FISHERIES LOAN FUND fiscal year 1959 FISH AND WILDLIFE CIRCULAR 113 UNITED STATES DEPARTMENT OF THE INTERIOR FISH AND WILDLIFE SERVICE BUREAU OF COMMERCIAL FISHERIES WASHINGTON 25, D.C. ANNUAL REPORT OF FISHERIES LOAN FUND FISCAL YEAR 1959 The Fisheries Loan Fund was au- thorized by Section 4 of the Fish and Wildlife Act of 1956 (l6 U.S.C. 742c), and operations were begun during fiscal year 1957. Background and historical information regarding the Fund can be found in the "Annual Report of Fish- eries Loan Fund, Fiscal Year 1957," published as Circular 103, and for "Fiscal Year 1958" (Circular 106). Conditions in most of the fisheries in fiscal year 1959 were poorer than in the previous year. The upsurge in value of the catch in the latter half of 1958 was followed by lower prices of shrimp and tuna during 1959. Loan applica- tions during this fiscal year were re- ceived at a lower rate (both in number and value) than in either of the 2 previous fiscal years. STATISTICS OF THE COMMERCIAL FISHERY, 1959 During the calendar year 1959 the catch of fish and shellfish rose to 5.10 billion pounds, second only to the 5.25 billion pounds landed in 1956. The large increase in menhaden caused landings of industrial fish to exceed the catch of food fish for the first time. There were increases in landings of shrimp, halibut, and Pacific mack- erel, and decreases in landings of grovmdfish, tuna. Pacific sardines, salmon, and sea herring. The fisher- men and vessel owners received over $342 million for the catch which was $31 million less than in 1958 and $11 million less than the average of the previous 10 years. Low shrimp prices contributed to this decline. Fish freez- ing, w^hich has been rising for several years, reached a new peak of 337 naillion pounds. A sunnmary of the number of fishing craft and fishermen is shown in Table 1. TABLE 1.— Vessels, boats and fishermen— United States, 1959 Area Vessels Number Fishermen Boats Number Fishermen North Atlantic Southeast Pacific Northwest . . . California Great Lakes and Mississippi River. Hawaii Alaska Total, excl\isive of duplication 2,5';2 4,897 2,099 1,';20 511 64 1,999 12,109 11,434 16,278 6,568 6,022 1,497 343 6,345 42,920 25,963 15,001 3,741 1,332 10,304 263 4,053 60,620 37,757 20,865 7,522 2,186 12,348 345 5,121 86,065 OPERATIONAL CHANGES As a result of the recommendations of the committee appointed to review the operations and administration of the fund during fiscal year 1958, a number of changes were made. The applica- tion form was revised (Appendix A). Revised regulations (Appendix B) were adopted and published in the Federal Register. Changes in internal and Small Business Administration procedures helped to reduce the aver- age processing time and enabled all progranri employees to understand bet- ter the principals followed in reaching final decisions. ORGANIZATION AND STAFF The organization of the Office of Loans and Grants was changed during fiscal year 1959 by transferring line supervision of field employees to the Regional and Area offices of the Bureau of Commercial Fisheries, As a result of this action, the number of field offices remained the same, but their physical locations were changed in certain instances. Four full-time and one half-time professional employees and two full-time clerical eniployees conducted field operations. Three pro- fessional and three clerical employees continued to staff the central office. During the last half of the fiscal year a financial specialist, detailed fronn the Small Business Administration, worked on a review of outstanding loans and on the anticipated Fishing Vessel Mortgage Insurance Program. An organizational chart (fig. 1) shows the organization of the office at the end of the fiscal year. Director, BCF Assistant Director Line Supervision Office of Loans and Grants ■ 1 1 1 1 Division of Biolojlcal Research Division of Industrial Research ancLSenrltea . Division of Resource Manasement Division of Admiristration r- — 1 - --1 r - 1 - 1 — - --1 — — - - - -1 - — - — -I 1 — — — — 1 .., i. Regional Director Region 1 Regional Director Region 2 Regional Director Region 3 Regional Director Region K Regional Director Region 5 Area Director California Area Director Hawaii Fie Off! Saat id ce tie P( Fie Offi St Stan Id ce ibur R Fie Off! Bost Id ce on Field Office Juneau Field Office Terminal Island Members of Regional Staff Figure 1.