of the N.R.A. suited to the needs of the next phase, which is, in
turn, a period of preparation for legislation which will determine
its permanent form.

In this recent reorganization we have recognized three distinct
functions: first, the legislative or policy making function;
second, the administrative function of code making and revision;
and, third, the judicial function, which includes enforcement,
consumer complaints and the settlement of disputes between
employers and employees and between one employer and another.

We are now prepared to move into this second phase, on the basis of
our experience in the first phase under the able and energetic
leadership of General Johnson.

We shall watch carefully the working of this new machinery for the
second phase of N.R.A., modifying it where it needs modification
and finally making recommendations to the Congress, in order that
the functions of N.R.A. which have proved their worth may be made a
part of the permanent machinery of government.

Let me call your attention to the fact that the national Industrial
Recovery Act gave businessmen the opportunity they had sought for
years to improve business conditions through what has been called
self-government in industry. If the codes which have been written
have been too complicated, if they have gone too far in such
matters as price fixing and limitation of production, let it be
remembered that so far as possible, consistent with the immediate
public interest of this past year and the vital necessity of
improving labor conditions, the representatives of trade and