The CHAIRMAN. There is no other place where you can obtain kelp potash?

Dr. WHITNEY. On the Japanese coast.

The CHAIRMAN. I mean in this country.

Dr. WHITNEY. No, sir; it grows only right there.

The CHAIRMAN. There is a sufficiently steady flow of this supply to justify an investment in the plant?

Dr. WHITNEY. Yes, sir. There would be small plants along the coast. Efforts are being made to have small plants in Alaska to give work to the Indians. There, of course, the season is short, and they get but one crop a year.

The CHAIRMAN. This is a natural growth, is it not?

Dr. WHITNEY. Yes, sir.

The CHAIRMAN. It does not have to be planted?

Dr. WHITNEY. No, sir. You cut it as you would hay or as you would cut clover.

The CHAIRMAN. You must have marine harvesters?

Dr. WHITNEY. Yes, sir; they have cutting knives, similar to those on the ordinary mower. They cut the kelp off about 6 feet below the surface of the water, and it comes to the surface.

The CHAIRMAN. When it is cut it floats?

Dr. WHITNEY. Yes, sir. The harvesters load it on the barges. They load about 100 tons on a barge.

The CHAIRMAN. You have to dry it, then, before you manufacture it?

Dr. WHITNEY. Yes, sir.

The CHAIRMAN. What process do you go through with in drying it?

Dr. WHITNEY. We have rotary kilns.

The CHAIRMAN. How long does it take to put it through the drying process?

Dr. WHITNEY. Just a few minutes, or about 20 minutes.
The CHAIRMAN. Do you then grind it up?

Dr. WHITNEY. Yes, sir. There are several things we do with it. depending on what we want to prepare. Some of it has been sold as dried ground kelp, and some of it has been sold as kelp char. The CHAIRMAN. What do you use that for?

Dr. WHITNEY. It can be utilized as a fertilizer, but the most advantageous way to use it is to activate the kelp charcoal by methods which we ourselves have worked out. Those are electrical furnace methods. When properly treated, it is exceedingly active in its power to absorb gases and in the purifying of liquids. The country is depending more and more in its great chemical industry on absorb ing substances, such as ordinary charcoal, bone charcoal, fuller's earth, and things of that kind. Since the war the value of charcoal has been demonstrated, and the methods of activating charcoal have been demonstrated as of so much value that this product of kelp char has become a valuable asset. We think that the value of kelp char is sufficient to run the entire plant. Then, besides that, we have the potash recovered and the iodine.

The CHAIRMAN. Those are all by-products?

Dr. WHITNEY. Yes, sir. Then, we have ammonia and a number of other things that we have not had time to work out on an accurate scale. Of course, that is all stopped now.

The CHAIRMAN. What you want in this case is $2,860 to keep the plant going until you can make a sale of it?

Dr. WHITNEY. Yes, sir.

The CHAIRMAN: That is, for the balance of the fiscal year?

Dr. WHITNEY. Yes, sir.

The CHAIRMAN. If you can make a sale of the plant within the next 30 days you will not need it?

Dr. WHITNEY. No, sir; and we will not be able to use it for anything else.

FRIDAY, FEBRUARY 17, 1922.

BUREAU OF MARKETS AND CROP ESTIMATES.

STATEMENTS OF MR. H. S. YOHE, IN CHARGE ADMINISTRATION OF THE UNITED STATES WAREHOUSE ACT, AND MR. WELLS A. SHERMAN, SPECIALIST IN MARKET SURVEYS.

ADMINISTRATION UNITED STATES WAREHOUSE ACT.

The CHAIRMAN. You have an appropriation for the current fiscal year of $80,000 for the administration of the United States warehouse act, and you are asking for $9,015 more. Did you make an allotment of this appropriation at the beginning of the fiscal year

1922?

Mr. YOHE. Yes, sir; it was allotted.

The CHAIRMAN. Did you make your allotment with a view to living within the appropriation?

