From the drought, an opportunity (Fortune, 1935) by Fortune Editors @FortuneMagazine September 9, 2012, 1:43 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Editor’s note: Every Sunday, Fortune publishes a favorite story from our magazine archives. This week, we turn to a feature from April 1935 that examines the ins and outs of America’s early-20th century fishing trade, which was ripe for a major recovery in the wake of a 1934 drought that devastated meat production.In 1934 the U.S. eater put away in round figures nearly 20,000,000,000 pounds of meat against 1,900,000,000 pounds of fish — a little more than ten times as much meat as fish. For during 1934, everybody in the U.S. ate (averaged):-Sixty-eight pounds of beef -Sixty-eight pounds of pork -Eleven pounds of veal -Six pounds of lambWhich totaled 153 pounds of meat, the highest figure in twenty-seven years. Also, everybody in the U.S., on the basis of preliminary estimates, ate:-Fifteen pounds of fish -Fish eaters ate only 65 per cent of what they did in 1929, when a twenty-three-pound per capita consumption made the fish industry briefly happy.But 1935 is going to be different. It offers, indeed, the prospect of perhaps the most widespread change in the U.S. diet since the early settlers subsisted largely on what their hunting skill might bring them. For in the great drought of 1934 so many meat animals perished that a most serious meat shortage has already resulted. So many starving cattle collapsed in their parched fields that the government, moved by both sympathy and politics, eventually took the animals off the farmers’ hands. To the usual slaughter of some 12,000,000 steer, over 8,000,000 more were added for the account of the U.S. Government. Allowing for replacements, the cattle census of about 68,000,000 head was in consequence reduced to 60,000,000. And the hog slaughter for the year beginning October 1934 will be the smallest in twenty years. The U.S. Department of Agriculture estimates that the 1935 supply of pork alone will be 2,600,000,000 pounds less than it was in the previous year. Hogs are now selling for 167 per cent more than their 1932 all-time lows.What has this to do with fish? Everything. For the price of fish reflects the price of meat as a mirror reflects light. Fish is most directly competitive with pork — both protein sources are commonly known as the “poor man’s food.” During the worst of the depression, the price of pork dropped so low that fish became a comparative luxury. But as the hog supply dwindled and the pork cost rose, fish again assumed its useful place as least expensive source of protein. Meanwhile, though the fishman always figures his product to sell well under the price of beef, the fish business nonetheless profits as the spread between fish and beef prices widens. So, logically, fishmen are now looking forward to their best year since 1930, perhaps their best year since 1929. That is why the fish has assumed new importance and why this story is being written. Fishmen themselves are so well aware of their opportunity that they have organized the Fish and Sea Food Institute of the United States to publish the food merits of fish. Retained by the Institute is publicist Edward L. Bernays, businesslike nephew of Sigmund Freud.Wherever there is water, there is likely to be fish, so geographically fishing no doubt rates as man’s most widely distributed endeavor. Most numerous fish is the herring, whose U.S. catch has run to 100,000,000 pounds. But the herring is much more esteemed in Europe than in this country (except for young herring, sold as sardines). In the U.S. the salmon is the most valuable food fish. Found by the millions along the Pacific Coast from San Francisco Bay to Bering Strait, the salmon is caught in the amount of 529,000,000 pounds a year. In 1933 the pack of canned salmon alone amounted to 6,362,000 cases with a value of $36,242,000. (In May, FORTUNE will present a detailed story of the salmon industry.) Pacific fishermen also specialize in halibut and tuna. Next most important fishing center is the North Atlantic from Cape Cod in Massachusetts to St. Pierre. Here the fish standbys are cod, haddock, mackerel, herring, with pollack, cusk, hake, flounder (usually marketed as sole), and whiting of secondary importance. To New England ports last year came more than 30o,ooo,ooo pounds of fish, of which some 260,000,000 came in at Boston, the U.S. fishing capital. New England produces 27.5 per cent of the nation’s fish (ignoring Alaskan production and excluding shellfish). And these North Pacific and North Atlantic fishing grounds make up most of the fishing industry in any large sense of the word. Dried codfish.Fish are plentiful outside these areas, which do not account for more than 1,000,000,000 of the 2,600,000,000-pound annual catch. (There is, however, a catch in the catch, for the over-all figure counts 328,000,000 pounds of menhaden-small fish used in making fertilizer.) But south of New England, though you may see hundreds of fishermen, a fishing corporation is hard to find.Major sources of fresh-water fish are the Great Lakes and the still more northerly lakes of Manitoba. Here whitefish, yellow perch, trout, and blue pike help support one large fishing company, Booth Fisheries, although Booth also catches cod and haddock in the Atlantic, halibut and tuna in the Pacific. But southern fish and inland fish are taken by so many one-man or one-boat fishing enterprises that they can be talked of only in collective terms. For the fishing company one must look (again remember that we waive salmon and shellfish) to those corporations whose ships move out of New England harbors.We have already seen that the most important of the fish caught off New England and the Maritime Provinces of Canada are cod, haddock, mackerel, and herring. They are taken on the fishing banks — submarine ledges that stick out below the surface of the water at anywhere from a few feet to 6oo feet, with 240 feet (forty fathoms) the most frequent depth. There are a score of recognized banks, from Georges Bank, 150 miles from Boston, to Grand Banks, 1,200 miles from Boston. The banks are all parts of the main continental shelf — a kind of jumping-off place that surrounds all continents, and beyond which the floor of the ocean slopes precipitously to the true ocean depths. Sometimes a bank becomes fished out or the fish migrate from it — Georges Bank has been of minor importance since 1931. But since more fish are eaten by other fish than are caught by man, there is no possibility that the marine population will ever disappear. Indeed, if the fish were not so voracious, the ocean would not long be large enough to hold them, for a cod will lay up to 10,000,000 eggs in a single season.New England fish are sharply divided between ground fish and surface