National Industrial Recovery Act Creates NRA Blue Eagle Program, Enabling Corporate Self-Regulation

President Roosevelt signs the National Industrial Recovery Act (NIRA) on June 16, 1933, creating the National Recovery Administration (NRA) to oversee the development of industry-wide “codes of fair competition” establishing minimum wages, maximum hours, collective bargaining rights, and production limits. The NRA launches its iconic Blue Eagle campaign, with businesses displaying the Blue Eagle emblem and slogan “We Do Our Part” to signal compliance. The program represents the most extensive experiment in government-supervised industrial self-regulation in American history—and demonstrates how corporate interests can capture ostensibly reform-minded institutions.

General Hugh Johnson, appointed NRA administrator, presides over the drafting of 557 basic codes and 208 supplementary codes covering approximately 23 million workers. While the codes establish important labor protections including Section 7(a)’s guarantee of collective bargaining rights, the code-drafting process is dominated by large corporations and trade associations that use the opportunity to cartelize their industries. Major corporations dominate the code authorities that administer each industry’s regulations, effectively allowing big business to write the rules governing their own conduct. Small businesses complain bitterly that the codes favor large competitors, while labor unions find that enforcement of Section 7(a) collective bargaining provisions is weak to nonexistent.

The NRA experience demonstrates how regulatory structures ostensibly designed for public benefit can be captured by regulated industries. Large corporations use code authorities to fix prices, limit competition, and suppress smaller competitors under the guise of “fair competition.” The U.S. Chamber of Commerce, initially skeptical, enthusiastically embraces the NRA once business dominance over code-making becomes clear. By 1935, the NRA faces criticism from both left and right—progressives attack its corporate domination while conservatives oppose its labor provisions. The Supreme Court’s unanimous invalidation of the NIRA in Schechter Poultry v. United States (May 1935) ends the experiment, but the episode provides lasting lessons about the risks of delegating regulatory authority to industry-dominated bodies and the capacity of organized business to turn reform institutions into instruments of cartelization.