2. The date of the report was so late in the congressional session that it would be impossible for the industry to obtain any relief through legislative means; and

3. The report suggested several ways in which these six departments of the executive thought that the United States Government could aid the industry in helping itself out of its economic difficulties.

The State Department, Mr. Martin said, would make inquiries of the Japanese Government with a view to raising the wages of Japanese tuna fishermen and to see if there was a violation of GATT in this respect. However, the wages of Japanese tuna fishermen then and now were well above the average for Japanese industry and most Japanese tuna fishermen then and now earn more than most Japanese college professors.

These rudimentry facts were known even to us. We have never heard further of any State Department inquiries in this matter.

The Small Business Administration, Mr. Martin said, would give priority attention to loans to tuna boats. I am informed after making numerous applications for such loans and the industry followed them up in detail for some months, all loans to tuna boats were rejected by the Small Business Administration on the grounds that there lacked the assurance that the loan could be repaid out of earnings. This was hardly news to anyone in the producing end of the industry.

The United States Fish and Wildlife Service, Mr. Martin said, would continue its vigorous program of aid to the industry and consider expanding it even further. The Fish and Wildlife Service was doing nothing for us at the time that we knew of. After investigating this avenue for some months, spokesmen for the producers informed the President that if the whole Department of the Interior went out of business we would not notice it in our cost per ton of production of earnings.

The other lines of purported relief, upon investigation, all turned out to be similar humbug. During the course of these studies by the task force and our investigation of their sterile recommendations we found out that the Branch of Commercial Fisheries hidden over in a corner of the Department of the Interior had been pretty well ignored by the White House and the task force and we were sent to the Department of Commerce for relief and consultation.

This whole turn-around procedure disgusted us so that we determined to start right back at the beginning and see if the Congress would establish a policy for the commercial fisheries of the Nation and establish in the executive an agency on a policymaking level competent to implement the policy.

We made such representations to the Senate Committee on Interstate and Foreign Commerce in November 1955. Legislation was introduced in January 1956 to accomplish these objectives. The result was the Fish and Wildlife Act of 1956 which reorganized the handling of commercial fishery matters in the Federal Government, established a bureau of Commercial Fisheries in Interior, created an Assistant Secretaryship in Interior for Fish and Wildlife, and clearly established the policy that the purpose of the legislation was to create conditions that would build a vigorous and prosperous fishing industry in the United States.

The Department of State kept its record of working against the interest of the domestic tuna fisheries clear by opposing this legislation in committee; the bill did become public law, however, on August 7, 1956.

During the course of this legislative campaign one of the most peculiar actions taken against the domestic tuna fishing industry by the executive occurred. On August 29, 1956, the Federal Trade Commission issued a complaint against every union, every cooperative and every canner in the west coast tuna industry. In the case of the unions and cooperatives the individual officers, staff members, and members were cited individually as well as collectively. All sorts of illegal activities were charged, such as restraint of trade which raised tuna prices, attempting to block tuna shipments from Japan, etc. The complaint read more like an attempt to discredit the entire tuna industry than like a legal indictment for malfeasance. Our suspicions were heightened when we heard that the Department of the Interior and the Department of Justice had recommended against bringing such an action against the cooperatives and unions in the tuna industry and that the Federal Trade Commission had moved against these agency recommendations.

There may have been some deeper seated motives behind this Federal Trade Commission action than we know about, but it will take a good deal of explana

27629-58-pt. 2-11

tion to convince the tuna fishermen that this was anything much more complicated than a punitive fishing expedition inspired by the Department of State to scare us into cessation of legislative efforts to secure import controls. This suspicion was only heightened when, after nearly a year of investigation, the Federal Trade Commission offered a consent decree which so benefited the unions and cooperatives that it was obviously better business judgment to accept the decree than contest the original accusations in court.

In 1956 the domestic tuna industry again suffered one of those blows from Japanese imports that have gradually hammered it to its knees in the last 7 years.

