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of something over $700,000, and I know that our members in that area are extremely well satisfied with that situation.

There is also a Production Credit Loan Association of Salisbury, Md., and they have been making loans, not on so extensive a scale; but I understand they have been extremely helpful. And I believe the president of the New England Oyster Growers' Exchange has written you a letter which explains the situation with respect to the cooperative.

The CHAIRMAN. Yes; there is a brief letter here; but what I would like to have is a statement that would cover the field very generally and show just what benefits have accrued from that legislation.

Dr. RADCLIFFE. I will endeavor to get that for you.
The CHAIRMAN. That will be filed as a statement in the record.
(The letter referred to follows:)

THE OYSTER INSTITUTE OF NORTH AMERICA,

Washington, D. C., July 12, 1937. Hon. S. O. BLAND, Chairman, Merchant Marine and Fisheries Committee,

House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN : Referring to your request at the hearings on H. R. 7309 for further information on the success of the Farm Credit Administration in meeting by loans the needs of the oyster planters, Mr. S. M. Garwood, production credit commissioner, writes me that:

“The associations which extend credit to oyster planters, likewise finance the members engaged in other types of operations and, accordingly, their periodical reports on loans do not disclose facts relating to any particular type of loan.

It is our understanding that the associations have found it possible to finance the operations of quite a number of the leading oyster planters in a manner which has been quite helpful to them.”

At our convention in New York on June 1, the secretary of the Providence, R. I., Production Credit Association showed loans to oyster planters as follows: 1935.

$151, 650 1936: New loans..

309, 025 Renewals.

42, 650

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Grand total of new and renewals for the 3 years-

721, 316. 21 In my discussions of the situation with members of the industry all the comments have been favorable to the helpfulness of the aid given by the Farm Credit Administration. Very truly yours,

LEWIS RADCLIFFE, Director'. (The hearing was thereupon adjourned subject to the call of the chairman.)

as I did a minute ago, that this Nation in 1934 permitted the commercial fishermen to market cooperatively, it might be more to the point if I said the Congress at that time supplied the fishermen with a vehicle with nice, new tires, a good engine, a fine shiny body, but no fuel with which to run it and no road maps to aid in guiding it over a planned route; without funds to underwrite part of the initial costs of new facilities for storing, freezing, and otherwise processing; withcut funds with which to pay these primary producers at least a part of the value of their production.

And without this money that this bill provides. Public, No. 464, as I said before, is of little value to most of these 122,000 American fishermen brought up in a tradition of cooperation. But when, as is proposed under this legislation, you provide money for the purposes outlined in the Fisheries Credit Act, you fill the tank of the vehicle you previously provided; when you provide market help, as you will have done under this legislation, you have supplied the commercial fishermen with the necessary road maps to guide them toward effective merchandising of their product.

Now, those are two basic essentials without which these attempts at cooperative self-help have fallen far short of effectiveness.

The members of this committee know this fishing industry. You know that it produces over 4 billion pounds of protein food annually, valued at over $80,000,000 to the fishermen; you know that these same fishermen, risking their lives daily in perhaps the most arduous and hazardous occupation, frequently working 18 and more hours a day under conditions of great physical hardship, gross an arerage of something like $600 a year, out of which they must pay for boat, bait, and gear, and other expenses. You know why. For no other reason than that this is an industry almost entirely devoid of any semblance of merchandising: a raluable food industry which is in direct competition with food sold under the most modern merchandising methods. It is this lack of merchandising which accounts for the point you raised, Jr. Oliver, a while ago—the vast spread between what your families pay for sea foods at the retail stores and the price received by those men who risk their lives to bring that fish in.

I know from years of study that the price to the fishermen can be rastly increased, often doubled, possibly trebled: the price to the consumer reduced. Now, that perhaps is at variance: in fact, it is at variance with some statements that hare been made here this morning, but I re no reason why the price to the consumer cannot be reciuced, the price to the producer increased, and the middleman still be permitted to make an honest living and pay for wages to his employees, if this hopelessly inadequate thing thai is all we have in lieu of merchandising is changed over, through study and education, trancing and orderly help.

