standards of safety; and through the provision of an inspection and grading service to improve and standardize the quality of domestically produced fishery products. Whether the bill should be enacted involves questions of policy on which the Department of Justice prefers to make no recommendation. There are, however, certain aspects of the bill to which the attention of the committee is invited. The officers and employees and former officers and employees of the Department of the Interior would be subject to the conflict of interest laws in title 18, United States Code, sections 281, 283, 284, 434, and 1914, and Revised Statutes, section 190, title 5, United States Code, section 99. The committee may wish to consider, however, whether these laws are adequate to protect the Government in connection with applications for financial assistance under the bills and in the administrative actions thereon. With respect to such financial assistance the bill contains no provisions comparable to those which were applicable to the lending operations of the Reconstruction Finance Corporation, such as the prohibitions against payment of a fee or commission in connection with an application for financial assistance, and against participation by an officer, agent, or employee of that Corporation in the deliberation upon or the determination of any question affecting his personal interests, or the interests of any corporation, partnership, or association in which he is directly or indirectly interested (47 Stat. 6, as amended, 15 U. S. C. 604 (d) and (e), respectively). Respecting fees and commissions, the Small Business Act of 1953 requires disclosure by a borrower of its arrangements for fees for attorneys, agents, or other persons engaged by or on behalf of a business enterprise for the purpose of expediting an application to the Small Business Administration (67 Stat. 239, 15 U. S. C. (Supp. V) sec. 648). If the committee should conclude that such disclosure is advisable in the case of an application for financial assistance under the bill, then it is recommended that the bill be amended to incorporate a disclosure requirement similar to that applicable to a borrower from the Small Business Administration. The Small Business Act of 1953 also provides for the execution by a borrower of an agreement to refrain for certain periods of time from employing, tendering any office or employment to, or retaining for professional services, certain officers, attorneys, agents, or employees of that administration (15 U. S. C. (Supp. V), sec. 648). It is suggested that the bill be amended to make provisions against any similar conflict of interest on the part of the officers and employees of the Department of the Interior with respect to applications thereunder for financial assistance. The Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely yours, Hon. WARREN G. MAGNUSON, LAWRENCE E. WALSH, THE SECRETARY OF COMMERCE, Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. DEAR MR. CHAIRMAN: This letter is in reply to your request of February 6, 1958, for the views of this Department with respect to S. 3229, a bill to provide a 5-year program of assistance to enable depressed segments of the fishing industry in the United States to regain a favorable economic status, and for other purposes. The legislation would authorize direct Federal assistance to any segment of the domestic fishing industry threatened with or suffering from injury occasioned by a trade-agreements concession from which escape-clause relief, as authorized by section 7, has been or may be withheld because of considerations affecting the Nation's security or because of other overriding considerations in the national interest. Direct Federal assistance would be provided in the form of loans, grant-in-aid, and incentive payments to aid the industry to improve its methods of catching, handling, preserving, and processing fish and to improve the quality of its products, and thus improve its competitive position vis-a-vis foreign produced fishery products. The bill would also authorize assistance in the construction, reconditioning, equipping, and outfitting of fishing vessels, improving safety standards, and providing an inspection and grading service. The Department of Commerce recommends against enactment of this legislation. We realize that the problem of an industry seriously injured by imports can be a difficult one and we are in favor of all appropriate Government facilities being used to help. However, we do not favor the establishment of separate Federal programs of assistance as alternatives to escape-clause action where tariff concessions create injury to domestic industries. To single out for special adjustment assistance a business enterprise facing import competition would give them a shelter from adverse economic influences that is not available to .other industries. We are particularly concerned with the scope of Federal assistance proposed by this legislation. If enacted it would, in our opinion, put the Federal Government in a position of responsibility for management decisions and actions in practically every phase of the domestic fishing and fish processing businesses. Such assistance would be prolonged as the bill specifically provides for a 5-year program. Title IX of the Merchant Marine Act of 1936 specifically authorizes the insurance of private loans made to aid in financing the purchase or construction of vessels designed for commercial use in the fishing trade or industry. Recent amendments to this title meet one of the problems encountered by fishing vessel owners who have been unable to secure financing except through short-term mortgage loans. For these reasons, this Department recommends against enactment of S. 3229. The Bureau of the Budget has advised that it would interpose no objection to the submission of this report to your committee. Sincerely yours, Hon. WARREN G. MAGNUSON, SINCLAIR WEEKS, DEPARTMENT OF STATE, Chairman, Committee on Interstate and Foreign Commerce, United States