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In 1945, the Bureau on Narcotics and Dangerous
Drugs (BNDD) attempted to implement unreasonable regulations
on hemp cultivation in the United States. Guards would be
required to protect the hemp at the mills, and that any hemp
leaves or tops that remained on the plant during its transfer
from the field to the mill would constitute a violation of
the law. (1)
The hemp industry complained to Congress. Senator Robert La
Follette, Jr., chairman of the Senate Finance Committee, held
hearings on the problem on May 24, 1945. Eventually the entire
Senate agreed that the hemp industry deserved protection from
arbitrary law enforcement regulation, and adopted amendments
of La Follette's exempting hemp millers from important provisions
of the Marihuana Tax Act of 1937.
On March 23, 1945 James J Biggins, district supervisor, District
No 9, Treasury Department, Bureau of Narcotics had sent the
following letter to the Matt Rens Hemp Co. of Brandon Wisconsin.
"Gentlemen: The Bureau of Narcotics has been informed
by field officers that the growers of hemp have been transferring
to the mills plants from which all of the flowering tops
and leaves have not been separated. This is a violation
of the law and subjects the transferor to severe criminal
as well as civil penalties. The purpose of this letter is
to inform you that the Bureau cannot and will not permit
the tax-free transfer of hemp plants containing foliage
from the producer to the mill, with respect to 1945 or succeeding
crops." (2)
This new interpretation of the Marihuana Tax Act of 1937
subjected the hemp industry to new and substantial taxation.
In 1946 Congress passed the Administrative Procedures Act
to protect private interests from arbitrary, unreasonable,
and capricious regulations, or regulations that exceed an
agencies statutory authority. However these new hemp regulations
were issued in 1945 and the only avenue of appeal for the
hemp industry was to go straight to Congress. Following the
end of the Gillette hearings on fiber utilization and their
high hopes for hemp's future in the US by a mere seven months,
the industry found support on both sides of Capital Hill.
Minnesota Rep. O'Hara, who also spoke to the 1944 Gillette
hearings, first addressed the 1945 hearings. In response to
the complaints that he received from the industry, he met
with Mr. Anslinger and others at the Division of Narcotics
and described the "harsh burden" created by the
requirement to guard hemp at the mills. That conference did
nothing to resolve the problems created by Anslinger's unhelpful
attitude. O'Hara asked the Senate Committee to consider a
reasonable action that would not harass and embarrass legitimate
hemp growers while still protecting the public.
Senator La Follette then thought it would be appropriate
if he made a statement on the legislative history of the Marihuana
Tax Act under which the Bureau of Narcotics issues its regulations
concerning the hemp industry. After noting that Kentucky grew
hemp for most of the 19th century, and hemp had been produced
continuously in Wisconsin since 1916, he reviewed the war
time production of hemp for 42 government owned scutching
mills.
La Follette then recalled that when the Marihuana Act was
passed in 1937, United States Treasury representatives assured
the committee that the legislation would not interfere with
the legitimate production of hemp and quoted Commissioner
Anslinger's testimony in 1937 that the hemp industry was
protected under the Act.
Hemp was being raised in 1945 the same way it had been in
1937, and the industry has operated during these years without
causing any need for new regulations. Furthermore, it was
the experience of these private producers of hemp which provided
this valuable fiber during both World Wars. Because this industry
had made a substantial contribution to the country's rapid
naval expansion during the war; it was important to La Follette
that their legitimate interests not be abandoned by the United
States Congress.
A high percentage of leaves drop off of the hemp stalk during
the retting process, when the stalks are left spread in the
fields for the natural lignin to decay, allowing the separation
of the fiber from the stalk at the mill. Because dew-retting
depends on weather conditions, there is no economical way
to insure that a fixed percentage of leaves are removed from
the "straw" before it is sent to the mill for processing.
The Treasury had decided that any remaining leaves were now
marijuana subject to taxation. According to La Follette:
"the farmers and businessmen in requesting this hearing
have indicated that they have no desire to enter into a
discussion of the narcotic effects of marihuana. This hearing
will be confined to a discussion of the problem of the production
of hemp fiber for industrial purposes along with the uses
of this fiber in the postwar periods." (3)
Commissioner Anslinger was nursing a bad back at home in Pennsylvania
when the hearings took place. La Follette expressed regret
that Anslinger could not attend the hearing, and planned to
call Anslinger's deputy, Will Wood, after hearing from some
witnesses from out of town representing the hemp industry.
Matt Rens' hemp company built their first hemp mill in Wisconsin
in 1916. During the last few years of the war their supplying
farmers made $90 to $100 per acre net profit after paying
for seed and harvesting. Rens explained to the committee the
nature of the leaves the Treasury Department was attempting
to subject to the Marihuana Tax Act of 1937.
