The draft bill that has come out of the Senate, we understand, provides for an extension of the program for 5 years, but the Department's recommendation is for an extension of 10 years, Mr. Chairman. So that, the only difference in the Department's position, approved by the Bureau of the Budget, and the Senate bill, which we understand has been passed by the Commerce Committee, is that the Senate version provides for a 5-year extension and the Department's recommendation is for a 10-year extension. That is the only difference.

I think, Mr. Chairman, that in view of the time element that the chairman pointed out, I will just make myself available for any questions in this regard.

Mr. THOMPSON. Are there any questions?

Mr. DOWNING. No questions.

Mr. THOMPSON. Mr. Pelly.

Mr. PELLY. I would like to ask Mr. McKernan about the language which is in the draft bill. Is that the language which you indicated, according to your understanding, had been approved by the Senate

committee?

Mr. McKERNAN. Yes.

Mr. PELLY. In other words, this is a new proposal as far as your Department goes, dated May 10, and does this language as given in this bill superseded any other proposed action that you recommended to this committee?

Heretofore you approved the extension of the law. Now you are sending over language which was sent to the Senate, too, I take it?

Mr. McKERNAN. This combines these, Mr. Pelly. It does not really supersede them. It simply combines the legislation and the bills which have been introduced here in the House with the additional proposals that have been suggested in the Senate and recommended by the Department.

Mr. PELLY. In effect, the language in this proposed bill would allow the Department to finance new fishing vessels regardless of whether they were replacing the older vessels or were simply to add to our fishing fleet?

Mr. McKERNAN. Yes; and we see this as an advantage in two areas: One, a young man just getting started oftentimes does not have the financial resources to put up money enough for a construction of a new modern fishing vessel which would, for example, qualify under the Construction Act, and this, then, would allow him perhaps to purchase a vessel from a more experienced fisherman who was well established, but he wanted to build, perhaps, a newer vessel.

This would in a sense, in our view, supplement existing legislation quite well and fill in what we consider to be a gap in the present financial program that Congress has provided fishermen in recent

years.

Mr. PELLY. The Department certainly is aware that there are going to be a considerable number of fishermen or groups that will not approve of this because they feel that already we have too many fishing boats, and they feel that the problem of the fishing industry is of too much fish and too low price, is that not right?

Mr. McKERNAN. We do not feel that this particular proposal will cause the same kind of objections that were caused by the Construction Subsidy Act because in this case there will not be a change in the value of the vessel, you see.

In fact, one might consider that the value of the vessels might even increase because there would be more competition for them.

Mr. PELLY. Yes. And one objection, of course, to a subsidy was the fact that it gave your competitor an advantage over you because his boat was subsidized and your boat was not.

Mr. McKERNAN. Yes; and this will not do this.

Mr. PELLY. On the other hand, there are certainly fishermen's organizations that feel that their problem today is one of too many fishing boats and too much fish and, as a consequence, too low a price.

I would myself feel that a large amount of that problem came from imports and not from our own production. Is that not right?

Mr. McKERNAN. Yes, Mr. Pelly. I could not agree with you more. Mr. PELLY. For the first time in history this country now is consuming a larger amount of imported fish than we produce ourselves, is that not right, in the last 2 years?

Mr. McKERNAN. Yes. You are on a favorite subject of mine. When a foreign nation can come and fish off our shelf and take its products back to Europe and Asia and then reship them back to our country, there obviously is something wrong with the economics of our industry.

I am quite convinced in my own mind that we need to get out and fish, and I think in many parts of the country the legislation_that this committee has sponsored is going to bring that revolution about. We are going to begin to compete on the high seas and, furthermore, we are going to begin to compete successfully.

The price of some of the frozen products from Europe is rising to a point now where I feel it is economical, for example, to produce frozen blocks from American sources. I believe that this will be done

within the next year, in fact, in New England and the west coast. Mr. PELLY. The chairman asked the question as to whether there might be any opposition or whether we could expedite action on the bill. My feeling is that I do not believe that the fishing organizations out in my area know about this additional language or have had a chance to express themselves.

I would like them to have a chance to testify or to at least consider the new language that has been added in this proposal.

Mr. McKERNAN. Mr. Chairman, while I would leave this to the judgment of the committee, of course, this was discussed in the Senate rather fully and, in fact, at that time there were representatives of Pacific Northwest people present at the hearings.

