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National Industrial Recovery Act
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The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933, Ch. 90, 48 Stat. 195, formerly codified at 15 U.S.C. sec. 703, was part of President Franklin D. Roosevelt's New Deal. It authorized the President to regulate banks, and attempt to stimulate the United States economy to recover from the Great Depression. To do this it established the National Recovery Administration and the entirely separate Public Works Administration (PWA, which built major construction projects like dams.)
NIRA was strongly supported by many leading businessmen, some of whom had helped draft the legislation.
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Encyclopedia
The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933, Ch. 90, 48 Stat. 195, formerly codified at 15 U.S.C. sec. 703, was part of President Franklin D. Roosevelt's New Deal. It authorized the President to regulate banks, and attempt to stimulate the United States economy to recover from the Great Depression. To do this it established the National Recovery Administration and the entirely separate Public Works Administration (PWA, which built major construction projects like dams.)
Description
The NIRA was strongly supported by many leading businessmen, some of whom had helped draft the legislation. Gerard Swope, head of General Electric, was one of the first champions of this legislation which legalized cartels and funded massive government spending on public works through the PWA. This increased spending was designed to restore prosperity and benefit General Electric and all businesses. Harry Harriman, president of the U.S. Chamber of Commerce and a leading supporter of the legislation, argued that "it constitutes a most important step in our progress towards business rehabilitation." The National Association of Manufacturers opposed passage. After passage a prominent opponent was Henry Ford.
The NIRA was famous for its rules, all of which were written by committees of businessmen from the specific industry involved. Journalist Raymond Clapper reported that between 4,000 and 5,000 business practices were prohibited by NIRA orders that carried the force of law, which were contained in some 3,000 administrative orders running to over 10,000 pages, and supplemented by what Clapper said were "innumerable opinions and directions from national, regional and code boards interpreting and enforcing provisions of the act." There were also "the rules of the code authorities, themselves, each having the force of law and affecting the lives and conduct of millions of persons." Clapper concluded: "It requires no imagination to appreciate the difficulty the business man has in keeping informed of these codes, supplemental codes, code amendments, executive orders, administrative orders, office orders, interpretations, rules, regulations and obiter dicta."
The NIRA was overturned in May 1935 when the Supreme Court of the United States unanimously ruled in the case Schechter Poultry Corp. v. United States (295 U.S. 495, 1935), sometimes called the "sick chicken" case, that the Act infringed upon states' authority, unreasonably stretched the Commerce Clause, and gave legislative powers to the executive branch in violation of the Nondelegation doctrine. Moreover, the opinion fell back on the question of constitutional authority by stating, "extraordinary conditions do not create or enlarge constitutional powers." By then the NRA program had become unpopular and there was no effort to rewrite the legislation.
There is controversy over the effectiveness of this Act. Section 7(a) helped promote the formation of labor unions, and led to the establishment of the National Labor Board. The Act's lack of clarity and enforcement powers regarding unions led to passage of the Wagner Act in 1935, which incorporated Section 7(a). Moreover, some economists consider the act to be downright damaging to the stability of the economy as it weakened antitrust laws and allowed collusion.
Bibliography
- Best; Gary Dean. Pride, Prejudice, and Politics: Roosevelt Versus Recovery, 1933-1938. Praeger Publishers. 1991
- Hawley, Ellis The New Deal and the Problem of Monopoly Princeton UP (1968) the standard intellectual history
- Johnson; Hugh S. The Blue Eagle, from Egg to Earth 1935, memoir by NRA director
- Lyon, Leverett S., Paul T. Homan, Lewis L. Lorwin, George Terborgh, Charles L. Dearing, Leon Marshall C.; The National Recovery Administration: An Analysis and Appraisal The Brookings Institution, 1935
- Ohl, John Kennedy. Hugh S. Johnson and the New Deal (1985), academic biography.
- Schlesinger, Arthur Meier. The Coming of the New Deal (1958) pp 87-176
- Weinstein, Michael 1980, Recovery and Redistribution under the NIRA. New York, NY: North Holland.
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