(6) It is expressly agreed that the Government shall have a lien upon such personal property of the Lessee as is installed in or about the leased premises, for unpaid rent under Article IV (1) and for unpaid bills under Article VI.

VIII. LIMITATION OF RIGHT

This lease shall not be construed as an exclusive franchise in American Samoa.

IX. CUSTOMS DUTIES AND TAXES

During the term of this lease, the Lessee shall be exempt from any and all taxes, customs duties, assessments, license fees, or other levies imposed or levied by the Government: Provided, That the Lessee shall not be exempt from the export duty on fresh or frozen fish: Provided, further, That with respect to the preceding proviso, the Lessee and its agents and persons contracted to it, shall be exempt from the export duty (a) on any fresh or frozen fish other than tuna incidentally caught while fishing primarily for tuna, and (b) on 30% of the total tonnage of tuna tendered to the Lessee in American Samoa by its agents and persons contracted to it. This percentage shall be computed against the total tonnage tendered to the Lessee in American Samoa by its agents and persons contracted to it during each three month period of this lease. The parties hereto agree that such 30% shall be, to the greatest extent possible, made up of tuna not suitable for canning. The second proviso of this Article shall apply only to such fish as shall be designated by the Lessee as within the exceptions therein stated, as either incidentally caught or tendered in good faith.

X. DESTRUCTION OF PREMISES

(1) The Lessee shall obtain insurance covering loss by fire, explosion, and other loss included in extended coverage policies not, however, including loss by act of God, war, or other causes beyond the Lessee's control, covering the buildings and equipment on the leased premises as of the effective date of this lease in an amount not less than $220,000. The Lessee shall place such insurance in a responsible company or companies and, in addition thereto, shall carry such coverage as it deems adequate for its own protection and shall maintain all such insurance coverage during the lease term.

The Lessee shall pay all premiums upon said insurance policies throughout the term of this lease and any renewal thereof. Such policy or policies of insurance shall name the Lessee and the Government as the insured and shall contain a loss payable clause requiring adjustment of loss with the Lessee and the Government as their respective interests appear. The Lessee's liability for loss or damage to the property of the Government shall not exceed the obligations assumed in this Article of the lease. If all or any part of the buildings, equipment, or structures located on the leased premises as of January 1, 1954, are destroyed or damaged and are covered by insurance, and if the Lessee agrees to rebuild or replace the property so damaged or destroyed in a manner mutually agreeable to the parties, then the Government shall pay its share of the insurance proceeds to the Lessee.

(2) If all or any part of the buildings, equipment or structures located on the leased premises as of the date of this lease are destroyed or damaged by reason of act of God, war or other cause beyond the Lessee's control which is not covered by insurance, then—

(a) The Government may rebuild or repair any such buildings or structures so destroyed or damaged.

(b) If the Government shall not within ninety (90) days of any such destruction or damage with due diligence commence to rebuild or repair any such buildings or structures, this lease shall forthwith terminate, unless the Lessee shall elect to rebuild or repair at its own expense.

(c) The Government and the Lessee shall agree upon an adjustment of the annual rental for the period during which the Lessee is deprived of the use of such buildings or structures which adjustment shall be based upon the extent to which the Lessee is required to curtail its operations by reason of the destruction or damage of such buildings, equipment, or structures.

XI. TERMINATION

(1) This lease shall be terminated:

(a) immediately, in the event the leased premises, in whole or in part, are necessary for naval, military, or defense purposes, and the Government shall notify the Lessee thereof: Provided, That nothing herein contained shall be or shall be construed to be a waiver by the Lessee of any and all claims for just compensation for its property taken for naval, military, or defense purposes; or (b) at the option of the Government, if the Lessee shall be in default in the performance of any term, condition, covenant, or restriction of this lease, and shall have failed to remedy such default, within a reasonable time after receipt of written notice of such violation from the Government. Reasonable time as herein employed shall be related to the circumstances involved and, in no event, shall be more than thirty (30) days, unless the default is such that it cannot be remedied in thirty (30) days; or

