Alleviating Poverty through Profit with the Development of Enterprise and Enterprise through Development



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Hemp growers had to register with the government; sellers and buyers had to fill out cumbersome paperwork; and, of course, it was a federal crime not to comply.
The Marijuana Tax Act effectively destroyed all legitimate commercial cultivation of hemp. With most of their markets gone, farmers stopped growing hemp, and the legitimate industry disappeared. Ironically, though, hemp continued to grow wild all over the USA, and its "illegitimate" use was little affected by Congress.
The Marihuana Tax Act of 1937
Whenever Congress is going to pass a law, they hold hearings. The hearings can be extremely voluminous, they go on and on, they have days and days of hearings. The hearings on the national marijuana prohibition lasted one hour, on each of two mornings and since the hearings were so brief I can tell you almost exactly what was said to support the national marijuana prohibition. When Professor Whitebread asked at the Library of Congress for a copy of the hearings, to the shock of the Library of Congress, none could be found It took them four months to finally honor their request because – are you ready for this? -- the hearings were so brief that the volume had slid down inside the side shelf of the bookcase and was so thin it had slid right down to the bottom inside the bookshelf. That's how brief they were. Are you ready for this? They had to break the bookshelf open because it had slid down inside. There were three bodies of testimony at the hearings on the national marijuana prohibition. The first testimony came from Commissioner Harry Anslinger, the newly named Commissioner of the Federal Bureau of Narcotics. In the late 20s and early 30s in the USA there were two Federal police agencies created, the FBI and the FBN -- the Federal Bureau of Investigation, and the Federal Bureau of Narcotics.
Commissioner Anslinger gave the Government testimony and I will quote him directly. He was working from a text that had been written for him by a District Attorney in New Orleans, a guy named Stanley. Reading directly from Mr. Stanley's work, Commissioner Anslinger told the Congressmen at the hearings, and I quote, "Marihuana is an addictive drug which produces in its users insanity, criminality, and death." That was the entire Government testimony to support the marijuana prohibition from the Commissioner. The next body of testimony -- remember all of this took a total of two hours .. You understand what the idea was, don't you? The idea was to prohibit the cultivation of hemp in America. You all know, because there has been some initiative in California, that hemp has other uses than its euphoriant use. For one, hemp has always been used to make rope. Number two, the resins of the hemp plant are used as bases for paints and varnishes. And, finally, the seeds of the hemp plant are widely used in bird seed. Since these industries were going to be affected the next body of testimony came from the industrial spokesmen who represented these industries. The first person was the rope guy and he said by about 1820 it got cheaper to import the hemp needed to make rope from the Far East and so now in 1937 we don't grow any more hemp to make rope in this country -- it isn't needed anymore. It explains the long-standing rumor that the founding forefathers had something to do with marijuana. Yes, they did -- they grew it. Hemp was the principal crop at Mount Vernon, George Washington’s home. It was a secondary crop at Monticello, Thomas Jefferson’s home.
Five years later, 1942, USA is cut off from their sources of hemp in the Far East. They need a lot of hemp to outfit their ships for World War II, rope for the ships, and therefore, the Federal Government went into the business of growing hemp on gigantic farms throughout the Midwest and the South to make rope to outfit the ships for World War II.
The paint and varnish people said "We can use something else." And, of the industrial spokesmen, only the birdseed people balked. The birdseed people were the ones who balked and the birdseed person was asked, "Couldn't you use some other seed? “

These are all direct quotes from the hearings. The answer the birdseed guy gave was, "No, Congressman, we couldn't. We have never found another seed that makes a birds coat so lustrous or makes them sing so much."


The birdseed people both got and kept an exemption from the Marihuana Tax Act right through this very day for so-called "denatured seeds"? There was only one body of testimony left at these brief hearings and it was medical. There were two pieces of medical evidence introduced with regard to the marijuana prohibition.

The first came from a pharmacologist at Temple University who claimed that he had injected the active ingredient in marihuana into the brains of 300 dogs, and two of those dogs had died.

