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The Harrison Act was a landmark in the development of federal drug policy. Enacted in December 1914, it established the first national drug control regime in the United States. Under its terms, producers and distributors of drugs were required to formally register with the federal government, maintain records of their purchases and sales, and pay taxes on these transactions. The act also specified conditions under which individuals could legally purchase drugs—namely, with a prescription from a doctor in the context of his or her professional work with the patient. By grounding national drug control policy in the federal government's right to levy taxes, the Harrison Act also lodged drug enforcement authority primarily in the Department of Treasury. After the act's passage, Treasury officials sought and achieved new and tougher legal interpretations of the law.

In the years leading to the Harrison Act, drugs such as cannabis, cocaine, and opium derivatives were unregulated at the federal level. Many were used in patented medicines sold by physicians, druggists, mail-order companies, and retail stores. Rising public concern over drug use and addiction, fueled at times by nativist and race-based fears of reported drug distribution and use among nonwhite minorities (such as opium use among Chinese immigrants and cocaine use among southern blacks), sparked state-level restrictions.

In the 1910s these concerns were amplified by the growing national temperance movement, which campaigned to prohibit the consumption of alcohol. U.S. diplomats were also engaged in negotiating treaties to ban the drug trade internationally (with major meetings in Shanghai in 1909 and the Hague in 1911 and 1913), creating a further impetus for legislating federal controls in the United States to bring domestic law in line with the international agreements made at these conferences.

In 1912 Representative Francis Burton Harrison (D-NY) introduced legislation, backed by officials from the State Department. The initial legislation sought to ban the nonmedical sale of narcotics in the United States, and included strict reporting requirements, fees, and penalties for those involved in the drug trade. These were opposed by one or more of the major trade associations (including pharmaceutical chemists, retail and wholesale druggists, the medical products association, and the American Medical Association), who claimed that the legislation was too restrictive and complex. The bill was revised in 1913 to address these objections through legislative compromises, enabling passage by the House of Representatives on June 26, 1913, and by the Senate (after further changes) on August 15, 1914.

As enacted, the legislation allowed for the continued sale of a number of patented medicines that contained limited amounts of cocaine, opium, heroin, and morphine. For physicians, the law specified that those prescribing drugs must do so “in good faith” and only “in pursuit of their professional practice.” But it did not resolve the debate within the medical community over whether prescribing drugs to addicted patients to allow them to lead otherwise normal lives was a legitimate medical practice. For drug users, the law meant that hundreds of thousands of individuals who had used drugs regularly and legally would now have to obtain a prescription from a physician in order to continue to do so. But it did not specify the sanctions that would be imposed on those who used drugs without a prescription.

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