Mr. PELLY. When were the hearings on this?

Mr. McKERNAN. They were the 11th and 12th of May.

Mr. PELLY. Were the fishing vessel owners' associations represented by witnesses?

Mr. McKERNAN. Yes; they were.

Mr. PELLY. You would know. I would concede that there is nobody that knows more about the fishing industry in my district than the witness who is before the committee now.

Mr. McKERNAN. I might mention a couple of names that are very familiar to you from your district. Mr. John Wedin testified in favor of the amended bill, if my memory serves me right.

Mr. PELLY. That is a pretty good recommendation because Mr. Wedin has to satisfy everybody. He runs a fishermen's newspaper.

Mr. McKERNAN. He also represents some trawlers out there, too. Mr. George Johansen testified in favor of the legislation also.

Mr. PELLY. That means a lot to me. If those people support the bill, Mr. Chairman, that means that it is really carefully considered because they are really very knowledgeable as to the industry. Mr. THOMPSON. Will the gentleman yield?

Mr. PELLY. I yield.

Mr. THOMPSON. On page 6 of your statement, you stated:

However, in making a loan where the vessel will not replace an existing vessel, the Secretary must determine that the operation of the vessel in a fishery will not cause economic hardship or injury to the efficient vessel operators already operating in that fishery.

Now, did you hear any specific comments in the Senate testimony as to whether or not that type of stopgap authority would satisfy the fisheries in operation?

Mr. McKERNAN. I do not recall any specific comment but there was no opposition whatsoever to any aspects of the legislation. We feel that if by chance anybody felt they might be injured because of the addition of units to the fleet, that a hearing would be held, and they could present their material and the Secretary of the Interior would be required to consider this very carefully before approving such applications.

Mr. THOMPSON. How would these other members of this fleet or this fishery be alerted to the fact that approval was pending?

Mr. McKERNAN. We would publish it in the Federal Register, Mr. Chairman, according to the Adminisrative Procedure Act.

Mr. THOMPSON. I just wonder if the fisheries ever have access to the Federal Register or whether it is the practice of them to follow the Federal Register?

Mr. PELLY. I think the publication is pretty widespread and I have noticed in the Fishermen's News out my way the actual printing of the questions and answers that went on in connection with one of these hearings.

Mr. McKERNAN. The chairman will recollect that we put out a daily news service that reaches large groups of fishermen and vessel owners, and they are well notified.

We are quite certain of this. The announcement goes out about 30 days in advance, and we make sure that it is carried in local papers, and then our daily Fisheries Market News gets out to the fishermen and boatowners also. So they are quite well informed.

Mr. THOMPSON. Thank you, Mr. McKernan. Are there any further questions?

Mr. DOWNING. Yes, Mr. Chairman.

Mr. McKernan, I wonder if you would refresh my memory as to what this bill actually covers. Would it cover, say, an oysterman who wanted to replace his oysterboat?

Mr. McKERNAN. Yes; it would, and we have made loans to oyster

men.

Mr. DOWNING. Or, say, an oyster buy boat, a larger type vessel? Mr. McKERNAN. No, it would only cover fishing vessels, Mr. Peterson informs me. Oyster dredger or tonger boats.

Mr. DOWNING. Would it cover the boat that contacts each of these small vesels and takes in their catch at the end of the day and then sells their catch on the shore that night?

Mr. McKERNAN. No: it would not.

Mr. DOWNING. Would it apply to the menhaden industry?
Mr. McKERNAN. Yes.

Mr. DOWNING. We might as well put in crabs, too. How about the crabbing industry?

Mr. McKERNAN. Yes. The loan fund has applied quite well and has been used throughout the mid-Atlantic area to a considerable degree.

Mr. DOWNING. Have you any breakdown on the geographic distribution of this money?

Mr. McKERNAN. Yes; but I do not have it by the 50 States. I have it by general areas, Mr. Chairman. For example, in the New England and mid-Atlantic area, these I have combined. There are about 200 approved loans for about $5 million.

Mr. DOWNING. In the New England

Mr. McKERNAN. And mid-Atlantic. In the South Atlantic and gulf, for example, there are about 130 loans for about $3 million. Mr. KEITH. You do not have any breakdown between the New England and the mid-Atlantic at this time?