(c) at the option of the Government, in the event of the filing of a petition by or against the Lessee for adjudication as a bankrupt, for reorganization or for arrangement within the meaning of the Bankruptcy Act of July 1, 1898 (30 Stat. 544), as amended (Tit. 11 U. S. C., 1952), or as hereafter amended, or in the event of the appointment of a receiver or trustee of the property of the Lessee; or (d) at the option of the Lessee, in the event that the United States Government imposes a duty on fresh or frozen fish brought into American Samoa or imposes a duty on the products of the cannery entering the continental United States or other Territories of the United States, or in the event that the determination of the Bureau of Customs of the United States Treasury Department that under the Act of September 2, 1950 (64 Stat. 577, 46 U. S. C. sec. 251), a foreign-flag mother ship or fishing vessel is not prohibited from landing in any port of American Samoa fresh or frozen fish taken on the high seas and that a United States flag vessel may land fish in ports of American Samoa transferred on the high seas from a foreign-flag ship is reversed or withdrawn; or

(e) at the option of the Lessee: Provided, That the Lessee shall give the Government no less than six (6) months notice in writing of such proposed termination and shall pay to the Government the sum of $1,000.

(2) Upon any such termination, as aforesaid, the Government shall have the right immediately to retake possession of the leased premises, in whole or in part, without notice, all legal notice being specifically waived by the Lessee. If this lease is terminated as provided in Articles XI (1) (a), (d) or (e), the Lessee shall have the right to remove any of its personal property installed in or about the leased premises within 30 days. At the option of the Government, any or all such property may be sold by the Lessee to the Government at a price mutually agreed upon by the parties.

XII. LEASE TO BE NONASSIGNABLE

Neither this lease nor any interest therein may be transferred or assigned, either voluntarily or by operation of Law, nor shall the premises or any right with respect thereto, be sublet or granted, without the written consent of the Government. The Lessee may, however, transfer this lease to its wholly owned subsidiary, or to a corporation organized by the Lessee for the purpose of operating the property.

XIII. REPORTS

The Lessee agrees to submit to the Governor, with copies thereof to the Fish and Wildlife Service, Department of the Interior, Washington 25, D. C., the following reports:

(1) Monthly and annual reports stating the number of pounds of fish landed, by species; and the value thereof including the basis on which the value is determined; and the production of canned fishery products and the yield of fish meal and oil, if any.

The data on the production of canned fishery products shall indicate for each species the size of can and type of pack (such as "in oil," "not in oil," or "in tomato sauce," "solid pack," "chunk style," etc.). The annual reports on the production of canned fishery products shall include a statement of the value of the total annual production thereof, computed in terms of United States West Coast prices for the several species, less cost of transportation of such products from American Samoa to the United States West Coast. The information as to value herein specified shall be considered confidential and shall not be disclosed to the public.

(2) If a freezer is operated, monthly reports showing the number of pounds of fish and shellfish frozen during the preceding month and the stocks of each, reported by individual species, held at the end of such month.

(3) Monthly reports showing for each species of fish received by the Lessee at American Samoa, the name and license number of the vessel from which such fish were landed, quantities of fish, date of receipt of such fish, kind of gear employed in catching the fish and place or places of origin.

(4) Annual reports stating the uumber of persons employed at the fish cannery in American Samoa during the period of peak employment, the man-years of employment, the total wages and salaries paid, and stating separately the number of foreign nationals, their nationalities and positions.

(5) Annual reports shall be submitted not more than 30 days after the anniversary of the commencement of the lease term, showing the gross income from the business conducted under the lease for the preceding year, the different items of such income and the amount of these items. The Governor of American Samoa shall have the right to verify such reports by examination of the books, accounts, and records of the Lessee. The information contained in such reports shall be labeled "Confidential," shall be considered confidential, and shall not be disclosed to the public.

XIV. GENERAL PROVISIONS

(1) It is understood that a waiver by the Government of performance by the Lessee of any of the terms, covenants, or conditions of this lease, shall not be construed as a waiver of the future performance of any such terms, covenants, or conditions, nor shall the failure of the Government to insist upon such performance by the Lessee be construed as a waiver thereof.

