The purpose of the law and the establishment of National Recovery Administration was to address the crisis in industry by suspending the antitrust laws and allowed the government, businesses and labor to work together in setting up new, voluntary business codes and rules of fair competition. The codes addressed many issues including working hours, productivity, minimum wages, union membership and setting prices. The National Recovery Administration (NRA) ran the program but it failed to meet many goals and was declared unconstitutional in 1935 by the Supreme Court.
Which emblem served as the symbol for the National Recovery Administration? The symbol of the NRA was the Blue Eagle. Businesses were allowed to use the NRA "Blue Eagle" as a symbol that "we do our part" as long as they remained in compliance with code provisions
What did the National Recovery Administration do? The NRA ran the program to oversee that businesses and labor worked in cooperation with the government to implement voluntary business codes and rules of fair competition
Why was the National Recovery Administration unsuccessful? The NRA was unsuccessful because the complex codes and rules were too difficult to administer, business and labor leaders did not support it, price fixing limited competition, industrial production actually fell and the U.S. Supreme Court ruled it unconstitutional
Were there any successes? Yes. The National Recovery Administration (NRA) improved labor conditions in some industries, ended child labor in the textile industry and aided the unionization movement and the right to collective bargaining for minimum wages. It also spread the available hours of work among more employees reducing unemployment. The Public Works Administration (PWA), created by the NIRA law, was also a success and saw the completion of 34,000 construction projects and reduced unemployment levels
National Recovery Administration
The development of the National Recovery Administration (NRA) saw FDR turn his attention to the problems in industry following the measures he had taken to tackle the banking crisis and the difficulties faced by the farmers
Like the farmers, American businesses were suffering due to high production rates and low prices.
The National Industrial Recovery Act of 1933 (NIRA) was passed as an attempt to recover the economy of the United States and continued the government's policy of creating federal agencies to manage the economy and bring about Industrial recovery
The NIRA was emergency legislation, limited to two years. The law enabled the President to suspend large sections of the antitrust laws for designated industries. The antitrust laws apply to virtually all industries and prohibited a variety of practices that restrained trade.
The law not only contained antitrust relief but also included labor provisions and a public works program. The federal agency created under the act was the National Recovery Administration (NRA)
The NRA agency authorized the President's representative to negotiate, approve and administer codes proposed by business and labor industry representatives
The National Recovery Administration (NRA) was under the direction of Hugh S. Johnson, a member of the 'Brain Trust' of Franklin D. Roosevelt. Hugh S. Johnson was an energetic, domineering and outspoken man who pushed his "blue eagle" campaign to reorganize American business in order to raise wages and prices and reduce competition.
The "blue eagle" campaign used a blue eagle as its emblem and "We do our part" as its slogan. Business owners who signed NRA code agreements received signs to display in their businesses and on their packaging, as long as they remained in compliance with the codes .
The "blue eagle" campaign was a powerful PR exercise that urged Americans to purchase goods only from businesses that displayed the "blue eagle" as a sign of patriotism "seal of approval". In this way the NRA, which had limited power to enforce the codes, used public opinion to pressurize companies and businesses to join the scheme.
Price setting codes were adopted but this caused problems as companies were unable to cut prices and increase their market share
The NIRA law contained a section that related directly to the oil industry. This gave the President and the NRA regulatory power over pipelines, interstate and foreign transport of oil and petroleum products. It also allowed for agreements between oil companies.
Codes were established to reduce working hours in order to create more jobs
Codes were put into place that limited factories to two shifts per day, so that work could be across as many different companies as possible.
Section 7a of NIRA stipulated that workers should have the right to organize and bargain collectively through their own representatives and that no one should be banned from joining an independent union. Many Business owners disliked the codes that gave workers such rights.
Other codes established minimum wages. However, employers argued that paying high minimum wages forced them to cover the additional costs by charging higher prices.
Textile magnates announced their intention to abolish child labor in the mills under the new agreed codes
The Public Works Administration (PWA), created by the NIRA law and put public works programs under the control of the federal government to organize the construction of roads, bridges, dams and public buildings such as schools, hospitals and post offices
The PWA completed more than 34,000 projects around the country and was one of the successful elements of the NRA
Many different codes aimed at fair competition were established for various industries. During its short history the NRA agency established 557 basic codes and 208 supplementary codes that affected about 22 million American workers.
It was not unusual for one business to be governed by numerous codes and the complex rules soon became too difficult to administer.
Despite of the success of the Public Works Administration, the NRA continued to lose the support from all sectors.
Industrial production had actually fallen following the establishment of the agency and it became obvious that NRA had failed to meet many of its major goals and objectives.
Three weeks before National Industrial Recovery Act (NIRA)ís reached its two-year expiration date, on May 27, 1935, the Supreme Court unanimously declared that the law was unconstitutional in Schechter Poultry Corp. v. United States, nicknamed the "Sick chicken case". The ruling also struck down labor's right to organize. The Wagner Act, aka the National Labor Relations Act, was passed on July 5, 1935 that guaranteed workers the right to organize Unions and to bargain collectively
In 1936 the controversial National Recovery Administration (NRA) came to an end. Subsequent New Deal legislation incorporated some elements of NIRA, most notably the labor provisions
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