No. 4.] REPORT OF SECRETARY. 21 



a leaf from the book of European farmers and plant larger 

 acreages of the root crops, — beets, mangels and turnips, — 

 which can take large amounts of their nourishment from the 

 subsoil on account of their deep-rooting capacity. 



Potash, however, is not the only fertilizing element which the 

 war has affected. Practically all the basic slag used in this 

 country is also brought in from Germany, where it is a by- 

 product of iron smelting. Our own ore does not seem to be 

 able to furnish a substitute. This has resulted in basic slag 

 being practically unobtainable both this year and last. Conse- 

 quently, the demand for acid phosphate has greatly increased, 

 with a resulting 25 per cent advance in price. 



As to nitrogen, the situation is complicated by a number of 

 factors. Chili saltpeter, that is, nitrate of soda, is one of the 

 principal ingredients of gunpowder, and so has been in great 

 demand by all the nations at war. Practically all of this is 

 mined from beds in northern Chili, and in normal times the 

 annual output is over $100,000,000 in value. As a general rule, 

 80 per cent of this goes to Europe, largely to Germany. 



At the beginning of the war the banking connections of 

 South America were almost entirely with London. The great 

 financial strain thrown on England by the war has caused a real 

 collapse of credit in South America, and as one result of this a 

 large part of the nitrate beds have had to be shut down on 

 account of lack of capital. 



A third factor to which is attributed the rise of price of 

 nitrate of soda has been the slides in the Panama Canal, which 

 it is reported have seriously delayed several steamers loaded 

 with this material. This cause, of course, will only be tempo- 

 rary. In fact, the opening of the canal will in the end be a 

 great advantage to users of nitrate, as this reduces the distance 

 from Icj[uique, the chief Chilean nitrate center, to New York 

 by over 5,000 miles. This means a freight rate on nitrate to 

 America of only a little over half the rate to Europe, and 

 even with the handicap of the slides in the first year's operation 

 of the Panama Canal, the amount of nitrate passing through 

 it was double that of any other commodity. 



As a general rule, German farmers use a great deal of nitrate 

 of soda, but as German sea commerce is practically at a stand- 



