Mr. OLIVER. In other words, the price level to the consumer would not necessarily increase because of the cooperatives?

Mr. MARGOLIS. No; it would not. The only thing is that people who are acting in the capacity of a leech on the industry-and there are various divisions doing that-would be eliminated, and the people actually giving service would get a fair return for the service offered. Mr. OLIVER. In other words, the cooperatives might bring more competition into the price level, which might possibly have a tendency to lower the price level to the consumer?

Mr. MARGOLIS. That might be. I could not venture an opinion on that, but that might be.

Mr. OLIVER. Do you know what the experience has been with cooperatives in other lines than fisheries?

Mr. MARGOLIS. In other lines than fisheries, the experience has been it has brought down the price to consumers on certain occasions. Mr. OLIVER. That is, they have brought the price level down for the consumer's benefit?

Mr. MARGOLIS. That is right; in certain cases.

Mr. OLIVER. That was the reaction I had. I probably misunderstood what you said, but I thought you said it would have a tendency to increase the price. I am glad to have that point cleared up as well as you have.

Mr. SEGER. I do not think it is cleared up yet. If you expect the Government to subsidize these cooperatives, and they are not going to give the consumer the benefit, why should the Government go in the business?

Mr. MARGOLIS. I would not consider that as the Government going in business in that case any more than the Government gives the farmers a subsidy. I would not call it a subsidy.

The CHAIRAN. Is not a parallel situation that you are trying to improve the price of agricultural products, and the fisheries are just as much entitled to have the price increased to the producer? Mr. MARGOLIS. That is right.

The CHAIRMAN. At the hearing we held in 1934 the testimony generally given before the committee was to the effect it would certainly not increase the price to the consumer and would probably stabilize the price to the consumer, but would result in vastly increased returns to the producer.

Mr. MARGOLIS. That is absolutely correct.

The CHAIRMAN. Not so much because it would eliminate leeches upon the industry, as because of the elimination of uneconomic and wasteful methods of distribution and marketing, which could be removed by the cooperative organization if the people had the money with which to cooperate, but they can not get credit for the formation of these cooperatives and do not know how to form them. Mr. MARGOLIS. That is correct.

The CHAIRMAN. Even if it increased a little the price to the consumer, as you very pertinently said, that is what we have done with agriculture and in other commodities that we are trying to increase the price there to the consumer in order to get some benefit to these underdogs.

Mr. MARGOLIS. The point I would like to make is it does not necessarily have to increase the price to the consumer and at the same time give the original producer a bigger return on the work he is putting in.

The CHAIRMAN. That was the general consensus of opinion at the time we had these hearings in February and March 1934. We did not have a bill of this kind before the committee at that time, but the general consensus of opinion was that some system might be put into effect of aids that would help the producer and yet not impose additional burdens upon the consumer.

Just in that connection, I want to cite here, for the benefit of the members of the committee, a Government document, the number of which I will insert in the record, showing subsidies and aids that are given by foreign countries to their fisheries. That was a study made by the Tariff Commission, was it not, Mr. Fiedler?

Mr. FIEDLER. Yes, sir.

The CHAIRMAN. Ánd the report was made to the Senate and published in the last year, as I recall, and is very illuminating.

Mr. OLIVER. Does that include the value of the fishery industries to those foreign countries?

The CHAIRMAN. I am not sure whether that is brought out or not. I do not think it is. But there are some other features and it is a very illuminating document in showing the aids and benefits. The Government in many cases, I think in Canada, participates in the formation of these cold-storage plants, and financing them for the benefit of the fishery industry.

Mr. MARGOLIS. That is right. As a matter of fact, in making a study of this question, I wrote to the Dominion of Canada on the subject, and they volunteered the statement they would be ready to give any help necessary for the formation of a cooperative in Connecticut if we were interested there.

The CHAIRMAN. The document I have reference to is the Report to the United States Senate on Subsidies and Bounties to Fishery Enterprises by Foreign Governments, submitted by the United States Tariff Commission in 1936, Report No. 116, second series.

