high and so did not have that condition, but it developed after the war

was over.

Mr. FORAND. This is not a seasonal unemployment?

Mr. BATES. Not at all.

Mr. FORAND. It is a development of a particular situation of which you speak.

Mr. BATES. Yes.

Mr. FORAND. Thank you.

The CHAIRMAN. As I understand it, Mr. Bates, the people you represent are worried about what may happen to them over in Geneva as practically all sorts of fish are on the agenda to be considered over there, I understand.

Mr. BATES. That is right. As I say, with an inventory in the year 1939 of 29,000,000, and in the year 1946 of 152,000,000, you can well understand the difficulties the fishermen have in disposing of the fish. The CHAIRMAN. Well, now, I asked you a while ago where the price of fish is fixed. You said at the wharf. Does Gloucester fix the price of fillet for the entire New England section?

Mr. BATES. Well, they have to go in competition, of course, with every other type of fish, and the price is set at whatever we can get in the open market. But when the inventories build up, they have to come down in price to dispose of the fish. It is the old economic law of supply and demand and what you can get for it.

The CHAIRMAN. The imported fish comes through what ports? Mr. BATES. The Boston port, the New York port, and so on. The CHAIRMAN. They are quickly reflected up in New England in the matter of domestic prices.

Mr. BATES. And also the availability of the local fishermen to dispose of their fish in the market, instead of piling up in storage. The CHAIRMAN. We thank you.

Mr. BATES. Mr. Thomas Rice represents the Massachusetts Fisheries Association. He is the executive secretary, Mr. Chairman, and he is one of the best.

Mr. RICE. I would like to give way to Mr. Fulham at this time.

STATEMENT OF THOMAS A. FULHAM, REPRESENTING THE FEDERATED FISHING BOATS, OF NEW ENGLAND AND NEW YORK

Mr. FULHAM. I will only take a few minutes, Mr. Chairman, perhaps 6 or 8.

Most of what I was going to speak on has been covered pretty much in questions in the past.

The Federated Fishing Boats is an association for approximately 60 large trawlers operating principally from the port of Boston, with a fishing potential of about 350,000,000 pounds.

I am also, myself, engaged in the wholesale fish business, being connected with the Haskins Fish Co., and am a producer of fish and a processor.

The question was asked just a short time ago: How is the price arrived at? I will take just a minute to describe that.

The New England Fish Exchange was established by court decree, Federal court decree, in 1919, I believe. I could be wrong on that date. It has been operating ever since. It has operated in this manner: A boat arrives at the fish pier.

On a large blackboard the total amount of fish it has hauled is noted. The fish is then handed over to an auctioneer standing on a large platform and offers the fish for sale to the buyers who are assembled below.

The fish is sold to the highest bidder.

That is a very sensitive market.

It reacts almost entirely to what is happening. The price of fish is not fixed. It would be absolutely impossible to fix it, because there are anywhere from 39 to 45 wholesale firms bidding on that fish.

Mr. COOPER. I did not understand that. What did you say about a decree in 1919?

Mr. FULHAM. I think it was in 1919; yes, sir.

Mr. COOPER. What was that?

Mr. FULHAM. At that time, if I remember correctly, there was evidence of collusion between the boat owners and the operators and the fishermen.

Mr. COOPER. Evidently I must have misunderstood you. I thought you said there was a court decree.

Mr. FULHAM. There was. The Federal court established this exchange to do away with the individual proposition that had existed prior to that time.

That exchange has existed since that day to this.

Many times persons not interested in the exchange have requested it be investigated or that all sorts of things were wrong with it. It has been investigated many, many times, and it still exists in the form in which it was established in 1919 as the most equitable method of arriving at a price for fish.

Mr. REED. As I understand it, prior to 1919, certain groups interested in the price of fish entered into collusion. The result was you had an unstable and unpredictable market.

Mr. FULHAM. That is correct.

Mr. REED. The court after a suit rendered a decree that established the present exchange to stabilize the market.

Mr. FULHAM. That is very true.

I will give you an example of how that works, if I may. I may have an interest in a boat. I may also be a wholesaler.

When that fish lands, the fish is turned over to the exchange to be sold, and I cannot take any fish without buying it through the exchange in competition with other interested bidders.

Another question was asked on the price of fish going up. A year ago at this time, the average price of haddock was 14 cents out of the boat. This past week the average price of haddock out of the boat is 64 cents.

