National Industrial Recovery Act
The National Industrial Recovery Act of 1933 (NIRA) was a federal law signed by President Franklin D. Roosevelt (D) on June 16, 1933, that established the National Recovery Administration. NIRA aimed to exempt businesses from anti-trust laws that prohibited anticompetitive practices and guarantee laborers a right to collective bargaining. NIRA also mandated that companies write codes of fair competition with the intent of using such codes to self-regulate industry.[1][2]
The United States Supreme Court in 1935 effectively neutralized NIRA by declaring sections of the act unconstitutional in violation of the nondelegation doctrine. President Roosevelt later abolished NIRA, effective January 1, 1936, via Executive Order 7252.[3]
Background
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A quarter of the workforce in the United States was considered unemployed during the Great Depression of the 1930s, according to the Library of Congress. The Hoover administration in 1932 aimed to improve the country's economy through the creation of the Reconstruction Finance Corporation (RFC), among other initiatives. The RFC gave aid to state and local governments and granted loans to banks, railroads, farm mortgage associations, and other businesses.[2]
Franklin D. Roosevelt took office as president in 1933 and began promoting his approach to economic recovery programs, known as the New Deal. NIRA—key legislation underpinning the New Deal—aimed to address what Roosevelt considered to be fair competition in industry. The text of NIRA states that the legislation broadly aimed to “encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works,” among other provisions.[1]
U.S. Supreme Court strikes down NIRA provisions
The United States Supreme Court in 1935 held in A.L.A. Schechter Poultry Corp. v. United States and Panama Refining Co. v. Ryan that certain sections of NIRA violated the nondelegation doctrine by granting the executive branch lawmaking powers formally afforded to Congress. The rulings effectively nullified NIRA.[4]
President Roosevelt on December 21, 1935, abolished NIRA via Executive Order 7252, effective January 1, 1936.[3]
Provisions
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The following sections provide descriptions of selected NIRA provisions:
Section one
Section one of NIRA created the National Recovery Administration with the intent to promote compliance with the codes of fair competition. The administration was in charge of writing industrial codes for companies to adopt and was authorized to make voluntary agreements with these companies that included hours of work, rates of pay, and prices to charge for their products.[5]
Section three
In section three, later struck down by the U.S. Supreme Court in Schechter, companies were mandated to write codes of fair competition applicable to an entire industry. These codes fixed wages and prices, established production quotas, and placed restrictions on the entry of other companies into industry alliances. Lawmakers at the time viewed the codes of fair competition as a means to self-regulate industry in order to promote stable growth and prevent another economic depression.[5]
Section seven
Under section seven of NIRA, employees were granted the right to organize labor unions. They also could not be forced to join or refrain from membership in a labor organization as a condition of employment. Prior to the passage of NIRA, companies were permitted to fire workers for joining unions and could force them to sign a pledge not to join a union as a condition of employment.[5]
Section nine
Section nine gave the president the authority to prohibit the transportation of petroleum and petroleum products in interstate and foreign commerce if they had been produced in excess amounts permitted by states. This section was later found unconstitutional by Panama for violating the nondelegation doctrine by granting to the president legislative powers that Congress did not have the authority to delegate.[6]
See also
- Federalism
- A.L.A. Schechter Poultry Corp. v. United States
- Panama Refining Co. v. Ryan
- Nondelegation doctrine
External links
Footnotes
- ↑ 1.0 1.1 National Archives, "National Industrial Recovery Act (1933)," accessed November 14, 2022
- ↑ 2.0 2.1 Library of Congress, "National Recovery Administration (NRA) and the New Deal: A Resource Guide," accessed November 14, 2022
- ↑ 3.0 3.1 The American Presidency Project, "Executive Order 7252 Terminating the National Recovery Administration," December 21, 1935
- ↑ Oyez, "A. L. A. Schechter Poultry Corporation v. United States," accessed November 14, 2022
- ↑ 5.0 5.1 5.2 Britannica, "National Industrial Recovery Act," accessed November 14, 2022
- ↑ Oyez, “Panama Refining Company v. Ryan,” accessed November 21, 2022
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