Mr. YOHE. Yes, sir; and we are within it. This is simply a supplemental estimate, and it is not a deficiency.

The CHAIRMAN. It is not a deficiency?

Mr. YOHE. No, sir.

The CHAIRMAN. It has no place here if it is not a deficiency.

INCREASED NUMBER OF WAREHOUSES LICENSED.

Mr. YOHE. This is simply an item which is asked for to make possible the carrying on of the work to the extent that it is demanded. When the estimates were submitted last year we asked for $100,000, and it was felt that that amount would be needed to answer the demands which were being made on the part of warehousemen to become licensed under the United States warehouse act. The representations which were made at that time with respect to the development of the work and the actual development since apparently fully justified the amount which we asked for. We have found in the past year the greatest growth in the matter of licensing warehouses that has occurred since the act went into effect. This act was passed in August, 1916. Up to the first of last April, we had licensed 238 cotton warehouses with a total capacity of approximately 429.975 bales of cotton; we had licensed 56 grain warehouses with a capacity of approximately 2,108,000 bushels of grain; we had licensed 5 wool warehouses, with a capacity of 24,375,000 pounds of wool. There were no tobacco warehouses licensed at that time. Since then those

numbers have been increased in the matter of cotton warehouses to 264 cotton warehouses, with a combined capacity of 1,250,000 bales; in the way of grain, the number of licensed warehouses has moved from 56 to 275, with a total capacity of over seven times as great as we had last April, or over 14,000,000 bushels.

We have now 18 wool warehouses with a capacity of 33,000,000 pounds, and we have 6 tobacco warehouses with a capacity of 3,820,000 pounds. Now, we are not calling attention to the particular increase in the number of warehouses, but are calling attention to the matter of the increased capacity of those warehouses, which is the thing we must consider if we are going to administer the act effectively, because it is necessary to make subsequent inspections of the warehouses a certain number of times a year to see that the products represented by the outstanding receipts are on hand. When we stop to consider that in six months' time in the past year we have more than trebled the amount of licensed cotton warehouse capacity and have increased seven times the amount of grain warehouse capacity, and then if you will stop to consider that those warehouses must be inspected, as we believe, at least four times a year, you can easily see how the demands are made on our appropriation. I want to say right here that the matter of the expenditure of that appropriation is not going into salaries. This is one of the lowest salaried projects in the whole Bureau of Markets. We pay men as low as $1,500 a year.

EMPLOYEES, NUMBER AND SALARIES.

The CHAIRMAN. What is the highest salary paid?
Mr. YOHE. The highest salary is $3,300 a year.

The CHAIRMAN. How many employees do you have?

Mr. YOHE. There are about 18. I think. Many of those men are out at least 80 per cent of the time.

Mr. SISSON. I understood you to say that $3.300 was the highest salary paid, but I notice you have one man here at $3.600.

Mr. YOHE. That is in estimates for this coming year. There is no one drawing $3,600 now in that project. Until a few months ago the highest salary paid was $3.000.

AMOUNT OF SUPERVISION OF WAREHOUSES.

The CHAIRMAN. What sort of supervision do you have of the warehouses when they are licensed?

Mr. YouE. We can require them to submit reports such as we may desire, and we have supervision to the extent that if they are not conducting the warehouses as we think they should be conducted, we can revoke the licenses.

The CHAIRMAN. What is the advantage of licensing the warehouses?

Mr. Yone. The advantage of the license is not so much to the warehouseman, except that from a business standpoint he can advertise, if he want to to get business, that he is a licensed warehouseman, and that his warehouse has been approved by the Federal Govern

ment.

The CHAIRMAN. Do you pass on the fireproof character of the warehouses?