One year ago, or a little later than that, I should say in July of last year, I know a wholesale firm which sold a carload of frozen fillets for 39 cents. The last sale on carload lots I have heard of was at 24 cents. There is a marked decrease in that.

Actually the price of fish followed the price of poultry, beef, cheese, eggs, and foods of that group, protein foods, that are directly competing with it.

In relation to prices before the war in those particular products and prices existing now, cheese is no higher than they are.

The reason why there was tremendous impetus given to the consumption of fish during the war was because meat was in short supply.

Cheese was in short supply. So were eggs. People turned to fish, and they drove it to prices that were practically never thought of before the war.

But I assure you gentlemen that that is rapidly coming down.

The CHAIRMAN. Let me ask you this question. I think Mr. Hart testified that in Canada and in Iceland and the Maritime Provinces, the fishermen are beneficiaries, for instance, of certain subsidies in the way of building ships or trawlers; rather, plants ashore, freezing plants, and so forth.

Do you know whether the American fishermen enjoy any such assistance from the Government?

Mr. FULHAM. The American fishermen enjoy no subsidy whatsoever, to my knowledge, from the Government.

As a matter of fact, it is even difficult at times to establish experiments or experimental stations to improve our fish. There is no Government assistance I know of in any way in the fisheries, at least around the port of Boston and in New England, nothing on the building of boats or the purchase of gear or oil.

The CHAIRMAN. Freezing plants.

Mr. FULHAM. Freezing plants. They are all privately financed. Mr. COOPER. Mr. Chairman?

The CHAIRMAN. Mr. Cooper.

Mr. COOPER. I believe that you said that the price of fish to the consumer followed beef and pork and other similar food products, is that right?

Mr. FULHAM. It has in the past, sir. That is not a historic pattern. However, in determining whether or not our company should build an inventory on frozen fish in the freezer, we take into consideration the fish which is coming in from foreign countries.

We take into consideration what the availability will be. That is, whether or not the boats will catch a lot of fish. We think things of that nature influence it.

The third thing we look at is poultry. For some unknown reason, the price of fish follows up and down the poultry price. I do not know whv.

Mr. COOPER. If poultry, beef, and these other products are not affected by the trade-agreements program, why is the fish so much affected?

Mr. FULHAM. Well, of course, the person who determines the price of anything is the woman who goes to the store. If she is willing to pay, as someone said a short time ago, 51 cents a pound for haddock fillets, that is what the price will be.

The original processors, realizing she will pay 51 cents, will bid onfish coming from boats more avidly than they would if they knew she had a sales resistance point of 49 cents.

Mr. COOPER. Well, of course, I know the customer's sales resistance has an important part in it, but that does not control it entirely. Mr. FULHAM. That is right.

Mr. COOPER. If she goes to the market and she has to buy something to eat for her family, she has to pay the price charged her. Mr. FULHAM. In that regard, you can always say that she is presently paying 99 cents in some places for steak, too.

Mr. MILLS. Mr. Chairman, permit me to ask one or two questions of this witness.

I will refer back to section 303 of the tariff act. Certain provisions were put into the tariff law by the act of 1930.

You refer to the fact there are some subsidies paid by other countries for their fishermen, with whom our fishermen must compete. Mr. FULHAM. That is correct, sir.

Mr. MILLS. Do you have any positive proof that there is this subsidization?

Mr. FULHAM. Well, I have a note here which states that Canada grants $100 per ton subsidy in shipbuilding.

Mr MILLS. Have you or anyone representing your concern made known these facts to the Treasury Department with a request for a countervailing duty?

Mr. FULHAM. When we appeared before the Committee on Reciprocity Information, there was a member of the Treasury Department there, who no doubt heard our testimony.

Sec

Mr. MILLS. That is not the procedure at all. The Committee on Reciprocity Information has nothing whatsoever to do with it. tion 303 gives to the Secretary of the Treasury exclusive jurisdiction in determining whether the facts warrant the countervailing duty.

I have been amazed at these industries which have come before the committee, testifying day after day of injury resulting to the industry itself from some action on the part of the foreign government, yet no one within any of these industries has ever tried to utilize existing law under which protection can be had.

Mr. FULHAM. Yes, sir.

