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Marijuana
Tax Act of 1937
TAXATION
OF MARIHUANA
Hearings
Before the
Committee on Ways
and Means
House
of Representatives
Seventy-fifth
Congress
First
Session on
H.R.
6385
April
27-30, and May 4, 1937
SECTION
1 SECTION
2 SECTION
3 SECTION
4 SECTION
5
Letters
to the committee:
Statement
of Dr. D. E. Buckingham, District Veterinarian, Washington, D.C.
Statement
of Hon. Ralph F. Lozier, Carrollton, Mo, General Counsel of the National
Institute of Oilseed Products
Further
Statement of Clinton M. Hester, Assistant General Counsel, Treasury
Department
STATEMENT
OF DR. D.E. BUCKINGHAM
DISTRICT
VETERINARIAN, WASHINGTON, D.C.
Dr.
Buckingham: Mr. Chairman and gentlemen of the committee, I am veterinarian for
the government of the District of Columbia, and I also represent the Board of
Examiners of Veterinary Medicine of the District of Columbia. I was formerly the
dean and a professor of veterinary materia medica and therapeutics at George
Washington University.
I
come here in favor of the bill. I would like to outlaw Cannabis sativa. as a
drug to be used by veterinarians in their practice, for the reason that a survey
of the veterinarians of the District of Columbia, especially those in large
animal practice, in which I am engaged, shows that they use very little of it,
preferring the use of chloral hydrate in a milk solution, which is far more
efficacious in the colics of horses and other large animals. I might say, in
this connection that I am veterinarian to the Zoological Gardens here, and I
have never given Cannabis to any large animals, either domestic or wild animals.
Because
of the immense amount of damage that this drug does, I would like to go on
record as voting against the use of it by veterinarians in the District of
Columbia.
Unfortunately,
I have not read the bill, but with reference to its use by veterinarians, I
believe that the entire profession in the District would be behind me in vetoing
its use in veterinary practice.
Mr.
McCormack: As you may know, this is a bill that is applicable throughout the
entire country, and I take it that any legislation specifically applying to the
District of Columbia would come before the legislative committee on the District
of Columbia.
Dr.
Buckingham: Yes, sir.
Mr.
McCormack: I understand that several years ago there was a bill pending here, or
a uniform bill that has been endorsed by 34 or 35 States of the Union. That bill
was pending before the committee several years ago, perhaps for 3 or 4 years. I
specifically
call this to your attention, because this committee cannot legislate or
recommend legislation especially for the District of Columbia. However, your
testimony is very valuable in support of this bill, and I do not want you to
think, because of my
observation,
that I do not regard your testimony here this morning as of great value.
Mr.
Boehne: Section 15, line 12, includes the District of Columbia.
Mr.
McCormack: That includes the District of Columbia, but this bill covers the
entire United States, including the District of Columbia. We cannot legislate
especially for the District of Columbia.
Mr.
Boehne: The section I referred to includes the District of Columbia under the
terms of the act.
Mr.
McCormack: We have included the District of Columbia. If we did not include the
District of Columbia, it would have to be specifically excluded. The point I
made is that this bill has general application to the entire United States.
Dr.
Buckingham: I am certainly in favor of having the District of Columbia included.
Mr.
McCormack: Naturally it would include the District of Columbia, but the bill
applies, also, to all of the 48 States of the Union. It is a tax measure, and it
will, of course, apply to the District of Columbia, just as it applies to all of
the States. You want to outlaw the use of this drug by veterinarians in the
District of Columbia.
Dr.
Buckingham: Yes, sir.
Mr.
Cullen: I think the doctor is appearing before the committee to express his
opinion in regard to this drug, and the effect it has on animals. He is not
asking that the District of Columbia be exempted from the provisions of the
bill, but you want the District included.
Dr.
Buckingham: Yes, sir.
Mr.
Vinson: Your activities are confined more or less to the District of Columbia.
Dr.
Buckingham: Yes, sir.
