impression prevailing in some branches of the industry, and among others, is that a fisherman is a laborer. He is generally considered to be of an independent character who may obtain fish at will and at such times and in such quantities as he desires, without preliminary experience, preparation, or financial investments. A fisherman, such as this discussion is concerned with, is not a laborer in the same sense as is generally applied to industrial workers. He is a laborer, it is true, but in the sense that the farmer is a laborer. And, like the farmer, he has investments in years of experience, in capital, and in equipment and mechanisms of production. Like the farmer, he is a primary producer of products derived from natural resources. A fisherman is an enterpreneur-he is the investor in and manager of his own business, and he assumes the risk that is commonly associated with any business, the same as the farmer. For clarity in the beginning of this discussion, fishermen were classed as independent and dependent. Now let us examine the so-called independent fisherman. A fisherman may be an individualist, but few of them are independent. The average fisherman's independence is far less than that of the average farmer. The fisherman is dependent, first, upon outside financing-a very small percentage of fishermen continues operations through a 12-month period without having to secure substantial advances from some source. He is dependent upon the local wholesale shipper, the wholesale receiver, commission merchants, and brokers-comprising a system over which he has no control and less legal protection than is afforded the farmer in the marketing of farm produce. Practically all of the many varieties of fish products, unlike many agricultural products, may be substituted for each other and, therefore, are competitors for the consumer's demands. This makes virtually all fishermen competitors of one another. Furthermore, fishermen's products are at a competitive disadvantage in the market with the fish products of business firms catching fish in large quantities and merchandising them through vast distributing systems, affecting consuming markets and definitely influencing prices paid to fishermen at shipping points.

The fisherman is dependent upon seasonal fluctuations in the production of fish, which is further affected by elements of the weather. Fish, especially certain species of edible fish for the fresh market, move in large "runs" or "schools." Fishermen know that fish must be caught when and where they are found; consequently, at times great quantities of fish are caught in limited areas and in brief periods. As such times prices immediately drop in the local market, yet the several large consuming markets, hundreds of miles away, may not be affected by the catch, at least not to the same extent as the local market. Fishermen continue to catch the fish so long as they can, and the local price may decrease steadily during the time. In the absence of adequate cold storage facilities in outlying producing areas and because of the need for finances of an independent character, fish are shipped or "dumped" in the metropolitan markets. However, when the school of fish has passed on and there are few or no fish to be had, local prices immediately rise, and the fishermen further along the coast who have an opportunity to catch fish from the same school experience the same procedure. This is supposed to be the working of supply and demand, yet it is questionable

whether the consumer realizes any beneficial results from such a system; furthermore, the fisherman's market and economic status are not improved thereby. This system permits the concentration of vast quantities of highly perishable yet nutritionally valuable commodities in the markets and freezers of a few metropolitan areas. It also provides that any enhancement in the price of fish occurs after the fish has passed out of the fisherman's hands.

These factors have made the independent position of the fisherman untenable. They have weakened the economic position of the individual fisherman and over which he is unable to exercise any control. These factors contribute to an uneconomic system with which the industry appears unable to cope. Just so long as this system continues, just so long as fishermen depend upon fish-buyers for finances and to whom they are, in turn obligated to sell their fish, and just so long as local wholesale shippers are subject to become the agent of wholesale receivers and commission merchantsin other words, just so long as the fisherman is unable to exercise freedom to sell his fish to the best advantage-just so long will we fail to merchandise fish in an orderly manner.

This uneconomical waste is costing the industry, and more particularly fishermen and consumers, hundreds of thousands of dollars annually. We have all heard much of late concerning the "rugged individualist". In some fishing areas of this country fishermen are referring to themselves, humorously yet pathetically, as "ragged individualists". Official cognizance will need to be taken of existing conditions in the fisheries and followed up by adequate measures to improve them, if we are to maintain the independent status of our fishermen. The history of some fisheries indicates that the more complete exploitation of a fishery, requiring capital investments and management beyond the average fisherman's command, results in the rise of corporation fishing and in the decrease of individual fishing. Usually fishing corporations are also interested in market operations which results in primary consideration being given to the merchandising of corporation products and less dependence upon individual fishermen as a source of supply.

