Connally Hot Oil Act of 1935
Encyclopedia
The Connally Hot Oil Act of 1935 was enacted in the wake of the Supreme Court
's decision to strike down Section 9 (c) of the National Industrial Recovery Act
(NIRA) in Panama Refining Co. v. Ryan
, which gave the President authority "to prohibit the transportation in interstate and foreign commerce of petroleum ... produced or withdrawn from storage in excess of the amount permitted ... by any State law". It revived the provisions of Section 9 (c) of the NIRA and added procedural safeguards, which the Supreme Court argued was constitutional. Ostensibly enacted to protect the industry from "contraband oil", it was mainly a way of cartel
izing the industry to stabilize falling prices. The new law reestablished the NIRA's original provision that violators would receive a maximum jail sentence of six months, but also increased The maximum fine penalty from $1,000-which was enacted in the NIRA- to $2,000. Though the legislation was intended to expire on June 16, 1937, it was maintained afterwards as a permanent law. The law was later administered by the Federal Petroleum Board, a part of the Department of the Interior which was also created by the law as well.
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
's decision to strike down Section 9 (c) of the National Industrial Recovery Act
National Industrial Recovery Act
The National Industrial Recovery Act , officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 (Ch. 90, 48 Stat. 195, formerly...
(NIRA) in Panama Refining Co. v. Ryan
Panama Refining Co. v. Ryan
Panama Refining Co. v. Ryan, 293 U.S. 388 , also known as the Hot Oil case, was a case in which the United States Supreme Court ruled unconstitutional the Roosevelt Administration's prohibition of interstate and foreign trade in petroleum goods produced in excess of state quotas—the "hot oil"...
, which gave the President authority "to prohibit the transportation in interstate and foreign commerce of petroleum ... produced or withdrawn from storage in excess of the amount permitted ... by any State law". It revived the provisions of Section 9 (c) of the NIRA and added procedural safeguards, which the Supreme Court argued was constitutional. Ostensibly enacted to protect the industry from "contraband oil", it was mainly a way of cartel
Cartel
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
izing the industry to stabilize falling prices. The new law reestablished the NIRA's original provision that violators would receive a maximum jail sentence of six months, but also increased The maximum fine penalty from $1,000-which was enacted in the NIRA- to $2,000. Though the legislation was intended to expire on June 16, 1937, it was maintained afterwards as a permanent law. The law was later administered by the Federal Petroleum Board, a part of the Department of the Interior which was also created by the law as well.
External links
- Connally Hot Oil Act of 1935 from Handbook of Texas online
- Again, Hot Oil from Time Magazine, 1938