and Theodore into protection and indemnity 

 insurance expenditures revealed a direct 

 oissociation betvjeen receipts and claim 

 losses which "to some extent may be due to 

 fishing operations requiring greater expo- 

 sure of crews to risks involved in longer or 

 more frequent trips for larger receipts." 

 lOl/ They later note that the direct asso- 

 ciation of yearly receipts and claim losses 

 is largely spurious and further that "it 

 may be possible to find a stronger argument 

 for an inverse association between receipts 

 and losses . " 105 / The high incidence of 

 petty claims (no more than $200) under pro- 

 tection and indemnity insurance, coupled 

 with the share arrangement by which fisher- 

 men are paid, tends to verify an argument 

 for an inverse association between receipts 

 and claim losses. Assuming the fishermen of 

 the more efficient trawlers had average per 

 trip net earnings of $250, while a fisher- 

 man of the less efficient trawlers received 

 substantially less than $120 per trip, that 

 both suffered a minor injury, and that the 

 filing of a claim necessitates a period of 

 inactivity, one can speculate that the 

 fisherman with net earnings of $250 per 

 trip would be less willing to remain in- 

 active and sacrifice his earnings than would 

 the fisherman with net earnings of $120 per 

 trip. "It would be more logical for a fall 

 in receipts to be associated with a rise in 

 claim losses inasmuch as fishermen might 

 tiy to compensate losses in wages with 

 larger insurance benefits." 106/ 



Numerous interviews with individual 

 marine insurance brokers in the New England 

 area again revealed the importance of ves- 

 sel receipts as a major factor influencing 

 insurance costs. The importance attached 

 to vessel receipts in this respect is par- 

 ticularly evident from brokers comments 

 concerning factors which should be consid- 

 ered when contemplating whether to insure 

 individual vessels, and their reasons for 

 the mounting insursince costs. Most brokers 

 emphasized that in negotiating new insur- 

 ance contracts special attention should be 

 given to the caliber of management, the 

 owner's financial position, past and pres- 

 ent vessel and crew earnings, and the level 

 of vessel maintenance. All agreed that the 

 cost of insurance was increasing because of 

 an increase in both the number of claims 



and the cost of settlement, and that lower 

 rates can come only from lower loss ex- 

 perience. 



5. Grew Earnings 



Prior to 19ii6 the union-management 

 share agreement provided that after certain 

 deductions from gross receipts the remain- 

 der was to be shared equally between the 

 crew and vessel owner, the lay then being 

 50-50. The broker payment (minimum wage 

 guarantee payable to the crew when a physi- 

 cal break-down or low gross receipts im- 

 pedes the earning capacity of the crew on 

 any particular trip) in existence prior to 

 I9li6 called for a payment of $25 per man 

 per trip for a maximum of 10 menj if there 

 were more than 10 men, the maximum amount 

 payable ($250) was to be divided among the 

 crew. The share agreement also provided 

 for minimum per trip payments of $50 to 

 the chief engineer, $kS to the mates, and 

 $iiO to the second engineer and cook. In 

 May 19146, the union negotiated a contract 

 changing the lay arrangement from 50-50 

 to one giving the crew 60 percent and the 

 owner 1;0 percent of gross receipts after 

 the deductions of certain joint expenses. 

 This contract also changed the broker pay- 

 ment from $25 per trip per man with a max- 

 imum of $250 to a guarantee of $6 per day 

 per man for a maximum of 10 days. The 

 amount payable to the chief engineer, mate, 

 etc., was also changed from their per trip 

 basis to one calling for a payment to each 

 of $6 per day per man for a maximum of 10 

 days. This change, in effect, raised the 

 minimum guarantee payable to the crew by 

 the owner for a IQ-day trip from $li25 prior 

 to I9U6 to $81iO thereafter. A further 

 change in the broker agreement during the 

 1950«s raised the guarantee to $12 per day 

 per man for deckhands and $13 per day per 

 man for chief, mate, second engineer and 

 cook. This change in the contract raised 

 the minimum' guarantee for a lO-day trip 

 from $8hO to $1,960. It also raised the 

 maximum amount payable from $8U0 to an 

 amount dependent upon the number of days a 

 vessel is absent from port. Another change 

 which took place after 19ii6 was the in- 

 crease in the layover time between trips 

 from what was termed a 2ii-hour layover to 

 a 148-hour layovgr. 



Exhibit C was constructed to illus- 



lOV Ibid., p. 106. 

 ToF/ Ibid., p. 106 

 IO6/ Ibid., p. 106. 



66 



