National Recovery Administration: Difference between revisions

Revision as of 14:05, 2 May 2007

NRA Blue Eagle stamps

see also National Rifle Association, often called the NRA

The NRA (National Recovery Administration) was a key part of the First New Deal in 1933-35, until it was abolished by the Surpeme Court and never reestablished. The goal was to eliminate cut-throat competition by bringing industry, labor and government together to create codes of fair practices and set prices. The NRA was created by the National Industrial Recovery Act) under the general guidance of President Franklin D. Roosevelt and his top advisors. It allowed industries to create "codes of fair competition," which were intended to reduce destructive competition and to help workers by setting minimum wages and maximum weekly hours. Most economic historians consider the NRA to be a resounding failure with very little positive economic success.

The NRA, symbolized by the blue eagle was popular with workers. Businesses that supported the NRA put the symbol in their shop windows and on their packages. Though membership to the NRA was voluntary, businesses that did not display the eagle were urged to be boycotted - making it seem mandatory for survival.

Its director was Hugh S. Johnson, a retired general and successful businessman. Johnson saw the NRA as a national crusade designed to restore employment and regenerate industry. Johnson was removed in 1934, In early 1935 the new chairman announced that the NRA would stop setting prices, but businessmen complained. Chairman Samuel Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Williams said, "Greater productivity and employment would result if greater price flexibility were attained." Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim, reported Time magazine. "To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer." The business position was summarized by George A. Sloan, head of the Cotton Textile Code Authority:

“

"Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level in so far as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employes is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise....But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive.^[1]

”

About 23,000,000 people worked under the NRA fair code. However, violations of codes became common and attempts were made to use the courts to enforce the NRA. The NRA included a multitude of regulations imposing the pricing and production standards for all sorts of goods and services.

Pennock (1997) shaws that the rubber tire industry faced debilitating challenges, mostly brought about by changes in the industry's retail structure and exacerbated by the Depression. Segments of the industry attempted to use the NRA codes to solve these new problems and stabilize the tire market, but the tire manufacturing and tire retailing codes were patent failures. Instead of leading to cartelization and higher prices, which is what most scholars assume the NRA codes did, the tire industry codes led to even more fragmentation and price cutting.

Alexander (1997) examines the macaroni industry and concludes that cost heterogeneity was a major source of the "compliance crisis" affecting a number of NRA "codes of fair competition" that were negotiated by industries and submitted for government approval under the National Industry Recovery Act of 1933. The argument boils down to assumptions that progressives at the NRA allowed majority coalitions of small, high-cost firms to impose codes in heterogeneous industries, and that these codes were designed by the high-cost firms under an ultimately erroneous belief that they would be enforced by the NRA.

Storrs (2000) says the National Consumers' League (NCL) had been instrumental in the passage and legal defense of labor legislation in many states since 1899. Women activists used the New Deal oppotunity to gain a national forum. General Secretary Lucy Randolph Mason and her league relentlessly lobbied the NRA to make its regulatory codes just and fair for all workers and to eliminate explicit and de facto discrimination in pay, working conditions, and opportunities for reasons of sex, race, or union status. Even after the demise of the NRA, the league continued campaigning for collective bargaining rights and fair labor standards at both federal and state levels.

The NRA came under attack from some businessmen, while others supported it. (Best 1991). Sniegoski (1990) shows that a major attack came from the left. The "National Recovery Review Board," headed by famed lawyer Clarence Darrow, was created by President Roosevelt in March 1934 and abolished by him that same June. During its brief existence, the board issued three reports highly critical of the NRA. The reports, which charged the NRA with fostering monopolies, were philosophically consistent in their advocacy of competitive capitalism and their denunciation of special privilege for big business. Although the NRA was attacked from other quarters at the same time, the small-business viewpoint of the Darrow board, supported by followers of Louis Brandeis in the New Deal, was a major factor in the NRA's demise.

In 1935, in the case of Schecter Poultry Corp. v. US, the Supreme Court declared the NRA as unconstitutional because it gave the President too much power.^[2] The NRA quickly stopped operations, but many of the labor provisions reappeared in the Wagner Act of 1935.

↑ "Dollar Men & Prices" Time (Jan 21, 1935) online
↑ The Supreme Court Historical Society.

