Marijuana Tax Act of 1937 Stamp

Image retrieved from on February 3rd, 2013.
Image retrieved from on February 3rd, 2013.
Image retrieved from on February 3rd, 2013.

"Social Reorganization

[Andrew] Mellon, in his role as Hoover's Secretary of the Treasury, in 1931 appointed his future nephew-in-law, Harry J. Anslinger, to be head of the newly re-organized Federal Bureau of Narcotics and Dangerous Drugs (FBNDD), a post he held for the next 31 years.
These industrial barons and financiers knew that machinery to cut, bale, decorticate (to separate the fiber from the high-cellulose hurt), and process hemp into paper or plastics was becoming available in the mid-1930s. Cannabis hemp would have to go.
In DuPont's 1937 Annual Report to its stockholders, the company strongly urged continued investment in its new, but readily accepted, petrochemical synthetic products. DuPont was anticipating "radical changes" from "the revenue raising power of government... converted into an instrument for forcing acceptance of sudden new ideas of industrial and social reorganization." (DuPont Company, annual report, 1937)
In The Marijuana Conviction (U. of Virginia press, 1974), Richard Bonnie and Charles Whitebread II detailed this process:

By the fall of 1936, Herman Oliphant (general counsel to the Treasury Department) had decided to employ the taxing power [of the federal government], but in a statute modeled after the National Firearms Act and wholly unrelated to the 1914 Harrison [narcotics] Act. Oliphant himself was in charge of preparing the bill. Anslinger directed his army to turn its campaign towards Washington.
The key departure of the marijuana tax scheme from that of the Harrison Act is the notion of prohibitive tax. Under the Harrison Act, a non-medical user could not legitimately buy or possess narcotics.
To the dissenters in the Supreme Court decisions upholding the act, this clearly demonstrated that Congress' motive was to prohibit conduct rather than raise revenue. So in the National Firearms Act, designed to prohibit traffic in machine guns, Congress "permitted" anyone to buy a machine gun, but required him to pay a $200 transfer tax and carry out the purchase on an order form.
The Firearms Act, passed in June 1934, was the first act to hide Congress' motives behind a "prohibitive" tax. The Supreme Court unanimously upheld the anti-machine gun law on March 29, 1937. Oliphant had undoubtedly been awaiting the Court's decision, and the Treasury Department introduced its marihuana [sic] tax bill two weeks later, April 14, 1937"

Thus, DuPont's decision to invest in new technologies based on "forcing acceptance of sudden new ideas of industrial and social reorganization" makes sense.

A Question of Motive

This prospect was alluded to during the 1937 Senate hearings by Matt Rens, of Rens Hemp Company:

    Mr. Rens: Such a tax would put all small producers out of the business of growing hemp, and the proportion of small producers is considerable... the real purpose of this bill is not to raise money, is it?
    Senator Brown: Well, we're sticking to the proposition that it is.
    Mr. Rens: It will cost a million.
    Senator Brown: Thank you. (Witness Dismissed)

Hearst, His Hatred & Hysterical Lies
William Hearst
Concerned about the effects of hemp smoke had already led two major governmental studies. The British governor of India released the Report of the Indian Hemp Drugs Commission 1893- 1894 on heavy bhang smokers in the subcontinent.
And in 1930, the U.S. government sponsored the Siler Commission study on the effects of off-duty smoking of marijuana by American servicemen in Panama,. both reports concluded that marijuana was not a problem and recommended that no criminal penalties apply to its use.
In early 1937, Assistant U.S. Surgeon General Walter Treadway told the Cannabis advisory subcommittee of the League of Nations that, "It may be taken for a relatively long time without social or emotional breakdown. Marihuana [sic] is habit-forming... in the same sense as... sugar or coffee.
But other forces were at work. The war fury that led to the Spanish American war in 1898 was ignited and fanned by William Randolph Hearst through his nationwide newspaper chains, marking the beginnings of " yellow journalism" as a force in American politics.
In the 1920s and ‘30s, Hearst’s newspapers deliberately manufactured a new threat to America and a new yellow journalism campaign to have hemp outlawed. From 1916 to 1937, as an example, the story of a car accident in which a marijuana cigarette was found would dominate the headlines for weeks, while alcohol-related car accidents (which outnumbered marijuana-connected accidents by more than 1000 to 1) made only the back pages.
The same theme of marijuana-related car accidents was burned into the minds of Americans over and over again (1936- 1938) by showing marijuana related car-accident headlines in movies such as Reefer Madness and Marijuana- Assassin of Youth.

Bigotry and Apartheid

Starting with the 1989 Spanish American War, the Hearst newspaper had denounced Spaniards, Mexican-Americans and Latinos.
After the seizure of 800,000 acres of Hearst's prime Mexican timberland by the "marihuana" [sic] smoking army of Pancho Villa, these slurs intensified.
Non-stop for the next three decades, Hearst painted the picture of the lazy pot-smoking Mexican- still one of our most insidious prejudices. He also did a similar racist smear campaign against the "Yellow Peril" of the Chinese.
Hearst papers from 1910 to 1920 would say that the majority of Negroes raping white women could be traced directly to cocaine. This continued for 10 years until Hearst decided it was not cocaine crazed Negroes raping white women- it was now marijuana crazed Negroes raping white women...
The actual Spanish word for hemp is "cáñamo". But using a Mexican Sonoran colloquialism- marijuana, often Americanized as 'marihuana'- guaranteed that no one would realize the world's chief natural medicine and premier industrial resource had been outflanked, outlawed and pushed out of the language.

