The
National Industrial Recovery Act (
NIRA) was a law passed by the
United States Congress in 1933 to authorize the President to regulate industry in an attempt to raise prices after severe
deflation and stimulate economic recovery.
[1] It also established a national
public works program known as the
Public Works Administration (PWA, not to be confused with the WPA of 1935).
[2] The
National Recovery Administration (NRA) portion was widely hailed in 1933, but by 1934 business' opinion of the act had soured.
[3] By March 1934 the "NRA was engaged chiefly in drawing up these industrial codes for all industries to adopt."
[4] However, the NIRA was declared unconstitutional by the
Supreme Court in 1935 and not replaced.
[3][5][6]
continuing:
The Depression began in the United States in October 1929 and grew steadily worse to its nadir in early 1933.
[3][6][20] President
Herbert Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values. His
laissez-faire views appeared to be shared by the
Secretary of the Treasury Andrew W. Mellon.
[21] To combat with the growing economic decline, Hoover organized a number of voluntary measures with businesses, encouraged state and local government responses, and accelerated federal building projects.
[21] However his policies had little or no effect on economic recovery.
[3][6][22] Toward the end of his term, however, Hoover supported several legislative solutions which he felt might lift the country out of the depression. The final attempt of the Hoover administration to rescue the economy was the passage of the
Emergency Relief and Construction Act (which provided funds for public works programs) and the
Reconstruction Finance Corporation (RFC) (which provided low-interest loans to businesses).
[3][6][21][22]
Hoover was defeated for re-election by Roosevelt in the
1932 presidential election. Roosevelt was convinced that federal activism was needed to reverse the country's economic decline. In his first hundred days in office, the Congress enacted at Roosevelt's request a series of bills designed to strengthen the banking system, including the
Emergency Banking Act, the
Glass–Steagall Act (which created the
Federal Deposit Insurance Corporation), and the
1933 Banking Act.
[3][6] The Congress also passed the
Agricultural Adjustment Act to stabilize the nation's agricultural industry.
[3][6]
continuing:
By May 1933, two draft bills had emerged, a cautious and legalistic one by John Dickinson (
Under Secretary of Commerce) and an ambitious one focusing on trade associations by Hugh Johnson.
[9][25] Many leading businessmen—including
Gerard Swope (head of
General Electric),
Charles M. Schwab (chairman of
Bethlehem Steel Corporation),
E. H. Harriman (chairman of the
Union Pacific Railroad), and
Henry I. Harriman, president of the
U.S. Chamber of Commerce—helped draft the legislation.
[6][25] A two-part bill, the first section promoting cooperative action among business to achieve fair competition and provide for national planning and a second section establishing a national public works program, was submitted to Congress on May 15, 1933.
[27]
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