We pass on the construction of the warehouses, but it I that the warehouse must be fireproof, in order to be only thing required in the act is that the warehouse the products against damage from either the elements whatever sources it may come from. To the depositor, the warehouse means everything. In other words, the one else who may be using a warehouse would be benexetent, that with the licensed warehouse receipt he can ny bank and borrow up to a certain value on the parets covered by the receipt. On the other hand, if he ot from an unlicensed warehouse, he very frequently borrowing capacity is not based upon that receipt, but is own personal financial responsibility. The purpose quent inspections to which I have referred, and which, , use up so much of our appropriation, is to see that the re on all outstanding receipts.

You require a bond, do you not?

Yes, sir.

How do you determine that? Is it fixed by law? No. The act does not fix the bond; it simply leaves etion of the Secretary and the regulations the Secretary ted determine it. There is no deficiency called for here ot going to have a deficit.

NEED OF APPROPRIATION TO EXTEND LICENSING.

MAN. This is a deficiency?

No; we are simply asking for money to make it possible nd answer the demands that are being made upon us. MAN. There is nothing before this committee but de

I understood you were considering both deficiency and

maters.

MAN. Not this committee

Then it should not be here.

. I imagine Mr. Anderson is the man to take charge

SON. Is this an item for the remainder of the current

The remainder of this year: yes, sir.

This is a deficiency in this sense: That if you do not e will not extend it and we will stop the work. That int.

MAN. That is, you will stop the extension?

No; we will stop the whole work.

No; we can go ahead with our present appropriation have a certain amount allotted so that we can go ahead ehouses we now have licensed.

But you will stop the extension of the work.

MAN. That is what I said.

But we have reached the point where we can not admit rehousemen to the list of eligibles as licensed ware

AMOUNT OF APPLICATIONS COMING IN.

The CHAIRMAN. How many applications have you now?

Mr. YOHE. The number of applications depends on the season of the year. For instance, very shortly we expect to have a number from the wool people. They usually do not get active in the matter of filing applications until the particular product which they handle begins to move into storage. Right now we have been served with notice by the Burley Tobacco Growers' Association that they expect to file applications-they have probably filed them now-for at least 40 warehouses.

We are served with similar notice from the tobacco growers in North Carolina and Virginia, which will come in this spring. A number of wool people have told us that they expect to file applications. Just day before yesterday I got a letter from a large grain-elevator concern in Fort Worth, Tex., with a million and a half bushel capacity, stating that they had definitely made up their minds to file an application. Last week we got an application from a concern in Davenport, Iowa, a grain elevator with a capacity of a million and a half bushels. They are constantly coming in. Just last week we had a letter from the secretary and general manager of the Oregon Wheat Growers' Association, in which he says he wants to get all the elevator men in Oregon into the system. Yesterday I received a letter from them transmitting the names of about 150 or 160 grain elevators in Oregon alone.

Mr. ANDERSON. As I understand the operation of this law as it is administered, when an application is received you make a preliminary inspection?

Mr. YOHE. Yes, sir; an inspection of the warehouse itself and also of the applicant.

Mr. ANDERSON. After you have made the first inspection, you figure on making an average of four inspections a year?

Mr. YоHE. Yes, sir.

Mr. ANDERSON. And you situation, as I understand it, is that with the amount of money you have you are not able to accept any new applications, because you will not have the money with which to make the preliminary inspections and follow them with the inspections that are necessary in order to make sure that the receipt is properly safeguarded?

Mr. YоHE. That is correct.

The CHAIRMAN. And you think this $9,015 will enable you to do that for the rest of the year?

Mr. YоHE. Yes, sir.

UNEXPENDED BALANCE.

The CHAIRMAN. How much of an unexpended balance have you on hand now?

Mr. YOHE. We have now about $15,000; the appropriation of last year has about $10,000 in it, and there is $5,000 left in the continuing appropriation from the original act. Now, there is another thing that must be considered in connection with the $15,000, and that ithat we have not allotted the necessary traveling expenses for our present force to the end of this fiscal year, and there will be consider