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here, the crews are paid at the rate of 60 percent of the catch, after deducting expenses. The owner gets 40 percent.

In Nova Scotia and Newfoundland the crew gets 371, and the owner gets 6212

Senator MILLIKIN. Does the fisherman furnish any equipment of his own up there where he does not here?

Mr. McHugh. No, the only difference is that here we pay for the food, oil, ice, and so on, and down there they pay for food alone.

Out of the 3712 percent, they pay for the food, and then the rest is split up between them. So it is almost a reverse of what we have.

Senator MILLIKIN. Let me get that clear, now. What is the situation in that respect in Newfoundland ? Mr. McHugh. The fishermen are paid on the basis of 3714 percent. Senator MILLIKIN. And the fisherman furnishes what? Mr. McHugh. His food. Up here, we get 60 percent, and we pay for the food, the oil, and the ice used on the trip.

Senator MILLIKIN. Would that roughly bring the two into line? Mr. McHugii. No, sir. Senator MilliKIN. We pay more? Mr. McHugh. It is a much better system here. In addition to that, our men out of Boston have a guarantee; regardless of whether the boat catches anything or not, or if she breaks down on a trip and has to come home after any number of days, our men have that guarantee of not less than $5 a day clear of everything. The owner then must pay all the expense.

Again, we have a 12-hour day.
Senator MILLIKIN. Suppose the catch exceeds the $5 a day?
Mr. McHugh. Then the men share.

Senator MILLIKIN. But if the catch is less than $5 a day, they get $5 a day?

Mr. McHugit. Anyway. And the owner pays the expense. Again, we have a 12-hour day, 6 hours on watch and 6 hours off, around the clock, all year round. Down there they have no stated hours. They work whenever they are wanted to, and as long as they can stand.

Senator MILLIKIN. That is in Newfoundland ?

Mr. McHugu. In Nova Scotia and Newfoundland. And when we come in off a trip, we have a couple of days home. Those men have no time ashore. They come in in the morning, and they will sail that night if the vessel is ready. The only time ashore is when she is discharging and getting her supplies for the following trip.

In addition to that, according to this letter, their help get from 35 cents to 60 cents an hour with no overtime. The girls get 35 cents an hour, and they work them up to 15 hours a day. The men get 60 cents an hour and they work them as long as they want to.

Senator MiLLIKIN. You are talking about the processing plants?

Mr. McHugi. This is the shore help. The shore workers that handle the fish.

Senator MILLIKIN. At the dock?

Mr. McHugi. At the dock, when the fish is discharged, it goes up to be filleted, and boxed, and packed and wrapped.

Our shore workers get a minimum of $1.08 an hour to $1.4: an hour, with time and a half after 8 hours, and double time for Sundays and holidays. So it is easy to see when you pay 35 cents an hour against 60 cents an hour with no overtime at all, what the situation must be.

Senator Millikin. You are going to get to the processing plants, I assume, and you are going to go into the difference there?

Mr. McHugh. Well, the difference, as I pointed out, is that their help, the women, get 35 cents an hour.

Senator MILLIKIN. But you identified that with the landing. Did you mean that also as to the processing plants?

Mr. McHugh. That is the processing. You see, the fishermen go out on the boats, and they bring in the fish and unload at the dock. It is then taken into the processing plants. Well, where our help get from $1.08 minimum to $1.43, they only get from 35 to 60 cents an hour. Again, our help get overtime, and so forth, and they don't get anything. It is all straight time.

Senator MILLIKIN. Do you have any machinery that gives us any kind of an advantage? Is our machinery better than theirs? Is it any different from theirs ?

Mr. McHugh. No, sir; this is all hand work. It is all done by hand.

Senator MILLIKIN. These things are all very familiar to you, but there are some of us here who want to learn something about this.

Mr. McHugh. Yes. Again, of course, they happen to have fish somewhat closer to their ports than we have. And we have to steam a longer distance. That gives them an advantage. Of course, again, we have a couple of days home after a trip of 10 or 12 days, and they do not have any time at home. So when it comes to producing and processing fish they have an advantage all the way around, from any point of the compass you look at it, insofar as low cost of their product is concerned. Those people are set up to put us out of business.

Senator MILLIKIN. Take two typical ports, please. What is the steaming time from some typical American port to some typical fishing grounds, and compare that to the steaming time from a Canadian port to their fishing grounds.

