterans. In fact, immediately following the Civil War a much higher proportion of the population was disabled or survivors of deceased breadwinners than at any time in America's history. This led to the development of a generous pension program, with interesting similarities to later developments in Social Security. (The first national pension program for soldiers was actually passed in early 1776, prior even to the signing of the Declaration of Independence. Throughout America's ante-bellum period pensions of limited types were paid to veterans of America's various wars. But it was with the creation of Civil War pensions that a full-fledged pension system developed in America for the first time.)
The Civil War Pension program began shortly after the start of the War, with the first legislation in 1862 providing for benefits linked to disabilities "incurred as a direct consequence of . . .military duty." Widows and orphans could receive pensions equal in amount to that which would have been payable to their deceased solider if he had been disabled. In 1890 the link with service-connected disability was broken, and any disabled Civil War veteran qualified for benefits. In 1906, old-age was made a sufficient qualification for benefits. So that by 1910, Civil War veterans and their survivors enjoyed a program of disability, survivors and old-age benefits similar in some ways to the later Social Security programs. By 1910, over 90% of the remaining Civil War veterans were receiving benefits under this program, although they constituted barely .6% of the total U.S. population of that era. Civil War pensions were also an asset that attracted young wives to elderly veterans whose pensions they could inherit as the widow of a war veteran. Indeed, there were still surviving widows of Civil War veterans receiving Civil War pensions as late as 1999!
In the aggregate, military pensions were an important source of economic security in the early years of the nation. In 1893, for example, the $165 million spent on military pensions was the largest single expenditure ever made by the federal government. In 1894 military pensions accounted for 37% of the entire federal budget. (The Civil War pension system was not without its critics.)
But these figures based on the federal budget exaggerate the role of military pensions in providing overall economic security since the federal government's share of the economy was much smaller in earlier times. Also, there were features of the system which meant that many veterans did not receive any benefits. For example, former Confederate soldiers and their families were barred from receiving Civil War pensions. So in 1910 the per capita average military pension expenditure for residents of Ohio was $3.36 and for Indiana it was $3.90. By contrast, the per capita average for the Southern states was less than 50 cents (it was 17 cents in South Carolina).
Despite the fact that America had a "social security" program in the form of Civil War pensions since 1862, this precedent did not extend itself to the general society. The expansion of these types of benefit programs to the general population, under Social Security, would have to await additional social and historical developments.
Prior to the rise of company pension plans, paternalistic companies sometimes "graduated" older workers to token jobs at reduced pay. A few paid some form of retirement stipend—but only if the company was so inclined, since there were no rights to any kind of retirement benefit. Most older workers were simply dismissed when their productive years were behind them.
One of the first formal company pension plans for industrial workers was introduced in 1882 by the Alfred Dolge Company, a builder of pianos and organs. Dolge withheld 1% of each workers’ pay and placed it into a pension fund, to which the company added 6% interest each year. Dolge viewed providing for older workers as being a business cost like any other, arguing that just as his company had to provide for the depreciation of its machinery, he should also "provide for the depreciation of his employees." Despite Mr. Dolge’s progressive ideas and his best intentions, the plan proved largely unsuccessful since it required a worker to spend many years in continuous employment with the company, and labor mobility, then as now, meant that relatively few workers spend their whole working career with one company. Not only was the Dolge Plan one of the first formal company pension systems in industrial America, it was also one of the first to disappear when the company went out of business a few years later.
The biggest problem with company-provided pensions was that the percentage of workers anticipating an employment-related pension from their company or their union was tiny. Indeed, in 1900 there were a total of five companies in the United States (including Dolge) offering their industrial workers company-sponsored pensions. As late as 1932, only about 15% of the laborforce had any kind of potential employment-related pension. And because the pensions were often granted or withheld at the option of the employer, most of these workers would never see a retirement pension. Indeed, only about 5% of the elderly were in fact receiving retirement pensions in 1932.
So the company pension was an option not available to most Americans during the time prior to the advent of Social Security.
The Great Depression of the 1930s was not the only one in America's history. In fact, it was the third depression of the modern era, following previous economic collapses in the 1840s and again in the 1890s. During the depression of the 1890s unemployment was widespread and many Americans came to the realization that in an industrialized society the threat to economic security represented by unemployment could strike anyone--even those able and willing to work. Protest movements arose--the most quixotic and notable being that of "Coxey's Army."
|Jacob Coxey was an unsuccessful Ohio politician and industrialist who, in 1894, called on the unemployed from all over the country to join him in an "army" marching on Washington. Ten of thousands of unemployed workers started marches, but by the time Coxey and his group finally made it to Washington only about 500 hard-core believers remained. Coxey himself was promptly arrested for walking on the grass of the Capitol Building and the protest fizzled out. Coxey later became an advocate of public works as a remedy for unemployment and ran for president as the Farmer-Labor party candidate in 1932 and 1936. (Coxey was also an ardent proponent of the free-silver monetary policy and an opponent of the gold standard. Perhaps to demonstrate his earnestness on monetary issues he even named his son Legal Tender Coxey!)|
Although his march failed, Coxey's Army was a harbinger of an issue that would rise to prominence as unemployment insurance would become a key element in the future Social Security Act. (Ohio would continue to play an important role in the development of unemployment insurance as its state program was one of two looked to as models for the new federal program--the other being the program in operation in Wisconsin.)
Following the outbreak of the Great Depression, poverty among the elderly grew dramatically. The best estimates are that in 1934 over half of the elderly in America lacked sufficient income to be self-supporting. Despite this, state welfare pensions for the elderly were practically non-existent before 1930. A spurt of pension legislation was passed in the years immediately prior to passage of the Social Security Act, so that 30 states had some form of old-age pension program by 1935. However, these programs were generally inadequate and ineffective. Only about 3% of the elderly were actually receiving benefits under these states plans, and the average benefit amount was about 65 cents a day.
There were many reasons for the low participation in state-run pension systems. Many elderly were reluctant to "go on welfare." Restrictive eligibility criteria kept many poor seniors from qualifying. Some jurisdictions, while having state programs on the books, failed to actually implement them. Many of the state-passed pension laws provided for counties within the state to opt to participate in the pension program. As a result, in 1929 of the six states with operating pension laws on the books only 53 of the 264 counties eligible to adopt a pension plan actually did so. After 1929, the States began enacting laws without county options. By 1932 seventeen states had old age pension laws, although none were in the south, and 87% of the money available under these laws were expended in only three states (California, Massachusetts and New York).
Despite all of the institutional strategies adopted in early America to assure some measure of economic security, huge changes would sweep through America which would, in time, undermine the existing institutions. Four important demographic changes happened in America beginning in the mid-1880s that rendered the traditional systems of economic security increasingly unworkable:
- The Industrial Revolution
- The urbanization of America
- The disappearance of the "extended" family
- A marked increase in life expectancy
The Industrial Revolution transformed the majority of working people from self-employed agricultural workers into wage earners working for large industrial concerns. In an agricultural society, prosperity could be easily seen to be linked to one's labor, and anyone willing to work could usually provide at least a bare subsistence for themselves and their family. But when economic income is primarily from wages, one's economic security can be threatened by factors outside one's control--such as recessions, layoffs, failed businesses, etc.
