collectively with the employers over wages and conditions of work. On the other hand, labor unions in the fisheries sometimes include employee fishermen, captains, mates, engineers, and in the past even vessel operators and vessel owners. This intermixed association stems from the community of interest created by the "lay" system whereby each individual on the fishing vessel is remunerated by a share of the proceeds from the catch after each voyage. Hence, it is to the mutual advantage of all who share in the proceeds that the catch sells for the highest price which is to improve the economic standards of our fishermen. In the early period following the passage of the antitrust acts, the courts often adjudged cooperative marketing associations, per se, as illegal combinations restraining trade. The Capper-Volstead Act, passed in 1922, recognized agricultural cooperative associations engaged in interstate commerce. The Fishery Cooperative Marketing Act of 1934, supra, modeled after the Capper-Volstead Act, as we have indicated above, recognized fishery cooperative marketing associations engaged in interstate commerce. It provided the machinery, however, in section 2 of the Act (15 U.S.C. sec. 522) for policing these associations, organized under its provisions, and preventing them from monopolizing or restraining trade so that the price of any aquatic product is "unduly enhanced by reason thereof". In some segments of our domestic fishing industry, labor unions representing employee fishermen bargain with cooperatives representing vessel owning employers for the minimum price on which the crew's share or wage would be based, and the cooperative bargains separately with a canner or buyer. Where the fishermen operate the boats as employees of the canners, the unions bargain directly with canners or processors. These are limited examples of many types of ex-vessel price bargaining which prevail in the industry. Some uniform means for allowing fishermen employee unions to bargain collectively for fish prices which are a significant influence on their members' wages should be developed for certain segments of the fishing industry. An effective right to bargain would be helpful in encouraging more stable industry relations in these segments of the fishing industry. he economy welfare of the commercial fisherman is dependent upon a wide variety of physical and other circumstances beyond his control. When his wages fluctuate substantially because the price of fish fluctuates, it is natural for him to seek some measure of wage stability. S. 1054 is designed to help provide this stability. We are not, however, able to make a definitive judgment as to whether S. 1054 will in fact provide such wage stability, or whether it will meet the economic needs of the industry as a whole, or whether the antitrust implications of labor unions bargaining for the price of fish outweighs the needs of these people. We agree, however, with the objective of this bill and we think that in determining whether this approach or some other legislative approach to the problem is a reasonable one the fishermen must be viewed, not in the technical and legal sense, but as wage earners who form an important segment of our economy. There is at least one segment of the industry in which the enactment of S. 1054 would be useful. We cannot say, however, that it would be useful throughout the industry. In the salmon fishery in Álaska, many former union-member fishermen employed by salmon canneries have become vessel owners. Some of these have a very limited investment in vessels financed largely by salmon canning firms that previously employed them. This changed status makes them ineligible to use labor union procedures in bargaining with fish processors over prices for fish. This, in turn, has a bearing on the income of both vessel owner or operator and employee crew members because of the use of the "lay" system. Some of these fishing vessel owners are interested in the enactment of a statutory provision such as this, so that they may continue, together with union-member fishermen who are clearly in an employee-fishermen status, long-standing salmon price bargaining practices. Acting together, the bargaining power of the group would be stronger than when acting separately. In relation to the scope of the bill, we think that the bill can be interpreted to permit an exemption from the antitrust laws of agreements between buyers and fishermen that cover more than just the price of fish. These might include the cost of ice, fuel, and similar items. While we believe, as we have stated above, that in at least one segment of the industry, namely Alaska, some uniform means for allowing fishermen employee unions to bargain collectively with producers or buyers for fish prices is needed to encourage economic stability in the industry, we lack adequate information to justify an extension of an exemption from the antitrust laws to matters other than the actual price of fish. If the Committee acts favorably on this legislation, we recommend that the scope of the bill be narrowed to apply only to the price of fish. We also think that consideration could