The National Industrial Recovery Act (NIRA), signed by President Franklin D. Roosevelt on June 16, 1933, was the central industrial recovery measure of the First New Deal of 1933. Though unsuccessful in lifting the economy out of the Great Depression, it did help to energize labor union organization, led to a reduction in child labor, and eventually underwrote major public works projects that strengthened the nation’s infrastructure.
The legislation had multiple origins and many authors. The War Industries Board of World War I was a significant precursor. The NIRA drew on ideas from businessmen on how to avoid excessive competition and ensure stability by agreeing on production limits, prices, and other matters. Some labor leaders saw in such arrangements a way to safeguard wages and employment. Roosevelt’s Brain Trust had advocated planning and controls involving business to address the depression. General Hugh S. Johnson, a former member of the War Industries Board, and New York senator Robert F. Wagner, a liberal and an advocate of labor, played an especially important role in drafting the final legislation. Johnson felt that destructive competition was a central factor in the collapse of the economy and supported the principle of business self-regulation, while Wagner insisted upon provisions for labor’s rights.
Title I of the NIRA authorized business and government to create codes of fair competition regarding production quotas, prices, wages, and labor standards in an attempt to stabilize the market and prevent unfair competition. It also created the National Recovery Administration (NRA), which would be led by Hugh Johnson and would oversee the formation and administration of the codes. The NIRA gave participating businesses exemption from antitrust laws and the NRA had power to license corporations. Section 7(a) of the NIRA provided for the right of workers to organize and bargain collectively as well as authorizing establishing maximum hours and minimum wages.
Title II of the NIRA established the Public Works Administration (PWA) and appropriated $3.3 billion dollars to fund the agency. Headed by Harold L. Ickes, the PWA was to stimulate the economy by means of public works projects and provide employment opportunities on the projects. The NIRA also included taxation on capital stock and excess profits to help finance public works spending.
The NIRA failed to bring about economic recovery. Especially at first, the PWA spent money too slowly to make much difference, and the NRA codes were unable to stimulate investment or expansion. The NRA proved increasingly unpopular as well as unsuccessful. Many businessmen resented government regulations, labor representatives were unhappy about the lack of enforcement of Section 7(a), consumers complained about high prices, and defenders of small business claimed that the codes promoted monopoly. Troubles for the NIRA culminated with the unanimous Supreme Court decision of May 1935 in ScHECHTER Poultry Corporation v. United States declaring the NIRA unconstitutional. Despite its denouement, however, the NIRA was one of the major New Deal measures.
Further reading: Ellis W. Hawley, The New Deal and the Problem of Monopoly (Princeton, N. J.: Princeton University Press, 1966); Robert F. Himmelberg, The Origins of the National Recovery Administration: Business, Government, and the Trade Association Issue, 1921-1933 (New York: Fordham University Press, 1976).
—Courtney D. Mattingly
World History
