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The National Industrial Recovery Act

designed to promote economic recovery and reform, encourage collective bargaining for unions, establish maximum work hours and minimum wages, and forbid child labor

NIRA was signed into law by President Franklin Delano Roosevelt on June 16, 1933. Title I of the Act was devoted to industrial recovery. It authorized the establishment of industrial codes of fair competition, guaranteed trade union rights, permitted the regulation of working standards, and regulated the price of certain petroleum products and their transportation. Title II of the Act established the Public Works Administration (PWA). The Act was implemented by the National Recovery Administration (NRA) and the Public Works Administration.

The NIRA sanctioned, supported, and, in some cases, enforced an alliance of industries. Antitrust laws were suspended, and companies were required to write industry-wide "codes of fair competition" that effectively fixed prices and wages, established production quotas, and imposed restrictions on entry of other companies into the alliances. The act further called for industrial self-regulation and declared that codes of fair competition -- for the protection of consumers, competitors, and employers -- were to be drafted for the various industries of the country and were to be subject to public hearings. Employees were given the right to organize and bargain collectively and could not be required, as a condition of employment, to either join or refrain from joining a labor organization. Those businesses that "voluntarily" abided by the codes established by their respective industries were allowed to display the poster below, and consumers were encouraged to only do business with establishments that displayed their industry compliance.

NRA poster

Sixteen specific pieces of legislation came out of the NIRA in 1933, including: Emergency Banking Act, Civilian Conservation Corps, Federal Emergency Relief Act, Emergency Farm Mortgage Act, Home Owner's Loan Act, Agricultural Adjustment Act, Tennessee Valley Authority, and abandonment of the gold standard.

Title I of the NIRA was ruled unconstitutional by the U.S. Supreme Court on May 27, 1935, as a result of A.L.A. Schechter Poultry Corp. v. United States. The case began when Schechter was cited for disobeying requirements of the "Code of Fair Competition for the Live Poultry of the Metropolitan Area in and about the City of New York" by failing to observe provisions for fixing minimum wages and maximum hours for employees, allowing customers to select individual chickens, selling unfit chickens, dealing with slaughterhouses and dealers not licensed under code, and making false reports. In its ruling, the Court said that the NIRA provisions mandating industry-wide codes was not a valid exercise of federal power, that the Act gave the President too much control, and that Congress did not have the authority to tell states how much their minimum wages and maximum work hours could be. Although the Supreme Court's ruling effectively disbanded the NRA, it had already by then been deemed responsible for four million people finding work.


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President Franklin Delano Roosevelt

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This page was last updated on December 09, 2018.