TO ENCOURAGE DISTRIBUTION OF FISHERY PRODUCTS

THURSDAY, APRIL 1, 1954

UNITED STATES SENATE,

SUBCOMMITTEE No. 5 ON

FISHERIES AND WILDLIFE OF THE

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee met at 11:09 a. m., pursuant to call, in room G-16 in the Capitol, Senator James H. Duff (chairman of the subcommittee) presiding.

Present: Senators Duff and Magnuson.

Senator DUFF. The subcommittee will come to order.

Without objection, a copy of S. 2802 will be inserted in the transcript of the hearings at this point.

(S. 2802 is as follows:)

[S. 2802, 83d Cong., 2d sess.]

A BILL To further encourage the distribution of fishery products, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 2 of the Act of August 11, 1939 (53 Stat. 1411), is hereby amended to read as follows:

"SEC. 2. (a) The Secretary of Agriculture shall transfer to the Secretary of the Interior each fiscal year, beginning with the fiscal year commencing July 1, 1954, from moneys made available to carry out the provisions of section 32 of such Act of August 24, 1935, an amount equal to 30 per centum of the gross receipts from duties collected under the customs laws on fishery products (including fish, shellfish, mollusks, and crustacea), which shall be maintained in a separate fund and used by the Secretary of the Interior (1) to promote the free flow of domestically produced fishery products in commerce by conducting a fishery educational service and fishery technological, biological and related research programs, the moneys so transferred to be also available for the purchase or other acquisition, construction, equipment, operation, and maintenance of vessels or other facilities necessary for conducting research as provided for in this section, and (2) to develop and increase markets for fishery products of domestic origin. "(b) For the purposes of this section, any agency of the United States, or any corporation wholly owned by the United States, is authorized to transfer, without reimbursement or transfer of funds, any vessels or equipment excess to its needs required by the Secretary of the Interior for the activities, studies, and research authorized herein.

"(c) In carrying out the purposes and objectives of this section, the Secretary of the Interior is directed as far as practicable to cooperate with other appropriate agencies of the Federal Government, with State or local governmental agencies, private agencies, organizations, or individuals, having jurisdiction over or an interest in fish or fishery commodities.

"(d) The Secretary of the Interior is further authorized to retransfer any of the funds made available under this section to the Secretary of Agriculture to be used for the purposes specified in section 1 of this Act."

Senator DUFF. This bill would amend section 2 of the act of August 11, 1939 (53 Stat. 1411) by earmarking an amount equal to 30 percent of the gross receipts from duties collected under the custom laws on

fishery products to be transferred to the Secretary of the Interior, to be used in promoting the free flow of domestically produced fishery products in commerce.

This would be accomplished in two ways:

1. By conducting a fishery educational service and fishery technological, biological, and related research programs; and

2. In developing and increasing markets for fishery products of domestic origin.

We do not need to elaborate upon the reasons for this bill. It is common knowledge that the fishing industry is in a difficult position. This situation is getting worse every year, due to less plentiful catches, depletion of fishing grounds and the need for improved techniques. We will hear from the author of this bill, Senator Saltonstall, and from industry about the urgent need for some type of remedial legislation. I have been advised this morning by the Department of Agriculture that the Department has reconsidered S. 2802 in the light of new information which has been brought to its attention, and that the Department now will send a new recommendation no later than tomorrow.

For that reason, Mr. Wells will not appear for the Department of Agriculture this morning.

The Department of State is concerned over the possibility that section 2 (a) (2) might authorize the use of funds to encourage exports of fish and fishery products by the payment of export subsidies. The Department observes that any such system of export payments tends to create uneconomic trade patterns and increases governmental intervention in the conduct of foreign trade. The Department feels that such export payments lead to retaliatory actions by other countries prejudicial to the overall economic interests of the United States and creates friction and ill will in our relations with other countries.

The Department states that affected countries have protested vigorously in the past that export payment systems disrupt their normal trade in their markets and seriously impair their foreign exchange earnings.

As presently drafted, the bill would not allow such payments, in my opinion.

