late, under the guise of the taxing power, a subject matter reserved to the States under the tenth amendment, if it appears on its face to be a revenue measure and contains no regulatory provisions except those reasonably related to the collection of the revenue.

The regulatory features of the bill fall within this rule. The Supreme Court has upheld on this basis the similar order form and registry requirements of the Harrison Act (United States v. Doremus, (1919) 249 U. S. 86; Nigro v. United States (1928), 276 U. S. 332) and, in the present term of court, has sustained the similar registration provisions of the National Firearms Act (Sonzinsky v. United States (1937) 57 S. Ct. 554).

The law is also settled that Congress has the power to enact a tax which is so heavy as to discourage the transactions or activities taxed and that the prohibitive character of the excise is not alone. sufficient to authorize a court to go behind the face of the legislation in an attempt to discern motives other than the raising of revenue which may have impelled Congress to enact the statute. Thus, in Veazie Bank v. Fenno (1869) (8 Wall. 533), the Supreme Court upheld a prohibitive tax of 10 percent upon the circulating notes of State banks, which Congress had imposed with the purpose of driving such notes out of existence and which fully effectuated this purpose. In Lee Mow Lin v. United States (C. C. A. 8th, 1918) (250 Fed. 694), a prohibitive tax of $300 per pound upon the manufacture of smoking opium was upheld. Again, in McCray v. United States (1904) (195 U. S. 27), the Supreme Court held constitutional a law which taxed colored oleomargarine at the prohibitive rate of 10 cents per pound but levied only a 4 cent per pound tax upon uncolored oleomargarine. These cases sustain the $100 tax imposed by this bill upon transfers of marihuana to unregistered persons.

Finally, it is well established that in order to uphold a tax with classified rates under the due-process clause of the fifth amendment of the Constitution, the varying rates need be based only upon some reasonable difference in the subjects taxed. Thus, the Supreme Court found a sufficiently reasonable difference between colored and uncolored oleomargarine in the McCray case, supra, to justify the imposition of a 10-cents-per-pound tax upon the former type, with but a one-fourth-cent-per-pound imposition upon the latter type. The Court pointed out that since yellow oleomargarine was likely to deceive the public into buying it as butter, there was sufficient difference between the two subjects to justify taxing them differently. Obviously, by analogy, there is sufficient difference between a transfer of marihuana to those who will use it for legitimate purposes and a transfer to those who may use it for purposes harmful to the public health and morals, to justify a $1 transfer tax with respect to the former and a $100 transfer tax in the case of the latter.

In addition, certain provisions of the bill may be sustained under the power of Congress to regulate commerce and under the power of Congress over the District of Columbia and the Territories and possessions of the United States.

ANALYSIS OF THE BILL

Section 1: This section defines the important terms used in the bill, notably "marihuana" and "producer." The term "marihuana" is defined so as to bring within its scope all parts of the plant having the

harmful drug ingredient, but so as to exclude the parts of the plant and the valuable industrial articles produced therefrom in which the drug is not present. The term "producer" is defined so as to include not only one who actively fosters the growth of marihuana but also a person who harvests and transfers or makes uses of marihuana which has grown wild. Those on whose land the plant grows wild, however, are not included unless they harvest and transfer or make use of it.

Section 2: This section levies an occupational tax upon persons who deal with marihuana and requires them to register with the collector of internal revenue.

Section 3: This section exempts employees of registered persons, acting within the scope of their employment, and Government officers who handle marihuana in the course of their official duties from payment of the occupational tax and registration with the collector of internal revenue.

Section 4: This section makes it criminal to engage in any activity with respect to marihuana for which registry and payment of the occupational tax imposed by section 2 are required, without having registered and paid the tax. The section also creates a presumption that a person is a producer and thus subject to the occupational tax and registry provisions of section 2, upon proof of the fact that marihuana is growing upon land under his control. Presumptions similar in principle have been sustained by the Supreme Court in Yee Hem v. United States (1925) (268 U. S. 178) and Casey v. United States (1928) (276 U. S. 413).

Section 5: This section makes it illegal to ship marihuana in interstate commerce or transport it within the Territories, possessions, the District of Columbia, or the Canal Zone without having registered and paid the occupational tax.