Along with the shift from an agricultural to an industrial society, Americans moved from farms and small rural communities to large cities--that's where the industrial jobs were. In 1890, only 28% of the population lived in cities, by 1930 this percentage had exactly doubled, to 56%.
This trend toward urbanization also contributed to another significant shift in American society, the disappearance of the extended family and the rapid rise of the nuclear family. Today we tend to assume that "the family" consists of parents and children--the so-called nuclear family. For most of our history, we lived in "extended families" that included children, parents, grandparents and other relatives. The advantage of the extended family was that when a family member became too old or infirm to work, the other family members assumed responsibility for their support. But when the able-bodied left the farms to seek employment in the cities, often the parents or grandparents stayed behind. And when new immigrants first arrived in our land, it was often the breadwinner who first made the passage and only later could he bring the family over.
And finally, another significant change happened in the early decades of this century. Thanks primarily to better health care and sanitation, and the development of effective public health programs, Americans began to live significantly longer. In three short decades, 1900-1930, average life spans increased by 10 years. This was the most rapid increase in life spans in recorded human history. The result was a rapid growth in the number of aged persons, to 7.8 million by 1935.
The net result of this complex set of demographic and social changes was that America was older, more urban and more industrial, and fewer of its people lived on the land in extended families. The traditional strategies for the provision of economic security were becoming increasingly fragile.
The Stock Market Crash & The Great Depression
When the New York Stock Exchange opened on the morning of October 24, 1929, nervous traders sensed something ominous in the trading patterns. By 11:00 a.m. the market had started to plunge. Shortly after noon a group of powerful bankers met secretly at J.P. Morgan & Co. next door to the Exchange and pledged to spend $240 million of their own funds to stabilize the market. This strategy worked for a few days, but the panic broke out again the following Tuesday, when the market crashed again, and nothing could be done to stop it.
Before three months had passed, the Stock Market lost 40% of its value $26 billion of wealth disappeared. Great American corporations suffered huge financial losses. AT&T lost one-third of its value, General Electric lost half of its, and RCA's stock fell by three-fourths within a matter of months. (It would take 25 years for the stock market to return to its pre-crash level following the 1929 crash.)
As America slipped into economic depression following the Crash of 1929, unemployment exceeded 25% about 10,000 banks failed the Gross National Product declined from $105 billion in 1929 to only $55 billion in 1932. Compared to pre-Depression levels, net new business investment was a minus $5.8 billion in 1932. Wages paid to workers declined from $50 billion in 1929 to only $30 billion in 1932.
The decade of the 1930s found America facing the worst economic crisis in its modern history. Millions of people were unemployed, two million adult men ("hobos") wandered aimlessly around the country, banks and businesses failed and the majority of the elderly in America lived in dependency. These circumstances led to many calls for change.
Huey Long was Governor of Louisiana from 1928 to 1932 and was elected to the U.S. Senate in 1930. A nominal Democrat, Huey Long was a radical populist. He wanted the government to confiscate the wealth of the nation's rich and privileged. He called his program Share Our Wealth. It called upon the federal government to guarantee every family in the nation an annual income of $5,000, so they could have the necessities of life, including a home, a job, a radio and an automobile. He also proposed limiting private fortunes to $50 million, legacies to $5 million, and annual incomes to $1 million. Everyone over age 60 would receive an old-age pension. His slogan was "Every Man A King."
The Share Our Wealth program immediately became a movement. Clubs were formed in every state in the nation. By 1935 the movement claimed 27,000 local clubs with 7.7 million members.
Francis E. Townsend was a lean, bespectacled doctor from Long Beach, California. In 1933 he found himself unemployed at age 66 with no savings and no prospects. This experience galvanized him to become the self-proclaimed champion of the cause of the elderly. He devised a plan known as the Townsend Old Age Revolving Pension Plan, or Townsend Plan for short.
The basic idea of the Townsend Plan was that the government would provide a pension of $200 per month to every citizen age 60 and older. The pensions would be funded by a 2% national sales tax. There were three eligibility requirements:
- the person had to be retired
- "their past life is free from habitual criminality"
- the money had to be spent within the U.S. by the pensioner within 30 days of receipt.
Dr. Townsend published his plan in a local Long Beach newspaper in early 1933 and within about two years there were 7,000 Townsend Clubs around the country with more than 2.2 million members actively working to make the Townsend Plan the nation's old-age pension system.
Fire & Brimstone:
|Another influence on Depression-era public policy was the Union for Social Justice movement led by a radio preacher by the name of Father Charles E. Coughlin. Father Coughlin had a weekly radio program with 35-40 million listeners which he used to mix a little religion with a lot of politics. His enemies, in addition to the devil himself, were Roosevelt, international bankers, communists, and labor unions, and he was not shy in describing them in interchangeable terms. At the height of his popularity, Father Coughlin had a greater share of the weekly broadcast audience than Howard Stern, Rush Limbaugh, Paul Harvey and Larry King combined. |
Although Father Coughlin's main effort was to pillory his enemies, he did have a broad program of social reforms that included a deliberate inflation of the currency and the nationalization of all banks. He was also an anti-Semite and isolationist whose views were so extreme that the Catholic Church finally censured him and forced him to cease his political activities. In 1936, Coughlin, along with Townsend and the remnants of Huey Long's Share the Wealth Movement, would join to form a third party to contest the presidential election in the hopes of preventing President Roosevelt from being re-elected.
A Writer & his EPIC:
Upton Sinclair was a famous novelist and social crusader from California , and an avowed Socialist, who in 1933 was asked by a dissident group of Los Angeles Democrats to help them draft a platform proposal for dealing with the state's economic problems. They were so impressed by Sinclair's plan--which he christened the End Poverty in California, or EPIC plan--that they persuaded him to change his registration to Democratic and to run for the party's nomination for governor in 1934.
|Sinclair's EPIC scheme was a 12-point program to remake the Californian economy. It involved the issuance of scrip currency, the creation of large state-run bartering enterprises, a tax on idle land and floating a large state bond for $300 million. Point 10 of the plan was a proposal to give pensions of $50 a month to all needy persons over 60 who had lived in California for at least three years. There was a state pension plan in operation in California at the time, but its benefits were very low, and the eligibility requirements were so severe that most elderly Californians could not qualify. (This was true of many of the state pension programs around the country.) Sinclair's pension proposal was very popular because in one fell swoop it reduced the minimum age for pensions by 10 years, almost doubled their value, and eliminated restrictive eligibility requirements.|
Sinclair's EPIC program, and especially its pension proposal, had a great appeal in Depression-weary California. Sinclair and his supporters organized EPIC clubs, published newsletters, formed ad hoc organizations and found a large chorus of supporters with unlimited enthusiasm for his ideas. In short order, Upton Sinclair's EPIC movement captured the Democratic party and Sinclair became the Democratic nominee for governor in the election of 1934. The party's platform became the EPIC program, including the pension plan.