When asked by the Congressmen, and I quote, "Doctor, did you choose dogs for the similarity of their reactions to that of humans?"
The answer of the pharmacologist was, "I wouldn't know, I am not a dog psychologist." The active ingredient in marijuana was first synthesized in a laboratory in Holland after World War II. So what it was this pharmacologist injected into these dogs we will never know, but it almost certainly was not the active ingredient in marijuana. The other piece of medical testimony came from a man named Dr. William C. Woodward. Dr. Woodward was both a lawyer and a doctor and he was Chief Counsel to the American Medical Association. Dr. Woodward came to testify at the behest of the American Medical Association saying, and I quote, "The American Medical Association knows of no evidence that marihuana is a dangerous drug." One of the Congressmen said, "Doctor, if you can't say something good about what we are trying to do, why don't you go home?" That's an exact quote. The next Congressman said, "Doctor, if you haven't got something better to say than that, we are sick of hearing you." Now, the interesting question for us is not about the medical evidence.

The most fascinating question is:


Why was this legal counsel to the most prestigious group of doctors in the United States treated in such a high-handed way? In 1936, President Franklin Roosevelt was re-elected in the largest landslide election in the country's history till then.

He brought with him two Democrats for every Republican, all, or almost all of them pledged to that package of economic and social reform legislation we today call the New Deal.


The American Medical Association, from 1932, straight through 1937, had systematically opposed every single piece of New Deal legislation. So that, by 1937, this committee, heavily made up of New Deal Democrats is simply sick of hearing them: "Doctor, if you can't say something good about what we are trying to do, why don't you go home?" So, over the objection of the American Medical Association, the bill passed out of committee and on to the floor of Congress.

Now, some of you may think that the debate on the floor of Congress was more extensive on the marijuana prohibition.


It wasn't. It lasted one minute and thirty-two seconds and, as such, I will give it to you verbatim. The bill was brought on to the floor of the House of Representatives -- there never was any Senate debate on it not one word -- 5:45 Friday afternoon, August 20, 1937. Now, in pre-air-conditioning Washington, who was on the floor of the House? Who was on the floor of the House? Not very many people Speaker Sam Rayburn called for the bill to be passed on "tellers". Does everyone know "tellers"? Did you know that for the vast bulk of legislation in the USA, there is not a recorded vote. It is simply, more people walk past this point than walk past that point and it passes -- it's called "tellers". They were getting ready to pass this thing on tellers without discussion and without a recorded vote when one of the few Republicans left in Congress, a guy from upstate New York, stood up and asked two questions, which constituted the entire debate on the national marijuana prohibition. "Mr. Speaker, what is this bill about?" To which Speaker Rayburn replied, "I don't know. It has something to do with a thing called marihuana. I think it's a narcotic of some kind." Undaunted, the guy from Upstate New York asked a second question, which was as important to the Republicans as it was unimportant to the Democrats. "Mr. Speaker, does the American Medical Association support this bill?" A member of the committee who had supported the bill leaped to his feet and he said, "Their Doctor Wentworth came down here. They support this bill 100 percent.” It wasn't true, but it was good enough for the Republicans. They sat down and the bill passed on tellers, without a recorded vote.
In the Senate there never was any debate or a recorded vote, and the bill went to President Roosevelt's desk and he signed it and they had the national marijuana prohibition.
Was a viable hemp industry forced out of existence because it was a threat to people's health or because it was a threat to a few large businesses that would profit from banning it?
Here are some facts; hemp was outlawed just as a new technology would have made hemp paper far cheaper than wood-pulp paper. Enthusiastic about the new technology, Popular Mechanics predicted that hemp would become America's first "billion dollar crop." The magazine pointed out that "10,000 acres devoted to hemp will produce as much paper as 40,000 acres of average [forest] pulp land." Hearst, one of the promoters of the anti-hemp hysteria, had a vested interest in protecting the pulp industry. Hearst owned enormous timber acreage; competition from hemp paper might have driven the Hearst paper-manufacturing division out of business and cause the value of his acreage to plummet. Hearst was even responsible for popularizing the term "marijuana" in American culture. In fact, popularizing the word was a key strategy of Hearst's efforts: "The first step in creating hysteria was to introduce the element of fear of the unknown by using a word that no one had ever heard of before...'marijuana.'" It associated the plant with Mexicans and played on racist fears, and it misled the public into thinking that marijuana and hemp were different plants.
The DuPont Company also had an interest in the pulp industry. At this time, it was in the process of patenting a new sulfuric acid process for producing wood-pulp paper. According to the company's own records, wood-pulp products ultimately accounted for more than 80% of all of DuPont's railroad car loadings for the next 50 years. DuPont realized after the end of World War I that developing peacetime uses for artificial fibers and plastics would be more profitable in the long run. So it began pouring millions of dollars into research, -Two years before the prohibitive hemp tax, DuPont developed a new synthetic fiber, nylon, which was an ideal substitute for hemp rope.
-The year after the hemp tax, DuPont was able to bring another "miracle" synthetic fabric onto the market, rayon. Rayon, which became widely used for clothing, was a direct competitor to hemp cloth.
-"Congress and the Treasury Department were assured, through secret testimony given by DuPont, that Hemp-seed oil could be replaced with synthetic petrochemical oils made principally by DuPont." These oils were used in paints and other products
Five years after the hemp tax was imposed, when Japanese seizure of Philippine hemp caused a wartime shortage of rope, the government reversed itself. Overnight, the U.S. government urged hemp cultivation once again and created a stirring movie called "Hemp for Victory" then, just as quickly, it recriminalized hemp after the shortage had passed. While U.S. hemp was temporarily legal, however, it saved the life of a young pilot named George Bush, who was forced to bail out of his burning airplane after a battle over the Pacific.

