The CHAIRMAN. I wish to advise the representative of the State Department that we would like to have filed in the record for incorporation in the hearings the treaty of 1818 and the amendments referred to.

Mr. VALLANCE. I shall be glad to do that, Mr. Chairman.

(The treaty referred to will be found on p. 38.)

Mr. CENERAZzo. I am sure that I can get an amendment through that would take care of our situation. The Pure Food and Drug Department is putting certain restrictions on the red-fish industry which would cause the cost of production to go up. If this concern goes into Newfoundland they will have even a better advantage than they have at the present time, and the same will be true of any other concerns that may go there. The Government of Newfoundland, New Brunswick, and the Maritime Provinces tells these concerns, telling them that they have the help available for them at the rate of 75 cents a day, and guaranteeing them no labor troubles if they will go down there. Under this so-called reciprocal trade agreement, with a duty of only 1% cents a pound, there is no question but what they would be able to compete with American concerns doing business here. They are sending letters to the members of the fishing industry telling them that.

The CHAIRMAN. If you have any such letters, eliminate the name of the party so that they will not get into trouble, and have one put in the record.

Mr. CENERAZZO. I believe I can send one of them to Congressman Oliver, and he could insert it in the record.

(The following statement was submitted for inclusion in the record:) A message to the production employees of the Gorton-Pew Fisheries Co., Ltd., members of the Gloucester Sea Foods Workers' Union, series 1572, Local 1, International Longshoremen's Association:

The contract which was just signed is the third contract signed between the Gorton-Pew Co. and the Gloucester Sea Food Workers' Union. It is the will and intent of the Gorton-Pew Co. and the Gloucester Sea Food Workers' Union that all employees of the Gorton-Pew Co. work in close cooperation with the officials of the company so as to bring about a spirit of cooperation among the employees and a spirit of helpfulness to bring about reduction in production costs.

All employees in the general utility class and all women employees are receiving a 3-cents-per-hour increase. All the company expects in return and the union agrees with the company, is that each and every employee do his best to give a fair day's work with the idea of producing as much as possible at as low a cost as possible, so that the product that each employee produces can be sold on the market in competition with those goods that come here from foreign countries.

The competition in the salt-fish industry is so keen today that if the GortonPew Co. is able to maintain its present customers it will do well, let alone obtain any new customers because the cost of production in Gloucester is much higher than it is in the Maritime Provinces which is our greatest competitor in the salt-fish business.

If each and every employee in both the salt-fish division and the fresh-fish division of our industry cooperates with the employer and with the union, watches either his or her work and eliminates all wastefulness in the handling of raw materials that go into the finished product, as well as eliminating all stalling time, the production cost of Gorton-Pew Co. would be reduced from 10 to 15 percent. This does not mean that people will be laid off or that people will lose work; it means that the Gorton-Pew Co. will be able to sell its products for less money because the unit cost of production will be lower and by selling these products for less cost the company will be able to give more work to the employees in supplying these new orders.

If every employee would realize that the union and the employer are not fighting each other and are cooperating with each other, this will tend to bring about a better feeling on the part of the employer and on the part of the employee. The

controversy between the union and the employer ends on the day upon which the contract is signed. It then must become a question of partnership between the employees of the company and the employer in order to bring about profits for the stockholders and more earning power for the employees. Without this coopera

tion, it is impossible for any corporation to stay in business any length of time. The union's business agent is pledging the union to a complete cooperation with the employer and the employer is pledging himself to cooperate with the union in order to bring about a lower production cost so that the company can make more money and, in turn, the employees will receive higher wages.

Let's all work together for a more successful Gorton-Pew Fisheries Co., so as to make your job more secure.

With the hope that you will cooperate, we remain
Respectfully yours,

THOS. J. CARROLL,

President, Gorton-Pew Fisheries Co., Ltd.
WALTER W. CENERAZZO,

Business Agent, Gloucester Sea Food Workers' Union.

The CHAIRMAN. Who is your next witness, Mr. Oliver?

Mr. OLIVER. We have with us Captain McHugh of Boston who represents the Atlantic Fishermen's Union, and at this time I believe we would like to hear him.

STATEMENT OF PATRICK MCHUGH, REPRESENTING THE ATLANTIC FISHERMEN'S UNION, BOSTON, MASS.

