New Deal

:Alternative meaning: New Deal (United Kingdom)

The National Industrial Recovery Act (NRA)

Business, labor, and government cooperation

The actions of the "first hundred days" were largely stopgaps. More comprehensive government programs followed later in the Roosevelt administration, designed in large part to deal with deflation. In the roughly three years between the 1929 stock market crash and Roosevelt's first hundred days in office, the economy had been suffering from a cycle of deflation. In response, the Chamber of Commerce, then and now the leading voice of organized business, urged the Hoover and later Roosevelt administration to adopt an anti-deflationary scheme that would permit trade associations to cooperate in stabilizing prices within their industries. The administration was receptive to some of these proposals, despite existing antitrust laws that forbade such practices.

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The Roosevelt administration, packed with reformers aspiring to forge all elements of society into a cooperative unit (a reaction to the worldwide specter of "class struggle"), was fairly amenable to the idea of cooperation among producers. Desperate for salvation, many industries even expressed an interest in having the government enforce such trade associate agreements on pricing and production. But the administration insisted on additional provisions that would deal with other economic problems as well. Many, after all, remembered that in the 1920s wages increased at a rate that was a fraction of the rate at which productivity increased, remembering that production costs were falling while wages were rising slowly and prices remained constant.

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The Roosevelt administration, under increasing pressure to do more to alleviate unemployment, and alarmed at the increasing militancy of the trade union movement and the political pressures of radical, dissident challenges as Huey Long, Father Charles E. Coughlin, and even the Communist Party, insisted that business would have to ensure that the incomes of workers would rise along with their prices. Against this backdrop, the product of all these impulses and pressures the National Industrial Recovery Act (NIRA), the most important undertaking of the first Hundred Days, which Congress passed in June 1933.

Related Topics:
Unemployment - Huey Long - Father Charles E. Coughlin - Communist Party - National Industrial Recovery Act - June - 1933

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It guaranteed to workers of the right of collective bargaining and helped spur major union organizing drives in major industries. And responding to business clamor for anti-deflationary trade associate agreements, the NIRA established the most important, but ultimately least successful provision: a new federal agency known as the National Recovery Administration (NRA), which attempted to stabilize prices and wages through cooperative "code authorities" involving government, business, and labor.

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In case consumer buying power lagged behind—thereby defeating the administration's initiatives—the NIRA created the Public Works Administration (PWA), a major program of public works spending designed to alleviate unemployment, and moreover to pump needed funds into the economy.

Related Topics:
Public Works Administration - Unemployment

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The new program was hailed at its inception as a miracle. Indeed, it had something for everyone. Just as business leaders hailed it as the beginning of a new era of cooperation between government and industry, labor leaders hailed it as a "Magna Carta" for trade unions.

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The NRA "Blue Eagle" campaign

At the center of the NIRA was the National Recovery Administration (NRA), headed by former general Hugh Johnson. Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 40 cents an hour, a maximum workweek of 35 to 40 hours, and the abolition of child labor. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.

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To mobilize political support for the NRA, and the administrations "blanket code", Johnson launched the "NRA Blue Eagle" campaign. The "Blue Eagle" was to be displayed in commercial establishments by employers who accepted the provisions of the blanket code. Blue Eagle flags, posters, and stickers, with the slogan "We Do Our Part," rapidly became visible in shops and workplaces throughout the country.

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Meanwhile, Johnson needed extraordinary public and corporate support for enough bargaining strength to negotiate the codes with both business and labor. Cooperation proved to be a great burden; a firm could, after all, violate such codes in search for a competitive advantage. In the short run, enough support among key sectors of society was generated. Even so, Johnson won agreements from almost every major industry in the nation.

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These and other early initiatives created broad popular support for the Roosevelt administration and halted the rapid unraveling of the financial system. They did not, however, end, or even significantly abate, the Great Depression.

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