At the time he didn't know that:


-Parts of his aircraft engine were lubricated with hemp-seed oil.
-100% of his life-saving parachute webbing was made from U.S. grown hemp.
-Virtually all of the rigging and lines of the ship that rescued him were made of hemp.
-The flight-suit on his back was a rubberized hemp-cloth.
-The fire hoses on the ship were woven from hemp Ironically, President Bush consistently opposed decriminalizing hemp grown in the United States..
1938 to 1951 In this next step there are three stories to tell you about 1938 to 1951.
The first of them: Immediately after the passage of the national marijuana prohibition, Commissioner Anslinger decided to hold a conference of all the people who knew something about marijuana -- a big national conference. He invited forty-two people to this conference. The first morning of the conference of the forty-two people that Commissioner Anslinger invited to talk about marijuana, 39 of them got up and said some version of "Gee, Commissioner Anslinger, I don't know why you asked me to this conference, I don't know anything about marijuana."
That left three people. Dr. Woodward and his assistant -- you know what they thought. That left one person -- the pharmacologist from Temple University -- the guy with the dogs. And what do you think happened as a result of that conference? Commissioner Anslinger named the pharmacologist from Temple University the Official Expert of the Federal Bureau of Narcotics about marijuana, a position the guy held until 1962. Now, the irony of trying to find out what the drug did after it had been prohibited, also finding out that only one person agrees with you -- and naming him the Official Expert, speaks for itself. After national marijuana prohibition was passed, Commissioner Anslinger found out, or got reports, that certain people were violating the national marijuana prohibition and using marijuana and, unfortunately for them, they fell into an identifiable occupational group.

Who were flouting the marijuana prohibition? Jazz musicians.


