Railroad Retirement Board (1934)

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

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

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

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

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

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

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

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

SOURCES

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

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