be given to limiting the bargaining to individual buyers as the present law now provides. The Bureau of the Budget has advised that there would be no objection to the presentation of this report to the Committee and that the Bureau is opposed to the enactment of S. 1054 for the reasons set forth in the reports of the Department of Justice and the Federal Trade Commission on the bill. Sincerely yours, STANLEY A. CAIN, Assistant Secretary of the Interior. FEDERAL TRADE COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This is in response to your request of February 11, 1965, for a report on S. 1054, 89th Congress, 1st Session, a bill "To make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends." The bill would authorize unions or other organizations of active fishermen, whose income is dependent on the exvessel price of fish or other aquatic products, although the membership of such an organization is composed of either masters of boats or crew members, to qualify as cooperative fishing associations under the Fishermen's Cooperative Marketing Act (15 U.S.C. 521-522), and bargain severally or jointly with one or more buyers of such products regarding the terms and conditions of ex-vessel sales of such products “or take such other action with reference to such ex-vessel sales or factors affecting such ex-vessel sales, as an association may lawfully take," regardless of whether such organization acts as a selling agent or only as a bargaining agent. In addition, the bill adds a proviso that nothing in the Fishermen's Cooperative Marketing Act, or in any state or local law, shall limit the rights of employee fishermen under the Labor Manage ment Relations Act, the Clayton Act, the Norris-LaGuardia Act or other Acts to bargain collectively or take other collective action regarding the ex-vessel price per pound of fish "to be used as a basis for computing their compensation." Another proviso of the bill is to the effect that any agreement between an association and one or more buyers regarding the terms of ex-vessel sales of fish shall not be held to violate any antitrust or trade laws of the United States. The bill is thus apparently designed to permit employee fishermen to exercise a voice in the selling and in determining the sale prices of fish or other aquatic products. It would permit employee fishermen whose income is dependent on the ex-vessel price of fish (1) to join with a cooperative fishermen's organization under the Act; (2) to participate in bargaining with buyers on the selling price of fish they have produced; and (3) to take "such other action" regarding the sale of such fish as an association may lawfully take. The Federal Trade Commission has had considerable experience in dealing with fishermen's organizations under the Fishermen's Cooperative Marketing Act. For example: Alaska Salmon Industry, Inc., Docket 6141, 50 FTC 863 (1954); Cordova District Fisheries Union, Docket 6261, 52 FTC 66 (1955); Cordova District Fisheries Union, Docket 6369, 52 FTC 731 (1956); United Fishermen of Alaska, Docket 6388, 52 FTC 1240 (1956); Pudget Sound Salmon Canners, Inc., Docket 6376, 52 FTC 1251 (1956); California Fish Canners Ass'n, Docket 6623, 54 FTC 120 (1957). In those cases, the Commission was confronted with situations wherein various cooperative groups combined with other respondents, including employee groups (such as fishermen's unions) boatowners' associations, and canners, in pricefixing combinations in restraint of trade. Orders were issued requiring the parties to cease and desist from so combining or entering into any agreements between and among themselves or with others with the purpose or intent of fixing or maintaining prices at which fish or other aquatic products were to be purchased or sold and also from interfering with the fishing operations of others. Those orders, however, did assure bona fide fishermen's cooperative organizations that actions pursuant to and in accordance with the provisions of the Fishermen's Cooperative Marketing Act were excepted therefrom. In addition, those orders specifically excepted activities by any of the respondents, including fishermen's cooperatives, in individually purchasing or selling or bargaining for the purchase or sale of any fish or aquatic product with any single buyer or seller. The Fishermen's Cooperative Marketing Act is modeled after the Agricultural Cooperative Marketing Act (7 U.S.C. 291-292). These Acts permit groups of fishermen or farmers to form cooperative associations in order to market their products effectively. They are not permitted by those Acts, however, to engage in practices considered to be monopolistic or in restraint of trade. The courts, in construing both these Acts, have uniformly held that they do not grant a complete exemption from the antitrust laws. United States v. Borden Co., 308 U.S. 188 (1939); Columbia River Packers Ass'n. v. Hinton, 315 U.S. 143 (1942); Hawaiian Tuna Packers, Ltd. v. International Longshoremen's and Warehousemen's Union, 72 F. Supp. 562 (D.C. Haw. 1947); Local 36 of International Fishermen & Aliied Workers of America v. United States, 177 F. 2d 320 (9th Cir. 1949), cert. denied 