During the winter albacore season in Japan, which extends from late November through March, the Japanese canners and the Japanese frozen tuna exporters contested vigorously for the catches of the Japanese albacore fishermen. As a consequence the prices tended steadily upward over the prices of the same period in the previous year, despite the fact that we had cut our prices in the meantime by $80 per ton.

On April 7, 1956, our price cuts of the previous year were finally reflected by a cut of $2 per case in the wholesale price of canned tuna in the United States. This resulted in an immediate upsurge in the sale of canned tuna in the United States. Under the impetus of this movement the Japanese frozen tuna exporters steadily drove the ex-vessel price of albacore upward in Japan through the summer season. The catch of albacore during the 6 weeks from June 1 to July 15 was about 20,000 tons above the same period of the former year and expectations. In April the All Japan Frozen Tuna Export Fisheries Association had formed the Frozen Tuna Export Cooperative Co. to handle all sales of its members to the United States.

In late September the west coast tuna trade learned that there were about 15,000 tons of frozen albacore in warehouses that the Japanese frozen tuna cartel was intending to dump on this market at something over $100 per ton less than their cost of production. This news produced two results in early October: The price of albacore to domestic fishermen dropped from $375 to $300 per ton, and the industry filed an antidumping complaint with the Secretary of the Treasury.

This industry is now calloused from its treatment at the hands of the executive but this time we thought that there was no way in which the Secretary of the Treasury could avoid his responsibilities under the law and refuse to prevent this dumping. Even the Japanesse freeley admitted that the price at which they were preparing to sell this 15,000 tons of frozen albacore in the United States was $120 per ton below what it had cost them to produce. However the Department of the Treasury once more cut the free trade pattern and on March 1, 1957, announced that there had been no sales at less than fair value nor were any expected.

The consequence was that the Japanese dumped the whole lot of albacore in this market at more than $100 per ton less than its cost of production. This has been the final straw which has broken this industry. The results which have already flowed from this action are these:

1. The domestic albacore price opened at $300 per ton, rose briefly to $310 per ton, and then when the fish began coming in dropped to $280 per ton. 2. The bluefin price which opened at $260 per ton, dropped to $240 per ton, then to $210 per ton, and we understand it is now being offered as low as $150 per ton.

3. The canners started to slow down the unloading of tuna clippers in the first week of June. By the second week of August, when unloading stopped entirely, the vessels had been waiting for 40 days to unload. There was every indication that there would be no further unloading before mid-October. There were 40 vessels in harbor with 8,000 tons of fish aboard. Accordingly, on August 19 the price of yellowfin and skipjack tuna declined by another $40 per ton so as to get the vessels unloaded.

This has been a move of desperation. I do not believe tuna clippers can operate profitably under the best of conditions at prices of $230 per ton for yellowfin and $190 per ton for skipjack tuna. I know fishermen cannot make living wages at these price levels. The very best that can happen as a result of this move is that 50 of the 153 vessels left in this fleet will go broke and be removed from the fishery. The worst that can happen is that the whole fleet will be tied up, and either one is a calamity for the fishermen.

The trade laws of this country provide that they will be implemented in such a manner as to increase the flow of imports so long as that increase does not seriously injure or threaten to seriously injure a domestic industry. A series of criteria are provided in the law to define serious injury. By every one of those criteria our industry has been seriously injured by increased imports. The Department of State and each of the other executive departments affected have nevertheless consistently opposed every effort we have made to get relief from imports and stabilize this market.

An example of the bitter end opposition of the Department of State to the welfare of this industry and in support of the welfare of the Japanese industry was given in 1955. In the middle of the worst year in the history of this industry up to that date the Department concluded a trade agreement with Japan which— 1. Cut the tariff on tuna canned in oil from 45 percent ad valorem to 35 percent ad valorem.

