I'm not sure how your hubs work, but when the hubs are powered through the power supply there's no need for the RED wire in the USB cable.
If it's not cut then you'll get one hub powering the other via the RED wire.
you can test this 'power-backing' theory by plugging one hub without the power supply plugged in, into a hub which has the power supply plugged in and then plug one usb erupter in the hub without the power supply and you'll probably see it power up. It's safer to cut the RED wire, because if a power supply fails then only erupters in that hub go down. Otherwise more will go down as more power supplies get overloaded.
If you're not sure about what I'm talking about, reply and I'll try and take a couple pics of what I did to my cables.