Guffey Act

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Guffey Act

United States 1935

Synopsis

The Guffey Act, also called the Guffey-Snyder Act and, more formally, the Bituminous Coal Conservation Act, was passed by the U.S. Congress to stabilize the coal industry. The act fixed minimum prices for coal and attempted to bring order to the wages, working conditions, and hours of coal workers. It also protected the rights of coal workers to organize and bargain collectively. The act came under fire as unconstitutional congressional interference in private commerce, and in 1936, in Carter v. Carter Coal Co., the U.S. Supreme Court declared the act unconstitutional.

Timeline

1920: League of Nations, based in Geneva, holds its first meetings.
1925: European leaders attempt to secure the peace at the Locarno Conference, which guarantees the boundaries between France and Germany, and Belgium and Germany.
1930: Naval disarmament treaty is signed by the United States, Great Britain, France, Italy, and Japan.
1933: Newly inaugurated U.S. President Franklin D. Roosevelt launches the first phase of his New Deal to put depression-era America back to work.
1935: Germany annexes the Saar region after a plebiscite. In defiance of Versailles, the Nazis reintroduce compulsory military service. The Allies do nothing, and many western intellectuals maintain that it is only proper for Germany to retake its own territory and begin building up its army again.
1935: Italians invade Ethiopia, and the response by the League of Nations—which imposes sanctions but otherwise fails to act—reveals the impotence of that organization.
1935: Second phase of New Deal begins with the introduction of social security, farm assistance, and housing and tax reform.
1938: The U.S. Fair Labor Standards Act establishes a minimum wage.
1940: Hitler's troops sweep through Western Europe, annexing Norway and Denmark in April, and in May the Low Countries and France. At the same time, Stalin—who in this year arranges the murder of Trotsky in Mexico—takes advantage of the situation to add the Baltic republics (Latvia, Lithuania, and Estonia) to the Soviet empire, where they will remain for more than half a century.
1945: April sees the death of three leaders: Roosevelt passes away on 12 April; the Italians execute Mussolini and his mistress on 28 April; and Hitler (along with Eva Braun, propaganda minister Josef Goebbels, and Goebbels's family) commits suicide on 30 April.
1950: North Korean troops pour into South Korea, starting the Korean War. Initially the communists make impressive gains, but in September the U.S. Marines land at Inchon and liberate Seoul. China responds by sending in its troops.

Event and Its Context

Background

The Guffey Act and the Carter case that issued from it represented a collision of at least three social, political, and economic trends in the mid-1930s.

The first of these was the condition of the coal industry itself. Coal mining since the 1920s had been regarded as a "sick" industry. Profits were declining, and mine closures were frequent. The industry was plagued by frequent strikes as miners attempted, often with violence, to ameliorate the squalid, dangerous, and unhealthful conditions in which they lived and worked. In 1921 the number of men employed in coal mining peaked at over 832,000; by 1933 that number had declined to just over 523,000. In 1923 the average annual earnings of workers in the bituminous (soft) coal industry were $1,917; by 1932 that figure had declined to $937. The number of mines in operation declined from a peak of 9,311 in 1923 to 5,555 in 1933. Total industry production declined from a peak of $1.506 billion in 1923 to just $625 million in 1932, although production recovered to $822 million in 1935 and $954 million in 1936. In the meantime, the retail price of coal was increasing in real dollars; using 1926 as a base year of 100, the price was 112.1 in 1933 and 116.8 in 1934. Given conditions in the coal mines and the importance of coal to both industry and the public, Congress was under increasing pressure to regulate the coal industry.

The second trend was the New Deal of President Franklin D. Roosevelt, a set of legislative initiatives enacted to curb the effects of the Great Depression and to protect organized labor. The National Industrial Recovery Act (NIRA) of 1933 recognized the right of workers to bargaining collectively, but that law was declared unconstitutional in 1935. After labor unrest in 1934, when half a million workers in a range of industries went on strike, the administration tried again in 1935 with the Wagner Act, more formally the National Labor Relations Act (NLRA), which established the National Labor Relations Board (NLRB) to supervise union elections and stop unfair labor practices. The question on the minds of many observers was whether the Wagner Act would meet with the same fate as the NIRA in the courts.

