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It is Still Amazing This Was Once Law in This Country

August 25, 2010, 10:14 am

From the National Industrial Recovery Act of 1933, eventually struck down by the Supreme Court:

Whenever the President shall find that destructive wage or price cutting or other activities contrary to the policy of this title are being practiced in any trade or industry or any subdivision thereof, and, after such public notice and hearing as he shall specify, shall find it essential to license business enterprises in order to make effective a code of fair competition or an agreement under this title or otherwise to effectuate the policy of this title, and shall publicly so announce, no person shall, after a date fixed in such announcement, engage in or carry on any business, in or affecting interstate or foreign commerce, specified in such announcement, unless he shall have first obtained a license issued pursuant to such regulations as the President shall prescribe. The President may suspend or revoke any such license, after due notice and opportunity for hear ing, for violations of the terms or conditions thereof. Any order of the President suspending or revoking any such license shall be final if in accordance with law.

With this law, all commerce was to be conducted only at the President's pleasure. The law also instituted code authorities, modeled on Mussolini's economic system, that would set prices, wages, production quotas and nearly every other business practice in an industry. To some extent, I would argue that the recent health care bill is the first modern American code authority.

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  • caseyboy

    Good old FDR. After this law was struck down he was determined to only appoint judges that were like-thinking and beholding to him. He actually attempted to expand the number of justices on the Supreme Court in order to be able to get more appointees on it. Fortunately he couldn't get Congress to go along with that. Congress said they couldn't legislate that type of change and that it would have to be done by Constitutional Amendment. FDR didn't want to expend the political capital or energy to take that path.

  • TomB

    You should check out the ridiculous set up of the "milk market."

    The Feds regulate the price, the supply, the quality, etc.

    http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateO&navID=IndustryMarketingandPromotion&leftNav=IndustryMarketingandPromotion&page=FMMOProgramObjectives

  • Henry Bowman

    Amity Shlaes book The Forgotten Man goes into some detail about the NIRA. Note that the Supreme Court struck down the law 9-0. The court was influenced in no small way by the description of how chickens were purchased (government agents actually specified exactly how customers could select their chickens for slaughter.) I suspect today's court might leave it in place.

    The first director of the NIRA placed a huge portrait of Benito Mussolini in his office. That gives one an idea of what sort of people were running the country at the time.

  • Years ago when I lived in the Arcadia district of NE Phoenix, I had enough grapefruit trees in my year to produce several tons a year. These were sold to Sunkist to be turned into juice, and I received a pittance ($%/ton or so).

    One year, there was a big freeze in Florida which damaged their grapefruit crop. That year, Sunkist did not buy at all in Arizona - the Grapefruit Marketing Board (or whatever it was called) decided to protect FL (I don't get the logic of this, but it happened).

    The word of that marketing board was, literally, law. Oh, and it had 12 members, 9 of whom were Sunkist.

  • John Moore

    Let us also not forget that in the 90s, a conviction for marijuana growing for personal use was upheld on Commerce Clause grounds. The court ruled just as they had in the original wheat ruling, that the person's use of home grown marijuana reduced his participation in the interstate marijuana market, and hence the feds had jurisdiction under the tortured Commerce Clause to regulate it (and imprison him).

    I believe that is the current state of Commerce Clause law, although IANAL.

  • Ron H.

    "Let us also not forget that in the 90s, a conviction for marijuana growing for personal use was upheld on Commerce Clause grounds."

    John, you may be thinking of another case, but it sounds similar to Gonzales vs Raich.

    This poor woman, who was unable to relieve her constant pain in any way except through the use of medical marijuana, which is LEGAL in CA, was prosecuted under the commerce clause.

    I don't know of a case that's a worse perversion of the commerce clause.

    Here's Justice Thomas's dissenting opinion. A great read on the subject.

  • Ron H.

    Sorry about all the bold. I apparently mistyped a tag.

  • Dang!! Who was President in 1933? ... Ah, yes, Obama's most favorite President ever (besides himself, of course): FDR.

  • Mesa Econoguy

    If you actually read the purpose and intent of the law, and it's historical context, you get an eerie sense of déjà vu looking at Obamalinicare.

    Same idea, slightly different application.

    The new financial regs bill, same thing.

    They want to control everything, and by everything, I mean anything that moves, breathes, serves a purpose, has value, creates value, or otherwise exists.