Dear redblue: I remember seeing this phrase in stories about codfishermen. They had to work hard, and
waste no time, because fish might stop biting, or weather might change. Someone in the dory had to cut bait
for others to put on hooks and cast overboard. So when ashore, and impatient with someone wasting
time, or indecisive, "Fish or cut bait!" was a challenge to them to get moving.
Here's a discussion from a site I found:
"
Meaning


Either do some useful work or leave and let other get on with it.

Origin


US origin. Cut bait means stop fishing. "

(I don't believe "cut bait" meant stop fishing.)