NATIONAL RECOVERY ADMINISTRATION

NATIONAL RECOVERY ADMINISTRATION (NRA). The National Recovery Administration was the most ambitious effort ever to enact federal planning of the economy during peacetime. As such, it was the culmination of interest in planning that arose during the Progressive Era and climaxed during World War I when the War Industries Board (WIB) mobilized agriculture, industry, and transportation for the war effort. After the wartime planning ended, the urge to have expert, cooperative management of the economy, rather than competition held in check by antitrust legislation, remained strong. In the private sector it resulted in the creation of management and labor councils in several industries, the rise of organizations dedicated to planned conservation of natural resources, and expressions of admiration for state planning in revolutionary nations, especially Fascist Italy and Soviet Russia. Within the federal government, Herbert Hoover focused his work as secretary of commerce and then as president on fostering voluntary association between industry and government as a way to establish fair and efficient business practices.

Franklin Roosevelt also developed an interest in planning during his government service in World War I and was quick during his 1932 campaign for the presidency to endorse the recovery plan of the president of General Electric, Gerard Swope, to set up trade associations under the direction of the Federal Trade Commission and a national workmen's compensation law to provide a financial cushion for unemployed, disabled, and retired workers. After taking office Roosevelt summoned Swope to Albany for a talk and listened attentively to Rexford Tugwell and others in his "brains trust" who favored measures that would go beyond the self-regulation urged by Swope to outright government coordination of the economy. Out of those discussions arose the design for the National Industrial Recovery Act (NIRA), which was voted into law by Congress on 16 June 1933.

The NIRA and its implementing agency, the NRA, struck a balance between industrial self-regulation and governmental planning in an effort to serve the interests of all parties. The act authorized councils composed of representatives from industry, government, and consumer groups to draw up codes of fair wages and prices for each industry. To foster cooperative integration of the economy, rather than competition, the act suspended antitrust laws for those whose codes were accepted by the government. A group offering a code had to be truly representative of the trade or industry involved, and no code could be designed to promote monopoly or oppress or eliminate small enterprises. Every code also had to provide for maximum hours and minimum wages and abide by section 7a, guaranteeing freedom for workers to join their own unions. Within a year nearly all American industry was codified.

The NRA failed to live up to hopes that it would fundamentally reform the economy and lead to recovery with full employment. One problem was that the chief administrator, Hugh Johnson, chosen because of his energetic service in the WIB during World War I, proved to be unstable and failed to inspire cooperation. As Johnson engaged in promotional campaigns, feuds, and drinking bouts, businessmen exerted their advantage within the councils. They knew their industries' operations far better than government officials and consumer advocates and were well organized to advance self-interest. As a result, the 541 codes eventually completed tended to maintain high prices, low wages, and long hours. Consumer desire for more affordable goods was thwarted, as were plans to reduce unemployment by spreading the work around through shorter hours. Workers also soured on the promises of section 7a as NRA officials repeatedly allowed industries to form company unions, rather than deal with independent labor organizations.

The failure of the NRA dashed progressive hopes for a planned economy. Yet it did demonstrate that active governmental involvement in the running of the economy was possible. In particular, the NRA established the principle of maximum hours and minimum wages on a national basis, abolished child labor, and made collective bargaining a national policy, setting the stage for the transformation of organized labor.

By the time the authorization of the NIRA approached its end in early 1935, public support had dwindled, and the chances for renewal in Congress were in doubt. The Supreme Court then delivered the death blow in the case of Schechter Poultry Corporation v. United States (1935), which ruled that NRA codes were an unconstitutional delegation of legislative power and further violated the Constitution by regulating commerce within sovereign states. Although Congress acceded to the president's wish for renewal, the NRA had lost its powers and was terminated on 1 January 1936.

BIBLIOGRAPHY

Brand, Donald R. Corporatism and the Rule of Law: A Study of the National Recovery Administration. Ithaca, N.Y.: Cornell University Press, 1988.

Hawley, Ellis W. The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence. Princeton, N.J.: Princeton University Press, 1966. The classic work on the importance of the NRA to New Deal policy.

Himmelberg, Robert F. The Origins of the National Recovery Administration. New York: Fordham University Press, 1976.

AlanLawson

See alsoNew Deal .

National Recovery Administration

Photograph

By: The Associated Press

Date: 1933

Source: AP/Wide World Photos.

About the Photographer: The Associated Press is a worldwide news agency based in New York.

INTRODUCTION

The National Recovery Administration (NRA), created when President Franklin D. Roosevelt (1882–1945) signed the National Industrial Recovery Act on June 16, 1933, proved to be one of the most controversial parts of the New Deal. Headed by General Hugh S. Johnson (1882–1942), the NRA aimed to stabilize businesses by reducing competition through the implementation of codes that set wages and prices. It also set out to generate more purchasing power by providing jobs, defining labor standards, and raising wages.

The NRA initially concentrated on those industries that were either strong supporters of industrial self-government or sufficiently organized through trade associations to permit quick codification. The code for the cotton textile industry was the first to be completed and approved in July 1933. It was typical of other industry codes in that it provided for collective bargaining, reduced working days, established minimum wages, and set strong production controls. Business owners possessed a wealth of information about their industries and they generally dominated government forces in the code-making process.

