When Franklin Roosevelt formed the
National Recovery Administration (NRA) early in the
New Deal, Davis was tapped as Deputy Administrator. The NRA was declared unconstitutional and disbanded in 1937, and Davis returned to New York to head the state's Labor Mediation Board. He developed such a good reputation as a mediator between management and labor that Roosevelt brought him back to Washington in 1941 to join (and soon chair) the
National Defense Mediation Board (NDMB), which became the
War Labor Board (WLB) in early 1942. Davis ran the Board until March 1945, when, seeing the end of the war in sight, Roosevelt named him Director of Economic Stabilization, to manage the return to a peace-time economy. The NDMB-WLB Chairmanship was an important yet difficult position, Davis having to walk the line between management and organized labor. Though generally trusted by both sides, his main job was to strongly discourage strikes for the duration of the war. A frequent figure in news articles of the 1940s, Davis' success was often ascribed to his personality and appearance. The news magazine
Time described him variously as "rumple-haired", "dry-humored", "shaggy", "humane", "tendacious", "chunky", and "grizzled", but above-all patient and fair-minded. A 1941
Time article praised his " record' of "peacably unraveling the most tangled wrangle", and declared him "one of the brightest hopes of the US had in the murky field of industrial disputes." ==From Roosevelt to Truman==