be entirely unable to handle yellowfin intended for exports. They would, in essence, be completely shut out because 90 percent of yellowfin for export were ship frozen goods held by the ship freezers section of the Skipjack & Tuna Fishery Association. The intention of the Skipjack & Tuna Fishery Association is not known. Present action seems to be court and gain the goodwill of the Skipjack & Tuna Fishery Association. Since there is no way out but to ask them to join the All Japan Freezers Association.

Those in the the first place who were not too keen in carrying out the present problem of adjustments in the shipment of yellowfin, demanded and brought about the indefinite postponement of restrictions concerning shipping quotas.

Things turning this way, the problem now would be whether or not to brush aside the shipping quota and establish only an export quota. Although voices were heard from a section of the business firms to have this vigorously carried out, the fishery agency began to show its opposition. The fishery agency, up to this time, had agreed to establishing a shipping quota which was conditional upon the establishment of an export restriction.

Again, those business firms which held only meager holdings of past showings in the exports of yellowfin started giving their disapproval. In summary, the arguments in favor of the necessity for the restrictions were based on personal benefits which is the reason for its ineffectiveness. Unable to pacify the differences, the question of restrictions seems to have been shelved.

Red signal on exports of loin and disks to the United States

During mid-June when the trade circles were drunk with the excellent situation of albacore exports, preparations were steadily being made in the United States to cast cold water over their heads. This was the restrictive movement in the United States against the imports of Japanese loin and disk tuna.

Up to the present, loin and disk tuna was successful, ever since its trial production several years ago. With the prosperity of today's several thousand tons exported annually, the byword usually being reiterated was, “instead of exporting frozen round tuna, since we can add processing charges, it would be profitable for us and for United States packers by doing away with high labor costs." This meant to manufacture canned goods in the United States with cheap Japanese labor.

A very good story, but on account of this there would be some who would be hit hard. One of these being canned factory laborers in the United States, and the other being those packers in the United States who, by various reasons, are unable to import loins and disks. The United States cannery laborers, especially the labor unions in southern California, were from the first strongly opposed to the imports of loins. They contended that if such loins and disks should become imported in large quantities to replace rounds, the result would be less work for them and more unemployment.

However, the situation changes when it pertains to areas other than California. For example, in the northwestern areas such as Seattle where the principal manufactured article is canned salmon, nearly all of these factories were placed in a situation where they had to close down during the offseason. During such shutdown periods, if purchases were to be made of round or loin tuna from Japan, the workers would be able to continue working and it would be more profitable for the manufacturers. Needless to say, if by importing rounds there would be more work to do, insufficiently equipped to process round tuna. Again, they would not possess the cash reserves to carry at all times the necessary personnel which would be required. Thus, at any cost it must rely on loin tuna. The situation is the same for the eastern canners principally canning fruits.

Under these various circumstances, Japanese trade circles have been strictly prohibiting the exports of loin and disk tuna to California. Their main customers have been in the northwestern and eastern States and Puerto Rico.

However, this would be contested by the California packers who are unable to make purchases of loin and disk tuna. Thus, they would have to pay more for high labor costs as compared to the packers in the other areas who would benefit from the imports of loin and disk tuna in carrying out the so-called spare-time work in the manufacturing of canned tuna. In other words, in spite of the principal product of the California packers being tuna, the result would be that they would be taken in by the salmon and fruitpackers of the other areas which is unbearable. Because of this situation, for some time the California canners and laborers had been waiting for a chance to set the spark burning on the restriction movement against imports of Japanese loins and disks.

Agreed price cut-cause for lighting of fuse

Unfortunately and at a very bad time the Japanese trade circles, completely without any preparation, unofficially decided on the following resolutions:

1. To restrict loin and disk tuna under the export control law identical with the round albacore.

2. The f. o. b. per ton check price on this to be:

3. Separately from the check price, and same as heretofore, to establish an agreed price to conform to prevailing prices. Also, future agreed prices for the time being to be as follows:

The computation ratio for the yellowfin loin and disk against rounds to be 1 to 1.

The above news was circulated in California and became a matter of great consternation. The fact that the agreed price was decreased as much as $100 a ton was charged by California packers as only adding cheap Japanese labor on to the $270 a ton f. o. b. check price for round frozen albacore. When seen from this angle the price of rounds is comparatively high. The fact that the yellowfin computation ratio of 1 to 1 was made, clearly indicated that the plan openly favored loans. The above factors greatly irritated the Californians who suddenly began to increase their voices to restrict imports of loins.

At any rate, California is a precious customer of Japanese round albacore with contracts for shipments in August and September still remaining. If the exports of rounds, because of the fracas concerning loins, should be stopped, them both capital and interest will be lost.

Thus, the Japanese tuna industry hastily retreated and rejected the previous plan with a decision:

1. Not to establish a check price for the time being.

2. The computation ratio of yellowfin to be returned to a clean slate. matter of course since yellowfin export restrictions was aborted).

