Although the National Industrial Recovery Act (NIRA) and its agency the National Recovery Administration (NRA) were among Franklin Roosevelt’s proudest accomplishments, they were also among the New Deal’s biggest fiascos. To call the NIRA and the NRA bizarre would be a severe understatement. The truth is that like much of the New Deal, their features were straight out of a fascist playbook. In fact, even the most die-hard proponents of the New Deal would not deny that the NIRA and NRA would have fit in perfectly in both Mussolini’s Italy and Hitler’s Germany.
The NIRA declared that U.S. industries should combine into cartels, where they would set codes for prices, wages, and working conditions with which all the companies in that industry were required to comply.
Not surprisingly, black markets began developing in reaction to the NRA codes. In his great book The Roosevelt Myth (1944), John T. Flynn stated:
The NRA was discovering it could not enforce its rules. Black markets grew up. Only the most violent police methods could procure enforcement. In Sidney Hillman’s garment industry the code authority employed enforcement police. They roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night. But without these harsh methods many code authorities said there could be no compliance because the public was not back of it.
(For an excellent description of the NRA, see this Wikipedia entry.)
The head of the NRA was a man named Hugh S. Johnson. He was a retired U.S. Army Brigadier General, a man who believed in rules, regulations, order, and stability. Like Roosevelt, he considered the New Deal to be a national crusade to restore prosperity to America. To build support for the NRA, Johnson came up with the idea of a patriotic emblem known as the Blue Eagle.
American businessmen were expected to prominently display Blue Eagle posters in their windows, on packages, and in advertisements. The posters displayed a big blue eagle with the words “NRA Member. U.S. We Do Our Part.”
The idea was to combine Roosevelt’s fascist programs with the power of patriotism. That way, Americans businessmen could be more easily manipulated into accepting an economic system that was alien to everything Americans had stood for since the founding of the Republic — i.e., economic liberty, private property, free markets, and free enterprise
Any businessman who refused to display the Blue Eagle was, not surprisingly, considered to be a suspect American, one who had to be dealt with. To deal with such dissidents, pro-New Deal proponents organized well-publicized economic boycotts designed to pressure these unpatriotic dissidents into getting with the program.
In 1935 in the case of Schechter Poultry Corp. vs. U.S., the U.S. Supreme Court unanimously declared Roosevelt’s NIRA and NRA unconstitutional. Given that Roosevelt’s socialist program of Social Security survived constitutional scrutiny and has been with us ever since, it boggles the mind as to what America would look like today if the Supreme Court had ruled otherwise in Schechter.