Mr. MILLS. Someone has been derelict in his duty in some of these industries in not making a case to the Treasury Department if the facts justify the representatives of these industries coming before this committee and complaining on that basis.

I would suggest that some of these people read section 303 of the tariff act, if they have not done so already.

I have just one question further, Mr. Chairman.

The reciprocal trade agreements, as pointed out by Mr. Cooper a few minutes ago, reduced the tariff on the type of fish produced in New England by 62%1⁄2 cents per hundred, within the quota of 15,000,000 I believe it is. There was no reduction whatsoever on imports in excess of that quota.

Would the restoration of this duty of 621⁄2 cents a hundred materially affect the fish industry which now derives $6 and $7 a hundred for its fish from the ships?

Mr. FULHAM. Yes, sir. The restoration of any duty whatsoever would assist.

Mr. MILLS. To what extent?

Mr. FULHAM. Actually, in order to place our fillet producers on a parity with Halifax, Nova Scotia, on haddock you would need a duty of about 5 cents a pound and on cod about 6 cents per pound, to equalize the cost of production in Boston and Halifax, Nova Scotia. Mr. MILLS. In other words, our friends back in 1930 did not treat you right in the establishment of this duty of 21⁄2 cents. They did not make it high enough.

Mr. FULHAM. Actually, you must remember then, sir, that at that time we paid $2.80 a hundred, $3 a hundred, $3.10 a hundred; whereas it is 6, 7, 8, with our costs in these days.

For example, the labor cost for producing a pound of fillet is approximately 3 cents today, where it was approximately 1%, cents before.

Mr. MILLS. What is the labor cost for producing a pound of fillet in Canada? Has it not materially gone up over that period of time? Would I be correct in assuming it has gone up in that period of time? Mr. FULHAM. Just one moment, sir, if I may. I will leave those figures to Mr. Rice, who will follow me, if I may.

Mr. MILLS. Let me desist then from any further questions.
I will ask Mr. Rice on that point.

Mr. REED. This question came up here in regard to the price of fish following that of poultry. Of course on poultry the tariff duty was reduced under the trade agreements. I see here that fowls, geese, turkeys, and guineas went from 8 cents to 4 cents per pound.

Then there are birds, dead, dressed or undressed, freshly killed or frozen, chickens and guineas, 10 cents to 6 cents a pound; and ducks and geese, 10 cents a pound to 6 cents a pound.

Others, except turkeys, went from 10 cents to 5 cents a pound.

On turkeys we had a very distinguished member of this committee who frantically held on before the committee and relieved turkeys from any reduction.

This may account for the ratio as between the price of fish and poultry.

Mr. FULHAM. I think at the time I mentioned, the price of poultry went up and down depending upon the availability of beef, and the price of fish followed pretty much the same way.

Mr. MILLS. Mr. Chairman, just one more question, if I may.

On this cost that we discussed a moment ago, is it not a fact that you are now utilizing machinery in the production of fillets that you did not have in the Tariff Act of 1930 when it was written?

Mr. FULHAM. To the best of my knowledge, there is one machine operating that is cutting fillets. There are as many men standing by that machine as would be necessary to cut those fillets by hand.

Mr. MILLS. You mean the use of the machine has not reduced the cost?

Mr. FULHAM. Not the labor cost. You must understand that from the time that fish comes out of the water until it gets into the consumer, we are very highly unionized.

Mr. MILLS. I am deriving my information from this same article. in the Saturday Evening Post referred to by Mr. Cooper.

Mr. FULHAM. That particular article, sir, indicates that under an ideal situation, the labor cost of producing the fillets would be less. I mean, if they could fit the number of men with the need.

Mr. MILLS. Could that ideal situation be developed?

Mr. FULHAM. It could be, except the initial price of one of those machines is approximately a million dollars.

Mr. MILLS. Do you think it is the responsibility of the Federal Government to maintain an industry in a high-cost operation when there is a way of getting around that high cost of operations?

Mr. FULHAM. That comes into a social consideration which I did not intend to touch on, but I will.

Mr. MILLS. You do not mean it is socialism for the Government, do you?

Mr. FULHAM. Oh, no. I said a social consideration.

Mr. MILLS. I think it is an economic question all the consumers in the United States are very much interested in.

Mr. FULHAM. It is, sir, to be sure. But you must also consider that these foreign countries, we will say, Iceland, England, Denmark,