Johnson mobilized the nation behind the NRA with a campaign reminiscent of the war rallies of World War I. Radio speakers, motorcades, torchlight parades, mass rallies, and a nationwide speaking tour by Johnson all trumpeted the benefits of the program. Business owners and the public quickly enlisted in the NRA's army of Depression fighters. The NRA Blue Eagle appeared on posters, billboards, flags, movie screens, magazines, newspapers, and numerous products. Beauty contestants had the Blue Eagle stamped on their thighs and, in Philadelphia, fans cheered a new professional football team dubbed the Eagles after the NRA's icon. This national fervor helped quicken the pace of NRA code drafting. Consumers were asked to patronize only those businesses displaying the Blue Eagle.

PRIMARY SOURCE

NATIONAL RECOVERY ADMINISTRATION

See primary source image.

SIGNIFICANCE

The NRA only enjoyed popularity for a short period of time. By 1934, signs of economic recovery and a new confidence about the imminent end of the Depression inspired hostility toward the mass of NRA regulations. Since spokespeople for consumers had been largely shut out during the creation of NRA codes and workers received comparatively little in the way of wages and better working hours, complaints were common that the NRA only benefited businesses.

The NRA had other problems as well. Charges mounted that the largest companies dominated the code authorities and that price-fixing robbed small producers of the chance to compete. A congressional investigating committee substantiated some of these charges. Limiting production had discouraged investment, and not all workers were covered by NRA wage codes. The NRA excluded agricultural and domestic workers, thereby excluding three out of every four African Americans from the direct benefits of the program. Lastly, some of the provisions of the NRA appeared bizarre, such as the regulation restricting the number of times that a stripper could remove her clothes each day. When the Supreme Court unanimously struck down the NRA on May 27, 1935, declaring it unconstitutional for delegating legislative power to the president and for interfering with intrastate commerce, few mourned its passing.

The NRA experiment was generally a failure, but it left an enduring legacy. Workers had been seeking a forty-hour work week since the 1870s, and child labor had been under attack for an equally long period of time. The NRA set a forty-hour work week and standardized minimum weekly wages. It also outlawed child labor practices, ending a practice that had kept children out of school and mired in poverty as adults. Additionally, the NRA's endorsement of collective bargaining spurred the growth of unions, turning organized labor into one of the major political and economic forces of the twentieth century.

FURTHER RESOURCES

Books

Bellush, Bernard. The Failure of the NRA. New York: W. W. Norton, 1975.

Brand, Donald R. Corporatism and the Rule of Law. Ithaca, N.Y.: Cornell University Press, 1988.

Himmelberg, Robert F. The Origins of the National Recovery Administration: Business, Government, and the Trade Association Issue, 1921–33. New York: Fordham University Press, 1976.

NATIONAL RECOVERY ADMINISTRATION

The National Recovery Administration (NRA) developed out of President Franklin D. Roosevelt's (1933–1945) New Deal initiative. The NRA was created under the National Industrial Recovery Act (NIRA) in 1933. The chief provision of the act was the creation of the National Recovery Administration. Modeled after the War Industries Board, the NRA oversaw the implementation of several core initiatives set out in the Recovery Act.

Among the initiatives was the establishment of business codes of fair competition, which were standards accepted by businesses and industries. The codes included provisions for minimum wages, voluntary union participation (neither encouraging nor discouraging union membership), and shorter work hours. The business codes regarding union participation resulted in a sharp increase in union membership. For instance, the United Mine Workers experienced a jump in membership from 100,000 to 400,000 less than a year after the NIRA became law. Businesses who followed the codes displayed a blue eagle and the motto "We do our part" to advertise their participation to the public.

Despite its strong start, the NRA began to lose public support. The business codes sometimes conflicted with one another and were difficult to comply with. They tended to raise prices and limit production, which, during the hard times of the Great Depression (1929–1939), was the opposite of what the public wanted. In addition enforcement of the business codes was limited.

In 1936 the National Recovery Administration ceased to exist. It ended activity after the United States Supreme Court ruled that the National Industrial Recovery Act, which gave it birth, was unconstitutional on the grounds that the act overstepped the legislative and commercial powers of the federal government.

See also: Great Depression, National Industrial Recovery Act, New Deal, Franklin D. Roosevelt, War Industries Board

we do our part.

motto announcing adherence to the nra's business codes

NATIONAL RECOVERY ADMINISTRATION

In 1933, the United States was in the throes of a severe economic depression. Unemployment was widespread, and the economic system was in chaos. An emergency measure was needed to alleviate the situation, and the members of President franklin delano roosevelt's new deal administration attempted to ease the problem with the passage of the national industrial recovery act (NIRA) (48 Stat. 195).

The chief provision of the act was the establishment of business codes to be enforced nationally. The codes included rules regarding fair competition, discontinuance of antitrust regulations for a two-year period, voluntary participation in unions, and establishment of shorter hours and better wages.

In June 1933, the National Recovery Administration (NRA) was created to supervise the execution of the NIRA under the direction of Hugh S. Johnson. During its first year, the NRA worked on the industrial codes; all participating businesses displayed a blue eagle, a sign of patriotism as well as acceptance of the program.

Many people regarded the NRA as too powerful, and in 1935 the U.S. Supreme Court declared the codification system of the NRA unconstitutional in schechter poultry corp. v. united states, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570, due to the incorrect granting of legislative authority to the executive branch.

In 1936 the controversial NRA came to an end. During its brief existence, employment was stimulated, child labor was prohibited, and labor organization was encouraged.

further readings

Bellush, Bernard. 1975. The Failure of the NRA. New York: Norton.

Himmelberg, Robert F. 1976. The Origins of the National Recovery Administration: Business, Government, and the Trade Association Issue, 1921–1933. New York: Fordham Univ. Press.