Mr. McHUGH. My name is Patrick McHugh, and I represent the Atlantic Fishermen's Union, and my address is Boston, Mass. I have a statement prepared.

The CHAIRMAN. Captain, if you desire, this will be incorporated in the record for the benefit of the members of the committee. We are right anxious to get along as rapidly as possible, and this will be made a part of your statement, and will be included in the record.

(The statement submitted by Captain McHugh is as follows:)

STATEMENT OF PATRICK MCHUGH, OF BOSTON, REPRESENTING ATLANTIC FISherMEN'S UNION, AT HEARING ON AMERICAN FISHERIES, BEFORE THE HOUSE OF REPRESENTATIVES COMMITTEE ON MERCHANT MARINE AND FISHERIES IN WASHINGTON, D. C., APRIL 16, 1940

The fishermen of America and I speak directly for 3,500 of my own union and indirectly for all of the 19,000 fishermen in the New England area-look to you gentlemen in Congress as our last resort. We are faced by a danger of a "blackout” by a foreign competitor. Not so quickly as a "blitzkrieg" but nonetheless devastating, will be this impending wave after wave of Newfoundland fish * * * literally millions of pounds, and all duty-free.

This threat to the jobs of all of the 120,000 fishermen in the United States of America is not entirely from a foreign source. It is partly from our own Government. Congress alone stands between the American fisherman and almost certain, although gradual, destruction.

Your committee is here met to discuss the need for so redefining the term "American fishery" that never again can our rights be swept summarily away from us, without benefit of advance warning, without public hearing, and solely because one big, powerful combination is able to influence governmental bureaus along desired lines.

Briefly, the danger facing our industry is this: Two summers ago the United States Treasury "enacted an important bit of legislation" on its own authority, by changing existing customs regulations so as to permit a "shore station" to become part of an American fishery activity. This was done at the direct, and exclusive, petition of General Seafoods Corporation, of Boston, owned wholly by General Foods Corporation of New York, the world's largest food distributors. This Boston fishing company then signed an agreement with the government of Newfoundland, for erection on the treaty shore of Newfoundland of a "shore

station" for processing of fish. In reality, this plant is to be a gigantic one for freezing and exploiting "all the resources in the neighborhood in addition to fish." Some $200,000 will be provided by the Newfoundland government for the shore plant, which will employ only Newfoundland fishermen and shore labor, and will ship each year into the United States of America about 30,000,000 pounds of their fish, all duty-free.

Thus we have an American fishery as one in which no American may work. This utterly ridiculous situation was made possible by the United States Customs Bureau, which issued, two summers ago, their famous (or rather infamous) Treasury Decision No. 49682. This redefined an American fishery. We submit that this was a function which should be reserved solely for you gentlemen in Congress.

However, because of the valuable work of one of the New England Congressmen-Hon. Ralph O. Brewster, of Maine—this situation was made widely known in an enlightening speech on the floor of Congress last February 6. Mr. Brewster's exposé shook the entire fishing industry from coast to coast and led to an impressive demonstration against this Newfoundland deal at the recent March 12 hearing before the United States Commissioner of Customs.

Two other United States departments seem unable to help us. In fact, they are, in our opinion, somewhat lax in their duty. First of all, one would naturally suppose that the United States Bureau of Fisheries, formed to aid the American fishing industry, would be leading the fight against this Newfoundland deal.

However, we find that the United States Bureau of Fisheries, at the time the negotiations between General Seafoods and the Newfoundland officials was in full swing, was embarrassed by the fact that the chairman of its Fisheries Advisory Counc1 was a paid employee of General Seafoods. During that time he urged the Bureau to accept from his company a fishing trawler which was needed for scientific research work. They accepted and paid the nominal fee of $1, at about the exact time the Newfoundland deal was being negotiated.

Then, too, the president of General Foods Corporation, which owns General Seafoods, was a member of the Business Advisory Council of the Department of Commerce, which at that time had the Fisheries Bureau in its departmental functions. Naturally, with two employees of General Foods occupying key positions in the Government department controlling fisheries work, the United States Bureau of Fisheries was too much embarrassed to act to defend American fishing interests.

We turn now to the State Department. This Department was, and is, embarrassed on two counts. The first is that its consul general in Newfoundland worked rather closely with the interested parties and made the amazing suggestion of how to circumvent the tariff laws in order to make the processed Newfoundland fish available for duty-free entry into the United States markets.

