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What is the National Recovery Administration?

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  • Written By: Jim B.
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The National Recovery Administration was a U.S. bureau created by the National Industrial Recovery Act in 1933. Spurred on by the leadership of President Franklin Delano Roosevelt, Congress passed the National Industrial Recovery Act as a way to address industrial stagnation and high unemployment rates at the height of the Great Depression. As the administrative body in charge of enforcing the measures contained in the legislation, the National Recovery Administration, or NRA, set about establishing a series of codes dealing with industrial self-regulation and competition and enticed businesses to comply. A U.S. Supreme Court ruling in 1935 that accused the NRA of overstepping its boundaries led to the end of the bureau in 1936.

Proposed by President Roosevelt as a way to ensure fairness in industry for both businesses and consumers, Congress passed the National Industrial Recovery Act in 1933. The act stated that codes of conduct would be established for various industries, and adherence to these codes would allow industries to be exempt from antitrust laws. Price levels were to be set to help consumers and employee conditions were to be improved in terms of pay rates and hours worked.

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As the enactor and watchdog of these codes, the National Recovery Administration was empowered to contact leaders of industry and make sure they complied. President Roosevelt named Hugh S. Johnson as the head of the new agency, and the NRA was depicted as a patriotic endeavor. Businesses that complied were encouraged to display the Blue Eagle, the emblem for the NRA, to prove participation and engender confidence with consumers. Those businesses that failed to comply were considered to be untrustworthy and lacking patriotism.

Under the auspices of the National Recovery Administration, more than 500 codes of fair practice were drawn up for various industries. Critics quickly harped on the fact that the NRA lacked the authority, under the Recovery Act, to properly enforce the codes, while others claimed that the antitrust exemptions would lead to monopolies. Workers did benefit from the act though, as it gave them the power to collectively bargain for better conditions and allowed them many concessions as part of the various codes.

In 1935, a challenge to the National Recovery Administration arose in the form of a Supreme Court case involving a poultry corporation that was accused of violating one of the codes. The Supreme Court ruled in favor of the corporation, concluding that the act was legislating illegally and trespassing on the authority of state laws. Weakened by this decision, the NRA dissipated in early 1936, although many of its labor provisions would be validated by later legislation.

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