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National Industrial Recovery Act

National Industrial Recovery Act

To encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes."

-National Recovery Act of 19331

President Franklin Delano Roosevelt passed the National Recovery Act during his first hundred days in office. The act addressed the issues that arose during the Great Depression. It was meant to create jobs and regulate the labor industry. In reality, it didn't achieve the Roosevelt Administration's goals. Let's take a closer look at the National Industrial Recovery Act.

National Industrial Recovery Act of 1933

Before we can look at the National Industrial Recovery Act (NIRA), let's take a few steps back. In 1929, the Stock Market crashed, which caused the Great Depression. There are more factors at play here, but the important takeaway is that The Great Depression began in 1929. Franklin Delano Roosevelt became President in 1933 with ambitious goals to end the depression.

Roosevelt wasted no time and almost immediately acted. The president passed many acts in his first hundred days in office, including the National Recovery Act of 1933.

National Industrial Recovery Act Franklin Delano Roosevelt StudySmarterFig 1: Franklin Delano Roosevelt was the President during the New Deal era. The National Industrial Recovery Act was passed within his first year as President!

National Industrial Recovery Act: Purpose

In 1933, many theories were about the cause of the Great Depression. The Roosevelt Administration, like everyone else, was unsure of what exactly caused the depression, so they didn't have a definite solution for the issue. The administration appointed experts to write out the NIRA. The act was to accomplish what its title said, help American industries recover.

Just like there were many theories about the cause of the depression, there were many alternative solutions. Some believed the federal government needed to withdraw further from the economy, but the Roosevelt Administration disagreed. NIRA was supposed to regulate industries, raise wages, standardize the workweek, and protect the right to unionize.

National Industrial Recovery Act NRA logo Study SmarterFig 2: NIRA Blue Eagle. The phrase "We Do Our Part" targeted the American patriotic spirit.

Roosevelt used an executive order to establish a department to oversee NIRA called the National Recovery Administration. Hugh S. Johnson was responsible for the administration. To make the NRA more popular, the Roosevelt Administration launched a campaign to popularize the act. Flyers praised it, while businesses that followed NIRA were encouraged to display a blue eagle. The blue eagle represented NRA.

National Industrial Recovery Act: Definition

Titles are different sections of an act, and NIRA had three. The graph below shows a brief breakdown of each title. The section below will go into more detail about the different sections of NIRA!

TitleExplanation
Title ICreated codes for fair production that were meant to centralize the economy
Title IICreated the Public Work Administration
Title IIIMade minor adjustments to previous New Deal Acts

Title I

Title 1 of NIRA was about industrial regulation. People in business were required to create fair codes that would apply to the entire industry. These codes allowed American industries to self-regulate.

Unionization was a protected right under section 7A of Title I. Union status couldn't affect an employee's or future employment status. An employer couldn't fire employees if they joined unions or refused to join corporate unions. Employers were unable to pay employees less than minimum wage. Lastly, employees could only work 30 hours a week.

The workweek was limited to thirty hours, so employers had to hire multiple people to fill one role. For example, John was a miner who initially worked 12-hour shifts six days a week. John worked 72 hours a week. When the NIRA limited the workweek to 30 hours, John's boss had to hire two more workers to fulfill the amount of work that John initially filled.

National Industrial Recovery Act Miners StudySmarterFig 2: Miners in Idaho

Title II and Title III

Title II of NIRA designated 3.3 billion dollars to public works projects. This created the Public Works Administration (PWA) headed by Secretary of the Interior Harold L. Ickes. This program awarded funds to different states. The states then hired private contractors to fulfill public work projects. The PWA built schools, homes, bridges, and more!

Public Work Administration and Race

The Great Depression hit African Americans the hardest. Unlike the Civilian Conservation Corps, the PWA made an active effort to employ people of color. Ickes supported civil rights and ensured that African Americans received some of the benefits of the PWA. 28 of the 60 federal housing projects conducted by the PWA were in African American communities.

Ickes spent around thirty million dollars on African American communities. The PWA also made sure that African Americans were employed through them. While many New Deal programs excluded African Americas, the PWA didn't. The New Deal was good for America but could've been better for African Americans.

