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whether or not they like Government service, they may not be able to afford the sacrifice.

A glance at a chart we prepared from a recent survey will explain why. The survey covered 46 corporate patent departments from coast to coast. The vertical scale is salaries; the horizontal, experience. The area indicated by the word “red” shows examiner salaries. The area indicated by the word "green" above shows the greener pastures which beckon to the examiner from the world outside. There were of course wide variations from these averages, in different companies, different geographic areas, different individuals; but conceding the possibility of minor errors, three zones of the chart clearly reveal certain very significant facts.

The first zone, the areas at the left of the little arrows, involve the first 5 years following graduation from engineering or other college. Over this period, outside salaries average a full $1,500 higher than the Patent Office under existing law can pay. Do you wonder we have trouble recruiting?

The second zone, the wide central band at the right of the little arrows, covers the 5- to 15-year period. At the beginning of this period, with a degree in engineering, a degree in law (usually a member of the bar), and 5 years' experience in the Patent Office, the examiner receives an annual salary of $8,215. Ten years later, on the present salary scale, he will be receiving $8,645. An increase—not in 1 year but over the entire 10-year period of a total of $430. What a rich reward for 10 years of increasingly valuable service.

Outside, he sees that as even an average attorney, he can go out and earn today more than he can ever earn as a nonsupervisory examiner in the Patent Office; and further, that his salary will rise steadily to a level many thousands above Patent Office levels.

He then sees in the third zone, the supervisory area to the right, that if he waits patiently in the Patent Office until someone dies or retires 20 or 30 years hence, he may hope for supervisory duties at a thousand or two more; while if he leaves today, his salary in private employment at supervisory levels some years hence should double his hope within Government.

A man 5 years in the Office with 3 children faces the need of $3,000 a year more for college expenses a dozen years hence. With only a few hundred in prospect to meet this need, what can he do? In simple justice to his family, the good examiner must—and does—go.

This situation is simply an extension of that discussed recently by former President Hoover, who said, “With inadequate pay for top executive skill and the uncertainty of promotions, our best employees become the easy recruits of private business. In consequence many services are left to be administered by deadwood.” A similar danger threatens here; for with many of our career officials already nearing retirement age, the dearth of high level ability left in lower levels is increasing cause for concern.

III. EFFECT OF EXAMINER LOSSES ON PATENT OFFICE OPERATIONS

It may be asked, is this turnover necessarily harmful? Without going into detail at this time, the answer must be a resounding, “Yes." Major reasons perhaps may be briefly summarized as (1) the loss in production when experienced men averaging 6 to 8

cases a week are replaced by beginners averaging 3; (2) the loss from production of time needed for the experienced to train, supervise, and advise the beginners; (3) the loss in efficiency when so many cases during prosecution are handled each by a succession of different examiners; (4) the deterioration in quality that comes when the influx of so many new men combined with a top heavy workload makes adequate supervision almost impossible; and (5) the cumulative loss to the Patent Office of its heavy investment in each trained and experienced examiner who leaves, totaling over $1,500,000 each year.

The potential gain in efficiency obtainable from reducing these losses is great.

These are immediate effects today.

But what are the future effects of the present salary scales? The Patent Office requires about 230 administrative or specialist positions in GS-13 or above, for which 15 to 20 years' experience in the Office is considered a normal prerequisite. When these become vacant, how competently will they be filled. Compared with present effects, future effects are even more dismaying.

Here is a recent chart. It shows the year when examiners in all grades from top to bottom entered the Patent Office. For those at the left, who entered in 1930 or before, the retirement benefits of long service make resigning costly; so they wait until retirement age to

It is the group of 1931 and later, less restrained by accrued retirement rights, from which so many of the more able examiners have been lured recently by the greener pastures of private employment. In the entire 15-year period from 1931 through 1945, only 177 are left, many unqualified for high position.

Yet these higher positions will soon be vacant. Even since this chart, many men have gone. Of 219 shown as entering through 1930, only 191 now remain; 84 of these are eligible to retire today; 107 more will be eligible by 1960. In the last 3 months, 5 of our highest positions have been vacated, and 2 more will be in June. Further, nearly all examiners are retiring early, partly from dissatisfaction with existing conditions, partly for the very persuasive reason that outside of the Office, many can work fewer hours, with more pay. If most of these eligible to retire by 1960 should do so, what then?

If the Patent Office could keep and use every one of the 177 remaining of those who entered during the entire 15-year period up to 1946– every one, good, bad, or horrible-down to those who today have been in the Office for 10 years and less could 177 men fill 230 positions ?

Yet month by month, the loss of experienced men, caused by low salaries, increases, with real peril for the future.

Is this a time for appointing more study committees?
Or time for action?

go.

IV. POSSIBLE MEASURES TO REDUCE EXAMINER LOSSES

In the portion of this fiscal year ending May 15, the Patent Office has lost 185 examiners. It anticipates losing many more before June 30. Are any unused measures available to reduce or replace these losses?

By section 104 of Public Law 763, the 83d Congress gave the Civil Service Commission authority to raise salaries to top-of-grade levels when Government salaries are otherwise noncompetitive with private industry. The Patent Office has already asked and received full cooperation from the Civil Service Commission under this law. But what good is a GS-7 top-of-grade offer of $5,335, when others are offering $7,200, as happens frequently today?

Congress has also authorized recruiting measures. The Patent Office has used these to the limit. Low salary levels have made recruiting of experienced men a hopeless quest. To tap the last remaining resource, the Patent Office this fiscal year has sent 37 men to 147 colleges and universities, at an estimated expense of over $30,000. Despite its best sales arguments, the low salary levels have dropped the Patent Office so far out of competition that virtually all of those who come are doing so only for training purposes, planning to leave the Patent Office for private practice when law studies are completed. The Office has lost 185 examiners since last July 1, nearly all experienced. Against this loss, the total in-hiring has been 177; a net loss in men of 8 for this period, and a net loss of Patent Office investment in training and experience of well over a million dollars.

Top-of-grade increases have failed. Recruiting is failing. Only a complete statutory revision of salaries to competitive levels can meet the need.

V. SUMMARY

It becomes increasingly apparent that to recruit and hold permanent career personnel in such a scientific and professional field as this, a revised salary schedule, new from bottom to top, is vital, and urgent.

We believe that S. 734 might ease the situation somewhat, but would not permanently cure it. The peculiar and rare qualifications needed for such positions, often little related to rungs on the ladder of administrative authority contemplated by the existing GS schedule, suggest that S. 1326 would come closer to solving the problem.

We believe further that a schedule of salary levels along the lines of S. 1326 adequate to recruit and retain career examiners would greatly improve the efficiency of operation of the Patent Office. It would induce men of high ability to remain in the service. It would reduce turnover, with its tremendous wastage in training costs now lost to the Office each year. It would gain a higher production and efficiency of experienced career personnel. There is at least an even chance that this higher efficiency might bring about, along with a marked improvement in the quality of the work, an actual decrease in operating cost.

Thank you.
Would you care to have the two charts I referred to inserted ?

Senator NEUBERGER. I was going to say, Mr. Whitmore, your testimony would not have too much clarity unless those charts do appear in the record.

I would like to ask the staff if that is not correct in their opinion?
Mr. KERLIN. Yes.
Mr. WHITMORE. Might I put them in the record ?

Senator NEUBERGER. Yes. I am given to understand that you wish to submit a supplemental statement regarding section 803 (a).

(See p. 320 for supplemental statement by Mr. Whitmore.)

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