Mr.
Vinson: Is there anything, in connection with the profession of veterinary, that
would cause a veterinarian who resided elsewhere than in the District of
Columbia to have a different viewpoint from that you expressed?
Dr.
Buckingham: Where they may possibly have no large animals practice they may use
this drug but if you are practicing veterinary medicine, you would find that
there were better drugs for the purpose. For instance, they could use morphine
or atropine hypodermically with better results.
Mr.
Vinson: So far as you are concerned, you think it would have the same effect
over the line in Maryland that it would have in the District of Columbia.
Dr.
Buckingham: Yes, sir.
Mr.
Vinson: You think it is a harmful drug, and that your profession in the District
should be recorded in support of this measure.
Dr.
Buckingham: That is right. Perhaps my thought on the subject has been
accentuated because of the fact that I attend at the Lorton Penitentiary, as
well as the reformatory, and I understand that this drug is mainly used by that
type of gentleman who climb in second-story windows, break into banks, and so
forth.
Mr.
Vinson: And it reaches children in school, also.
Dr.
Buckingham: Yes, sir.
Mr.
Fuller: Doctor, regulations on this subject that would apply to the District of
Columbia would be applicable to the entire United States, would they not?
Dr.
Buckingham: Yes, sir.
Mr.
Fuller: Therefore, you are not only opposed to the use of this drug here, but
you would eliminate it by regulations not only here, but all over the United
States.
Dr.
Buckingham: I answered that same question somewhat differently, and I would like
to answer it now by saying "Yes."
Mr.
Boehne: Is there any evidence to show that this plant is used by larger animals
in nature? Will animals, whether wild or domestic, use it in their native State,
as a forage plant, or do they reject it?
Dr.
Buckingham: This is a foreign drug, but I am not aware of animals using it like
they do loco weed on the western range. Would that be a parallel?
Mr.
Boehne: Yes. Where it is scattered around through its use as bird seed, and
grows along fences, would a grazing cow eat it?
Dr.
Buckingham: No, Sir. They might by mistake.
Mr.Boehne:
Would they reject it?
Dr.
Buckingham: I believe they would.
Mr.
Boehne: Naturally, they would prefer not to eat it.
Dr.
Buckingham: Yes, sir. Of course, animals eat a number of plants that are of no
benefit to them. As they graze, animals will leave aside noxious weeds which
might possibly be put in this same category.
Mr.
Dingell: Has this weed or plant, marihuana, any relationship to or affinity with
the loco weed? Is there any comparable objection there?
Dr.
Buckingham: I think the chemical set-up there is considerably different.
Mr.
Cullen: This completes the list of witnesses who want to speak in favor of the
bill, and we will now hear the opposition. There are four witnesses in
opposition, and we will be glad to hear Mr. Lozier at this time.
STATEMENT
OF HON. RALPH F. LOZIER,
CARROLTON,
MO.,
GENERAL
CONSUL OF THE NATIONAL
INSTITUTE
OF OILSEED PRODUCTS
Mr.
Cullen: Mr. Lozier, you may State for the record who you represent.
Mr. Lozier: For the record and for the information of
those present who do not know me, I will say I am Ralph F. Lozier; my home is in
Carrolton, Mo., where I have for many years been engaged in the practice of law.
I appear before this committee as general counsel for the National Institute of
Oilseed Products, an association composed of about 15 or 20 concerns dealing in
and crushing vegetable oil-bearing seed. I have a list of the organizations
composing this association, and will hand it to the reporter for the purpose of
the record.
(Said
list is as follows:)
NATIONAL INSTITUTE OF OILSEED PRODUCTS
Member companies of San Francisco, Calif.: Pacific
Vegetable Oil Corporation, R.J. Raesling &; Co., C.B. Jennings &;Co.,
S.L. Jones &;Co., and El Dorado Oil Works.