- -Office of Loans and Grants organization chart, June 30, 1959. STATUS OF THE LOAN FUND During fiscal year 1959, 135 appli- cations totaling $2,879,000 were re- ceived. This made a total of 586 applications for $18,902,000 received since the program began. During the year 76 loans totaling $1,455,000 were approved, 43 for $712,000 were de- clined, 13 for $246,000 were declared ineligible, 13 for $184,000 were with- drawn, and 24 for $3,102,000 were being processed or were held in a deferred status at the request of the applicants. From the beginning of the program 318 loans totaling $7,722,000 have been approved, 150 for $4,251,000 have been declined, 52 for $1,191,000 were declared ineligible, and 42 for $1,679,000 were withdrawn by the ap- plicants. Figures 2, 3, 4, and 5 show the number and value of applications received and loans approved by areas during fiscal year 1959. Figures 6, 7, 8, and 9 show similar cumulative in- formation for fiscal years 1957 to 1959, inclusive. The largest increase in applications came from the Pacific Northwest and the shrimp fishery of the South Atlantic Jind Gulf States. In California the loan emphasis shifted to albacore vessels as clipper (bait boat) operations were unprofitable due to lower prices and labor troubles. A few clippers were converted to purse seiners by the use of private financing and substantially Area North Atlantic Pacific Northwest Southeast California Alaska Great Lakes Hawaii and Puerto Rico Number »" a r V V « « w^ r .-...-.; i I I T^*-i^i^r i^i^i^i ',','1 'T*-*-*-''*'***l'l*f*"*l'*'«'«'«'«*'****'*'*'* »»''*«*l 1 *- - ■* ■ ■' * - - • ' - ' ■ 18 $10,000 or less HI ::>::>::::::< Over $10,000 I L_ 27 36 45 Figure 2.--Number of loan applications received by area, fiscal year 1959. Area North Atlantic Southeast Pacific Northwest California Great Lakes Alaska Hawaii and Puerto Rico . j.*.-.'.'.'.'^'. '.'.'. '.'.'.'.' »****■■■■ a 1 I ■--■■»*■ snnn3 3 Thousand dollars -t- .» — ■ *- 200 400 600 ^m^m aoo 1000 Figure 3.--Value of loan applications received by area, fiscal year 1959. Area North Atlantic Pacific Northwest ;:•:•:::!::::::::::::::::•:•:>::•:':':•:•:•:':':•:•:': •:•:•:•:•:•:•:•:• California Alaska Southeast Hawaii and Puerto Rico » t ■ ■ Tr~i — 1— T" Number -I — s — r 1 I 1 I I l"» T ^ 1 *.».».■.». 10 15 20 25 Figure 4,--Number of loans approved by area, fiscal year 1959. Area North Atlantic California Alaska Hawaii and Puerto Rico ^ — I — t — t — ■ ■ ■ • ■ V ■ ■ ■ V ■ ■■■»»»l»»'»l ■»■■»» '.■.' '.'.'.' '.'.'.'.'1 Pacific Northwest •:-:':-:':':-:':-:":':-:-:-:-:-:-:':i Southeast -^^•^^^m ■ m\ Tm a Thousand dollars 125 250 375 '■'•'■**! 500 625 Figure 5.- -Value of loans approved by area, fiscal year 1959. Area North Atlantic Pacific Northwest | Southeast California Alaska I^es Hawaii and Puerto Rico Number 'iVfl'ITl'ITfi mmmi l-x:::x-x:x-:-x:x:>x!:;:;:;:;:;:l ■T^» ■■>■■■ >yT»» *'*I*TT^^*tS M >^^w'w ■ ^ ■ » ■ ■ 50 100 if $10 ,000 or less, p^xixiii!) Over $10,000. 1 I 150 200 250 Figure 6.— Number of loan appUcations received by areas, fiscal years 1957-1959 inclusive. ■ I I I 1 Area North Atlantic California Southeast Pacific Northwest Eiii^i^^i^i^i^i-i^i-iJ Alaska Laikes '*----------- — . — ' — * I . ■ * — ' ' h ' - ' ' ' * * j» a !• - — a.-^— a — 1 — f ' ' Tm^ Hawaii and Puerto Rico -J.,.«, » ■ ^ .4^- 3 ] Million dollars _L 1.5 3.0 -*■-*■* i*.5 6.0 7.5 Figure 7.— Value of loan applications received by areas, fiscal years 1957-1959 inclusive. Area I 1 1 1 1 '^ ■ ■ ■ '■-■r 'WW 1 — »— « — ■ — ■ — r T » — > » y ■ ■ — « — V V * * « « — • — « — • — •-"• — »wr »»•••••_•_ North Atlantic •:•:•:•:•:•:•:•:•:•:•:•:••:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•:•: •••■•••■•••■••••'••• i..«.ttttttttttttt-t--' Pacific Northwest California Southeast Alaska Hawaii and Puerto Rico Lakes I'l'i'i'i'i' i'i't'i SSI Number ::::::::::::::::::::::::::::::::j .•■•..•.•.•:-.-.---!:l 25 50 75 100 125 Figure 8.--Number of loans approved by areas, fiscal years 1957-1959 inclusive. Area North California Southeast Pacific Northwest Alaska Hawaii and Puerto Rico Lakes Thousand dollars 1 1 11 ':•:•:•:•:•: :::\:\:\:\^\-l->\':-:-:-\i ■ ^ * ^ <^ '^ty^ *•'•'•*•*■ !i!iii:i:iL3 1 1 1 •:•:•:•:•:• :•:•:•:•:•:• ':-:'l ><>\ i 1 750 1,500 2,250 3,000 3,750 Figure 9.