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, 28, 29, 30, AND MAY 4, 1937

STATEMENT OF CLINTON M. HESTER, ASSISTANT GENERAL COUNSEL FOR THE DEPARTMENT OF THE TREASURY; AND S.G TIPTON, OFFICE OF GENERAL COUNSEL

MR. HESTER: Mr. Chairman and members of the Ways and Means Committee, for the past two years the Treasury Department has been making a study of the subject of marihuana, a drug which is found in the flowering tops, seeds, and leaves of Indian hemp and is now being used extensively by high-school children in cigarettes. Its effect is deadly.

I would like to say at this point that we have with us this morning Commissioner Anslinger, of the Bureau of Narcotics, who has had charge of the enforcement of the Harrison Narcotics Act, and who will have charge of the enforcement of this act, if this bill is enacted into law. We also have with use a pharmacologist who is prepared to testify as to the effect of the drug on human beings. We also have an expert chemist, and one of the outstanding botanists in the country, who are prepared to testify with reference to the bill, if you desire to hear them.

The leading newspapers of the United States have recognized the seriousness of this problem and many of them have advocated Federal legislation to control the traffic in marihuana. In fact, several newspapers in the city of Washington have advocated such legislation. In a recent editorial, the Washington Times stated:

The marihuana cigarette is one of the most insidious of all forms of dope, largely because of he failure of the public to understand its fatal qualities.

The Nation is almost defenseless against it, having no Federal laws to cope with it and virtually no organized campaign for combating it. The result is tragic.

School children are the prey of peddlers who infest school neighborhoods.

High-school boys and girls buy the destructive weed without knowledge of it capacity for harm, and conscienceless dealers sell it with impunity.

This is a national problem and it must have national attention.

The fatal marihuana cigarette must be recognized as a deadly drug and American children must be protected against it.

As recently as the 17th of this month, there appeared in the editorial columns of the Washington Post and editorial on this subject, advocating the speedy enactment by Congress of this very bill introduced by Chairman Doughton, and now before this committee for consideration. In its concluding paragraph, the editorial stated:

With a Federal law on the books a more ambitious attack can be launched. It is time to wipe out the evil before its potentialities for national degeneracy become more apparent. The legislation just introduced in Congress by Representative Doughton would further this end. Its speedy passage is desirable.

In an editorial on this subject appearing in its editorial columns on April 10, 1937, the Washington Herald quoted the Journal of the American Medical Association, in part, as follows:

The problems of greatest menace in the United States seem to be the rise in use of Indian hemp (marihuana) with inadequate control laws.

A cartoon unusually illustrative of the insidiousness of the illicit traffic in marihuana appeared in the Washington Herald of April 15, under the title "Another Pied Piper". The cartoon pictured the Pied Piper in the form of a marihuana cigarette, marching down a road described as "The Dope Habit", playing his pipe and being followed by a group of children portrayed as "Our High School Youth".

Apropos the seriousness of the problem which H.R. 6385 is designed to correct, is a statement made by Commissioner Anslinger of the Bureau of Narcotics, before a House judiciary subcommittee on Friday of last week. In the course of his testimony in support of two bills, which, like H.R. 6385 are designed to aid the Federal Government in its fight to stamp out the illicit traffic in narcotic drugs, Mr. Anslinger made the statement, supported by statistics of the Department of Justice, that the major criminal in the United States is the drug addict; that of all the offenses committed against the laws of this country, the narcotic addict is the most frequent offender.

The purpose of H.R. 6385 is to employ the Federal taxing power not only to raise revenue from the marihuana traffic, but also to discourage the current and widespread undesirable use of marihuana by smokers and drug addicts and thus drive the traffic into channels where the plant will be put to valuable industrial, medical, and scientific uses. In accomplishing this general purpose two objectives should dictate the form of the proposed legislation: First, the development of a scheme of taxation which would raise revenue and which would also render virtually impossible the acquisition of marihuana by person who would put it to illicit uses without unduly interfering with the use of the plant for industrial , medical, and scientific purposes; and second, the development of an adequate means of publicizing dealings in marihuana in order that the traffic may be effectively taxed and controlled.

