the vessel's earning capacity, particularly 

 at low levels of production. In construct- 

 ing Exhibit D, deductions of joint expenses 

 from gross receipts and the deduction of 

 the captain's bonus from the vessel share 

 Were ignored. 



produce $5,000 in gross receipts to obtain 

 $1,500. The same earnings v;ere obtained 

 while producing only $3,000 in gross re- 

 ceipts in I9U2. The increase .in trip ex- 

 penses and guarantee has then drastically 

 raised the minimum level of per trip 



Exhibit D 



Vessel Operating in 1956 



Source: Adapted from data in Exhibit C. 



The effect of the increases in these 

 items is obvious. It was possible for a 

 vessel operating in 19^2 to realize gross 

 earnings of $820 at per trip levels of 

 only $2,0005 in 1956 this was impossible. 

 In 1956, with trip and guarantee payments 

 amounting to approximately $3,600, gross 

 receipts must be approximately $it, 000" be- 

 fore the vessel owner takes any part of the 

 gross, and even at this level of produc- 

 tivity the vessel owner would receive less 

 dollars than he did at the $2,000 level in 

 19U2. Under the conditions governing its 

 operations in 1956, a vessel would have to 



receipts necessary to allow a vessel owner 

 to participate in the returns. 



At low levels of gross receipts the 

 change in the lay arrangement produces 

 no effect on the vessel's earnings. If 

 the vessel in 1956 had per trip receipts 

 of $ii,000, the vessel owner would have 

 received only $5U0 whether under a 60-U0 

 or 50-50 lay. At trip receipt levels 

 above $6,000 the vessel owner would be 

 substantially better off if the lay were 

 50-50. The existence of a 50-50 lay in 

 1956 would, however, allow the crew to 



68 