fish. The ground fish, such as the cod and the haddock, swim only a few feet above the floor of the ocean. The surface fish, such as the mackerel and the herring, swim only a few feet beneath the surface of the ocean. So the cod and the haddock are caught in nets dragged along the bottom, whereas the mackerel and the herring are scooped up in a different type of net hauled by a different type of vessel.Although Massachusetts remains traditionally the land of the cod, the haddock catch has recently been more numerous. However, the cod and the haddock, along with the pollack, the hake, and the cusk, are all members of the same family. The haddock usually weighs about four pounds, is distinguished by two spots or smudges behind its gills. There is a legend that the smudges were made by Fisherman St. Peter when he hauled from the sea near Capernaum that Biblical fish from whose mouth a piece of money dropped. Cod are considerably larger than haddock, commonly being caught at weights of from five to twenty pounds. Both cod and haddock travel in schools numbering thousands of fish and it is not extraordinary for 2,000 at a time to swim into the fisherman’s net. Incidentally, the famed Boston scrod is a mythical creature, the name being applied to undersized cod and haddock that weigh up to two and a half pounds.The mackerel runs in schools even larger than the other fish; its mass of densely packed sea food sometimes reaching a length of twenty miles, a width of half a mile. The formation makes them easy prey for fishermen and for other fish, but through some fish-of-a-feather-flock-together instinct, they cling obstinately to it. The prolific herring is among the less important New England fish. The industry is more Canadian than American. Meanwhile, let us turn from the fish to the men, the boats, and the nets that catch them.The trawlerThere are over 300 boats in the Boston fishing fleet. Largest, strongest, best producers are the fifty-seven steam trawlers, with their average length of 140 feet, their average displacement of 350 tons. Many of the trawlers were built during the War for mine sweeping, and they are rugged vessels, seaworthy in even the roughest weather. The trawler lies close to the water (the closer the better for hauling in thousands of pounds of fish) and a tramp steamer will tower far over it. But there are many stormy days during which the trawler is the only vessel that will risk leaving its harbor. The trawler is the dreadnought of the fishing fleet, built with the idea of being able to fish in any weather and to keep up the supply of fish at times when the smaller wooden schooners are unable to make their catch. It averages about thirty trips per year, makes a speed of nine or ten knots, and on a twelve-day trip to Western Banks may spend two and a half days outward bound, seven days at the banks, and two-and-a-half days on the homeward journey.If you have any leanings toward being seasick, trawling will be no pleasure to you, for the squat, sturdy boats pitch and roll violently on even a moderately heavy sea. Add to this hazard the low deck that invites passing waves to come aboard, and you will also find it extremely handy to have a sure footing and a firm grip. Yet the fishermen, completely used to their work, keep their feet even when the decks are cluttered with thousands of pounds of slithery, slippery fish and when the spray turns to ice as it hits the stays and rigging and swells them up to ten times their normal size. Click to enlarge.The trawler is divided into four main sections. First the forecastle with its crew’s quarters. There are usually eighteen men on a trawler, and the crew is tucked into double rows of bunks in a room heated with a coal stove and not very adequately ventilated. (Adequate openings would leave the forecastle swamped in any heavy weather.) Abaft the forecastle is the fish hold, in which the catch is stored. The hold has an insulating lining of wood-covered cork and is divided into pens. Here the fish are iced away, a ton of ice being used for each ton of fish. The pens are arranged in tiers and as the pile of fish becomes deeper and heavier, the boards of the upper tiers are put in place and so prevent the later arrivals from crushing the bottom of the load. Next section of the ship is the engine room with its 300- to 500-horsepower engines. The trawler (most of them are steamers, but a few are Diesel-powered) has more main engine power per ton than a battleship. Aft of the engine room is the galley — a most vital portion of the trawler’s equipment. For once on the banks, the trawler fishes twenty-four hours a day, each man standing two six-hour shifts. There are three set meal hours, but a man is always welcome to a quick lunch and the fisherman may have six or eight meals (which he calls “mug-ups”) a day. There is no formality; the captain and the fireman eat side by side and from the same ample larder. Over the galley and engine room are rooms for the mate, the engineers, the cook, and the fireman, while the captain’s room is over the deckhouse abaft the pilothouse. The trawler is a miracle of compact housing. The actual fishermen (usually twelve) split into a captain’s crew and a mate’s crew, the skipper’s gang working from 6:00 to 12:00, A.M. and P.M., the mate’s gang getting the 12:00 to 6:00 shifts.So much for the trawler. Now for the trawl. This is a flattened, conical-shaped net, usually imported from Grimsby, England. Grimsby and Hull, world’s greatest fishing centers, are towns where trawls of this type have been used since the nineties (whereas first U.S. otter trawl dates from 1905). The net is about 150 feet long, tapers from a hundred-foot spread at the mouth to a point in the closed, or cod end (where caught fish pile up). It is lowered over the side of the boat and towed along the bottom of the ocean. The wide end of the net is kept spread out by the presence of two large, ironbound doors, known as otter boards. The otter boards, one at each side of the net, are attached to towing wires in such a manner that their resistance to the water caused them to spread apart. The mouth of the net then forms a vertical rectangle about a hundred feet by five feet. And so far as the actual fish catching is concerned, it is simply a matter of waiting for the fish to swim in. The net is usually left down for about an hour-and-a-half, while the trawler moves at some three-and-a-half knots, then a steam winch draws it to the surface, the men haul the net over the side and plump the fish down on the deck.The lifting of the net from the water is the big moment in the fisherman’s life, for in any given haul his catch runs all the way from no fish at all to 20,ooo pounds. Here the modern trawler is as much a gambler as the lone Eskimo with his harpoon. Top mark for one trip is 380,000 