Senate. DEAR MR. CHAIRMAN: In your letter of February 6, 1958, you invited the comments of the Department of State on S. 3229, a bill to provide a 5-year program of assistance to enable depressed segments of the fishing industry in the United States to regain a favorable economic status, and for other purposes. Your letter was acknowledged by my letter of February 7, 1958. This Department would welcome action by Congress directed at the basic problems of the fishing industry and toward the establishment of an economically sound basis for its prosperity. These problems include outmoded equipment and methods, the fact that the United States ocean perch fleet must now travel greater distances for its catch, and other competitive disadvantages which the American industry faces with respect to foreign producers and producers of other food products. It appears that section 4 of S. 3229, which would provide grants to help the industry improve its equipment, would promote the solution of these basic problems. We believe the provisions of section 5, which are designed to enable the American industry to buy new fishing vessels at the same cost as its foreign competitors, would contribute to the solution of the industry's problems. This also appears to be true of the proposal in section 6 for loans for improving and modernizing fish processing plants. The proposal in paragraph (2) of section 7 for exploratory and experimental fishing operations might result in substantial long-term benefits to the industry. We assume that the Department of the Interior, which has primary responsibility in this field, will report on the effectiveness of these measures in dealing with the basic problems of the industry. As another constructive measure to help the fishing industry, we support an increase in the fisheries loan fund authorization under the Fish and Wildlife Act of 1956, as would be provided by S. 3295. Congress may also wish to investigate the possibility of encouraging increased consumption of fishery products in the United States. On the other hand, we question the advisability of incentive payments to fishermen and processors, including the proposed rates, as provided for in section 7, paragraph (1), and section 8 of S. 3229. Such payments, if large enough to increase significantly the returns to fishermen and processors, would run the risk of causing uneconomic expansion of domestic production, particularly since there is no limitation in the bill on the amount of production which would be subsidized. Production increases stimulated by incentive payments could, in turn, cause substantial displacement of imports. The bill is apparently intended to help the domestic industry without causing the same difficulties in our foreign relations as would raising the duty or imposing a quota. Displacement of imported fish as a result of a subsidy for United States producers, however, might have effects on trade similar to those created by a higher tariff or a quota and could, as a consequence, have serious economic and political effects on friendly foreign countries-Iceland and Canada, for example. We believe it essential that any program of assistance to the industry avoid running this danger. An additional factor, with respect to imports of fish which have been the subject of a trade-agreement concession, is that such economic effects, if they occurred, could in fact impair the concession and lead to compensatory withdrawals or adjustments of concessions on other articles, including those which have been granted to United States products. Assistance to the fishing industry under S. 3229 would be dependent on the President's rejecting an escape-clause recommendation of the Tariff Commission for tariff or quota relief “because of considerations affecting the Nation's security or because of other overriding considerations in the national interest." We believe that making assistance dependent on such a rejection of an escape-clause recommendation is inappropriate since many of the problems of the fishing industry which S. 3229 is designed to correct have no necessary connection with the factors which might make possible an escape-clause finding of serious injury. For example, problems resulting from unsatisfactory handling methods could exist regardless of the height of the duty. On the other hand, in examining other possible criteria for eligibility for assistance, the possibility would, of course, have to be faced that use of different criteria might result in coverage of a larger part of the industry and in greater problems of administration than if the program were limited to parts of the industry for which escape-clause relief had been denied by the President for the reasons specified in S. 3229. The Department has no comment on the remaining sections of S. 3229, which have to do primarily with technical and administrative matters. The Department has been informed by the Bureau of the Budget that there is no objection to the submission of this report. Sincerely yours, WILLIAM B. MACOMBER, Jr., Assistant Secretary (For the Secretary of State). Hon. WARREN G. MAGNUSON, OFFICE OF THE SECRETARY OF THE TREASURY, Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Department on S. 3229, to provide a 5-year program of assistance to enable depressed segments of the fishing industry in the United States to regain a favorable economic status, and for other purposes. The program of assistance that would be authorized by the proposed legislation is not of primary interest to this Department and the Department has no comments to make as to the general merits of the proposed program. However, it is suggested that your committee critically examine the expenditures that would be authorized by the bill to determine whether they are essential when viewed in relation to expenditures necessary to provide adequately for our national security or whether they would contribute to the stability and growth of the national economy. Also, the Department recommends that section 6 (b) (1) be revised to establish