known as the Fishery Credit Corporation Act. These discussions will deal with the social and economic aspects of the fishing industry as it affects the State of Maine according to the experience and observations on the part of this board.

The fishing industry in Maine was established long before the Plymouth colony was ever conceived. In 1607 a fishing colony was established at the mouth of the Kennebec River at what is now known as St. George. From that time on the industry has developed so that at the present time there are approximately 5,000 fishermen on the coast of Maine. Most of them are small-boat trawlers and handliners, or lobstermen.

The CHAIRMAN. The first ship of our old merchant marine was built there, the Virginia.

Mr. STONE. How is that?

The CHAIRMAN. I say, the first boat in our old merchant marine was built in that Colony, in 1607, known as the Virginia.

Mr. STONE. The small villages, particularly in the most eastern section of the State, depend entirely upon the fisheries. It has been estimated that 80,000 people in the State of Maine rely upon this industry, either directly or indirectly, for their existence.

Since the earliest time in this country, during periods of war as well as times of peace, fishermen have been recruited for Navy service. For generations they have lived on and from the sea, raised their families in the little fishing villages that dot our coast line. Most of the fishermen of Maine live on land that is unfit for agriculture. The people know no other means of livelihood.

The fishing industry in New England represents an investment of approximately $50,000,000 to be considered in connection with an additional investment in cold-storage plants estimated at $1,500,000. Most countries protect the investments of their fishermen and encourage their fishing with cash bounties, or other subsidy. Canada pays to its Atlantic coast fishermen the interest on the fisheries indemnity of $4,500,000 received from the United States.

There has been an era in which the fishermen of Maine were the owners of an industry. To quote the recent articles by Bertram B. Fowler in Scribner's

They caught their fish and brought them to a port where the people owned their own units of processing. They split their fish, salted, and dried them. When they sold, they sold a partially finished product. Then came the change that the modernization of marketing methods has worked. Iced or frozen fillets began to replace the salt fish. Local fish dealers began to buy fish direct from the boats of the fishermen as they came in. The local dealer sold to another dealer in Portland, who, in turn, sold to a dealer in Boston, who sold again to the retail outlets. All had to have a profit. Retail prices remained practically unchanged. Therefore, prices to the fishermen dropped lower and lower, until they were swallowed by production costs and poverty swept a whole section of the population into its embrace. The fishermen were carrying on their backs a vicious system of distribution.

With the steady increase in the centralization of the industry in the larger ports, where mass-production methods obtained and costly plants and equipment became the order, impoverishment of these fishermen progressed to the day when these once sturdy and independent people were forced to ask for help.

In May 1934, the Fisherman's Relief Corporation was incorporated under the laws of the State of Maine as a charitable corporation. Its purpose was to administer grants of funds and bequests from the

Federal or State Government and/or from others for the purpose of making loans to individual fishermen and cooperative groups of fishermen. During that first year of its organization, loans were made to approximately 1,000 fishermen clients, averaging from $50 to $150 each, for the purpose of replacing or repairing outworn or lost gear and equipment.

While there were instances of individuals who received assistance who were unworthy, as is bound to occur in any relief undertaking, yet observation indicates that these were the exception and that, on the whole, the need was definite and the clients were able to provide for themselves and family and make a new start. However, most cases represented an accumulation of indebtedness and impoverishment that does not predicate the possibility of their being able to advance themselves beyond the bare subsistence basis to where they might hope, or reasonably be expected, to repay their obligation to the len ling corporation on these early loans. However, there has been substantial evidence of the desire to repay where conditions have been such that they could, and we have frequent remittances of small amounts in installments which, without question, would be more general were better marketing conditions obtaining.

It was recognized by those concerned with the administration of this corporation that such loans were not a corrective for the social and economic plight of this considerable group of our citizens; that it was, at best, but an attempt to restore to some extent to these people the tools of their trade lost to them either through the hazards of their occupation or the economic depression, and that consideration must be given to the marketing problem if actual rehabilitation was to obtain.

In August of 1934, such an attempt was made to provide at least a temporary market, from the impetus of which it was hoped might develop a permanent cooperative marketing agency that would provide an outlet into the larger marketing centers not available through individual effort by those residing in the more isolated communities on the coast.

