Authorizing Investigations to Determine the Location and Extent of Potash Deposits Or Occurrence in the United States

A BILL Authorizing joint investigations by the United States Geological Survey and the Bureau of Soils of the United States Department of Agriculture to determine the location and extent of potash deposits or occurrence in the United States and improved methods of recovering potash therefrom.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there be, and hereby is, authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, the sum of $550,000 for the fiscal year ending June 30, 1926, and a similar amount for each succeeding fiscal year for four years, to be expended jointly in the proportion above mentioned, by the United States Geological Survey and the Department of Agriculture, respectively, for the purpose of determining the location and extent of potash deposits in the United States and new and improved methods of recovering potash from other substances: Provided, That before undertaking drilling operations upon any tract or tracts of land the Secretary of the Interior shall enter into a contract with the owners or lessees, or both, of the mineral rights therein, which contract shall provide, in the event that commercial amounts of potash or other valuable minerals are discovered, for reimbursement to the United States of not more than the actual cost of the exploration, and this claim for reimbursement shall constitute a preferred claim against any minerals developed and against any enhanced values due to the discovery of mineral in the land: Provided further, That such contract shall not restrict the Secretary of the Interior in the choice of drilling locations within the property or in the conduct of the exploratory operations, so long as such selections or conduct do not interfere unreasonably with the use of the surface of the land or with the improvements thereon, and the United States shall not be liable for damages on account of such reasonable use of the surface as may be necessary in the proper conduct of the work: Provided further, That before such drilling be commenced the owners of the land lying within a radius of ten miles of the proposed well, in consideration of the great increase in value to the land incident to any discovery of potash and in order to prevent profiteering, be required to enter into an agreement whereby the Department of the Interior is empowered to act as referee in determining the maximum price at which the potash rights of such land can be sold, and, furthermore, that the purchasers of such rights, in consummating the purchase and in consideration of the advantage accruing from an equitable price for such rights as effected by the said department, be required to enter into an agreement whereby the potash obtained by them shall be marketed at a price not in excess of a maximum determined by the department as equitable, and, furthermore, from the net profits of such sales shall pay to the Government 10 per centum per annum until the Government shall have been reimbursed for the expenditure incurred in the exploration of the deposits in point.

STATEMENT OF HON. C. B. HUDSPETH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. HUDSPETH. S. 1821 passed the Senate on April 5. It is a companion bill to the one that I have had pending before your committee during this session, and as the Senate bill passed first I will ask the committee to consider it.

The CHAIRMAN. The terms are identical.

Mr. HUDSPETH. Practically the same. As this bill by Senator Sheppard has passed the Senate, I will ask the committee to consider his bill, which is, of course, practically the same as mine.

This is one of the most important hills that will come before Congress at this session. There are fields of potash all over the northwestern part of the United States and in west Texas in my district and other Texas districts. In the State represented here by my friend from Utah, Mr. Colton, there is a vast field, also Searles Lake, Calif.; and in Texas, in drilling for oil, they have discovered potash there at a depth of 800 feet. I have a letter from a gentleman, formerly one of my constituents, who said that at a depth of 800 feet, in Ward County, in drilling for oil they struck a stratum of potash, went through it 400 feet, and it tested 16 per cent. That is higher than any test of German potash that has ever been made.

The CHAIRMAN. That is the highest test of any potash in the world?

Mr. HUDSPETH. As far as I know, yes, sir. I know it is not necessary to argue to this committee the importance of this to the farmers, in view of the fact that there is a German corporation selling and exporting to-day into the United States about 99 per cent of the potash used, and we are paying $15,000,000 a year for this German potash, which they are delivering to us, according to the statement here from the Bureau of Foreign and Domestic Commerce, at $34 to $35 per ton. It is thought by developing these fields that I have mentioned that the price can be cut in half to the farmer. Senator Sheppard and myself have discussed this with the Secretary of Commerce, Mr. Hoover; we also conferred with General Lord, Director of the Budget, and he is favorable. He is strongly advocating this bill. I understand he has an amendment that he will suggest to the committee. It cuts down the appropriation, and Mr. Hoover, I understand, has has also conferred with the Director of the Bureau of the Budget, General Lord. I know Mr. Hoover is a busy man. He is here this morning to make a statement, and I will appreciate it if the committee will hear him now.

STATEMENT OF HON. HERBERT HOOVER, SECRETARY OF COMMERCE

Secretary HOOVER. Mr. Chairman, as has been stated, we have a great field of potential potash in Texas and New Mexico and some very promising probabilities also in Utah. The importance of developing our own potash has become more emphatic during the last few months than ever before, in that there has now been effected a combination between the French and German potash producers by which practically all of the effective world potash is now under one control. That control is established through the German Government, under which

prices are fixed by the potash syndicate under authority of the Government. In establishing that control, the output of the various potash mines in France and Germany has been limited. Some mines have been suspended, and indemnities are paid to the suspended mines out of the general returns of the potash syndicate. In other words, we are here in the presence of a Government price-fixing control over a very essential raw material.

Under the direction of the Congress of three years ago, the Department of Commerce made an exhaustive investigation of all of the raw materials upon which we are dependent upon for imports that are under price-fixing control, and in the course of that investigation the department formulated an extensive report on the German syndicate. It is not necessary for me to go into the details of it as it is set out here at great length.

The economic results of this syndicate, of course, is that out of the sales price of the potash which we import we are bearing the burden of the nonoperating mines, even assuming that the price made by the syndicate per se is fully legitimate, and we are at all times subject to the will of the potash syndicate as to the price at which we receive potash for our farmers.

The only substantial remedy and protection that I know of is that we should, as far as we can, stimulate the production of potash in the United States. The potash deposits, as has just been stated, were discovered as an incident to oil drilling. They comprise in some spots very promising beds and beds of higher quality than the continental potash. It ought to be possible for us if we could accurately locate the best deposits to develop an industry on a lower basis of production cost than those in Europe.

The question of an appropriation comes up from an administrative point of view when the departments are called in to consult, and on these matters we have to confer with the Bureau of the Budget under the law. General Lord expresses the approval of the administration generally to the sum of $100,000 for this year.

There are one or two suggestions as to the bill before you as to which we have given some consideration: First, the inclusion in the bill of a provision to make it possible to cooperate with other agencies in these developments. You will understand that in oil drilling a churn drill is very largely used, and in puncturing salt beds of these dimensions we get qualitative samples rather than quantitative samples from the sludge of the drills and therefore do not have an accurate knowledge as to the actual character of the bed, either its thickness or value. The sludge may be mixed a great deal with other material. Therefore it is necessary to put some kind of a core drill into the operation. The oil companies do not often use that form of drilling in this territory. It is necessary, if we wish to get an accurate knowledge of the situation underground, to use a core drill for that purpose. It is quite possible that for a small subsidy the oil companies in drilling might be willing to substitute a rotary drill and get a core. It might be the most economical way of getting results.

Also there are other agencies interested in the question, such as the State University of Texas, which has considerable land holdings in this area, so that we would like to suggest that some authorization be given in the bill to make joint undertakings with other people in

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