The second embarrassment of this Department is that the right-hand man of the Secretary of State is none other than ex-Ambassador Joseph E. Davies, lavish contributor to party political funds, and husband to the largest stockholder of General Foods. President Roosevelt himself told Massachusetts Congressmen that "Mrs. Marjorie Davies is the key to the situation."

With three principal branches of our Government too involved or too embarrassed to help us, we appeal to Congress to exercise its normal functions of legislating a definition of American fisheries as one in which all the main activities shall be American-and not include a tricky shore station manned on foreign soil by foreigners under a protection of the American flag.

Much can be said about the need for congressional action on this front. We shall, however, confine our remarks to two main thoughts. The first deals with Customs Form 3295, which is the affidavit a fishing master and two members of his American crew fill out in taking oath that the fish they land in the United States actually is the product of an American fishery.

The captain and two of his crew swear before an acting deputy customs collector or a notary public that the fish was caught by them and is the product of an American fishery "and that no portion of said cargo was purchased or obtained otherwise than by the above means

* *

In their printed brief filed with the Customs Bureau at the oral request of Chief Counsel Johnson, of the Bureau, the General Seafoods Corporation very frankly, and totally with a disregard for the feeling of American fishermen, urged that this oath No. 3295 be changed. They actually said that it was unworkable from their viewpoint and had to be revised, so that it would not interfere with bringing Newfoundland fish in as American fish. Full details on this point were given in the brief which our Atlantic Fishermen's Union filed at the March 12 hearing, copy of which testimony is in your committee's files.

Incredible as that performance was, it can be matched by the series of events preceding the issuance of Treasury Decision 49,682 and the signing of General Seafoods agreement No. 49. We now present for your information, and that of the public, a chronology of dates involved in or related to the whole situation. This is the result of intensive research on our part, and all the facts listed have been verified, mostly from official documents. This is the first time a completely related picture has been given of a chapter in American history, of which those three Bureaus cannot be especially proud. We fishermen think they let us down. We suggest you Congressmen read this account of dates and then judge for yourself * * and then recommend legislation which will forever define an American fishery for Americans.

*

CHRONOLOGY OF THE NEWFOUNDLAND DEAL

(Events in the year of 1937)

August 1937: "Very confidential" discussions commence between General Seafoods and Newfoundland Commissioner of Natural Resources.

September 18: General Seafoods gives "definite written authority" for a basis of negotiations toward the "establishment of a modern fishing industry on the treaty coast" of Newfoundland.

December 2: R. P. Ewbank, Commissioner of Natural Resources, informs local board of trade that an agreement had been tentatively reached on deal.

December 2: Commissioner Ewbank declares General Seafoods plans to "freeze all available resources in the neighborhood in addition to fish * * * ""

December 2: Commissioner says "haddock will be exploited" by company. December 2: Commissioner Ewbank says General Seafoods "consider they will have certain advantages, the absence of which makes a strictly Newfoundland enterprise in the American markets almost impractical."

December 2: Ewbank says real purpose is to take Newfoundland fishermen off the dole.

December 3: American counsel general in Newfoundland sends enclosures to the State Department in Washington, D. C., "relative to the plans of an American company, General Seafoods, to carry on extensive operations on the southwest coast of Newfoundland."

December 31: Consul general writes he "had nothing to do with initial stages of the negotiations" and asks State Department to let him know if they "foresee any objection to this proposition."

(Events of the year 1938)

January 1, 1938: President Clarence Francis, of General Foods, is a member of the Business Advisory Council of Department of Commerce, in which is located the Bureau of Fisheries.

January or February: Representative of Newfoundland government visits General Seafoods manager in Boston; tentative agreement discussed.

February 3: Consul general sends a report which he marks as "confidential until agreement is finalized in 60 days"; says both sides "seem happy with their contract. It is believed Alphen (general manager of Seafoods) will profit from the agreement as drawn, as several of the terms of the proposed contract give his company considerable leeway."

February 7: Assistant Secretary of State Francis B. Sayre, as chairman of the Executive Committee on Commercial Policy, says he "will appreciate it" if the United States Treasury Department "would be willing to ascertain the views of your Department in this matter" of possible application of section 303 of tariff laws on countervailing duties.

February 21: Newfoundland Board of Trade makes strong written protest. February 24: Verbal objections of board made, in vain.