--Value of loans approved by areas, fiscal years 1957-1959 inclusive. increased their landings. No loan ap- plications were received during fiscal year 1959 for conversion of tuna clip- pers to purse seiners although most vessel owners were watching the re- sults obtained by the early conversions. Since the program started nearly 50 percent of the applications received were for loans of $10,000 or less while 61 percent were for amounts of $20,000 or less. Most of the small loan applications came from Alaska and the albacore fishermen of Cali- fornia, with a small number from the New England lobster fishermen. The status of the fund as of June 30, 1959, was as follows: Appropriated Interest collected Principal collected Total available Administrative expenses Net loans authorized* Total obliga- tions Amount available for loans Applications being processed $10,000,000 327,715 890,999 $11,218,714 485,215 6.531,512 7,016,727 4,201,987 3,101,534 * Net loans authorized represents the total loans au- thorized minus authorizations which were cancelled after approval on request of the applicants. Five percent interest is charged on all fisheries loans. All principal and interest are returned to the revolving fund and become available for future loans or administrative expenses. Ad- ministrative expenses are paid from the fvmd. A limitation on the amount which can be spent each year for this purpose is carried in the Department of the Interior Appropriations Bill. During fiscal year 1959 this limitation was $313,000. Expenditures for ad- ministrative expenses during the year amounted to $266,618. During this fiscal year four loans were declared in default. Two of these were turned over to the Department of Justice for collection. The other two as well as two earlier cases had their defaults remedied. From the beginning of the program 14 cases have been declared in default. Five of these defaults have been remedied leaving nine requiring further legal action. As legal action has not been completed in most of these cases actual loss figures are not available. The estimated cumulative loss to principal to June 30, 1959, is $120,000. DISCUSSION AND CONCLUSION During the past 3 fiscal years the Fisheries Loan Fund has provided long-term financing for approximately 350 vessels. Some of the loans pro- vided aid for more than one vessel. One of the requisites for obtaining a loan from this fund is a showing that the desired financing is not available on reasonable terms from any other source. It can be assumed that most, if not all, of these vessels would have been in serious difficulties if these loans had not been available. Not only did these loams keep the vessels op- erating, but the fact that the Federal Government had sufficient faith in the fishing industry to make the loans also encouraged banks and suppliers to ex- tend limited credit to other vessels. The loans from the Fisheries Loan Fund enabled vessel owners to pay off long-standing debts which assisted the general economy of those areas largely dependent on fishing. In addition, mort- gage foreclosures were prevented in many instances. Since the start of the program ap- proximately 50 percent of the loans have been used for refinancing mort- gages and lienable debts--47 percent for repairs, improvements and re- placements, ajid 3 percent for operating expenses. During the early stages of the program a larger portion of the funds were used for refinancing with smaller amounts used for repairs and improvements. The proportionusedfor refinancing has been declining, and this trend is expected to continue. As more of the funds go into vessel im- provements, the efficiency of the vessels and also the prospects for repayments will improve. The esti- mated catch of fish and shellfish of these 350 vessels in fiscal year 1959 was approximately 230 million pounds. APPENDIX A Font NO. 3-I8B4 (NtNnaFn I35B) UNITED STATES DEPARTMENT OF THE INTERIOR Budget Bohehu Ho. 42 -R 1295.2 Form Apnioveo APPLICATION FOR LOAN Pursuant to Section 4, Fish and WildliJc Act of 1956, Appiovcd August 8, 1956(70 Slot 1119) Date of ApplicatiOD: 1. Full Dame and address of applicant (Print) (Street, City, Zone, and State) Amount of loan requested: Maturity (period of loan) requested: 2. Type of buslnes (attach brief histDxy of business on separate sheet): Dote business cstabli^ed: 3. Purpose of loan (Give brief but clear general statement of need anid purpose of loan — Sec InftiucCLODS and use separate sheet.) 