7. The National Industrial Recovery Act
The National Industrial Recovery Act, often referred to as the NIRA, was enacted by Congress under Roosevelt’s prodding in June, 1933. It created the Public Works Administration (PWA) and the National Recovery Administration (NRA) to stimulate the economy through the creation of public works and industrial codes and regulations. Initially well received by industry, the enthusiasm waned when manufacturers and others found themselves subjected to federal regulations (such as fair competition requirements, recognition of unions, and in some cases price controls). The NIRA demonstrated an example of FDR’s considerable political wiliness. The army and navy both had their budgets reduced, in part to provide money for the PWA, which was then used to build both ships for the navy (including two aircraft carriers) and tanks and airplanes for the army.
Business leaders and industrialists soured on the act, particularly the NRA, because in their eyes it favored trade unions over management, imposed excessive regulations, and increased their costs of operation. Strenuous arguments over the act drained public support of the NRA, and several lawsuits over portions of the NRA began working their way through the courts. In May of 1935, less than a month before the NIRA was set to expire, the United States Supreme Court ruled that Title I of the act (which created the NRA) was unconstitutional. The NIRA was considered to be a failure in its day and continues to retain that reputation. Many of the codes and regulations promulgated by the NRA were included in the National Labor Relations Act of 1935, a somewhat more successful vehicle.