By Barbara F. Dyer | Sep 19, 2019
Courtesy of: Barbara Dyer Franklin D. Roosevelt is greeted by onlookers on his way to the train station, after meeting with Winston Churchill.

“The love of money is the root of all evil.”  In today's world there seems to be a great love of money, but the Bible says ”to lay up your treasures in heaven.”  I have heard many people say that money isn't everything, as you never saw anyone's money being hauled behind a hearse. To a working person, the lack of money can be of great worry. “Trust fund” people have different problems. There are some with with no income and who do not want to work and instead use welfare benefits today, and much is given to them, except maybe self respect. It was not always that way.

What lead me to this topic, was thinking about payroll in the Knox Woolen Mill for many years. It is very difficult to imagine but for all those years in business they paid the employees by cash. After the payroll was made up, two men employees from their office, would walk to the bank with two large suitcases. The local bank would fill them with all denominations of cash bills and change. The men would return to the Mill, where small manila envelopes had been prepared for each employee. Then with help, all the envelopes were filled and distributed. I find it difficult to visualize, as it was one of the three largest businesses in town. Checks are also proof for both the employer and employee, but cash is a different story.

During the Great Depression not many household had a checking account. When they received their weekly or monthly paycheck, they would pay their grocery bill, clothing bill, power, electric, telephone or fuel bill. Many stores delivered the groceries and left a slip. If your pay check was for the month, their bookkeeper would sent a total with the groceries and the delivery person would be given the cash. Some people walked to the stores when they received their pay, to pay them in cash. Some of the companies that had an office in Rockland would have a place in Camden where you could leave your cash payment.

Checks were developed to transfer large sums of money over a distance. History has it that John Hancock was one of the first users. They were made of paper that had to travel from the payer's bank to the payee's bank. At the time the Federal Reserve was founded in 1913, the collection of checks was so slow in the United States that the Reserve Banks were given the authority to be intermediary collecting banks, to speed up the process.

Strange as it may seem, the first known bank account originated in Mesopotamia around 1899 B.C. As the Roman Empire expanded, traditional bartering needed to be changed to money. People did not necessarily have goods that were wanted by the other person bartering. The Romans invented checks; that eventually spread through Europe and then to America. While women had the right to open bank accounts in the 1800s, it was really thought of as a masculine environment. So it is said that women hid their money in their stocking.

Many people had a question about the safety of their money in banks. Then in 1929, when the stock market crashed, thousands of banks collapsed. It was then that people started stashing their money at home from the 1930s to World War II. The Great Depression was in the 1930s and jobs were scarce. Most women worked only at home, as men were the breadwinners and needed what jobs were to be had. That is when President Franklin D. Roosevelt started the W.P.A., the C.C.C. and all the other things that would give work to the men.

The United States entered World War II December 7, 1941, because the Japanese bombed Pearl Harbor. Great Britain's Winston Churchill had met in the Atlantic with Roosevelt to convince him that Europe needed our help. Roosevelt knew the United States did not want to go to war, so he held off until Pearl Harbor changed everything.

I graduated that year and went to every store in town to see if I could get a job. I did find one in the Rexall Drug Store and earned $6 per week for a six day week. They were eight-hour days. The Shipyard started up in 1941, and in 1942 the Camden Herald carried a full page advertisement “that they would even hire women.” The young men had gone to war and there were not enough older men to do the work of building wooden vessels for the contracts for the United States and some for England. Oh yes, I thought, I could do that and maybe be a painter. The personnel manager laughed his head off and said no. I reminded him of the advertisement. He said that he would hire women, but not me, as he wanted me in the payroll office. I did not want to work in an office, but must have liked it as I remained for 44 years. My pay, at that time, was $35 a week. I studied “office stuff” and ended up as Office Manger and Accountant.

So many deductions were taken from your gross pay, but that all happened gradually here and is still taking quite a bit of one's pay.

Social Security numbers were created in 1936 for the purpose of tracking the history of U.S. workers to determine Social Security benefits. They are made up of nine digits. The first three are assigned to a geographical region. The second two numbers are group numbers written within your state. The last four numbers are a numerical series within the group number of your state. At that time, no one dreamed it would become a universal identifier.

The very first beneficiary of Social Security benefits was Ida May Fuller. She filed her retirement claim Nov. 4, 1939. She had worked only three years and had paid $24.75 in taxes to the Social Security program. Her first check was for $22.54 and as she lived to be 100 years old, she collected a total of $22,888.92.

Because of the “baby boomer” generation, the number of beneficiaries in the future will be greater than the number of covered workers. When Roosevelt signed it into law in 1935, average life expectancy was 64. Today we live 14 years longer, retire three years earlier and spend 20 years in retirement; they predict that “the well will run dry” by 2034.

The beginning of the Federal Income Tax is the 16th Amendment, passed by Congress in 1909, but ratified in 1913. Actually, during the Civil War, Congress passed the Revenue Tax of 1861 to help pay expenses. That was repealed 10 years later, but in 1894 Congress enacted a flat rate Federal Tax, which was declared unconstitutional the following year by the Supreme Court. The 16th amendment removed the objection. The IRS Restructuring and Reform Act of 1998 is the most comprehensive reorganization in half a century.

Maine's personal income tax, the state income tax, is another deduction from your paycheck and I do not believe it has changed much. But wages from 1929 to the present day have changed drastically. But so have prices of goods.

I am not competing with Bloomberg or Wall Street gurus, but just giving you a simple picture of money in “our neck of the woods.”


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Comments (1)
Posted by: Mary A McKeever | Sep 19, 2019 17:04

A very accurate accounting of the beginning and the here and now. Thanks Barbara for this vital information. A lot of our young people really do not, I believe, understand the process. Now the drain is with a lot of young people who do not save for retirement and actually live at home far longer than in the past. But, alas, that will be for the future fathers of America to solve.

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