pounds — an enormous load, as most trawlers have a capacity of less than 300,000. Low mark is 10,000 pounds — here the load paid no more than the cost of keeping the ship at sea for a single day. Yet extremes average out, and a good run-of-mine trip is around the 100,000-pound mark. After the net has been emptied out on the deck the fish has its belly slit, its guts removed, and its carcass washed off with a hose. Good fishermen can clean thirty fish a minute. Then the fish are dropped into ice-packed chambers, the net dropped overboard again. So it goes.Draggers, schooners, guinea boatsThe remainder of the fishing fleet is made up of wooden boats of greatly varying sizes and types. Some of these boats — often nearly as long as the trawler — are called draggers, diesel-powered boats that drag a net much like the trawler’s, although not so large. Besides its engine, it usually has two masts and a profusion of good old-fashioned rigging and rope and sails and shrouds. The dragger, along with the schooner, represents fishing in a more romantic form, but it is the trawlers that catch more than half the fish. The schooners, many owned by Gloucester men, do their fishing from dories and with bait and line. A schooner may have fourteen or more dories piled up on its decks — they are built in nests, one fitting into the other like a nest of ash trays. And the dory fisherman really is an old oil-skinned salt who goes down to the sea in little ships and takes his chances on not coming back. When the schooner reaches the banks, the mother ship drops off the dories and the dory men put out their lines. The line, which may be a mile or a mile-and-a-half long, is run parallel to the ocean floor and about three feet above it. It is set with hundreds of hooks, the hooks being placed as close as they can be without fouling each other, and a line may have 400 or 500 hooks. They are baited with clams or herring. And the fisherman simply sits all day in his little boat and waits for the fish to get themselves impaled on his hook. In the evening, he hauls in his line and takes the catch to the mother boat. Good day’s haul, per dory: 1,200 pounds.How man can fish in small open boats in some of the worst waters of the Atlantic is difficult for the landsman to see. Some of the fishing is carried on up around Sable Island, “graveyard of the Atlantic.” There have been over 200 known wrecks on Sable Island; doubtless many more ships have found there an unrecorded grave. A trawler once went aground on Sable Island and got off again, but usually when a boat strikes on the island it is seen no more. Worst risk of dory fishing, however, is the coming of a sudden fog. The dories, strung out miles from the mother ship, are unable to find her, and may drift away or founder. Even without this danger, there are also numerous occasions on which it is not at all healthy to be bobbing around the North Atlantic in a rowboat. But it is all in a day’s work to the dory man, who is a bit inclined to look down on the trawler crew as living a mechanical and almost effete life. And though even a large schooner can bring in no such loads as the trawler (a good trip is 30,000 to 50,000 pounds), they have a comparatively negligible overhead.Smallest boats are the guinea boats — so called because they are manned mostly by Portuguese or Italians. They are no more than fair-sized gasoline launches, fish near home, and usually make a trip in one day. They are a picturesque part of the fishing business, but can hardly catch more than 3 or 4 per cent of the total Boston landings.So far we have talked only about the catching of ground fish — and we mentioned some time ago that the mackerel, a surface fish, was caught in a somewhat different manner. The mackerel is the fish that sometimes swims in schools twenty miles long, and so close to the surface that the lookout in the bow of a fishing schooner can readily spot them. They are best found on moonless nights because the water around them gives off a phosphorescent glow which the fishermen call firing. When the school is sighted, a dory puts out from the schooner. The dory tows a net of the type called the purse seine, not more than eighteen to twenty feet deep but up to 400 feet long. The other end of the net is attached to the schooner. The trick lies in encircling the whole school with the net and then, if it is nicely around them, pulling a purse string that gathers up the bottom of the net and traps the fish. It is like scooping them out of the ocean with an enormous ladle, and many thousands of mackerel may be landed in one scoop. Mackerel do not run in the wintertime, so then mackerel fishermen look for cod and haddock. Mackerel landings in New England ports total 60,000,000 pounds annually. Since the trawlers fish only on the ocean floor, the schooners have no mackerel competition from them.In 1934, the New England fishing boats brought to the Fish Pier (Boston’s chief landing place for fish and largest single fish pier in the world) 221,500,000 pounds of fish. In this catch:-100,500,000 pounds were haddock -61 ,000,000 pounds were cod -22,000,000 pounds were mackerel -11,000,000 pounds were flounders -8,000,000 pounds were pollack -5,000,000 pounds were hake -3,000,000 pounds were cusk -11,000,000 pounds were miscellaneous.Economic importance of these fish about corresponds to their numerical order.The economics of fishing are complicated by the fact that the schooners and trawlers both operate on some variation of profit sharing between the owner and the crew. In the schooners the crew members may own shares in the vessel, split trip proceeds on a prorata basis. In any case the crew is usually paid some percentage of the gross for the trip, although there is no standard system of making the division. The trawlers, however, have a definite pay-off known as the trawler’s lay, the lay being the division of the money obtained for the catch.Suppose that a trawler brings in 100,000 pounds of fish and sells them at an average of three cents a pound. Then the income on the trip is $3,000. From this $3,000 are made certain deductions, such as the pay of the radio operator ($4.50 a day) and the rent on the radio ($6oo to $700 a year, from Radio Corp. of America) and on the depth-sounding fathometer ($6o a month from Submarine Signal Co.). After these deductions, the remainder — called the net stock — is split fifty-fifty between owners and crew. Owners pay items such as insurance, taxes, repairs, gear, overhauling, shore expenses, and depreciation. They also give the captain 10 per cent of their total share. (The captain also rates one share as a crew member.) The crew pays not only for its food, but also for the coal (or oil), the ice, and the water. It also contributes $15 to the mate’s share, $15 to the cook’s, and $10 to the engineer’s. Since