National Industrial Recovery Act

National Industrial Recovery Act (NIRA), United States law enacted by the United States Congress in June 1933; one of the measures by which President Franklin D. Roosevelt sought to assist the nation's economic recovery during the Great Depression. To reduce unemployment, the act authorized an expenditure of $3.3 billion for an expansion of public works. Roosevelt established a new Public Works Administration (PWA) and appointed Secretary of Commerce Harold Ickes as its head. Ickes was always careful to contract for high-quality construction at the lowest possible cost. In part because of his stringent standards, however, the PWA was able to commit only $1.2 billion by the end of 1933 and was slow in creating new jobs.

To ensure orderly and fair competition in business, the act authorized the president to set up a National Recovery Administration (NRA) to draft a set of codes for each of more than 500 industries. The act suspended relevant antitrust regulations, and representatives of each firm in an industry joined with NRA officials in writing the codes. Although the NRA did not approve overt price setting, most codes so regulated competition as to ensure a cartel-like pricing system. The NRA director Hugh Johnson also tried to gain corporate endorsement of interim re-employment agreements, launching a veritable crusade, symbolized by a blue eagle and boosted by parades and patriotic propaganda. These early agreements, which were supposed to attest to a restored confidence in the economy, contained maximum hour and minimum wage provisions.

From the beginning, the NRA reflected divergent goals and suffered from widespread criticism. The businessmen who dominated the code drafting wanted guaranteed profits, and thus security for renewed investment and production. Congressional critics insisted upon continued price competition and saw the codes as a means of making it fair and orderly. A few intellectuals wanted a much more extensive government role and thus a form of central economic planning. Finally, unhappy labour union representatives fought with small success for the collective bargaining promised by the NIRA. The codes did little to help recovery; by raising prices, they may have retarded it. Thus, in 1935, when the US Supreme Court nullified the codes as an unconstitutional delegation of legislative power to the executive, the NRA was abandoned. The PWA continued, under Ickes, until 1939.