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Mr. HUBBARD. Are you aware of any actual instances in the
Panama Canal where, as a result of pilot negligence on, say, ship
A, a second ship has been struck and damaged?
Mr. BROWN. Yes. Any time you have a collision between two
ships in the canal, ordinarily there is damage to the other ship.
Mr. HUBBARD. But this is not always the result of pilot negli-
gence?
Mr. BROWN. Oh, no. It may be due to pilot negligence. It may be
due to other forms of negligence. I might say, however, ordinarily,
as a realistic matter, responsibility for ship collision rests upon the
person in charge of the ship's navigation. That person in the
Panama Canal is generally the pilot. There may be other features
that come into it--
Mr. HUBBARD. Like defects in the ship?
Mr. BROWN. Defects in the ship. There might be negligence on
the part of the ship's personnel. For those defects and negligence
on the part of the ship's personnel, the shipowner would be liable.
If there were negligence on the part of both pilot and shipowner,
that negligence would be apportioned; so each party would pick up
its proportion.
Mr. HUBBARD. At the bottom of page 1, Mr. Brown, you note that
most vessels are uninsured to the extent of their deductibles and
are not insured against loss of use. Could these vessels be so in-
sured if the owner wanted them to be?
Mr. BROWN. I suppose it is theoretically possible that they could
be. There is a question of premium charge. If you eliminate--
Mr. HUBBARD. A question of what?
Mr. BROWN. The premium charge. I think you can buy insurance
for just about anything if you are ready to pay the premium for it.
I know as a matter of practice that most-well, I have been in this
business about 28 years now. I have never known a case where a
shipowner has been insured for a loss of use of his vessel as a
result of the collision. That is a shipowner's risk ordinarily.
Mr. HUBBARD. This last question: Obviously, to the extent that
vessels can recover money damages from the Panama Canal Com-
mission their insurance rates will go down and vice versa. What
would be helpful for the committee to know is how much insurance
rates will change if, for example, all authority of the Commission
to pay claims were removed or if the Commission were given au-
thority to pay all claims?
Mr. BROWN. I think, Mr. Chairman, that would be an extraordi-
narily difficult calculation to make. I don't know if it can be made.
I think it can be said that there would be an increase in insurance
costs to some extent.
Mr. HUBBARD. What would you say to the argument of some that
private insurance premiums would change very little if the Com-
mission simply got out of the insurance business altogether?
Mr. BROWN. I don't know the degree of the change. You know, it
would be hard to make that calculation. I think what would
happen would be that if a shipowner were taking a ship through
the canal and had a heavy casualty, that shipowners' premiums
would go up very heavily if he could not make a legitimate recov-
ery from the canal.