[11][67] As a consequence, NIRA collapsed due to failure of leadership and confusion about its goals. In addition, the National Labor Board was established under the auspices of the NRA to implement the collective bargaining provisions of the Act. [3][6][20] President Herbert Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values. The Act was implemented by the NRA and the Public Works Administration (PWA). The protections of the Act led to a massive wave of union organizing punctuated by employer and union violence, general strikes, and recognition strikes. [9][25] Many leading businessmen—including Gerard Swope (head of General Electric), Charles M. Schwab (chairman of Bethlehem Steel Corporation), E. H. Harriman (chairman of the Union Pacific Railroad), and Henry I. Harriman, president of the U.S. Chamber of Commerce—helped draft the legislation. The NRA attempted to revive industry by raising wages, reducing work hours and reining in unbridled competition. [18], The leadership of the Public Works Authority was torn over the new agency's mission. [39] Section 9(b) permitted the executive to take over any oil pipeline company, subsidiary, or business if the parent company was found in violation of the Act. Ickes. The constitutionality of the NIRA was tested in Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). It supplies no standards for any trade, industry, or activity. [23][24] Roosevelt, himself the former head of a trade association, believed that government promotion of "self-organization" by trade associations was the least-intrusive and yet most effective method for achieving national planning and economic improvement. [6] Roosevelt himself shifted his views on the best way to achieve economic recovery, and began a new legislative program (known as the "Second New Deal") in 1935. National Industrial Recovery Act. The industry was almost entirely centered on New York City. [38] The National Recovery Administration (NRA) to regulate trade and stimulate competition. [6][10] Very large numbers of regulations were generated under the authority granted to the NRA by the Act,[11][12] which led to a significant loss of political support for Roosevelt and the New Deal. Senators William E. Borah, Burton K. Wheeler, and Hugo Black opposed any relaxation of the Sherman Antitrust Act, arguing that this would exacerbate existing severe economic inequality and concentrate wealth in the hands of the rich (a severe problem which many economists at the time believed was one of the causes of the Great Depression). But the argument necessarily stops short of an attempt to justify action which lies outside the sphere of constitutional authority. Prior to this act, the courts had upheld the right of employers to go to great lengths to prevent the formation of unions. Title II also provided funding for the Act. National Recovery Administration (NRA), U.S. government agency established by Pres. She focused on being an excellent hostess. [15] Business support for national planning and government intervention was very strong in 1933, but had collapsed by mid-1934. [66] Others point out that the cartels created by the Act were inherently unstable (as all cartels are), and that the effect on prices was minimal because the codes collapsed so quickly.[67][68]. Daugherty, Carroll R.; de Chazeau, Melvin G.; and Stratton, Samuel S. Dubofsky, Melvyn and Dulles, Foster Rhea. Sections in Title I of the NIRA are numbered 1, 2, 3, etc. National Industrial Recovery Act (NIRA) Signed into law on June 16, 1933 by President Franklin Delano Roosevelt, this Act was administered in part by the National Recovery Administration (NRA), which was established after the passage of NIRA as an independent agency by Executive Order (EO) 6173. Legendre-Soule Professor of Business Ethics, Loyola University, New Orleans. For that legislative undertaking, section 3 sets up no standards, aside from the statement of the general aims of rehabilitation, correction, and expansion described in section 1. [3] Although Donald Richberg and others felt the government's case in Schechter was not a strong one, the Schechters were determined to appeal their conviction. His laissez-faire views appeared to be shared by the Secretary of the Treasury Andrew W. Title II established the Public Works Administration, outlined the projects and funding opportunities it could engage in. This form of the statute, in slightly modified form, still exists today at 18 U.S.C. One is that NIRA's industry codes interfered with capital markets, inhibiting economic recovery. Hugh S. Johnson, Raymond Moley, Donald Richberg, Rexford Tugwell, Jerome Frank, and Bernard Baruch—key Roosevelt advisors—believed that unrestrained competition had helped cause the Great Depression and that government had a critical role to play through national planning, limited regulation, the fostering of trade associations, support for "fair" trade practices, and support for "democratization of the workplace" (a standard work week, shorter working hours, and better working conditions). [70] Without the support of industry, the Act could never have performed as it was intended. In the Senate, Robert F. Wagner, Edward P. Costigan, and Robert M. La Follette, Jr. were promoting public works legislation, and Hugo Black was pushing short-work-week legislation. [2] The National Recovery Administration (NRA) portion was widely hailed in 1933, but by 1934 business' opinion of the act had soured. [11] Between 4,000 and 5,000 business practices were prohibited, some 3,000 administrative orders running to over 10,000 pages promulgated, and thousands of opinions and guides from national, regional, and local code boards interpreted and enforced the Act. Women benefited from this shift to unionization as well. The National Industrial Recovery Act (NIRA) of 1933 (48 Stat. Historian Alan Brinkley stated that by 1935 the NIRA was a "woeful failure, even a political embarrassment." John T. Woolley and Gerhard Peters, The American Presidency Project. 