When the votes were counted, Upton Sinclair got 37% of the vote, the Republican candidate got 48% and a third-party progressive candidate took another 13%. Had it been a two-man race, Upton Sinclair might have become Governor of California and the EPIC pension plan might well have become the California model.
During the 1930s California was a virtual hot-house for new pension schemes, and one of the most creative (and dubious) of the pension schemes of the 1930s went by the unlikely moniker of "Ham & Eggs." Ham & Eggs was the brainstorm of a self-promoting huckster in-aptly named Robert Noble. The scheme was based on a call for the state government to issue special currency called "scrip" that would be paid each week to every unemployed Californian age 50 and older. Questions about the validity of the economics did not dampen the enthusiasm of the movement's supporters, nor even did the numerous scandals, financial and otherwise, involving the movement's leaders. The eventual form of the plan called for the state to issue "$30 every Thursday," which became the rallying cry of the movement. The simplicity of the movement was expressed in a bit of doggerel from the organization's newsletter the National Ham and Eggs :
|" Let's stay away from politics |
Regardless of who hollers
Let's not be fooled by childish tricks
LET'S GET OUR THIRTY DOLLARS"
The Ham & Eggs movement had more than 300,000 members--and many more supporters. In 1938 the successful Democratic candidate for governor, Culbert Olsen, openly supported the plan and a proposition was placed on the ballot to adopt the Ham & Eggs plan as California state policy. The proposition was narrowly defeated by a vote of 1,143,670 in favor to 1,398,999 against.
The Ham & Eggs movement was based on dubious economics, it was founded and run by a succession of characters of questionable integrity, it suffered from internecine rivalries and frequent scandals, and yet, at the peak of its influence in 1938, more than a million Californians, including the state's Governor, believed that it was the solution to the problem of income security for the aged. That such a poor candidate for a public policy would be so widely embraced is strong evidence of how hungry the public was for action to address the problem of income security for the elderly.
In Ohio, Reverend Herbert S. Bigelow initiated a proposed State amendment to guarantee an income of $50 a month ($80 for married couples living together) to those over sixty years of age who were without gainful employment. This particular plan was to be financed partly out of an increased tax on real estate (2% hike on land valued at more than $20,000 an acre), and partly out of an income tax equal to one-fourth the federal income tax paid by individuals and corporations. The Bigelow pension plan garnered nearly half a million voters before it was defeated. As some experts of the time calculated, the plan would cost more than the existing state budget for two years.
General Welfare Federation of America:
A woman in South Carolina scrawls a note to a man in Washington whom she addresses as "Dear Mr. President." "I'm 72 years old and have no one to take care of me." Another letter comes to the White House from Virginia. "I'm a 60 year-old widow greatly in need of medical aid, food and fuel, I pray that you would have pity on me." Letters such as these came by the thousands from old folks across the country to the President, to Mrs. Roosevelt, to almost every one in Washington whose name was familiar to them.
It isn't any wonder then, why the elderly looked to the various organizations that sprang up around the country offering salvation in some form of an old-age pension plan. One such organization was the General Welfare Federation of America. Headquartered in Washington, DC, and founded by Arthur L. Johnson, who denounced the newly established Social Security Act as a "great American fraud." He was just as severe in attacking other organizations such as the Townsend, Ham-and-Eggs, and Bigelow plans as "crackpot" pension schemes.
Mr. Johnson's plan, like most of the others, wiped out the elaborate system of employment records kept under the present Social Security Act. Instead, it provided for a pension to every citizen on or after reaching the age of 60, with the simple stipulation that they not engage in gainful employment, that they spend their pension for American goods and services, and that they not maintain able-bodied male dependents between the ages of 30 and 60.
The pension would be fixed at not less than $30 a month and not more than $60 a month. The actual amount would be determined by dividing the total funds available by the total number of annuitants. The funds would be derived from a gross income tax of 2 percent on individuals and corporations, with exceptions to protect charitable, religious, cooperative and similar organizations. The proponents of the this plan did manage did get it introduced in the House of Representatives, however, the bill died in committee in 1939 before ever reaching a House vote.
Out of America's fascination with technology came another eccentric "reform" movement known as Technocracy. Founded in 1918 by a California patent attorney it would briefly flare as a serious intellectual movement centered around Columbia University although as a mass-movement its real center was California where it claimed half a million members in 1934. Technocracy counted among its admirers such men as the novelist H.G. Wells, the author Theodore Dreiser and the economist Thorstein Veblen.
Technocracy held that all politics and all economic arrangements based on the "Price System" (i.e., based on traditional economic theory) were antiquated and that the only hope of building a successful modern world was to let engineers and other technology experts run the country on engineering principles. Technocracy's rallying cry was "production for use," which was meant as a contrast to production for profit in the capitalist system. Production for use became a slogan for many of the radical-left movements of the era. Upton Sinclair, among others, affirmed his belief in "production for use" and the Technocrats briefly made common cause with Sinclair, and even Huey Long, in California. But the Technocrats were not of the political left, as they held every political and economic system, from the left to the right, to be unsound.
|The Technocrats believed that the solution to all problems of economic security were the same, the rigorous application of engineering principles in a system freed from the Price System. They conceived of retirement as being made possible at age 45 for everyone due to the vast prosperity the new age of Technocracy would usher in. Rejecting all forms of traditional political science, the Technocrats refused to even use standard geographical maps because their boundaries were political, so they would refer to states only by their geographical coordinates. Names, too, were suspect for some reason so members of the movement in California were designated only by numbers. A speaker at one California rally was introduced only as 1x1809x56! |
Oddly enough, alone among this collection of radical movements of the 1930s, the Technocracy movement survives, if not quite thrives, into the present day.
|The classic 1941 Frank Capra film "Meet John Doe," staring Gary Cooper and Barbara Stanwyck, depicts this period of quixotic mass movements through the story of a fictional "John Doe" who represents an amalgam of many of the ideas of these various movements.|
The Establishment Response
If America was to avoid the siren songs of the "radical calls to action," responsible political leaders would need to offer some persuasive alternatives. As the Depression grew, three general approaches emerged: do nothing rely on voluntary charity and expand welfare benefits for those hardest hit by the Depression.
It seemed to many politicians and leading public figures that the Depression was just another dip in the economic cycle and that it would right itself soon enough. These voices counseled a restrained response, or no response at all. In the early aftermath of the stock market crash such views were especially common.
This view that nothing very much was wrong and nothing very much needed to be done, began to fade quickly as the Depression deepened. Even so, it held considerable sway in the early years after The Crash.
