ship to efficient operators already engaged in the 
fishery, no provision exists to retire an older vessel 
replaced by the subsidized vessel. Thus, the law 
generates inequities as it corrects others. 
The law has worked to the disadvantage of 
some aspects of the work of the Bureau of 
Commercial Fisheries. In addition, the Bureau has 
not had much control over which fishery would 
receive subsidy funds. The long-range solution to 
the vessel cost problem probably will come from 
increased use of advanced technology and mass 
production techniques. 
Regarding the subsidy program, the Govern- 
ment should develop guidelines to establish priori- 
ties in handling subsidy applications. For example, 
a major portion of the program should be directed 
to those fisheries not in danger of depletion. It 
also should help those in overfished fisheries move 
into underutilized fisheries. When appropriate, the 
subsidy should be applied to distant-water fish- 
eries. In all cases modern technological develop- 
ments should be incorporated into the subsidized 
vessels and gear. 
U.S. fishermen should be permitted to buy 
equipment anywhere in the world where they can 
find the best combination of price and perform- 
ance. At present, import duties often prevent 
acquiring such equipment. 
Recommendation: 
Restrictions on the purchase of fishing equipment 
abroad should be removed. Legislation should be 
enacted to permit U.S. fishermen to purchase 
vessels in foreign shipyards; if it is decided not to 
repeal the restrictive laws, the vessel construction 
subsidy program should be expanded and modified 
to provide for retirement of older vessels. 
4. Availability of Capital and Credit 
The credit problems of fish processing, distrib- 
uting, and marketing are no different than those of 
any other industry and the normal financial 
institutions have served these segments well. How- 
ever, the fishing segment of the industry has not 
been so fortunate, witnessing a relative scarcity of 
capital since World War II. Following the war, 
bankers everywhere became reluctant to finance 
fishing vessels. During the low-profit period from 
1948 through 1960, and still existing in several 
fisheries, fishing vessel financing problems were 
V-40 
among the worst handicaps to fisheries develop- 
ment. 
Congress recognized this and by 1956 began to 
ease the fishing industry’s credit problem through 
U.S. Government loan programs. The Fisheries 
Loan Fund Program has been a very effective 
incentive for U.S. flag fishing at a nominal cost to 
the Government. It also has removed the fishing 
vessel owner from dependence on his customers 
for capital. 
This program is supplemented by a Mortgage 
Insurance Program. Whereas the Fisheries Loan 
Fund enables a direct cash loan to the fisherman, 
under the Mortgage Insurance Program the Gov- 
ernment guarantees mortgages used to finance 
construction, reconstruction, and reconditioning 
of fishing vessels. The program provides a vehicle 
through which the Government can exténd assist- 
ance without making a direct capital outlay. 
The fisherman ordinarily will seek a loan from 
his customer or from a bank under the Mortgage 
Insurance Program. If reasonable financial assist- 
ance applied for commercially is not available, 
financial assistance may be provided under the 
Fisheries Loan Fund. The existence of the fund 
thus provides a fisherman with an alternate source 
of credit. 
The fund has been very helpful to hard-pressed 
fishermen. Some in the industry contend that the 
fund is so popular it frequently “runs out of 
money.”’ Authorization for the fund is $20 mil- 
lion; however, $13 million was appropriated in 
1968. On various occasions lending has been 
restricted to an even lesser amount because of 
overall Government expenditure limitations. 
Both the Fisheries Loan Fund and the Mortgage 
Insurance Program should be retained. Favorable 
consideration should be given those fishermen who 
are or intend to become involved with underuti- 
lized species having commercial potential. 
5. Legal/Regulatory 
Among the most serious problems facing the 
U.S. fishing industry are the laws and regulations 
that prevent increases in efficiency. These restric- 
tions have resulted from a combination of at- 
tempts at conservation, competition among fisher- 
men for limited supplies of particular species, and 
competition between commercial and sport fisher- 
men for certain species. 