339 U.S. 947 (1950); and Maryland & Virginia's Milk Producers Ass'n. v. United States, 362 U.S. 458 (1960). In attempting to improve the bargaining position of the fishermen employees, the subject bill would sanction types of activities or conduct by them, which now runs afoul of the antitrust laws. It has been held in several cases that the Fishermen's Cooperative Marketing Act does not authorize fishermen whose compensation is directly affected by the amount for which the catch is sold to combine with their employers, the boatowners, to fix the prices which dealers are required to pay for fish. Local 36 of International Fishermen & Allied Workers of America v. United States, 177 F. 2d 320, at 335. See also Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797 (1945). In the Local 36 case, p. 332 supra, the court states specifically: "If then the boatowners were acting in voluntary conjunction with the fishermen employees of their boats in such a combination, their activities would certainly be illegal. United States v. Women's Sportswear Manufacturers Association, 336 U.S. 460, 69 S. Ct. 714." It has consistently been the Commission's view that exemptions from the antitrust laws designed for the relief of a particular industry or group of persons should be viewed most critically and only adopted after a very convincing showing of necessity. On the basis of its experience to date with the fishing industry, the Commission is not aware of circumstances that would justify antitrust exemption as a solution for problems of the fishing industry. The Commission is opposed to S. 1054. By direction of the Commission, Commissioner MacIntyre not concurring. His views on this matter are stated in a letter to you, as Chairman of the Commerce Committee of the United States Senate dated July 2, 1963, regarding S. 1135 of the 88th Congress. PAUL RAND DIXON, Chairman. N.B.-Pursuant to regulations, this report was submitted to the Bureau of the Budget on April 2, 1965, and on June 16, 1965, the Bureau of the Budget advised that there is no objection to the submission of this report from the standpoint of the Administration's program. JOSEPH W. SHEA, Secretary. DEPARTMENT OF JUSTICE, Washington, D.C., June 17, 1965. Hon. WARREN G. MAGNUSON, DEAR SENATOR MAGNUSON: This is in response to your request for the views of this Department on S. 1054 (89th Cong., 1st Sess.), a bill to amend the Fishery Cooperative Marketing Act (Public Law 464, 73rd Cong., 15 U.S.C., Secs. 521-522). This Act now authorizes fishermen when catching, collecting or cultivating aquatic products to act together in associations in collectively marketing such products and to have marketing agencies in common. Such marketing agencies may bargain with and sell the catch to any one of the companies that operate plants or canneries which prepare fish or other aquatic products for market. The practice in at least some segments of the fishing industry apparently is for fishermen, whether masters or crewmen, to be paid on the basis of the total 67-933-66- -2 price paid upon the ex-vessel sale of the catch. These fishermen may use either company owned or independently owned boats. In the past certain organizations have attempted to act as bargaining agents of the fishermen in negotiating the price to be received for the fish, on the theory that the money received by a fisherman for his share of the catch constituted wages. Unions are now prevented from doing so by virtue of court decisions and a decision of the National Labor Relations Board which ruled that such fishermen are independent contractors or entrepreneurs and not employees. The proposed amendment would authorize the inclusion of a labor union as an association and, as an association the union would be able to act as a bargaining agent or as a selling agent in setting the price of the ex-vessel sale of fish or other aquatic products caught by members of the organization. By authorizing a labor union to be included as an association of "active fishermen whose income is dependent on the ex-vessel price of fish or other aquatic products", the amendment would nullify the existing decisions on union representation of non-employees. Section 6 of the Clayton Act provides "that the labor of a human being is not a commodity or article of commerce", and exempts from the antitrust laws the legitimate activities of labor unions, which otherwise would be in restraint of trade. Permitting a union directly to fix the sale price of a commodity may constitute a precedent for a far-reaching additional exemption for union activities. The bill also authorizes the reciprocal right of the buyers (the companies that operate the canneries or prepare the catch for market) to act together in bargaining with associations of fishermen concerning the terms, conditions and prices to be paid for the catch. This reciprocal right is covered in the second proviso of the proposed amendment which reads: "And provided further, That the making of any such agreement or agreements between such an organization or organizations and one or more buyers or one or more associations of buyers concerning the terms, conditions, and prices