322 MARINE FISHERIES OF NORTH CAROLINA 



to be at a maximum, and the rewards to be those of wage earners who often 

 do not or cannot accumulate from their earnings working capital for their 

 operations. This is especially true of fishermen in small communities where 

 incomes are erratic and undependable; they need capital or credit for boats 

 and gear, for supplies and family living expenses and for financing sales. 



Unlike agriculture, wherein privately owned land can be pledged or mort- 

 gaged for credit, the fisheries cannot pledge the water as collateral. Boats are 

 insurable, but at such high premiums that small fishing units are often with- 

 out insurance and therefore not acceptable collateral for mortgage loans. 



Frozen inventories are poor collateral for credit. They are subject to the 

 hazards of spoilage and deterioration; their value is not accurately ascertain- 

 able or predictable where there are no futures trading markets and no official 

 standards of grade. 



In small communities one of the few sources of credit available to small 

 fishermen is the shore dealer (or sometimes the remote commission merchant) 

 who makes advances to be paid back in fish produce, in return for which as 

 security the dealer usually requires exclusive right to sell the fishermen's 

 produce until the debt is paid. Often the dealer also owns the boat or a large 

 share of it. Such loans by the dealers are usually not motivated purely by the 

 expectation of the return of interest with safety of principal as is bank credit 

 which does not hamper the borrower's freedom to sell to his best advantage. 

 The dealer may and often does waive interest on such debts, and, having a 

 monopoly on the fisherman's produce, is in position to exercise a considerable 

 degree of control over the prices which the fisherman, who is in poor bargain- 

 ing position, must accept. 



Corporate Form of Business. Most of the corporations in the fisheries are 

 in the manufacturing and selling business rather than in catching fish, though 

 some marketing corporations also operate fishing vessels or traps. Where 

 vessels are separately incorporated, as the larger ones often are, the purpose 

 of incorporation is usually to limit liability rather than to secure capital. In 

 the business of catching fish, the problems of capital and credit are not as 

 well solved by the corporate form of enterprise as they are in many other 

 industries wherein substantial amounts of capital are obtained from a large 

 number of investors for the conduct of large-size business. In other businesses 

 where the corporate form is suitable, adequate capital is obtained, economies 

 are realized by large scale operation, functions are departmentalized and 

 performed by experts, the advantages of close management and discipline 

 are obtained, and research, experimentation, and development can be sup- 

 ported as they cannot be by small companies. Large scale operation also often 

 makes possible diversification, which is desirable in the fisheries in com- 

 pensating for a poor season in one fishery with a good season in another. 



In the business of catching fish, the actual fishing is remote from central 



