Statement of Mr. Moksnes,

Superintendent of the Amhempco Corporation, Danville, Ill.

MR. MOKSNES: I happen to be the superintendent of the Amhempco Corporation, at Danville, Ill.

SENATOR BROWN: I want to say that Congressman Meeks wrote me about your problem.

MR. MOKSNES: This company was organized three years ago by Bell Bros., of Muncie, Ind, and the Sloan Interests, who are textile people in New York. They had in mind developing a process whereby a fiber that is now being used for rope and cordage could be further processed to go into textiles, and also that the hurd or the woody part could be processed and made into plastics. Three years ago we planted 4,200 acres, last year 1,200 acres, and this year 7,000 acres., and we are in operation. The capacity of the plant is 15,000 acres.

We have to contract our seed from the growers in Kentucky, that was covered by Mr. Rens, and their acreage runs anywhere from a quarter of an acre up, and we have no objection to the bill. In fact, any attempt to prevent the passage of a bill to protect the narcotic traffic would be unethical and un-American. That is not the point, but we do believe that a tax of five dollars is going to be prohibitive for the small dealers as well as the man that grows the hemp; not only the seed dealer, but the man that grows the crop, because he will average -- I do no know what the average will be, but they raise as little as two acres.

SENATOR BROWN: As I understand it, Mr. Hester can take care of the dealer.

MR, HESTER: The dealers, yes.

SENATOR BROWN: That will be generally agreed, that he will be exempted from the tax..

MR, HESTER: From the transfer tax. he will be exempted from the transfer tax.

MR. MOKSNES: That is the deal. That is the transfer tax, but how about the grower of the seed?

SENATOR HERRING: The man who only grows one-eighth off an acre with a $20 or $25 crop cannot be harmed much. he does not have much at stake.

MR, HESTER: He would have to add the occupational tax on to the price that he sells to the dealer in the city.

SENATOR HERRING: Of course, that would make it pretty difficult for him to compete with the producer who had 10 or 15 acres.

MR. MOKSNES: You see we are dependent on the small growers down in the Kentucky 'river bottoms to furnish our seed. There are small growers who probably do not have over 10 or 15 acres of land, distributed among several crops. If has to pay five dollars an acre - --

MR, HESTER: Not five dollars an acre, five dollars a year.

MR. MOKSNES: I mean five dollars a year, and he has only a quarter or half an acre, that tax is going to be prohibitive, we are going to lose the small growers, and it is the combination of growers that we have to depend on.

SENATOR BROWN: According to our understanding, the Treasury will endeavor to see if they can cover that problem, and we will do our best about it. We are not certain what we can do about it, but we will do the best we can.

MR. MOKSNES: That is fine. Now, on the other had, the grower of the stalk -- well, with 15,000 acres, that is $7,500.

SENATOR HERRING: How is that? It is five dollars and nor more no matter what the acreage is.

MR. MOKSNES: I mean, 7,500 acres. We have to have about 600 growers. That is the way it will average up. That is $3,000. I am quite sure that we are going to have trouble getting the farmer to pay a five dollar tax. We will have to stand that ourselves.

Another point, where are we classed as mill men? We are not classed as producers,. In fact, we have no classification.

MR, HESTER: What is your business? How do you operate?

MR. MOKSNES: We contract the seed from the seed grower on contract. He raises so much. We pay him so much per bushel. We in turn take that seed and sell itt to the hemp grower, the grower of the straw, at cost, on a book charge, and it is deducted in the fall when he delivers his crop.

MR, HESTER: It seems to me you would be a seed dealer.

MR. MOKSNES: A seed dealer?

MR, HESTER: A seed dealer.

SENATOR BROWN: You are also a manufacturer?

MR. MOKSNES: We are also a manufacturer.

SENATOR BROWN: As I view it under section 2 you would pay one $24 tax only.

MR. MOKSNES: As a seed dealer?

MR, HESTER: As a manufacturer.

SENATOR BROWN: As a manufacturer, and as one who sell, deals in the product.

MR. MOKSNES: The $24 would cover ---

SENATOR BROWN: The $24?

MR. MOKSNES: Yes, the $24 would cover - -

SENATOR BROWN: That is a hasty summary on my part. Is that right, Mr. Hester?

MR, HESTER: That is right.

MR. MOKSNES: That is right.

SENATOR BROWN: I think on page 2, section 2, in subdivisions (a) and (a-1) you would be covered.

MR. MOKSNES: That point has been in question with us, as to where we would fit in the picture, so far as a millman is concerned. We did not want to be expected to ----

SENATOR BROWN: That section reads:

Every person who imports, manufactures, produces, compounds, sells, deals in .. .

It would seem to me that you would pay one $24 tax.

Well, we will do our best to meet those problems.

MR. MOKSNES: As we interpret this bill, of course, not knowing where we were classified, we did not know whether we would expect to pay one dollar an ounce for the seed or $100 an ounce.

MR, HESTER: I think we might save the time of the committee if this gentleman would let us sit down with him and explain the bill to him. We have not had an opportunity to do that. I think we would save the time of the committee by doing that.

MR. MOKSNES: That will be fine.

SENATOR BROWN: You will do that some time today?

MR, HESTER: Yes, we will be glad to, immediately after the committee adjourns.

SENATOR BROWN: Is there anything else that you want to present at this time?

MR. MOKSNES: Nothing else.

SENATOR BROWN: Mr. Johnson.