Member companies of Berkeley, Calif.: Durkie Famous Foods,
Inc., and Berkeley Oil &;Meal Co.,
Member company of Oakland, Calif.: Western Vegetable Oil
Corporation.
Member companies of Los Angeles, Calif.: Snow Brokerage
Co., California Flax Seed Products Co., Copra Oil &;Meal Co., Pacific Nut
Oil Co., Globe Grain and Milling Co., Pacific Oil &;Meal Co., Vegetable Oil
Products Co., California Cotton Oil Corporation, and Producers Cotton Oil Co.,
Fresno, Calif.
Spencer Kellogg &;Sons, Inc., Buffalo, N.Y.: Edgewater,
N.J. ; Chicago, Ill.; Des Moines, Iowa,; St. Paul, Minneapolis, and Duluth,
Minn.; and Kansas City, Mo.
Mr.
Lozier: May I say to this committee that, in my opinion, the measure before you
is one which should not be hastily considered or hastily acted upon. It is of
that type of legislation which conceals within its four corners activities,
agencies, and results that this committee, without a thorough investigation,
would never think were embodied in its measure.
In
the first place, I want it distinctly understood that the organizations for
which I speak want to go on record as favoring absolutely and unconditionally
that portion of this bill which seeks to limit and suppress the use of marihuana
as a drug, or for any other injurious purpose. That portion of the bill, it
seems to me, can merit the opposition of no right thinking or right-acting man.
I agree with the witnesses for the Government that the use of the drug marihuana
is a vicious habit that should be suppressed.
I
understand that the first use of this drug is lost in the mists of antiquity. It
is as old as history, as ancient as civilization: but, no chemists have ever yet
been able to very satisfactorily isolate or definitely determine and classify
the deleterious principle,
element
or radical which is the base of this drug. But we do know that the objectionable
principle not to be found in the seed or oil but in the flowering tops of the
female plants or in the resins therefrom. Every country has a little different
name for marihuana. Respectable authorities tell us that in the Orient at least
200,000,000 people use this drug; and when we take into consideration that for
hundreds, yes, thousands of years, practically that number of people have been
using this drug, it is significant that in Asia and elsewhere in the Orient,
where poverty stalks abroad on every hand and where they draw on all the plant
resources which a bountiful nature has given that domain-- it is a significant
fact that none of these 200,000,000 people has ever, since the dawn of
civilization, been found using the seed of this plant or the oil as a drug. Now,
if there were any deleterious properties or principles in the seed or oil, it is
reasonable to suppose that these Orientals who have been reaching out of their
poverty for something that would satisfy their morbid appetite, would have
discovered it; and the mere fact that for more
than
2,000 years the Orientals have found this drug only in the flowering tops of
female plants and not in the seeds and oils, affords convincing proof that the
drug principle does not exist in the plant except in the flowering tops.
For
thousands of years they have been handling the seed from this plant, and have
been handling the oil extracted from the seed, but down to this good day no
medical authority and no respectable writer on materia medica has ever claimed
that this deleterious principle is found in the seed or oil. Neither has any
reputable botanist ever found that the male plant of this species carries this
deleterious substance. This drug, element, principle, radical, or whatever you
want to call it, is defined as the glutinous flowering portion of the female
plant. In Bengal, the male plant is weeded out or pulled out in the cultivation
of the plants, because they recognize that this principle is not present in the
male plants, and by preventing fertilization the yield and quality of the drug
in the tops are increased. I think that the Government attorneys will not be
able to present to this committee a
single
respectable botanical authority or a single respectable authority on materia
medica, or a singe respectable authority on narcotics or toxicology, who will
contend for a moment that the deleterious element or principle which we find in
the resinous,
glutinous
portion of the flowering tops of the female plants, is found in the seeds or in
the male plants. No one will contend, or no respectable authority will assert,
that this deleterious principle is found either in the seed or the oil. If you
will refer to the
Pharmacopoeia
or to the United States Dispensatory, you will find it Stated that this
objectionable principle does not exist in the seed, and is not to be found in
either the seed or oil
If
the committee please, the hemp seed, or the seed of the Cannabis sativa., L. is
used in all the Oriental nations and also in a part of Russia as food. It is
grown in their fields and used as oatmeal. They have been doing that for many
generations, especially in periods of famines.