The Harrison Narcotics Act (U.S.C. title 26, sec 1040-1054 1383-1391), was designed to accomplish these same general objectives with reference to opium and coca leaves and their derivatives. That act required all legitimate handlers of narcotics to register, pay an occupational tax, and file information returns setting forth the details surrounding their use of the drugs. It further provided that no transfer of narcotics (with a few exceptions, notably by practicioners in their bona-fide practice and druggists who dispense on prescription) could be made except upon written order forms. Since it was also provided that no one except registered persons could legally acquire these order forms and since illicit consumers were not eligible to register, the order-form requirement serves the double purpose of publicizing transfers of narcotics and restricting them to legitimate users.

The same objectives impelled Congress to enact the National Firearms Act (U.S.C. title 26, sec. 1132-1132q) In that act, in order to accomplish them, it was provided that all manufacturers, dealers, and importers of firearms should register and pay special taxes ranging from $200 to $500 per year. It was further provided that firearms could not be transferred except in pursuance of a written order form and upon payment of a $200 tax for each transfer, transfers made to law enforcement officers being excepted. Thus, provision was made for publicizing dealings in firearms and for restricting their use to those persons who would have legitimate use for them.

The proposed marihuana bill is something of a synthesis of both of these statutes. It provides that all manufacturers, compounders, importers, producers, dealers, laboratory users, and practicioners must register and pay a special occupational tax ranging from one dollar for practicioners and scientific users to fifty dollars for importers compounders, and manufacturers. The filing of information returns is also required in order to publicize the dealings in the plant. As an additional means of bringing the marihuana traffic out into the open, the bill also makes it illegal, with certain exceptions, to transfer marihuana except in pursuance of a written order form setting forth the facts surrounding the transaction. Substantial criminal penalties are imposed for violating the order form or registry provisions of this bill.

In order to raise additional revenue and to stamp out transfers to persons who would use marihuana for undesirable purposes, it is further required that on any transfer which is required to be made in pursuance of an order form a transfer tax shall be imposed. This tax will be at the comparatively low rate of one dollar per ounce, or fraction thereof, for transfers to registered persons, but at the rate of $100 per ounce, or fraction thereof, on transfers to persons who have not registered and paid the special occupational tax whether or not they are required to register and pay the tax. It is made a criminal offense to acquire marihuana without having paid the transfer tax, when payment of such tax is required. Since those who would consume marihuana are not eligible to register under the bill, and since the $100 tax on unregistered persons is designed to be prohibitive, such persons could not acquire marihuana.

The form of the bill is such, however, as not to interfere materially with any industrial, medical, or scientific uses which the plant may have. Since hemp fiber and articles manufactured therefrom are obtained from the harmless mature stalk of the plant, all such products have been completely eliminated from the purview of the bill by defining the term "marihuana" in the bill, so as to exclude from it provisions the mature stalks and its compounds or manufactures.

There are also some dealings in marihuana seeds for planting purposes and for use in the manufacture of oil which is ultimately employed by the paint and varnish industry. As the seeds, unlike the mature stalk, contain the drug, the same complete exemption could not be applied in this instance. But this type of transaction, as well as any transfer of completed paint or varnish products, has been exempted from transfer tax. Any negligible medical use which marihuana may have will also be left largely unrestricted by this bill.

It is provided, as in the Harrison Act, that dispensations by registered practicioners in the course of their professional practice and transfers made in good faith by druggists in pursuant of a written prescription issued by a registered practicioner shall be exempt from the order-form provisions and from the transfer tax. Moreover, we are informed by authorities in the Public Health Service that there is no real medical use for the drug marihuana for the reason that its effect on human beings is so variable and also because there are better substitutes.

