The Great Depression, the New Deal, and World War II 225Hard on the heels of this Emergency Relief Act came the Soil Con-
servation Act (April 27 ); the Rural Electrifi cation Administration
(May 11 ); the National Youth Administration (June 26 ) established by
executive order granted by the Emergency Relief Act; and perhaps
most important of all, the Social Security Act (August 14 ). The Social
Security Act established a federal- state system of unemployment com-
pensation and old age pensions, thereby transferring to the federal
government functions that once had been the responsibility of families
and of state and local governments. It imposed a tax on employees’
wages and employers’ payrolls beginning on January 1 , 1937 , but would
not begin to pay retirement benefi ts until 1942 , a date later advanced to
1940 by amendments passed in 1939. But it failed to provide coverage
for domestic servants, agricultural workers, public workers, and cer-
tain professionals. Later the act was amended to cover many more
employees.
Also important was passage on August 23 of the Banking Act of
1935 , the only fundamental revision of the Federal Reserve Act since its
inception. By this act a new board of governors had direct and com-
plete control over interest rates, reserve requirements, and the open
market operations of the Federal Reserve banks.
Earlier, on July 5 , the National Labor Relations Act, better known
as the Wagner Act after one of its sponsors, Senator Robert Wagner of
New York, created a board with authority to oversee collective bargain-
ing by labor and management. It placed government in support of the
right of labor to bargain collectively, and it required employers to per-
mit the peaceful unionization of their companies. The Wagner Act
and the Social Security Act were probably the most radical of the bills
of the Second New Deal. In addition, the Holding Company Act (Au-
gust 28 ) broke up the large electric and gas holding companies and
placed the financial operations of these companies under the supervi-
sion of the Security and Exchange Commission (SEC). The legislation
ultimately abolished holding companies.
Despite FDR’s numerous victories in Congress, by the close of his
first term as President he faced growing opposition from conservative
Democrats and Republicans. He also, unexpectedly, faced the opposi-
tion of the Supreme Court. On “Black Friday,” May 27 , 1935 , in a
unanimous decision, the court struck down the industry code provisions