AT THE NADIR of the Great Depression, half of American industrial production was idle as the economy reeled under the weight of endless and destructive policies from both Republicans and Democrats in Washington.
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Perhaps the most radical aspect
of the New Deal was the National Industrial Recovery Act, passed in June 1933,
which created a massive new bureaucracy called the National Recovery
Administration. Under the NRA, most manufacturing industries were suddenly forced
into government-mandated cartels. Codes that regulated prices and terms of sale
briefly transformed much of the American economy into a fascist-style
arrangement, while the NRA was financed by new taxes on the very industries it
controlled. Some economists have estimated that the NRA boosted the cost of
doing business by an average of 40 percent - not something a
depressed economy needed for recovery.
The economic impact of the NRA
was immediate and powerful. In the five months leading up to the act's passage,
signs of recovery were evident: factory employment and payrolls had increased
by 23 and 35 percent, respectively. Then came the NRA, shortening hours of
work, raising wages arbitrarily and imposing other new costs on enterprise. In
the six months after the law took effect, industrial production dropped
25 percent. Benjamin M. Anderson writes, "NRA was not a revival measure. It was
an antirevival measure. ... Through the
whole of the NRA period industrial production did not rise as high as it had been
in July 1933, before NRA came in."
The man Roosevelt picked to
direct the NRA effort was General Hugh "Iron Pants" Johnson, a profane,
red-faced bully and professed admirer of Italian dictator Benito Mussolini.
Thundered Johnson, "May Almighty God have mercy on anyone who attempts to
interfere with the Blue Eagle" (the official symbol of the NRA, which one
senator derisively referred to as the "Soviet duck"). Those who refused to
comply with the NRA Johnson personally threatened with public boycotts and "a
punch in the nose."
ultimately more than 500 NRA codes, "ranging from the production of lightning
rods to the manufacture of corsets and brassieres, covering more than 2 million
employers and 22 million workers." There were codes for the
production of hair tonic, dog leashes, and even musical comedies. A New Jersey
tailor named Jack Magid was arrested and sent to jail for the "crime" of
pressing a suit of clothes for 35 cents rather than the NRA-inspired "Tailor's
Code" of 40 cents.
In "The Roosevelt Myth",
historian John T. Flynn described how the NRA's partisans sometimes conducted
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.