The fisherman's difficulties are not due entirely to the depression; some of them are of long standing, but most of them are the accumulation of unprogressive and uneconomic methods of merchandising and distributing. These factors, coupled with the progressive growth of large-scale enterprises in the production and merchandising of fish, comprise a system that threatens the existence of certain classes of our fishermen.

Charitable and relief measures are not needed, but there is definite need for an aid whereby fishermen may be enabled to help themselves. Although cooperative marketing is certainly no cure-all for the ills and evils of the industry, it is believed that with adequate and sound financing, coupled with research and educational work such as is considered here and similar to that provided for farmers, cooperative marketing will go a long way in rehabilitating the fisherman and effectuating desirable changes in the industry.

Now as to the second part of this discussion, relative to similar legislation that has been provided for farmers: Fishermen, like farmers, are primary producers; they are both engaged in combining capital, labor, and managerial ability to produce or extract products

from natural resources. The relative systems employed in producing, processing, packaging, distributing, and selling fishery and agricultural products are, for the most part, comparable. The differences that exist with respect to stability, the adequacy of the systems, laws of a protective character, and laws that aid the farmer through adequate financing and educational services are in the farmer's favor. Our State legislatures and Congress have taken ever-increasing recognition of the farmer's economic difficulties, and have provided various ways and means of aiding the farmer. Outstanding among these beneficent and progressive steps have been the acts of Congress whereby farmers are enabled to aid themselves through cooperation. In 1922, the Congress enacted the Capper-Volstead Act which established the right of farmers to associate for the merchandising of their products. In 1929, the Congress enacted the Agricultural Marketing Act creating a Federal Farm Board for the lending of funds to agricultural cooperatives. In 1933, Congress amended the Agricultural Marketing Act and established the Farm Credit Administration. The Farm Credit Administration is provided with credit facilities that enable it to make every type of loan needed by farmers for the purchase of land, production of crops and livestock, and for the marketing of agricultural products through farmers' cooperative associations. In the Farm Credit Administration there is provided a system of banks for cooperatives, including 12 regional banks and a central bank. It would appear that farmers and farmers' cooperatives are supplied with adequate credit facilities to meet all reasonable credit needs.

Through the foresight and guidance of the Committee on Merchant Marine and Fisheries, the Congress enacted in 1934, Public, No. 464, authorizing associations of producers of aquatic products. This act is comparable to the Capper-Volstead Act passed in 1922, and through it Congress established the principle that fishermen have the right to organize and operate cooperative production and marketing associations. In considering only the two enabling acts, it would appear that equal consideration had been given to providing authority for fishermen and farmers to organize and operate their respective cooperative associations. This is true. However, the ability of fishermen to take as full advantage of Public, No. 464 as farmers have exercised their rights under Capper-Volstead, depends upon the fishermen also receiving lending and educational facilities similar to those which have been made available to farmers. Prior to the passage of the Capper-Volstead Act, farmers had made considerable progress in developing and operating cooperative associations. This was due in part to State laws legalizing such activities, and in part to instructional services available to the farmer through the land-grant colleges. Then, in a number of the States, and certainly today in every State, there is available at the call of farmers county farm agents or specialists who can advise pertaining to farming operations, or the organization and operation of cooperative marketing and purchasing associations. There is no such service available to fishermen.

Today the farm boy and girl may attend public rural high schools in which they may learn something of being a better farmer or a better farm wife, and better citizens. This is supplemented by rural boys' and girls' clubs for further training. What are known as home

agents, and specialists in the various arts and crafts of home-making are available to the farm wife and farm women's clubs. There is no such aid or service available to fishermen's wives, boys, or girls.

Such educational service provides a better understanding of one's problems, how to deal with them, and it is a decided influence in teaching people how to live and work with each other. And, therefore, farmers are better equipped by training and association to understand the principles and operations of cooperative associations. On the occasion of necessity or demand, they have seized upon cooperation as a method for marketing their produce, buying farm supplies and equipment, and as a means for social betterment.

