increased their landings. No loan ap- 

 plications were received during fiscal 

 year 1959 for conversion of tuna clip- 

 pers to purse seiners although most 

 vessel owners were watching the re- 

 sults obtained by the early conversions. 

 Since the program started nearly 50 

 percent of the applications received 

 were for loans of $10,000 or less 

 while 61 percent were for amounts of 

 $20,000 or less. Most of the small 

 loan applications came from Alaska 

 and the albacore fishermen of Cali- 

 fornia, with a small number from the 

 New England lobster fishermen. 



The status of the fund as of June 30, 

 1959, was as follows: 



Appropriated 

 Interest collected 

 Principal collected 



Total available 

 Administrative 



expenses 

 Net loans authorized* 

 Total obliga- 

 tions 

 Amount available for 



loans 

 Applications being 

 processed 



$10,000,000 

 327,715 

 890,999 



$11,218,714 



485,215 

 6.531,512 



7,016,727 



4,201,987 



3,101,534 



* Net loans authorized represents the total loans au- 

 thorized minus authorizations which were cancelled after 

 approval on request of the applicants. 



Five percent interest is charged on 

 all fisheries loans. All principal and 

 interest are returned to the revolving 

 fund and become available for future 

 loans or administrative expenses. Ad- 

 ministrative expenses are paid from 

 the fvmd. A limitation on the amount 

 which can be spent each year for this 

 purpose is carried in the Department 

 of the Interior Appropriations Bill. 

 During fiscal year 1959 this limitation 

 was $313,000. Expenditures for ad- 

 ministrative expenses during the year 

 amounted to $266,618. 



During this fiscal year four loans 

 were declared in default. Two of these 

 were turned over to the Department of 

 Justice for collection. The other two 

 as well as two earlier cases had 

 their defaults remedied. From the 

 beginning of the program 14 cases 



have been declared in default. Five of 

 these defaults have been remedied 

 leaving nine requiring further legal 

 action. As legal action has not been 

 completed in most of these cases actual 

 loss figures are not available. The 

 estimated cumulative loss to principal 

 to June 30, 1959, is $120,000. 



DISCUSSION AND CONCLUSION 



During the past 3 fiscal years the 

 Fisheries Loan Fund has provided 

 long-term financing for approximately 

 350 vessels. Some of the loans pro- 

 vided aid for more than one vessel. 

 One of the requisites for obtaining a 

 loan from this fund is a showing that 

 the desired financing is not available 

 on reasonable terms from any other 

 source. It can be assumed that most, 

 if not all, of these vessels would have 

 been in serious difficulties if these 

 loans had not been available. Not only 

 did these loams keep the vessels op- 

 erating, but the fact that the Federal 

 Government had sufficient faith in the 

 fishing industry to make the loans also 

 encouraged banks and suppliers to ex- 

 tend limited credit to other vessels. 

 The loans from the Fisheries Loan 

 Fund enabled vessel owners to pay off 

 long-standing debts which assisted the 

 general economy of those areas largely 

 dependent on fishing. In addition, mort- 

 gage foreclosures were prevented in 

 many instances. 



Since the start of the program ap- 

 proximately 50 percent of the loans 

 have been used for refinancing mort- 

 gages and lienable debts--47 percent 

 for repairs, improvements and re- 

 placements, ajid 3 percent for operating 

 expenses. During the early stages of 

 the program a larger portion of the 

 funds were used for refinancing with 

 smaller amounts used for repairs and 

 improvements. The proportionusedfor 

 refinancing has been declining, and 

 this trend is expected to continue. As 

 more of the funds go into vessel im- 

 provements, the efficiency of the 

 vessels and also the prospects for 

 repayments will improve. The esti- 

 mated catch of fish and shellfish of 

 these 350 vessels in fiscal year 1959 

 was approximately 230 million pounds. 