The heart of this bill is contained in sections 2, 6, and 7. Section 2 imposes an occupational excise tax in the case of (1) importers, manufacturers, and compounders of marihuana, $50 per year; (2) producers of marihuana, $25 per year; (3) physicians, dentists, veterinary surgeons and other practicioners one dollar per year; (4) persons who use marihuana for research, instruction or analysis, $1 per year; (5) dealers, $15 per year.

Upon payment of the tax, the taxpayer is required to register with the collector. These occupational taxes and registration provisions are similar to those imposed by the Harrison Narcotic Act and the National Firearms Act. The constitutionality of such provisions in the Harrison Narcotics Act was sustained by the Supreme Court in Doremus vs. United States (249 U.S. 86) and on the 29th of March of this year, the Supreme Court sustained the validity of the similar occupational taxes and registration provisions imposed by the National Firearms Act in the case of Sonzinsky vs. United States (57 S. Ct. 554).

Section 6 of the bill makes in unlawful for anyone 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 of the Treasury. This order form requirement does not apply, however, to a transfer of marihuana by a practicioner to his patient, or by a druggist to a consumer who presents to the druggist a prescription issued by a practicioner registered under the act. Nor does it apply to exportations of marihuana, transfers of marihuana to Government officials, transfers to paint or varnish of which marihuana is an ingredient, transfers of marihuana to registered persons for use in the manufacture of paint or varnish and transfers of seeds of the marihuana plant. This order form requirement is similar to that contained in the Harrison Narcotics Act and the National Firearms Act.

Section 7 imposes a tax of one dollar per ounce upon all transfers of marihuana to person who have paid the special occupational tax and registered under Section 2 of the bill. It imposes a tax of $100 per ounce on transfers of marihuana to nonregistered person. The types of transfer exempted form the order form requirements under section 6, such as those by practicioners and druggists, are likewise exempted from the payment of any tax under the provisions of this section.

At this point, this bill, like the National Firearms Act, departs from the plan of the Harrison Narcotics Act which limits the right to purchase narcotic drugs to those persons who are permitted to register under that act. This limitation was the focal point of attack against the constitutionality of the Harrison Narcotics Act in the case of Doremus vs. United States, supra, and Nigro vs. United States (1927) (276 U.S. 332). In the latter case, the minority of the court expressed the view that this provision in the Harrison Narcotics Act, which limited the persons entitled to purchase narcotic drugs, was unconstitutional on the ground that it manifested an intention on the part of the Congress to regulate a subject matter reserved to the States under the Tenth Amendment.

Thus, in order to obviate the possibility of a similar attack up the constitutionality of this bill, it , like the National Firearms Act, permits the transfer of marihuana to nonregistered persons upon the payment of a heavy transfer tax. The bill would permit the transfer of marihuana to anyone, but would impose a $100 per ounce tax upon a transfer to a person who might use it for purposes which are dangerous and harmful to the public, just as the National Firearms Act permits a transfer of a machine gun to anyone but imposes a $200 tax upon a transfer to a person who would be likely to put it to an illegal use.

Although the $100 transfer tax in this bill is intended to be prohibitive, as is the $200 transfer tax in the National Firearms Act, it is submitted that it is constitutional as a revenue measure.

In the case of Veazie Bank v. Fenno (1869, 8 Wall, 533) the Supreme Court sustained as a proper exercise of the taxing power a ten percent tax upon state-bank notes, notwithstanding the tax, as it was intended to be, was so heavy as to drive such notes out of circulation. The Court said that the fact that a tax was prohibitive would not invalidate it if, on its face, it appeared to be a revenue raising measure, and the fact that a tax is burdensome or tends to restrict or suppress the thing taxed, does not make it any the less a valid exercise of the taxing power. Where the taxing act appears on its face to be a revenue measure, the Court stated that it is not within the province of the judiciary to inquire other motives that may have influenced the Congress in enacting the tax.