And so, in 1947, Commissioner Anslinger sent out a letter, I quote it verbatim, "Dear Agent So-and-so, Please prepare all cases in your jurisdiction involving musicians in violation of the marijuana laws. We will have a great national round-up arrest of all such persons on a single day. I will let you know what day."
"Dear Commissioner Anslinger, I have your letter of October 24. Please be advised that the musical communities here in Hollywood are unionized and very tight we have been unable to get an informant inside it. So, at the present time, we have no cases involving musicians in violation of the marihuana laws." For the next year and a half, Commissioner Anslinger got those kinds of letters. He never acknowledged any of the problems that the agents said they were having with this idea and always wrote them back the same letter. "Dear Agent so-and-so, Glad to hear you are working hard to give effect to my directive of October 24, 1947. We will (and he always underlined the word 'will') have a great national round-up arrest of musicians in violation of the marijuana laws all on a single day. Don't worry; I will let you know what day." This went on -- and, of course, you know that some jazz musicians were, in fact, arrested in the late 40's (Gene Krupa, Louis Armstrong et al.)-- this all went on until it ended just the way it began -- with something that Anslinger said. Commissioner Anslinger was testifying before a Senate Committee in 1948. He was saying, "I need more agents." And, of course, the Senators asked him why. "Because there are people out there violating the marijuana laws."
Well, you know what the Senators asked -- "Who?"
Anslinger first said, "Musicians." But then he looked up at that Senate committee and he gave them a little piece of his heart and said the single line which provoked the most response in the country's history about the non-medical use of drugs. Anslinger said, "And I don't mean good musicians, I mean jazz musicians."
The final story from this period: In the late 30's and early 40's marihuana was routinely referred to as "the killer drug", "the assassin of youth". You all know "reefer madness", right? Where did these extraordinary stories that circulated in this country about what marijuana would do to its users come from?
The terrific reputation that marijuana got in the late 30s and early 40s stemmed from something Anslinger had said. Does everybody remember what Anslinger said about the drug? "Marihuana is an addictive drug which produces in its user’s insanity, criminality, and death."
Well, this time the magic word -- come along lawyers out there, where's the magic word? – Insanity! …Marihuana use, said the Government, would produce insanity.
And, sure enough, in the late 30s and early 40s, in five really flamboyant murder trials, the defendant's sole defense was that he -- or, in the most famous of them, she -- was not guilty by reason of insanity for having used marijuana prior to the commission of the crime. All right, it's time to take you guys back to class here. If you are going to put on an insanity defense, what do you need? You need two things, don't you? Number one, you need an Expert Witness. Where, oh where, in this story, are we going to find an expert witness? Here it comes -- sure enough -- the guy from Temple University -- the guy with the dogs. I promise you, you are not going to believe this. In the most famous of these trials, what happened was two women jumped on a Newark, New Jersey bus and shot and killed and robbed the bus driver. They put on the marijuana insanity defense. The defense called the pharmacologist, and of course, you know how to do this now, you put the expert on, you say "Doctor, did you do all of this experimentation and so on?" You qualify your expert. "Did you write all about it?" "Yes, and I did the dogs" and now he is an expert. Now you ask him what? You ask the doctor "What have you done with the drug?" And he said, and I quote, "I've experimented with the dogs, I have written something about it and" -- are you ready -- "I have used the drug myself."
What do you ask him next? "Doctor, when you used the drug, what happened?" With all the press present at this flamboyant murder trial in Newark New Jersey, in 1938, the pharmacologist said, and I quote, in response to the question "When you used the drug, what happened?", his exact response was: "After two puffs on a marijuana cigarette, I was turned into a bat." He wasn't done yet. He testified that he flew around the room for fifteen minutes and then found himself at the bottom of a two-hundred-foot high ink well Well, friends, that sells a lot of papers. What do you think the Newark Star Ledger headlines were the next day, October 12, 1938? "Killer Drug Turns Doctor to Bat!"
What else do we need to put on an insanity defense? We need the defendant's testimony -- himself or herself. OK, you put defendant on the stand, what do you ask? "What happened on the night of . ." "Oh, I used marijuana." "And then what happened?" And, if the defendant wants to get off, what is he or she going to say? "It made me crazy." You know what the women testified? In Newark they testified, and I quote, "After two puffs on a marijuana cigarette my incisor teeth grew six inches long and dripped with blood."
This was the craziest business you ever saw. Every one of these so-called marijuana insanity defenses were successful.
The one in New York was just outlandish. Two police officers were shot and killed in cold blood. The defendant puts on the marijuana insanity defense and, in that case, there was never even any testimony that the defendant had even used marijuana. The testimony in the New York case was that, from the time the bag of marijuana came into his room it gave off "homicidal vibrations", so he started killing dogs, cats, and ultimately two police officers. Commissioner Anslinger, sitting in Washington, seeing these marijuana insanity defenses, one after another successful, he writes to the pharmacologist from Temple University and says, "If you don't stop testifying for the defense in these matters, we are going to revoke your status as the Official Expert of the Federal Bureau of Narcotics." He didn't want to lose his status, so he stopped testifying, nobody else would testify that marijuana had turned them into a bat, and so these insanity defenses were over but not before marijuana had gotten quite a reputation, indeed.
The next step -- and now we are going to move very quickly here -- in 1951. We get a whole new drug law called the Boggs Act and it is important to us for only two reasons. Number one, it reflects what I am going to call the formula for drug legislation in the USA. Here is the formula. The formula really is always the same, think about it in our lifetime.
The formula is that someone, and by the way, that someone is usually the media, perceive an increase in drug use. What's the answer? The answer in the history of the USA is always the same -- a new criminal law with harsher penalties in every single offense category. The Boggs Act of 1951 quadrupled the penalties in every single offense category and, by the way, the Boggs Act had a whole new rationale for the marijuana prohibition. Do you remember the old rationale -- that marijuana was an addictive drug which caused in its users insanity, criminality, and death? Just before Anslinger was to testify on the Boggs Act, the doctor who ran for the Government and the Lexington, Kentucky narcotics rehabilitation clinic testified ahead of Anslinger and testified that the medical community knew that marijuana wasn't an addictive drug. “It doesn't produce death, or insanity, and instead of producing criminality, it produces passivity,” said the doctor. Who was the next witness? Anslinger. And, if you see, that the rug had been pulled out from under everything he had said in the 1937 hearings to support the marijuana prohibition.

