The National Recovery Administration (NRA) was a prime agency established by U.S. president Franklin D. Roosevelt (FDR) in 1933. The goal of the administration was to eliminate "cut throat competition" by bringing industry, labor, and government together to create codes of "fair practices" and set prices. The NRA was created by the National Industrial Recovery Act (NIRA) and allowed industries to get together and write "codes of fair competition". The codes intended both to help workers set minimum wages and maximum weekly hours, as well as minimum prices at which products could be sold. The NRA also had a two-year renewal charter and was set to expire in June 1935 if not renewed.
The NRA, symbolized by the Blue Eagle, was popular with workers. Businesses that supported the NRA put the symbol in their shop windows and on their packages, though they did not always go along with the regulations entailed. Though membership of the NRA was voluntary, businesses that did not display the eagle were very often boycotted, making it seem mandatory for survival to many.
In 1935, the U.S. Supreme Court unanimously declared that the NRA law was unconstitutional, ruling that it infringed the separation of powers under the United States Constitution. The NRA quickly stopped operations, but many of its labor provisions reappeared in the National Labor Relations Act (Wagner Act), passed later the same year. The long-term result was a surge in the growth and power of unions, which became a core of the New Deal Coalition that dominated national politics for the next three decades.
Background As part of the "First New Deal", the NRA was based on the premise that the Great Depression was caused by market instability and that government intervention was necessary to balance the interests of farmers, business and labor. The NIRA, which created the NRA, declared that codes of fair competition should be developed through public hearings, and gave the Administration the power to develop voluntary agreements with industries regarding work hours, pay rates, and price fixing.National Recovery Administration. The Columbia Encyclopedia, Sixth Edition. 2001–07 The NRA was put into operation by an executive order, signed the same day as the passage of the NIRA.
New Dealers who were part of the administration of President Franklin D. Roosevelt saw the close analogy with the earlier crisis handling the economics of World War I. They brought ideas and experience from the government controls and spending of 1917–18.
In his June 13, 1933 "Statement on the National Industrial Recovery Act", President Roosevelt described the spirit of the NRA: "On this idea, the first part of the NIRA proposes to our industry a great spontaneous cooperation to put millions of men back in their regular jobs this summer."Franklin D. Roosevelt Presidential Library and Museum – Our DocumentsFranklin D. Roosevelt Statement on N.I.R.A. He further stated, "But if all employers in each trade now band themselves faithfully in these modern guilds—without exception—and agree to act together and at once, none will be hurt and millions of workers, so long deprived of the right to earn their bread in the sweat of their labor, can raise their heads again. The challenge of this law is whether we can sink selfish interest and present a solid front against a common peril."
Inception
The first director of the NRA was Hugh S. Johnson, a retired United States Army general who had been in charge of supervising the wartime economy in 1917–1918. He was named Time magazine's "Man of the Year" in 1933. Johnson saw the NRA as a national crusade designed to restore employment and regenerate industry.
Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35 to 45 hours, and the abolition of child labor. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.
Coal The negotiations of a code for the bituminous coal industry came against the background of a rapidly swelling union, the United Mine Workers headed by John L. Lewis and an unstable truce in the Pennsylvania coal fields. The NRA tried to get the principals to compromise with a national code for a decentralized industry in which many companies were anti-union, sought to keep wage differentials, and tried to escape the collective bargaining provisions of section 7A. Agreement among the parties was finally reached only after the NRA threatened that it would impose a code. The code did not establish price stabilization, nor did it resolve questions of industrial self-government versus governmental supervision or of centralization versus local autonomy, but it made dramatic changes in abolishing child labor, eliminating the compulsory scrip wages and company store, and establishing fair trade practices. It paved the way for an important wage settlement.James P. Johnson, "Drafting the NRA Code of Fair Competition for the Bituminous Coal Industry," Journal of American History, Vol. 53, No. 3 (Dec. 1966), pp. 521–41 in JSTOR
Price controls In early 1935 the new chairman, Samuel Clay Williams, announced that the NRA would stop setting prices, but businessmen complained. Chairman Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Williams said, "Greater productivity and employment would result if greater price flexibility were attained." Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim, reported Time magazine: "To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer." However, it was also argued NRA's price control method promoted monopolies.
The business position was summarized by George A. Sloan, head of the Cotton Textile Code Authority:
Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level insofar as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employees is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise....But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive.