Mr. McKERNAN. Not at my fingertips, Mr. Chairman. I would be glad to supply that for the record if you would care to have it. Mr. DOWNING. I would appreciate it. (The information referred to follows:)

DEPARTMENT OF THE INTERIOR,

FISH AND WILDLIFE SERVICE,
BUREAU OF COMMERCIAL FISHERIES,
Washington, D.C.

Hon. T. A. THOMPSON,

Chairman, Subcommittee on Fisheries and Wildlife Conservation, House of Representatives, Washington, D.C.

DEAR MR. THOMPSON: During the hearing on H.R. 4227 we were requested to furnish a breakdown in the number of loans approved between New England and the Middle Atlantic States.

Up to April 30, 1965, we have approved 166 loans for $4,380,000 in New England and 25 for $557,000 in the Middle Atlantic States.

Sincerely yours,

DONALD L. MCKERNAN, Director.

Mr. DOWNING. If I could resume further, what is the process for an applicant who wants to obtain a loan of this type?

Mr. McKERNAN. Mr. Chairman, we have small booklets, pamphlets, a copy of which I would be happy to supply for the record if you would like, and we disseminate this through our local offices of the Bureau. We put out advertising, and we have had, on local radio stations and public service time, information on where these loans are available.

By this time knowledge of our loan program seems, in my opinion, to have been generally disseminated throughout the fishing industry several times. We make a habit every 6 months or so of repeating knowledge of this so that if people forget it or do not understand it the first time we try and get news to the local people down at the fishermen's level regularly.

Mr. DOWNING. I am not too sure that the information is filtered down below the large business-type operation of fishery though.

Mr. McKERNAN. Mr. Chairman, Mr. Peterson informs me that about 50 percent of our loans are under $10,000, indicating that we have had considerable success in getting this information to the small fishermen.

Mr. Chairman, we also put out posters in most of the fish-buying houses throughout the country. This is done by our local offices, and we do everything we can, and we would be very pleased to know if we are not reaching some fishermen because it is certainly our intention to let the small fishermen especially know about this program.

Mr. THOMPSON. Have you ever suggested to the local or State fish and wildlife agencies such procedures in order that they may reach people that you do not reach?

Mr. McKERNAN. Yes, we do, Mr. Chairman. We have these right down at the local level. We have statistical agents, for example, through the South and southeastern part of the United States and they are all generally familiar with this program and have copies of the brochure to disseminate.

Mr. THOMPSON. Will the gentleman yield for a point?

Mr. DOWNING. I yield.

Mr. THOMPSON. You mentioned about $8 million thus far between the New England coast, the South Atlantic and gulf coasts. That means that $5 million more have been loaned

Mr. McKERNAN. There is about $19 million altogether, Mr. Chairman.

Mr. THOMPSON. What would be the distribution of the balance? That has not been mentioned. Will you give that just so that the record will show it, Great Lakes and Pacific?

Mr. McKERNAN. Let us start with the Great Lakes. There has been about $110,000 approved for 31 loans in the Great Lakes. In Hawaii there have been 15 loans at $205,000; Alaska, 186 loans at approximately $2 million; Pacific Northwest, 178 loans with $3 million; California-that is a large section of the coast, so it is separate-135 loans for $6 million.

Mr. THOMPSON. Then your larger loans are apparently on the west coast?

Mr. McKERNAN. Well, I think New England and the mid-Atlantic have the greatest number of loans. There are 191 loans there for about $5 million.

Mr. KEITH. Alaska is included on the west coast?

Mr. McKERNAN. That is right. There are 186 loans in Alaska for $2 million. You will remember that I came before this committee right after the earthquake disaster and Congress gave us approval to consider, in a sense, disaster loans in Alaska right following the earthquake.

We processed about 100 of these disaster-type loans in Alaska and successfully approved 76 loans, I think it was, in Alaska; and they have been very successful in helping these people up on their feet after that disaster.

Mr. DOWNING. I have two further questions, Mr. Chairman. One is would a party fishboat be included?

Mr. McKERNAN. No.

Mr. DOWNING. My last question is, What are the criteria for a favorable consideration for a loan briefly?

Mr. McKERNAN. Briefly, Mr. Downing, the application and the successful approval requires that this be an established fisherman and that he have experience in the fishing business, and that he has a good reputation for general repayment of loans.