In 1913 the Ways and Means Committee reported out a bill which became the Smoking Opium Act of January 17, 1914 (38 Stat. 277). That act imposed a prohibitive tax of $300 per pound upon the manufacture of smoking opium. The act further required anyone desiring to engage in the business of manufacturing smoking opium to give to the United States a bond in the minimum amount of $100,000 to insure the collection of this tax. The constitutionality of this prohibitive tax was considered by the Circuit Court of Appeals for the Eighth Circuit in the case of Lee Mow Lin v. United States (195 U.S. 27), in which the court considered the constitutionality of the Oleomargarine Act of 1902. That act imposed a tax of one-quarter cent per pound upon the manufacture or white oleomargarine and a tax of ten cents per pound upon the manufacture of yellow oleomargarine. The latter tax was deliberately designed to discourage the manufacture of yellow oleomargarine. The constitutionality of the ten cent tax on yellow oleomargarine was challenged on the grounds, first, that it was so heavy as to indicate an intention by Congress to regulate a subject-matter reserved to the States by the tenth amendment; and second, that it was an unreasonable classification in that the ten cent tax arbitrarily discriminated against yellow oleomargarine and in favor of white oleomargarine in violation of the due process clause of the fifth amendment.

The Supreme Court overruled both of these contentions. IN answer to the first, it held that, although the ten cent tax was prohibitive, it was nevertheless within the power of Congress to impose such a tax. The Court repeated the rule that so long as a statute appears upon its face to be a revenue measure, the Court cannot go behind the statute and inquire as to the motives which impelled Congress to enact it, although these motives may have been to regulate, rather than to raise revenue.

In answer to the second contention, namely, that the classification as between the two kinds of oleomargarine violated the due process clause of the fifth amendment, the Court stated that a classification need be based only on a reasonable difference between the subjects of the classification. Since yellow oleomargarine was likely to deceive the public into buying it as butter, the classification was held to be a reasonable one. Just as many of the States now prohibit the manufacture of marihuana, many of the States then prohibited the manufacture of yellow oleomargarine. Since there is obviously a material difference between a transfer of marihuana which may be used for purposes dangerous or harmful to the public, and a transfer of marihuana to a legitimate dealer who will put it to industrial, scientific, or medical uses, it is submitted that the imposition of the one dollar tax upon transfers of marihuana to registered persons and the $100 tax upon transfers to nonregistered persons is a reasonable classification and, therefore, valid.

Finally these same principles were reiterated in the recent case of Sonzinsky v. United States, supra. In that case, the defendant was indicted and convicted for failing to pay the occupational tax and register under the National Firearms Act. He contended that the whole act was an unconstitutional, regulatory scheme, because of the cumulative effect of the heavy occupational tax, coupled with the transfer taxes, was to prohibit traffic in firearms. Although the court did not pass upon the validity of the transfer tax standing by itself, the court brushed aside this argument, remarking:

It has long been established that an act of Congress which on its face purports to be an exercise of the taxing power is not any the less so because the tax is burdensome, or tends to restrict or suppress the thing taxed.

It is urged, therefore, that the $100 transfer tax imposed by H.R. 6385 is a valid taxing provision on the authority of the banknote, smoking opium, oleomargarine, and firearms cases, supra, which hold that if a statute is on its face a revenue measure, the court will not inquire as to what other motives may have impelled Congress to enact it. Of course if a purported taxing measure appears on its face to be regulatory, that is, contains regulatory provisions which are not reasonably necessary to protect or aid in the collection of the revenue, but the tax is imposed to compel obedience to such regulatory provisions, the statute will be held unconstitutional as an attempt by Congress to regulate a subject-matter which is reserved to the States by the tenth amendment. The court so held in the Child Labor Tax Case (1921) 259 U.S. 20 and Hill v. Wallace (1922 259 U.S. 44)

In the Child Labor Case, the court considered a statute which levied a ten percent tax upon the annual net earnings of employers who had at any time during the year employed child labor except where it was done in an honest mistake as to the employee's age. The statute was held unconstitutional as an attempt to regulate a subject matter reserved to the States by the tenth amendment, because the purported excise was not a tax, but a penalty to enforce the regulation of child labor.