External links

References

Alexander, Barbara J. "Failed Cooperation in Heterogeneous Industries under the National Recovery Administration." Journal of Economic History, 1997 57(2): 322-344. Issn: 0022-0507 Fulltext: in Jstor
Best; Gary Dean. Pride, Prejudice, and Politics: Roosevelt Versus Recovery, 1933-1938. Praeger Publishers. 1991 online edition
Brand, Donald R. "Corporatism, the NRA, and the Oil Industry." Political Science Quarterly 1983 98(1): 99-118. Issn: 0032-3195 Fulltext: in Jstor. Uses corporatism model to explore the struggle between independent oil producers and major oil producers over production and price controls.
Hawley, Ellis W. The New Deal and the Problem of Monopoly Princeton UP (1968)
Hawley, Ellis W. "The New Deal and Business," in The New Deal: The National Level ed by Robert H. Bremner and David Brody; Ohio State University Press. (1975) pp 50-82, online edition
Johnson; Hugh S. The Blue Eagle, from Egg to Earth 1935, memoir by NRA director online edition
Lyon, Leverett S., Paul T. Homan, Lewis L. Lorwin, George Terborgh, Charles L. Dearing, Leon Marshall C.; The National Recovery Administration: An Analysis and Appraisal The Brookings Institution, 1935. in-depth analysis by economists
Charles L. Dearing, Paul T. Homan, Lewis L. Lorwin, Leverett S. Lyon. The ABC of the NRA, (1934) 200 pgs. online edition
Ohl, John Kennedy. Hugh S. Johnson and the New Deal (1985), academic biography.
Pennock, Pamela. "The National Recovery Administration and the Rubber Tire Industry, 1933-1935." Business History Review," 1997 71(4): 543-568. Issn: 0007-6805 Fulltext: in Jstor
Schlesinger, Arthur Meier. The Coming of the New Deal (1958) pp 87-176 online version
Sniegoski, Stephen J. "The Darrow Board and the Downfall of the NRA." Continuity 1990 (14): 63-83. Issn: 0277-1446
Storrs, Landon R. Y. Civilizing Capitalism: The National Consumers' League, Women's Activism, and Labor Standards in the New Deal Era, U of North Carolina Press, 2000 on consumer activism promoted by NRA; online edition

[1] "Dollar Men & Prices" Time (Jan 21, 1935) online

[2] The Supreme Court Historical Society.

[1]

[2]