4. NATURE OF EXPENDITURES TO BE MADE AMOUNT Total (Tills should agree with amount of loan requested) "S. Have you requested a loan from the Government dtulng the past 5 years? (Ye (No) If yes, explain: 6. Recent efforts to obtain credit. The Department of the Interior Is authorized, as prescribed by the Fish and Wildlife Act of 15^6, to make loans to qualified membea of the flibdng industry -only when the financial assistance Is not otherHrise available on reasonable tenns. Applicant must furnish evi- dence that efforts were made within 90 days preceding the filing of this ^rpLication to obtain credit fiom banks or other sources. Letteis declining to extend credit must be obtained fiom the bank, banks or instltutlDns in vrhich the applicant has a bank account, or accounts. It is essential that these letters contain (1) date of ^>plication; (2) amount of loan and terms requested; and that they be at- tached to this application • 7 . Give two credit references: (A)_ (Name) (B) ,^ (Name) Collateral offered by applicant as security for loan: (Address) (Addrea) DATE ACQUIRED COST (Omit Cents) BOOK VALUE (Net! APPRAISFD VALUE (Fixed Assets) Property now held and nabne of title: « To be acquiied (Complete 1st and 2nd columns only): X X Appraised by: Name _ ^Describe existing Uens, if any, on poopexty listed above. T itle Date Attach photograph of piopeity If avallableT 9. Give names and experience of key personnel, with length of service or similar Infonnatlon, who manage and operate vevel or gear for wrtiich the loan is proposed. (Use separate dieet) 1(X Is vesel or gear now In operation? If not, explain why: U. Proposed method of repayment of loan. (Sute sources of funds and proposed schedule of repayment on separate sheet.) 12. Are there now, or have there been in the past 5 yeais, any Judgements or compromise settlements obtained against you or your corpo- ration relating to your business? . If so, sUte nature and present status on separate sheet. 13. Have you been involved in any bankruptcy proceedings at any time, or made an assignment for benefit or creditore, etc.? Cive full details and other pertinent information relating to these matters. (Use separate sheet.) 14. NAMES OF ATTORNTt'S, ACCOUKTANTS AND OTHER PARTIES. The names of all attorneys, accountants, appraises, agents and all other parties (whether individuals, partnerehips, associations or corporaUons) engaged by or on behalf of the applicant (whether on a salary, retainer or fee basis and regardless of the amount of compensation) for the purpose of rendering professional or other services of any nature vviiatever to applicant, in connection with the preparation or presentation of this application or with any loan to appli- cant which the Department of the Interior may make, or in vrfiich the Department of the Interior may participate, as a result of this application, or such loan or participation; and all fees or other charges or compensation paid or to be paid tiierefor or for any purpose in connection with this application whether in money or other property of any kind whatever; b>- or for the account of the applicant, together with a description of such services rendered, are as follows! NAME AND ADDRESS DESCRIPTION OF SERVICES RENDERED AND TO BE RENDERED TOTAL COMPENSA- TION AGREED TO BE PAID* COMPENSATION ALREADY PAID APPLICANT SHOULD IMMEDIATELY NOTIFY THE DEPARTMENT OF THE INTERIOR OF ANY CHANGE IN OR ADDITION TO THE INFORMATION SET FORTH ABOVE * Subject to the Department of the Interior approval. IS. NAMES OF ANY DEPARTMENT OF THE INTERIOR OR SRA* EMPLOYEES who have any relationdiip or direct or indirect interest whatsoever in applicant (such interest to include any direct or indirect financial interest in any other business entity or enterprise which is. in any way, connected with applicant): NAME AND ADDRESS INTEREST IN APPUCANT AGREEMENT ON NONEMPLOYMENT OF DEPARTMENT OF THE INTERIOR OR SBA* PERSONNEL. In considejation of the making by the Department of the Interior to applicant of all or any part of the loan applied for in this application, applicant hereby agrees with the Department of the Interior that applicant will not, for a period of two years after disbursement by the Department of the Interior to applicant of said loan, or any part thereof, employ or tender any office or employment to or retain for professional services any person who, on the date of such disbursement, or within one year prior to said date, (a) shall have served as an officer, attorney, agent of the Department of the Interior or SBA