The Department of Interior is represented here and we will hear their views. The other agencies have no objection to the measure. Without objection, agency comments will be inserted in the transcript at the conclusion of Mr. Suomela's statement.

I would like the views of the industry on the following matter. It is imperative that we realize that in certain techniques now in use, the spawn beds of our fisheries are being destroyed. We must develop not only techniques for catching fish but, also, techniques that will increase our supply so that there will be more fish to catch. If the industry has suggestions upon how this can best be done, I would like to include this phase in the record.

We shall first hear from the sponsor of this bill, and other Senators, then from the Department of Agriculture and representatives from the industry.

Senator Saltonstall, we are most happy to receive your comments upon this bill.

STATEMENT OF HON. LEVERETT SALTONSTALL, A UNITED STATES SENATOR FROM THE STATE OF MASSACHUSETTS

Senator SALTONSTALL. Thank you, Mr. Chairman, and members of the committee. Mr. Chairman, this bill was introduced by a number of Senators, as is shown on the title page. I would state that Senator Payne of Maine is here to speak for himself and Senator Smith of Maine is here to speak for herself. Senator Green is also here to speak on this subject.

I want to say that my colleague, Senator Kennedy of Massachusetts, because of prior engagements which he had made before this hearing, said he could not be here but he wishes to associate himself with me as the other Senator from Massachusetts, and as a sponsor of this bill, to the fullest possible extent. While I will not say that he agrees with everything I say in my brief statement, I believe that he does and I hope that he does, because we worked together on this bill.

Also I would respectfully state that Mayor Ben Smith of Gloucester, which is our great fishing center, is here to testify and interest himself in this bill.

Senator MAGNUSON. May I also say for the record that Senator Kennedy, who is unavoidably absent, spoke to Senator Duff and myself about this matter and expressed great regret that he could not be here today.

Senator DUFF. I intended to put on the record that he had made that statement to me.

Senator MAGNUSON. I also received a call from Congressman John W. McCormack of Boston who is in a House meeting, but he wants to associate himself completely with you on this matter.

Senator SALTONSTALL. Thank you.

Since I have come here, Congressman Edward J. Robeson, Jr., from the First District of Virginia, and several other gentlemen have spoken to me on this.

There are 19 witnesses listed and, Mr. Chairman, I have a prepared statement which, with your permission, I will read and then I have several letters that I would like to put in the record.

I have also a statement from Mr. Edward W. Allen of Seattle, Wash., whose Senator is sitting on the committee, who expresses himself in favor of our bill.

I would like to add one small amendment, which I will put in the record at the proper point.

Mr. Chairman, I welcome this opportunity to appear in support of S. 2802, a bill which embodies the long, hard thought of many people deeply concerned about the future of the fishing industry in the United States.

In recent years the average annual catch of the domestic fishing industry has varied between 4 and 5 billion pounds of fish and shellfish worth to the fishermen $350 million more or less. Directly and indirectly, the industry employs 550,000 people. Throughout the United States, however, the industry is in an increasingly difficult position. Decreased catches, fluctuations in supply, and a lack of improved techniques have all harmed this basic American industry. Rising imports have subjected it to particularly severe pressure.

As a means of overcoming these difficulties, the basic recommendation of all recent studies, including those authorized by Congress, is an increase in research and development activities. The fishing industry, however, is one composed of individuals and small companies lacking the resources necessary to carry on these activities on a longrange basis. The Fish and Wildlife Service of the Department of the Interior is already engaged, on a scale severely limited by inadequate funds, in conducting commercial fisheries research. Recent studies have therefore also recommended the expansion of Fish and Wildlife Service activities to include additional badly needed research and development projects. But an expanded, long-range program requires an assured source of additional funds supplementing current appropriations.

Because the industry's difficulties so largely stem from competition by imports, an appropriate source of supplementary funds for research and development is the revenue derived from those same imports. The earmarking of a portion of this revenue would go far toward meeting the fishing industry's most urgent research and development needs.

