National Industrial Recovery Act

Definition

The National Industrial Recovery Act (NIRA) was a key piece of legislation enacted in 1933 during the Great Depression, aimed at stimulating economic recovery by promoting industrial growth and establishing fair competition. The act authorized the president to regulate industry in an attempt to raise prices after severe deflation and to stimulate economic activity through the creation of codes of fair practices for industries. It also provided for public works programs, aiming to create jobs and boost consumer spending.

5 Must Know Facts For Your Next Test

1. The National Industrial Recovery Act was signed into law by President Franklin D. Roosevelt on June 16, 1933, as part of his New Deal agenda.
2. NIRA aimed to combat the effects of the Great Depression by encouraging industrial growth and reducing unemployment through government intervention in the economy.
3. The act was declared unconstitutional by the Supreme Court in 1935, which limited its effectiveness and led to a shift in New Deal policies.
4. NIRA's establishment of codes of fair competition sought to stabilize prices and wages, creating a more predictable economic environment for businesses and consumers.
5. The Public Works Administration, created under NIRA, played a significant role in constructing infrastructure like bridges, dams, and schools, contributing to long-term economic recovery.

Review Questions

• How did the National Industrial Recovery Act attempt to address the economic challenges posed by the Great Depression?
  • The National Industrial Recovery Act aimed to address the economic challenges of the Great Depression by implementing measures that promoted industrial growth and established fair competition among businesses. By regulating industries through codes of fair practices, NIRA sought to stabilize prices and wages, encouraging consumer spending and job creation. Additionally, its provisions for public works projects helped provide immediate employment opportunities, which were crucial during this period of high unemployment.
• Discuss the impact of Section 7(a) of the National Industrial Recovery Act on labor relations in the United States.
  • Section 7(a) of the National Industrial Recovery Act had a significant impact on labor relations by recognizing workers' rights to organize and bargain collectively. This provision encouraged union formation and strengthened labor movements across various industries. While it provided legal protections for workers, its effectiveness varied depending on enforcement, leading to increased tensions between employers and labor unions as workers sought better wages and working conditions.
• Evaluate the long-term implications of the Supreme Court's decision to declare the National Industrial Recovery Act unconstitutional on subsequent New Deal policies.
  • The Supreme Court's decision to declare the National Industrial Recovery Act unconstitutional in 1935 had significant long-term implications for subsequent New Deal policies. This ruling highlighted the limitations of government intervention in the economy and prompted New Deal leaders to reconsider their approach. In response, future legislation was crafted with more careful consideration of constitutional boundaries, ultimately leading to new programs that focused on direct assistance to individuals rather than broad industrial regulation. This shift influenced how government involvement in economic recovery evolved throughout the remainder of the New Deal era.

Related terms

Public Works Administration: A New Deal agency created by the NIRA that funded large-scale public works projects to create jobs and stimulate economic growth.

Codes of Fair Competition: Regulatory standards established under the NIRA that set minimum prices, wages, and working conditions for various industries to ensure fair competition.

Section 7(a): A provision of the NIRA that recognized workers' rights to organize and bargain collectively, significantly impacting labor relations in the United States.