The Connally Hot Oil Act of 1935 was enacted in the wake of the

Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...

's decision to strike down Section 9 (c) of the

National Industrial Recovery Act The National Industrial Recovery Act of 1933 (NIRA) was a US labor law and consumer law passed by the 73rd US Congress to authorize the president to regulate industry for fair wages and prices that would stimulate economic recovery. It also e ...

(NIRA) in ''

Panama Refining Co. v. Ryan ''Panama Refining Co. v. Ryan'', 293 U.S. 388 (1935), also known as the ''Hot Oil case'', was a case, in which the United States Supreme Court ruled that the Franklin Roosevelt administration's prohibition of interstate and foreign trade in petrole ...

''. The act 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 produced or withdrawn from storage in excess of the amount permitted ...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." The act was named after Senator

Tom Connally Thomas Terry Connally (August 19, 1877October 28, 1963) was an American politician, who represented Texas in both the U.S. Senate and the House of Representatives, as a member of the Democratic Party. He served in the U.S. House of Representa ...

. It revived the provisions of Section 9 (c) of the NIRA and added procedural safeguards, which, the Supreme Court argued, were constitutional. Ostensibly enacted to protect the industry from "contraband oil", it was mainly a way of

cartel A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mos ...

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. There was some debate as to the law's effects on the transport of other fuels such as coal and timber, and many independent oil producers vehemently opposed the government regulations. In 1937, four federal courts upheld the Connally Act, which was later administered by the Federal Petroleum Board, also created by the law, within the

Department of the Interior The United States Department of the Interior (DOI) is one of the executive departments of the U.S. federal government headquartered at the Main Interior Building, located at 1849 C Street NW in Washington, D.C. It is responsible for the mana ...

References

External links

"Connally Hot Oil Act of 1935"
''

Handbook of Texas The ''Handbook of Texas'' is a comprehensive encyclopedia of Texas geography, history, and historical persons published by the Texas State Historical Association (TSHA). History The original ''Handbook'' was the brainchild of TSHA President Wal ...

''.
"Business: Again, Hot Oil"
''

Time Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...

''. April 4, 1938. 1935 in law Acts of the 74th United States Congress United States federal commerce legislation National Recovery Administration New Deal legislation United States federal legislation articles without infoboxes History of the petroleum industry in the United States {{US-fed-statute-stub

See also

References

External links