I
do not have time to read now from the Pharmacopoeia nor from the United States
Dispensatory, but both authorities say that the narcotic principle is absolutely
absent from the seed and absent from the oil in this plant.
Mr.
Fuller: I do not think that the gentlemen who have presented the case on behalf
of the committee, or the Government, have claimed that it was present in the
oil.
Mr.
Lozier: They have said it was in the seed.
Mr.
Fuller: He said there was very little in the seed. He said there would be no
injurious effect from the little there was in the seed.
Mr.
Lozier: The point I make is this, that this bill is too all-inclusive. This bill
is a world-encircling measure. This bill brings the activities, the crushing of
this great industry under the supervision of a bureau, which may mean its
suppression. Last year there
was
imported into the United States 62,813,000 pounds of hemp seed; in 1935 there
were imported 116,000,000 pounds, and in 1934 there were imported 12,000,000
pounds. In the last 3 years there have been 193,000,000 pounds of hemp seed
imported into this country, or an average of 64,000,000 pounds a year. Then, in
addition to that, in the 3 years 1934, 1935, and 1936, 752,000 pounds of hemp
oil have been imported. Considering that the seed yields 24 percent oil, the
importations of oil and seed in the last 3 years amount to 46,946,000 pounds.
Mr.
Woodruff: What is the oil used for?
Mr.
Lozier: It is a drying oil, and its use is comparable to that of linseed oil or
a perilla oil. It has a high iodine principle or strength. It is a rapidly
drying oil to use in paints. It is also used in soap and linoleum.
Mr.
Cooper: Just what do you object to in this bill?
Mr.
Lozier: This bill brings the crushers and importers of hemp seed under its
provisions, and requires not only a license fee, which is nominal, but provides
for Government supervision, and it provides for reports.
Mr.
Cooper: It provides for supervision of what?
Mr.
Lozier: Of the industry.
Mr.
Vinson: Where do you find that in the bill?
Mr.
Lozier: It is included in the definition.
Mr.
Dingell: How would you control the drug aspect of it without a reasonable and
proper regulation of the entire industry?
Mr.
Lozier: The point I make is this: There is no respectable authority, and I
measure my words, because I want to be a fair man talking to a fair minded
committee-- there is no respectable authority to be found for the statement that
this deleterious element is present in either the seed or in the oil of this
plant, even in an infinitesimal quantity.
Mr.
Dingell: You grant that in order to produce the seed and the oil, you must
permit the growth of the marihuana plant.
Mr.
Lozier: Not in this country.
Mr.
Dingell: Where do you go to get the seed?
Mr.
Lozier: Nearly all of the seeds come from the Orient, It is a well known fact
that the seeds imported from the Orient will not germinate readily, and
practically all of the hemp grown in this country is grown from domestic grown
seed, because of the low
germination
in foreign seeds.
Mr.
McCormack: As I understand it, there is nothing in the bill that would prevent
the importation of seed by crushers.
Mr.
Lozier: No.
Mr.
McCormack: If the crushers import seed to produce oil, it is only logical that
they might produce it from seeds grown in this country, and, therefore, they
might have to be under some supervision.
Mr.
Lozier: The point I make is that if you turn all of the hemp seed grown in this
country over to persons who have the marihuana habit, they would not be able to
satisfy that habit or appetite, and neither could the chemist or compounders of
the drug divide that element in either the seed or oil in such form as to
satisfy even the slightest passion or appetite for this drug. In other words,
the point I make is that it is not necessary----;
Mr.
Vinson: Mr. Lozier, we know you, we love you, and we respect your ability as an
advocate. We know that you are a real lawyer.
Mr.
