268 



(After the close of the hearings, information was received by the 



committee describing the activities of the Fouke Co. with regard to 



the Alaska fur seals. The information follows :) 



Chapman, Duff and Lenzini, 

 Washington, D.C., September 29, 1911. 



Re hearings on Ocean Mammal Protection Bills ; H.R. 6554, H.R. 10420. 



Hon. John Dingell, .. „ 



Chairman, Subcommittee on Fisheries and Wildlife Conservation, House tom- 

 mittee on Merchant Marine and Fisheries, Washington, D.C. 



Dear Mr. Chairman : On behalf of The Fouke Company, Greenville, South 

 Carolina, I wish to submit the following information for the record in connection 

 with the above-referenced bills. The Fouke Company and its predecessors have 

 processed Alaska fur sealskins under contract with the U.S. Government for 

 over fifty years. Accordingly, the Company is interested in the hearings which 

 have been held on the above-referenced bills. The issues before the Subcommittee 

 involve finding the best means of conserving and protecting valuable marine 

 mammal resources. We would support a bill along the lines of H.R. 10420. 



With respect to the Pribilof Island program, the annual harvest represents the 

 management control phase of the overall fur seal program. Qualified marine 

 mammal scientists have declared and the history of the Pribilof program dem- 

 onstrates that the annual harvest results in a healthy, productive population. 

 Since the Alaska fur seal is a commercially valuable animal, we believe that no 

 purpose is served by denying the rational use of a valuable product of nature. 



With respect to operations of The Fouke Company which may be of intere^ 

 to the Subcommittee we desire to submit for the hearing record the following 

 information : 



1. Compensation. Pursuant to the agreement (U.S. Government Contract No. 

 14-17-0007-1111) entered into between the Bureau of Commercial Fisheries and 

 the Fouke Company on February 13, 1970 covering the processing and sale of 

 U.S. harvested and owned Alaska fur sealskins from the annual Pribilof harvest 

 for 1968, 1969, and 1970, the Company is compensated on a per skin basis for 

 each category of sealskin sold in accordance with a contractual formula. For the 

 last seven auctions the Company has received the following compensation from 

 sales of the U.S. share. 



Date 



Net proceeds 

 of sale 



U.S. Gov- 

 ernment 

 share 



Fouke 

 compen- 

 sation 



Compensa- 

 tion as 

 percent of 

 net proceeds 



Number of 



U.S.-owned 



sl<ins 



auctioned 



Spring 1968 $2,371,567 



Fall 1968 2,054,732 



Spring 1969 _ 2,156,346 



Fall 1969 1,626,639 



Spring 1970 1,625,785 



Fall 1970 1,278,625 



Spring 1971 _ 1,358,255 



Under both the current and prior contracts the compensation to the Company 

 is based upon the ultimate sales price at which skins are sold. Thus the Com- 

 pany's compensation can increase or decrease because of favorable or unfavor- 

 able economic conditions. During the last two auctions Conducted under the prior 

 contract, poor economic conditions resulted in the Company's compensation being 

 less than its cost. The prior contract formula was calculated on a base amount 

 (which was less than cost) plus an increasing rate of participation as sales 

 prices increased. Under t'he current contract a formula was devised whereby 

 the Company's break-even point is lower but in return it receives a decreasing 

 rate of participation as sales prices increase. Total net proceeds of the past two 

 sales have been substantially reduced due to lower volume of skins available 

 and adverse economic conditions. 



2. Advertising. The current processing agreement and past agreements with 

 the U.S. Government have for many years required that The Fouke Company 

 develop the market for processed sealskin through use of but not limited to mer- 

 chandising and promotional work including recognized methods of advertising 

 and means designed to stimulate interest and sponsorship of fashion designers. 