2. Bound the tariff on tuna canned in brine at 121⁄2 percent ad valorem; and 3. Bound frozen albacore on the free list.

The mockery of hearings before the Committee for Reciprocity Information had been again complied with and as usual the Trade Agreements Committee paid no attention whatever to the information given by the industry, or to compliance either with the intent of the law or President Eisenhower's repeated assurance that no serious injury would be permitted to occur to a domestic industry by reason of the Trade Agreements Extension Act.

The Department of State and the Trade Agreements Committee has, indeed, proceeded deliberately to fragment the tuna import problem so as to put the maximum difficulties in the way of rectifying the problem either by Executive action or by the Congress. The situation of the different tuna commodities under the trade laws is as follows:

1. Frozen yellowfin, skipjack, bigeye, and bluefin tuna bear no duty and are not the subject of a trade agreement. Accordingly, the Executive can do nothing to regulate those imports. The only thing that can be done is for the Congress to enact a law providing for a duty or a quota for this category of tuna commodities.

However, there is no use in the Congress passing such a law because it would affect only one category of tuna commodities. The Japanese would simply shift their imports into other categories which are included in trade agreements and with respect to which it cannot legislate because the United States would then be in violation of its international obligations.

Furthermore this deliberately and cleverly splits the political effectiveness of the tuna industry into two segments, (1) the fishermen who need this protection, who are opposed (2) by the canners who do not want tariffs on frozen tuna unless they can be protected against the Japanese shifting this volume into canned tuna categories covered by trade agreements and presumably outside the legislative reach of the Congress.

Finally the Department of State would bitterly oppose any such legislation as they did the temporary and relatively innocuous legislation proposed by the House Ways and Means Committee in 1951.

This category is actually comprised of three primary commodities:

A. Round, whole tuna;

B. Gilled and gutted tuna which are about 8 percent by weight less than the fish in category 1; and

C. Fillet fish which are about half by weight of the fish in category A. The Treasury so far have refused to keep these commodities separated in its import statistics, and the valuations it prints are admittedly inaccurate.

2. Frozen albacore are bound on the free list under the trade agreement with Japan concluded in 1955. Obviously the only reason for binding on the free list a commodity already duty free is to remove it from the jurisdiction of the Congress.

However under the trade agreement law it would be expected that this would place frozen albacore within the purview of the escape-clause provisions of that act. Yet when two of the albacore producing cooperatives applied to the United States Tariff Commission in July 1957 for escape-clause proceedings with respect to frozen albacore the Tariff Commission denied them this avenue of relief as little as that may have meant. One of the reasons adduced by the Tariff Commission for denying this application is particularly pertinent. It

said that even if it could give relief on frozen albacore through an import quota this would be of no practical benefit to the fishermen because the Japanese would only send the albacore in the canned form.

3. Cooked and frozen loins and disks of tuna are imported at a duty rate of 1 cent per pound. This equates with a duty of about $8 per ton on round fish. This rate of duty is bound under the General Agreement of Tariff and Trade. These are two of the new tuna commodities which have arisen not from normal market demand but have been created artificially by administrative decision under the Tariff Act of 1930, as amended. It has been so determined that these two commodities fall within a “basket” category in that act. On the one hand the Japanese save duty by sending tuna in these two forms rather than hermetically sealed in the can; on the other hand they save freight at nominal duty rate by sending tuna in this form instead of as whole round fish. Quite significantly the Japanese have prohibited the export of these 2 tuna commodities to canneries in the State of California (which can approximately 90 percent of the tuna canned in the United States.) The reason for this is quite frankly stated by them to be to keep the cannery workers of California separated from the California tuna fishermen in demanding relief from imports. Their fears in this regard are realistic. Tuna loins dispense with half the cannery labor. They only require being cut into proper lengths and put in the can. Tuna disks dispense with most of the rest of the cannery labor. They are already cut to the right length and only have to be put in the can.

These 2 commodities have been increasing in volume sharply for the past 12 months. There has been a strong effort to get the Department of the Treasury to at least keep track of them separately in their import statistics.

