associations covered by the Act. Such organizations would then be authorized to bargain, severally or jointly, with one or more purchasers of fish or other aquatic products or with one or more associations of buyers, including area or industrywide associations, regarding the terms and conditions of ex-vessel sales of such fish or other aquatic products, or take such other action concerning such sales or factors affecting such sales, as an association may take lawfully, regardless of whether such organizations act as selling or bargaining agents.

The bill also provides that nothing in the Act, supra, or any other state or local law, shall limit the rights of employee fishermen under the Labor-Management Relations Act of 1947, the Clayton Act, the Norris-LaGuardia Act, or other acts to bargain collectively, or take such collective action regarding the ex-vessel price of fish or other aquatic products to be used as a basis for computing their compensation. H.R. 3955 provides that any agreement between such organizations and buyers or association or buyers, concerning the terms, conditions, and prices of such sales of such fish or other aquatic products, shall not be a violation of any of the antitrust or trade laws of the United States, and that such agreements shall be deemed lawful.

Section 1 of the Fishery Cooperative Marketing Act, supra, provides in part as follows:

"Persons engaged in the fishery industry, as fishermen, catching, collecting, or cultivating aquatic products, or as planters of aquatic products on public or private beds, may act together in associations, corporate or otherwise, with or without capital stock, in collectively catching, producing, preparing for market processing, handling, and marketing in interstate and foreign commerce, such products of said persons so engaged.

"Such associations may have marketing agencies in common, and such associations and their members may make the necessary contracts and agreements to effect such purposes: Provided, however, That such associations are operated for the mutual benefit of the members thereof, ***"

Under this Act groups of fishermen are permitted to established cooperative associations in order to market their products in interstate and foreign commerce effectively. This Act, however, does not grant to the fishermen cooperatives a complete exemption from the antitrust laws.

H.R. 3955 is designed to give unions or other organizations of active fishermen. who are either employee or employer fishermen, a voice in the sales price of fish or other aquatic products. The distinction between labor unions, in the usual sense, and labor unions in the fisheries and their members who would be benefited by H.R. 3955, has to be kept in mind in order to appreciate the significance of this proposed legislation. Labor unions in the usual sense function by bargaining collectively with the employers over wages and conditions of work. On the other hand, labor unions in the fisheries and sometimes include employee fishermen, captains, mates, engineers, and in the past even vessel operators and vessel owners. This intermixed association stems from the community of interest created by the "lay" system whereby each individual on the fishing vessel is remunerated by a share of the proceeds from the catch after each voyage. Hence it is to the mutual advantage of all who share in the proceeds that the catch sells for the highest price which is to improve the economic standards of our fishermen.

In the early period following the passage of the antitrust acts, the courts often adjudged cooperative marketing associations, per se, as illegal combinations restraining trade. The Capper-Volstead Act, passed in 1922, recognized agricultural cooperative associations engaged in interstate commerce. The Fishery Cooperative Marketing Act of 1934, supra, modeled after the CapperVolstead Act, as we have indicated above, recognized fishery cooperative marketing associations engaged in interstate commerce. It provided the machinery, however, in section 2 of the Act (15 U.S.C. sec. 522) for policing these associations, organized under its provisions, and preventing them from monopolizing or restraining trade so that the price of any aquatic product is "unduly enhanced by reason thereof”.

In some segments of our domestic fishery industry, labor unions representing employee fishermen bargain with cooperatives representing vessel owning employers for the minimum price on which the crew's share or wage would be based, and the cooperative bargains separately with a canner or buyer. Where

the fishermen operate the boats as employees of the canners, the unions bargain directly with canners or processors. These are limited examples of many types of ex-vessel price bargaining which prevail in the industry.

Some uniform means for allowing fishermen employee unions to bargain collectively for fish prices which are a significant influence on their members' wages should be developed for certain segments of the fishing industry. An effective right to bargain would be helpful in encouraging more stable industry relations in these segments of the fishing industry.

The economic welfare of the commercial fisherman is dependent upon a wide variety of physical and other circumstances beyond his control. When his wages fluctuate substantially because the price of fish fluctuates, it is natural for him to seek some measure of wage stability. H.R. 3955 is designed to help provide this stability. We are not, however, able to make a definitive judgment as to whether H.R. 3955 will in fact provide such wage stability, or whether it will meet the economic needs of the industry as a whole, or whether the antitrust implications of labor unions bargaining for the price of fish outweighs the needs of these people. We agree, however, with the objective of this bill and we think that in determining whether this approach or some other legislative approach to the problem is a reasonable one the fishermen must be viewed, not in the technical and legal sense, but as wage earners who form an important segment of our economy.

