An excellent example of failure to apply 

 economic as well as biological criteria for regula- 

 tion is provided by the Alaska salmon fishery. 

 After decades of research and regulation, over- 

 fishing apparently persists, as evidenced by the 

 steady decline in the Alaska salmon catch, which is 

 now levelling out but is well below the peak five 

 year period. Despite the efforts of able and 

 dedicated scientists, our basic knowledge of the 

 resource, one of the most complex in our fisheries, 

 is not yet adequate to permit close management of 

 all major populations. In the face of declining 

 yields, virtually all measures of fishing capacity, 

 such as the number of fishermen, units of gear, 

 and tonnage of vessels, have increased sharply 

 since 1946. In an effort to offset this, many 

 regulations aimed specifically at reducing the 

 efficiency of gear, preventing the appUcation of 

 new techniques, and increasing the time over 

 which men and gear stand idle have been insti- 

 tuted. The degree of cooperation and voluntary 

 compliance has not been satisfactory. 



This is not intended as criticism of those 

 charged with the hard, practical work of salmon 

 research and regulation. The reasons for this line 

 of development are partly political and partly 

 sociological. 



It is very important to emphasize that the root 

 cause is a matter of business economics. It is 

 abundantly clear that without regulation, prices 

 and costs in the operation would lead to far higher 

 short-run catch levels and, after a few cycles, to 

 disaster. It should be equally clear that if the catch 

 is limited to our best guess as to sustained 

 maximum yield, money returns will be far more 

 than enough to provide satisfactory incomes to the 

 minimum number of fully utilized units required 

 to take the catch. The surplus is economic rent-as 

 in the case of agricultural land, when used effi- 

 ciently in its best and highest use. 



But the fishery resource is not owned, as land 

 is, and if the regulatory authority cannot restrict 

 entry, the surplus is simply used up in more 

 under-utilized boats, gear, and men. That excess 

 capacity, in turn, puts tremendous pressure on 

 enforcement, since every vessel owner has a strong 

 incentive to violate regulations. It leads to impossi- 

 ble concentrations of gear at the location of each 

 successive run in a frantic effort to wring the 

 largest possible output from the underemployed 

 equipment. Until and unless it becomes possible to 



reduce the amount of gear to the minimum needed 

 to take the permitted catch, economic waste, 

 widespread violation of regulations, and a threat to 

 the very existence of the industry will remain. 



This problem is not unique to the fisheries. In 

 greater or lesser degree it has plagued the petro- 

 leum industry, the forest products industry, and 

 the use of pubhc grazing land. In each of these 

 cases, however, we have come, belatedly, to 

 recognize that unrestricted access to a common 

 property resource is fatal to wise conservation of 

 the resource and to efficiency in the use of other 

 productive factors. Only in the fisheries do we find 

 resistance to principles which are fundamental to 

 our free economy. 



C. Policy Implications 



The conclusions are obvious, though the panel 

 recognizes that implementation in practice in- 

 volves a host of difficult administrative problems. 

 The principal means of restricting the fish catches 

 to levels which will perpetuate and, in some areas, 

 rebuild the industry must be to reduce the number 

 of fishing units by restrictive hcensing; to permit 

 the development and use by these units of 

 efficient gear; and to recover at least a portion of 

 the "rent" which will accrue, as costs are reduced, 

 through taxes, Ucense fees, or auction of fishing 

 rights. 



This means that some public body should 

 manage the resource to maximize its economic 

 yield, leaving the actual operations to private 

 enterprise. The economic rent would go to the 

 fisherman, the vessel owner, and the State rather 

 than being dissipated in higher costs. Precisely this 

 principle is employed in the management of pubUc 

 forest and grazing land and, with some modifica- 

 tion, in the leasing of publicly owned oil lands. 



Obviously, this cannot be done soon without 

 serious hardship to those who entered the industry 

 in good faith. But if new entry could be pro- 

 hibited, the normal process of attrition would 

 enable us to reduce the glaring over-capacity 

 without undue pressure on those now committed. 

 Fishing boats and fishermen do grow old. Other 

 types of back-up controls and catch restrictions 

 would be required, of course, if for no other 

 reason than our inability to forecast precisely in 

 the complex marine environment. 



Apart from the obvious saving in costs, and the 

 resulting improvement in tax revenues and fishing 



Vll-66 



