Senator BARTLETT. Thank you.

Our next witness is Harold E. Crowther, Assistant Director, Bureau of Commercial Fisheries, Fish and Wildlife Service, Department of the Interior.

STATEMENT OF HAROLD E. CROWTHER, ASSISTANT DIRECTOR, BUREAU OF COMMERCIAL FISHERIES, FISH AND WILDLIFE SERVICE, DEPARTMENT OF THE INTERIOR; ACCOMPANIED BY WALTER STOLTING, CHIEF, BUREAU OF ECONOMICS, BUREAU OF COMMERCIAL FISHERIES

Mr. CROWTHER. Mr. Chairman, I have with me Mr. Walter Stolting, Chief, Branch of Economics, Bureau of Commercial Fisheries.

Mr. Chairman and members of the committee: I appreciate this opportunity to appear before your committee to make a statement regarding S. 1135, a bill "To make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends."

S. 1135 would amend section 1 of the Fishery Cooperative Marketing Act of 1934, 15 U.S.C. 521. Some progress has been made over the years in solving marketing problems of fishermen and this act has been an important factor in achieving this progress. There are in the United States about 100 fishery cooperative associations with about 12,500 members. They directly and indirectly account for onefifth to one-fourth of the total volume of fish and shellfish produced each year. Besides processing and marketing the catches of fishermen, they handle at substantial savings, supplies, equipment, and other items used by fishermen in their operations.

Fishery cooperative marketing associations are found in all important producing segments of our domestic fishing industry. They operate in our lobster, groundfish, scallop, shrimp, tuna, and salmon industries as well as in many other segments. They may be found in coastal areas from Maine to Alaska, as well as in many inland areas.

The ownership of the vast majority of these fishery cooperative marketing asociations is vested in fishing vessel owners. However, some of the cooperatives sell capital stock to crewmembers who are employees of the vessel owners.

The Department is well aware of the difficulties which commercial fishermen encounter in their profession. In addition to the risks which they take with respect to natural hazards such as weather, fluctuations in the availability of fish and shellfish, and so forth, this segment of our Nation bears the brunt of a large share of the adverse economic effects associated with poor marketing conditions of its products. Processors and dealers can often offset price difficulties they may have at either end of the distribution chain with corresponding price adjustments at the other end. However, fishermen, being primary producers, are in a very different position. When their catch is landed and offered for sale, it is difficult for them to offset any adverse market. conditions.

In spite of the existence of the Fishery Cooperative Marketing Act of 1934, many fishery cooperatives and fishermen's unions have been involved in cases before the courts and the Federal Trade Commission.

These cases involved charges of violation of the antitrust laws. This same state of affairs has applied to agricultural cooperative marketing associations which are organized under the Capper-Volstead Act. A very informative report which contains some reference to antitrust. cases involving agricultural and fishery cooperatives has been issued by the U.S. Department of Agriculture. It is FCS Bulletin 10 entitled "Legal Phases of Farmer Cooperatives," by L. S. Hulbert, revised and extended by R. J. Mischler.

Since S. 1135 pertains to an enlargement of the immunization from the antitrust laws under the Fishery Cooperative Marketing Act of 1934, we believe that the bill is of primary concern to the Department of Justice and the Federal Trade Commission. Therefore, the Department of the Interior defers to the views of these agencies on the bill.

Senator BARTLETT. Thank you very much. I have no questions. I would only say that the Department of the Interior is demonstrating remarkable agility.

Mr. Levin, do you have any questions?

Mr. LEVIN. The bulk of your statement is devoted to fishermen's cooperatives, and obviously they are a fine thing where they are established. However, this bill seeks to reach those people who do not benefit from a fishermen's cooperative and in areas where, for example, cooperative canning methods had been attempted and later were bought out by the larger canners.

I just say this to differentiate between the cooperatives that now exist and the areas where there is no immediate hope for a cooperative, and this is the void that this bill is, I believe, intended to fill. Senator BARTLETT. Thank you very much.

Mr. CROWTHER. Mr. Chairman, I have a statement on S. 1459, and I am not listed as one of the witnesses on it; so if the chairman would like. I will submit it for the record, sir.