Now I would like to read a letter from the Federated Scallop Proclucers' Cooperative Association, Inc., because it becomes much more important than anything I have attempted to say here this mornirgi so, with your permission, I will go on to that reading]:

The Fä, raidd Sallip Product'rs' Cratite lisamiation, Inc. with a membership of over 40 fishermen operating some patio inalny will owned boats. recognizes in the Fishery Chevit Act the first poretical national legislation designed to promote the orderiy marketing of seksuales

In 1934 a group of progressive and forward-looking fishermen, active in seascallop production, formed this association as a first step toward eventual collective action for mutual benefit. It was their sole available means for meeting certain of the manifold problems with which they, individually, were unable adequately to cope. This organization today produces practically 100 percent of all domestic sea scallops.

At present there are but two major points where sea scallops are purchased from the fishermen-producers for marketing ; namely, New Bedford, Mass., and New York City. The New York wholesale dealers operate as one body, setting one price to the exclusion of competition. At New Bedford, one wholesaler represents the entire outlet.

The price received by the fisherman-producer, while presumably the market value of his catch, is, in point of fact, a speculative price not in any measure based on conditions affecting retailer or consumer.

The scallops bought by the wholesaler are resold after a very substantial mark-up has been added; a large part of the tonnage being bought from the boats at glut or distress prices, held speculatively in cold storage, and later resold at top prices.

Orderly marketing requires that production reaches the market in volume consistent with the existing demand. To eliminate the evils of speculation, it should be feasible for the association, as a marketing cooperative, to buy in the catch of member vessels as landed, delivering it to the wholesale markets in such quantities as can be properly absorbed. The association should package and trade-mark a percentage of the catch as specialty merchandise, as well as reserving in cold storage, against periods of short production, such quantities as should from time to time be withheld from the wholesale outlets.

This association's repeated efforts to set up a practical cooperative have failed for no other reason than that it has been impractical for the members to underwrite among themselves more than a fraction of the required working capital.

It is estimated that upward of $100,000 might be needed for this association to effectively buy in sea scallops as landed; assuming that a low basic price of, perhaps, $1 would be paid to the member vessel for the catch at the time of arrival in port, and that normal merchandising of the product might require some 30 days to elapse before transactions involving the scallops so bought in would be completed and fully realized on.

In order to reserve in cold storage against periods of short production, such quantities as should from time to time be withheld from the wholesale outlets, and also to package and trade-mark a percentage of the catch as specialty merchandise, it is estimated that an additional fund of $500,000 would be required.

Sixty boats landing 1,500 gallons of scallops per boat per 12-day trip, under favorable conditions, paid a base of $1 per gallon, would require a fund of at least $100,000.

(NOTE.—There are 9 pounds of scallops to the gallon retailing at a minimum of 35 cents a pound, or $3.15 per gallon.)

The boats now, I think, are receiving 95 cents a gallon.

The letter from the Wisconsin association is short and, with your permission, I will read it:

In regard to the bill H. R. 7309, our association believes that such legisla-, tion is very much needed and will put the fishing industry on even terms with other industries that have received this help. Also it will help the industry as a whole to meet foreign competition which is flooding this country with cheap fish and fishery products. The fishing industry needs this sort of legislation to reestablish its credit and to give it a new start and make it a flourishing industry which is its birthright.

Thé CHAIRMAN. Are there any questions?

Mr. OLIVER. In view of what you have said with regard to the value of improved marketing conditions under this cooperative set-up that is contemplated, would you have any statement or suggestion to make with regard to the amount of money that this bill carries for the marketing set-up?

Mr. TURNER. Well, we have given-I was going to say we have given a good deal of thought, but I think I should say we have

given a good deal of speculation to that, Mr. Oliver, and, frankly, until we can see the picture very much more clearly than we do now, I do not think it would be very wise for us to attempt any estimate. In our speculations, however, we usually stop somewhere short of $30,000,000 or $35,000,000 as being the amount we would guess would be needed to cover the known cooperatives and those which we know need to be re-formed to qualify as cooperatives under this legislation.

Mr. OLIVER. What I had particular reference to was the amount of money provided here for the establishment of a marketing department for the setting up of cooperative marketing agreements.

Mr. TURNER. As to whether that looks to us like an adequate amount !

Mr. OLIVER. Yes.