I recognize, of course, that any proposal to earmark a source of revenue is subject to certain difficulties from a budgetary point of view. But in the case of import duties, section 32 of the act of August 24, 1935, sets aside for each fiscal year an amount equal to 30 percent of the gross receipts collected under the customs laws during the preceding calendar year. Thirty per cent of import revenues from fishery products are thus already earmarked, but not for the benefit of the fishing industry. On the contrary, the act of 1935 turns these funds over to the Secretary of Agriculture to be used to subsidize the export of agricultural commodities, to make support purchases of such commodities, and to make production payments to farmers.

The Secretary of Agriculture does have authority, it is true, to use a small portion of section 32 funds for the benefit of the fishing industry. This authority derives from the act of August 11, 1939. The 1939 act authorizes the Secretary of Agriculture to use not more than $1.5 million per year of section 32 funds to purchase and divert surplus fishery products for distribution through relief channels. It also permits him to transfer to the Secretary of the Interior $75,000 to conduct a fishery educational service and $100,000 to develop and increase markets for fishery products of domestic origin.

In recent years, the funds for a fishery educational service and for market development have been regularly transferred, but no section 32 funds are available for technological and biological research.

I would say there, Mr. Chairman, very briefly, that it is my understanding that the Secretary of Agriculture, Mr. Benson, with whom I talked the day before yesterday on the telephone, and my assistant spoke with him and saw him quite at length, has written a letter to the committee on the subject, and while I have not seen that letter I believe it is forthcoming.

Senator DUFF. Yes. That is correct. He may have modified his position and that will be put in the record at a later point.

Senator SALTONSTALL. Thank you.

I talked to the Secretary of the Interior who, I believe, is substantially favorable to this bill, although again I have not seen his letter.

Since enactment of the act of 1939, gross receipts from duties on fishery products have increased enormously. In 1940 the total amount was $4,772,428; by 1952 it had increased to $11,982,000, an increase of more than 150 percent. During this same period the value of fishery imports increased from $40 million to over $200 million. The domestic industry, in the meantime, by voyaging farther and farther afield at greater and greater expense for every pound of fish caught, has barely managed to hold the share of the market it had at the beginning of the period.

It is thus evident, Mr. Chairman, that during a period when the domestic fishing industry has been increasingly in need of assistance in meeting competition from abroad, it has been making increasingly large indirect contributions for purposes unrelated to this need. S. 2802 is aimed at correcting this plainly unfair situation.

To accomplish this, the bill would amend the act of 1939 so as to require the Secretary of Agriculture to transfer to the Secretary of the Interior every year, from the funds already earmarked under the act of August 24, 1935, that portion derived from the duties on fishery products. The Secretary of Agriculture would still retain power to make support purchases of surplus fishery products under section 1 of the 1939 act, should it ever be deemed desirable to exercise this authority. S. 2802 does not affect this authority in any way. That is the authority under section 1 of the 1939 act.

In addition, the Secretary of the Interior would be given power under section 2 (d) to retransfer funds made available under the proposed bill to the Department of Agriculture for this purpose, but this would be an emergency power invoked, if at all, only at rare intervals.

The remaining funds (ordinarily the entire amount) would be used by the Secretary of the Interior to conduct a fishery educational service and fishery technological, biological and related research programs and to develop and increase markets for fishery products of domestic origin. In carrying out these programs, the Secretary of the Interior would cooperate with other agencies of the Federal, State and local governments and with interested private organizations and individuals.

In this connection, Mr. Chairman, I would like to suggest what seems to me a sound proposal but one that is not covered by any provision of the bill as it now stands. This proposal is the outcome of discussions with spokesmen of every major segment of our fishing industry from both coasts and the gulf. It is that the bill include provision for the establishment of an industry advisory committee of individuals familiar with the problems of our domestic fishing industry to be selected by the Secretary of the Interior. I hope that your committee will consider an amendment to the bill along these lines.

To summarize, Mr. Chairman, the basic effect of S. 2802 is to increase the amount transferable by the Secretary of Agriculture to the Secretary of the Interior under the act of August 11, 1939; to establish as the measure of the amount transferred 30 percent of gross receipts from import duties on fishery products; and to add technological and biological research to the purposes for which the Secretary of the Interior may use the transferred funds.