the fuel bill per trip may come to from $800 to $900, and the food bill from $150 to $175, neither owners nor fishermen are likely to have any great swag to divide up. In a division that gave the captain $120, each crew member would get perhaps $40. But in depressed periods the crews sometimes come out owing the owners money, so often indeed that nearly all the trawler owners now have a minimum pay per trip ($20) to guarantee the fisherman some cash on landing. But once upon a time a crew came in with a catch that netted each member $330 for ten days’ work. And so long as the memory of this miracle lingers, the profit-splitting system will doubtless remain. Furthermore, it would be very difficult to operate on a straight salary basis. Once you guarantee the fisherman a fixed income regardless of his catch, you deprive him of the major incentive for going through the labor and discomfort involved.Atlantic Coast FisheriesThe fishing industry is as small in its corporations as it is big in its cargoes. Most of the dory fishing never does rise to the dignity of a corporation, it is an individual enterprise carried on by each vessel in unincorporated singleness. Even a few of the trawlers run in one-ship “fleets.” But since a new trawler today might cost $180,000, some of the larger companies have an investment rather too large for individual enterprise. Compared with the $600,000,000 annual income of Swift or the $450,000,000 of Armour, the fishing companies look minute. Their entire business (in value of new product) does not amount to more than what Armour gets for its butter and egg sideline alone. In 1934 (fiscal year ending April 30) Atlantic Coast Fisheries Co., largest in dollar volume, took in $4,993,000; Bay State Fishing Co., largest in total catch, took in $1,918,000. As these two companies are now operating twenty-seven out of the fifty-seven trawlers it is necessary to regard them as the big companies of fish.In 1922 Atlantic Coast Fisheries Co., like most other fish companies, was in a bankrupt condition. The fish people, like the meat packers, had continued to expand after the World War, expecting that “starving Europe” could be profitably fed. (The same illusion ruined J. Ogden Armour and came close to ruining the Armour company.) To Atlantic Coast Fisheries came the late Ira Cobe, not a fishman but a reviver of sick corporations. Mr. Cobe brought Harden F. Taylor, chief technologist of the U.S. Bureau of Fisheries, to head his research department, and invested $1,000,000 in a fish-processing plant at Groton. In 1928 Mr. Cobe retired, was succeeded by an expansionist named Frank Bryce. Mr. Bryce got Boston’s Jackson & Curtis and the Old Colony Corp. to finance the purchase of several western wholesale fish dealers, a fresh-water fish company in Winnipeg, two others in eastern Canada, and one in Newfoundland. Even before the depression these new acquisitions began to accumulate large losses, and in 1930 Mr. Taylor took over the direction of the company.A scientist among businessmen, Mr. Taylor retains at forty-five a youthful enthusiasm about fish and about the oceans they swim in. He is full of such items of information as the fact that every year 3,240,000,000,000,000 tons of water are evaporated from the ocean and descend again as rain; that there are 331,000,000 cubic miles of water in the ocean; and why the salmon, although a salt-water fish, swims up freshwater streams to lay its eggs. Mr. Taylor developed the method most commonly used in the manufacture of imitation pearls by coating glass beads with a substance made largely of fish scales. His favorite reading is the reports of the Smithsonian Institution. A purse seine.Mr. Taylor (along with A. Hamilton Cooke, also of Atlantic Coast Fisheries) developed the Taylor method of quick-freezing fish. The slow-frozen fish (twelve to twenty-four hours, temperature 10° below zero to 5° above zero) have their flavor damaged by the formation of large ice crystals, which rupture the cells. Quick-freezing produces smaller crystals, does the cells no damage. The Taylor method freezes fish in forty minutes. The fish are floated on aluminum plates that travel on the surface of calcium-chloride brine at 45° below zero. Similar to the Taylor system is the Kolbe system, which also floats fish across brine on metal plates. The most conspicuous quick-freezing idea was the process developed by Clarence Birdseye, later acquired by General Foods Corp. Mr. Birdseye gets a temperature of 50° below zero and presses his frozen food between two metal belts. Distinguishing Birdseye feature — the food is frozen with a cold contact on each side. The essential feature in quick-freezing is to get complete and even penetration. Although the Birdseye process is now used for all manner of foods — except lettuce and tomatoes, which have so far defied experiment — Mr. Birdseye, himself a Gloucester man, worked it out first with haddock.The quick-frozen fish looked like a great idea in 1928 and the Groton plant of Atlantic Coast Fisheries was geared to an output of 10,000,000 frozen fillets a year. But quick-freezing is more costly than slow-freezing, particularly since the quick-frozen fish were frozen one by one and packaged one by one, whereas slow-frozen fish are frozen — and packaged — in bulk. Depression showed that individually frozen fillets in elegant Cellophane were too high priced for popular consumption, and the industry turned from quick-freezing almost as quickly as it had welcomed it. (For great exception, see below under General Seafoods, a General Foods subsidiary.)In 1931 the Groton plant was shut down, and has not yet been reopened. It is badly located because it is too far from the Boston Fish Pier — trawlers whose home port is Boston can stop at the pier, sell their fish if the price is high, otherwise bring it to their own plant for filleting. But the distance between Boston and Groton and the rapidly shifting price of fish made this hedging process difficult for the Atlantic Coast fleet. It will take a big rise in the meat price to put the Groton plant once again at work on quick-frozen fillets.Atlantic Coast has shown a deficit in every year since 1930, and in 1932 (fiscal year ending April 30) the loss amounted to $863,000 — a very large sum for such a comparatively small company. But Mr. Taylor sold the wholesale fish companies and most of the other boom time acquisitions, trimmed 39 per cent off his overhead, and in fiscal 1934 got the deficit down to $35,000. For the year ending April 30, 1935, the company will probably show a respectable profit.In addition to its trawling fleet, the company also operates a big commission house in Manhattan’s Fulton Market, which is to fish distribution what the Boston Fish Pier is to fish production. New York is a minor fish port but gets