The third trend, then, was the response of the judiciary to New Deal legislation. During these years the U.S. Supreme Court under Chief Justice Charles Hughes was sharply split between supporters of the New Deal—justices Louis Brandeis, Benjamin Cardozo, Harlan Stone, and Owen Roberts—and the so-called Four Horsemen, a conservative bloc comprising justices Willis Van Devanter, James McReynolds, George Sutherland, and Pierce Butler. These justices adopted a strict construction of the commerce clause of the Constitution—the theoretical underpinning of most New Deal legislation—and a laissez-faire view of government's role in the economy. Frequently able to forge majorities, they invalidated a number of important facets of the New Deal, including the NIRA. What Roosevelt regarded as the recalcitrance of the Court led him to devise a "court-packing" plan in 1937 that would have increased the size of the Court and created a majority that would neutralize the Four Horsemen. Although that plan met with resistance and was never enacted, the Court did take a remarkably more liberal turn after 1937 in response to the threat and to the overwhelming support the president received in his 1936 reelection. This about-face eventually affected the Court's view of the Wagner Act, but in the meantime it had to deal with the Guffey Act.

The Bituminous Coal Conservation Act

The Bituminous Coal Conservation Act, popularly known as the Guffey Act after its Senate sponsor, Joseph Guffey of Pennsylvania, was passed in 1935. Section 1 of the act detailed the circumstances that, Congress believed, made the act necessary: that mining and distribution of coal were "affected with a national public interest"; that coal played an important part in industrial activity, transportation, and the "health and comfort of the people"; that coal had to be conserved and economically produced; that coal had to be supplied consistently and at a reasonable price; and that rational relations among the public, producers, and workers were necessary.

The Guffey Act established the Bituminous Coal Code, which divided the coal industry into 23 districts, each with a board that established minimum prices within its district to help stabilize wages, working conditions, and hours. From labor's standpoint, the most important part of the code was Part 3, which gave miners the right to organize and bargain collectively through representatives of their own choosing and without interference from employers. It also gave them the right to peaceably assemble and to select their own check-weighmen. It created a presidentially appointed labor board under the Department of Labor to adjudicate disputes. Further, the act provided a formula for wages and hours. When producers of more than two-thirds of the national average tonnage of coal and more than half of the mine workers agreed on hours, that agreement would be accepted throughout the industry; similarly, within each district, if producers of more than two-thirds of the coal and the majority of workers in the district agreed on wages, those wages would be accepted by all firms and workers in that district. Finally, the act imposed a federal excise tax on all coal production, 90 percent of which would be rebated to firms that adopted the code.

Carter v. Carter Coal Company

Immediately, coal producers attacked the constitutionality of the act and filed suits in the U.S. Court of Appeals for the District of Columbia and the Circuit Court of Appeals for the Sixth Circuit. These suits were consolidated and brought before the Supreme Court as Carter v. Carter Coal Co., which the Court heard on 11-12 March and decided on 18 May 1936.

The core question was whether Congress had exceeded its authority under the commerce clause of the Constitution. Justice Sutherland, who delivered the opinion of the Court, undertook a lengthy examination of this question, citing, for example, Justice Joseph Story, who in 1816 "laid down the cardinal rule" that the federal government can claim no powers that are not actually and expressly granted by the Constitution. Going back farther, he noted that the "determination of the Framers Convention … to preserve complete and unimpaired state self-government in all matters not committed to the general government is one of the plainest facts which emerges from the history of their deliberations."

