William Howard Taft

“ By the Revenue Act of 1918, the Anti-Narcotic Act was amended so as to increase the taxes under section 1, making an occupation tax for a producer of narcotic drugs $24 a year, for a wholesale dealer $12, for a retail dealer, $6, and for a physician administering the narcotic, $3. The amendment also imposes an excise tax of one cent an ounce on the sale of the drug. Thus the income from the tax for the government becomes substantial. ”

“ The two tax provisions of that section would be much less effective if a purchaser of drugs from an unregistered dealer is not required to furnish an order form. The purchaser may be himself one who should register, but has not done so, or he may be dealing in and selling the drug on which the stamp tax has not been paid, and it is just as important that sales by an unregistered dealer should be punished unless made on a prescribed form as that sales by registered dealers should be subject to penalty. ”

“ The requirement that the official forms can only be bought and obtained by one entitled to buy, whose name shall be stamped on the order form, and that after the sale the order form shall be recorded, effects a kind of registration of lawful purchasers, in addition to one of lawful sellers, and keeps selling and buying on a plane where evasion of the tax will be difficult.
There are persons who may lawfully have access to or even custody of the drugs without registration. Thus included among such persons are the employees of those who have registered and paid the tax. ”

“ The reasonableness of such requirements is well illustrated in the many limitations which were imposed upon the ancient freedom in the making and sale of distilled spirits to the end that the collection of the heavy tax on the subject-matter might be successfully secured in spite of the temptation to avoid the tax. The provision of section 2 making it an offense to sell unless the purchaser gives a particular official form of order to the seller was enacted with a like object. The sale without such an order thus carries its illegality on its face. ”

“ It is maintained, first, that section 2 applies to all sales, including, of course, those made by one who is not registered to a purchaser who cannot possibly secure an order form; and, secondly, that, so construed, is constitutional. Both propositions, I think, are wrong.
Section 1 of the act imposes a definite tax (uniform for each class) upon 'every person' who imports, manufactures, produces, compounds, sells, deals in, dispenses, or gives away opium; also a stamp tax of one cent per ounce upon the drug. All who are subject to the tax are required to register ”

“ The word 'persons' is given expressly the meaning of a partnership, association or corporation, as well as that of a natural person. Why should it not be given its ordinary comprehensive significance? The argument to the contrary in favor of limiting it to exclude all but those who are required to register and pay the tax is that it would be superfluous to include persons selling opium who are not registered, because they are denounced as criminals by the first section for selling without registration. ”

“ Is the allegation that defendant made the sale not in pursuance of a written order of the buyer on a form issued in blank for that purpose by the Commissioner of Internal Revenue of the United States sufficient to charge that defendant was a person required to be registered and to pay the tax under section 1? ”

“ It is to punish him for an added crime-that of deceiving others into the belief that the sale is a lawful sale. There is no incongruity in increasing the criminal liability of the nonregistered seller who fails to use an order form in his sales, or who misuses it. Both the registered and the nonregistered seller are, under our construction of the section, punished for not using the order forms as the statute requires, or for misusing them. ”

“ If only the latter class were subject to its penalties, all persons, by failing to register, could sell with impunity, without paying the tax or complying with the other requirements of the act.
'Section 1 punishes sales by persons who have neither registered nor paid the tax. Section 2 punishes persons who sell, not in pursuance of a written order of the person to whom the sale is made. ”

“ When a collector shall sell forms he is to cause the name of the purchaser to be plainly written or stamped on them before sale and delivery, and no person other than such purchaser shall use the forms so stamped to procure delivery on shipment of any such drug. It is made unlawful to obtain by means of such forms any such drug for use, sale or distribution of it except in the conduct of a lawful business in the drug or in the legitimate practice of a medical profession. ”

“ All the provisions of existing law relating to the engraving, sale and cancellation of tax paid stamps provided for in the internal revenue laws are made to apply to the stamps issued under the section. Unstamped packages found in possession of any person except as provided in the section are subject to seizure. Importers, manufacturers and wholesale dealers are to keep books and records and render monthly returns in relation to dealing with such drugs as are required by regulation made by the Commissioner and approved by the Secretary of the Treasury. ”

“ United States, 254 F. 225, the Circuit Court of Appeals for the Fifth Circuit decided that the proper construction of section 2 under the original act of 1914 made it applicable to sales by any person whether registered or not. ”

“ Ameris, being as the indictment charges an addict, may not have used this great number of doses for himself. He might sell some to others without paying the tax, at least Congress may have deemed it wise to prevent such possible dealings because of their effect upon the collection of the revenue.'
Referring to the same section 2, in United States v. Balint, 258 U.S. 250, 253, 42 S.C.t. 301, 302 (66 L. Ed. 604) ”

“ The questioned inhibition of sales has no just relation to the collection of the tax laid on dealers. The suggestion to the contrary is fanciful. Although disguised, the real and primary purpose is not difficult to discover, and it is strict limitation and regulation of the traffic.
Whether, or how far, opium, tobacco, diamonds, silk, etc., may be sold within their borders is primarily for the States to decide; the federal government may not undertake direct regulation of such matters.
This Court said in United States v. ”

“ The plain intent is to control the traffic within the States by preventing sales except to registered persons and holders of prescriptions, and this amounts to an attempted regulation of something reserved to the States. ”

“ In that case, Wong Sing was indicted under the amendment, section 1006 of the Revenue Act of 1918, for purchasing the drug not from an original stamped package and not from a person who was a registered dealer. It was objected that, under the Jin Fuey Moy Case, a person to be criminally liable under section 1006 must be of a class who must register and pay taxes, but it was held that that section was not limited as section 8 was held to be. ”