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Mr. Lozier: Mr. Chairman and gentlemen of the committee. I will State, in corroboration of the statement made by Mr. Hester, that we had a conference last evening, and at that time we agreed upon some of these changes. At that time the visitorial powers of the Department with reference to oil had not been removed from the bill, and it was our contention that if any supervision or visitorial powers were given the Department over oil and cake after the crushing process, it would taint and place under suspicion all oil and cake products, subject them to possible seizure, and the manufacturers or dealers to prosecution, and no linoleum, soap, or paint manufacturer would buy the oil and no farmer would buy the cake for fear it might be found that a few twigs, leaves, or portions of the flowering tops were not removed from the seeds before crushing.

Mr. Hester, representing the Department, exercising the good judgement that he always shows, has agreed to amend the definition of marihuana so as to eliminate the oil, oil cake, and oil meal entirely. That will prevent any seizures of tanks cars and the imposition of a tax on paint, soap, and linoleum manufacturers, should anyone raise any question as to the seed containing parts of the tops, twigs, or leaves of the plant. The definition drawn by Mr. Hester is satisfactory to us, and the other amendments are also satisfactory to the crushers or the mills engaged in the production of hempseed oil.

As I said in my statement yesterday, my clients recognize the wisdom of very severe and stringent regulatory control over marihuana, insofar as it may be used for deleterious purposes. The only point we want to bring before the committee is that the legislation be made reasonable, and that it may not travel into unexplored regions and embody provisions inimical to a great industry and which would no promote the real object of the bill.

Speaking for 15 or 20 companies engaged in crushing hempseed oil, represented by the National Institute of Oilseed Products, I will say to the committee that the amendments are satisfactory. We recognize the fact that you will pass upon amendments without regard to any agreements or understanding we may have; but if the amendments are satisfactory to the committee, they are entirely satisfactory to the crushers. Judge Williamson, who is vice president and general counsel of the El Dorado Oil Works, which is the oldest oil-crushing establishment on the Pacific coast, is present, and I will say that we see no objection to the passage of the measure in its substantive essence with the amendments that Mr. Hester has approved.

The Chairman: The Chair would like to state that he is very much gratified to know that an understanding has been reached between the interests that Judge Lozier represents and the Treasury Department. I regret that I was unable to be here yesterday because of another pressing appointment with General Hines. We are glad to have had a statement by Judge Lozier, a former able and diligent Member of the House, and I believe I voice the sentiment of each member of the committee who has served with Judge Lozier when I say that he would not appear before this or any other committee on behalf of any client on any proposition that he could not conscientiously and fully justify.

Mr. Lozier: I thank you very much, Mr. Chairman.

Mr. Fuller: I would like to ask Judge Lozier a question, because I was not here when the other gentleman made his statement. As I understand this agreement, you have agreed upon an amendment whereby you exempt from the operation of the bill all dealers who handle oil from the seed.

Mr. Lozier: The definition includes every particle of the marihuana plant, or the Cannabis sativa. L. plant, including the mature fruitage of the seed, up to the time the seeds are pressed and the oil or cake is extracted. At that point the definition ends, and the Government would have no supervision whatsoever over the oil, cake, or meal in the channels of trade and commerce.

Mr. Fuller: The other point I want to reach is this: Would Mr. Williamson, for instance, who imports these seeds for the purpose of obtaining oil by crushing them, be exempted entirely from all regulations under these amendments?

Mr. Lozier: No; this bill as originally framed, and in the form to which we have agreed, brings the importer, the manufacturer, the processor, and the compounder under the regulatory provisions of the bill up to the point where the seed ceases to be seed and become either cake or oil. The crushers must register, they must pay the occupational tax, and make their reports from time to time, as required by the Treasury Department.

Mr. Fuller: In order that they may know where the seed goes.

Mr. Lozier: Yes.

Now, may I say this, that the gentlemen whom I represent developed the hempseed-oil industry at a time when there was a great need for drying oils. We only produced from one-third to one-half the drying oils used in this country, and the need for drying oils became more acute because of the constantly declining production of flax in this country. The linoleum industry, the paint industry, and the varnish and lacquer industry, as well as the soap industry, and the building industry are looking for means which will enable them to have more generous supplies of these drying oils. They have no objection whatever to any regulation which Congress sees fit to make which will have for its object, or will accomplish, the ultimate and paramount proposal embodied in this bill; but we do think the bill originally went entirely too far.

I want to say in justice to Mr. Hester that we found him to be very reasonable. We found that he had an open mind, and we found his attitude receptive, and with a disposition to be fair.

So far as my clients are concerned, I am very much gratified that this major objection has been eliminated, or will be provided the suggested compromise meets the approval of the ways and Means Committee.

I thank you.

The Chairman: The House is meeting at 11 o'clock today, and we will have to adjourn shortly. Are there any witnesses who desire to be heard tomorrow?

Mr. McDonald: My name is M.Q. MacDonald [sic], and I am general counsel of the National Paint, Varnish, and Lacquer Association.

We concur in what Judge Lozier has said, and the agreement, or tentative agreement, is entirely satisfactory to us. I would like to submit a statement for the record, if that is agreeable to the committee.

The Chairman: That will be entirely agreeable.

Dr. Woodward: Mr. Chairman, I am the legislative counsel of the American Medical Association, and would like very much to be heard. If the committee prefers, I will file a brief if I am given reasonable time for that purpose.

Mr. Cooper: Would you prefer to be heard by the committee, Doctor?

Dr. Woodward: I would prefer to be heard by the committee.

The Chairman: In view of the organization he represents, I think he should be heard by the committee.

Mr. Scarlett: Mr. Chairman, my name is Raymond G. Scarlett, representing William G. Scarlett &;Co., seed merchants of Baltimore. We represent the interest of the feed manufacturers on this subject, which is a little different angle from that which has been presented heretofore. We would like to be heard at some time.

The Chairman: We will ask you to be here tomorrow morning.

Mr. Scarlett: I'll be present.

The Chairman: We will now adjourn to meet tomorrow morning at 10 o'clock.

(Thereupon the committee adjourned, to meet tomorrow, Friday, Apr. 30, 1937, at 10 a.m.)

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