This thesis has been designed to examine the share system and to study its effects on innovation, employment and income in the British Columbia salmon fishing industry. The approach taken has been that of examining the theoretical basis of the share system and then noting how the system has worked in practice. The share system has demonstrated some notable advantages over a wage system in its approach in providing an incentive for hard work and in the economizing of materials used, Against these advantages must be weighed the heavy burden of risk which is shifted from the capitalist to labour. Share fishermen are not assured that they will earn any income from a particular fishing trip and may, in fact, be forced to bear part of the losses of those ventures which fail. The share system creates a rigidity in the free movement of resources within the fishing industry by requiring that the net proceeds from fishing be divided between the crew and the vessel owner in fixed proportions. The allocation to labour of a fixed percentage of all net income results in the entrepreneur requiring a higher rate of return on his investment than would be the case if he were operating in a freely competitive market, thus in theory the share system would inhibit innovation,, The entrepreneur requires that his investment projects have a sufficient return to repay both his capital and interest after paying a share to labour. The number of licensed fishermen and fishing boats has increased annually since 1951. The opportunity of obtaining a high income which is a feature of the share system is a particular incentive which attracts new recruits into the industry. However, many fishermen fail to remain in the industry due to the low and unstable earnings they experience. The incomes of British Columbia salmon seine fishermen appear, on the average, to be below those offered in alternative occupations, though there are certainly some very high incomes earned by a few fishermen0 The increased employment both of labour and capital can, in the main part, be blamed on the common property feature of sea fisheries. The share system, though playing a part in the total industry, is not the most important variable, A solution to the difficulties that the industry faces can best be sought by changes and adjustments elsewhere. / Arts, Faculty of / Vancouver School of Economics / Graduate