There is at least one segment of the industry in which the enactment of H.R. 3955 would be useful. We cannot say, however, that it would be useful throughout the industry. In the salmon fishery in Alaska, many former union-member fishermen employed by salmon canneries have become vessel owners. Some of these have a very limited investment in vessels financed largely by salmon canning firms that previously employed them. This changed status makes them ineligible to use labor union procedures in bargaining with fish processors over prices for fish. This, in turn, has a bearing on the income of both vessel owner or operator and employee crew members because of the use of the "lay” system. Some of these fishing vessels owners are interested in the enactment of a statutory provision such as this, so that they may continue, together with union-member fishermen who are clearly in an employee-fishermen status, longstanding salmon price bargaining practices. Acting together, the bargaining power of the group would be stronger than when acting separately.

The Bureau of the Budget has advised that there would be no objection to the presentation of this report to the Committee and that the Bureau is opposed to the enactment of H.R. 3955 for the reasons set forth in the reports of the Department of Justice and the Federal Trade Commission on the bill.

Sincerely yours,

STANLEY A. CAIN,

Assistant Secretary of the Interior.

Hon. HERBERT C. BONNER,

U.S. DEPARTMENT OF JUSTICE,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, D.C., June 17, 1965.

Chairman, Committee on Merchant Marine and Fisheries, House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice on the bill (H.R. 3955), to amend the Fishery Coperative Marketing Act (Public Law 464, 73rd Cong., 15 U.S.C.. Secs. 521-522).

This Act now authorizes fishermen when catching, collecting or cultivating aquatic products to act together in associations in collectively marketing such products and to have marketing agencies in common. Such marketing agencies may bargain with and sell the catch to any one of the companies that operate plants or canneries which prepare fish or other aquatic products for market.

The practice in at least some segments of the fishing industry apparently is for fishermen, whether masters or crewmen, to be paid on the basis of the total price paid upon the ex-vessel sale of the catch. These fishermen may use either company owned or independently owned boats.

In the past certain organizations have attempted to act as bargaining agents of the fishermen in negotiating the price to be received for the fish, on the theory

that the money received by a fisherman for his share of the catch constituted wages. Unions are now prevented from doing so by virtue of court decisions and a decision of the National Labor Relations Board which ruled that such fishermen are independent contractors or entrepreneurs and not employees.

The proposed amendment would authorize the inclusion of a labor union as an association and, as an association the union would be able to act as a bargaining agent or as a selling agent in setting the price of the ex-vessel sale of fish or other aquatic products caught by members of the organization.

By authorizing a labor union to be included as an association of “active fishermen whose income is dependent on the ex-vessel price of fish or other aquatic products", the amendment would nullify the existing decisions on union representation of non-employees.

Section 6 of the Clayton Act provides "that the labor of a human being is not a commodity or article of commerce, and exempts from the antitrust laws the legitimate activities of labor unions," which otherwise would be in restraint of trade. Permitting a union directly to fix the sale price of a commodity may constitute a precedent for a far-reaching additional exemption for union activities. The bill also authorizes the reciprocal right of the buyers (the companies that operate the canneries or prepare the catch for market) to act together in bar+ gaining with associations of fishermen concerning the terms, conditions and prices to be paid for the catch.

This reciprocal right is covered in the second proviso of the proposed amendment which reads:

"And provided further, That the making of any such agreement or agreements between such an organization or organizations and one or more buyers or one or more associations of buyers concerning the terms, conditions, and prices of the ex-vessel sales of such fish or other aquatic products shall not be held to be in violation of any of the antitrust or trade laws of the United States, and any such agreement or agreements shall be deemed to be lawful."

Agreements between buyers as to the price to be paid for fish or other aquatic products are per se violations of the Sherman Act, and are not authorized by the present Act which permits only fishermen to act collectively.

The scope of this bill is indicated by the definition of aquatic products which includes "all commercial products of aquatic life in both fresh and salt water, as carried on in the several States, the District of Columbia, the several Territories of the United States, the insular possessions, or other places under the jurisdiction of the United States."

The Department of Justice objects to the enactment of this bill in that it would

(a) be discriminatory in singling out one industry where buyers or associations of buyers can enter into agreements as to the price they will pay for a commodity and be exempt from application of the antitrust laws in so doing; (b) establish the precedent that under special circumstances a union can be an association of independent entrepreneurs and act as a bargaining agent or selling agent in the sale of a commodity produced by its members.

The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the Administration's program. Sincerely,

RAMSEY CLARK, Deputy Attorney General.

Mr. LENNON. Historically, U.S. commercial fishermen have received wages for their work based on a share of the catch. Technically speaking, fishermen are considered employees of the boatowners, and as such, have always been authorized to bargain collectively with their employers concerning working conditions. However, because of this unique system of having shares in the proceeds of the catch, in lieu of wages, they are not allowed to participate in bargaining for the ex-vessel sale of fish, which is ordinarily negotiated between the boatowners and the buyers.

