Franklin D. Roosevelt (affectionately known as FDR by the common public), the only US President to serve 4 terms, presided over two horrific and devastating crises that occurred in the United States: the Great Depression and World War II. He held office from November 1932, when he defeated republican Herbert Hoover until April 12, 1945, when he died from a massive cerebral hemorrhage.
When FDR took office in March 1933, 25 percent of Americans were unemployed and most of the banks had closed. FDR suddenly had to deal with the greatest crisis in American history since the Civil War. Even though the majority of other industrialized nations throughout the world provided financial support for individuals in financial need, that concept was foreign to the United States. He initially spent many of his energies toward initiating programs that would put unemployed Americans immediately to work to try and mitigate family support systems that had been obliterated and communities that had been crumbling.
Simultaneously, he asked a team of trained experts from both Republican and Democratic parties to work out a solution to the immediate problem of so much of the United States’ population not being able to provide the very basics of day-to-day living could once again provide the basics without simply providing a “handout”. The team suggested a solution that was foreign to the rest of the world: an insurance plan. This insurance plan was called the Social Security Act and workers would make a regular payment into the plan with each paycheck and the result would be that when they reached retirement age, they would receive a monthly stipend.
On August 14, 1935, Franklin Delano Roosevelt signed the Social Security Act into law. This law included removing the nation from using the gold standard as a basis for our currency, which caused many bankers to turn against FDR’s “New Deal”.
What led up to the Social Security Act?
I thought I would give the background regarding what led up to the creation of the Social Security Act:
Due to the fact that gold had been discovered in the Americas and Africa prior to 1929, many people became exuberantly confident and invested a lot of their money, including that which they had set aside “for a rainy day” into stocks, which were based on the gold standard with the anticipated hope of making huge profits. At the time, the US economy, which was one of the strongest in the world, was based on the gold standard. Eventually, the amount of money being traded in stocks around the world surpassed the amount of money that was in circulation and because many people were investing money that they did not have outweighed the money they did have, they had to sell off some of their stocks in order to pay back the loans. As more people began to sell their stocks to pay their loans, shares began to decrease in value. Other countries around the world that depended on exports from the United States shut down, which created a domino effect around the world.
The American stock market crashed on October 29, 1929 on Tuesday, which became known as “Black Tuesday”. This scared people worldwide, who rush to withdraw their money from banks. Banks closed their doors without paying, which forced many banks to close, which caused businesses that had invested in the stock market to close, and they had to lay off most of their employees, without paying them. With people unable to pay for merchandise, even more businesses were forced to close. This same scenario happened around the world.
FDR’s team of financial professionals had come up with the idea of “insurance”, which FDR offered to the American Public after he signed it into law on 8/14/1935.
The very 1st American to Apply for Social Security
Initially Americans applied for Social Security at their local post office and received a paper card with a series of numbers on it. Initially, due to a lot of confusion on the part of American citizens, many people applied repeatedly to get a card with the numbers printed on it. That issue was resolved and those people were asked to return all of their Social Security cards and keep only one and from that point forward: each American citizen had one number and each number was unique to each American citizen.
The very first person to receive the very first card was a woman from New Hampshire, whose Social Security number was 001-01-0001. In 1937, the first person to receive a monthly check ($22.54) was Ida May Fuller.
The first 3 digits represent the state or region where the applicant lives. The next 2 digits represent the state or region within the state or region of the applicant. The last 4 digits tallied the number of applicants in that group.
Social Security was so well received by the American public that only after eight days after the first person received the very first Social Security card, Social Security Administration welcomed their 2nd million cardholders.
- In 1950, the first cost-of-living adjustment was made
- In 1956, benefits were added for disabled workers who were between 50 and 64 years of age
- In 1967, the armed forces stopped issuing “serial numbers” to military personnel and changed to using Social Security numbers
- In 1977, withholding was raised from 4.95 percent to 6.2 percent
- In 1995, Social Security became a separate federal agency
- In the late 1980s, Social Security began to permit parents to get Social Security numbers for their newborn babies. Those newborns will not be working for many years; however, they are Americans; therefore, they have a number.