The National Industrial Recovery Act (NIRA) was a law passed by the United States Congress in 1933 to authorize the President to regulate industry in an attempt to raise prices after severe deflation and stimulate economic recovery. It also established a national public works program known as the Public Works Administration (PWA, not to be confused with the WPA of 1935). The National Recovery Administration (NRA) portion was widely hailed in 1933, but by 1934 business' opinion of the act had soured. By March 1934 the "NRA was engaged chiefly in drawing up these industrial codes for all industries to adopt." However, the NIRA was declared unconstitutional by the Supreme Court in 1935 and not replaced.
The legislation was enacted in June 1933 during the Great Depression in the United States as part of President Franklin D. Roosevelt's New Deal legislative program. Section 7(a) of the bill, which protected collective bargaining rights for unions, proved contentious (especially in the Senate), but both chambers eventually passed the legislation. President Roosevelt signed the bill into law on June 16, 1933.
The Act had two main sections (or "titles"). Title I was devoted to
industrial recovery, authorizing 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 II
established the Public Works Administration, outlined the projects and funding opportunities it could engage in. Title II also provided funding for the Act.
The Act was implemented by the NRA and the Public Works Administration (PWA). Very large numbers of regulations were generated under the authority granted to the NRA by the Act, which led to a significant loss of political support for Roosevelt and the New Deal. The NIRA was set to expire in June 1935, but in a major constitutional ruling the U.S. Supreme Court held Title I of the Act unconstitutional on May 27, 1935, in Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). The National Industrial Recovery Act is widely considered a policy failure, both in the 1930s and by historians today. Disputes over the reasons for this failure continue. Among the suggested causes are that the Act promoted economically harmful monopolies, that the Act lacked critical support from the business community, and that it was poorly administered. The Act encouraged union organizing, which led to significant labor unrest. The NIRA had no mechanisms for handling these problems, which led Congress to pass the National Labor Relations Act in 1935. The Act was also a major force behind a major modification of the law criminalizing making false statements.