In 1933, the United States was in the throes of a severe economic depression. Unemployment was widespread, and the economic system was in chaos. An emergency measure was needed to alleviate the situation, and the members of President FRANKLIN DELANO ROOSEVELT's NEW DEAL administration attempted to ease the problem with the passage of the NATIONAL INDUSTRIAL RECOVERY ACT (NIRA) (48 Stat. 195).
The chief provision of the act was the establishment of business codes to be enforced nationally. The codes included rules regarding fair competition, discontinuance of antitrust regulations for a two-year period, voluntary participation in unions, and establishment of shorter hours and better wages.
In June 1933, the National Recovery Administration (NRA) was created to supervise the execution of the NIRA under the direction of Hugh S. Johnson. During its first year, the NRA worked on the industrial codes; all participating
businesses displayed a blue eagle, a sign of patriotism as well as acceptance of the program.
Many people regarded the NRA as too powerful, and in 1935 the U.S. Supreme Court declared the CODIFICATION system of the NRA unconstitutional in SCHECHTER POULTRY CORP. V. UNITED STATES, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570, due to the incorrect granting of legislative authority to the EXECUTIVE BRANCH.
In 1936 the controversial NRA came to an end. During its brief existence, employment was stimulated, child labor was prohibited, and labor organization was encouraged.