4. Tuna canned in brine has already been discussed above. It is now the principal canned tuna commodity imported into the United States. It is bound at 122 percent ad valorem in the trade agreement with Japan. It also has a quota (so large that it has never yet been reached) of 20 percent of the apparent annual consumption of tuna in the United States.

Like cooked loins and disks this is an artificial commodity created by administrative decision under tariff act of 1930, as amended, rather than by the natural demands of the market. The only reason it enters the market is that its duty is 121⁄2 percent ad valorem whereas the duty on tuna canned in oil is 35 percent ad valorem. We are informed that it is not sold in any other country in the world at this time.

5. Tuna canned in oil is bound at 35 percent ad valorem under the trade agreement with Japan, in which the duty on this commodity was reduced from 45 percent ad valorem. There is no quota on this commodity.

The Japanese restrict the import of this commodity to the United States to a nominal volume in an attempt to keep the tuna canners in the United States from joining politically with their cannery workers and fishermen in requesting import controls from the Congress.

This year the Japanese are having difficulties in enforcing this regulation for the reason that this commodity can be laid down in the United States, duty paid, at $3 per case below the wholesale price level of tuna canned in oil in the United States. Accordingly, the Japanese canners have a great incentive to evade their own Government's regulations. They have been doing so, the Japanese say, by diverting European and Canadian shipments to New York and Boston. At any rate the imports of tuna canned in oil this year so far have been running at about double the rate of last year. In our opinion there is no way out of this mess that the tuna industry has been deliberately forced into by our Government executive department except by comprehensive legislation which will control all forms of tuna imports. In reaction to our needs, Congressmen King, Wilson and Utt introduced identical bills on August 13. Mr. King's bill is numbered H. R. 9237, Mr. Wilson's, H. R. 9244 and Mr. Utt's, H. R. 9243. Senator Magnuson and Senator Kuchel jointly introduced S. 2734 on August 8, a bill having objectives similar to the House bill. Mr. King's bill would do these things:

1. The total volume of tuna permitted to enter the United States would be 200 million pounds or 35 percent of the apparent annual consumption of tuna in the United States, whichever is the greater.

2. Frozen tuna of all kinds would be treated in three categories:

(a) The first 50 million pounds, or 5 percent of annual apparent consumption whichever is the greater, would be duty free.

(b) The next 90 million would pay a duty of 3 cents per pound and

(c) All over 140 million pounds would pay a duty of 6 cents per pound. 3. All tuna prepared or preserved in any kind of container would pay 35 percent ad valorem duty. This would include loins and disks as well as tuna in brine and tuna in oil.

4. Tuna landed in Samoa, Guam, and the Virgin Islands would be treated as imported tuna.

5. No duties would be collected contrary to international obligations of the United States but the President would be instructed to renegotiate any trade agreements to the extent necessary to make them conform to the act.

The effect of this bill, if enacted, would not be to reduce Japan's trade in tuna with the United States. For the past 3 years it has run between 200 million pounds and 35 percent of the market.

It would not reduce the amount of frozen tuna imports. The average for the past 3 years has been actually a little less than 140 million pounds. It would not cut down the amount of canned tuna they could export to the United States. This has been running at about 60 million pounds per year on a round weight basis.

Nor would it breach an international obligation of the United States. But it would give tuna fishermen some tariff protection to even out the protection tuna canners now have and permit them to earn living wages from their labor. It would eliminate cooked loins and disks from the market and also tuna canned in brine. It also would create a basis of stability in the market which would permit us to once more begin growing and earning.

These minimum objectives we do not feel we can live without as an industry. We hope that you and your Department will aid us in attaining these objectives. Sincerely yours,

APPENDIX I

LESTER BALINGER,
Secretary-Treasurer.

Number of vessels and total carrying capacity tonnage of tuna chipper fleet working out of west coast ports, 1947 to date

Estimated annual consumption of canned tuna and tuna-like fish in the United