"Retting . . .also deteriorates the flowery top and
the leaves. Anybody that knows something about farming knows
what water and rain do to hay if it is left out. This does
the same thing to the leaves. . . if this hemp has been
out in the weather for from 4 to 12 weeks, depending on
the rain . . . these leaves are practically worthless, they
disappear to a large extent, and what remains on the stalk
is really just crumpled up, it is the shriveled-up remnants
of what formerly had been leaves." (4)
Since the Marihuana Tax Act was enacted, Rens reported, growers
have been paying attention to achieving a more uniform ret,
thus removing more of the leaves. However the industry cannot
operate if law enforcement considers these shriveled up remnants
of leaves to be marihuana.
"Personally, I do not think that the Bureau fully realizes
what it means to us. In the 30 years we have operated and
grown large acreages we have never heard of one instance
where there was an illicit use made of the leaves of this
hemp plant." (5)
D.E. Wren of the J. Leroy Farmers Hemp Mill, Beaver Dam Wisconsin,
also testified before the committee. This firm had been in
operation since 1930, steadily increasing acreage annually
well before World War II began. The mill invests in Kentucky
hempseed and leases it out to licensed farmers. Wren explained
that there was routinely a large investment in seed; farmers
were not charged until the crop was processed. The mill supervises
the growing, the cutting, the turning, and the tying. The
farmers process the land and sow the seed. The harvesting
is done with machinery supplied by the mill, and operated
by their personnel.
"When we are trimming the hemp or tying it the machinery
is moving or shaking it and a lot of those leaves that have
dried fall off onto the fields, fall free of the stalk.
Of course, there are a few leaves left but they are all
deteriorated, after it has been lain in the fields from
4 to 12 weeks." (6)
V.A. Batzner represented the Minnesota Hemp Company before
the committee. They were contacted in May of 1944 and told
that the 1945 crop had to be sufficiently free of leaves to
pass inspection.
"Prior to this time we had never been bothered by the
Narcotics Bureau. But their attitude from that time on seemed
to be that they were going to insist that the stocks be
entirely free of leaves or else the tax would apply. Well,
we protested quite a bit, naturally, . . . very recently
. . . they would permit us to have 10% leaf retention."
(7)
The company felt this was still unfair, because the amount
of leaf remaining after retting was subject to so many environmental
and weather-related factors "so that sort of thing is
in the hands of the Almighty." Operating under the new
regulations is too hazardous for the company, because they
don't know if the leaves in any year are going to comprise
12%, 10%, 8% or some other proportion of the crop.
Samuel McCory was the director of the hemp division in the
Agriculture Department, and was called on by the committee
as an expert in the World War II hemp program. He also testified
that it was not possible to eliminate all the leaves during
the retting process.
"It appears that if the hemp industry is to continue
in this country that some provisions should be made to permit
the hemp plant to be brought from the farm to the hemp mill
where it can be processed. The leaves are disposed of in
the milling operation and are not a source of danger after
that point." (8)
McCory also volunteered that the United States should remain
competitive in the soft fiber production and industry. He
described the market as "a highly competitive situation"
and McCory believed that it was in the country's interest
to keep a hemp industry. He did not want to create more obstacles
in the way of the people who are going to grow hemp, now create
requirements that increase their cost and place them at a
disadvantage. Questioned by Senator Guffey, McCory testified
that he also knew of no attempt to secure hemp leaves or blossoms
for drug purposes at the government-owned or privately-owned
hemp mills.
La Follette kept the witnesses coming. A representative from
the Bureau of Plant Industry, Soils, and Agricultural Engineering
testified that there was no efficient way to eliminate all
the leaves before movement of hemp from the field. The same
problem existed with cotton. An economic specialist from
the Agriculture Department, George Farrell, also testified.
He
too was bullish on the future of American Hemp. Farrell explained
that there were developments of new machinery that indicate
that hemp could be economically handled in the making of
cloth within the United States and noted that hemp production
was
expanding throughout the world. Farrell also explained that
hemp was in competition with corn for farmland, and that
in
the non-wartime economy hemp would provide a farmer with
a little more income than corn. (One reason hemp production
did not thrive after the war is that tremendous increases
in corn yields made hemp less attractive to farmers.)
After hearing the preceding testimony, the committee was finally
ready to hear from the representative of the Bureau of Narcotics,
Deputy Commissioner Will S. Wood. After apologizing that Commissioner
Anslinger was resting a sprained back at this Pennsylvania
home, Wood explained that the Bureau regarded marihuana enforcement
as a very important matter. Asked to explain the new regulations,
Wood explained that at the time the law was passed the industry
testified that 90% of the leaves or better were lost in the
retting process, and that rather than a formal regulation
this threshold had been an implicit standard since the passage
of the Marihuana Tax Act.