the interest rate on the loans that would be authorized by the bill at a rate not less than a rate determined by the Secretary of the Treasury taking into consideration the current market yields on outstanding marketable obligations of the United States of maturities comparable to the term of he loans, plus an additional amount deemed adequate by the Secretary of the Interior to cover administrative expenses and probable losses to the extent consistent with the purposes of the proposed loan program. In addition, it is recommended that the bill be amended to require that safety and lifesaving equipment and devices to be installed on fishing vessels be approved by the Secretary of the Department under which the Coast Guard is operating before grants-in-aid are made by the Secretary of Interior for the purchase and installation of such equipment. In view of the Coast Guard's administration of the marine inspection and navigation laws in the field of maritime safety, separate determinations by another agency regarding these matters would result in an unnecessary duplication of effort. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, A. GILMORE FLUES, Acting Secretary of the Treasury. Hon. WARREN G. MAGNUSON, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Interstate and Foreign Commerce, United States Senate. DEAR MR. CHAIRMAN: Your letter dated February 6, 1958, asknowledged February 7, enclosed a copy of S. 3229, 85th Congress, and requested our comments thereon. The bill by its title would provide a 5-year program of assistance to enable depressed segments of the fishing industry in the United States to regain a more favorable economic status. The segments of the fishing industry covered by the bill are those suffering by virtue of competition from foreign fishing interests, occasioned by foreign trade agreements entered into under the Trade Agreements Extension Act of 1951, as amended (19 U. S. C. 1351-1367), and for which segments the escape-clause relief authorized under section 7 (c) of that act (19 U. S. C. 1364 (c)) has been withheld because of overriding considerations in the national interest. Direct assistance is authorized in the form of grants-inaid, loans, incentive payments, and construction subsidies. We note that the loan assistance provided for under section 6 of the bill for improving and modernizing fish processing plants is similar to that provided for small business concerns under section 6 of the Small Business Act of 1953, as amended (15 U. S. C. 636). The matter of providing assistance to any part of the fishing industry which has been adversely affected by the operation of the Trade Agreements Extension Act of 1951, supra, is, in our view, one of policy for the consideration by the Congress; and since we have no special information on the subject matter of the bill, we make no recommendation on its merits. DEAR SENATOR MAGNUSON: Thank you for your letter of July 18, 1958, inviting our comments on a proposed amendment to S. 3229, by Senator Saltonstall, to authorize additional capital for the fisheries loan fund established by the Fish and Wildlife Act of 1956. Since the amendment would not affect the responsibilities of this Department, we have no recommendation to submit regarding it. Sincerely yours, E. T. BENSON. (The following communications were subsequently received by the Committee on Interstate and Foreign Commerce on S. 3530:) PORTLAND, MAINE, July 23, 1958. CHAIRMAN OF COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, The undersigned, an association consisting of those interested in the fishing industry in the State of Maine and comprised of boatowners, processors, ship chandlers, and marine insurance agencies, hereby endorses and urges the passage of S. 3530. ASSOCIATED FISHERIES OF MAINE. ASTORIA, OREG., July 15, 1958. CHAIRMAN INTERSTATE AND FOREIGN COMMERCE COMMITTEE, United States Senate, Washington, D. C.: We wish to register a vigorous protest against S. 3530. As canners and processors of fish we are properly under control of Federal antitrust laws. We are in direct business relations with several thousand fishermen. There are fishermen's organizations on the Pacific coast that are larger and more influential than many small groups of processors. To allow any casual nonprofit association of fishermen to act in concert and beyond control of antitrust statutes, particularly in relation to the marketing of aquatic products, would be absolutely inequitable, unfair, and destructive to all private enterprise in relation to the fishing industry. There does not exist adequate grounds for such unfair and unreasonable treatment of the processors. We cannot compete with such Government upheld and privileged groups. Any adequate study of such west coast organizations will convince any reasoning person that such legislation is unnecessary and unjustified. COLUMBIA RIVER SALMON & TUNA PACKERS ASSOCIATION, Senator WARREN G. MAGNUSON, INTERNATIONAL LONGSHOREMEN'S Washington, D. C. DEAR SIR: We enclose a copy of a letter recently sent to Senator Payne in which we have commended him for his introduction of S. 3530, a bill to amend the Fisheries Cooperative Marketing Act. We urge that you use your good offices as chairman of the Interstate and Foreign Commerce Committee in securing consideration for this bill, if at all possible, in the course of this session. May we take this opportunity to express our sincere appreciation for the fine work you have been doing on behalf of the west coast fishing industry. Very truly yours, JOE JURICH, Secretary-Treasurer. INTERNATIONAL LONGSHOREMEN'S Senator FREDERICK PAYNE, Senate Office Building, Washington, D. C. DEAR SIR: We have recently received a copy of your bill S. 3530 which is intended to protect fishermen's unions from antitrust prosecutions by the Government. Please be advised that on April 5 last, our executive board went on record to endorse this bill and to commend you for your introduction of this measure. This action was subsequently concurred in by our membership. |