STATEMENT OF EDWARD H. COOLEY, ON BEHALF OF THE
MASSACHUSETTS FISHERIES ASSOCIATION

Mr. COOLEY. My name is Edward H. Cooley, of the Massachusetts Fisheries Association. I should like, Mr. Chairman, to preface my remarks by saying that my remarks should not in any sense be considered as against this bill, for I am not appearing against it. I believe there are some erroneous things, however, that may be in the minds of the committee.

I was interested in your reference to mackerel selling at such a low price to the producer and such a high price to the consumer. The CHAIRMAN. Whom do you represent, Mr. Cooley?

Mr. COOLEY. The Massachusetts Fisheries Association, and I have been asked by the chairman of the Roper Fishery Advisory Committee, Mr. Poole, to appear here so that I may carry some of his thoughts to the committee.

The CHAIRMAN. Some of those are fish-buying concerns, arc they not?

Mr. COOLEY. Many of them are. I should like, since you have mentioned that, specifically to state that a member of any fish-buying concern is always interested in getting the highest price he can for his product, regardless of what he may have paid the producer for it.

The CHAIRMAN. Exactly; and I want to see the producer get something.

Mr. COOLEY. There is every reason why the producer should; but when we hear these discussions I can but hope that such legislation as this does go through; because there is no quicker way for the producer to learn the truth about marketing conditions than to be engaged in marketing.

I doubt if ever in the history of the industry mackerel that sold for a cent and a half to the producer ever brought 35 cents from the consumer. There is a period of time between production and distribution that must be taken into account, and there is a cost, likewise.

I enjoyed Mr. Stone's excellent presentation here, in which he explained the value of the fisheries to the United States; and if you will go over his work, you will see that he multiplied the raw material costs by thousands. And justly so; properly so; because in the manufacture of the finished product there is a big mark-up necessary, as illustrated by the fact that the industry of which he spoke buys over 51,000,000 gallons of fuel oil from the oil industry each year, which must be added to the cost of the fish before it is sold to the consumer. And at the same time, as he so aptly said, it is part of the value of this industry to the United States.

Now, I want particularly to commend this legislation for one particular reason: We need improvement in the morale of the fishing industry. In my opinion, this is one way to obtain it without working a hardship on anybody. I hear arguments for and against among my own members; but, in my opinion, with the amount of money that is provided in this bill no harm can come to those interested who do fear such. And I believe that the net result of this, if carried through, will be to improve conditions, general market conditions; stop the series of gluts which not alone affect the producer in a small way-I mean the outlying producers-but affect the big producers and affect such large points as Boston.

As an illustration, we will assume there is a market for 15 carloads of fish in Cincinnati, Ohio. Logically, those people out there are paying the least that is necessary to get their supplies, and they contact Portland, Maine, or any other seaport; it does not matter; Boston is not alone in it; although it is the largest market for production of fish, it is not the largest market for distribution, New York having that honor; but the price that Portland quotes determines the price that the Boston dealer can get for what he offers, regardless of what his cost may be.

The errors that Mr. Margolis spoke of-I should properly say the "evils" instead of "errors" were all discussed in N. R. A. days and heatedly discussed and denied, but they still apparently exist. I am not saying they do exist; but, whether or not they do, the quickest way to get the truth out of it and stabilize the industry and help everybody concerned is to let the people who believe they today are themselves ridden, get into the market and ride the horse themselves. I do not believe there is an instance of a cooperative having been formed where the most valuable portion of that did not come to the people who formed the cooperative, both by way of stabilization and increased earning and benefit to the consuming public. And I

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mention that particularly because of what happened a moment ago when you were speaking of increased costs. Certainly those of us who have followed cooperatives have found that, in the instance of the citrus fruits, you and I today can buy on a stabilized market fruits that we could not get before for love nor money, and when we did get them we either paid a very high price or else took inferior goods that were dumped on the market because too many people shipped carloads to one distribution center.

Personally, I have no fear of cooperatives. They are not easily run. There will be plenty of trouble when they start. The trouble will rest mainly with those who start them. And, as I say, they will result inevitably in stabilization, one way or the other.