Lozier: I thank you for that, but I think you are over-appraising my abilities.
Mr.
Vinson: Anybody who has you representing him will be well represented. Now, you
spoke of the suppression of this crushing industry for which you are speaking:
Suppose you, put your finger on the language in this bill that would bring about
the supervision to which you object.
Mr.
Lozier: Section 6, page 7, of the bill provides that--
It
shall be unlawful for any person, whether or not required to pay a special tax
and register under section 2, to transfer marihuana, except in pursuance of a
written order of the person to whom such marihuana is transferred, on a form to
be issued in blank for that purpose by the Secretary.
Subject
to such regulations as the Secretary may prescribe.
Then,
on page 9, subsection 5, there is a reference-----to a transfer of paints or
varnishes of which marihuana is an ingredient.
Mr.
Vinson: That excepts it from the operation of the bill.
Mr.
Lozier: Yes, sir.
Mr.
Vinson: You are not objecting to that.
Mr.
Lozier: Not to the exception----
Mr.
Vinson: You favor that.
Mr.
Lozier: Yes, sir.
Mr.
Buck: Is it your objection that this exception must be subject to regulation by
the Secretary?
Mr.
Lozier: Yes; that is one reason.
Mr.
Vinson: I have gotten down to the point of finding out what you are objecting
to. The exception you refer to is an exception in your favor. Now, what
supervisory functions are you objecting to?
Mr.
Lozier: I am objecting to, first, with reference to the supervision---
Mr.
Vinson: (interposing). The supervision of what?
Mr.
Lozier: Of the industry by requiring reports, and by a system of espionage.
Mr.
Vinson: Where is that in the bill?
Mr.
Lozier: They are required to make reports. The books of the crushers would be
subject to inspection, which includes authority to oversee the activities of the
industry. Under this bill, the Government has a right to go into the factories
and offices, and make investigations.
Mr.
Vinson: It seems to me that you are so certain that the activities of your
people are not connected, directly or indirectly, with the use of this marihuana
as a drug that you would not hesitate to permit an investigation, if an
investigation is called for under this bill, in order to kill this traffic. I
know that your people are not knowingly a part or parcel of the traffic. I know
that from what you say. If that is not the case, of course, they ought to come
under the law, and if that is the case, they will not be hurt.
Mr.
Lozier: I will answer that in this way, that there is no more reason for
supervision of the hemp-seed crushing industry under this bill than there is for
the supervision of the milling of rye, wheat, or any other grain from which
alcohol may be extracted.
Mr.
Vinson: Cannot marihuana be grown from seeds that come into the possession of
your crushers?
Mr.
Lozier: Yes, sir; it might be, but the germination of those seeds is practically
nil.
Mr.
Vinson: But you admit that this plant can be grown from seed coming into the
possession of your people, and, that being true, do you think it proper to
provide for the exercise of the Government's function to do that which will
prevent the further
propagation
of this plant in this country?
Mr.
Lozier: I might answer that in this way, by saying that these people buy
cargoes. They buy this product by shiploads, by trainloads, and by carloads.
They manufacture this oil and sell it in tank cars. They have been engaged in
this business for years,
and
never until the last 3 weeks was any suggestion made that they were handling a
commodity that was carrying a deleterious principle that was contributing to the
delinquency of the people of the United States.
Mr.
Vinson: Perhaps the committee in a way might be subjected to criticism for not
acting on the matter before; but it is fair to State it was not called to our
attention; if you admit that this marihuana is a menace to the youth as well as
the adult citizenship of
this
country, do you not recognize the power of the Federal Government to operate on
that drug?
Mr.
Lozier: Yes.
Mr.
Vinson: If you recognize that, do you not also recognize in the Government the
power and the right to prevent the illicit growth of that plant?
Mr.
Lozier: I am objecting to the method.
Mr.
Vinson: Do you not recognize the power of Congress to do that?
Mr.
Lozier: Yes; the Government has that absolute power, but the question is whether
or not the Government should exercise it in this way.