President Hoover's "Volunteerism"
President Hoover had a distinguished career before becoming president. He made a name for himself in international relief efforts before and after World War I. He helped feed millions of starving people, through the efforts of voluntary partnerships of government, business and private giving. He knew this kind of "volunteerism" worked, on a massive scale, and he saw no reason why it should not work to solve the problems of the Depression. So although he engaged in some limited federal relief efforts, his main response to the Depression was to advocate voluntary efforts, which never materialized.
The main problem with this strategy was that America was able to help rebuild Europe in the aftermath of World War I because America's economy was basically sound. In the Depression the total wealth of the nation was cut in half during the first three years after The Crash. This made voluntary charity a difficult ideal to achieve.
Even before the Depression hit, the States had been forced to deal with the problems of economic security in a wage-based, industrial economy. Workers Compensation programs were established at the state level before Social Security, and there were state welfare programs for the elderly in place before Social Security. Prior to Social Security, the main strategy for providing economic security to the elderly, in the face of the demographic changes discussed above, was to provide various forms of old-age "pensions." These were welfare programs, eligibility for which was based on proof of financial need. By 1934, most states had such "pension" plans. Even at the state level, however, these plans were inadequate. Some had restrictive eligibility criteria which resulted in many of the elderly being unable to qualify. The most generous plan paid a maximum of $1 per day.
In the Congress, the consensus of conventional wisdom was for more old-age assistance like that available in the states.
With the coming to office of President Roosevelt in 1932, and the introduction of his economic security proposal based on social insurance rather than welfare assistance, the debate changed. It was no longer a choice between radical changes and old approaches that no longer seemed to work. The "new" idea of social insurance, which was already widespread in Europe, would become an innovative alternative.
Social insurance, as conceived by President Roosevelt, would address the permanent problem of economic security for the elderly by creating a work-related, contributory system in which workers would provide for their own future economic security through taxes paid while employed. Thus it was an alternative both to reliance on welfare and to radical changes in our capitalist system. In the context of its time, it can be seen as a moderately conservative, yet activist, response to the challenges of the Depression.
The Social Insurance Movement
Although the definition of social insurance can vary considerably in its particulars, its basic features are: the insurance principle under which a group of persons are "insured" in some way against a defined risk, and a social element which usually means that the program is shaped in part by broader social objectives, rather than being shaped solely by the self-interest of the individual participants. Social insurance coverage can be provided for a number of different types of insured conditions, from disability and death to old-age or unemployment. We may find it obvious to think of death, disability or unemployment as conditions causing loss of income and which can be ameliorated by pooling of risk. It is at first a little odd to think of old-age or retirement in these same terms. But that is precisely how the early social insurance theorists conceived of retirement, as producing a loss of income due to cessation of work activity.
One of the first American books on social insurance was by a Columbia University economics professor named Henry Seager. Seager explained the principle of old-age security based on social insurance in his 1910 book, "Social Insurance, A Program of Social Reform" :
"As changing economic conditions are rendering the dependence of old people on their descendants for support increasingly precarious, so, on the other hand, new obstacles are arising to providing for old age through voluntary saving. . . The proper method of safeguarding old age is clearly through some plan of insurance. . . for every wage earner to attempt to save enough by himself to provide for his old age is needlessly costly. The intelligent course is for him to combine with other wage earners to accumulate a common fund out of which old-age annuities may be paid to those who live long enough to need it."
One of the earliest American advocates of a plan that could be recognized as modern social insurance was Theodore Roosevelt. In 1912, Roosevelt addressed the convention of the Progressive Party and made a strong statement on behalf of social insurance:
|"We must protect the crushable elements at the base of our present industrial structure. it is abnormal for any industry to throw back upon the community the human wreckage due to its wear and tear, and the hazards of sickness, accident, invalidism, involuntary unemployment, and old age should be provided for through insurance." TR would succeed in having a plank adopted in the Progressive Party platform that stated: "We pledge ourselves to work unceasingly in state and nation for: . . .The protection of home life against the hazards of sickness, irregular employment, and old age through the adoption of a system of social insurance adapted to American use."|
So as 1934 dawned the nation was deep in the throes of the Depression. Confidence in the old institutions was shaken. Social changes that started with the Industrial Revolution had long ago passed the point of no return. The traditional sources of economic security: assets labor family and charity, had all failed in one degree or another. Radical proposals for action were springing like weeds from the soil of the nation's discontent. President Franklin Roosevelt would choose the social insurance approach as the "cornerstone" of his attempts to deal with the problem of economic security.
|The Social Security Act--Passage and Development|
|Another provision of the Act established a Social Security Board (SSB) comprised of three members appointed by the President, with the chairman reporting directly to the President. The original members were John G. Winant, Chairman Arthur J. Altmeyer and Vincent M. Miles. (Winant was a former three-time Republican Governor of New Hampshire Miles was a Democratic Party official in Arkansas and Altmeyer was a civil servant working in Labor Department.) |
During the first year, SSB was faced with the tasks of providing employers, employees and the public with information on how earnings were to be reported, what benefits were available and how they were to be provided. In addition, sites for field installations had to be chosen and personnel to staff these offices had to be selected and trained.
|First meeting of the Social Security Board, September 14, 1935. Left to right: Arthur J. Altmeyer, John G. Winant (Chairman), and Vincent M. Miles.|
| ||The post offices collected the completed forms and turned them over to Social Security field offices located near major post office centers. The applications then were forwarded to Baltimore, Maryland, where SSNs were registered and various employment records established. The first SSN account number record established in Baltimore was assigned to John David Sweeney, Jr. of New Rochelle, New York. Over 30 million SSN cards were issued through this early procedure, with the help of the post offices. By June 30, 1937, the SSB had established 151 field offices, with the first office opening on October 14, 1936, in Austin, Texas. From that point on, the Board's local office took over the task of assigning SSNs.|
Although, John Sweeney received the first SSN account, his was not the lowest number ever issued. That distinction fell to New Hampshire resident, Grace Dorothy Owen. Ms. Owen received number 001-01-0001.
(The process of issuing Social Security numbers is called "enumeration," and over the years it has been one of the most interesting topics involving Social Security.)
|The earliest reported applicant for a lump-sum benefit was a retired Cleveland motorman named Ernest Ackerman , who retired one day after the Social Security program began. During his one day of participation in the program, a nickel was withheld from Mr. Ackerman's pay for Social Security, and, upon retiring, he received a lump-sum payment of 17 cents. |
The average lump-sum payment during this period was $58.06. The smallest payment ever made was for 5 cents!
"It is impossible under any social insurance system to provide ideal security for every individual. The practical objective is to pay benefits that provide a minimum degree of social security—as a basis upon which the worker, through his own efforts, will have a better chance to provide adequately for his individual security." -- From the Report of the Social Security Board recommending the changes which were embodied in the 1939 Amendments.
The original Act provided only retirement benefits, and only to the worker. The 1939 Amendments made a fundamental change in the Social Security program. The Amendments added two new categories of benefits: payments to the spouse and minor children of a retired worker (so-called dependents benefits) and survivors benefits paid to the family in the event of the premature death of a covered worker. This change transformed Social Security from a retirement program for workers into a family-based economic security program.
