NRA Code System.—The NRA admittedly was a logical exten sion of the voluntary trade practice submittal plan previously operated, which about 25 industries had set up, under Federal Trade Commission regulations. Under the tremendous NRA drive toward codes, 1933-35, about 800 national "code authorities" were set up to govern specific lines of trade, and in larger fields hundreds of local divisional code authorities. These code authori ties attempted to administer the various codes which had been evolved out of a multitude of conferences, first between those in the lines of trade, and second, between the government NRA heads and the representatives of the lines of trade. The NRA code requirements were (I) true representation of the trade, (2) fairness to employes, consumers, competitors, (3) not monop olistic, (4) non-oppressive to small enterprise. Special emphasis was upon setting of minimum wages and maximum hours of labour, between 3o and 4o per week. President Roosevelt's final approval of each code was necessary. The act also included a licensing system for business, thus giving the President the power (which he never used) to prevent a non-cooperator from continu ing in business. Each individual business was asked to sign the code adopted, and was then permitted to display the official NRA insignia, the "Blue Eagle." Violation of code provisions meant loss of this right, and the public was urged to patronize only "Blue Eagle" firms. United States attorneys had power to enjoin firms or groups not complying with the regulations. Industries not submitting codes could have one imposed upon them.
Code difficulties arose almost immediately. The 7000 separate lines of trade in the U.S. overlapped confusedly, and were slow in agreeing among themselves. In three months only five major and 47 minor industries had completed codes, although two years later a total of about Soo had developed some kind of code. From the start it was also evident that there was little difficulty of agreement on the basic matters of shorter hours and minimum wage, but that the fair competition and trade practice codes, as well as production and price control, and labour-consumer repre sentation in code making, were the most controversial points. As regards fair competition and trade practice the general tendency of business men was to set up ideal conditions of trading practice and profit protection, many of which sharply advanced prices or made more rigorous terms. The NRA however aimed at destruc tive price-cutting, not price-fixing; but the relaxing of the anti trust laws left open the door to price control. Thus some codes and organized industries (as for instance lumber) over-reached themselves, while many industries found that "chiselers" within their own ranks at once acted contrary to the code. There was soon widespread code demoralization, and not even the attempts of Gen. Hugh Johnson, code administrator, could stem the dis affection. Labour and consumer criticisms with regard to collec tive bargaining and a share in code-making became greater, and by April 1935 it was conceded even by its chairman (Donald R. Richberg) of the National Recovery Board that the code ma chinery was not working right. Legally there had been many court contests, 193 favourable and 31 unfavourable, as to particular questions arising in administration. 65 Federal judges had passed on the NRA but only 9 had expressed sweeping unfavourable opinion. The NRA Supreme Court decision was unanimous.
Promptly upon the Supreme Court decision in May 1935 the entire NRA organization was dissolved, and it was left to lines of trade that cared to do so to continue codes voluntarily. An NRA extension act permitted the President to approve voluntary codes up to April 1, 1936. By October 1935 it became clear that busi ness desired to retain the code method voluntarily, and a check-up showed that about 700 out of the 800 lines of trade which had developed codes were retaining at least the wage and hour pro visions; many retaining the entire code intact. There was no widespread drop in wages or rise in hours or dropping of the compulsory codes. NRA code failure, and rising business antag onism to Government participation in business during the "New Deal" administration, throttled progress for four years, in trade practice code matters. There was little activity in setting up further trade practice codes, either by completely voluntary action or in conjunction with FTC. In 1936, the Advertising Federation set up a new and more detailed code for advertisers, but when the Wheeler-Lea amendment to the FTC act was enacted in 1938, giving the FTC power to make stipulations even when no com plaints had been brought to it, a decided further tightening up of advertising practice was forced by frequent FTC stipulations. In 1939, a committee of business men headed by Lincoln Filene drafted an amendment to FTC laws enabling groups in any in dividual industry representing its various functions (from manu facturer to retailer) to set up a code of trade practice regulations and empower the FTC to supervise and administer it. This is the likely trend of American codes in the future; business men of the decade appearing certain to stress greater voluntary code action; as phrased by Winthrop Aldrich in 1939, "So that in this great democracy we can use voluntary action more than compul sion, self-control more than law, a growth of public responsibility more than legislative enactment, education more than force." BIBLIOGRAPHY.-J. G. Frederick's Book of Business Standards Bibliography.-J. G. Frederick's Book of Business Standards (1924) , Primer of New Deal Economics (1933) ; J. Heermance, Codes of Ethics (1924) ; Edward D. Page, Trade Morals (1914); J. A. Hob son, Economics and Ethics. (J. G. F.)