As indicative of this fact, the court pointed out that the act provided a heavy exaction for departure from a detailed and specific course of conduct n business set out on the face of the law, without basing the amount of the so-called tax in any degree upon the extent or frequency of the departures. The element of intent involved in the act was also associated, the court thought, with criminal penalties rather than taxes. Finally, the court pointed to the fact that the Secretary of Labor was to participate in the administration of the act, and stated that this also indicated that the law was not a revenue measure, since revenue laws are administered by the Secretary of the Treasury.

The Grains Futures Trading Act which was held unconstitutional in Hill v. Wallace, imposed a tax of twenty cents a bushel on all contracts for the sale of grain for future delivery,. but exempted contracts, consummated on boards of trade designated as contract markets by the Secretary of Agriculture, the designation being reserved for those markets which had complied with a large number of stringent regulations set out in the act. The court found it impossible to escape the conclusion that the act under consideration was regulatory on its face, and that the tax was merely imposed as a penalty to compel boards of trade to comply with these regulations, many of which were not relevant to the collection of the tax.

The court pointed out that the elaborate mechanism set up in the statute for hearings by the Secretary of Agriculture to determine whether or not a particular board of trade had complied with the prescribed regulations and the fact that the title of the act expressly recited that one of its purposes was that of regulating boards of trade were also strong evidence of the regulatory nature of the act.

It is submitted that the $100 tax imposed by H.R. 6385 could not be held unconstitutional under these cases, for the only regulation is that bill with which the taxpayer need comply is that which requires him to make a transfer of marihuana upon an order form. This order form requirement cannot be resorted to, however, as indicating that the $100 transfer tax is intended to regulate a subject-matter reserved to the States under the tenth amendment, for the reason that the much more drastic order form requirement in the Harrison Narcotic Act was upheld by the Supreme Court in Doremus v. United States, supra, as a regulation reasonably necessary to aid in the collection of the occupational taxes imposed by that act. In the course of its decision the Court stated:

Congress, with full power over the subject, short of arbitrary and unreasonable action which is not to be assumed, inserted these provisions in an act specifically providing for the raising of revenue. Considered of themselves, we think they tend to keep the traffic aboveboard and subject to the inspection of those authorized to collect the revenue. They tend to diminish the opportunity of unauthorized persons to obtain the drugs and sell them clandestinely without paying the tax imposed by the Federal law.

After the Doremus case, Congress amended the Harrison Narcotic Act, raising the occupational taxes and imposing a manufacturer excise tax on narcotics. In Nigro v. United States, supra, the Supreme Court again sustained the order for requirement as reasonable and necessary to aid in the collection of the occupational taxes and, in passing, stated that it was also reasonably necessary to aid the collection of the manufacturers' excise taxes. Furthermore, the Supreme Court sustained the additional and more stringent requirement absent in the National Firearms Act and in this bill, which limits the persons to whom the order forms may be sold and, consequently, those to whom narcotics may be sold. In that decision, the Court stated:

It would seem admissible and wise, in a law seeking to impose taxes for the sale of an elusive subject, to require conformity to a prescribed method of sale and delivery calculated to disclose or make more difficult any escape from the tax. If this may be done, any departure from the steps enjoined may be punished, and added penalties may be fixed for successive omissions, but all for the one ultimate purpose of making it difficult to sell opium or other narcotics without registering or paying the tax.