Mr. McHugh. Take a boat out of Halifax. She must steam 12 to 18 hours to reach the fishing grounds. Now, of course, we have the same steaming time to George's Banks, which is our handiest fishing grounds. But if we steam down to fish with them, which we do, oh, probably 30 percent of the time, we have to steam about 2 days. So we have 2 days additional steaming on the trip if we go down and fish with them. They don't have to come up here, because it so happens that there is just as good fishing down there. So all in all, they will, without question, I think, put us out of business.

Now, four of our boats have been sold to Newfoundland this last year. Two more are slated to go now. And because of the conditions, several of our owners are ready to dispose of about 15 more boats to the Army.

Senator BREWSTER. What does the Army want of them?

Mr. McHugh. The Army is intending to take them to Germany to try and fish them out of Germany.

Senator BREWSTER. Out of the North Sea ? Mr. McHugh. No; they intend them to go up to the banks of Iceland.

Senator BREWSTER. Iceland ?

Mr. McHugh. Yes. But, as I say, it is because of this competition on the imports. And some of our companies have already begun to build down in Canada. So it isn't a very good picture that we have

to face, and we hope that something can be done here to help us out on this.

Senator MILLIKIN. Do you attribute the conditions that you are speaking of to the present tariff arrangements on fish?

Mr. McHugh. Well, sir; I think that is the case, without question. You see, we just can't compete. Remember, when we get 9 cents for groundfish down here, and it takes about 21 pounds to one to make a fillet, and they only have to pay 3 cents, well, we just can't compete with them. I mean, the difference is too great. They have at least a 10-cent jump on us right off the bat, and we have a low duty, so there is no question about it. And they just keep their price enough under us to take the markets.

Senator MILLIKIN. Do you have unemployment in your business?

Mr. McHugh. We haven't any sizable unemployment. We have some at the present time. We haven't any sizable amount of it, but if the Army takes those 15 boats, it is going to be pretty tough. And again, if they do go to Germany, and if they do produce any fish, it will tend to stop the European countries, and principally Iceland, for instance, which is now supplying Germany with fish—those boats will stop them from some extent from selling a like amount over there. And of course it will mean further imports over here.

Senator BREWSTER. The reason those owners are thinking of selling those boats is because they are not profitable to operate here. Is that not right?

Mr. McHugh. Because they can't compete with these conditions I have told you about.

Senator BREWSTER. So that is the most telling evidence of conditions. Mr. McHugh. That is right.

Senator BREWSTER. The fact that they are willing to get out of the business.

Mr. McHugh. Well, they are. In fact, it will mean one company going out of business altogether, and as to another company it will mean about half their boats will go, and so on.

Senator MILLIKIN. I think there has been some testimony here that there are about 500,000 employees in this business, or 550,000.

Senator BREWSTER. All over the country.
Mr. McHugh. I would say that, easily.
Mr. JACKSON. Direct and indirect.
Senator MILLIKIN. By “indirect,” what do you mean?

Mr. JACKSON. That would mean people working in shipyards, building and repairing fishing vessels, and making nets and twines, and gears, and all the things that go to supply the industry.

Senator MILLIKIN. Those 550,000 employed people are using their pay envelopes to keep filling stations going and to keep alive the economy of the communities where they live.

Mr. McHugi. You see, our boats alone, on fuel oil alone, consume anywhere from about six to nine thousand gallons a trip. And, of course, there is food and twine, and all kinds of shore workers, truckmen, box men, and well, others too numerous to mention.

Senator MILLIKIN. Thank you very much. Mr. JACKSON. Our next witness, Mr. Chairman, will be Mr. John DelTorchio, of Gloucester, and he will be followed by Mr. Fulham, of Boston. They are the only two we have.

STATEMENT OF JOHN DELTORCHIO, PRESIDENT, CAPE ANN

FISHERIES, AND PRESIDENT OF THE GLOUCESTER FISHERIES ASSOCIATION

Mr. DEL TORCHIO. My name is John Del Torchio. I am president of the Cape Ann Fisheries, Inc., and president of the Gloucester Fisheries of Gloucester, Mass. This association, in whose behalf this statement is submitted, comprises 22 firms engaged in the wholesale handling, processing, packing, canning, freezing, selling, and shipping of fish and fishery products. The names of firm members and the purposes for which this association was formed appear in schedule 1 of an appendix attached to this statement.