Mr.
Vinson: I think that your people ought to hasten to join hands with the Federal
Government to prevent the condition obtaining in this country that my good
friend has depicted as existing in oriental countries.
Mr.
Lozier: If it will bring about that result, well and good, but, as you know, it
has been admitted here, and the books show it, that this plant exists all over
this Nation, and the question is how far this bill shall go. If it be true that
Cannabis sativa. is one species, and that there are other species, or plants of
a different genus or family , containing this deleterious principle, then, by
the limitation in section 1, you have made it impossible to regulate or
supervise the deleterious products that come from those other species. I am not
very familiar with botany, but there is the family, the genus, and the species.
this bill is directed only to one species, and the botanists or authorities are
not agreed as to whether the Cannabis sativa. Americana is the same species as
Cannabis sativa. L--the L referring to Linne, the Swedish botanist who
identified and described this plant and its products.
Mr.
Cooper: While this is all very interesting, and while I appreciate your
exhaustive discussion of the subject, yet, in order to be helpful to me, I would
like for you to go back to the bill itself. I would be glad to have you analyze
the bill we have under consideration. In your splendid statement you have
referred to section 6, and have also, discussed paragraph 5 on page 9. Paragraph
5 is an exception that is included in section 6.
Mr.
Lozier: Yes.
Mr.
Cooper: Now, from that point, will you be kind enough to proceed and point out
to the committee the exact language in the bill which you think would make the
operation of it unfair to your industry?
Mr.
Cullen: If you will suspend for a moment, let me say the House is now in
session. We have dispensed with Calendar Wednesday, and will take up the second
deficiency bill, in which many Members are interested. I am wondering if we
should not adjourn at this point to meet again tomorrow morning.
Mr.
Cooper: I agree to that suggestion.
Mr.
Lozier: If you will allow me one moment before adjournment, I will call your
attention to paragraph 6, page 9, which is an exception that permits the crusher
to sell marihuana to the manufacturer or compounder for use by the vendee as a
material in
the
manufacture of, or to be prepared by him as a component of paint or varnish.
Now, under that provision, you could not sell the cake or meal to farmers or the
oil to makers of soap or linoleum.
Mr.
Cullen: The committee will now stand adjourned until 10:30 tomorrow morning, at
which time we will continue hearing the testimony of witnesses in opposition to
the bill.
(Thereupon,
at 12 noon, the committee adjourned to meet tomorrow, Thursday, Apr. 29, 1937,
at 10:30 A.M.)
TAXATION
OF MARIHUANA
THURSDAY,
APRIL 29 1937
House
of Representatives,
Committee
on Ways and Means,
Washington,
D.C.
The
committee met at 10:30 a.m., Hon. Robert L. Doughton (chairman) presiding.
The
Chairman: The committee will be in order.
This
is a continuation of the hearing on the bill H.R. 6385. After the adjournment of
the committee in yesterday, I suggested to Mr. Hester, who has been representing
the Treasury Department in the presentation of this bill, that he have a
conference with
some
of those who have appeared in opposition to certain provisions of the bill to
see if it were possible to iron out the differences and reach an agreement as to
the points on which they were in disagreement.
If
Mr. Hester is present we will receive his report.
Do
you have something to report Mr. Hester?
FURTHER
STATEMENT OF CLINTON M. HESTER, ASSISTANT COUNSEL, TREASURY DEPARTMENT
Mr.
Hester: Yes, Mr. Chairman; I have. Pursuant to your request yesterday afternoon
we conferred with Judge Lozier and Mr. Williamson, and also with Mr. MacDonald,
Mr. Gordon, and Mr. Conners, and as a result of our conference, those gentlemen,
who represent importers of the seeds and those who crush the seeds for the
purpose of making oil and using the residue of the seeds for making meal and
cake, have expressed the view that they are willing to pay the occupational tax
which is provided in this bill if the definition of marihuana is amended so as
to eliminate oil made from the seeds, and the meal and cake which are made from
the seeds, as well as any compounds or manufactures of either oil, meal, or
cake.