3. Fifty dollars for albacore and $30 for yellowfin to be added to the former mentioned prices respectively.

Once the tire starts burning it is not easily quelled. If matters are jumbled up things may develop into an uproar and into a state of affairs where cancellation of contracts may really be made. Under such circumstances the opinion of the industry in Japan has become divided. The following is some views expressed by the industry:

1. There is a necessity to take voluntary restrictive measures in pechibiting loin exports.

2. To raise agreed prices still further, and this may become settled only by bringing it up to the former price level of $700 per ton.

3. Even at the present agreed of $650 a ton fer albacore loins, the northwestern earners are not buying, saying it is too high. Therefore, even at the present level of prices, it is believed that the fruits of self-discipline cannot be attained. While each theory has it own merits and demerits, that there is a serious red signal being raised against loan exports to the United States is true.

Although general opinion stresses the need to start concrete plans to cope with this situation, as it must be made by an industry which is suffering internal complications, it would be difficult to predict what kind of plan would be forthcoming from them. Be that as it may, since it is being said that leins and disks will become the hope of the frozen tura industry, it is wished that careful measures be considered as much as possible. This is especially so at the present because various areas in the United States are equipping themselves to handle Japanese loins and disks. It is said that after next year they are seċeduled

to go into full operation. For some time to come we must make an effort to gain the confidence of the Californians and prepare for developments in the future.

Remarks: F. E. Booth, 400 tons; Washington Fish & Oyster, 345 tons; Pan Pacific, 210 tons.

1. Figures have been taken from the ones having been completed and reported to the Frozen Tuna Export Fisheries Association.

2. B. C. Packers has a contract for 800 tons separately, but destination is not made clear.

3. Loin disks are computed quantities based on rounds.

4. 180 tons sold to CRPA by Tokyo Shosha contracted for by Wilbur Ellis.

APPENDIX 3

CANNERY WORKERS & FISHERMEN'S UNION,
San Diego, Calif., November 8, 1957.

LEONARD R. LINSEN MAYER,

Associate Director, Office of International Labor Affairs,
Department of Labor, Washington, D. C.

DEAR SIR: In the course of our conversation while I was in Washington a few weeks ago, I promised to give you a brief history of the tuna-fishing industry in the postwar years, an analysis of the economic difficulties of the industry, their origins, and what I feel might be done in a practical manner to arrest the decline of this industry and direct it toward a normal, healthy growth consistent with the progress of the general economy of the Nation. This follows:

World War II was a disruptive force of major importance to our industry, as well as to others. Most of our long-range tuna clippers were enlisted by the Navy for service in the South Pacific theater. In many instances, the crews went with the vessels because of the nature of the emergency, and were enlisted later. This class of vessel proved to be so useful to the Navy in the far reaches of the Pacific that it built 28 for its own use during the war (they were called YP's) besides those of our own that had been conscripted.

At the end of the Pacific war, the vessels taken by the Navy, except those lost in action, were returned to their owners, and the YP's were soon declared surplus and made their way into our fleet. The skilled personnel returned with the vessels, and the productive capabilities of this fleet grew rapidly between 1945 and 1949 from these causes.

The market for canned tuna in the United States grew more rapidly during these years than did the productive capabilities of the fleet. You will remember that there was a general shortage of protein food in the world during the immediate postwar years and that this was also true in the United States. With the release of the economy from price-control restrictions, prices of scarcer commodities increased substantially and generally. This was true of tuna at the ex vessel frozen-tuna level, the wholesale canned-tuna level, and at the retail canned-tuna level. This created general prosperity among the canners, boatowners, and fishermen, as it did in the general economy.

The fishermen plowed back the earnings of these prosperous years, formed partnerships, and became boatowners, this creating more jobs for fishermen. The long-range tuna clippers have always been substantially owned by the men who operate them, rather than by the canners who buy their catches, for the simple economic reason that owner-operated vessels produce tuna at a cheaper cost per ton of production than do clippers manned by hired crews. The prosperous condition of the fishery continued through 1949, 1950, and into early 1951. The fishermen kept plowing their earnings back into new vessels, and the fleet grew as it tried to keep pace with the growing market. As a matter of fact, the fleet continued to grow through 1951 and into early 1952, even after the economy of the fleet received a severe setback in 1951, for the reason that it takes from 9 to 18 months to complete a tuna clipper from the time that a building contract is let.

A tabulation of the number of vessels in the fleet and their combined carrying capacity for each year from 1947 to date is given in appendix 1. The estimated consumption of canned tuna in the United States from 1947 to date is given in appendix 2.

One of the reasons for this postwar prosperity in the industry was that the tuna fleet of Japan had been substantially destroyed in the last months of the Pacific war and there was little or no competition in this market. This situation was altered as rapidly as possible by the United States Government in the postwar years-in the first instance to provide food for a hungry Japan, and in the second instance to earn dollar exchange for an economically exhausted Japan which was turning from being a vigorous enemy to being a badly needed ally.