and (b) as such, shall have occupied a position or engaged in activities which the Department of the Interior or SBA shall have determined, or mav determine, involve discretion with respect to the granting of assistance under the Fish and Wjldliic Act of 1956, or said act as it may be amended from time to time. _^ 17. CERTIFICATION: I hereby certify that: (A) The applicant has not paid or Incuned any obligation to pay, directly or indirectly, any fee or other compensation for obtaining the loan hereby applied for, and has not paid or will not make any payment for services in connection with this applical-on, without the consent of the Department of the Interior. (B) Ail information contained above and in exhibits attached hereto axe true and complete to the best knowledge and belief of the applicant and are submitted for the purpose of inducing the Department of the Interior to grant a loan, or to participate in a loan by a bank or other lending institution, to applicant. Whether or not the loan herem applied for is approved, applicant agrees to pay or reimburse the Department of the Interior for the cost of any surveys, title or mortgage examination, appraisals, etc. , performed by non-Department of the Interior personnel with consent of applicant. (Name of Applicant) If A Corporation (SEAL) By. (Title) Whoever makes any statement knowing it be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or otherwise, or me acceptance, release, or substitution of security therefor, or for the purpose of influencing in any way the action of the Department of the Interior, or for the purpose of obtaining money, property, or anything of value, under the Fish and Wildlife Act of 1956 shall be punished as prescribed by law. * Small Business Administration. 10 SCHEDULE A - (To be filled in if application is for more than $10,000 or if applicant is a partnership or corporation) 18. Balance sheet ftatemeat of ]9 _, flical year endi__ _, 19_ (Statement must be dated wltfaln 60 days of the filing of this application. Omit centi.) (The applicant may fubmlt In lieu of the balance iheel ftatement prescribed below a copy of a statement dated within 90 days of the filing of this application provided he alao supplies the supplcmentaiy detail called for on items marked with an ajterisk.) ASSETS CaA on Hfl"H ftnrf In banks •...$ ♦Notes receivable - ♦Accoimts le ce 1 vable .......•..................$_ Less reierve for doubtful accounts Inventories (indicate kind and how valued): * $ S * Other cuirent assets __ Total current asets Ji_ * Due from affiliates or subsidiaries * Due fiom officen, directoa, and stockholders. . . Life insurance (CSV) Land , . . Buildings $ Vessels and gear % Machlneiy and equipmoU. . . . Furniture and fixtures ^ ^ Autos and trucks _ ^ Less reserve for depreciation. . * Other assett, •••••■■•■■>■■■■■■■■■■■<•>«•*■• LIABIUTIES ♦Note* payable to vendots Ji *Notei payable to banlcs ♦Notes to officejs, directoa, and stockfaoldea •Notes to others ♦Accounts payable to veodos Income taxes Other accruals ♦Other cmrent liabilities Total current liabilities $_ ♦Mortgage debts ♦Other liabilities __ Total liabilities $__ Capital stock , $_ Surplus and undivided profits Capital account (If individual or partnership) Total liabilities and net worth $ ¥ Itemize on a separate sheet all items marked with an asterisk. If any of the liabilities shown In the above balance ^eet statement are secured, state ^e amount and to whom owed and itemiie the coUateraJ. pledged as security. (See instructions) CONTINGENT LIABILITTES: Accounts or notes receivable discounted or sold with endoisement or guarantee and all other contingent liabilities, including terms of any leases, diould be explained on a separate &eet. Alao describe any pending litigation, NOTE — Submit a copy of last available audit or of balance sheet statement at close of last fif^a' year (if sich date differs from date of above statement). 11 19, Operating statement for vessel or vetteli offered as collateral for whl^ application ia made. ITEM 19 19 19 19 TO DATE Total Salei $ $ $ $ Trip Expense Ovnier czew shares, if any f-iired ciTw sharer Boat Share Ciwnf^ CfliftaJn commissinn, If any , Hired Captain commission, if any Gear and Supplies Interest ^ Depreciation Other expenses Net Profit from vessel operation (before taxes) Other net income of owner Balance after income taxes 20. If a corporation, also fill In consolidated operating statemeit for all activities of the corporation below (include figures given above). ITEM 19 19 19 19 TO DATE Total sales $ i $ i Officers salaries Depieciation Other expenses Net profit or loss Income taxes Dividends paid IKT.