Mr. TTRXER. So, Mr. Oliver. Our feeling is that that is the last important angle of this legislation; that the money help is necessary but is almost secondary. In other words, if we had marketing help without the advantage of funds with which to underwrite the normal costs of setting up effective cooperatives, we could function and could greatly improve our lot; but the money, without the marketing help would be a sheer waste.

The CHAIRMAX. But eren a small amount would demonstrate possibly the advantages of the cooperative system!

Mr. TURXER. Certainly, Mr. Bland.

The Chairmax. In and of themselves, and also make it possible, if additional funds were needed, to secure those funds?

Mr. TURNER. Any money that would permit any of these associations to more, say, toward the objective as for instance where there may be a discussion of the need for the installation of cold-storage facilities, it is entirely possible, if there were a shortage of money, that a well-insulated building of adequate capacity would be built and for the time being they would rely on water ice to refrigerate the catch which was held; whereas the ideal condition, of course, would be to put in refrigeration machinery and be able to control the temperature and be able to keep it at a lower point. But, as you know, the fishermen are sufficiently resourceful so that they could more, in matters of this kind, along any fairly orderly way, starting in with the barest minimum that would lead into an eventual advantage

Mri Sreer. I believe Ir. Chairman, the witness has brought out what I had in mind, and I am a little more sympathetie than I was before.

You believe that by orierly marketing and providing a way to erent this promitet deri te tille publiceerd is villa ray of hope that the consider mer be beletite is that right?

Mr. Turner. Why not l'uri for install this site te instance referred to in the letter of the Salop*abon, where they conSher they are laky,

aktivitete si a gallon for a product that relatis fongs Now, if they were abe, let us svi to pacato per the appesa 93-cent retailing packages wires pointed out an attractire disgart'ie wir the lewe the proveer ai the retailer wouki irti tanpa pengar that the reta 'er would buy that package i plines than the prevailing price of $3.25 a gallon for the bulk. I can see no other answer to it.

The same thing obtains with any variety of fish which, adequately merchandised, goes directly, or, as nearly directly as possible, to the market point, as against being dumped into one market, shipped, reshipped, with a profit, reprofit, and more profit taken on it.

The CHAIRMAN. And not only the profit, but also the expense by reason of loss, which necessarily carries up the cost of that which is sold.

Mr. TURNER. Yes; quite so.
The CHAIRMAN. By the elimination of the waste?
Mr. TURNER. Yes.

The CHAIRMAN. Are there any further questions? If not, we are much obliged to you, Mr. Turner. STATEMENT OF C. M. CASE, MANAGER, FISHERMAN'S COOPERATIVE

CORPORATION, RIVIERA, FLA. Mr. Cass. Mr. Chairman, I came up here quite a long ways from Florida to give you a little idea of what our conditions are in the fishing industry down there. I am manager of one of the three cooperatives that are operating on the east coast of Florida. We have one at Fort Pierce, one at Salerno, and one at West Palm Beach.

To understand the workings of the cooperatives, one must sort of understand the workings of the fish. In the fall, the fish start and migrate down the coast, start in up at the northern part and down through Virginia, especially with mackerel and bluefish. We have Spanish mackerel, bluefish, and kingfish, which are our principal fish.. Of course, great numbers of those fish are taken before they reach our point of production. Therefore, the market-most of the fish go to New York-becomes flooded and causing lots of those gluts in the wintertime which seem to been affecting the whole industry.

The reason for that is we have not any facilities in our set-up whereby we can hold these fish back. In other words, by the time they have taken these fish off of Georgia and along down the coast and they reach us at the lower end, the market has already taken in all of those fish that it possibly can handle and the result is a glut is thrown on the New York market. Now, we say if we had a small cold-storage plant to take care of those three cooperatives, so that we could hold those fish back for 6 or 7 days, a better market price could be obtained for the men concerned in the organization; but the result is, in not being able to hold the fish back sufficiently, they are dumped on to the New York market and receive a very low price.

Now, my principal reason for wanting to state that and coming up here was to explain why those gluts appear during the winter months, which has an effect on those northern markets. I do not know as there is any remedy for it, outside of some way to hold the fish in cold storage and keep them off the market; because if the boys do not produce those fish while they are there, they certainly cannot catch them after they are gone. And it is a very hard proposition for the fishermen to live.

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