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The Great Depression caused numerous economic problems, including faltering oil prices
because of overproduction and general economic slowdown. Parts of the oil industry sought relief through
Congressional controls. The National Industrial Recovery Act (NIRA) of 1934 provided the president
authority to prohibit interstate oil shipments if the oil was produced in excess of state quotas. The
excess oil was commonly referred to as “hot oil.” This “hot oil” provision was seen as an
unconstitutional delegation of legislative powers to the executive branch, thus violating the doctrine
of separation of powers. The Supreme Court held the statute unconstitutional and invalid. The reason
was that although Congress can never foresee all future ramifications of legislation, Congress had
nonetheless failed to provide a “primary standard” to guide the executive branch. This oversight
allowed the president to act as he pleased rather than within an administrative role. Full Text: Panama Refining Co. vs. Ryan 293 U.S. 388
(1935) |