NRA

Place info here about the NRA(National Recovery Act)


 * The NRA was known as Act of June 16, 1933. It was an American statute which allowed the President of the United States to regulate industry and permit cartels and monopolies in attempt to stimulate economic recovery, and establish a national public works program.


 * The Act had two Main titles**


 * **Title I** - was devoted to industrial recovery, and authorized the promulgation of industrial codes of fair competition, guaranteed trade union rights, permitted the regulation of working standards, and regulated the price of certain refined petroleum products and their transportation.
 * **Title ll** - Established the Public Works Administration, outlined the projects and funding opportunities it could engage in, and funded the Act.



> In early 1935 the new chairman, [|Samuel 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."
 * The first problem of the Act at the time as well as more recently is that the NIRA endorsed monopolies, with the attendant economic problems associated with that type of market failure. Even the National Recovery Review Board, made by President Roosevelt in April 1935 to review the performance of the NRA, concluded that the Act hindered economic growth by promoting cartels and monopolies. One of the economic effects of monopoly and cartels is higher prices. Higher prices were an intentional outcome of the Act because deflation was a severe problem at the time.
 * A second key criticism of the Act is that it lacked support from the business community, and thus was doomed to failure. Business support for national planning and government intervention was very strong in 1933, but had collapsed by mid-1934. This is a classic problem of cartels, and thus NIRA codes failed as small business abandoned the cartels.
 * A third major criticism of the Act is that it was poorly administered. The Act purposefully brought together competing interests this includes labor and business, big business and small business, etc. in a coalition to support passage of the legislation, but these competing interests soon fought one another over the Act's implementation. As a consequence, NRA collapsed due to failure of leadership and confusion about its goals. By end of 1934, NRA leaders had practically abandoned the progressive interventionist policy which motivated the Act's passage, and were supporting free-market philosophies contributing to the collapse of almost all industry codes
 * From the beginning, the NRA reflected divergent goals and suffered from widespread criticism. The businessmen who dominated the code drafting wanted guaranteed profits and insisted on security for their renewed investment and future production. Congressional critics insisted on continued open pricing and saw the NRA codes as a necessary means of making it fair and orderly. A few intellectuals wanted an even more extensive government role in the form of central economic planning. Finally, unhappy labor union representatives fought with little success for the collective bargaining promised by the NIRA. **The codes did little to help recovery, and by raising prices, they actually made the economic situation worse.**
 * Though under criticism from all sides, NRA did not last long enough to fully implement its policies. In May 1935, in the case of the //Schechter Poultry Corp. v. United States//, the U.S. Supreme Court invalidated the compulsory-code system on the grounds that the NIRA improperly delegated legislative powers to the executive and that the provisions of the poultry code (in the case in question) did not constitute a regulation of interstate commerce. (See the interstate Commerce Act In a lengthy and unanimous opinion, the Court seemed to demonstrate a complete unwillingness to endorse Roosevelt’s argument that the national crisis of economic depression demanded radical innovation. Later, FDR would use this Court opinion as evidence that the Court was living in the “horse and buggy” era and needed to be reformed.
 * === Price controls ===



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http://www.ourdocuments.gov/doc.php?flash=old&doc=66

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