Title III made minor adjustments to existing acts like the Emergency Relief Act and the Construction Act of 1932.

National Industrial Recovery Act: Impact

NIRA started incredibly popular. People were excited to unionize and have a minimum wage. Mismanagement made enthusiasm around the NIRA fade. The National Industrial Recovery Act had unforeseen consequences. The people in business in charge of creating the codes wanted incentives. They wanted guarantees that their companies would benefit from self-regulation. In the end, these codes caused prices to rise while production decreased.

Employers overlooked laws that protected unions or simply found workarounds. Unions found little to no success when they tried to fight for their rights. The National Industrial Recovery Act was unpopular among Conservatives and Liberals because it didn't meet either's expectations.

In 1935, the Supreme Court ruled that the National Industrial Recovery Act was unconstitutional in Schechter Poultry Corp. Versus the United States. The act was two years old and had two more hours before its renewal. The Roosevelt Administration didn't believe the show had enough time to develop fully, but the Supreme Court disagreed.

National Industrial Recovery Act: Significance

The National Industrial Recovery Act wasn't a complete failure. One of its most significant accomplishments, outside the other labor laws it created, was the illegalization of child labor in the textile industry. The textile industry was generally hazardous, but even more so for children. Small kids could reach areas that adults couldn't. They would send a child inside the broken machine to repair it. Many children lost fingers, hands, and other body parts. In the worst-case scenario, they lost their lives.

National Industrial Recovery Act National Industrial Recovery Act StudySmarterFig 4: Copy of the opening page of the National Industrial Recovery Act

The National Industrial Recovery Act enacted labor laws that protected workers. While it wasn't perfect, it was a good start. The Public Work Administration continued after NIRA was voted unconstitutional. It continued to provide construction work that benefitted the nation, state, community, and individual.

National Industrial Recovery Act - Key takeaways

  • The National Industrial Recovery Act aimed to vitalize the American economy through industrial regulation, labor laws, and government spending.
  • This act has three titles that cover different aspects of it. Title I was about industrial self-regulation, title II covered Public Work Administration, and title III addressed some issues with previously created acts.
  • NIRA's popularity didn't last. The codes created a rise in prices and a decrease in production.
  • While NIRA was supposed to protect the right to unionize, it didn't. Unions found little to no success when they tried to fight for their rights.

References

  1. National Recovery Act, 1935.

Frequently Asked Questions about National Industrial Recovery Act

The National Industrial Recovery Act was ruled unconstitutional by the Supreme Court in June 1935. The act is inactive today.

The National Industrial Recovery Act has mixed reviews. While some consider it successful because it ended child labor in the textile industry, others disagree. The act was meant to protect unions, but it didn't. It also caused a rise in prices during the Great Depression. While the act ended child labor in one industry, it was unsuccessful because it didn't accomplish its goals. 

The National Industrial Recovery Act sought to correct the issues that were created during the Great Depression. As experts had differing opinions as to the cause of the depression, they also had differing solutions. This is reflected in the act itself.

The National Industrial Recovery Act was enacted in June 1933 and ended in 1935. 

The National Industrial Recovery Act established the Public Work Administration, gave the federal government more power over the nation's economy, and ended child labor in the textile industry. It also raised prices, making life more difficult for the average person during the Great Depression. 

Final National Industrial Recovery Act Quiz

Question

Title II created which New Deal Program?

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Answer

Work Progress Administration

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Question

What national catastrophe was NIRA a response to?

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Answer

The Great Depression

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Question

True or False:

NIRA allowed industries to self regulate.

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Answer

True

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Question

NIRA offered what protections to workers?

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Answer

All of the above

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Question

When did the Supreme Court strike down NIRA?

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Answer

1935

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Question

NIRA illegalized child labor in which industry?

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Answer

Textile

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Question

True or False:

NIRA remained incredibly popular during its two year run.

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Answer

Ture

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Question

Title I of NIRA regarded _________.

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Answer

Industrial self-regulation

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Question

True or False:

Unions were and still are protected because of NIRA.

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Answer

True

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60%

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