@@ Line 1: / Line 1: @@
-[[Image:Blue_eagle.jpg|thumb|right|NRA [[Blue Eagle]] poster. This would be displayed in store windows, on packages, and in ads. When printed in color the eagle was blue, hence the name.]]
+[[Image:Blue-nra.jpg|thumb|right|NRA Blue Eagle stamps]]
-As part of the [[New Deal]] in the [[United States]], the '''National Recovery Administration''' (created by the [[National Industrial Recovery Act]]) was developed by President [[Franklin D. Roosevelt]] and his administration. It allowed industries to create "codes of fair competition," which were intended to reduce destructive competition and to help workers by setting minimum wages and maximum weekly hours. Most economic historians consider the NRA to be a resounding failure with very little positive economic success.
+*see also [[National Rifle Association]], often called the NRA
+The '''NRA''' ('''National Recovery Administration''') was a key part of the First New Deal in 1933-35, until it was abolished by the Surpeme Court and never reestablished. The goal was to eliminate cut-throat competition by bringing industry, labor and government together to create codes of fair practices and set prices.  The NRA was created by the [[National Industrial Recovery Act]]) under the general guidance of President [[Franklin D. Roosevelt]] and his top advisors. It allowed industries to create "codes of fair competition," which were intended to reduce destructive competition and to help workers by setting minimum wages and maximum weekly hours. Most economic historians consider the NRA to be a resounding failure with very little positive economic success.
 The NRA, symbolized by the blue eagle was popular with workers. Businesses that supported the NRA put the symbol in their shop windows and on their packages. Though membership to the NRA was voluntary, businesses that did not display the eagle were urged to be boycotted - making it seem mandatory for survival.
-Its director was [[Hugh Samuel Johnson|Hugh S. Johnson]], a retired general and successful businessman.  Johnson saw the NRA as a national crusade designed to restore employment and regenerate industry.  Johnson was removed in 1934, In early 1935 the new chairman announced that the NRA would stop setting prices, but businessmen complained.  Chairman Samuel Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Williams said, "Greater productivity and employment would result if greater price flexibility were attained."  Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim, reported ''Time'' magazine. "To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer."  The business position was summarized by George A. Sloan, head of the Cotton Textile Code Authority: {{Cquote|"Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level in so far as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employes is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise....But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive.<ref> "Dollar Men & Prices" ''Time'' (Jan 21, 1935) [http://www.time.com/time/magazine/article/0,9171,787937,00.html online] </ref>}}
+Its director was [[Hugh S. Johnson]], a retired general and successful businessman.  Johnson saw the NRA as a national crusade designed to restore employment and regenerate industry.  Johnson was removed in 1934, In early 1935 the new chairman announced that the NRA would stop setting prices, but businessmen complained.  Chairman Samuel Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Williams said, "Greater productivity and employment would result if greater price flexibility were attained."  Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim, reported ''Time'' magazine. "To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer."  The business position was summarized by George A. Sloan, head of the Cotton Textile Code Authority: {{Cquote|"Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level in so far as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employes is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise....But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive.<ref> "Dollar Men & Prices" ''Time'' (Jan 21, 1935) [http://www.time.com/time/magazine/article/0,9171,787937,00.html online] </ref>}}
+About 23,000,000 people worked under the NRA fair code. However, violations of codes became common and attempts were made to use the courts to enforce the NRA. The NRA included a multitude of regulations imposing the pricing and production standards for all sorts of goods and services.
-About 23,000,000 people worked under the NRA fair code. However, violations of codes became common and attempts were made to use the courts to enforce the NRA. The NRA included a multitude of regulations imposing the pricing and production standards for all sorts of goods and services. Individuals were arrested for not complying with these codes. For example, a man named Jack Magid was jailed for violating the "Tailor's Code" by pressing a suit for 35 rather than NRA required 40 cents. [[John T. Flynn]], in ''The Roosevelt Myth'' (1944) reported: {{Cquote|''The NRA was discovering it could not enforce its rules. Black markets grew up. Only the most violent police methods could procure enforcement. In Sidney Hillman’s garment industry the code authority employed enforcement police. They roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night. But without these harsh methods many code authorities said there could be no compliance because the public was not back of it.''}}
+Pennock (1997) shaws that the rubber tire industry faced debilitating challenges, mostly brought about by changes in the industry's retail structure and exacerbated by the Depression. Segments of the industry attempted to use the NRA codes to solve these new problems and stabilize the tire market, but the tire manufacturing and tire retailing codes were patent failures. Instead of leading to cartelization and higher prices, which is what most scholars assume the NRA codes did, the tire industry codes led to even more fragmentation and price cutting.
-In 1935, in the court case of ''[[Schecter Poultry Corp. v. US]]'', the Supreme Court declared the NRA as unconstitutional because it gave the President too much power.<ref> [http://www.supremecourthistory.org/02_history/subs_history/02_c11.html The Supreme Court Historical Society.]</ref> The NRA quickly stopped operations, but many of the labor provisions reappeared in the [[Wagner Act]] of 1935.
