more shares to be taken out of a fairly 

 constant gross revenue, but also more 

 shares from a lower net revenue. The ad- 

 ditional vessels represent not only added 

 shares but added costs to be distributed 

 before sharing. This is the reason why 

 not only per vessel profit, but also fleet 

 profit diminishes -with higher effort. 



It is vital to realize, also, that 

 this analysis is valid whether the price 

 of haddock is stable at 8 cents per poiond 

 or 28 cents per pound. Profits at all 

 levels may be elevated to a higher plateau 

 but the law of diminishing returns and 

 diminishing net revenues will still oper- 

 ate with equal vigor as long as landings 

 remain stable while effort varies. 



Some may feel that the analysis pre- 

 sented leads to a conclusion that the 

 fishery, because of its connon property 

 nature, has some aspects of a public 

 utility and that to prevent econanically 

 and socially wastefiG. duplication of ef- 

 fort (vessel and manpower) some form of 

 public control such as licensing or profit 

 reg\ilation is desirable. It is not the 

 purpose of this study to enter such an 

 area of controversy but merely to iH\uni- 

 nate the present cost-catch-effort relation. 



It is seen from table III-12 that, 

 with more brood years approaching the 

 1931-ii3 average, the mesh regulation would 

 make possible break-even operations at 

 about 125 percent of normal effort and 

 that at normal effort, profits would be 

 possible although toe fishery would still 

 be wasteful in a social and an economic 

 sense* 



Even if the number of ve£;sels pro- 

 jected for 100 percent or normal fishing 

 were to remain in service, but were to cut 

 their fishing activity in half, substan- 

 tial savings would result. TMs wotild be 

 equivalent to an effort level of SO percent 

 with double the number of vessels needed 

 at that plateau. Because of the relative 

 stability of total fleet yields at the two 

 levels, however, the vessels would get 

 only a slightly lovrer contribution to over- 

 head {Ik percent or $ll,ljOO less). Over- 

 head costs should, however, be cut more 

 than enough to offset the lower contribu- 

 tion. The costs of hull and protection 

 and indemnity insurance, gear, siqjply and 



repair, and maintenance costs would be 

 significantly less with the halved running 

 time* 



Alternatively, the reduced effort in 

 the Georges Bank haddock fishery would 

 provide additional income opportunities 

 for owner and crew through diversificatLon 

 to other species and other banks. 



It must be strongly emphasized again 

 that the profit and loss situation por- 

 trayed in table III-12 does not correspond 

 with present conditions in the fLsheiy due 

 to the currently poor abundance. If the 

 table were constructed on the basis of 

 yields prevailing in recent years, the 

 average vessel owner would lose money at 

 nonaal effort levels and with normal prices, 

 that this does happen can be seen in the 

 actual earnings data reported in Chapter V. 

 Profitable operations would not be possible 

 until fleet effort was cut at least 2$ per- 

 cent below normal. The fact that break- 

 even points and profit operations are so 

 related to abundance of the species, high- 

 lights the dangerous dependence of this 

 fishesry on scrod haddock. Successively 

 poor scrod years will mean financial 

 disaster to many operators. The continued 

 present dependence on scrod abxmdance 

 emphasizes the modem uneconomic overfLslk- 

 ing and points to the wisdom of reducing 

 fishing effort. 



It is not to be argued that Boston's 

 aging fleet needs extensive replacement. 

 It is difficult, however, to be convinced, 

 even under the most sanguine assun^jtions 

 concerning effort and catch, that this 

 Heet needs to be expanded. 



Reference to table III-l^ will show 

 that in recent years, with the exception 

 of 1957, there has been a tendency to 

 reduce the annual effort on Georges Bank, 

 Part of this reduced effort has been in- 

 voluntary, as older vessels became unsuit- 

 able for heavy weather, or as owners of 

 lost vessels lacked funds to replace them. 

 Part of the reduction has been voluntary, 

 with vessels being transferred to other 

 ports and other fisheries. 



For a fishery to have economic 

 vitality, it is necessary that in the long 

 run something more than a break-evoi oper- 

 ation be realized. What level of effort 



50 