At this point La Follette and Wood began to argue over what
the formal regulations actually were. B. T. Mitchell, a lawyer
for the Narcotics Bureau, interjected to explain that the
fine print of the definition of marihuana only excludes the
stalks, not the leaves, and that this is the basis for the
Bureau's position that the law requires that all leaves stay
in the field.
"You note that the mature stalks are exempt, and it
is my understanding that that was written in that manner
on the representations of the hemp growers that they could
ret it in such a manner that the leaves and tops would be
removed." (9)
La Follette asked Mitchell if this meant their position was
that a mature stalk was a stalk with no leaves, and he confirmed
that this was the Bureau's interpretation of the statute.
Asked to reconcile this position with the 1937 testimony of
Commissioner Anslinger, Mitchell repeated that the hemp industry
had told them that retting would destroy all the leaves. La
Follette continued on:
"Because it is perfectly clear if you read those Senate
committee hearings that the Senate Committee was very much
concerned to be certain that in enacting this drastic piece
of legislation they weren't putting the Bureau in a position
to wipe out this legitimate hemp industry." (10)
When Wood responded that "of course, the Bureau doesn't
want to do" this, La Follette referred to the day's prior
testimony. "They say that your regulation of March, or
your letter of March, whatever you want to call it, and I
will accept your terminology, is going to put the industry
out of business." (11)
Wood meekly replied that it was just a letter that notified
growers they would have to ret the stalks in the field.
La Follette was undeterred.
"Just a letter, but that puts them on notice that if
they take a single bundle of hemp out of the field after
it is retted and you can find that there are [too many]
leaves on it, they are liable to a tax that would wipe out
anybody that was in business and all of their children for
three or four generations by reason of the fact that they
have to pay the tax. The very fact that these men are so
concerned about it is an indication that they have been
endeavoring to comply with the law." (12)
Asked point blank by La Follette "what promoted the order
of the letter", Wood said he did not know, and neither
did Mitchell. The Bureau representatives asked the committee
to delay any legislative action until Commissioner Anslinger
himself could discuss it with them and answer their questions
about the Biggens letter. According to Wood the Commissioner
"handled that himself."
However La Follette had other plans, and his next action was
to request that the committee's legislative counsel explain
to the committee proposed amendments to other drug-related
legislation before the committee, HR 2348. These amendments
would exempt hemp millers from provisions of the Marihuana
Tax Act of 1937. Specifically, "the amendment that is
drafted here proposes to exempt from tax the transfer of the
plant when it is transferred from the farmer to the miller,
who produces fiber from the stalk. That exemption will be
applicable whether or not any leaves are still left on the
stalk." The amendments also require the millers to register
and pay a $1 per year tax.
The full Senate adopted these amendments on July 21, 1945
after floor remarks by Sen. La Follette, who described the
problem of unfair marihuana law enforcement on the hemp industry
and continued: "This raised the question whether it was
necessary to enact some new legislation which would make it
possible for this not large but very essential industry to
move forward." (13)
La Follette also wanted to emphasize on the Senate floor that
these amendments did not conflict with the public interest.
"I may also state, Mr. President, that I do not believe
there is any evidence of a substantial character that any
of the persons who have engaged in this legitimate industry
have been the source of illicit traffic in marihuana."
(14)
The Senate then insisted in conference on the adoption of
the amendments by the House of Representatives. The House
agreed during conference to accept the Senate Amendments and
Public Law 320 was passed on March 8, 1956, adding the following
provisions to the US Code: 26 USC 4742 (c), 26 USC 4751 (6),
and 26 USC 4753 (b). These Millers Exemptions were retained
by Congress in the Internal Revenue Act of 1954, and remained
in the statutes until passage of the Controlled Substances
Act in 1970 eliminated the use of prohibitory taxes to prevent
marijuana production.
Notes:
(1) Hemp and Marihuana: Hearings before the United States
Senate Committee on Finance, Seventy-Ninth Congress, first
session, on May 24, 1945. (On H.R. 2348)
(2) Hemp and Marihuana, 1945, pg. 31
(3) Hemp and Marihuana, 1945, pg. 4
(4) Hemp and Marihuana, 1945, pg. 5
(5) Hemp and Marihuana, 1945, pg. 5
(6) (Hemp and Marihuana, 1945, pg. 8)
(7) Hemp and Marihuana, 1945, pg. 9
(8) Hemp and Marihuana, 1945, pg. 11
(9) Hemp and Marihuana, 1945, pg. 18
(10) Hemp and Marihuana, 1945, pg. 18
(11) Hemp and Marihuana, 1945, pg. 18
(12) Hemp and Marihuana, 1945, pg. 19
(13) See 91 Cong. Rec. 7912–7916 , July 21, 1945
(14) See 91 Cong. Rec. 7912–7916 , July 21, 1945
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