+Alexander (1997) examines the macaroni industry and concludes that cost heterogeneity was a major source of the "compliance crisis" affecting a number of NRA "codes of fair competition" that were negotiated by industries and submitted for government approval under the National Industry Recovery Act of 1933. The argument boils down to assumptions that progressives at the NRA allowed majority coalitions of small, high-cost firms to impose codes in heterogeneous industries, and that these codes were designed by the high-cost firms under an ultimately erroneous belief that they would be enforced by the NRA.
+Storrs (2000) says the National Consumers' League (NCL) had been instrumental in the passage and legal defense of labor legislation in many states since 1899. Women activists used the New Deal oppotunity to gain a national forum. General Secretary Lucy Randolph Mason and her league relentlessly lobbied the NRA to make its regulatory codes just and fair for all workers and to eliminate explicit and de facto discrimination in pay, working conditions, and opportunities for reasons of sex, race, or union status. Even after the demise of the NRA, the league continued campaigning for collective bargaining rights and fair labor standards at both federal and state levels.
+The NRA came under attack from some businessmen, while others supported it. (Best 1991). Sniegoski (1990) shows that a major attack came from the left.  The "National Recovery Review Board," headed by famed lawyer [[Clarence Darrow]], was created by President Roosevelt in March 1934 and abolished by him that same June. During its brief existence, the board issued three reports highly critical of the NRA. The reports, which charged the NRA with fostering monopolies, were philosophically consistent in their advocacy of competitive capitalism and their denunciation of special privilege for big business. Although the NRA was attacked from other quarters at the same time, the small-business viewpoint of the Darrow board, supported by followers of [[Louis Brandeis]] in the New Deal,  was a major factor in the NRA's demise.
+In 1935, in the case of ''[[Schecter Poultry Corp. v. US]]'', the Supreme Court declared the NRA as unconstitutional because it gave the President too much power.<ref> [http://www.supremecourthistory.org/02_history/subs_history/02_c11.html The Supreme Court Historical Society.]</ref> The NRA quickly stopped operations, but many of the labor provisions reappeared in the [[Wagner Act]] of 1935.
 <references />
@@ Line 14: / Line 25: @@
 * [http://www.archive.org/details/National1933 1933 Promotional Video for National Recovery Administration]
 * [http://eh.net/encyclopedia/article/alexander.nra Article on the NRA from EH.NET's Encyclopedia]
-* [http://64.233.161.104/search?q=cache:fHF_o54pFCEJ:www.fee.org/pdf/the-freeman/1005RMEColumn.pdf ''When the Supreme Court Stopped Economic Fascism in America''] by [[Richard Ebeling]]
 ==References==
-* Best; Gary Dean. ''Pride, Prejudice, and Politics: Roosevelt Versus Recovery, 1933-1938.'' Praeger Publishers. 1991
+* Alexander, Barbara J. "Failed Cooperation in Heterogeneous Industries under the National Recovery Administration." ''Journal of Economic History,'' 1997 57(2): 322-344. Issn: 0022-0507 Fulltext: in Jstor
+* Best; Gary Dean. ''Pride, Prejudice, and Politics: Roosevelt Versus Recovery, 1933-1938.'' Praeger Publishers. 1991 [http://www.questia.com/PM.qst?a=o&d=23339686 online edition]
+* Brand, Donald R. "Corporatism, the NRA, and the Oil Industry." ''Political Science Quarterly'' 1983 98(1): 99-118. Issn: 0032-3195 Fulltext: in Jstor. Uses corporatism model to explore the struggle between independent oil producers and major oil producers over production and price controls.
 * Hawley, Ellis W. ''The New Deal and the Problem of Monopoly'' Princeton UP (1968)
-*  Johnson; Hugh S. ''The Blue Eagle, from Egg to Earth'' 1935, memoir by NRA director
+* Hawley, Ellis W. "The New Deal and Business," in ''The New Deal: The National Level'' ed by Robert H. Bremner and David Brody; Ohio State University Press. (1975)  pp 50-82,  [http://www.questia.com/PM.qst?a=o&d=62849721 online edition]
-* Lyon, Leverett S., Paul T. Homan, Lewis L. Lorwin, George Terborgh, Charles L. Dearing, Leon Marshall C.; ''The National Recovery Administration: An Analysis and Appraisal'' The Brookings Institution, 1935 .
+*  Johnson; Hugh S. ''The Blue Eagle, from Egg to Earth'' 1935, memoir by NRA director [http://www.questia.com/library/book/the-blue-eagle-from-egg-to-earth-by-hugh-s-johnson.jsp online edition]
+* Lyon, Leverett S., Paul T. Homan, Lewis L. Lorwin, George Terborgh, Charles L. Dearing, Leon Marshall C.; ''The National Recovery Administration: An Analysis and Appraisal'' The Brookings Institution, 1935. [http://www.questia.com/PM.qst?a=o&d=22849667 in-depth analysis by economists]
+* Charles L. Dearing, Paul T. Homan, Lewis L. Lorwin, Leverett S. Lyon. ''The ABC of the NRA,'' (1934) 200 pgs. [http://www.questia.com/library/book/the-abc-of-the-nra-by-charles-l-dearing-paul-t-homan-lewis-l-lorwin-leverett-s-lyon.jsp online edition]
 *Ohl, John Kennedy. ''Hugh S. Johnson and the New Deal'' (1985), academic biography.
+* Pennock, Pamela. "The National Recovery Administration and the Rubber Tire Industry, 1933-1935." ''Business History Review," 1997 71(4): 543-568. Issn: 0007-6805 Fulltext: in Jstor
 * Schlesinger, Arthur Meier. ''The Coming of the New Deal'' (1958) pp 87-176  [http://image.ulib.org/cgi-bin/handlers/handle8?call=15522.20704 online version]
+* Sniegoski, Stephen J. "The Darrow Board and the Downfall of the NRA." ''Continuity'' 1990 (14): 63-83. Issn: 0277-1446
-[[Category:1933 establishments]]
+* Storrs, Landon R. Y. ''Civilizing Capitalism: The National Consumers' League, Women's Activism, and Labor Standards in the New Deal Era,'' U of North Carolina Press, 2000 on consumer activism promoted by NRA; [http://www.questia.com/PM.qst?a=o&d=105875460 online edition]
-[[Category:1935 disestablishments]]
+----------
-[[Category:National Recovery Administration| ]]
+<references/>
+----------
-[[de:National Recovery Administration]]
+[[Category:History Workgroup]]
+[[Category:Politics Workgroup]]
+[[Category:Economics Workgroup]]
+[[Category:CZ Live]]

National Recovery Administration: Difference between revisions

Revision as of 14:05, 2 May 2007

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