Marihuana Tax Act of 1937

Background

Regulations and restrictions on the sale of Cannabis sativa as a drug began as early as 1906 (see Legal history of cannabis in the United States). The head of the Federal Bureau of Narcotics (FBN), Harry J. Anslinger, alleged, in the 1930s, the FBN had an increase of reports of people using marijuana. In 1935, he gained the support of president Franklin D. Roosevelt lobbying states to adoption the model Uniform State Narcotic Act to regulate of cannabis. The Marihuana Tax Act, according to Clinton Hester, the then-Assistant General Counsel to the United States Treasury Department, was itself based on the National Firearms Act and the Harrison Narcotics Tax Act:

"The primary purpose of this legislation must be to raise revenue, because we are resorting to the taxing clause of the Constitution and the rule is that if on the face of the fill it appears to be a revenue bill, the courts will not inquire into any other motives that the Congress may have had in enacting this legislation. This bill is modeled on the Harrison Narcotics Act and the National Firearms Act. The Harrison Narcotics Act has been sustained by the Supreme Court, the first time by a 5-to-4 decision, and a second time by a 6-to-3 decision. The Supreme Court in March of this year [in Sonzinsky v. United States] sustained the constitutionality of the National Firearms Act, insofar as it related to the occupational tax."

The total production of hemp fiber in the United States in 1933 decreased to around 500 tons per year. Cultivation of hemp began to increase in 1934 and 1935, but production remained low compared with other fibers.

Interested parties write that the aim of the Act was to reduce the hemp industry through excessive taxation largely as an effort of businessmen Andrew Mellon, Randolph Hearst, and the Du Pont family. The same parties argue that with the invention of the decorticator, hemp was an economical replacement for paper pulp in the newspaper industry. Newspaper magnate William Randolph Hearst realized cheap, sustainable, and easily-grown hemp threatened his extensive timber holdings. Mellon, Secretary of the Treasury and the wealthiest man in the US, invested heavily in the Du Pont family's new synthetic fiber, nylon, to compete with hemp. 1916, United States Department of Agriculture (USDA) chief scientists Jason L. Merrill and Lyster H. Dewey created a paper, USDA Bulletin No. 404 "Hemp Hurds as Paper-Making Material", in which they concluded this paper from the woody inner portion of the hemp stem broken into pieces, the 'hemp hurds', was "favorable in comparison with those used with pulp wood". Dewey and Merrill believed hemp hurds were a sustainable source for paper production. The concentration of cellulose in hemp hurds is generally around 35%. Manufacture of paper -- on equipment designed to use wood-pulp -- with hemp as a raw material shows hemp lacks the qualities needed to become a major competitor to the traditional paper industry. 2003, 95% of the hemp hurds in the EU were used for animal bedding, almost 5% were used as building material. Spokespersons from DuPont and many fiber manufacturers dispute a link between their promotion of nylon over hemp. They explain that the purpose of developing nylon was to produce a fiber competitive with silk and rayon.

The American Medical Association (AMA) opposed the taxation because the tax was imposed on physicians prescribing cannabis, retail pharmacists selling cannabis, and medical cannabis cultivation/manufacturing. The AMA proposed cannabis instead be added to the Harrison Narcotics Tax Act which would have been more efficient and created less burden on doctors. Dr. William Creighton Woodward, legislative counsel for the AMA, testified on behalf of the AMA. He stated that the claims about marijuana addiction, violence, and overdosage were not supported, and that the law should not burden further investigation into medical use.

After hearings with lawyers from Du Pont Chemicals and the Hearst Newspapers Group, the taxation was passed on the grounds of 'differing' reports and hearings. Anslinger also referred to the International Opium Convention from 1928 included cannabis as a drug not a medicine. All state legislatures approved laws against improper use of cannabis based on the model Uniform State Narcotic Act. By 1951, however, spokespeople from Du Pont, Hearst and others came up with new improved rationalizations, and the Boggs Act superseded the Marihuana Taxation Act of 1937. In August 1954, the Internal Revenue Code of 1954 was enacted, and the Marihuana Taxation Act was included in Subchapter A of Chapter 39 of the 1954 Code.