Section 6: This section makes it illegal to transfer marihuana, except in pursuance of a written order from the transferee, upon an official form obtained by him from the collector of internal revenue. This procedure need not be followed, however, in the following cases: Dispensations by registered practitioners in the course of their professional practice; transfers by druggists in good faith on prescription; export shipments; transfers to certain Federal, State, and local officials; and transfers of the seed to producers for the further production of marihuana and to manufacturers of birdseed, seed oil, seed cake, and products derived from such oil and cake.

Section 7: This section imposes a transfer tax upon all transfers required under section 6 to be carried out in pursuance of order forms. The tax is at the rate of $1 per ounce or fraction thereof on transfers to persons registered under the act and at the rate of $100 per ounce or fraction thereof on transfers to persons not registered under the act. The tax is to be paid by means of a stamp, by the transferee in the first instance, but if the transferee does not pay it, by the transferor. Section 8: This section makes it illegal for a transferee required to pay the transfer tax imposed by section 7 to acquire marihuana without payment of the transfer tax. Proof of possession of marihuana and failure, after demand, to produce the duplicate order form which section 6 requires a transferee to retain is made presumptive evidence of a violation of this section. The authorities cited to sustain the presumption in section 4 are equally applicable here.

Section 9: This section provides for the forfeiture to the United States of contraband marihuana, which must be destroyed unless it can be used for Governmental purposes.

Section 10: This section requires persons liable for any tax under this bill to keep records and make returns under regulations prescribed by the Secretary of the Treasury. Since many of the taxpayers under this measure, such as practitioners, druggists, manufacturers and importers are also taxpayers under the Harrison Narcotic Act, the Secretary may, by regulation, permit them to keep records and make returns with respect to marihuana on the same forms used under the Harrison Act.

Section 11: This section authorizes officers and agents of the Treasury and State officers charged with the enforcement of State marihuana laws to examine the order forms and other records which are required under the bill to be preserved by taxpayers.

Section 12: This section prescribes a criminal penalty of not to exceed $2,000 fine or 5 years' imprisonment, or both, for any violation of the bill.

Section 13: This section makes it unnecessary for the Government to allege in an indictment the fact that the defendant does not fall within any exemption prescribed in the act. The effect of this is to impose upon the defendant the duty to assert and establish his right to any exemption. The same provision is in the Harrison Act and thus has been in operation in criminal cases under that act for 23

years.

The section also places upon the defendant the duty of going forward with the evidence as to whether he has registered and paid the occupational tax or has effected a transfer of marihuana in pursuance of an order form.

Section 14: This section authorizes the Secretary of the Treasury to promulgate all necessary rules and regulations to carry out the provisions of the act, and to delegate to any officer or employee of the Treasury Department any of the functions conferred upon him by the act.

Section 15: This section defines the territorial scope of the act. Section 16: This section contains the usual separability clause. Section 17: This section sets forth the effective date of the act. Section 18: This section contains the short title of the act.

О

AUTHORIZING THE CONVEYANCE TO THE STATE OF VIRGINIA, FOR HIGHWAY PURPOSES ONLY, OF PORTIONS OF THE FORT MYER MILITARY RESERVATION, VA., AND FOR OTHER PURPOSES

MAY 11, 1937.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. COSTELLO, from the Committee on Military Affairs, submitted the following

REPORT

[To accompany H. R. 2299]

The Committee on Military Affairs, to whom was referred the bill (H. R. 2299) authorizing the conveyance to the State of Virginia, for highway purposes only, of portions of the Fort Myer Military Reservation, Va., and for other purposes, having considered the same, submit the following report thereon with the recommendation that it do

pass.

The bill will not involve the Government in any expenditure or require any appropriation to be made. The purpose of the bill is to grant to the State of Virginia a right-of-way over two parcels of Government property. First, over the extreme northwest corner of Fort Myer Military Reservation and second, over the right-of-way connecting Fort Myer with Key Bridge. The War Department is favorable to the enactment of the measure.

The State of Virginia has undertaken the construction of a formal approach to the Arlington Memorial Bridge. This approach will eventually connect that bridge with Shenandoah National Park, and will be known as the Lee Memorial Boulevard. The project has the approval of the National Capital Park and Planning Commission, and the Bureau of Public Roads. The right-of-way to be granted will isolate 2.2 acres from the northwest corner of Fort Myer. The steep nature of the ground in this portion of the reservation renders it useless for military purposes, and in any event the War Department feels that it will be more than compensated for the loss of this area by the diversion of traffic from the military reservation and from Arlington National Cemetery, and by ti e provision of an additional high-class traffic artery readily accessible from Fort Myer.