The 1939 Amendments also increased benefit amounts and accelerated the start of monthly benefit payments to 1940.
|In 1950 all Social Security beneficiaries received a general "cost-of-living" increase--for the first time since benefits began in 1940. Ida May Fuller is seen here receiving her first increased benefit check on October 3, 1950.|
|Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.|
In mid-August, 1941, Winston Churchill and Franklin Roosevelt met secretly aboard a warship off the coast of Newfoundland in the North Atlantic. On the sixth anniversary of the Social Security Act, they announced a joint-declaration known as the Atlantic Charter. The 383-word Charter was an expression of "certain common principles in the national policies of their respective countries on which they base their hopes for a better future for the world." This brief charter would be the founding document of the United Nations and among its eight principles was a call for social insurance. Former Social Security Board Chairman John Winant was then serving as the U.S. Ambassador to Great Britain. Although Winant did not attend the Conference, the social insurance provision was a suggestion he made from London which was instantly accepted by Churchill and FDR.
Although social insurance began in Germany in the 19th century, in the years following World War II the United States was the leading model for nations around the world who were interested in designing Social Security systems. This movement toward the internationalization of Social Security can be symbolically fixed with the issuance of the Atlantic Charter in 1941.
From 1940 until 1950 virtually no changes were made in the Social Security program. Payment amounts were fixed, and no major legislation was enacted. There was a significant administrative change in 1946, however, when the three-person Social Security Board was abolished and replaced by the Social Security Administration, headed by a single Commissioner.
Because the program was still in its infancy, and because it was financed by low levels of payroll taxation, the absolute value of Social Security's retirement benefits were very low. In fact, until 1951, the average value of the welfare benefits received under the old-age assistance provisions of the Act were higher than the retirement benefits received under Social Security. And there were more elderly Americans receiving old-age assistance than were receiving Social Security.
Because of these shortcomings in the program, in 1950 major amendments were enacted. These amendments increased benefits for existing beneficiaries for the first time (see The Story of COLAs), and they dramatically increased the value of the program to future beneficiaries. By February 1951 there were more Social Security retirees than welfare pensioners, and by August of that year, the average Social Security retirement benefit exceeded the average old-age assistance grant for the first time.
Most people are aware that there are annual increases in Social Security benefits to offset the corrosive effects of inflation on fixed incomes. These increases, now known as Cost of Living Allowances (COLAs), are such an accepted feature of the program that it is difficult to imagine a time when there were no COLAs. But in fact, when Ida May Fuller received her first $22.54 benefit payment in January of 1940, this would be the same amount she would receive each month for the next 10 years. For Ida May Fuller, and the millions of other Social Security beneficiaries like her, the amount of that first benefit check was the amount they could expect to receive for life. It was not until the 1950 Amendments that Congress first legislated an increase in benefits. Current beneficiaries had their payments recomputed and Ida May Fuller, for example, saw her monthly check increase from $22.54 to $41.30.
These recomputations were effective for September 1950 and appeared for the first time in the October 1950 checks. A second increase was legislated for September 1952. Together these two increases almost doubled the value of Social Security benefits for existing beneficiaries. From that point on, benefits were increased only when Congress enacted special legislation for that purpose.
In 1972 legislation the law was changed to provide, beginning in 1975, for automatic annual cost-of-living allowances (i.e., COLAs) based on the annual increase in consumer prices. No longer do beneficiaries have to await a special act of Congress to receive a benefit increase and no longer does inflation drain value from Social Security benefits.
The Social Security Amendments of 1954 initiated a disability insurance program which provided the public with additional coverage against economic insecurity. At first, there was a disability "freeze", (here being signed by President Eisenhower ) of a worker's Social Security record during the years when they were unable to work. (First application for disability freeze being filed.) While this measure offered no cash benefits, it did prevent such periods of disability from reducing or wiping out retirement and survivor benefits. On August 1, 1956, the Social Security Act was amended to provide benefits to disabled workers aged 50-64 and disabled adult children. In September 1960 President Eisenhower signed a law amending the disability rules to permit payment of benefits to disabled workers of any age and to their dependents. By 1960, 559,000 people were receiving disability benefits, with the average benefit amount being around $80 per month.
The decade of the 1960s brought major changes to the Social Security program. Under the Amendments of 1961, the age at which men are first eligible for old-age insurance was lowered to 62, with benefits actuarially reduced (women previously were given this option in 1956). This created an additional workload for the Agency as more beneficiaries entered the rolls. The number of people receiving disability benefits more than doubled from 1961 to 1969, increasing from 742,000 to 1.7 million.
The most significant administrative change involved the signing of the Medicare bill on July 30, 1965, by President Lyndon Johnson In the presence of former President Truman, who received the first Medicare card at the ceremony, Lady Bird Johnson, Vice-President Hubert Humphrey, and Mrs. Truman. With the signing of this bill, SSA became responsible for administering a new social insurance program that extended health coverage to almost all Americans aged 65 or older. Nearly 20 million beneficiaries enrolled in Medicare in the first 3 years of the program.
In the 1970s, SSA became responsible for a new program, Supplemental Security Income (SSI). In the original 1935 Social Security Act, programs were introduced for needy aged and blind individuals and, in 1950, needy disabled individuals were added. These three programs were known as the "adult categories" and were administered by State and local governments with partial Federal funding. Over the years, the State programs became more complex and inconsistent, with as many as 1,350 administrative agencies involved and payments varying more than 300% from State to State.
In 1969, President Nixon identified a need to reform these and related welfare programs to "bring reason, order, and purpose into a tangle of overlapping programs." In 1971, Secretary of Health, Education and Welfare, Elliot Richardson, proposed that SSA assume responsibility for the "adult categories." In the Social Security Amendments of 1972, Congress federalized the "adult categories" by creating the SSI program and assigned responsibility for it to SSA.
SSA was chosen to administer the new program because of its reputation for successful administration of the existing social insurance programs. SSA's nationwide network of field offices and large-scale data processing and record-keeping operations also made it the logical choice to perform the major task of converting over 3 million people from State welfare programs to SSI.
The 1972 & 1977 Amendments
In 1972 two important sets of amendments were enacted. These amendments created the SSI program and introduced automatic Cost-of-Living-Adjustments (COLAs).