The bill we are considering today is intended to solve this problem by making it clear that associations, which would include both the crewmen and masters of fishing vessels, and buyers would be authorized to bargain collectively on the ex-vessel sale of aquatic products.

Congressman Pelly's bill is identical to his bill of the 88th Congress, H.R. 1821, and is also identical to Senator Magnuson's bill of the 88th Congress, S. 1135. This subject has been considered on several occasions by the Merchant Marine and Fisheries Subcommittee on the Senate side, but before today, hearings have never been held on the House side. It is hoped that the witnesses will make a comprehensive record on this problem facing the fishing industry which will be of great assistance to the committee when considering this legislation.

I understand from counsel of the committee we do have reports from some of the agencies. Some agencies have not submitted their reports.

Mr. Pelly, we will be glad to hear from you, the author of this legislation.

STATEMENT OF HON. THOMAS M. PELLY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. PELLY. I think in the interest of orderly procedure I will make a short statement explaining the legislation as I see it, and then leave it to the later witnesses who are well versed in the procedures of marketing of fish and the legal aspects to go into the ramification of the bill more comprehensively.

With your permission I will read a short statement.

Mr. Chairman and my fellow members of the subcommittee, I appreciate this opportunity to make this statement in support of my bill, H.R. 3955.

This bill would amend the Marketing Act of 1934 so as to make it clear that associations of active member fishermen whose income is determined by the price of and proceeds from a fishing vessel's catch, may bargain collectively with fish buyers as to the ex-vessel sale price per pound or per piece of raw fish as a basis for computing their compensation.

A legal discrimination against fishermen has resulted from interpretations that such collective bargaining by fishermen was in restraint of trade, and since then in excess of 100,000 fishermen have been deprived of effective collective bargaining rights.

Under existing law, it is legal for a cooperative association of boatowners or captains to bargain collectively with individual fish buyers. Such an association as an employer group can deal with the crew's union concerning the price on which a crew's share is based. This legislation would assure to these crews as partners and joint venturers the right to join with the vessel owners in negotiating the dockside sale price of a vessel's catch of fish, and furthermore, the bill would broaden this arrangement so as to permit dealing with more than one buyer or packer and thereby its objective is to bring stabilization of fish prices between different areas.

My bill would continue to make it illegal for a fishermen's union to demand of a fish packer or buyer that he buy exclusively from the union's members. Also, provisions of this bill are permissive in that they do not require a packer to negotiate with anyone. Furthermore, the bill would allow fishermen to establish themselves into different types of organizations to suit themselves and their respective needs.

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As I said, the purpose of the legislation is to bring about stability of prices, wages, and working conditions through collective bargaining throughout the industry.

However, by no manner of means would it create a monopoly in restraint of trade. Rather, it could easily result in holding down prices over a period of time and should benefit the consumer. Product competition would continue and the price of processed fish and fish products to the wholesaler, retailer, or public in the marketplace would continue as in the past to be competitive and governed by supply and demand.

Mr. LENNON. Mr. Pelly, in your concluding paragraph you indicate one time in the past the fishermen had this historical right.

Mr. PELLY. I believe we have a subsequent witness, Mr. Johansen, secretary-treasurer of the Alaskan Fishermen's Union, who can probably describe their former procedures.

I have read carefully the testimony given when this bill was considered in the Commerce Committee of the Senate, and from that I rather gathered this historic arrangement goes back to around 1954 when an unfavorable ruling made it illegal to bargain collectively in this manner.

Mr. LENNON. Hearings were held over a period of time on Senator Magnuson's bill, but there was no action taken on it.

Mr. PELLY. Hearings were held on the west coast in various localities and also here in Washington, as I recall.

Mr. LENNON. Are there any questions of our distinguished colleague?

Our next witness will be Mr. George Johansen, secretary-treasurer of the Alaska Fishermen's Union.

STATEMENT OF GEORGE JOHANSEN, SECRETARY-TREASURER, ALASKA FISHERMEN'S UNION

Mr. JOHANSEN. Mr. Chairman and members of the committee, my name is George Johansen and I represent the Alaska Fishermen's Union.

First let me say I consider it a privilege and a pleasure to testify before this committee. I have had in the past on several occasions testified before this committee and I have found this committee to be both knowledgeable and sympathetic to fishermen's views. I hope I find the committee in the same frame of mind on this particular legislation.

H.R. 3955 will permit independent fishermen to bargain for fish prices through a union. The Senate has held rather extensive hearings on this proposed legislation and the Alaskan Fishermen's Union, together with many other organizations, have filed several briefs and also rendered verbal testimony before the Senate committee. I shall therefore just briefly touch upon a few items which perhaps could be made a little clearer for the information of the members of this committee.

While there have been some problems in certain instances in regard to some unions who tried to limit the buyer to buy fish only from a specified source, we cannot recall that action taken in the Hinton