I do not like to leave the impression that the mark-up between production price and consumer price is one that is planned and evilly thought out. I can remember a conversation in N. R. A. days where a Government official mentioned that all of the dealers or buyers in the market got together and fixed the price of fish. About 10 years ago I came into the fishing industry—Î have no traditions; my grandfather nor my father were in it-and I heard all of these accusations and recriminations, and so I went to Boston to see this great collusion that existed. I have yet to find a man who knows that market but what he will vouch for this statement, that if there is a city in the country, where there is competition and conflict between the buyers, it is right there. There is absolutely no collusion. And I am just as sure of it as I am that I stand here. If you want to see a place where there is strife, go into the New York market. And again let me add to that and say that in every market I have ever seen it is the same. I have had considerable experience with Portland, Maine, which town Mr. Rufus Stone represents so well, and yet I want to tell you if you will step up there you will find the same cutthroat competition between dealers-four or five them in the same town.

This Government official claimed somewhere along the line an unjust mark-up, so I gave him this problem: If you have $10,000, or some amount of money you wish to invest in the fishing industry, where would you put it; because you certainly would put it in the place where there was such an unjust mark-up, because there is where you would get the most returns on the money invested? So we started with production. Then went to the wholesaling, jobbing, commission man, the jobber in the inland sections of the country, then the retailer. When that official got through he said, "I guess production is the best end of it, after all", and history and economic studies will show that has been the case.

I want to mention one other thing in support of legislation to favor the fishing industry. Canada just recently voted, within the past 2 months, a bounty to her producers of salt fish of $1 per quintal. A quintal is 112 pounds. The duty, if I may be permitted to speak of the tariff, on salt fish is three-quarters of a cent a pound. Canada thereby nullified our duty on salt fish by that one action. Of course, you can say to me that there is a provision in the 1930 Tariff Act that enables me, representing the industry, or anyone else, to complain and declare that that is in violation of the Tariff Act of 1930, and it is. It also, in my opinion, materially affects our so-called

reciprocity treaty, but it illustrates, Mr. Chairman, exactly what the fisherman of the United States is up against.

The CHAIRMAN. I wish you would amplify your remarks by bringing out any other information of that kind you may have.

Mr. COOLEY. I believe you will get the most of that in the brochure you mentioned a moment ago in the record on aids and bounties prepared by the Tariff Commission.

The CHAIRMAN. But you may be familiar with other specific instances such as that, and if you will bring them out we will be glad to have them.

Mr. COOLEY. I will be glad to put in any I may have.

I want to say that the farmer has benefited materially, and as you, Mr. Chairman, so well stated a moment ago, it was with the direct and avowed intention of raising the price of his products to the consumer. Although I do not believe it is probable that the fishery cooperative will raise prices to the consumer, if it did so it is certainly in line with what has been done for the one and only industry which is in competition with the fishing industry.

I have plenty of people in my bailiwick who fear cooperatives; but, with the limitations placed in this bill, personally I do not feel that they need fear them.

I have nothing else to say, Mr. Chairman.
The CHAIRMAN. Are there any questions?

Mr. OLIVER. Mr. Cooley, I know of your great knowledge and experience in the fisheries industry and I respect very much what you have said here this morning. I know you are familiar with the New England situation fairly well, particularly the situation in Maine, and I would like to ask you, in your opinion, if this legislation is enacted into law, would it be of great benefit to those small producers in the fishing industry in the State of Maine?

Mr. COOLEY. I think that is where the chief benefit will rest and where it should rest and where the cooperatives should be started— with the small fisherman who today has no chance at a market except it be through channels which are accused today of making him suffer a loss.

Mr. OLIVER. And that same benefit would accrue equally as well to all of the other small producers all over the Atlantic and Pacific coasts of America?

Mr. COOLEY. They have equal opportunity, yes; and there is every reason why they should benefit from it. I do not believe it is applicable to Boston and to New York, and I do not think, from the amount of money provided, there would be sufficient funds to do it. In other words, a cooperative, to be successful-and I believe I speak advisedly on this, having given great thought and study to existing cooperatives-I believe a cooperative, to be successful, must have the same power by right of size that is possessed by a private corporation in the same industry, and thus, if the cooperative in Boston were to be successful, it would need production equipment that is worth from $4,000,000 to $5,000,000. And that is all you have provided for in this bill, and certainly the committee that was allocating that money would not give to one organization all the money that there was in its treasury.