The bill creating the SSI program also contained important provisions for increasing Social Security benefits for certain categories of beneficiaries (primarily aged widows and widowers). It also provided: a minimum retirement benefit an adjustment to the benefit formula governing early retirement at age 62 for men, in order to make it consistent with that for women extension of Medicare to those who have received disability benefits for at least two years and to those with Chronic Renal Disease liberalized the Retirement Test and provided for Delayed Retirement Credits to increase the benefits of those who delayed retirement past age 65.
|The separate bill creating automatic COLAs also provided for automatic increases in the earnings subject to Social Security taxes and an automatic adjustment in the wage-base used in calculating benefits. This second adjustment was put in the law as a sort of companion to the COLA. The COLA adjusts for increases in prices , whereas the wage-base adjustment corrects for increases in wages . The purpose of the COLA was to maintain the purchasing power of benefits already awarded. The purpose of the automatic adjustment in the wage base was to maintain the relative value of Social Security benefits for future applicants. Unfortunately, the procedure for adjusting for price and wage increases contained a flaw which resulted in future benefit levels soaring out of control. Indeed, it became apparent that if the trends of the mid-1970s continued, future Social Security beneficiaries could end up receiving more in their monthly retirement benefit than their gross salaries while working. This problem was corrected in the 1977 Amendments. However, the correction led to the appearance of what came to be known informally as "The Notch."|
The main purpose of the 1977 Amendments was to address the financing of the program. Shortly after passage of the 1972 legislation, it became apparent that Social Security faced a funding shortfall, both in the short-term and in the long-term. The short-term problem was caused by the bad economy, and the long-term problem by the demographics associated with the baby boom. By their 1975 report the Trustees said the Trust Funds would be exhausted by 1979. This financing shortfall was addressed by the 1977 Social Security Amendments. These amendments raised the payroll tax slightly (from 6.45% to the current 7.65%), increased the wage base reduced benefits slightly and "decoupled" the wage adjustment from the COLA adjustment. These fixes restored the long-term balance of the program for the next 50 years (but not the full 75 years used by the actuaries). It was hoped the amendments would prevent an expected short-term financing problem in the early 1980s. This hope would prove elusive as the major amendments in 1983 would be needed to avoid the short-term problem, and to address the remaining long-range program deficit.
The Social Security Amendments of 1980 made many changes in the disability program. Most of these changes focused on various work incentive provisions for both Social Security and SSI disability benefits.
The 1980 Amendments also required SSA to conduct periodic reviews of current disability beneficiaries to certify their continuing eligibility. This was to become a massive workload for SSA and one that was highly controversial. By 1983, the reviews had been halted, and in 1984, Congress passed the Disability Benefits Reform Act modifying several aspects of the disability program.
In the early 1980s the Social Security program faced a serious short-term financing crisis. President Reagan appointed a blue-ribbon panel, known as the Greenspan Commission, to study the financing issues and make recommendations for legislative changes. The final bill, signed into law in 1983, made numerous changes in the Social Security and Medicare programs, including the taxation of Social Security benefits, the first coverage of Federal employees under Social Security and an increase in the retirement age in the next century. (Summary of the provisions of the '83 Amendments)
From its modest beginnings, Social Security has grown to become an essential facet of modern life. One in seven Americans receives a Social Security benefit, and more than 90 percent of all workers are in jobs covered by Social Security. From 1940, when slightly more than 222,000 people received monthly Social Security benefits, until today, when over 50 million people receive such benefits, Social Security has grown steadily. The SSI program has grown as well from its inception in 1974.
|Year||Beneficiaries||Dollars (b)||Year||Beneficiaries (c)||Dollars (d)|
|a. Recipients of one-time lump-sum payments.|
|b. Benefit payments only.|
|c. Recipients of Federally-administered payments only.|
|d. Includes both Federal payment and Federally-administered State supplementation payments.|
The Social Security Board (SSB) began its life in 1935 as one of the federal government's "independent agencies." This means that it was not part of a larger cabinet-level organization. In 1939 this status changed when the SSB became part of the new cabinet-level Federal Security Agency. Ultimately, the Social Security Board became the Social Security Administration and it would finally become an operating component of the Department of Health & Human Services. (See SSA Organizational History.)
Throughout the 1980s and 1990s, there was growing bipartisan support for removing SSA from under its departmental umbrella and establishing it as an independent agency. Finally, in 1994 the Social Security Independence and Program Improvements Act of 1994 (P.L. 103-296) was passed unanimously by Congress and, in a ceremony in the Rose Garden of the White House, on August 14, 1994, President Bill Clinton signed the act into law.
Legislative Changes in 1996 & 1997
Contract With America Advancement Act of 1996 (P.L. 104-121).
This bill, signed by the President on March 29, 1996, made a change in the basic philosophy of the disability program. Beginning on that date, new applicants for Social Security or SSI disability benefits could no longer be eligible for benefits if drug addiction or alcoholism is a material factor to their disability. Unless they can qualify on some other medical basis, they cannot receive disability benefits. Individuals in this category already receiving benefits, are to have their benefits terminated as of January 1, 1997. Previous policy has been that if a person has a medical condition that prevents them from working, this qualifies them as disabled for Social Security and SSI purposes--regardless of the cause of the disability. Another significant provision of this law doubled the earnings limit exemption amount for retired Social Security beneficiaries, on a gradual schedule from 1996 to 2002. In 2002, the exempt amount will be $30,000 per year in earnings, compared to $14,760 under previous law.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
This "welfare reform" legislation, signed by the President on 8/22/96, ended the categorical entitlement to AFDC (Aid to Families with Dependent Children) that was part of the original 1935 Social Security Act by implementing time-limited benefits along with a work requirement. The law also terminated SSI eligibility for most non-citizens. Previously, lawfully admitted aliens could receive SSI if they met the other factors of entitlement. As of the date of enactment, no new non-citizens could be added to the benefit rolls and all existing non-citizen beneficiaries would eventually be removed from the rolls (unless they met one of the exceptions in the law.) Also effective upon enactment were provisions eliminating the "comparable severity standard" and reference to "maladaptive behavior" in the determination of disability for children to receive SSI. Also, children currently receiving benefits under the old standards were to be reviewed and removed from the rolls if they could not qualify under the new standards.
Omnibus Consolidated Rescissions and Appropriations Act of 1996.
Requires that all federal payments (including Social Security and SSI) be made by electronic funds transfer (no more paper checks) effective January 1, 1999, unless a waiver is granted by the Secretary of the Treasury.
The Department of Defense Appropriations Act, 1997
This massive omnibus spending bill contained SSA's budget as well as numerous legislative changes relating to the SSI program and to issues involved in fighting fraudulent documents in connection with obtaining Social Security numbers. The major SSI provision makes sponsorship agreements legally enforceable for the first time. In the area of identification-related documents, the law requires the establishment of federal standards for state-issued birth certificates and requires SSA to develop a prototype counterfeit-resistant Social Security card.
The Balanced Budget Act of 1997
This bill passed the House on 7/30/97 by a vote of 346 to 85, and passed the Senate the next day on a vote of 85 to 15. This law restored SSI eligibility to certain cohorts of non- citizens whose eligibility otherwise would be terminated under the "welfare reform" of 1996. It also extended for up to one year the period for redetermining the eligibility of certain aliens who may ultimately not be eligible for continued benefits.