Fishermen, on the other hand, have obtained meager accomplishments in cooperation due to the lack of assistance-educational, financial, or otherwise. There is a decided absence of State legislation authorizing fishermen specifically to organize and operate cooperative associations. Only in a few cases have State departments or institutions aided fishermen in organizing and operating fishery cooperatives. The existing associations of fishermen have been formed by and for fishermen on their own initiative and with little known outside advice, counsel, or financial assistance. Although many of the associations are faulty in construction and are provided. with inadequate finances, in a limited way they are marketing fishery products, purchasing supplies and equipment, and improving social conditions among their members. There are a few outstanding cooperative associations, however, that are performing marketing and purchasing services for their members in a creditable manner.

For the benefit of the committee, some data are inserted here pertaining to associations. Of the associations studied, there were 54 from which usable data were obtained. These associations are classed as commercial and semicommercial, or bargaining associations. Those associations selling fish and fishery products and buying supplies for their members did a volume of business in 1935 of more than $9,000,000 and had an investment in association property in excess of $5,200,000.

The CHAIRMAN. Those are fishery associations?

Mr. SALTER. Yes, sir. The 54 associations had members and crews exceeding 12,500 fishermen. The membership of these 54 associations had investments in vessels and boats of over $20,700,000. Their investment in gear was in excess of $3,600,000-without taking into consideration replacement of gear during the year, which ranges from 30 to 300 percent annually for the types of fisheries studied.

One would have thought if there had been a need for the provisions of Public, No. 464 prior to its enactment, fishermen might have flocked en masse to form associations upon passage of the act. Cooperation with stability does not take place in such manner. Although the needs or conditions that might have warranted cooperatives still exist, the ability of fishermen to take advantage of the provisions of the act is no greater today than before its passage. The conditions and circumstances previously related prevent fishermen from realizing the full benefits of the provisions of Public, No. 464. If fishermen are to take advantage of the provisions of Public, No. 464, in the manner and to the extent this committee and Congress evidently intended, or to the extent farmers have succeeded under the provisions of the Capper-Volstead Act, certain

educational and financial barriers must be first overcome with somewhat the same type of Government assistance that has been provided for farmers. H. R. 7309 proposes to provide, in part, such assistance. III. Now coming to the third part of this discussion, that is, as to the proposed legislation under consideration: H. R. 7309 contains a declaration of policy concerning the more orderly production and the effective merchandising of aquatic products. This policy is in keeping with Public, No. 464 and is comparable to the policy declared in the Agricultural Marketing Act, as amended.

In order to further the policy declared, H. R. 7309 authorizes a corporation to be established by the Secretary of Commerce for the purpose of making loans to fishery cooperative associations. The capital stock of the corporation is to be subscribed in part by the Secretary on behalf of the United States out of the $5,000,000 authorized to be appropriated by the bill, and in part by borrowing associations. The corporation is to operate under the supervision of the Secretary and be managed by a board of directors, composed of the Commissioner of the Bureau of Fisheries, two other officers of the Bureau, and four others, of whom three must be chosen from nominations submitted by borrowing associations. The corporation is to be legally constituted and have such powers as are usually delegated to corporations, in addition to specific powers to enable it to carry out the functions imposed by the bill.

The corporation is to be a bank for fishery cooperatives and it is to be restricted in its operations as such. Notes and other credit papers accepted by the corporation would be discounted through the Federal intermediate credit bank. The rate of interest or discount charged a borrowing association would be a rate of 1 percent in excess of such interest or discount rate charged the corporation by the intermediate credit bank.

The CHAIRMAN. That is a provision in the Agricultural Act, is it not?

Mr. SALTER. I beg pardon.

The CHAIRMAN. That is similar to the provision in the Agricultural Act?

Mr. SALTER. Yes, sir; it is similar to the provision in that act. This is to establish uniform and equitable rates to borrowing associations without recourse to arbitration. Through the discounting provision, the funds of the corporation may be loaned over and over again as in a revolving fund. This arrangement will permit the corporation only a 1-percent margin on which to operate. It is not considered the corporation would at any time show large, if any, profits on its operations. In this connection, it might be well to consider permitting the corporation to invest a portion of such idle capital as it might have at any time in Government bonds. This would enable the corporation to show a better operating statement. In order to exercise such authority, it might be necessary to have it set forth in the bill.

The corporation is authorized to make loans to fishery cooperative associations, but such loans are restricted to such associations as comply with the provisions of Public, No. 464. Furthermore, an association must otherwise comply, as an eligible borrower, with such rules and regulations as may be established by the corpora

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