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. 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 16, 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." 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."
Read more about this topic: National Recovery Administration
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