March 1938: General Seafoods quoted as informing Newfoundland government that the company "considered it advisable to arrange for a conference in Washington in order to discuss with the customs authorities certain questions arising out of the United States customs regulations in connection with the scheme.' March 11: Newfoundland cold-storage companies request, in vain, a conference with the Government.

March 14: Newfoundland Board of Trade protests that their recommendation had been ignored because "it is a closed bargain between the Government and the promoters.'

March 22: Chief Counsel Johnson, of Customs Bureau, makes an "oral request" for a brief to be filed by General Seafoods, on their plan.

March 23: After nearly 2 months' delay, United States Treasury informs State Department that "on the basis of meager information," no contravailing duties would be imposed upon the products of such a venture (Newfoundland fish into United States of America).

March 31: Consul general sends dispatch to State Department, dealing with proposed agreement and plans of General Seafoods to enter into large-scale operations on the treaty coast of Newfoundland.

April: 60-day "finalizing" period extended for another 2 months for General Seafoods, by the Newfoundland government.

April 12: Secretary of State, 2 weeks late, send March 31 despatch of consul general to the office of Secretary of the Treasury.

April 15: Assistant Secretary of State Sayre asks United States Treasury to keep him informed of result of conference with General Seafoods, and also raises important question that the project "may not come within the provisions of the Convention of 1818."

April 27: Consul general writes that inasmuch as the fish proposed to be purchased by General Seafoods from native fishermen cannot be classed as "an American fishery product," the alternative could be devised of paying wages or chartering the vessels of Newfoundlanders; also comments that the proposed plant on the "uninhabited coast" would cause the coast promptly to become inhabited (treaty of 1818 permitted simply uninhabited area).

April 30, 1938: In Boston, the Bay State Fishing Co.'s books show current assets of $645,000, plus capital assets of about two more million dollars in trawlers, real estate, machinery, etc.; for all these assets, the company president has offered to sell to General Seafoods for $1,265,000 cash, plus assuming some liability. Much intercompany discussions of possibility of violating the antitrust laws, as the combination of two of largest concerns on Boston fish pier might violate certain laws.

May 4. General Foods files with Securities and Exchange Commission its prospectus No. 1244, in which definite assertion is made that the Newfoundland government is to provide $200,000 for the project, which is mentioned in the prospectus as being planned for La Poile; document said that company would spend $125,000 of own money.

May 25: Pursuant to the "oral request" of Chief Counsel Johnson, of Customs Bureau, there is filed an extensive 140-page printed brief, containing application of General Seafoods, frankly asking for changes in customs regulations and fishermen's oath.

June 1: 60-day "finalizing" period again extended 2 months.

August 12: Treasury decision 49,682 is promulgated; changes definition of American fisheries so as to add a shore station, etc., in the manner desired by General Seafoods.

August 12: Stephen B. Gibbons, Assistant Secretary of State, notifies General Seafoods counsel that the "Department is of the opinion that the products * * * will be entitled to free entry as products of an American fishery * * * ""

August 27: Newfoundland government is "officially informed" that the United States Treasury Department has "ruled that the products resulting from the processes of the shore station * * * would be entitled to

free entry.'

* * *

September 7: J. Bruce Kremer, counsel for General Seafoods, files a printed brief with United States Attorney General "with respect to any question which might arise under the antitrust laws of the United States," in connection with proposed purchase of their largest competitor, Bay State Fishing Co.

September: Attorney General fails to notify cther fishing interests and the fishermen's unions, which had repeatedly urged investigation and prosecution on grounds of violation of antitrust and other laws; much mystery about this printed "memorandum" on proposed purchase; mystery as to whether Attorney General gave permission for sale, or even read the brief; this sale believed by union to be related to Newfoundland deal and Treasury Decision 49,682 (just promulgated), as Mrs. Marjorie Davies' company obtains, through purchase, several more trawlers, which are to be used in Newfoundland.

October 18: General Seafoods pays $1,260,000 cash for Bay State Fishing Co., which then owned fishery plant in Vinalhaven, Maine, subsequently closed out. November 17: Trade agreement between United States and United Kingdom signed, giving Newfoundland substantial tariff reductions, including 20 percent cut on blueberries (which are to be processed at the shore station).

December 31: Holdings of vessels of General Seafoods show increase from $831,000 in 1937, to $1,639,000 in 1938, due to Bay State deal.