regardless of the level of receipts, also 

 operates to keep costs inflexible. At low 

 levels of receipts, this guarantee is not 

 covered and must be made up from vessel 

 owner's share of receipts. The result is 

 a loss to the vessel owner on the trip. 



Expenditures for gear, repair, and 

 maintenance show a high degree of associ- 

 ation with the level of efficiency of a 

 trawler. Vessels with high levels of 

 earnings almost invariably have greater ex- 

 penditures for these items than do those 

 with low levels of earnings. Thus it ap- 

 pears that the less efficient trawlers suf- 

 fer from undermaintenance because of their 

 lower productivity. But this undermainte- 

 nance makes the trawler less efficient and 

 receipts continue to decline while other 

 costs increase. 



The level of maintenance or under- 

 maintenance shows its effects in the in- 

 surance costs incurred ty efficient and in- 

 efficient trawlers. The more efficient 

 vessels are properly maintained and hence 

 their accident rates are low. Consequently, 

 they receive the benefit of lower insurance 

 rates and decreased insurance costs. This 

 was borne out 'qy the financial staten»nts 

 of the efficient trawlers, all of which had 

 no increase in this cost over the five year 

 period 19^3 to 19?7. This inverse relation 

 between receipts and insurance costs like- 

 wise held true for the less efficient 

 trawlers, again demonstrating the inter- 

 relation of receipts, maintenance expendi- 

 tures, and insurance costs. 



The experience of Gloucester and Maine 

 trawlers has also been falling receipts and 

 decreasing ejqpenditures. This situation is 

 due mainly to the share arrangements in 

 these ports, which differ from the Boston 

 lay in that the crew takes a smaller share 

 of receipts, and also to the large dis- 

 cretionary element involved in incurring 

 maintenance and repair expenditures for 

 these trawlers. Although trip expenditures 

 have been increasing on these vessels, they 

 have had little effect on the percentage 

 share of receipts available to the vessel 

 owner because they have been offset by de- 

 clining crew earnings. 



Expenditures for gear, repair, and 

 maintenance on these vessels remained sta- 

 ble over the eight-year period (1950-5?) 

 studied. This fact is significant, since 



this was a time of rising qosts in Glouces- 

 ter and Maine repair yards, and is evidence 

 that these vessels, too, suffer from under- 

 maintenance. Similarly, insurance costs 

 on these trawlers have increased during 

 these years - following the same pattern 

 as on the less efficitint Boston trawlers - 

 again giving weight to the agrument that 

 there is a high degree of association be- 

 tween receipts and vessel expenditures. 



Conclusions 



Based on the findings and analyses 

 presented in this report, the following 

 conclusions are submitted: 



(1) Basic differences between the New 

 England and the Atlantic Provinces in- 

 dustries in four respects account for 

 the competitive advantages enjoyed by 

 the latter: geographic location; struc- 

 ture; organization; and, the economic 

 framework within >*iich the two industHes 

 operate. 



(a) Being closer to the more pro- 

 ductive grounds of the Northwest At- 

 lantic, the Canadian fleet can make 

 more trips - and more productive 

 trips - than the New England fleet, 

 and at lower cost. 



(b) The vertical integration typi- 

 cal of the Canadian industry allows 

 the Canadian operator widespread 

 discretion in controllijig costs and 

 prices - a degree of control almost 

 unknown in New England. 



(c) The unorganized trawler fisher- 

 men of the Atlantic Provinces can 

 exert little, if any, influence on 

 wages and working conditions. Con- 

 sequently, union requirements af- 

 fecting costs are vinknown in the 

 Canadian industry. 



(d) The lower standards of living 

 and the degree of undereinployment 

 in the Atlantic Provinces work to 

 keep labor costs low for the Cana- 

 dian operator. 



(2) The Canadian industry, ^riiich engages 

 in a diversified fishery, is less af- 

 fected by declines in abundance of a 

 particular species than is the New Eng- 

 land industry which is coinjosed of 



91 