fish, including much of the Boston catch, by rail from all over the country. Here Atlantic Coast sells 300,000 to 400,000 pounds of fish daily. It has also a Canadian subsidiary, Maritime-National Fish, Ltd., which operates three trawlers — the total number of trawlers licensed by the Canadian Government, which says that too many trawlers would ruin the small fisherman. Canadian fish is a sore subject in the U.S. — for cheaper labor permits the Canadian to hurdle the two-and-a-half-cent-a-pound tariff and undersell the U.S. producer — but Atlantic Coast sells more than 80 per cent of its Canadian production in Canada.Atlantic Coast owns eighteen trawlers, of which only twelve are now operating. Last year they brought in about 30,000,000 pounds of fish. But, purchasing fish from other companies and selling them through the Fulton Market, the company turned over more than 100,000,000 pounds of fish in the twelve-month period. And out of all this labor it got its $35,000 loss.Bay State Fishing Co.Second largest fishing company is the Bay State, which has twenty trawlers, though only fifteen are now in active operation. Bay State is first in trawlers and fish; but Atlantic Coast, through its sales at Fulton Market, takes in more money and in good times is a bigger earner. Back in 1905 Bay State commissioned the first U.S. steam trawlers and even as late as 1919 was the only trawler-operating company. It was, however, in the worst of all possible ways when the present management took it over in 1920. It owed the banks $600,000. The government claimed $500,000 in unpaid war-profit taxes. Worst of all, the predecessor management had been convicted of violating both the Clayton and the Sherman acts. Owning all the trawlers, the company had refused to sell its competitors any fish, and in bad weather when only the trawlers could navigate it had something in the neighborhood of a monopoly. Appeals dragged on, unsuccessfully, for some years, but finally the terms of the convicted directors (six months to a year) were served. One of the convicted “directors” was an office boy, a dummy director in the fullest sense of the word. By the time the last appeal had been refused, the onetime office boy was a grown man with a wife and child. But off to jail he nevertheless went. It was against this background that the new management took over, and a sufficiently hopeless job it seemed to be.But B. Devereux Barker, Boston corporation lawyer with a flair for saving sick corporations, thought that he could pull it through. He had taken charge of various tottering companies, ranging from a manufacturer of frames for women’s hats to a building-construction firm, and none of his patients had yet died on his hands. The tax suit was compromised for $ 13o,ooo. The bank loans were gradually paid off. And in an attempt to find some new and more attractive way of selling his product, Mr. Barker developed the large-scale practice of handling fish in the fillet form. We have already seen that the fillet (pronounced sometimes fillit sometimes filly, never fe’lay) is the fish with all the inedible portions removed. Fish had been filleted before Mr. Barker’s time, but the whole fish (which the trade calls the “round fish “) was still the standard selling unit. The idea that you could throw away half of your fish and get maybe twice as much per pound for the remainder struck most fishermen as absurd, but it was not long before Mr. Barker’s neatly packaged fillets had set a new fashion in the marketing of fish. Also, Mr. Barker got a fine name for his new product. One of his advertising men, asking at what depth the fish were caught, was told “forty fathoms.” (A fathom is six feet.) Whereupon he devised the tradename of Forty Fathom Fish for Bay State fillets, and the Forty Fathom name is today the best-known fish signature. Bay State made $334,000 in the year ending April, 1929, and was again soundly on its feet. The company was so prosperous that it spent more than $200,000 on radio programs, first with National Broadcasting (Announcer, Graham McNamee) and later with Columbia. Bay State was one of Columbia’s early clients, and the Bay Staters were much impressed when the radio people put on a broadcast from a trawler at sea.Depression, however, wrote the same red ink on the Bay State income account that it was writing on Atlantic Coast’s. Not with such large deficits, because Bay State never did make any considerable investment in quick-freezing, and so had no $ 1,000,000 plant to write off. But it was primarily in the fillet business, and the fillet is a quality fish at a quality price. You might be paying twenty cents a pound for haddock fillets against ten cents a pound for haddock, and although the fillet, with no waste, gives as much nourishment per penny, the high cost per pound prejudiced the housewife against it. Bay State’s worst year was fiscal 1931, in which it lost $169,000. That year there was a scarcity of fish, and trawler loads dropped from a 100,000-pound average to 75,000 pounds. This would have been all very well if the shortage had raised prices, but meat was so plentiful and so cheap that it prevented the fishman from getting more money for his fewer fish. So the net result was simply that trawler loads were unprofitably small and large deficits became unavoidable. In fiscal 1934, however, Bay State made a $51,000 profit. It caught 38,000,000 pounds of fish, which it sold for an average price of 2.54 cents a pound. But it cost 2.39 cents a pound to catch the fish, so the profit was less than one-quarter of a cent per pound.Gorton-Pew of GloucesterA fine old town is Gloucester, but not what it used to be from a fishing standpoint. The industry has become more and more centered on Boston; none of the trawlers are Gloucester boats and although schooners still cluster around Gloucester wharves the city’s reputation as a great fishing port leans heavily on its past. But Gloucester is still the home of the Gorton-Pew Fisheries Co., the dominating factor in the salt-fish trade. It was Gorton-Pew that postered the U.S. on Gorton’s Boneless Codfish. The boneless codfish were not free from various small bones, so the extracting technique was perfected and the new product sold as Gorton’s Absolutely Boneless Codfish. The company was organized in 1906 as the merger of four Gloucester codfish companies, was discussed as a Fish Trust formed to combat the Meat Trust, a description more flattering than accurate. But it has been and remains the big purveyor of dried codfish and codfish cakes (the cakes have potatoes ground up along with the cod), and may sell 75 per cent of all salt fish. Gloucester schooners.The last Pew in Gorton-Pew died in 1934, but there is still a Gorton — fat, jovial Tommy Gorton, so short and so round that he himself is shaped somewhat like a