-OUP. SIC., lASM., DC. uilli 12 APPENDIX B FEDERAL REGISTER Wednesday, August 13, 1958 RULES AND REGULATIONS TITLE 5&->WILDLlFE Chapter I — Fish and Wildlife Service, Department of the Interior Svbchapt*r J— FUb*rit« Leon Fiwd Pari 160 — Loak Procedtteis Notice was published In tbe Federal Recistie on JuD€ 26, 1958 (23 F. R. 4700) that pursuant to tbe authority vested In the Secretary of the Interior by section 4 ot the Fish and wndllfe Act of 1B56 (70 Stat. 1H9, 1121; 16D. S. C. sec 742c). It was proposed to adopt the regxilations set forth below as a revision of Part 160 — Loan Procedures. Interested per- sons were Invited to submit in writing any comments, suggestions or objections relating to the proposed regulations within thirty days of the date of publi- cation of the notice tn the Federal Reg- ister. No comments, suggestions or ob- jections were submitted within tbt thirty day t>erlod. The ptirpose of this revision is to clar- ify the meaning of several sections of the regulations, to include fishery mar- keting cooperatives as qualified loan ap- plicants, to delete the provision allowing a person using a fishing vessel or fishing gear imder his control on a lease or share basis to be a qualified applicant for fi- nancial assistance, and to specify addi- tional purposes for which applications for financial aasiatance cannot be con- sidered. The revised regulations are hereby adopted without change and are set forth below. Dated: August 7. 1958. Fred A. Seaton, Secretarn of the Interior. Sec. 160.1 Definition of ternu. ieo.2 Purposes of loan fund. 160.3 Interpretation ol loan authorization. 160.4 Qualified loan appUcanta. 160.6 Basic limitations. ieo.6 Applications. 160.7 Processing of loan applications. 160.8 Approval of loans. 160.9 Interest. 160.10 Maturity. 160.11 Sec\irlty. 160.12 Books, records, and reports. 160.13 Penalties on default. AnTHO«rrT: 15 160.1 to 160.13 Issued under Bee. 4, 70 Stat. 1121: 18 U. 8. C. 742c. 9 160.1 Definitions of terms. For the purposes of this part, the following terms shall be construed, respectively, to mean and to include: (a) Secretary. The Secretary of the Interior or his authorized representative. (b) Administrator. Administrator of tbe Small Business Administration or his authorized representative. (c) Person. Individual, association, partnership or corporation, any one or aU as the context requires. (d) State. Any State, the Territories and possessions of the United States, the Commonwealth of Puerto Rico, and the District of Columbia. i 160.2 Purposes of loan fund. The broad objective of the fisheries loan fund created by the Fish and Wildlife Act of 19S6 is to provide financial assistance which will aid the commercial fishing industry to bring about a general up- grading of the condition of both fishing vessels and fishing gear thereby con- tributing to more efficient and profitable fishing operations. (a) Under section 4 of the act, tbe Secretary is authorized, among other things: (1) To make loans for financing and refinancing of operations, maintenance, replacement, repair and equipment of fishing gear and vessels, and for research into the basic problems of fisheries. (2) Subject to the specific limitations in the section, to consent to the modifica- tion, with respect to the rate of interest, time of payment of any installment of principal, or security, of any loan con- tract to which he is a party. (b) All financial assistance granted by the Secretary must be for one or more of the purposes set forth In paragraph (a) of this section. ! 160.3 Interpretation of loan author- ization. The terms used in the act to describe the purposes for which loans may be granted are construed to be limited to the meanings ascribed In this section. (a) Operation of fishing gear and ves- sels. The words "operation of fishing gear and vessels" mean and include all phases of activity directly associated with the catching of fish and sheilflsb for commercial purposes. (b) Maintenance of flahing geai and t>essel3. The words "malnteniuicu ot fishing gear and vessels" mean the normal and routine upkeep of all parts of fishing gear and fUhing vessels. In- cluding machinery and equipment.