A fixed price above cost has proved a lifesaver to more than one inefficient producer."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.
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. Carson noted: At this moment in time from the early days of the New Deal, it is difficult to recapture, even in imagination, the heady enthusiasm among a goodly number of intellectuals for a government planned economy.
So far as can now be told, they believed that a bright new day was dawning, that national planning would result in an organically integrated economy in which everyone would joyfully work for the common good, and that American society would be freed at last from those antagonisms arising, as General Hugh Johnson put it, from "the murderous doctrine of savage and wolfish individualism, looking to dog-eat-dog and devil take the hindmost.
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. 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.
The National Recovery Administration was a prime New Deal agency established by U. The NRA also had a two-year renewal charter and was set to expire in June 1935 if not renewed. 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 NRA was created by the National Industrial Recovery Act (NIRA) and allowed industries to get together and write "codes of fair competition." The codes were intended to reduce "destructive competition" and to help workers by setting minimum wages and maximum weekly hours, as well as minimum prices at which products could be sold. Supreme Court unanimously declared that the NRA law was unconstitutional, ruling that it infringed the separation of powers under the United States Constitution.
Agreement among the parties was finally reached only after the NRA threatened that it would impose a code.
Representing big business, the American Liberty League, 1934–40, was run by leading industrialists who opposed the liberalism of the New Deal.
Regarding the controversial NRA, the League was ambivalent.
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.