The volume of shelled nuts offered on the local market was smaller than usual, due partly to scarcity of the nuts and partly because the mountain folk who produce most of the kernels were not so keen at cracking walnuts for a pittance when once they had tasted the sweets of 40 cents per hour on road work offered as part of the Federal recovery program. This, apparently, will become a factor in the development of commercial cracking plants. The price was better than for several years past. Home-cracked nuts sold at an average price of 25 cents per pound to local consumers, who took most of the season's production. Sales to northern concerns were mostly at from 30 to 35 cents for hand-picked goods, ranging up to 38 cents per pound by midsummer. I do not know present prices. The writer knows of no new development in mechanical cracking and separating processes. At the present time he is completing the construction of a power driven cracker of new design, but any report must await successful operation. In the marketing of kernels five channels may be considered: 1. The local consumer market, which should be cultivated as far as possible. 2. Mail order consumer, usually reached by advertising. A two-pound carton lined with wax paper makes a most satisfactory unit for sales of this kind. This package has been selling generally at $1.25, postpaid. 3. Commercial consumers, who are usually manufacturers of food products, such as bakeries, ice cream manufacturers, confectioners, etc. Usually these people buy from wholesale supply houses. In order to hold this trade the producer should be in a position to fill orders throughout the year. An "In-and-outer" cannot hope to hold this excellent class of customers. 4. Wholesale supply houses, who specialize on supplying commercial consumers and nut stores. These people depend on buying their season's supply as cheaply as possible during the flush period and distributing later at a profit. It is to their interest to demoralize the market early, so they can buy cheaply, and later proclaim a scarcity so the market will advance to profitable levels. They seem fully alive to their interests. At the opening of the past season one very prominent New York buyer was offering from 16 to 18 cents per pound for hand-picked kernels, though I knew of none selling at anywhere near that figure. This class of customer is rather unsatisfactory, though they will pay fair prices late in the season if a real shortage exists, and they are out of supplies. 5. A good, honest broker or commission merchant is probably the most satisfactory channel for handling large quantities of kernels. He is acquainted with actual prices and market conditions, as well as a large list of possible customers. His customers are usually commercial consumers, though he also sells wholesale supply houses. His commission is usually 3 per cent.