The
position they take is that under the bill at the present time those who sell oil
for the manufacture of varnish and paints would have to pay the occupational
tax, even though they would not have to pay the transfer tax or make the
transfers on the order forms. They also take the position that under the bill,
as now drawn, they could not sell this residue from the seeds, or the meal and
cake, to cattlemen, because of the fact that the cattlemen could not register
under the bill, and that, therefore, they would have to pay a prohibitive tax.
I
will say this, that I have never come up here in connection with any legislation
where the Ways and Means Committee has not found it necessary to make some
changes. We always expect that when we appear before the Ways and Means
Committee, because of the fine consideration the committee gives to all
legislation. If the committee should ask the Secretary of the Treasury for his
recommendation with respect to the proposals made by these gentlemen
representing this legitimate industry, I will say very frankly to the Secretary
that I see no objection to amending the definition of marihuana so as to
eliminate oil, meal, cake, and the manufactured compounds of those materials.
The
Chairman: Why not make that request now, and later on we can have the report of
the Secretary?
Mr.
Hester: That is agreeable to us.
The
Chairman: That will save time.
Mr.
Reed: Are these the only objections that have been raised so far, or are these
the only requests that have been made to amend the bill?
The
Chairman: The chairman was not here yesterday, but I understand there is one
more witness to appear in opposition to the bill.
Mr.
Reed: I was wondering whether this agreement would clear the atmosphere so we
could go ahead, or whether there are other witnesses who may raise other points
in opposition to the bill. Has there been any indication of that?
The
Chairman: My understanding is that this clear the atmosphere so far as this
provision of the bill is concerned. There may be opposition to other provisions
in the bill. However, this agreement will clear the atmosphere considerably.
Mr.
Reed: Have you had notice of any other opposition to the bill?
The
Chairman: I am informed that the American Medical Association has a
representative here to make some statement in regard to the bill, and, perhaps,
in opposition to certain features of it. I am not informed as to the particulars
of their position.
Mr.
Buck: I was going to ask Mr. Hester whether he has prepared any suggested
amendments to the bill.
Mr.
Hester: Yes, sir. There was one other point raised that I omitted to State. I
refer you to page 4 of the bill, line 19. These gentlemen point out that
marihuana is shipped in railroad cars at times, and that under the language of
the bill, commencing in line
19,
page 4, the Secretary of the Treasury would require an exact inventory. They say
that even on account of wind a bushel or two might be removed from a railroad
car. We have considered the matter overnight, and we feel that their objection
is meritorious. Therefore, it is agreeable to us to strike out that entire
sentence, commencing in line 19, page 4, with the words, "At the time of
such registry." It will be agreeable to us to strike out that entire
sentence.
Mr.
Reed: You would strike out the whole sentence.
Mr.
Hester: Yes, sir.
Section
10 (a), page 13, gives us ample authority to prescribe the regulations requiring
reasonable inventories. That section reads as follows:
Every
person liable to any tax imposed by this act shall keep such books and records,
render under oath such statements, make such returns, and comply with such rules
and regulations as the Secretary may from time to time prescribe.
That
will give us ample authority.
I
have a copy of the amendments here, which are agreeable to these gentlemen. Do
you want me to read them?
Mr.
Cooper: Of course, we will take up the question of amendments in executive
session.
Mr.
Hester: Then, I will insert them in the record.
The
Chairman: You may hand them to the reporter for insertion in the record.
(Said
amendments are as follows:)
Amendments
To H.R. 6358
I
Hempseed
oil, hempseed cake, hempseed meal, and all products manufactured from the above
may be eliminated from the purview of the bill by amending section 1 (b), which
contains the definition of marihuana, to read as follows:
The
term :"marihuana" includes all parts of the plant Cannabis sativa. L.,
whether growing or not; the seeds thereof; the resin extracted from any part of
such plant; and every compound, manufacture, salt, derivative, mixture, or
preparation of such plant, its seeds or resin; but shall not include the mature
stalks of such plant, oil or cake made from seeds, and any compound manufacture,
salt derivative, mixture, or preparation of such mature stalks, oil or cake.