fish. Tommy (he would be hurt if referred to as Mr. Gorton) is head Gorton salesman and there is no fish buyer whom Tommy does not know and few who have not been house guests at his Riverview home. But the real executive at Gorton is Thomas Carroll, General Manager since the beginning of the company and President for the last ten years. He has been in the fish business for fifty years, starting in Gloucester at the age of eleven. His father and his older brother were fishermen, drowned at sea; his widowed mother ran a fishermen’s boardinghouse. Despite his long allegiance to Gloucester, he has recently been buying go per cent of his salt cod and a large quantity of herring from Canada, for the insurmountable reason that the Canadian product greatly undersells the U.S. variety. However, he brings in the salted cod still with its bones and skin on, continues to provide labor for Gloucester in skinning, boning, further drying. Yet Gloucester still grumbles at its biggest company for importing Canadian fish. But Gloucester fishmen will not work for Canadian wages — Mr. Carroll is paying fifty cents an hour against the Nova Scotian scale of less than half as much.Gorton-Pew has fourteen schooners but no trawlers. The fleet operates out of Gloucester and last year landed 11,000,000 pounds of fish. Gorton-Pew tries to preserve a Gloucester industry, but it does not consider itself chiefly a fish producer and would just as soon run no schooners and buy all its fish. The company experienced the usual War boom and post-War collapse — the collapse being accelerated by the fact that after Armistice Day the Italian Government canceled an order for 20,000,000 pounds of dried fish (equal to 100,000,000 pounds of fresh fish) and the Gorton company could not sell the fish in this country because Italian dried fish is too dry for the U.S. taste. But in recent years Gorton has been less depressed than the other fish companies. It has little to do with frozen fish, and its fillet production is only about one-eighth of its total trade. Its big staples — dried codfish and codfish cakes — are free from the perishability of fresh fish and Gorton has the nearest fish approach to national distribution. (Yet nearly two-thirds of even Gorton’s fish is sold in New England, New York, and Pennsylvania.) Furthermore, the codfish and the cakes are fish in its most inexpensive form; here fish really is the poor man’s food and dried fish much more depression-proof than the fillets. So although sales did drop from $3,650,000 in 1929 to $2,370,000 in 1934, the company continued to pay dividends even through the depression years. About 45 per cent of its output is sold through chain stores, with the Great Atlantic & Pacific Tea Co. its best customer (as the A&P is the best customer of most fish producers).Frank E. (Fish-by-Mail) DavisThe ancient and picturesque figure in the Gloucester fish trade is eighty-three-year-old Frank E. Davis. Back in 1885 Mariner Davis began sending out pails of mackerel, chiefly to inlanders who had been vacationing in Gloucester and took a taste for fish back home with them. After a good many years of longhand, mail-order letters composed by Mr. Davis and his wife, orders climbed up to 6,000 a year. Mr. Davis began to organize on business lines. He got his son, Arthur, in as Treasurer, and in 1910 began advertising in Harper’s magazine. Now the Davis company sends out 10,000,000 mailing pieces per annum and receives 1,500 letters per day. Probably half the mail passing through the Gloucester post office is going to or coming from the Davis concern. There is a file list of 500,000 customers, past and present, of which about 200,000 names are said to be active. The list of products has also expanded. Today Mr. Davis does about a quarter of his total business in canned lobsters. These are canned by Mr. Davis in Canada — another thrust at Gloucester prosperity. Another big import is Japanese crab meat, the Japanese producer delivering the crabs neatly canned and carrying the Davis label. The company claims to use 750,000 pounds of round mackerel and 50o,ooo pounds of whole lobster each year. Seventy per cent of the orders come from men — bearing out the argument that the U.S. housewife is prejudiced against fish. So magazines appealing chiefly to men are favorite Davis mediums. Best magazine, says the company, is the Literary Digest, because Digest readers have a mail-order complex. Catholic papers are notably bad order-getters.The company releases no income figures but is thought to have lost money in each of the last several years. Average orders dropped from a 1928 high of $9.50 to a 1934 low of $5.75, and much of the profit is eaten up by express rates. (Some of Mr. Davis’ more distant customers pay $2 a tub for fish that cost the company $1 to ship.) The company still keeps up the personal touch about the old fisherman going daily to the wharves and picking out the choicest fish for his customers, but his son Arthur is probably the actual head of the company. But the old man still reports for duty every morning at eight and works till five. Advertising Manager J. A. Smith Jr. now writes the direct-mail copy, but Mr. Davis has it all read to him and changes anything that fails to sound like his own salty prose.General SeafoodsAs a subsidiary of General Foods (FORTUNE, October 1934), General Seafoods Corp. has more solid, corporate backing than any other fish company. But it was put together at the tail end of the boom and its short life has been spent almost entirely in the depression period. It went in very enthusiastically for quick-frozen fillets in individual packages (remember that it could use the already mentioned Birdseye process). And it still sticks to quick-freezing, although the Cellophane-wrapped container of other days has been replaced by humbler, cheaper parchment. Yet it quick-freezes 8,000,000 pounds of fillets a year and last year sold more than ever before. The company operates five steel trawlers and two wooden draggers. Its catch may run to 18,000,000 pounds a: year. But it is a big buyer at the Boston Fish Pier, handles about 35,000,000 pounds of fish per annum. It fillets about 20,000,000 pounds (8,000,000 pounds of fillets) and has a good fresh-fish business. General Seafoods and Birdseye Frosted Foods have probably been the only losing members of the General Foods family. But Seafoods just about broke even in 1934.O’Hara, et al.Smaller operations include four boats of Frank O’Hara, named for Catholic colleges like Fordham, Holy Cross, and Boston College. The O’Hara boats bring in around 15,000,000 pounds a year. Then there are seven boats of R. O’Brien & Co., with a 20,000,000-pound annual catch, three boats of the Boston Trawling Co., and several even smaller outfits. Fine, one-boat fleet is the Hekla, run by a smart young