The Social Security Advisory Board
From the very beginning, the Social Security program has had the services of periodic Advisory Councils composed primarily of non-government members whose function was to represent the public at large in advising government officials on Social Security policy. The first such Advisory Council was convened in 1934 in support of the work of the Committee on Economic Security. Over the years, the Advisory Councils have been very influential in setting the agenda for changes in Social Security. The Councils were especially influential in shaping the pivotal 1939 and 1950 amendments. Eventually, the tradition of periodic Social Security Advisory Councils was made a standard provision of the law, with a requirement that such a Council be appointed every four years. This law stayed in effect until 1994, when it was repealed as part of the legislation which made SSA an independent agency. The 1994-1996 Advisory Council was thus the final Council, signaling the end of a long tradition in Social Security. Under that 1994 law, the Councils are abolished and a permanent 7-member Advisory Board was formed to serve many of the same functions.
On December 17, 1999 the President signed the "Ticket to Work and Work Incentives Improvement Act of 1999"--one of the most significant changes in disability policy in the last 20 years. This law creates a Ticket to Work and Self-Sufficiency Program which will provide disability beneficiaries with a ticket they may use to obtain vocational rehabilitation services, employment services, and other support services from an employment network of their choice. In addition to allowing beneficiaries to purchase vocational services, the law provides incentive payments to providers for successful rehabilitation in which the beneficiary returns to work. The new provisions also provide a number of safeguards to the beneficiaries to protect their benefits and health Taken together, the Ticket to Work initiative seeks to shift the emphasis in the disability program away from mere maintenance of benefits more toward rehabilitating the disabled and assisting them in returning to productive work.
Repeal of the Retirement Earnings Test (RET)
On April 7, 2000 "The Senior Citizens' Freedom to Work Act of 2000" was signed into law, eliminating the Retirement Earnings Test (RET) for those beneficiaries at or above Normal Retirement Age (NRA). (The RET still applies to those beneficiaries below NRA.)
The legislation began its swift march through Congress on March 1, 2000 when the full House of Representatives passed H.R. 5 by a vote of 422 to 0 . The Senate, on March 22, 2000 then passed the bill by a vote of 100-0 (with a technical amendment). On March 28, 2000 The House agreed to the Senate amendment by a vote of 419-0 and cleared the measure for transmission to the President.
This was a historic change in the Social Security retirement program. From the beginning of Social Security in 1935, retirement benefits have been conditional on the requirement that the beneficiary be substantially retired. This requirement was carried out by the provisions of the RET. The RET has changed considerably over the years . The requirement was first scaled-back in the 1950 Amendments, which exempted workers age 75 and older from the RET. The exempt age was reduced to 72 in 1954, and to age 70 and older in 1977. With the new legislation, starting at the NRA, Social Security retirement benefits will be paid to beneficiaries who are still working. Effectively, for those who have reached full retirement age, this repeals the requirement that the beneficiary be substantially retired in order to receive full Social Security retirement benefits.
Social Security in the George W. Bush Administration
In his Inaugural Address , President George W. Bush announced his intentions to reform Social Security and Medicare. Throughout the early months of his presidency the President made many speeches and addresses in which this was a major recurring theme. In his first speech to a joint-session of Congress in February 2001, the President announced his intention to appoint a Presidential Commission to recommend ways to address Social Security reform. The President stated the Commission would operate under three broad principles:
- It must preserve the benefits of all current retirees and those nearing retirement.
- It must return Social Security to sound financial footing.
- And it must offer personal savings accounts to younger workers who want them.
On May 2, 2001 the President announced the appointment of his Social Security Commission, the "President's Commission to Strengthen Social Security." The Commission issued its final report in December 2001.
At the beginning of his second term, President Bush made it clear that Social Security reform would be a top priority of his Administration. Although the President pushed for major changes in Social Security, none were enacted into law during the President's second term.
- (H.R. 3338) was signed into law on January 10, 2002. This law eliminated deemed wage credits for members of the uniformed services for all years after calendar year 2001.
Medicare Prescription Drug Benefits
A major change in the Medicare program was enacted into law during this period. P.L. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (H.R. 1), was signed into law on December 8, 2003. The law amends title XVIII of the Social Security Act to provide for a voluntary prescription drug benefit under the medicare program. This was the largest single expansion of the Medicare system since its creation in 1965.
Social Security in the Obama Administration
On February 17, 2009, the President signed H.R. 1, the "American Recovery and Reinvestment Act of 2009" (Public Law 111-5). This law appropriated an additional $1 billion to the Social Security Administration's administrative budget, $500 million of which is to be used to replace the National Computer Center, and the information technology costs associated with such Center and $500 million for processing disability and retirement workloads, including information technology acquisitions and research in support of such activities. The bill also provided special a one-time economic recovery payment of $250 to adults who were eligible for benefits from one of the four following Federal benefit programs: Social Security, Railroad Retirement, Veterans Disability, and Supplemental Security Income (SSI).
On September 18, 2009, the President signed into law H.R. 3325, the &ldquo " which became Public Law 111-64.
This legislation extends, through fiscal year 2010, funding authorization for the Work Incentives Planning and Assistance program and the Protection and Advocacy for Beneficiaries of Social Security program.
On December 15, 2009, President Obama signed H.R. 4218, the &ldquoNo Social Security Benefits for Prisoners Act of 2009&rdquo, which became Public Law 111-115.
The bill prohibits the payment of any retroactive Title II and Title XVI benefits to individuals while they are in prison, are in violation of conditions of their parole or probation, or are fleeing to avoid prosecution for a felony or a crime punishable by sentence of more than one year.
|Bibliography for the Pre-Social Security Period|
|To assist students and other researchers we have grouped the reference sources into three categories: Classic Sources, which are the earliest published works and which are likely to be out-of-print and available only in larger libraries Academic Treatments, which is meant to indicate a more scholarly approach to the subjects, and may be more suitable for advanced students and in-depth researchers and Popular Accounts, which are works that seem suitable for a broad general audience. These categories are arbitrary, imprecise, and flexible. They are intended as a rough guide only and should not be taken too literally.|
Armstrong, Barbara, "Insuring the Essentials," Macmillan Co., 1932. A scholarly review of the state of social insurance efforts as they stood in the early 1930s, by one of the principal designers of Social Security's old age insurance program.
Epstein, Abraham, "Insecurity: A Challenge to America," Third Revised Edition, Harrison Smith and Robert Haas, 1936. A classic study of social insurance, with one of the first published critiques of the recently passed Social Security Act by a critic who believed the Act did not go far enough in addressing the need for social insurance programs.
Rubinow, I. M., "Social Insurance: With Special Reference to American Conditions," Henry Holt, 1913.
Rubinow, I. M., "The Quest for Security," Henry Holt, 1934. Rubinow's two books were the most influential on early thinking regarding social insurance. President Roosevelt, in particular, was an admirer of Rubinow's work.
Seager, Henry, " Social Insurance: A Program of Social Reform, " Macmillan Co., 1910. Believed to be the first American work on social insurance.
