Mr. KEARNEY. I believe, Mr. Chairman, that concludes the statement that I desire to make, unless there are some questions.

Mr. CUMMINGS. Does any one wish to question Mr. Kearney?
Mr. BIERMANN. I have some questions.

Mr. CUMMINGS. Mr. Biermann.

Mr. BIERMANN. I understood, Mr. Kearney, you to list the States in which you have organizations or representatives. Have you membership in the State of Iowa?

Mr. KEARNEY. We do not have, Mr. Biermann. We have had some contact with some of the Iowa people from up in the area around Mason City, but they have not, recently, as I understand it, organized an association there.

Mr. BIERMANN. Was the 1934 act satisfactory to the beet growers? Mr. KEARNEY. It was a satisfactory program. I think it could be bettered, and I feel that we could suggest improvement on that if that were to be the exact foundation for legislation, which our experience has taught us should be made to that program. But, in general, I think it is fair to say that it was a satisfactory program and I feel its administration was satisfactory.

Mr. BIERMANN. Did I correctly understand you to say something about that act being nullified in some way?

Mr. KEARNEY. I did not mean to say, if I did, that it was nullified. The Hoosac Mill decision prevented the continuation of the collecting of the sugar tax and the making of benefit payments which we operated under the Jones-Costigan Act.

Mr. BIERMANN. The 1934 act was a benefit to the beet-sugar factories, was it?

Mr. KEARNEY. Yes, I am sure it was a benefit to them and to all connected with the American sugar industry. I know of no branch of the industry that did not benefit by the operation of that act.

Mr. BIERMANN. Do you think it would have been possible for the beet factories to have earned a profit except from the operation of the 1934 act?

Mr. KEARNEY. If there had been no sugar legislation I will say we very definitely feel that we were going into a chaotic and demoralized condition in the production and the manufacturing end in the sugar industry in this country which would have, if continued up to this time, eventually have eliminated the American sugar industry.

Mr. BIERMANN. It has been my opinion that that act has saved the beet-sugar grower and the beet-sugar factory from financial ruin. Is that a correct view?

Mr. KEARNEY. Had the downward trend continued and prosperity not returned, some prosperity, at least as far as the sugar industry is concerned, I believe it is fair to say, as far as the beet-sugar industry is concerned, that we were on our way out.

Mr. CUMMINGS. Do you not believe it would have been out? Mr. KEARNEY. I do not know whether it would have been out in 1934 or not, but I think by now we would have been far out.

Mr. BIERMANN. You further stated, Mr. Kearney, something about the manufacture of refined sugar by American industries in foreign countries. What effect do you think that practice has had on the American refining industry?

Mr. KEARNEY. The refining of beet sugar?

Mr. BIERMANN. Yes.

Mr. KEARNEY. The beet processors, sugar-beet processors sell our sugar; our interest in the sugar is roughly about half of it. Frequently they have told us that it is a very serious detriment to the net return of our sugar beets, which was brought about by the competition of foreign refined sugar.

Mr. BIERMANN. The labor in the foreign refineries is poorer paid than the labor in the American refineries of sugar; is that your thought? Mr. KEARNEY. I am not a sugar expert, Mr. Congressman. I would assume that that is true because of the production in the tropical regions, and I assume that has been a factor in the development of the refining industry in those areas.

Mr. BIERMANN. Are you acquainted with the establishment of large factories for the refining of sugar in Cuba?

Mr. KEARNEY. What was the question?

Mr. BIERMANN. Are you acquainted with the industrial activities on the part of concerns that have established large refineries in Cuba? Mr. KEARNEY. No; I do not know the largest refineries in Cuba. I have understood that there were two or three, and I believe that is correct, although I do not know which has the largest.

Mr. BIERMANN. Is it not a fact that there are

Mr. KEARNEY (continuing). I do not know which has the largest; I am not familiar with that.

Mr. BIERMANN. Is it not a fact that a certain large chocolate manufacturer in this country has a sugar refinery in Cuba?