(2) The Lessee warrants that it has not employed any person to solicit or obtain this lease upon any agreement for commission, percentage, brokerage, or contingent fee. Breach of this warranty shall constitute a default on the part of the Lessee, the penalty for which may be the immediate cancellation of this lease.

This warranty shall not apply to commissions paid by contractors upon contracts secured through bona fide established commercial agencies maintained by the Lessee for the purpose of obtaining business.

(3) Except as otherwise specifically provided herein, all disputes concerning questions of fact arising under this lease, and all matters which are subject to the mutual agreement of the parties but upon which the parties may be unable to agree, shall be decided by the Governor with a right of appeal within thirty (30) days to the Secretary of the Interior whose decision shall be final and conclusive upon the parties hereto, but shall not prevent the Lessee from the exercise of any right to resort to a court of law. The existence or pendency of any dispute shall not excuse the Lessee from the continued performance of its obligations hereunder.

(4) No Member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or part of this lease, or to any benefit to arise therefrom, but this provision shall not be construed to extend to this agreement if made with a corporation for its general benefit.

(5) Any written notice to the Lessee hereunder shall be addressed to the Lessee at its offices in Tutuila, American Samoa, and any such notice to the Government of American Samoa hereunder shall be addressed to the Governor at Pago Pago, Tutuila, American Samoa.

(6) No notices, demands, determinations, consents, or approvals under this lease shall be of any effect unless in writing.

XV. SURVIVAL

This lease shall be binding upon the Lessee, its successors and assigns.

XVI. AMENDMENT

This lease may be amended without further consideration at any time during the lease term by mutual agreement of the parties hereto.

XVII. IDENTITY OF LESSEE

The company, corporation, or partnership signing this lease hereby certifies that seventy-five percent (75%) or more of its capital is owned by individuals who are United States citizens or nationals, and that at no time during

73588-56-pt. 1-3

the term of this lease will more than twenty-five percent (25%) of the capital be owned by individuals who are not United States citizens or nationals.

XVIII. DEFINITION

Wherever the term "Governor of American Samoa" is used in this agreement, it shall also mean his duly authorized representative.

IN WITNESS WHEREOF, the Government and the Lessee have caused this instrument to be duly executed by their proper officers under authority duly given, as of the day and year first above written.

of

on behalf of the said Corporation, was then---. said Corporation; that said lease was duly signed for and in behalf of said Corporation by authority of its governing body, and it within the scope of its corporate powers.

[Seal]

Notary Public.

My commission expires.

BINGHAM, COLLINS, PORTER & KISTLER,
Washington 5, D. C., January 23, 1956.

Hon. JAMES ROOSEVELT,

House of Representatives, Washington, D. C.

Dear Mr. CONGRESSMAN: In accordance with your request, Mr. William D. Moore, Jr., of Van Camp Sea Food Co., Inc., and I have prepared the attached memorandum concerning the company's operations.

We trust this gives you the full information you desire. If there are any further questions, we will be glad to attempt to get the answers for you. Please be assured of our deepest appreciation of your cooperation in this matter which we feel is so urgent and timely.

Sincerely yours,

(The information referred to is as follows:)

LINTON M. COLLINS.

MEMORANDUM ON OPERATIONS OF VAN CAMP SEA FOOD CO., INC.,
IN AMERICAN SAMOA

Van Camp Sea Food Co., Inc., is a California corporation with plants located at Terminal Island, Calif., San Diego, Calif., Astoria, Oreg., and Pago Pago, American Samoa. Its chief business is processing and packing tunafish. Its products are sold under the trademark names of "Chicken of the Sea" and "White Star."

Van Camp was awarded a lease to operate a fish cannery owned by the Government and located at Pago Pago, American Samoa, pursuant to invitations to bid issued by the United States Department of Interior in 1953. This invitation had national circulation. The lease granted Van Camp is not an exclusive franchise. No competitor is prohibited from operating a cannery in Samoa. This lease does not involve a subsidy by the Government. All expenses pursuant to activating this plant have been borne by the company.

