2640 AWARD OF THE FISHERY COMMISSION. 



average value of his vessels, taken for the time that they have been 

 running. 



Q. What right had you to charge interest and insurance on this prop- 

 erty at an amount largely disproportionate to the real value ? Don't 

 you see that you reduce the profits immensely by that mode of proceed- 

 ing? A. That is the face value of the property; if he pays interest on 

 more than he ought to, that is his loss. 



Q. But you don't pretend to say that he is paying the interest you 

 made up in this sum ; this is your estimate ! A. "Well, it is an estimate 

 based on the original cost of the vessels, and the average cost. 



Q. I will ask you frankly if you knew what his vessels were worth, 

 and what you ought to put down there ! Is it fair to make up the sum 

 and charge interest on $535,000 \ A. I think so, because I have charged 

 nothing for losses. 



Q. I beg your pardon ; this does not allow the possibility of risk. 

 You have insured the capital invested, charged interest at the rate of 7 

 per cent, on that capital, allowed 14 per cent, for depreciation of ves- 

 sels, and charged insurance upon the charter and outfits, and it is a 

 dead certainty f A. That is true ; insurance is charged on the charter. 



Q. There is a dead certainty and no possibility of risk! A. That is 

 true, as the statement goes ; yes. 



Q. Do you think that is fair, when he is running no risk, to ask him. 

 to pay insurance on the value of the property far beyond what it is 

 worth f In that way you reduce the profits down to nothing ? A. Yes. 



Q. Suppose you readjust that sum, and make up the sum on the real 

 value of these things, and charge interest on the real value of the ves- 

 sels, and insurance and taxes on real value? A. I should then have to 

 charge more for depreciation. 



Q. Are you aware what percentage you charged for depreciation ? A_ 

 I did not charge so much as it would be. 



Q. Are you aware what percentage you charged in this account ? A. 

 No ; I did not reckon any percentage. 



Q. It seems to me to look like 14| per cent., at least ? A. For depre- 

 ciation ? Well. 



Q. Do you think that 14J per cent, is a large sum, or not, to allow for 

 depreciation ? A. I do not think that it is a large sum. 



Q. Why ? A. Because it is very expensive running a vessel. 



Q. But running a vessel has nothing to do with depreciation f A. 

 Why not. 



Q. Explain how it is. I cannot conceive of the connection ? A. The 

 wear and tear of the vessel is an expense, and it costs something to keep 

 her in repair and running order. 



Q. That is for repairs ? A. Well, that is part of the depreciation ac- 

 count. Can you find repairs there any where ? 



Q. Part of it is depreciation account. It embraces both the actual 

 repairs and the actual depreciation which arises from the vessel getting 

 older ? A. That is it, 



Q. You stated that the $800 is the amount of depreciation after the 

 first year for the following five years ; do you still adhere to that ? A- 

 Yes; that would be about right, I should think. If anything it would 

 be more, because Procter's vessel shows about $1,200 or $1,400 expense 

 in this regard. 



Q. That is in the statement which you have put in to-day ! A. Yes. 



Q. I see in it that $19 is charged for tinware and $48 for anchor lost, 

 but is that an ordinary expense f It is an extraordinary loss ? It does 

 not often happen ? A. I have known vessels lose two anchors a year- 