Icelander, Magnus Magnusson. Back in 1929 Mr. Magnusson was captain of O’Hara’s Boston College. Magnusson did so well with it that his crew is said to have made $5,000 apiece for the season’s work. At any rate Captain Magnusson bought a trawler of his own, changed its name from Sea Hawk to Hekla (a volcano in Iceland), and has since done himself very well. Another one-ship fleet is the Patrick J. O’Brien, owned by one Patrick J. O’Brien. But Mr. O’Brien has had so little luck with his namesake that seamen consider it jinxed.Recapitulating, the catch of the trawler fleets splits up among the principal companies much as follows:Bay State Fishing Co.: 38,000,000 pounds Atlantic Coast Fisheries: 30,000,000 R. O’Brien: 20,000,000 General Seafoods: 18,000,000 Frank O’Hara: 15,000,000Remember that these figures count no draggers (except General Seafoods’), dory schooners, or guinea boats. Boston Trawling and the other small fleets might run the trawler catch up another 35,000,000 pounds, giving a total of 156,000,000 pounds to the trawler companies. Guinea boats do not figure at more than 10,000,000 pounds. Taking the total catch at 26o,ooo,ooo pounds, the 130 or so schooners and draggers account for the remaining 94,000,000 pounds caught. But there are twice as many schooners and draggers as trawlers.Booth FisheriesNot strictly a Boston fishing company — although it does operate two modern Diesel-engine trawlers out of Boston Harbor — is Booth Fisheries Corp., largest factor in fresh-water fishing on the Great Lakes. Its widespread activities also include halibut and salmon fishing on the West Coast, but its home is in Chicago, and the Great Lakes is its major hunting ground. It catches whitefish, trout, perch, and bluefish in Lake Erie; whitefish, trout, and chub in Georgian Bay; more whitefish and trout — also herring — in Lake Superior; and whitefish, yellow pike, and pickerel at Lake of the Woods and in the Canadian lakes of Winnipegosis, Winnipeg, and Manitoba.Grand Rapids, in the province of Manitoba, is some 250 miles from Winnipeg, 114 miles from the nearest railhead. Here the fishermen — Indians, mixed breeds, Scandinavians — cut holes in the lake ice, poke down gill nets, and haul up their fish by the thousand. The gill net acts as a trap. Of fine mesh, it slips neatly over the head of the fish, whose gills spread apart and hold him when he tries to escape the web. The fish is loaded into hundred-pound boxes, then packed forty boxes to a sleigh team. It moves down to the railroad in groups of ten to twenty sleighs, preferably enough 4,000-pound loads to make a train carload (22,000 pounds). Here is one place where it is easy to get frozen fish — you just dump them on the snow and ice and they are frozen solid in fifteen minutes. Summer fishing is a quieter and more standard operation, a fleet of fishing boats dropping their gill nets over the side and, as usual, waiting for the fish to walk, in. Booth’s Canadian catch is about 10,000,000 pounds per year. Booth has a more national organization than most fish companies, and has organized 5,000 retailers as Certified Booth Dealers (selling Booth Tastyloin fillets). Since the depression the company’s financial affairs have been as tangled as a fouled trawler net, with three Presidents and a reorganization since 1931. But the current year has shown a sharp improvement — to a probable total of 60,000,000 pounds, ninety-nine species. Booth, like the salt-water fishmen, thinks that better times are on their way.Fish out of waterMost of the fish caught at the fishing banks go to the Boston Fish Pier after they die. The pier is an enormous brick and concrete structure, 1,200 feet long, 300 feet wide, with a fish exchange at one end, a freezer at the other, and running down its center a wide, cobblestoned roadway flanked on both sides by the offices of the fish catchers and wholesalers. The pier itself was built by the Commonwealth of Massachusetts, its buildings by the Boston Fish Market Corp. This corporation is made up of fish producers and dealers who literally got in on the ground floor when the pier was new (1914) and fish was mostly unloaded at the old T-Wharf. They leased the pier from the state ($3o,ooo for the first fifteen years, $45,000 second fifteen years, option to renew, at unstated figure, for two more fifteen-year periods). Then they built $3,000,000 worth of brick and concrete to house themselves and rent to others. Since 1922 they have been making mopey, last year reputedly 10 per cent on the investment. Tenants include a branch of the Shawmut Bank, two ship’s outfitters, U.S. Bureau of Fisheries office, one sailmaker, six oil-supply companies, two barbershops, one tavern (Massachusetts for saloon), two tailors, two drygoods stores, one blacksmith, one scale manufacturer. Nowadays 1,000,000 pounds of fish is no unusual cargo for a day’s unloading.But not all the fish that come in to Boston come to the Fish Pier. Suppose that a Bay State trawler is homeward bound. The home office knows (via radio) how much fish is coming in and knows also what the fish are likely to bring at the pier. If the market looks saturated and probable prices appear unduly low, the trawler may be routed directly to Bay State’s East Boston filleting plant and its fish made directly into Forty Fathom fillets. Meanwhile a Bay State buyer, at the pier, buys fish from other companies in an attempt to take advantage of the prevailing low prices. The operation is a crude form of hedging, results in a rather bewildering situation in which Atlantic Coast may be buying Bay State fish on Monday and Bay State buying Atlantic Coast fish on Tuesday. Meanwhile the smaller independents, with no processing plants, must get rid of each cargo at whatever price it may bring the day the boat comes in.Actual process of barter takes place on the floor of the Fish Exchange. Here is a long, bare room, ornamented with a few posters proclaiming the nutritive value of fish, and equipped with a raised and railed-off platform that occupies the greater part of the floor space. On this platform, at seven-fifteen each morning, gather the fish sellers. With the guinea boats, or with the smaller independents, the seller is the captain of the fishing boat. The larger companies have one representative to do all their selling — a professional fish seller who represents the captains of three or four trawlers that day in port. Outside the platform gather the buyers. They include buyers from the big companies, but mostly buyers for wholesale fish dealers. Buyers and sellers together total perhaps 150: a jovial, informal, variously dressed assemblage that looks like anything in the world but the focal point for a considerable proportion of the U.S. diet. On one occasion someone sailed a frozen fish across the room with such excellent aim that