possible to proceed with the arrangements for making the payments. The growers have harvested their crop, and they are expecting these payments.

Mr. TAYLOR. The growers are now expecting their payments, and they are rather impatient because they haven't been paid before, are they not?

Dr. BERNHARDT. That is right except that they didn't expect to be paid as early as this. They are expecting to be paid from now on, since their crop is finished.

Mr. TAYLOR. How much is left of the $250,000, or whatever you got before?

Dr. BERNHARDT. I think perhaps $100,000, or some sum like that. That simply covered the general administrative budget, whereas the payments involve millions.

We have gone nearly as far as we can with title III. That is, we have made the determinations, the regulations and rules, which can be done here.

Mr. TAYLOR. You feel that the need for this is imminent, and that we ought to get it out to keep faith with the growers?

Dr. BERNHARDT. I believe that the growers have been told by the Congress in this act that they would be paid.

Mr. TAYLOR. Surely. And they are writing to us and wanting to know when they are going to get their money.

Mr. TABER. They have until February first, haven't they?
Dr. BERNHARDT. There is no time limit.

Mr. TABER. No time limit?

Dr. BERNHARDT. No.

Mr. TABER. I would like to get some information on that.

Dr. BERNHARDT. Payment is to be made, Mr. Congressman, as soon as possible.

Mr. TABER. I should like to know what is the urgency with reference to this appropriation on the basis of your administrative expenses.

Dr. BERNHARDT. We need this for carrying forward the work under act done here in Washington. For example, at the present time-and during the last few months-the question has arisen of possible violation of the child-labor conditions under this act, by the farmer who is going to be entitled to a payment otherwise. Say that there is a freeze in Louisiana, or that there is a drought in Colorado. necessary for someone to check up on all this in the field and make sure that the grower will be entitled to the deficiency payments provided in the act.

Mr. TABER. A drought is not going to mean very much in Colorado this year.

Dr. BERNHARDT. The point is to determine whether the particular grower who has been affected by the drought or freeze is entitled to a payment under the act. The facts must be ascertained, and the longer you wait, the less you can find out.

Mr. TABER. There is an exception here on page 10 of the act in paragraph (c) of section 303 where reductions are required on account of the large producers.

Dr. BERNHARDT. That is right.

Mr. TABER. I notice that your item here is only $321,000 for that figure. I wish you would give us the number of farms in each category subject to the reduction through the country.

Dr. BERNHARDT. It would be impossible, Mr. Congressman, to ascertain that until we have had this appropriation.

Mr. TABER. Is this just an estimate?

Dr. BERNHARDT. This is just a balancing estimate. There is no way to tell that.

Mr. TABER. Would you say that perhaps 50 percent of the sugar produced in Puerto Rico and 75 percent of that produced in Hawaii would come under this exception?

Dr. BERNHARDT. That is not determinable, Mr. Congressman, until we know what the following provision (in sec. 304) (c) means in practice:

All payments shall be calculated with respect to a farm which, for the purposes of this act, shall be a farming unit as determined in accordance with regulations issued by the Secretary.

Now, until we know the actual stituation in every area with respect to the farm unit to which these sliding scales apply, we cannot tell how much savings result; and that cannot be done until the administrative work in the field is done.

Mr. TABER. I see. The Secretary is given a discretion in determining what a farm unit is?

Dr. BERNHARDT. Yes, sir.

Mr. TABER. And until that is determined, a man can be determined by the Secretary to own 8 or 10 farms instead of the whole outfit being called a farm?

Dr. BERNHARDT. Yes. That is it.

No one knows what his status is exactly; and if that provision were not in the bill, there would be no way to make sure. That is to be determined by the Secretary to make sure that there will be no evasion.

Now, we have made a guess

Mr. TABER. Your guess is that it is infinitesimal as compared with the total?

Dr. BERNHARDT. No. May I explain the relation of abandonment and deficiency provisions to this item?

Mr. TABER. Yes.

Dr. BERNHARDT. The total amount of the 1937 crop deduction that we estimate, under section 303 (c), as far as we can tell now from our past experience, is 2,763,000 tons.

In Hawaii, we cannot tell, because this crop year under the act Hawaii gets paid on half of the crop. That is, the act provides that all payments are to be made on harvestings after July 1. So that there will not be so many large producers this year to which this sliding scale will be effective.

So that, as near as we can guess, the deductions may be close to $3,000,000, altogether.

But we have an off-set in this item-that the act requires payments, as a form of crop insurance, wherever there has been a deficiency in harvest or abandonment of acreage, under certain conditions. In other words, for a grower who expected to get 1,000 tons and had a crop failure and only gets 20 tons, there is a certain payment to be made to him on the balance, one of the most constructive things in the act, I think some may say this provision for stabilizing the income of the individual grower who has had this crop failure through no fault of his own.

Mr. TAYLOR. How long will it be before the farmers will get this money in these payments that you are going to make?

Dr. BERNHARDT. Within a few months, I should say.
Mr. TAYLOR. Months?

Dr. BERNHARDT. A few months.