73–394, 48 Stat. Die NRA wurde durch den National Industrial Recovery Act (NIRA) geschaffen. Omissions? ", Cole, Harold L. and Ohanian, Lee E. "How Government Prolonged the Depression. [62][65] But other economists disagree, pointing to far more important monetary, budgetary, and tax policies as contributors to the continuation of the Great Depression. The National Industrial Recovery Act (NIRA) was an unusual experiment in U.S. history, as it suspended antitrust laws and supported an alliance of industries. [3][9] Some work on an industrial relief bill had been done in the weeks following Roosevelt's election, but much of this was in the nature of talk and the exchange of ideas rather than legislative research and drafting. [33] The heart of the Act was Title I, Section 3, which permitted trade or industrial associations to seek presidential approval of codes of fair competition (so long as such codes did not promote monopolies or provide unfair competition against small businesses) and provided for enforcement of these codes. The Act regulates the industry and permit cartels and monopolies in an attempt to stimulate economic recovery. Roosevelt wollte damit den Kurs strikter Haushaltskonsolidierung unter Herbert Hoover korrigieren, der nach Ansicht Roosevelts die Massenarbeitslosigkeit verschärft hatte. [58] The Court dismissed with a bare paragraph the government's ability to regulate wages and hours. [3][6][48] NRA and PWA reported to different cabinet agencies, making coordination difficult, and PWA money flowed so slowly into the economy that NRA proved to be the more important agency by far. The Act purposefully brought together competing for interests (labor and business, big business and small business, etc.) "Some Legal Aspects of the National Industrial Recovery Act. c. She was an important advisor on foreign policy. The act was written by Senator Robert F. Wagner, passed by the 74th United States Congress, and signed into law by President Franklin D. Roosevelt . [34] Title I, Section 5 exempted the codes from the federal antitrust laws.[35][36]. [9][20][28][29] Wagner defended the bill, arguing that the bill's promotion of codes of fair trade practices would help create progressive standards for wages, hours, and working conditions, and eliminate sweatshops and child labor. ", Pennock, Pamela. [49], Implementation of Section 7(a) of the NIRA proved immensely problematic as well. Under the new poultry code, the Schechter brothers were indi… NIRA authorized the National Recovery Administration to help businesses self-regulate and to promote fair trade practices. Among the projects it funded between 1935 and 1939 are: the USS Yorktown; USS Enterprise; the 30th Street railroad station in Philadelphia, Pennsylvania; the Triborough Bridge; the port of Brownsville; Grand Coulee Dam; Boulder Dam; Fort Peck Dam; Bonneville Dam; and the Overseas Highway connecting Key West, Florida, with the mainland. and Mitgang, Herbert. ", Collins, Robert M. "Positive Business Responses to the New Deal: The Roots of the Committee for Economic Development, 1933–1942.". A third major criticism of the Act is that it was poorly administered. ", This was not, however, unexpected: Senator, Fifth Amendment to the United States Constitution, "The Goal of the National Recovery Act: A Statement by the President on Signing It - June 16, 1933", "Franklin D. Roosevelt: "Message to Congress Recommending Enactment of the National Industrial Recovery Act.," May 17, 1933", "Executive Order 9357 – Transferring the Functions of the Public Works Administration to the Federal Works Agency." On April 13, 1934, the President had approved the "Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and about the City of New York. The National Recovery Administration (NRA) was a prime agency established by U.S. president Franklin D. Roosevelt (FDR) in 1933. [3][10][23], NIRA, as implemented by the NRA, became notorious for generating large numbers of regulations. b. The National Industrial Recovery Act had two major titles. [3][12] Senator Bennett Champ Clark introduced an amendment to weaken Section 7(a), but Wagner and Senator George W. Norris led the successful opposition to the change. [14][63] One of the economic effects of monopoly and cartels is higher prices—this was seen as necessary because the severe deflation of 1929–33 had depressed prices 20% and more. In view of the scope of that broad declaration and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. Employees were given the right to organize unions and could not be required, as a condition of employment, to join or to refrain from joining a labour organization. [73] But at least one study has shown no effect whatsoever.[74]. Roosevelt was convinced that federal activism was needed to reverse the country's economic decline. [17] At the outset, NRA Administrator Hugh Johnson naïvely believed that Section 7(a) would be self-enforcing, but he quickly learned otherwise. [11][13][14][62] Even the National Recovery Review Board, established by President Roosevelt in March 1934 to review the performance of the NIRA, concluded that the Act hindered economic growth by promoting cartels and monopolies. [75], In 1934, at the request of the Secretary Ickes, who wished to use the statute criminalizing making false statements to enforce Section 9(c) of the NIRA against producers of "hot oil", oil produced in violation of production restrictions established pursuant to the NIRA, Congress passed Pub.L. President Roosevelt sought re-authorization of NIRA on February 20, 1935. While it was ultimately ruled unconstitutional by the U.S. Supreme Court, several of its labor provisions formed the basis of subsequent regulations. 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