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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 dealers, and a transfer tax upon dealings in marijuana.”
Importers, manufacturers, sellers, and distributors were required to register with the Secretary of the Treasury and pay the occupational tax. Transfers were taxed at $1 an ounce; $100 an ounce if the dealer was unregistered. The new tax doubled the price of the legal “raw drug” cannabis, which at the time sold for one dollar an ounce.2 The year was 1937. New York State had exactly one narcotics officer.*
2. Uelmen & Haddox, Drug Abuse and the Law, 1974.
* New York currently has a network of thousands of narcotics officers, agents, spies, and paid informants—and 20 times the penal capacity as it had in 1937, although the population has only doubled since then.
“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.”
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 other appropriate committees such as food and drug, agriculture, textiles, commerce, etc.
His reason may have been that “Ways and Means” is the only committee to send its bills directly to the House floor without being subject to debate 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.
* Colby, Jerry, The DuPont Dynasties, Lyle Stewart, 1984.
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