The reasonableness of such requirements is will illustrated in the many limitations which were imposed upon the ancient freedom in the making and sales of distilled spirits, to the end that the collection of the heavy tax on the subject matter might be successfully secured in spite of the temptation to avoid the tax. The provision of section 2 making it an offense to sell unless the purchaser gives a particular official form of order to the seller was enacted with a like object. The sale without such an order thus carries its illegality on its face. Its absence dispenses with the necessity of sending to examine the list of those registered to learn whether the seller is engaged in a legal sale. The requirement that the official forms can only be bought and obtained by one entitled to buy, who name shall be stamped on the order form, and that after the sale the order form shall be recorded, effects a kind off registration of lawful purchasers, in addition to one of lawful sellers, and keeps selling and buying on a plane where evasion of the tax will be difficult.

Since the similar order-form requirement in the Harrison Act was sustained as a regulation reasonably necessary to aid in the collection of the occupational taxes imposed by that act, anyone challenging the constitutionality of the $100 transfer tax imposed by this bill will be unable to rely upon the order-form requirement as indicating that the $100 tax is regulatory in character, but will be compelled to rely solely upon the fact that the tax is too heavy. Thus, the $100 transfer tax is brought squarely within the bank-note, smoking-opium, and oleomargarine cases which establish the proposition that the prohibitive character of a tax does not make it any the less a valid revenue measure.

In the final analysis, after the committee has given full consideration to the subject of marihuana, it is not beyond the realm of possibility that the committee may conclude that the legitimate uses of marihuana are so negligible as compared to the injurious effect it has upon the public health and morals of the people of this country, that the committee will conclude to impose a prohibitive tax upon the production, manufacture, and sale of marihuana, and thus discourage its use in any form in this country.

MR. LEWIS: The treatment of this subject as a matter of method, and so far as constitutional basis is concerned, is about the same as the Harrison Narcotic Act, is it not?

MR, HESTER: With one exception.

MR. LEWIS: I was thinking you might add this drug as an amendment to the Harrison Narcotic Act.

MR, HESTER: No; there are three reasons why we think that would be a bad thing to do.

The first is that while the Harrison Narcotic Act would include producers, there are actually no producers in the United States of the plant from which opium and coca leaves are obtained. Therefore, we have never had a problem under the Harrison Narcotic Act with respect to products which are produced in this country but have only been concerned with products which are imported from abroad.

here we have the reverse situation. Practically all of this marihuana is grown in the United States and for that reason, instead of being concerned only with importation and sale as under the Harrison Act, provision must also be made for regulation of production of marihuana.

There is the further point that opium and coca leaves, which are the subjects of the Harrison Act, are legitimately used almost exclusively as medicines, whereas there are many industrial uses for marihuana. That is another distinction between the Harrison Act and this bill.

The third is this, that the Harrison Narcotic Act has twice been sustained by the Supreme Court of the United States and lawyers are no longer challenging its constitutionality. If an entirely new and different subject matter were to be inserted in its provisions, the act might be subjected to further constitutional attacks.

We feel, in view of the reasons I have cited, that this problem is one that should be dealt with under a separate act.

We have departed from the Harrison Narcotic Act in one major respect, and we have done that because the Ways and Means Committee departed from the plan of the Harrison Act in preparing the National Firearms Act.

Under the Harrison Narcotic Act no one can buy narcotics unless he has registered and paid the occupational tax. In the National Firearms Act the committee did not follow that plan. Anyone is permitted to buy a machine gun or a submachine gun, but he must pay a $200 transfer tax, and carry out the purchase on an official order form.

The focal point of attack on the Harrison Narcotic Act by the judges who dissented in the Doremus case and the Nigro case, was that the provision of the act which limited the persons to whom narcotics could be sold clearly indicated that the primary purpose of the act was not to raise revenue but to regulate matters which were reserved to the States under the tenth amendment.

MR. VINSON How did the Court stand in those cases?

MR, HESTER: In the first case the Court stood 5 to 4, and in the second case the Court stood 66 to 3.

MR. MCCORMACK: What was the firearms case?

MR, HESTER: The firearms case involved only the occupational tax under the Firearms Act.

