ONION SUPPLY AND DISTRIBUTION. 93 



practice among storage men and in rebates allowed because of short-term 

 insurance, the onions (486,900 bushels) were figured at 30 cents a bushel, 

 and the rate of insurance taken at .$6 per $1,000 per year. 



Depreciation. 



Four and one-half per cent, is a fair allowance for depreciation and 

 repairs. It was arrived at in this way. The ratio of the value of the 

 storage to its equipment is approximately 3:1, but the life of the building 

 is about forty years, while that of equipment, especially crates, is possibly 

 only fifteen years ; hence, depreciation for crates is 6.6 per cent., and for 

 storage 2.5 per cent. Taking three times the building depreciation, plus 

 once the equipment depreciation, and dividing by four we have 3.5 per 

 cent. — the depreciation of buildings and equipment. For repairs 1 per 

 cent, was allowed. 



In accordance with the above principles the distribution of the overhead 

 charges for storage of onions is as follows : — 



Number of storages considered, ...... 



Capacity (bushels), ........ 



Total valuation, including equipment (crates, bins, derricks, etc.). 



Interest on investment at 5 per cent., ..... 



Taxes, $17 per $1,000 on 65 per cent, of valuation, 

 Insurance on buildings and equipment ($1.25 per $100 on $200,000) 

 Insurance on onions (486,900 bushels at 30 cents) $6 per $1,000, 

 Depreciation at 31 per cent., ...... 



Repairs, 1 per cent., . . . . ... 



22 



486,900 

 $211,000 00 



$10,550 00 

 2,331 55 

 2,500 00 

 876 42 

 7,385 00 

 2,110 GO 



Total overhead charges $25,752 97 



Overhead charges per bushel, ....... $0 053 



In all these computations rather high valuations were made, so that 

 10.053 per bushel seems a generous allowance for overhead charges. 



Specific Problems of Storage. 



The first problem of the storage man is to secure a sufficient quantity of 

 good storable onions. He solves this by purchasing early, especialh" 

 when the crop is reported short. In many cases contracts between 

 grower and dealer are made even before the onions are harvested. 



His second problem is to reduce shrinkage to a minimum. Shrinkage 

 is dependent upon the quality of the onions, the temperature changes 

 of the season and artificial atmospheric regulation of the storage. Over 

 the first two factors the storage man has practically no control except 

 in so far as he may select storable onions and ship immediately all other 

 purchases; but some years even the most carefully selected stock keeps 



