RECENT RECONSTRUCTION FINANCE CORPORATION EXPERIENCE IN 

 THE DOMESTIC TUNA INDUSTRY^i/ 



Since its inception, the Reconstruction Finance Corporation has 

 made 371 loans to the fishing and fish processing industry. Total 

 loan authorizations amoiinted to ^23.8 million, of which $h.3 million 

 was banks' shares in participation loans. 



The basic law under which Reconstruction Finance Corporation 

 operates provides that no business loan shall be made unless the 

 credit is not otherwise available on reasonable terms. It is 

 apparent then that normal financial and credit channels were unable 

 or unwilling to furnish the frinds needed in these loans. 



Reconstruction Finance Corporation participation loans, both 

 immediate and deferred, enabled many banks to make and service loans 

 to their customers where size of loan or other considerations would 

 have prevented their making the loans completely on their own. In 

 addition, banks and the Reconstruction Finance Corporation frequently 

 cooperated in credit arrangements wherein Reconstruction Finance 

 Corporation extended the desired term loan while the bank agreed 

 to take care of short term working capital and inventory loan 

 requirements. 



It is not possible, in the limited time available^/ to determine 

 which of the 371 loans were made to West Coast tuna fishers and 

 packers. It may be of value, however, to discuss briefly the aspects 

 of some typical loans made recently in that area, 



1, A loan of $1^0,000, with a maturity of 38 months, made to 

 a California firm which processes and packs tuna, sardines, 

 and mackerel, and also produces fish meal and oil. The 

 company was established about 20 years ago. Its loan 

 request was declined by three California banks, for the 



26/ Prepared by Economic Analysis Staff, Office of the Controller 

 Reconstruction Finance Corporation, as requested by the Fish and 

 Wildlife Service in the closing days of the present survey. 



417 



