Many grade school discussions of the National Recovery Administration - the epitome of the (first) New Deal approach to battling the Great Depression - talk of businesses drawing up their codes of fair competition as if Roosevelt had merely offered helpful suggestions. In reality, of course, the only way to make the NRA codes "work" was to enforce their provisions on the small producers, once the big producers (and big labor unions) had hammered out the code for a given industry. Countless producers were fined or jailed, such as Jacob Maged, a Jersey City dry cleaner.
Although FDR was encouraging his political allies to insinuate that the New Deal corresponded to populist notions about helping the "little guy" in the face of "big business," Jacob Maged was the littlest of the little guys, being bullied by the National Recovery Administration (NRA). Historian Burt Folsom explains:
Maged had been pressing pants for twenty-two years and his low prices and quality work had kept him competitive with larger tailor shops in the better parts of town. The NRA Cleaners and Dyers Code demanded that 40 cents be charged to press a suit. Maged, despite repeated warnings, insisted on charging his customers only 35 cents. "You can't tell me how to run my business," Maged insisted. When threatened with jail, he said, "If you can send me to jail, go ahead." Not only was Maged thrown in jail, he was also slapped with a hundred-dollar fine. "We think that this is the only way to enforce the NRA," said Abraham Traube, a director of the NRA code authority for the Cleaners and Dyers Board of Trade. "If we did the same thing in New York City we would soon get the whole industry in line."
This hardly seems like voluntary compliance! Yet Hugh Johnson, operating the NRA for Roosevelt, continuously put forth the notion that businesses across America were freely choosing to operate according to NRA guidelines. It is true that, in many cases, there was no official enforcement. In those cases, however, enforcement was left to thugs and ruffians hired by Hugh Johnson, who made ominous comments about what could happen to small business owners who didn't comply. Major American cities had NRA parades in which workers marched like soldiers. The message was clear: everyone was expected to join. Across the country, dozens of men were fined or jailed - or both - for failing to volunteer.
Despite the heavy-handed enforcement, the NRA in fact failed to help the economy. Roosevelt was actually relieved when the Supreme Court canceled the program, because he did not then need to admit that it had failed. Historian John Steele Gordon writes:
In fact, the court did the Roosevelt administration a big favor. The whole system established by the NRA was collapsing as public opinion turned decisively against it. "The excessive centralization and dictatorial spirit," columnist Walter Lippmann explained, "are producing a revulsion of feeling against bureaucratic control of American economic life." The original bill had contained a two-year sunset provision, and it was increasingly unlikely that Congress could have been persuaded to renew it.
FDR had learned. His future attempts at reducing the economic freedom of the ordinary citizen would be more subtle.