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 (NRA), a federal agency created under the National Industrial Recovery Act of 1933 and abolished after the Supreme Court held this act unconstitutional in 1935.The agency was modeled on the War Industries Board (WIB), the World War I agency that sought to promote industrial self‐government. A similar system, advocates claimed, could end the “destructive competition” allegedly perpetuating the Great Depression. In 1933, as part of his New Deal, President Franklin Delano Roosevelt secured an emergency two‐year measure suspending the antitrust laws and authorizing government‐recognized industrial organizations to formulate a new regulatory system consisting of codes of fair competition and fair labor practices. Presidential approval made such codes federal law, and where no approvable codes were adopted by industrial sectors, federal authorities were authorized to impose them.

To administer the law, Roosevelt created the NRA under General Hugh Johnson, a former WIB member. A massive propaganda campaign followed, depicting support for the NRA's codes of fair competition as patriotic, and urging citizens to boycott businesses operating without the NRA's official Blue Eagle emblems. Eventually 541 codes were approved, each combining regulation of business practice with a required guarantee of workers' rights to organize and bargain collectively. Despite widespread noncompliance, codification did reduce competition, foster labor and business organization, and largely end child labor. Yet such results failed to bring recovery, and owing to this failure a code structure disproportionately fashioned by big businessmen came under severe criticism from smaller businesses, labor, consumers, and political dissidents, many demanding extensive code revision. In 1934 a new administrative board replaced Johnson, but policy conflicts and deadlocks only worsened. By May 1935, when the Supreme Court ruled that the system involved both an unconstitutional delegation of legislative power to the executive branch and an unconstitutional expansion of the government's power to regulate commerce, it had few supporters left. The NRA that lingered on under a six‐months extension busied itself mostly with writing official histories of the codification experience.

Historians have generally regarded the NRA as a huge mistake, an unfortunate flirtation with corporatism that, in effect, turned policy‐making over to big business with disastrous results. Recently, however, scholars have complicated the picture by using the history of the NRA to illuminate patterns of business organization and disorganization, federal administrative structures and incapacities, and liberal ideas concerning planning. Some have also shown that parts of the code structure reflected the demands of small and medium‐sized rather than big business. In addition, the historical significance of the NRA has become clearer, both as an example of failed corporatism in America and as an unsuccessful experiment that opened the way to more innovative reforms and the new regulatory agencies of the later New Deal.
See also Depressions, Economic; Economic Regulation.

Bibliography

Bernard Bellush , The Failure of the NRA, 1975.
Donald R. Brand , Corporatism and the Rule of Law: A Study of the National Recovery Administration, 1988.

Ellis W. Hawley

National Recovery Administration (NRA), in U.S. history, administrative bureau established under the National Industrial Recovery Act of 1933. In response to President Franklin Delano Roosevelt's congressional message of May 17, 1933, Congress passed the National Industrial Recovery Act, an emergency measure designed to encourage industrial recovery and help combat widespread unemployment. The act called for industrial self-regulation and declared that codes of fair competition—for the protection of consumers, competitors, and employers—were to be drafted for the various industries of the country and were to be subject to public hearings. The administration was empowered to make voluntary agreements dealing with hours of work, rates of pay, and the fixing of prices. Employees were given the right to organize and bargain collectively and could not be required, as a condition of employment, to join or refrain from joining a labor organization. The NRA—by a separate executive order—was put into operation soon after the final approval of the act. President Roosevelt appointed (June, 1933) Hugh S. Johnson as administrator for industrial recovery. Until Mar., 1934, the NRA was engaged chiefly in the drawing up of industrial codes; a blanket code for all industries was adopted, and well over 500 codes of fair practice were adopted for the various industries. Patriotic appeals were made to the public, and firms were asked to display the Blue Eagle, an emblem signifying NRA participation. Attacked in certain quarters as authoritarian, the NRA did not last long enough to fully implement its policies. In May, 1935, in the case of the Schechter Poultry Corp. v. United States the U.S. Supreme Court invalidated the compulsory-code system on the grounds that the NRA improperly delegated legislative powers to the executive and that the provisions of the poultry code did not constitute a regulation of interstate commerce. The NRA was extended in skeletonized form until Jan. 1, 1936. Many labor provisions of the NRA were reenacted in later legislation (see Fair Labor Standards Act and National Labor Relations Board ).

Bibliography: See L. S. Lyon et al., The National Recovery Administration (1933, repr. 1972); C. L. Dearing et al., The ABC of the NRA (1934); C. A. Pearce, NRA Trade Practice Programs (1939).

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.

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