Van Camp commenced operations in late December 1953. There were, at this time, real uncertainties as to the commercial supply of fish. Their predecessor's operation, involving a substantial investment, failed for lack of this necessary supply of fish. (See Report of a Special Subcommittee of the Committee on Interior and Insular Affairs of the House of Representatives, pp. 12-13, made pursuant to H. Res. 89 of the 83d Congress, Committee Print No. 4, filed with the House in the 84th Cong., following hearings in November 1954, conducted by

Congressman Wayne N. Aspinall.) This report gives information on the history, as well as the political and economic progress of the islands of American Samoa. When Van Camp went into Samoa, there were neither commercial fishermen nor experienced cannery workers there. One of the expressed purposes of this lease with the Government is "to provide for improvement of the economy of American Samoa by developing skills relating to fishing and fish processing among the Samoans, by providing local income through wages, and by insuring a local supply of raw, frozen, and processed fish."

The past 2 years of operating the cannery at Pago Pago have been unprofitable. Van Camp, however, is sufficiently encouraged with its progress to consider continuation of its Samoa cannery because a nominal supply of fish has been found. Uncertainties as to the continuance and adequacy of this supply still exist.

The Samoan has shown that he is capable of applying himself to industrial methods of fish canning and that he has an aptitude which further experience and training will develop.

The prevailing wages of the American Samoa group of islands are predicated upon a survey to determine fair rates and job classifications made for the Department of Interior in 1952 by Research Associates, Inc., a consulting firm of Honolulu, Hawaii. The wages paid Van Camp's approximately 300 employees conform to the wage scale of the government of Samoa employees. They range from 27 cents per hour, for those who clean fish, to as high as $1 per hour for 1 employee, who is a technician, a weighted average of around 40 cents per hour per employee. This wage plan provides for a base scale by job classification with increments to reward service and proficiency. The company has found that it takes from 3 to 5 Samoan workers to perform what 1 continental worker in the United States will do. It is therefore felt that this justifies a lower rate for Samoans.

The Samoans do not seek the minimum wages as provided by the Fair Labor Standards Act of 1938, as amended. In fact, through their fono or legislature, an elected body representing the peoples of the island, a resolution was passed in July 1954, requesting the Governor of the territory through the Department of Interior to "negotiate for exemption of American Samoa from the Wage and Hour Act by virtue of the relatively lower living costs in Samoa. Such exemption will undoubtedly prove itself a desirable measure as well as an attractive industrial incentive." The Samoan Legislature is appealing for this assistance because such legislation will aid in the promotion of a healthy economy in the islands, thereby lessening the burden of the American taxpayer.

The Samoan operation is beset with logistical problems not experienced by the company's California operations. All cans, cartons, oil and the many supplies necessary to fish canning are transported 5,000 miles to the Samoan cannery site. The finished product is then returned to the United States for domestic marketing. The resultant costs are extra costs not usually experienced in normal packing operations. In addition to the extra expenses involved, as cited, is the expense of transporting skilled supervisory personnel and their families to Samoa. Experience has shown the rate of turnover in key personnel to be high, therefore costly.

Van Camp's operations in American Samoa are small and unquestionably will remain so. The total production there at present is about 1 percent of the total volume produced by its plants in California.

ermen.

Van Camp does not contemplate making large profits from this small operation. It plans to incorporate in Samoa and to use its income derived from that plant for developing that fishery and processing plant to a higher level of efficiency. This will mean additional training of Samoans, as cannery workers and as fishermen, and the purchase and maintenance of fishing vessels for these fishThe construction of a shoreside refrigeration plant is also essential to the continued operation of the cannery. This whole program will involve the further expenditure of several hundred thousand dollars on the part of Van Camp. It has been Van Camp's hope since its initial operations there that it will be able to encourage west coast fishermen to operate in the waters surrounding Samoa and deliver their catch to its plant in Pago Pago. One San Diego fisherman experimented with the operation of two fishing vessels at Christmas Island, not far removed from American Samoa, and his operation met with moderate success. When Samoans are trained as fishermen and American fishing vessels will operate in those waters, there will not be the dependency on outside sources, such as Japanese fishermen, for the purchase of its needed supply of tuna.

As reported to the Department of Interior and to the Bureau of Internal Revenue on its income tax returns, the company has suffered substantial losses