Contracts were obtained from the State Relief Administration for the delivery of definite quantities of fresh and canned fish products. Loans were made by the Fisherman's Relief Corporation to a cooperative organization, organized and incorporated as the Maine Coast Fisheries, for the necessary operating capital. Fish and clams were purchased from members of branch units of this cooperative organization from Eastport to Portland. During the first 9 months of its operation, over $250,000 worth of fish and clams were handled by the corporation. While some volume of sales of its products was developed in the open market, the major portion were made to the State Relief Administration; and, with the liquidation of the relief administration, this temporary project was found impractical to continue for the reason that the capital or credit facilities essential to so large an operation were wholly inadequate to provide the essential physical facilities and operating funds necessary to predicate a sound marketing program. Storage facilities would be required to enable the holding of products when a glutted market might result in unduly depressed prices, and sufficient finances under such circumstances to make advance payments to the fishermen so that their families might be provided for.

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Since the liquidation of the Maine Coast Fisheries, the Fisherman's Relief Corporation has sought to assist, through counsel and some modest loans, small cooperative groups of fishermen in isolated communities. Any adequate approach to solving the needs of our Maine fishery for a constructive, orderly marketing program for the small, independent boat fishermen is wholly beyond the present resources of the corporation. Passage of Public, 464 has but pointed the way for the need of further legislation to provide credit facilities for marketing associations, surveys, marketing information, and an extension and educational service similar to that obtaining in agriculture, and which would be available to all producing fishermen qualifying under provisions of Public, 464.

In presenting the arguments on the facts stated, I have developed the following theories: (1) The fishermen of this country constitute line of defense in time of war; (2) the fishermen of Maine depend entirely upon fishing for a livelihood, having no other recourse for earning money on account of their environment; (3) the fishing industry in Maine and New England, by reason of its size and magnitude of investment, forms a vital economic cog in the welfare of the country; (4) passage of Public, No. 464 indicates a recognition of the need for a more orderly marketing and distribution system, particularly with respect to those groups of fishermen in isolated sections where they are no longer an economic factor in an increasingly centralized industry, unless through cooperative action they are able to deliver their products competitively in the larger centers; and (5) provisions of H. R. 7309 recognize the need of credit facilities, and marketing and extension service section for the fisheries in the same way that a similar service and facilities are extended to cooperative marketing organizations handling agricultural products or commodities, and passage of this bill would fulfill a most definite need at this time.

On the first theory, that the fishermen of this country constitute a line of defense in time of war, the first proposition to be discussed is the question of preserving employment for fishermen in this country, thereby enabling them to secure training which is indispensable from a standpoint of national defense. From the earliest days, the fishermen played a leading role in the new country. They formed the nucleus of the War of the Revolution. Just 1 month after Lord North secured passage of an act which prohibited the colonists from fishing, the Battle of Concord Bridge was fought. Guns were mounted on fishing vessels and the Atlantic coast bristled with privateers owned and manned by fishermen. During the last World War, the fishermen in large numbers were recruited for Navy service. The captains and mates of fishing vessels became officers in the United States Navy, and Coast Guard vessels were practically manned entirely by fishermen. Again, during the World War, at the request of the Government, the fishermen kept continuously at their calling so that their products could be used for food for the civilian population, thereby allowing meat and meat products to be shipped overseas to the Army. The fisherman on Georges Bank were time and again imperiled by German submarines; but despite the hazards during those days, fishermen continued to ply their boats to and from the banks.

The fishermen of the Maine coast are direct descendants of those men who fought in the War of the Revolution of 1775. It was these

same descendants who participated in the World War and through whose efforts the food supply of the country was sustained during the World War. In recognition of the services rendered to the United States by the fishermen during the Revolutionary War, the signing of the treaty with Great Britain was delayed until the American fisherman was conceded the right to fish in Canadian waters. The Federal Government granted a bonus to American fishermen, a custom which prevailed for 75 years.

The American fisherman today stands ready to follow in the footsteps of his ancestors and to repeat the activities in which he participated during the World War. He asks of his Government only that protection which will entitle him to earn a livelihood for himself and his family.

Under the second theory, that the fishermen of Maine depend entirely upon fishing for a livelihood, having no other recourse for earning money on account of their environment-for generations the fishermen of Maine have lived on and from the sea, raising their families in the picturesque little villages which abound along the Maine coast. Most of the fishing villages of Maine are in far, inaccessible places. The land is extremely rocky and unfit for agriculture. The only vocation that the inhabitants of these villages know is that of fishing. These little villages have for generations produced fishermen. The people know no other means of livelihood. They could not be removed from their villages and given farms and industrial work elsewhere because they are not fitted by training or nature for such work.