Senator BARTLETT. Yes; we will be glad to place that in the record. Mr. CROWTHER. Thank you, sir.

1135.

Senator BARTLETT. This completes the taking of testimony on S. Before proceeding to the other two bills on the calendar, we will be in recess for a couple of minutes.

(Whereupon, at 11:35 a.m., the hearing was recessed.)

(The following statements were received subsequent to the hearings for inclusion in the record:)

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY, Washington, D.C., May 7, 1963.

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,
U.S. Senate, Washington, D.C.

DEAR SENATOR MAGNUSON: Your committee has requested this Department's comments on S. 1135, a bill to make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends.

S. 1135 would amend section 1 of the Fishery Cooperative Marketing Act of 1934 (15 U.S.C. 521) by adding a new paragraph which would authorize the inclusion of unions or other organizations of active fishermen who are either masters of crewmembers of fishing vessels, and whose income is dependent on the ex-vessel price of fish or other aquatic products, in the category of cooperative fishing associations covered by the above 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 exvessel 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 would also provide 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. Finally, S. 1135 would provide that any agreement between such organizations and buyers or association of 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 establish 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.

S. 1135 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 S. 1135, 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 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.

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 Capper-Volstead 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." There is at least one area in which the enactment of S. 1135 would fill a need that has developed in the last few years. In the salmon fishery in Alaska, many former union-member fishermen employed by salmon canneries have now 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 crewmembers, because of the use of the "lay" system. Some of these fishing vessel 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. We believe that S. 1135, in permitting employee and employer fishermen to organize for the purposes of fixing the ex-vessel price of fish and other aquatic products, would result in an enlargement of the immunization from the antitrust laws under the Fishery Cooperative Marketing Act of 1934 (15 U.S.C., secs. 521, 522). Such an immunization from the antitrust laws may establish an undesirable precedent in relationship to other industries. Thus, while this bill relates only to a situation in the commercial fishing industry, we believe that other segments of the Nation's industries may be affected by such a precedent.

The question is of primary concern to the Department of Justice and the Federal Trade Commission. Accordingly, we defer at this time to the views of those agencies on S. 1135.

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

FRANK P. BRIGGS, Assistant Secretary of the Interior.

STATEMENT BY CHARLES E. JACKSON, LEGISLATIVE CONSULTANT, NATIONAL FISHERIES INSTITUTE, INC., WASHINGTON, D.C.

The National Fisheries Institute is opposed to S. 1135, a bill to make clear that fishermen's organizations, regardless of technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products.

S. 1135 would amend the Fishery Cooperative Marketing Act of 1934 (15 U.S.C., sec. 521) so as to recognize, for purposes of the act, unions or other organizations of active fishermen whose income is dependent on the ex-vessel price of fish or other aquatic products, although the membership of such an organization is composed of fishermen who are either masters or crew members of fishing vessels. The bill provides further that such organizations, composed of fishermen having ownership rights in the fishery products as well as employees, may bargain with buyers of fish or other aquatic products regarding the terms and conditions of ex-vessel sales of such fish or aquatic products.

While employed commercial fishermen are often thought to be coadventurers and entrepreneurs because of the common arrangements for sharing the proceeds of the catch between crew and vessel owner, such is not generally the case. Many times in many, many court cases, crewmember fishermen, when they are subject to direction by an owner or operator of a vessel, have been found to be employees. Many of these fishermen are organized in unions, and they have a common interest in seeing that the catch of fish brought in by fishing vessels sells for the highest possible price. Accordingly, it appears that the subject bill has as its objective permitting employee fishermen, organized in labor unions, to get together with vessel owners, organized in cooperatives, to bargain for the best possible price for the sale of the catch of a fishing vessel. Permitting such action would create a new legal distinction for employed fishermen and unions in the fishing industry. It would set a precedent by permitting employees to participate in and quite possibly determine in a unilateral manner the price level of a fishery commodity. Furthermore, if this precedent were to be set in the fishing industry, there is some question whether the same kinds of legislative requests might come from other segments of our economy.

It appears that the adoption of such legislation would be confusing to the fish industry trade, would encourage price fixing, and further complicate the administration of the antitrust laws.

