National Industrial Recovery Act 48 Stat. 195 (1933)

AuthorDavid Gordon
Pages1775-1776

Page 1775

The National Industrial Recovery Act (NIRA) was the best-known and, perhaps, in President FRANKLIN D. ROOSEVELT'S words, "the most important and far-reaching legislation ever enacted" by the NEW DEAL Congress. The act was designed to curb unemployment, stimulate business recovery, and end the competitive wars of the Great Depression. By May 1935, over 750 codes covering some twenty-three million people had been created under the NIRA's authority. Even before Roosevelt's inauguration, his "brain trust" had begun to plan a recovery bill. Introduced May 17, 1933, the bill raised questions of constitutionality. Congress passed it, however, and Roosevelt signed it into law on June 16.

The act declared a national emergency and justified congressional action under the COMMERCE CLAUSE and the GENERAL WELFARE CLAUSE. Section 2 established the National Recovery Administration (NRA) to supervise the NIRA, limiting its operation to two years. The heart of the act, section 3, provided for the framing of "codes of fair competition" by private businessmen and trade associations. After meeting certain requirements and obtaining presidential approval, these codes became "standards of fair competition" with the full force of federal law, regulating industrywide prices, wages, and practices. Such an extraordinary DELEGATION OF POWER was unprecedented: it allowed private citizens to draft codes to rule industry and provided, at best, minimal policy guidelines and standards. Violations of the codes "in any transaction in or affecting INTERSTATE or FOREIGN COMMERCE [were] deemed an unfair method of competition in commerce within the meaning of the FEDERAL TRADE COMMISSION ACT." Upon complaint or failure of an industry to formulate a code, the President could establish a compulsory code. Section 7 prescribed three mandatory provisions for every code: availability of COLLECTIVE BARGAINING, employee freedom from coercion to join or refrain from joining a union, and compliance with regulated MAXIMUM HOURS AND MINIMUM WAGES. The various clauses of this section constituted the broadest regulation of wages and hours in American history to that date. The NRA also incorporated in its "blanket code" a provision outlawing child labor in industries without specific codes. Although the NIRA prohibited monopolies and monopolistic practices, it exempted code-covered industries from the antitrust laws. Title II of the NIRA established a Public...

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