The National Recovery Administration: History & Overview

Instructor: Jason McCollom
To address the industrial challenges of the Great Depression, the National Recovery Administration aimed at stabilizing the business sector through reducing competition. Its gains, however, were limited and the Supreme Court struck down the law in 1935.

The Creation and Goals of the National Recovery Administration

In 1933 at the height of the Great Depression, thousands of excited people packed into Yankee Stadium, and then made their way to a huge parade down Fifth Avenue in New York City. A passerby might have thought the Yankees just won the pennant, and that the crowds were celebrating this bright spot in an otherwise dismal year. The celebration, however, had nothing to do with sports. It was a public relations campaign for the National Recovery Administration, urging employers to publicly display the department's Blue Eagle stamp.

A little background: In the first years of the Great Depression, which began in 1929, businesses followed a predictable pattern. To survive, competing businesses drastically lowered prices and wages and laid off workers. President Franklin Roosevelt and his advisors argued that such practices only deepened the Depression and prevented economic recovery. They responded in 1933 with the New Deal program called the National Recovery Administration (NRA).

Led by retired general and prominent businessman Hugh Johnson, the NRA pressed companies and businesses to work together, rather than compete with one another. With relaxed antitrust regulations, the Roosevelt administration allowed businesses in hundreds of industries to meet and agree on issues of production, pricing, and work conditions. This was to be accomplished via fair-trade rules, referred to as 'codes.' In the big picture, these NRA measures sought to stabilize entire industries.

The second significant aspect of the NRA involved workers' rights. NRA guidelines urged management to meet with labor to work out agreeable prices and wages. Most importantly, the NRA set the precedent for federal recognition of workers' right to unionize and collectively bargain with their employers.

Promoting the NRA

The Roosevelt administration could not force businesses to participate in the NRA program of industry codes and worker-employer relations. So General Johnson had to launch a public relations campaign to persuade major businesses in all the major industries. Between 1933 and 1935, the NRA distributed tens of thousands of pamphlets across America, and Johnson made his case over the radio and reached all corners of the country.

The NRA also staged the rallies at Yankee Stadium and the parades down Fifth Avenue. In addition, all participating businesses were urged to stamp their products with the NRA Blue Eagle along with the program's slogan, 'We do our part.' Shoppers across the nation came across the Blue Eagle on storefronts, company paperwork, and entrances to workplaces and factories. The Blue Eagle became a symbol of the hope for better economic times, and it embodied Roosevelt's contagious optimism.

The NRA Blue Eagle became a symbol of hope.
blue eagle

The Results of the NRA

But Blue Eagles alone could not bring the country out of the Great Depression. Neither could the NRA. Instead of the NRA codes fostering a sense of comradery between competing businesses and between workers and owners, they instead strengthened the status quo. Big businesses and corporations controlled the code-writing, and did so to serve their own interests rather than the general welfare. As larger businesses fixed prices, they purposefully priced out their smaller competitors.

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