vessels fisliing the sane number of days 

 vjowld represent ll5 percent of nornal 

 effort. 



It must be continually kept in mind 

 that the retvirn on investment analysis 

 made in tables II1-16 and III-l? concerning 

 possible new trawlers, rests on the tenuous 

 ass\ii;5)tion of more liberal brood years in- 

 creasing annual fleet landings ftrora about 

 90 million to 120 million pounds. If 

 these newer vessels entered the fishery 

 with yields still approximating those now 

 being realized, their investment attrac- 

 tiveness would altar considerably. Vessels 



of a size similar to the class now typical, 

 even with a iS percent increase in catch- 

 ing efficiency, could attain a 10-12 per- 

 cent investment return only if fleet 

 effort were cut to less than 75 percent of 

 normal, (table III-17, part B-II). Even 

 smaller vessels of the class now being 

 designed would attain a desirable return 

 on investnent only if fleet effort were 

 cut to about 87.$ percent of normal, (table 

 III-17, part C). 



fishery biologists are less and less 

 optimistic about the return of brood re- 

 cruitment to the higher levels sustained 

 before 1953. If the currently poor yields 

 are considered in relation to the low 

 capacity utilization of the present large 

 trawlers, the wisdom of replacing these 

 with smaller sized trawlers is evident. 

 Ibis is not to say that these vessels will 

 necessarily be profitable. They can be if 

 they are \ised to replace present vessels 

 in the haddock fishery or if they are used 

 to exploit other species. If, however , 

 the new vessels are considered only "as an 

 a ddition to the present haddock fleet , the 

 effegt of the increased annual fleet~fish- 

 ing effort on the old vessels would be 

 ruinous » The process of bankruptcy^ 

 distress sales, and disclocation could 

 begin all over again. 



It is recognized that break-even or 

 profit calculations are dependent upon the 

 prevailing price level and the relation of 

 this to changes in costs. It has been 

 repeatedly emphasized that per povind prices 

 have- remained relatively inflexible over 

 the years. Yet there are long-term con- 

 sumption factors generating a stronger de- 

 mand which shovild produce some price relief 

 even without Governmental action. 



It may, therefore, be instructive to 

 examine table III-I6 in >rtiich the ex-vessel 

 prices per pound necessary to break-even, 

 and to obtain a minimum profit, are calcu- 

 lated. This is done on the basis of new 

 vessels replacing those in the present 

 large otter trawler fleet. In one case, 

 the replacement vessel is a trawler of a 

 similar size; in the other it is one of 

 the more compact draggers now in design. 



For a large trawler of a size typical 

 of that now in the fleet to gain its prof- 

 it objectLvB at normal fleet effort, the 

 ex-vessel pric« would have to be 10,1,'^ per 

 pound. The only years in history vrtien such 

 a price was achieved were in 19l46, 1958, 

 and 1959, The latter two were years of 

 international scarcity of haddock, A price 

 of 8^ per pound which would permit profit 

 goals being realized at 75 percent of 

 normal effort reflects the weighted average 

 price received in Boston in the 19li7-57 

 period. Again it is shown that profit 

 objectives on new trawlers of a size simi- 

 lar to those now operative can be attained 

 under recent year price trends only if 

 fleet effort is substantially cut. If, 

 however, the 1958 and 1959 price plateau 

 were to remain, new vessels could achieve 

 profit aims even if fleet effort remains 

 at normal levels. Again, the analysis is 

 based on more norflal brood years increas- 

 ing landings about 30 percent. If abun- 

 dance were to remain at present yields 

 fleet effort woiild have to be out to less 

 than 75 percent to attain a minimum return 

 on investment. 



If the "smaller" large-trawlers now 

 under design can cut overhead to a $61,000 

 annual average, and can through better 

 capacity utilization retain present catch 

 per day relationships, then table III-I6 

 shows that the profit goals can be achiev- 

 ed with an &|# price at presently prevail- 

 ing or "normal" levels of effort, 



Suimmry and Qonclusions 



It may be well at this point 

 to summarize and to make certain con- 

 clusions on the economic implications of 

 the Georges Bank haddock resoiurce. First, 

 the present fishery is uneconomic. Even 

 if abundance increases, due to more normal 

 brood years, fleet fishing effort could be 

 cut 25 percent. Consumer supplies would 

 not be seriously affected and there would 



52 