STATEMENT OF SEAFARERS INTERNATIONAL UNION OF NORTH AMERICA ON REBUTTAL ON S. 1135

We wish to thank the subcommittee very much for this opportunity to file a statement in rebuttal to the reports and testimony of the Federal Trade Commission and the Department of Justice.

We had, of course, anticipated that the Federal Trade Commission, and probably the Department of Justice also, would oppose this bill as government agen

cies have traditionally opposed legislation which cuts down their jurisdiction or restricts the application of the laws they administer. We have never challenged the motivations of the Federal Trade Commission or the Department of Justice in their enforcement actvities in this field, or do we do so now. They enforced the law as they found it, as primarily established by the Supreme Court in the Hinton decision, and it was precisely to get the law changed because of the inequity of its operation that the present legislation was sought.

There were, however, several respects in which we felt the presentations made by the Federal Trade Commission and the Department of Justice should be answered.

In the first place, both the Department of Justice and the Federal Trade Commission took the position that the present law would entirely negate the decision of the U.S. Supreme Court in the Hinton case. This is not accurate. Basically, the complaint of the packers (plaintiffs) in the Hinton case was not that the union demanded a price agreement, but rather that the union demanded that the packers buy from nobody but union members. In striking down this demand, the Supreme Court struck down the whole structure of price agreements. Under S. 1135, it would still be illegal for a union to demand of a packer or buyer that he buy no fish except from members of a particular association or union. We made this statement hertofore, in writing, in our supplemental statement filed at the hearings in May of this year. Counsel for the Association of Pacific Fisheries, in his statement of May 3, 1963, agrees that, as drawn, the present law does not permit such an agreement or monopolization. All it purports to legalize is the price agreement which was struck down concomitantly with the monopoly demand in the Hinton case.

This leads into a second point raised by the Department of Justice. When challenged by Senator Bartlett to produce any evidence of harm resulting from the experience during the years when price agreements were in effect, Mr. Nicholas deB. Katzenbach referred to the fact that the suit in the Hinton case was brought on the complaint of a packer whom, from this, he assumed was being injured. As pointed out above, the packer was ont primarily complaining of the price-agreement demand, but of the demand of the union for a monopoly of supply to him.

This, then, is the answer to the contentions of these agencies that the Hinton case is entirely negated by this law and that the bringing of the Hinton case by a packer was evidence of public harm as a result of price agreement.

The Department of Justice also expressed some concern in oral testimony after the submission of its prepared statement, that because the bill did not include some provision requiring the union to negotiate with any particular packer, that by arrangement between some of the favored packers and the union or cooperative, a disfavored packer might be frozen out. This cannot happen either practically or legally under this statute. The statement, we think, was rather inadvertently made. As we have pointed out time and time again, the statute is permissive only, so that the packer is not required, except as practical circumstances dictate, to bargain with anyone, and is entirely free to select his source of fish or fishermen without even the restraints of impartiality such as are required by the Taft-Hartley Act. The proponent unions originally sought stronger legislation, but this concession was made and agreed to by the proponent unions at the request and instance of the packers and existing cooperatives in the field so that it would be clear that there was no interference with voluntary relationships either currently existing or which might be entered into. Second, as pointed out above, because the bill authorizes a price agreement does not furnish any basis for assuming that it authorizes monopolization, i.e., exclusive buy or sell, agreements. It does not do so. Third, familiarity with the industry would demonstrate that as a practical matter, no such hazard exists or could exist.

After submission of the prepared statement, and response to interrogation by the committee and counsel, Chairman Dixon of the Federal Trade Commission stated, and it is unfortunate that the tone of his voice at the time could not be recorded as well as his words, that the passage of this legislation would result in unionization of the industry. He stated this as though it were sufficient reason to kill the legislation. Maybe it is the policy of the Federal Trade Commission to oppose unionism and collective bargaining. This is certainly not the policy of the U.S. Government nor of Congress. It is the direct, reiterated, and often-stated policy of Congress, as shown by the Taft-Hartley Act, the LandrumGriffin Act, as well as their historical precedents, the Wagner Act, the Norris