Mr. TAYLOR. Then there is urgency about it?

Dr. BERNHARDT. We cannot start until we get this.

Mr. SMITH. We cannot start at all. We cannot even get our forms released from the General Accounting Office until the funds have been appropriated.

Mr. TAYLOR. You think that you will be at a standstill until you get this money?

Mr. JUMP. Very much so. We can't even get our forms approved so that they can be printed, because the General Accounting Office won't approve them until we get the appropriation.

Mr. TAYLOR. You feel that there is a real urgency for this to be provided?

Mr. JUMP. There is a vital urgency from the time standpoint.

Mr. TABER. Your estimates are apparently way beyond what you are going to need; and it is going to leave a large sum available for allotment to all sorts of outfits that haven't any business with or connection with this. It is going to be all out of control. Isn't that so?

Mr. TAYLOR. If that is true, say so. If it isn't, tell us why not.
Mr. TABER. We had that experience two or three times.
Mr. TAYLOR. Answer the question.

Dr. BERNHARDT. I am trying to answer it, Mr Chairman. The Congressman said that this figure of $321,000 was small, and I began to answer, but I was interrupted.

I pointed out that we will not save $321,000 for large producer penalties, but nearly $3,000,000; but that there was an offsetting item for deficiency and abandonment payments which brought the net figure down to $300,000.

Does that answer your question as to the smallness of this item? Instead of being $300,000, the item we are allowing for is nearly ten times as large as that, but there is an offsetting item.

Mr. TABER. I would like to see a table along that line.
Dr. BERNHARDT. I would be very glad to submit one.

Mr. TABER. You have nothing in the record to show how that figures out. That table that you put in doesn't show anything on that.

Dr. BERNHARDT. We will be glad to supply that for the record. Mr. TAYLOR. You won't have any money to burn?

Dr. BERNHARDT. 'We don't expect to have money left.

We believe that we can come within that total amount, although these individual items may change. That is to say, the abandonment item may be larger, and, as the Congressman says, the penalties may turn out to be a larger saving.

Mr. TAYLOR. The tax more than covers the expense?

Dr. BERNHARDT. The expense of the entire program. It more than covers it.

Mr. JUMP. In the Budget for 1938 as submitted to Congress by the President there is included an estimate of $44,150,000 in the revenue set-up for the fiscal year 1938 as estimated cash collections.

Mr. TABER. I though Mr. Bernhardt said that that was about $41,000,000.

Mr. JUMP. No. $53,000,000 is our estimate, on an accrual basis. There is a lag of course between the tax accrued and the tax collected. Mr. TABER. How much?

Dr. BERNHARDT. $53,000,000 is the accrual figure.

I might add, Mr. Chairman, that the act itself authorizes to be appropriated not $39,000,000, but $55,000,000.

Mr. TABER. There isn't any question about that.

Mr. TAYLOR. How do you estimate the cost for the next year for administration?

Dr. BERNHARDT. For the year 1939?

Mr. TAYLOR. Yes.

Dr. BERNHARDT. We have already submitted the budget. It is in the President's message. It is $48,000,000 for the total cost.

Mr. JUMP. Of which $759,252 will be for administrative expenses as compared to the amount shown here for 1938. But the estimate for 1939 will be on the basis of a full year, whereas this estimate and the $250,000 in the deficiency bill of last session is only on the basis of part of a year, from September through June 1938.

Mr. TAYLOR. You estimate the cash collections at how much? Dr. BERNHARDT. For next year, about $68,000,000.

Mr. LUDLOW. Then this won't be a Government subsidy to persons who want to go into new production?

Dr. BERNHARDT. A producer is paid only upon his allotment. If he doesn't comply with the allotment, he doesn't get paid.

Mr. LUDLOW. I mean, it won't bring a lot of new individuals into production?

Dr. BERNHARDT. No, sir; because we do not pay any such persons unless they have allotments. We have a lot of applications from people who desire to become new growers, but that will be dealt with under the act.

Mr. LUDLOW. I notice that you have set up here $93,000 for travel. How many persons are in the travel status?

Dr. BERNHARDT. Our travel program is simply this: These public hearings are required in each area, including Puerto Rico and Hawaii and 17 beet-sugar States besides Louisiana and Florida on wages and fair prices. That means that an attorney and an expert will have to go to each of these areas.

Mr. LUDLOW. So you have a traveling staff?

Dr. BERNHARDT. No. We have no traveling staff.

Mr. LUDLOW. How does a person come into the traveling status then?

Dr. BERNHARDT. It would simply be that several members of the sugar section would go out into the field to attend hearings and make necessary investigations. We have, of course, a great deal of administrative travel in the field, which cannot be avoided.

Mr. LUDLOW. That comes under this item?

Dr. BERNHARDT. Yes.

Mr. TABER. I think there should be some limitation on these transfers of funds. In my experience there have been a lot of abuses of that. Mr. JUMP. We discussed that whole point with the Bureau of the Budget. They brought it up too. We spent an hour discussing the whole situation.