The Prohibitive Marijuana Tax Act

In the secret Treasury Department meetings conducted between 1935 and 1937 prohibitive tax laws were drafted and strategies plotted. 'Marijuana' was not banned outright; the law called for an "Occupational excise tax upon deals, and a transfer tax upon dealings in marijuana".
Importers, manufacturers, sellers and distributors had to register with the Secretary of the Treasury and pay the occupational tax. Transfers were taxed at $1 an ounce; $200 an ounce if the dealer was unregistered. Sales to an unregistered taxpayer were prohibitively taxed. At the time, "raw drug" cannabis sold for one dollar an ounce. The year was 1937. New York State had exactly one narcotics officer.
After the Supreme Court decision of March 29, 1937, upholding the prohibition of machine guns through taxation, Herman Oliphant made his move. On April 14, 1937 he introduced the bill directly to the House Ways and Means Committee instead of to the other appropriate committees such as food and drug, agriculture, textiles, commerce etc.
The reason may have been that Ways and Means is the only com,mitte to send its bills directly to the House floor without the act having to be debated upon by other committees.
Ways and Means Chairman Robert L. Doughton, a key DuPont ally, quickly rubber-stamped the secret Treasury bill and sent it sailing through Congress to the President."

-pp. 22- 26, Chapter 4: The Last Legal Days of Cannabis in The Emperor Wears no Clothes: The Authoritative Historical Record of the Cannabis Plant, Marijuana Prohibition, & How Hemp Can Still Save the World by Jack Herer (1992)

"Hearst, Anslinger and Murphy
Harry Anslinger
The first laws against cannabis in the US were on border towns with Mexico, such as the ordinance passed in El Paso in 1914. (Sloman, 1979) Supposedly to control cannabis, the law succeeded only in providing a weapon the local government could beat Mexicans with. (Mann, 2001) William Randolf Hearst was an up-and-coming newspaper tycoon, owning twenty-eight newspapers by the mid-
1920’s. In 1915, Pancho Villa’s men took over “Babicora,” a million-acre ranch in Mexico owned by Hearst. (Swanberg, 1961). Hearst then dropped the word “cannabis” and “hemp” from his newspapers, and began a propaganda campaign against “marijuana” - Villa's men's favorite relaxant. (Conrad, 1994; Marez, 2004)
Harry Anslinger was chosen to be the head of the Federal Bureau of Narcotics in 1930 by his wife’s uncle, Andrew Mellon. (Sloman, 1979) Anslinger would receive tremendous positive newspaper coverage for his new war on cannabis, cocaine and
opiates – much of this from Hearst’s newspapers. (Silver, 1979) In 1937,
Anslinger would select lurid newspaper stories from his famous “gore file” and read them out loud while testifying to the House Ways and Means committee:

“Negro raped a girl eight years of age. Two Negros took a girl fourteen years of age and kept her for two days in a hut under the influence of marihuana. Upon recovery she was found to be suffering from syphilis. ... Colored students at the University of Minnesota partying with female students (white) smoking and getting sympathy with their stories of racial persecution. Result—pregnancy.” (Sloman, 1979, Grey, 1998)

Emily Murphy, Canada’s first female judge, wrote a series of racist articles for Macleans magazine entitled “The Grave Drug Menace”, which she later expanded into a book called “The Black Candle”. (Anthony, Solomon, 1973; Oscapella, 2004) The magazine and –book—along with a series of anti-Asian and anti-opium propaganda published in Canadian newspapers between 1920 and 1922—lead to more anti-opium laws and the first anti-marijuana legislation in Canada in 1922 and 1923.

FDR, Mellon and Rockefeller
Andrew MellonAndrew Mellon owned Alcoa, Gulf Oil and the Mellon Bank. (Lundberg, 1968) Mellon financed DuPont’s 1920’s takeover of GM, and DuPont owned chemicals used by Heart’s paper-making factories. Hearst, combined with Congressman Robert Doughton and Senator Prentiss Brown (both DuPont allies) combined their strength and passed the bill with little opposition.
In the DuPont 1937 Annual Report, it stated, “the revenue raising power of government may be converted into an instrument for forcing acceptance of sudden new ideas of industrial and social reorganization.” (Conrad, 1994) The “revenue raising” they were talking about was a tax act that was designed to avoid handing out any tax stamps—a prohibition pretending to be a tax. With hemp rope gone, DuPont's new invention Nylon would be one of the synthetic “sudden new ideas” accepted by North American citizens. The hemp-free paper made from trees using Dupont’s chemicals would be another.

Hemp as Viable Fuel- And Market Competition

The same “outlaw the natural to monopolize the synthetic” business strategy would work with fuel. According to one researcher, with today’s enzyme technology, hemp ethanol could be produced for $1.37 per gallon plus the cost of the raw material, with technological improvements and tax credits reducing the price by another dollar or so per gallon. (Castleman, 2001) The cost of the raw material would decrease as hemp was grown for more products, providing more free (or nearly-free) hemp stalks as a “waste product.” Could you imagine paying under 50 cents per gallon (US) or 15 cents per liter (CAN) for your hemp ethanol? Rockefeller and Mellon could envision it, but they preferred their vision of dirty fuel monopolies for Standard Oil and Gulf Oil rather than clean fuel farms for prosperous farmers. It was crucial to their business model that hemp became and stayed illegal."

-pp. 30- 32, Recent History by David Malmo-Levine in The Pot Book: A Complete Guide to Cannabis edited by Dr. Julie Holland (2010)

1937 Marijuana Tax Act Stamps
William Hearst
Harry Anslinger
Andrew Mellon