Until 1948, all of the product of the rapidly expanding Japanese tuna fleet was needed to feed Japan. In that year, SCAP permitted a small export of tuna to the United States, and in 1949 a larger amount. By 1950, the Japanese tuna industry had recovered its prewar productive capabilities and was prepared to reestablish its position in the United States canned-tuna market.

The tariff situation in which it found itself in 1950 was much better than it had been in 1941. In 1943, the 45 percent tariff on tuna canned in oil-then the only tuna commodity in world trade in a substantial volume-was cut to 221⁄2 percent ad valorem in a trade agreement concluded with Mexico, although Mexico had never been a substantial supplier of tuna to this market nor did it become so by reason of the concession thus made to it.

The American industry was keeping close watch on the growing industry in Japan. In late 1948, during 1949 and early 1950, we, along with other parts of the industry, made numerous representations to the Department of State, the Committee for Reciprocity Information, and other instrumentalities of the tradeagreement machinery of the Government to return to us some part of the protection we required to compete with the cheap labor of the Japanese.

In mid-1950, the tuna-fishing industry received the most vicious and cruel blow it has yet had from the Executive. In the late spring, Mexico gave notice that it was abrogating its trade agreement with the United States. The causes of abrogation were not related to tuna, because Mexico has never been interested

in its inconsequential trade in tuna. But the effects were momentous to the tuna trade. At the date which abrogation took effect, the tariff on tuna canned in oil would revert automatically from 221⁄2 to 45 percent ad valorem.

Our Government had the choice, within a range of months, of when the new duties would come into effect as a result of the abrogation. The tuna industry made most desperate representations to the Department of State to make the duty changes effective at the same date as the abrogation was announced, for the simple reason that the Japanese would dump all of the tuna on this market they could get into the can as soon as they learned of the new duty rate so as to get there in advance of the new duty.

The result of our representations was that the Department of State completely and deliberately ignored our pleas and chose dates which brought a maximum amount of damage to the United States tuna industry. Mexico abro gated the trade agreement in June 1950 and the Department of State announced that the new duty rates brought about by this action would be effective on January 1, 1951.

The consequences of this action were even greater than the industry had anticipated. The Japanese dumped about 1,500,000 cases of tuna on this market during the 6-month period. In terms of processed weight the size of this shock can be measured by the following statistics. The average annual importation of canned tuna in the years 1931-40 was 8,060,800 pounds. The highest for a prewar year (1933) was 14,382,100 pounds. In 1948 it was 8,289,400 pounds and in 1949, 4,504,900 pounds. But in 1950 it was 36,409,500 pounds. Almost all of this came in during the last 6 months of 1950. It came in a pellmell dash to beat the January 1 dateline. Not only was it dumped in an indiscriminate manner but most came in through brokers and importers inexperienced in the tuna trade who dumped it into the wholesale channels as rapidly as they could. The effect of this dumping hit the market with full impact in mid-1951 and by the early fall our canneries were closing, our fleet was being tied up with its frozen tuna on board with no market in which it could be sold, and the United States tuna industry was grinding to an abrupt halt which ran on for the rest of 1951 and into 1952.

The full effect of this act by the Department of State in mid-1950 has still not left this industry. But from that date to this the Department of State has used every weapon in its arsenal to prevent us from recovering from the blow. It has opposed every proposal we have made to the Congress or to the Execu tive. Its counterproposals have been designed to be of no benefit to the domestic industry whatsoever. It has, on the other hand, we believe, used every office it could to encourage the Japanese in increasing their tuna shipments to this country. It is opposing us at this moment of writing and is, by doing so, aiding the Japanese.

The crisis was so acute in this west-coast industry in 1951 that a number of west-coast Congressmen submitted a variety of bills aimed at correcting the situation. The House Ways and Means Committee established a special Tuna Subcommittee which held hearings. The Department of State opposed all of the permanent corrective legislation before the committee. It had to admit that there was a serious crisis in the domestic industry. But it took the view that this was transitory and that the industry would adjust to the new situation wihout serious injury.

In spite of this the Ways and Means Committee reported out a bill which would have done two things: (1) Establish a 3-cent-per-pound tariff on frozen tuna until March 31, 1953, and (2) direct the United States Tariff Commission and the Secretary of the Interior to make comprehensive studies of the competitive status of the domestic tuna industry and report their findings to the Congress before that date so that the Congress could properly formulate permanent legislation.

This bill was passed by the House in the closing days of the 1951 session to the considerable surprise of the opposition. I believe it was the first legislation in nearly 30 years imposing a tariff increase which had been reported by the Ways and Means Committee and passed by the House. Had it gotten to the Senate floor during that session, it no doubt would have been enacted. The days were so few to recess time that the opposition was able to block this by getting the Senate Finance Committee to insist upon hearings, for which there was not time before the recess. The upshot was that the bill held over to the second session, but Senator George, chairman of the Senate Finance Committee, promised us early hearings.