The National Industrial Recovery Act was a major initiative of the new Roosevelt Administration for coping with the Great Depression, designed to “encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes”[1]. It was signed into law by the president on June 16, 1933.
The National Industrial Recovery Act was a two-pronged effort to stimulate economic recovery and ameliorate unemployment. Title I of the act instituted codes of fair competition for a range of basic industries and Title II created a public works program, eventually called the “Public Works Administration” (PWA). The National Recovery Administration (NRA) was established to oversee the creation of the industry codes and Hugh Johnson was appointed head administrator [2].
The code provisions of the act were controversial because they created industrial alliances and “effectively fixed prices and wages, established production quotas, and imposed restrictions on entry of other companies into the alliances.” Participants in the code program placed Blue Eagle signs with red “N.R.A.” letters at their places of business [3].
Title I of the act was probably the least successful of all New Deal programs. It was thought by many to be too intrusive in the nation’s economic affairs. Lawsuits were brought against the act for restraint of trade and on May 27, 1935, the U.S. Supreme Court struck down Section 3 of Title I (“Codes of Fair Competition”) as unconstitutional [4]. Unlike the Agricultural Adjustment Act, which was also rejected by the court, the National Industrial Recovery Act was never reintroduced.
An enduring legacy of the act, however, was its support for collective bargaining rights (Title I, Section 7(a)), which was reaffirmed in the National Labor Relations Act of 1935. Such support allowed labor organizing to flourish over the following years. (See our summary of the NLRA, also on this web page.)
Title II of the act was much more successful. The PWA helped fund tens of thousands infrastructure projects across the nation, many of which we still utilize today. (See our summary of the PWA, also on this web page.)
Despite its flaws, the National Industrial Recovery Act is a good example of President Roosevelt’s willingness to experiment with different policies to get the nation out of depression. A little over a year before he signed the act, Roosevelt had said, “The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something” [5]. There was no fixed blueprint for the New Deal, but an assemblage of strategies rolled out over several years.
Sources
(1) “Transcript of National Industrial Recovery Act,” Our Documents, https://www.ourdocuments.gov/doc.php?flash=false&doc=66&page=transcript, accessed April 9, 2015. (2) “National Industrial Recovery Act (1933),” Our Documents, https://www.ourdocuments.gov/doc.php?flash=true&doc=66, accessed April 9, 2015. (3) Ibid. (4) Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935), Oyez, https://www.oyez.org/cases/1901-1939/1934/1934_854, accessed April 9, 2015. (5) “Address at Oglethorpe University in Atlanta, Georgia, May 22, 1932,” American Presidency Project, University of California – Santa Barbara, https://www.presidency.ucsb.edu/ws/?pid=88410, accessed April 9, 2015.
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