Sutherland went on to examine the history of the word commerce as it applied to the commerce clause. He reasoned that while the Constitution grants to Congress the power to regulate interstate commerce—the transportation, purchase, sale, and exchange of commodities between the citizens of the states—it does not grant the power to regulate that which is not commerce. So the next question was whether manufacturing (and by extension, mining) is "commerce." Citing a number of earlier cases, including the recent Schechter Poultry Corp. v. United States (1935), Sutherland declared that it was not. The commerce clause gave Congress the power to regulate the exchange of goods between the states but not the power to regulate the manufacture or production of those goods, even if they are intended for interstate commerce.

Accordingly, Sutherland concluded, mining is not commerce. Mining, like manufacture or agriculture, is a strictly local activity. It brings the subject matter of commerce into existence, but in and of itself it is not commerce. On this basis, the Court, with justices Cardozo, Brandeis, and Stone dissenting, declared the Guffey Act unconstitutional. "Beneficent aims," the Court concluded, "however great or well directed can never serve in lieu of constitutional power."

The Aftermath

Labor was troubled by the anticipated impact of this decision on the recently passed Wagner Act, which applied to the 10 million workers in manufacturing. If the Carter doctrine held, then the protections labor gained under the Wagner Act would certainly be invalidated. But when the Wagner Act was tested in 1937, in NLRB v. Jones and Laughlin Steel Corporation, the Court upheld it and affirmed the authority of Congress to intervene in the labor relations of manufacturing and protect the rights of strikers, even if the effect of a strike was to impede interstate commerce.

As it turned out, then, the Carter decision was the last gasp of those who wanted to curb the involvement of the federal government in labor issues. Just a year after striking down the Guffey Act as an unconstitutional congressional foray into matters of local interest, the Court affirmed both the right of employees to organize and bargain collectively and the power of Congress to protect that right by outlawing unfair labor practices. Under the protection of the Wagner Act, union membership in the United States increased from about four million in 1935 to 16 million in 1948. Membership in the United Mine Workers of America, which had fallen by two-thirds during the 1920s, exploded until virtually all mines were organized and the union claimed 500,000 members.

Key Players

Butler, Pierce (1866-1939): Butler was born near Northfield, Minnesota, and practiced law for 25 years, gaining expertise in railroad law, before President Warren Harding appointed him to the Supreme Court (1923-1939).

Guffey, Joseph F. (1870-1959): Guffey was born in Guffey's Landing, Pennsylvania, and was president of several oil companies before being elected as a Democrat to the Senate (1935-1947), where he was a strong backer of New Deal legislation.

McReynolds, James Clark (1862-1946): McReynolds was born in Elkton, Kentucky, and began his judicial career as an assistant U.S. attorney general (1903-1907) and as a federal prosecutor. President Woodrow Wilson appointed him attorney general (1913-1914) and to the Supreme Court (1914-1941), where he wrote over 100 dissenting opinions.

Sutherland, George (1862-1942): Sutherland was born in England but came to the United States at age two. He served in Utah's first legislature and in the House of Representatives (1901-1903) and the Senate (1905-1917). President Warren Harding appointed him to the Supreme Court (1922-1938).

Van Devanter, Willis (1859-1941): Born in Marion, Indiana, Van Devanter was appointed assistant U.S. attorney general (1897-1903) and federal judge (1903-1910). He was appointed to the Supreme Court (1910-1937) by President William Howard Taft.

Bibliography

Books

Badger, Anthony. The New Deal: The Depression Years,1933-1940. New York: Hill and Wang, 1989.

Mason, Alpheus Thomas, and William M. Beaney. American Constitutional Law: Introductory Essays and Selected Cases. Englewood Cliffs, NJ: Prentice-Hall, 1978.

Taylor, Benjamin J., and Fred Witney. Labor Relations Law,3rd ed. Englewood Cliffs, NJ: Prentice-Hall, 1979.

U.S. Department of Commerce. Historical Statistics of the United States: Colonial Times to 1970. Washington, DC: Government Printing Office, 1976.