MR. MCCORMACK: Was that decision unanimous?

MR, HESTER: Yes, that was a unanimous decision. That is the decision of March 29, In the Firearms Act you arranged it of that anybody can buy a machine gun but he must pay a transfer tax of $200 and would have to use an order form.

We have looked into the records in connection with the transfer tax in the Firearms Act, and we found that only one machine gun was purchased at $200 last year.

MR. DINGELL: Legitimately?

MR, HESTER: Yes, this bill would permit anyone to purchase marihuana, as was done in the National Firearms Act in permitting anyone to buy a machine gun, but he would have to pay a tax of $100 per ounce of marihuana and make his purchase on an official order form. A person who wants to buy marihuana would have to go to the collector and get an order form in duplicate, and buy the $100 tax stamp and put it on the original order form there. He would take the original to the vendor, and keep the duplicate. If the purchaser wants to transfer it, the person who purchases the marihuana from him has to do the same thing and pay the $100 tax. That is the scheme that has been adopted to sto high-school children from getting marihuana.

MR.VINSON: What is the fair market value, per ounce, of marihuana?

MR, HESTER: In its raw state it is about a dollar per ounce, as a drug.

MR. VINSON: I notice in your statement -- and I want to say it is a good statement; the gentleman does not have any other kind of a statement when he comes before our committee.

MR, HESTER: I thank you.

MR. VINSON: You say in your statement that ----

It is provided, as in the Harrison Act, that dispensations by registered practitioners in the course of their professional practice and transfers made in god faith by druggists in pursuance f a written prescription issued by registered practitioners shall be exempt from the order-form provisions and from the transfer tax.

I was wondering whether the good-faith requirement was in the Harrison Act.

MR. TIPTON: The good-faith requirement is not in the Harrison Act.

MR. VINSON: It seems to me that is a weakness of the Harrison Act. I think the good-faith provisions in this act will strengthen the law.

MR. TIPTON: Exactly. That is the reason we put that in there. That provision is not in the Harrison Act.

MR. VINSON: It is not included in the Harrison Act?

MR. TIPTON: No.

MR, HESTER: Mr. Tipton says they have had difficulty in enforcing the Harrison Act because of the absence of that requirement.

MR. VINSON: I had the notion that the provision would really strengthen the law in regard to a menace of this kind.

MR, HESTER: That is right.

MR. VINSON: I would like to have some information as to where you get this plant.

MR, HESTER: I have completed my statement, and I may say, Mr. Vinson, that we have here a pharmacologist, a chemist, and an outstanding botanist, who can give you information of that nature.

MR. VINSON: I take it, Mr. Hester, from your citations of the decisions in the Doremus case, and in the Firearms case, together with the decision in the Veazie case and the McCray, or Oleomargarine case - - -

MR, HESTER: (interposing) We have cited five cases.

MR. VINSON: What is the fifth one?

MR, HESTER: that is a decision from the Circuit Court of Appeals of the Eighth Circuit which sustained the imposition of a tax of $300 per pound upon smoking opium.

MR. VINSON: In view of these cases you have no doubt as to the power of Congress to enact this character of legislation?

MR, HESTER: My answer to that is, no; we have given it a great deal of consideration. In the final analysis we submit it to your judgment.

The Supreme court, in the Nigro case and in the Doremus case held that the regulatory provisions of the act, which even limited the class of people who could buy narcotics, were constitutional, since they were regulations reasonably necessary to aid in collecting the revenue. Therefore in considering the constitutionality of H.R. 6385 we do not even have to consider the order-form provision in that bill. Consequently, there is nothing left in the bill to consider but the prohibitive tax, and the McCray case, which held constitutional ten percent tax on yellow oleomargarine, and the Bank Note case and other cases which we have cited clearly hold that, although the tax may be prohibitive, if there are no regulatory provisions on the face of the act which the court may say are not reasonable and necessary to aid in the collection of the tax, the tax is constitutional.