it knocked several teeth out of its target; upon which the jokester sent his victim a bill for “extraction.” But beneath the informal atmosphere there exists a deadly seriousness; for on the moot question of whether a man is going to get two and one-half cents a pound or three cents a pound for his haddock there rests the difference between a money-making and a money-losing trip. When the gong rings the sellers gather at the railing, the buyers cluster under it, and the two chatter back and forth until someone has named a price that the seller will accept. By eight o’clock the first — and major — sale of the day is over, and the greater part of a million pounds of fish has been sold or optioned. Later on there will be other auctions of fish left over from the earlier sale, with some salt-fish company (like Gorton-Pew, which can afford to hold its fish for an indefinite period) furnishing a floor for the market and taking up all the fish that might otherwise not be sold. Sometimes a company like Gorton-Pew buys fish at less than the cost of catching them, but on the other hand the salt-fish company fulfills an invaluable function in taking up what would otherwise be sold for close to nothing per pound.Fish to plateThe fish is a highly perishable product that starts to deteriorate as soon as it leaves the water. So as soon as it is landed everyone who handles it tries to get it to the next man as rapidly as possible. Except for Atlantic Coast’s commission business at the Fulton Market, the fish producer usually sells his fish to wholesalers, to large retail outlets like the Mills Restaurants in Cincinnati and Cleveland. Here his technique is entirely different from the meat packers’. Armour & Co., for instance, through its national system of branch houses, does business with 200,000 retail butchers, follows its meat n early all the way down the distribution line from steer to steak. But the fishman has little contact with his small retailer and consequently much fish goodwill is lost at the point of final sale.The retail fish market is the bottleneck of the fish industry. The fish-store man is likely to sell fish that, although undeniably still edible, has nevertheless lost most of its juice and flavor, and he may run a store in which the odor of fish is a bit on the overpowering side. Also, because his volume of business is usually small, he needs a high markup to make any money. Thus a fish store (of excellent quality) in a Boston suburb sold last year $13,000 worth of fish. The fish cost the store only $7,800. Here was a 40 per cent markup and a gross profit of $5,200. But the marketman paid $330 for telephone, $480 for advertising, $800 for rent, $500 for delivery service. He allowed his clerk $1,040 ($20 a week), and himself, as proprietor, the handsome sum of $ 1,300 ($25 a week). Add light, heat, wrapping paper, other items of overhead, and when the year was finished his profit was $435.If it is difficult to run a fish store near Boston, it is much more difficult in towns distant from the sea. There are great stretches of the hinterland where salt-water fish are a rarity. Probably 75 per cent of Boston fish are consumed east of Cleveland and north of Richmond — a circle with a radius from Boston of not more than 500 miles. For this restricted area the fishmarket man has partly himself to blame. But the difficulty in keeping fish strictly fresh is the major reason for the unpopularity of fish that has gone too far from the sea. You can hang meat — a certain amount of breakdown in the meat cell actually improves the flavor. But any breakdown in the cell of the fish has an immediately unfortunate result. It is true that the quick-frozen fish — particularly in specially refrigerated and insulated tank cars — can travel anywhere and arrive in good condition. But that brings us back to the economic problem of the high cost of frozen fillets, to say nothing of the added cost if the distributor goes in for special transportation.New Yorkers eat over thirty pounds of fish per annum against the national average of fifteen. But in far-off Kansas City the man who eats five pounds a year is doing as well as his fellow citizens toward making the fish trade brisk. There was a time in the first flush of quick freezing when the fish producer thought he might have licked the coastline problem. But his boomtime advances into the interior were checked, then routed, by eight-cent (wholesale) meat and he found himself thrown back on the coastal cities that had always been his main reliance.But fishmen think that they see one great and beneficent factor growing steadily more powerful in fish distribution. That element is the chain store, most particularly the Great Atlantic & Pacific chain. The A&P sells fish in 4,500 of its 15,6oo stores. It has been selling fish only since 1927, but its sales already run to over 6o,ooo,ooo pounds per year. And the B. F. Kroger chain, with fourteen years of fish experience, sells 12,000,000 pounds. Here are two chains, both automatically eliminating the wholesaler, and tending to eliminate the small retailer. And the fish producer is on the side of the chain store (close buyers though the chains may be), because he feels that the chains will do a better job of selling fresher fish in cleaner stores. And should the meat shortage cause meat prices to soar far above the people’s ability to buy, it is a certainty that companies like Atlantic & Pacific and other chains would go into the fish-selling business in the most serious of ways. Even the more ordinary channels of distribution would no doubt improve themselves if greater demand for fish, and higher prices, gave them a better margin of operating profit.So the fishman is happy in the Great Opportunity of 1935 that has come to him from the Great Drought of 1934. Hence his confidence that the Fish and Sea Food Institute will educate the U.S. public to the food merits of fish. Even aside from the price comparison with meat, there are other encouraging factors in his problem. Most important is the fact that the “fish cycle” again appears to be moving in his favor. The fish catch will mount steadily over a period of years, then, for reasons not entirely clear, go through a declining period. It was at the low point of one of these declines that the 1931 trawlers brought in loads of 25,000 pounds less than today’s average. But the cycle — particularly of haddock — is again swinging upward and from every indication the trawlers should find good fishing in 1935. Furthermore, fish supply protein in a more digestible form than either steer or hog supply it, and the industry trusts that it will eventually educate the more sedentary U.S. inhabitant to this important fact. Still — for the present at least — in the scarcity of hogs and cattle is the foundation for prosperity in fish.