Mr. KEARNEY. We have been advised by the processors who market our sugar and who are familiar with market conditions that the foreign white-sugar situation is a very important one and that it is of much concern to them.

Mr. BIERMANN. Would it be your opinion, Mr. Kearney, that the further restriction of importation of refined sugar from Cuba would be a benefit to the continental sugar situation?

Mr. KEARNEY. Yes, I feel that it would.

Mr. CUMMINGS. Any further questions?

Mr. BIERMANN. That is all.

Mr. CUMMINGS. Any questions by the members of the committee? Mr. COFFEE. I have a question, Mr. Kearney.

Mr. KEARNEY. Yes.

Mr. COFFEE. Mr. Kearney, your most serious objection to the provisions of this bill is the percentage of increased consumption, 30 percent allocated to continental producers; you want that figure increased; is that correct?

Mr. KEARNEY. That is one of them.

Mr. COFFEE. Is that your most serious objection?

Mr. KEARNEY. I would have to qualify that by saying that it is one of the important ones, Mr. Congressman.

Mr. COFFEE. What is the most important modification which your organization feels should be made to the bill?

Mr. KEARNEY. Another very important suggestion that we have made is that the payments, and by that I mean the initial payments, be made 75 cents per hundred pounds of sugar, which is the exact amount of tax collected on that grower's sugar.

Mr. COFFEE. That 75 cents per 100 pounds translated into tonnage would amount to about how much per ton of beets?

Mr. KEARNEY. I think $2.26, on the average, is about the figure that we have obtained from the department-perhaps there is someone here who could correct me if that is not correct.

Mr. COFFEE. In general you feel this bill as written is probably as good if not better than the Jones-Costigan bill?

Mr. KEARNEY. Yes; I say that without reservation.

Mr. CUMMINGS. Mr. Hook, you had a question?

Mr. Hook. I want to ask you a question in regard to section 204. What do you think as to the delegation of power? In your opinion would you think that a delegation of power so broad as to allow price fixing is desirable?

Mr. KEARNEY. I am really not competent to give you an answer to that question.

Mr. Hook. Thank you.

Mr. COFFEE. One more question, Mr. Chairman.

Mr. CUMMINGS. Yes, Mr. Coffee.

Mr. COFFEE. Mr. Kearney, in your judgment would the 75-cent tax be passed on to the consumer, paid by the processor or the grower? Or if it is paid by all of them, in about what proportion?

Mr. KEARNEY. That is a pretty big order. I wonder if it should not be answered by referring to the President's message and to the press release issued by Secretary Wallace this morning on this sugar legislation?

Mr. COFFEE. Well, I will modify the question. In your judgment you do not anticipate that it would be passed on to the producer entirely?

Mr. KEARNEY. No.

Mr. CUMMINGS. Any further questions?

Mr. HOFFMAN. Mr. Kearney, did I understand you to say that this industry was on its way out and would have been out except for the sugar legislation?

Mr. KEARNEY. Yes.

Mr. HOFFMAN. Would you mind telling me very briefly just why it was on the way out; just what was the matter with it?

Mr. KEARNEY. We were, of course, in the throes of the depression which affected all agricultural crops. Particularly did it affect us. In the first place, sugar from the various tropical producing areas was comining in in an increasing amount, particularly from the Philippines, which had jumped from a half a million tons, let us say in 1925 and 1926, to 1,400,000 tons.

Mr. HOFFMAN. I did not mean it from that standpoint.

Mr. KEARNEY. And that all came in in direct competition with us. Mr. HOFFMAN. Were you disturbed by anything except those two factors?

Mr. KEARNEY. I rather think those two factors were the most important, in my judgment.

Mr. HOFFMAN. Are you in favor of this provision in the bill which permits the Secretary of Agriculture to practically fix prices to the consumer?

Mr. KEARNEY. What provision is that, Mr. Congressman?

Mr. HOFFMAN. I refer to the labor provision; if you fix the price of labor might you not just say that is another way of fixing the price? Mr. KEARNEY. I think that the regulation of the quotas, Mr. Congressman, could affect and affect very substantially the price of