II
In
order to render the remainder of the bill consistent with this amendment,
section 3 (c) should be eliminated from the bill. This section provides that the
occupational excise tax and registry provisions of the bill shall not apply to
dealers in paints and varnishes. Since the definition of marihuana, as above
amended, would not include paints and varnishes, this section is no longer
necessary.
III
Section
6 (b) (5) and (6) may be eliminated from the bill because they merely except
from the transfer tax and order-form provisions of the bill a transfer of paints
or varnishes, of which marihuana is an ingredient, and a transfer of seeds or
oil to a manufacturer of paint. since paints, varnishes, and hempseed oil, under
the definition as amended, will not be included within the term
"marihuana", it is no longer necessary to exempt these products from
the transfer tax.
IV
Since
hempseeds will, even under the amended definition, be subject to the provisions
of the bill, it is necessary to amend section 6 (b) (6), which exempts from the
transfer tax and order form provisions a transfer of seeds for the further
production of the plant or for use in the manufacture of oil, so as to permit a
transfer of seeds for the manufacture of hempseed cake and meal. That section
is, therefore, amended to read as follows:
"To a transfer of any seeds of the plant Cannabis
sativa. to a person, registered as a producer under section 2, for use by such
person for the further production of such plant, or to a person registered under
section 2 as a manufacturer, importer, or compounder, for use by such person for
the manufacture of seed oil, seed cake, or any compound, manufacture, salt,
derivative, mixture, or preparation of such oil or meal."
V
Section
2 (d) provides at the time of registry and payment of the occupational tax a
taxpayer must file an inventory of the exact amount of marihuana on hand.
Manufacturers of hempseed oil, cake, and meal will be occupational taxpayers,
and, as such, would have to file an inventory of the exact amount of seeds on
hand at the time of registry. Representatives of industry State that it would be
very difficult for them to file such an inventory due to the required exactness.
This difficulty might be eliminated without jeopardizing the enforcement of the
measure by striking out the second sentence of section 2 (d) which requires the
inventory. With that sentence eliminated the Secretary of the Treasury could
make such inventory requirements as are appropriate to the particular case under
section 10 (a) of the bill which gives the Secretary authority to require
taxpayers under the act to render under oath statements, make returns, and
comply with rules and regulation.
Mr.
Lamneck: Are there any harmful ingredients in the so-called meal?
Mr.
Hester: I would rather have Dr. Wollner answer that.
Dr.
Wollner: There are not.
Mr.
Hester: Dr. Woolner, the consulting chemist in the Office of the Secretary of
the Treasury, says there are not.
Mr.
Lamneck: I would like to inquire whether all importation of hempseed are of this
variety, or whether there are other varieties that are not harmful.
Mr.
Hester: My understanding is that all hempseeds contain marihuana unless the
liquid has been completely dried out of the seed.
Mr.
Lamneck: The testimony the other day showed that there was a great amount of
these seeds imported, and that all of them contained these harmful ingredients
we are talking about.
Mr.
Hester: Yes, sir; that is right. I want to make this clear: Am I correct, Mr.
Wollner, in saying that when the seeds are dry marihuana is not contained in
them?
Dr.
Wollner: That is right.
Mr.
Hester: As I see it, the enforcement problem is to see that the seeds cannot get
out of the hands of the importers for use in growing marihuana in this country.
Mr.
Buck: Your proposed amendments, as I understand it, will only permit the use of
hulls or the seeds after they have been cracked or crushed so they cannot be
used for germination purposes?
Mr.
Hester: That is right.
The
Chairman: Judge Lozier, do you wish to make a further statement?
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