It is estimated that there are 5,000 fishermen on the Maine coast at the present time. Most of them are small boat trawlers and handliners, or lobstermen. They have large families. The smaller villages, particularly in the most easterly section of this State, depend entirely upon fisheries.

Coming to the third theory, the fishing industry of Maine and New England, by reason of its size and magnitude of investment, forms a vital economic cog in the welfare of the country. In determining whether or not the fishing industry should be preserved, and consideration given to the social and economic plight of many of those engaged therein, it might be well to take into consideration. the actual expenditures in New England during the course of a year by the fishing industry and its allied industries, and also the investment that the industry represents. The fishing industry represents an investment in vessels, gear, and equipment of the sum of $50,000,000 and, in addition thereto, $1,500,000 is invested in coldstorage plants. There is expended by the industry each year, by conservative estimate, merchandise purchased as follows: (1) Foodthat is, farm products consumed by fishermen at sea-$1,000,000; (2) repairs on floating equipment, estimated $4,000,000; (3) ice for boats going to sea, at an average of 20 tons per vessel on 400 boats, 30 trips per year, 200,000 tons, $800,000; (4) repairs to gear, twine, hooks, and other fishing equipment, $1,000,000; (5) fuel oil, estimated at 25,000,000 gallons, $1,750,000; gasoline, $1,000,000; (6) tins for 50,000,000 fillets, $500,000; wooden boxes, $500,000; parchment paper, $200,000; (7) paid to fishermen, $25,000,000; (8) transportation, $1,500,000; (9) interest on investment of $50,000,000, at 6 percent, $3,000,000, or a total of $40,250,000. From the foregoing

it must be evident that any industry which shows a valuation in just one section of the country of $51,500,000 and an annual expenditure of $40,250,000 is worthy of considerable thought and a great deal of consideration when its destiny is being determined and the needs of its people engaged therein is involved.

As to my fourth theory, the passage of Public, No. 464: While the passage of Public, No. 464 in June 1934 made it legally possible for producing fishermen to associate for the purpose of cooperatively inarketing their products and thereby promote more orderly marketing with lowered costs to consumer and increased return to producer, much more in the way of constructive legislation is needed. Within a few days now many cooperative marketing men, educators, and other interested will be beating a trail to the little town of Antigonish, Nova Scotia, to learn how Nova Scotia is raising living standards through cooperatives among her farmers, fishermen, and other citizens.

The CHAIRMAN. Where is that?

Mr. STONE. Antigonish, Nova Scotia, maintains a regular extension service among the fishermen and farmers of that section of Nova Scotia.

The CHAIRMAN. When will that be held?

Mr. STONE. That is in July. They have a regular cooperative. school for their own people, but it has become a mecca for a great many educators and people from our own country who are watching the experiment.

The CHAIRMAN. That is very interesting.

Mr. STONE. They are raising living standards through cooperatives among their farmers, fishermen, and other citizens. There are 25 cooperative lobster factories, numerous cooperative fish plants, stores, and credit unions. I am speaking from personal observation, for I was a guest at the university one time last spring.

From a condition of hopelessness and poverty 10 years ago to a condition of returning independence, property ownership, renewed morale is the interesting story of what a vigorous educational and extension department has done to rehabilitate a people through cooperative action. There is very definite need now for the type of educational and extension service as provided in the cooperative marketing section of H. R. 7309. There is definite need for the studies, surveys, and marketing and organizational guidance that this section may provide to cooperative marketing associations, so that through wise counsel at the right time needless mistakes and costly errors in policy may be avoided on the part of such associations.

The extension of cooperative service activities to producing fishermen in the storage, processing, and marketing of their products will, it would seem reasonable to expect, obtain only in that degree in which the service can be performed more efficiently and economically than similar service may be performed by private interests. Cooperative enterprise has no claim to special legal privilege, but it should have equal privilege and opportunity with other forms of ownership and business enterprise. Because the usual banking structure does not at the present time afford the small fisherman or his cooperative organization the credit facilities he needs and that are available to other enterprises ordinarily, provision for a fishery