The Railroad Pension Act of 1934 was declared
unconstitutional in Railroad Retirement Board v. Alton Railroad, 295 US 330 (1935). The
Act was to establish a compulsory retirement and pension for all rail carriers subject
to the Interstate Commerce Act. The Supreme Court declared the act as a violation of
the Fifth Amendment due process clause. The Court
stated:
readability="16.682926829268">
That the Act violates the due
process clause is shown by the following
considerations:
(1) All persons who were in carrier service
within one year prior to the passage of the Act (about 146,000) would be entitled under
it to pensions, whether reemployed or not. Among them would be those who had been
discharged for cause, or had been retired, or had resigned to the other gainful
employment, or whose positions had been abolished, or whose employment was
temporary....To place such a burden upon the carriers is arbitrary in the last degree,
and the claim that such largess would promote efficiency or safety in the future
operation of the railroads is without rational support. P. href="http://supreme.justia.com/us/295/330/case.html#348">295 U. S.
348.
The Act
violated the due process clause because all persons who were in service would be
entitled to benefits without paying into the system along with other arbitrary
requirements of the carriers. The Court held that the pension plan was not a proper
action to be regulated by the Interstate Commerce Act.
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