The Blue Eagle The Blue Eagle was a symbol used in the United States by companies to show compliance with and support of the National Industrial Recovery Act. To mobilize political support for the NRA, Johnson launched the "NRA Blue Eagle" publicity campaign to boost his bargaining strength to negotiate the codes with business and labor.SchlesingerJohnson, Hugh S. The Blue Eagle From Egg to Earth. New York: Doubleday, Doran & Company, 1935.Himmelberg, Robert. The Origins of the National Recovery Administration. 2d paperback ed. New York: Fordham University Press, 1993. Businesses were entitled to display the logo only if they abided by the labor standards mandated by the NIRA, including increased hourly wages and maximum work hours. President Roosevelt's goal was for consumers to only shop at stores that displayed the Blue Eagle, and to avoid stores that did not. In doing this, Roosevelt hoped that those stores which did not comply with the policies of the NRA would change their stance, or they would risk experiencing "economic death" as a result.
Many sources credit advertising art director Charles T. Coiner with the design. When the NRA was looking for someone to design its symbol, a governmental contract with Philadelphia advertising agency N.W. Ayer led them to Coiner, who had gotten a job with Ayer in 1924, nine years before the creation of the NRA. According to a few sources, however, it was sketched by Johnson, based on an idea used by the War Industries Board during World War I.Schlesinger, Jr., Arthur M. The Age of Roosevelt, Vol. 2: The Coming of the New Deal. Paperback ed. New York: Mariner Books, 2003. (Originally published 1958.) The eagle holds a gear, symbolizing industry, in its right talon, and bolts of lightning in its left talon, symbolizing power. The NRA's slogan, "We Do Our Part", often appeared below the eagle, encouraging consumers to feel part of a collective effort.
All companies that accepted President Franklin D. Roosevelt's Re-employment Agreement or a special Code of Fair Competition were permitted to display a poster showing the Blue Eagle together with the announcement, "NRA Member. We Do Our Part." In addition, manufacturers began affixing the logo to product packaging and other advertising, with the Blue Eagle appearing on clothing labels, food packages, cigar labels, fruit crates, sheet music, shaving razors, and typewriter ribbons. When the Blue Eagle was first introduced, it arrived with a flurry of hope for businesses and individuals struggling as a result of the Great Depression. Shortly after the rules of the NRA were established, more than 10,000 businesses applied for the right to display the Blue Eagle in their store windows, by pledging their support to the program. Johnson decided to put together a Blue Eagle drive to gain support for the movement; while it worked initially, support dwindled as time went on. What started as mass support of the NRA and the Blue Eagle symbol that accompanied it turned into resentment and disapproval, especially from the businesses that were boycotted because they refused to display the symbol in their front windows.
In addition to businesses displaying posters in storefront windows, in advertising, and in packaging and labels, American consumers and businesses used the Blue Eagle in a variety of other ways. Citizen consumers stitched the logo onto doilies, tapestries, and quilts to show their allegiance to the program. Grassroots quilt makers designed, constructed, and displayed quilts bearing the symbol, not following one pattern source, but creating their own. Some of these quilt makers sent their Blue Eagle quilts as gifts to the Roosevelts. Like any other art, there is more meaning behind these quilts than being simply quilts; the NRA and Blue Eagle were a big enough impact for artists to incorporate it into their work. Other items that used the Blue Eagle symbol include buttons, picture frames, candy boxes and tape packaging. The most famous use of the Blue Eagle is perhaps as an NFL team name, when the franchise from Philadelphia named their team the Eagles. Bert Bell and Lud Wray purchased the team in 1933 and changed the name of the team in honor of the NRA.
Critics Most businesses adopted the NRA without complaint, but Henry Ford was reluctant to join.Dan Cooper and Brian Grinder, "We Do Our Part: Henry Ford and the NRA," Financial History, Spring 2009, Issue 94, pp. 10–35
The National Recovery Review Board, headed by noted criminal lawyer Clarence Darrow, a prominent liberal, was set up by President Roosevelt in March 1934 and abolished by him that same June. The board issued three reports highly critical of the NRA from the perspective of small business, charging the NRA with fostering cartels. The Darrow board, influenced by Justice Louis D. Brandeis, wanted instead to promote competitive capitalism.