257 



mented elsewhere, this is the first instance in which I have read of the federal 

 government's involvement in the economic aspects of fur sealing. 



In order to enlighten the members of the Merchant Marine and Fisheries 

 Committee regarding this matter, I would appreciate your furnishing me a 

 detailed report of the extent to which the federal government, as represented 

 by your department, assists financially or otherwise in the transportation, proc- 

 essing and distribution of seal skins taken on the Pribilof Islands. In this con- 

 nection, I also would appreciate a more complete analysis of the contractual 

 relationship between the federal government and the Fouke Fur Company of 

 Greenville, South Carolina, than appears in these articles. 

 Sincerely yours, 



Richard N. Shaeood, 



Minority Counsel. 



U.S. Department of Commerce, 

 National Oceanic and Atmospheric Administration, 



Washington, B.C., January 12, 1971. 

 Mr. Richard N. Sharood, 



Minority Counsel, Committee on Merchant Marine and Fisheries, House of Rep^ 

 resentatives, Washington, B.C. 



Dear Mr. Sharood : This is in response to your letter of December 30, 1970, to 

 Mr. Philip M. Roedel, Director of the National Marine Fisheries Service, con- 

 cerning the Federal Government's involvement in the economic aspects of fur 

 sealing. 



Under the law (16 U.S.C. 1154), the Secretary of the Interior is to provide for 

 the processing of fur sealskins and for the sale of fur sealskins, and the Secre- 

 tary is authorized to enter into agreements with any public or private agency or 

 person for this purpose. (This responsibility was transferred to the Secretary of 

 Commerce under President Nixon's Reorganization Plan No. 4 of 1970.) 



The Fouke Company is under contract to the U.S. Government for processing 

 U.S. Government-owned Alaska fur sealskins and selling them for the account 

 of the U.S. Government. (A copy of the current contract is enclosed.) After 

 deduction of the Fouke Company compensation, based upon the contractually 

 prescribed formula, the net proceeds received by the U.S. Government are 

 deposited under a special account in the U.S. Treasury. Congress appropriates 

 funds to the Department to defray expenses of administering the fur seal program. 



Since the sale price of the fur sealskins bears directly on the proceeds from the 

 program, it has been considered that fur seal advertising by the contractor is in 

 the interest of the Government by serving to stimulate interest in fur sealskins 

 which would be reflected in prices received from the sales. The current contract 

 provides that the contractor will promote and advertise processed sealskins, and 

 estimated promotion and advertising costs were included as a part of the total 

 estimated costs from which the negotiated contract price formula was established 

 as the basis for payment to the Company upon sale of the fur sealskins. Adver- 

 tising costs considered in the contract negotiations as being applicable to the 

 U.S. Government each year are substantially less than one-third of the $750,000 

 frequently cited by critics of the Pribilof Islands seal harvest. 



Under the terms of the contract the Government is responsible for transporting 

 the raw pelts from the Pribilof Islands to the Fouke Company plant in Greenville, 

 South Carolina. The processing and sale of the sealskins from there on is covered 

 under the contract. 



The history of the contractual relationship between the Fouke Company and 

 the Federal Government is as follows. 



Contracts with the Fouke Company and its predecessor agency date back to 

 1915. In that year a 5-year contract was awarded to the Funsten Brothers firm, 

 headed by Mr. P. B. Fouke, for processing and sale of U.S. Government-owned 

 Alaska sealskins. In 1921 the Fouke Fur Company was organized and was 

 awarded a 10-year contract. In 1931 a new contract was awarded the Fouke 

 Fur Company which was terminated in 1939. At that time bids were solicited 

 and, based on qualifications of the bidders, a contract was awarded to the Fouke 

 Fur Company. This contract was renegotiated in 1947 and continued in exist- 

 ence, with several amendments, until 1962. In 1963, following solicitation of 

 proposals, a contract was awarded to the "Supara" firm ; in the same year this 

 contract was declared by the Comptroller General of the United States to be 

 invalid. A contract was awarded to the Pierre Laclede Company in 1965 for 