Anslinger, you know, had been bitten bad enough by what he said, he didn't want that again -- he said, the doctor is right, marijuana -- he always believed, by the way, that there was something in marijuana which produced criminality -- is not an addictive drug, it doesn't produce insanity or death but it is "the certain first step on the road to heroin addiction."


And the notion that marijuana was the stepping stone to heroin became, in 1951, the sole rationale for the national marijuana prohibition. It was the first time that marijuana was lumped with all the other drugs and not treated separately, and we multiply the penalties in every offense category.
Well, now once you buy it, the ball is going to roll like crazy.
1956 and the Daniel Act
1956, we get another new drug law, called the Daniel Act, named for Senator Price Daniel of Texas. It is important to us for only two reasons. One, it perfectly reflects the formula again. What is the formula? Somebody perceives an increase in drug use in this country and the answer is always a new criminal law with harsher penalties in every offense category. Where did the perception in 1956 come from that there was an increase in drug use? Answer: In 1956 USA had the first set ever of televised Senate hearings. And whose hearings were they? They were the hearings of Senator Estes Kefauver of Tennessee about organized crime in America. These hearings, which everybody watched on their little sets showed two things. Number one, there is organized crime in America and number two, it makes all its money selling drugs. There it was, that was all the perception that was needed. They passed the Daniel Act which increased the penalties in every offense category, that had just been increased times four -- times eight. Just to show you where it was, in the same time period in Virginia: First degree murder had a mandatory minimum sentence of fifteen years. Rape, a mandatory minimum sentence of ten years. Possession of marijuana -- mandatory minimum of twenty years. Sales of marijuana - mandatory minimum of forty years
That is the situation in 1969 when the USA have a new drug law, the first one in the country's history that does not follow the formula. It is the 1969 Dangerous Substances Act. For he first time in the country’s history, they have a perception of an increase in drug use during the Sixties, but instead of raising the penalties, they lower them. And, further, in the Dangerous Substances Act of 1969, for the first time they finally abandon the so-called "taxing" mythology. In the 1969 Act, what the Federal law does is, it takes all the drugs we know -- if you can't fill in this next blank, you are in trouble -- except two -- which two? Which two are never going to be mentioned? Nicotine and alcohol. But, other than nicotine and alcohol -- every other drug. What the 1969 act did, and what most state laws still do, is to classify all drugs except nicotine and alcohol by two criteria. What is the drug's medical use? And, what is the drug's potential for abuse? They put all the drugs, by those two criteria, in schedules, and then they tie the penalties for possession, possession with intent to sell, sale, and sale to a minor to the schedule of the drug in question. The first schedule, Schedule One Drugs were drugs that had little or no medical use and a high potential for abuse. What's going to go in there? LSD, marijuana, hashish, they are all in Schedule One -- little or no medical use and a high potential for abuse. Once you schedule your drugs, you then tie the penalties for the drugs to the schedule and then, because in 1969 they wanted to reduce the marijuana penalties they had to deal with marijuana separately and did so. Well, then you know what happened. We get the War on Drugs. You know how it all went down. We got perceptions in the 80s that there was an increase in drug use, a great dramatic decision to declare war on drugs and, predominantly, war on drug users The War on Drugs, a very interesting war, because why? It was cheap to fight. It was cheap to fight at first -- why? Criminal forfeiture was used to make this a costless war. That is, easy forfeiture from those who were caught allowed them to pay for the war in that way.
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