FISHERIES LOAN AND MORTGAGE PROGRAMS 



by 

 Lester T. Bradbury 1/ 



My talk today primarily concerns the Fisheries Loan Fund and the Mortgage 

 Insurance Program for fishing vessels, both of which are the responsibility of the Bureau 

 of Commercial Fisheries. 



The financing of new fishing vessels for the tuna fleet — albacore, bait boats, 

 and purse seine types — to replace vessels that have been lost at sea, damaged, and worn 

 out, or have become obsolete or inefficient is considered to be one of the major problems 

 facing the tuna industry. A large proportion of the present fishing fleet is becoming 

 obsolete and as time goes on more and more of the existing fleets will have to be re- 

 placed with modern vessels if this country is to maintain its position in the worldwide 

 tuna industry. I might make that statement much stronger by saying that we will have to 

 rebuild our fleets relatively soon if we are going to continue to have a domestic tuna 

 industry. 



It has been emphasized for several 

 years that the industry' s inability to se- 

 cure sufficient venture capital to construct 

 new vessels and to modernize or convert some 

 of the existing fleet is a problem of major 

 proportions that must soon be resolved. 

 Vessel owners have little or no incentive 

 either to replace old or lost vessels with 

 new ones, or to make additions to the fleet. 

 This is particularly true today of the tuna 

 bait-boat fleet. Generally speaking, in- 

 vestment money to build new vessels is 

 lacking because of the poor financial ex- 

 perience of vessel operators during the 

 past several years. Unquestionably, one of 

 the principal reasons that sufficient 

 venture capital is not readily available is 

 because of the decline in world tuna prices 

 and the resultant unprofitable operation of 

 the fishing vessels. It seems reasonable 

 to expect that to be able to entice suf- 

 ficient venture capital into the industry 

 to eventually rebuild the fleet, the 

 investors must be given reasonable assur- 

 ance of something more than just a very 

 modest return on their investment. Other- 

 wise there would be no incentive for them 

 to take the additional risks involving 



1/ Office of Loans and Grants, Bureau of 

 Commercial Fisheries, Terminal Island, 

 California. 



hundreds of thousands of dollars or even 

 a million dollars for only one modern tuna 

 fishing vessel and its gear. 



At the present time we have, in the 

 Bureau, two programs that are of assis- 

 tance to the tu .a industry in the financ- 

 ing of fishing vessels and operations. 

 The Fisheries Loan Program was established 

 by the Fish and Wildlife Act of 19^6 and 

 the Fishing Vessel Mortgage Insurance Pro- 

 gram was transferred from the Maritime 

 Administration under provisions of this 

 Act. 



FISHERIES LOAN FUND PROGRAM 



The Fish and Wildlife Act of 1956 

 established a ten million dollar revolving 

 loan fund, which in 1958 was increased to 

 twenty million dollars. To date, thirteen 

 million dollars have been appropriated to 

 the fund. This Fisheries Loan Fund is 

 used by the Secretary of the Interior to 

 make loans for financing and refinancing 

 of operation, maintenance, replacement, 

 repair, and equipment of fishing gear and 

 vessels, and for research into the basic 

 problems of fisheries. 



The broad objective of this fund is 

 to provide financial assistance which will 

 aid the commercial fishing industry to 



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