I appear before your committee to record the opposition of our association to House Resolution 1211. We want to make it perfectly clear at the outset that we oppose neither the principles, nor the purposes, nor the underlying philosophy of the Reciprocal Trade Agreements Act. Our objection is directed toward that part of the proposed bill which seeks to eliminate the provision of the act under which the Tariff Commission is authorized to investigate an industry to determine whether imports of a particular commodity are entering the country in such quantities as to injure or threaten injury to any domestic unit of agriculture, labor, or industry. In other words, to determine the peril point above which imports should not be permitted, having due regard for the economic security of domestic industry.

We submit that the tremendous imports of fresh and frozen groundfish fillets into this country from Canada, Newfoundland, and Iceland are injuring our domestic fishing industry and threaten its very existence; and that therefore the provisions with respect to the Tariff Commission in the existing law are vitally necessary and should not be eliminated. We need to preserve this legislative machinery so we can present the critical situation in our industry to an impartial Government agency whose sold function and duty is to act as the watchdog to see that the operation of any reciprocal trade agreements do not impose undue hardship upon, nor threaten the economic security of our domestic industry.

The commercial fisheries of this country, especially the New England fishing industry, offers mute testimony of what can happen to an industry where no peril point has been established—where there is no adequate control over imports.

Last year, 1948, the New England fisheries produced 930,000,000 pounds of fish and shellfish. This was a little more than one-fifth of the country's total production. The major portion of the New England catch is groundfish of the species of cod, hake, haddock, cusk, pollack, and redfish. Fresh and frozen fillets of these species entering this country from Canada, Newfoundland, and Iceland have now reached such staggering amounts that unless these importations are immediately regulated by quota to provide equitable and proper protection to domestic production, the entire fishing industry of New England is doomed to gradual extinction.

To illustrate the point I have made, I need only cite the example of my city of Gloucester, which is one of the principal producing ports in the New England area.

86697-49-pt. 1- 50

Total landings of fresh fish at Gloucester during 1948 amounted to over 251,000,000 pounds of whole fish valued, ex vessel, at $12,000,000. Ninety percent of fish landed at Gloucester is filleted and frozen and sold principally in the southern and midwestern parts of the country.

We have 24 plants engaged in the processing and filleting of fish, together with canning plants, freezer and cold-storage facilities, ice manufacturing plants, dehydration plants, and all of the various facilities and allied industries that are necessary to the conduct of the fishing business.

The on-shore investment in the fishing industry at Gloucester, including wharf properties and facilities amounts to $25,000,000. Fish processing firms alone employ an average of 2,000 men and women throughout the year, although the number fluctuates because of the seasonal nature of the business. These employees receive an annual pay roll of between $4,000,000 and $5,000,000.

We have over 250 vessels engaged in off-shore fishing with an estimated value of $15,000,000. The crews of these vessels number approximately 2,400. These vessels can be grouped into five classifications, as follows: Large draggers, medium-size draggers, small draggers, seiners, and gill netters. The large draggers, of which there are about 40, carry from 150,000 to 200,000 pounds of whole fish, and cost in the vicinity of $150,000; the medium and smaller draggers carry from 25,000 up to about 100,000 pounds of fish, and cost from $20,000 to $100,000; the seiners are engaged in the mackerel fishery, and their boats vary in size and cost; the gill-net boats use the gear that is commonly used in the Great Lakes, are generally smaller, and cost from $25,000 to $50,000.

Senator MILLIKIN. What is a gill net? Mr. DELTORCHIO. A gill net is a net that stands about 6 feet high. They set them along the bottom of the ocean, proabably a half mile to a mile long, and they are anchored there, and the fish swim into them, and they get caught by the gills. That is why they are called gill nets.

Our boats are owned practically entirely by individuals. The represent the lifetime earnings and savings of our fishermen. In Gloucester, substantially every vessel in our fleet is a joint enterprise; a pooling of the resources of individual fishermen and their families, their relatives, their friends. There is little absentee ownership here: few of the vessels are owned, even in part, by corporations. They are managed, captained, and often manned by the very men who own them. Years of hard, dangerous work have resulted in the accumulation of sufficient money to build or to buy a boat “of your own." No Government subsidy, no Newfoundland type bounty, nor Icelandic type government purchase went into our fleet. It was built by years of back-breaking effort and courage of our men of Gloucester, who went to sea, many nerer to return; by years of saving and deprivation on the part of their families to acquire a “stake."

It is significant that practically no new ressels presently are under construction. Most of our shipyards are idle while the Governments of Canada, Newfoundland, and Iceland are subsidizing the rapid expansion of their own production facilities.

In January 1939 the second trade agrement was negotiated by the United States and Canada, the provisions of which were applicable

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