Review the Great Depression time line and the section entitled "The Stock Market Crash and The Great Depression" on The Historical Background and Development of Social Security page, and answer the questions below.
Read the Preamble to the Social Security Act, and answer the questions below.
Read the following text, and work collaboratively with the rest of your group to answer the questions that follow.
Excerpt from "Jackson's Voice Clear on Social Security Issues" by biographer John Q. Barrett, including quotes from Jackson�s defense of Social Security before the Supreme Court in Helvering v. Davis, 1937.
ATTORNEY GENERAL ROBERT JACKSON
Arguments from the Helvering v. Davis Supreme Court Case (1937)
...The failure of private pension plans is explored by the evidence, and pointed out in our brief. The failure of private charity to meet this problem is conclusively shown by the figures of the Bureau of Internal Revenue. In 1928 the persons with $3 million and up of income contributed an average of $25,400 to purposes for which they were entitled to the charitable deduction. By 1931 they had reduced those contributions, the same group, to $12,900 average, showing that the well to do retrenched in their charitable contributions during the period of Depression, although the need was greater...
The resources of the States have been declining. Real estate reserved to the States as a source of taxation has been taxed to the limit of its capacity to bear, and personalty has never been successfully taxed locally. The Federal Government, which is able to tax incomes and to lay excises, has sources of revenue which have been drying up for the States, not because of any change in the legal system but because the economic emphasis on personal property has left the States without a comparative source of revenue such as they had at the beginning of our constitutional system...
The condition which is promised as an implication of our system, that thrift would be followed by plenty, failed in the Depression, for the man who had responded to the inducements and had accumulated a bank account and selected the wrong bank, or the man who had saved to purchase a home, found himself in the same position as the one who had never saved at all. In fact, the man who had not tried to acquire a home perhaps was better off because he was not faced with a deficiency judgment. The unfortunate consequences of this Depression bring home to us the fact that self-denial had not assured comfortable age...
[I]f we are to review in this Court the question whether Congress has served the general welfare in fact, I am frank to admit that we face a tradition of 150 years of practice that is against the making of old-age relief a matter of national welfare. But I would call your attention to the fact that old-age welfare has been a constantly widening concern. The matter of the care of the old was at one time a matter for the family only. It became gradually a matter for the town poormaster if the family failed. From the town poormaster it became a matter for the county with its poorhouse, and then the State, because of failures of counties, intervened, and now we argue that it has become a matter of national welfare and this old-age-pension system was set up in the hope that it would make true the promise to men that if they were thrifty and industrious and self-disciplined their age would be spared at least extreme poverty. This plan does no more than spare extreme poverty, and may not in many instances do that. This plan was that if the workman during his productive years would contribute to the Treasury of the United States, then the Treasury of the United States in his unproductive years would contribute to his necessities...