Changes

There was something almost awesome, and perhaps typically American, in automaker [[Henry Ford]]'s defiance of the NRA. Ford insisted his giant company was adhering to the law and had, in fact, anticipated many of the code provisions regarding minimum wages, maximum hours, and working conditions. Critics focused their attack upon the company's labor practices, which clearly foreshadowed a coming strife (the autoworkers union did not yet exist), but no case was brought to court and Ford's fiercely individualistic attitude was never successfully challenged by the New Dealers, who opposed individualism. The larger issue was not whether Ford did or did not comply, but rather what, in this period of profound social change, was to be the "fundamental American idea."<ref> Fine (1958)</ref>  

There was something almost awesome, and perhaps typically American, in automaker [[Henry Ford]]'s defiance of the NRA. Ford insisted his giant company was adhering to the law and had, in fact, anticipated many of the code provisions regarding minimum wages, maximum hours, and working conditions. Critics focused their attack upon the company's labor practices, which clearly foreshadowed a coming strife (the autoworkers union did not yet exist), but no case was brought to court and Ford's fiercely individualistic attitude was never successfully challenged by the New Dealers, who opposed individualism. The larger issue was not whether Ford did or did not comply, but rather what, in this period of profound social change, was to be the "fundamental American idea."<ref> Fine (1958)</ref>  

==Price controls==

==Price controls==

In early 1935 the new chairman announced that the NRA would stop setting prices, but businessmen complained.  Chairman Samuel Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Williams said, "Greater productivity and employment would result if greater price flexibility were attained."  Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim, reported ''Time'' magazine. "To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer."  The business position was summarized by George A. Sloan, head of the Cotton Textile Code Authority:  

In early 1935 the new chairman announced that the NRA would stop setting prices, but businessmen complained.  Chairman Samuel Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Williams said, "Greater productivity and employment would result if greater price flexibility were attained."  Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim, reported ''Time'' magazine. "To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer."  The business position was summarized by George A. Sloan, head of the Cotton Textile Code Authority:  

:"Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level in so far as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employes is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise....But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive.<ref> "Dollar Men & Prices" ''Time'' (Jan 21, 1935) [http://www.time.com/time/magazine/article/0,9171,787937,00.html online] </ref>

:"Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level in so far as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employes is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise....But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive.<ref> "Dollar Men & Prices" ''Time'' (Jan 21, 1935) [http://www.time.com/time/magazine/article/0,9171,787937,00.html online] </ref>

==case studies==

==case studies==

Pennock (1997) shaws that the rubber tire industry faced debilitating challenges, mostly brought about by changes in the industry's retail structure and exacerbated by the Depression. Segments of the industry attempted to use the NRA codes to solve these new problems and stabilize the tire market, but the tire manufacturing and tire retailing codes were patent failures. Instead of leading to cartelization and higher prices, which is what most scholars assume the NRA codes did, the tire industry codes led to even more fragmentation and price cutting.

Pennock (1997) shaws that the rubber tire industry faced debilitating challenges, mostly brought about by changes in the industry's retail structure and exacerbated by the Depression. Segments of the industry attempted to use the NRA codes to solve these new problems and stabilize the tire market, but the tire manufacturing and tire retailing codes were patent failures. Instead of leading to cartelization and higher prices, which is what most scholars assume the NRA codes did, the tire industry codes led to even more fragmentation and price cutting.