Chambers, Clarke, "Seedtime of Reform: American Social Service and Social Action 1918-1933," University of Minnesota Press, 1963. In-depth discussion of events in the period leading up to the creation of Social Security .
Katz, Michael B., "In The Shadow of the Poorhouse: A Social History of Welfare in America," Tenth Anniversary Edition, Basic Books, 1996. An outline of the development of American social policy from the earliest days.
Lubove, Roy, "The Struggles for Social Security: 1929-1935," Harvard University Press, 1968.
Mitchell, Daniel J.B., "Pensions Politics and the Elderly: Historic Social Movements and Their Lessons for Our Aging Society," M.E. Sharpe, 2000. A discussion of the Townsend Plan, the Ham and Eggs movement, and other alternative pension movements in California.
Skocpol, Theda, "Protecting Soldiers and Mothers," Harvard University Press (Belknap), 1992. Source for information on Civil War pensions, Mothers pensions, and early workmen's compensation efforts.
Schlesinger, Jr., Arthur M., three volumes: "The Crisis of the Old Order," "The Politics of Upheaval" and "The Coming of the New Deal." Houghton-Mifflin, The American Heritage Library, 1988. This is the classic history of this period.
Weaver, Carolyn, "The Crisis in Social Security: Economic and Political Origins," Duke Press Policy Studies, 1982. Contains an account of historical developments from prior to 1900 through the Social Security amendments of the early 1970s.
Brinkley, Alan, "Voices of Protest: Huey Long, Father Coughlin and The Great Depression," Vintage Press, 1983. A good overview of Long and Coughlin.
Kennedy, David M., "Freedom From Fear: The American People in Depression and War, 1929-1945." Oxford University Press, 1999. The early chapters in this book contain a good summary of the period right before the Depression through the passage of Social Security.
McElvaine, Robert S., "The Depression and New Deal: A History in Documents." Oxford University Press, 2000. This books has lots of photos and short essays and is easy to read.
Mitchell, Greg, "The Campaign of the Century," Random House, 1992. This is the most comprehensive account of Upton Sinclair's EPIC Plan.
Watkins, T. H., "The Great Depression: America in the 1930s," Back Bay Books, 1993. Lots of photos and short essays.
Watkins, T. H., "The Hungry Years: A Narrative History of the Great Depression in America," Henry Holt, 1999. A more in-depth account of this period.
|Bibliography of the Social Security Act and its Development|
Cohen, Wilbur, and Haber, William, (eds.) "Readings in Social Security," Prentice-Hall, 1948. A collection of essays by a wide variety of authors on the history, philosophy and major policy issues in the development of Social Security.
Cohen, Wilbur, and Haber, William, (eds.) "Social Security: Programs, Problems, and Policies," Richard D. Irwin, 1960. Similar to their earlier book, with a bit more emphasis on policy issues, and bringing the discussion current through the passage of the 1960 amendments.
Frase, Robert and McKinley, Charles, "Launching Social Security: A Capture and Record Account 1935-1937," University of Wisconsin Press, 1970. A detailed academic exercise in which two political scientists recount the implementation of the new Social Security program in its first years. Primarily an administrative history.
Perkins, Frances, "The Roosevelt I Knew," Viking Press, 1946. Memoir of Miss Perkins' role in the Roosevelt Administration, with a chapter on the development of the Social Security Act.
Social Security Board, " Social Security in America ," Social Security Board, 1937. Summary of the research developed by the Committee on Economic Security that underlay the Social Security Act.
Achenbaum, Andrew, "Social Security: Visions and Revisions," Cambridge University Press, 1986. Review of the political and policy development of the Social Security Act, up through the 1983 amendments.
Berkowitz, Edward D., "Disabled Policy: America's Programs for the Handicapped" Cambridge University Press, 1987. A review of workmen's compensation and the disability benefits program of the Social Security Act.
Berkowitz, Edward D., (ed.) "Social Security After Fifty," Greenwood Press, 1987. Proceedings of an academic conference held at George Washington University in 1986.
Berkowitz, Edward D., "America's Welfare State: From Roosevelt to Reagan," Johns Hopkins University Press, 1991. A review of developments in Social Security, welfare reform and health insurance since the passage of the Social Security Act.
Berkowitz, Edward D., "Mr. Social Security: The Life of Wilbur Cohen," University Press of Kansas, 1995. A biography of one of the important pioneers of Social Security and an account of the historical developments in which he participated, with a special emphasis on the development of the Medicare program.
Derthick, Martha, "Policymaking for Social Security," Brookings Press, 1979. A political scientist surveys the political and administrative development of the Social Security program up through the early 1970s.
Derthick, Martha, "Agency Under Stress: The Social Security Administration in American Government," Brookings Press, 1990. A political scientist reviews the administration of the disability and SSI programs.
Nash, Gerald Pugach, Noel and Tomasson, Richard (eds.), "Social Security: The First Half Century," University of New Mexico Press, 1988 . Proceedings of an academic conference held at the University of New Mexico in 1985.
Tynes, Sheryl, "Turning Points in Social Security: From 'Cruel Hoax' to 'Sacred Entitlement'," Stanford University Press, 1996. A critical history of the development of Social Security up through the early 1980s.
Weaver, Carolyn, "The Crisis in Social Security: Economic and Political Origins," Duke Press Policy Studies, 1982. Contains an account of historical developments from prior to 1900 through the Social Security amendments of the early 1970s.
Altmeyer, Arthur, "The Formative Years of Social Security," University of Wisconsin Press, 1968. Chronicle of the development of Social Security from 1934-1954 from a major figure in this history.
Ball, Robert, "Insuring the Essentials: Bob Ball on Social Security," Century Foundation Press, 2000. A collection of historical and policy essays by a former Commissioner of Social Security.
Bellush, Bernard, "He Walked Alone: A Biography of John Gilbert Winant," Mouton, 1968. Biography of the first Chairman of the Social Security Board.
Coll, Blanche, "Safety Net: Welfare and Social Security 1929-1979," Rutgers University Press, 1995. A readable history of the welfare provisions of the Social Security Act.
Davis, Kenneth, "FDR: The New Deal Years," Random House, 1986. Contains an extended chapter on the development of the Social Security Act.
Eliot, Thomas, "Recollections of the New Deal," Northeastern University Press., 1992. Memoir of the lawyer who helped draft the legislative language for the Social Security Act in 1935.
Light, Paul, "Artful Work: The Politics of Social Security Reform," Random House, 1985. And "Still Artful Work: The Continuing Politics of Social Security Reform," McGraw-Hill, 1995. A history of the Greenspan Commission and the development of the 1983 amendments.
Myers, Robert J., "Within the System: My Half Century in Social Security," Actex Publications, 1992. An autobiography of the Social Security actuary who started with the Committee on Economic Security in 1934 and eventually became SSA's Chief Actuary.
Schlabach, Theron, "Edwin Witte: Cautious Reformer," State Historical Society of Wisconsin, 1969. Interesting biography of a key figure in the creation of the Social Security program.
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