Guffey-Snyder Act of 1935

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GUFFEY-SNYDER ACT OF 1935

Under Title I of the National Industrial Recovery Act, the bituminous coal industry in late 1933 drafted a code governing business and labor practices in an effort to stabilize an industry long plagued by cutthroat competition and labor conflict. The code brought higher profits and wages, an increase in union membership, and a reduction in strikes. But the industry's peace and prosperity were fleeting, for within months the code began to collapse in the face of widespread violations. Thereupon, the United Mine Workers (UMW), with the support of many operators in the northern coalfields, fashioned a bill to bring stricter controls to the industry than the National Recovery Administration (NRA) had provided.

Introduced in Congress in January 1935 by Senator Joseph F. Guffey and Representative J. Buell Snyder, both Democrats from Pennsylvania, the bill initially made little headway. Large consumers of coal contended it would unreasonably increase prices; southern and western operators said it would discriminate against low-wage and nonunion mines; and political conservatives, fearing it would set a precedent for regulatory measures affecting other industries, questioned its constitutionality.

After the U.S. Supreme Court declared Title I of the National Industrial Recovery Act unconstitutional in May 1935, proponents of coal stabilization urged Congress to pass the Guffey-Snyder bill or see the industry degenerate into chaos, a warning given added weight when John L. Lewis, head of the UMW, threatened a strike if Congress did not act. Nevertheless, the bill remained stalled until President Franklin D. Roosevelt asked legislators to leave constitutional questions to the courts, prompting the House of Representatives to approve it on August 20 by a vote of 194 to 168 and the Senate on August 23, 45 to 37.

The Guffey-Snyder Act established a National Bituminous Coal Commission to determine prices and approve and enforce trade practices and marketing agreements. It also guaranteed workers the right to collective bargaining and uniform wages and hours. To enforce compliance, it prescribed a penalty tax on the selling price of coal, most of which would be rebated to those who adhered to the law.

Sometimes called "a little NRA," the Guffey-Snyder Act was designed to favor those who had benefited from the coal code. From the outset, however, it was ineffective. Operators feuded over prices, and restraining orders crippled the commission's authority. Finally, on May 18, 1936, the U.S. Supreme Court declared the act unconstitutional in Carter v. Carter Coal Company. In the majority's opinion, the labor provisions were a federal intrusion on states rights and therefore made the price provisions invalid since the two were inextricably intertwined.