of the ex-vessel sales of such fish or other aquatic products shall not be held to be in violation of any of the antitrust or trade laws of the United States, and any such agreement or agreements shall be deemed to be unlawful." Agreements between buyers as to the price to be paid for fish or other aquatic products are per se violations of the Sherman Act, and are not authorized by the present Act which permits only fishermen to act collectively. The scope of this bill is indicated by the definition of aquatic products which includes: "all commercial products of aquatic life in both fresh and salt water, as carried on in the several States, the District of Columbia, the several Territories of the United States, the insular possessions, or other places under the jurisdiction of the United States." The Department of Justice objects to the enactment of this bill in that it would: (a) be discriminatory in singling out one industry where buyers or associations of buyers can enter into agreements as to the price they will pay for a commodity and be exempt from application of the antitrust laws in so doing; (b) establish the precedent that under special circumstances a union can be an association of independent entrepreneurs and act as a bargaining agent or selling agent in the sale of a commodity produced by its members. The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the Administration's program. Sincerely, RAMSEY CLARK, Deputy Attorney General. DEPARTMENT OF AGRICULture, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, Washington, D.C. DEAR MR. CHAIRMAN: This is in reply to your request of February 10, 1965 for a report on S. 1054, a bill "To make clear that fishermen's organizations, regardless of their technical legal status have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends." The Department of Agriculture is taking no position on this bill since it would not affect the Department's responsibilities. The Bureau of the Budget advises that there is no objection to the presentation of this report from the standpoint of the Administration's program. Sincerely yours, ORVILLE L. FREEMAN, Secretary. B-105876. COMPTROLLER GENERAL OF THE UNITED STATES, Hon. WARREN G. MAGNUSON, DEAR MR. CHAIRMAN: In reply to your request of February 10, 1965, for our comment on S. 1054, entitled "A bill to make clear that fishermen's organizations, regardless of their technical legal status, have a voice in the ex-vessel sale of fish or other aquatic products on which the livelihood of their members depends," you are advised we have no firsthand knowledge of the subject of the bill, and therefore offer no comment or recommendation concerning the proposed legislation. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. FISHERMEN'S COOPERATIVE MARKETING ACT (48 Stat. 1213; 15 U.S.C. 521-522) AN ACT AUTHORIZING ASSOCIATIONS OF PRODUCERS OF AQUATIC PRODUCTS Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That persons engaged in the fishery industry, as fishermen, catching, collecting, or cultivating aquatic products, or as planters of aquatic products on public or private beds, may act together in associations, corporate or otherwise, with or without capital stock, in collectively catching producing, preparing for market, processing, handling, and marketing in interstate and foreign commerce, such products of said persons so engaged. The term "aquatic products" includes all commercial products of aquatic life in both fresh and salt water, as carried on in the several States, the District of Columbia, the several Territories of the United States, the insular possessions, or other places under the jurisdiction of the United States. Such associations may have marketing agencies in common, and such associations and their members may make the necessary contracts and agreements to effect such purposes: Provided, however, That such associations are operated for the mutual benefit of the members thereof, and conform to one or both of the following requirements: First. That no member of the association is allowed more than one vote because of the amount of stock or membership capital he may own therein; or Second. That the association does not pay dividends on stock or membership capital in excess of 8 per centum per annum. and in any case to the following: Third. That the association shall not deal in the products of nonmembers to an amount greater in value than such as are handled by it for members. SEC. 2. That if the Secretary of Commerce shall have reason to believe that any such association monopolizes or restrains trade in interstate or foreign commerce to such an extent that the price of any aquatic product is unduly enhanced by reason thereof, he shall serve upon such association a complaint stating his charge in that respect, to which complaint shall be attached, or contained therein, a notice of hearing, specifying a day and place not less than thirty days after the service thereof, requiring the association to show cause why an order should not be made directing it to cease and desist from monopolization or restraint of trade. An association so complained of may at the time and place so fixed show |