real and personal property of all kinds necessary for, or resulting from, scientific research."

In essence, power is given a group of 24 appointed individuals to take over personal and real property. The Foundation would have the right to acquire and pool patents which could be an invasion of the rights of individual citizens and companies. This provision is of such far-reaching consequences that all research conducted by private enterprise could be driven underground. It would limit the protection to the inventor now given by the patent system and force him to operate in secrecy, whereas our present practices promote wide dissemination of scientific and technical knowledge through the publication of the patent.

The need for any patent provisions in H. R. 12 is questioned. Basic research, which is the only research mentioned in H. R. 12, is not patentable and should be published as soon as possible. Basic research means the study of fundamental laws of nature and the discovery of new ones, whereas applied research, which includes development, takes the fundamental laws of nature and converts them into pilot plants and commercial units with the view of producing products useful to our way of life.

The patent provisions of H. R. 12 are in themselves objectionable. 12 (b), under patent rights, is particularly bad, as stated:

Section

"No officer or employee of the Foundation shall acquire, retain, or transfer any rights, under the patent laws of the United States or otherwise, in any invention which he may make or produce in connection with performing his assigned activities and which is directly related to the subject matter thereof: Provided, however, That this subsection shall not be construed to prevent any officer or employee of the Foundation from executing any application for patent on any such invention for the purpose of assigning the same to the Government or its nominee in accordance with such rules and regulations as the Director may establish."

The provisions give the Director far too broad powers in regard to patents. He may prevent use of an invention regardless of the value it might have to the country. On the other hand, he may assign the invention to a nominee and thus establish a monopoly with benefits to a party who had nothing to do with the invention. Section 12 should be eliminated entirely. Section 6 (a) makes no provision that the Director be a person of experience in scientific research or in its administration. The Director should have a record of long and thorough experience in scientific research and have a reputation at least national in scope. It is imperative that he know what science is all about and not completely dependent on assistants. The value of a science foundation would be seriously decreased if the Director were not a highly qualified man. Subsequent provisions give said Director dictatorial powers. It is believed that a Director without dictatorial powers, elected by the members of the Foundation, would insure better administration. The Director should be elected by his peers. II. R. 12 contains no provisions for the integration of numerous research facilities which the Government already has in many departments. Inasmuch as Government agencies have a number of basic research projects in operation, coordination is necessary before a new agency embarks on a program of its own. According to Steelman's Science and Public Policy, volume 1, page 12, the Government is spending $55,000,000 a year on basic research alone. In volume 2, page 56, it is stated that the Office of Naval Research is supporting about 600 projects in over 150 colleges, universities, and other nonprofit institutions. If there is to be a National Science Foundation some provisions should be made to prevent duplication of the activities of other governmental projects.

Sincerely yours,

GUSTAV EGLOFF,

Director of Research, Universal Oil Products Co.
and President, Chicago Technical Societies Council.

STATEMENT OF E. A. TERRELL, PRESIDENT OF THE TERRELL MACHINE CO. OF CHARLOTTE, N. C., REPRESENTING THE TERRELL MACHINE Co.

Subject: National Science Foundation Act of 1949, H. R. 12.

To the House Subcommittee on Public Health, Science, and Commerce of the Committee on Interstate and Foreign Commerce:

I wish to express my thanks to the chairman and members of this committee for extending the time for hearings on the above bill and for permitting the inclusion of my statement in the hearing.

I am making this statement on behalf of my company and myself and based upon 32 years of actual experience in the development of new or improved machinery primarily for the textile industry. During that period I have personally secured about 45 patents and my company has assisted in the commercial development of many inventions of employees and outside inventors, and has given advice and services in securing patent protection for them. company employs a total of 89 persons in its shop, office, and sales force. plant occupies a total of 30,000 square feet, so it is truly in the small business class.

Our
Its

I am opposed to the National Science Foundation Act of 1949 in its entirety on the general grounds that it is not necessary and that it will undoubtedly result in overlapping of work in many existing fields of research and is therefore a needless expense to the taxpayers.

However, I shall confine my remarks to specific features which I feel are dangerous and inimical to independent firms and inventors, including both large and small business. If the bill is to be passed at all, it seems to me it should at least be amended in several fundamental repects. These are as follows:

Section 3. Unless otherwise separately provided, I believe that any appointee to the Foundation should execute an anti-Communist oath. The prominence of such scientists as Dr. Harlow Shapley of Harvard University, and of Prof. Dirk J. Struik of Massachusetts Institute of Technology, indicates the need of such a provision.

Section 4, and other sections containing the same broad inclusion, “and other sciences" should be amended to provide for congressional control and approval over the extent to which the term "science" may be applied. Otherwise, with the broad wording now in the bill, the Foundation could undoubtedly enter fields which members of the Congress nor any one else can at present visualize.

Section 6 (b). This section provides that the Director may act entirely on his own initiative in all matters not prescribed by the executive committee, except as to authority granted by par. (c) of sec. 11. I feel that this section should provide that the Director shall exercise the power set forth in this act within the policies developed by the Foundation, and with the approval of the executive committee in all cases.

Section 11 (e): I am informed that if the power "to acquire by purchase" is given by the Congress, the judicial interpretations include the power to acquire property by the exercise of the power of eminent domain. Since this section relates to real and personal property of all kinds, it would necessarily follow that patent rights, plants, and other property may be taken from their rightful owners by the Foundation. If this provision is to remain in the bill I feel that that this interpretation of the word "purchase" should be limited to exclude the exercising of the power of eminent domain. Moreover, if the Foundation should acquire any patents from any source whatever, I believe that such patents should be immediately dedicated to the public and made available to any citizen, partnership, or corporation of the United States, or of any State thereof. Ample provision already exists for the protection of secrecy in case of inventions relating to national security.

Section 12 (b): This section should be amended in similar fashion to section 11 (e), to provide that any patent granted to the Foundation, or acquired by it in any way whatsoever, should be dedicated to the public and should under no circumstances be assigned to a nominee of the Government. This latter provision is an exceedingly dangerous one under which Government-controlled monopolies may easily be created to the great detriment of private, competitive industry.

In section 15 (a) page 16, lines 8 and 9, I believe the words "except with the approval of executive committee" should be omitted, making it mandatory that neither the Director nor the Deputy Director may hold any office, or act in any capacity for any organization, agency, or institution with which the Foundation makes any contract or other arrangement under this act.

In conclusion, I respectfully submit that this bill offers great dangers to independent inventors who have been and still are the backbone of our industrial progress, and that a grave injustice will be done to these citizens, and to our industry as a whole, if this bill is passed in its present form.

Respectfully yours,

APRIL 22, 1949.

E. A. TERRELL.

STATEMENT OF J. DOUGLAS ROBERTSON, PRESIDENT, MOUNT HOPE MACHINERY CO., TAUNTON, MASS., PERTAINING TO NATIONAL SCIENCE FOUNDATION BILLS, H. R. 12, H. 185, H. R. 311, H. R. 359, H. R. 1845, H. R. 2308, H. R. 2751, AND S. 247 WITH RESPECT TO PATENT PROVISIONS OF THE BILLS

Mr. Chairman and members of the subcommittee, my name is J. Douglas Robertson. Taunton, Mass., has been my home since I was a small boy. My address is 2 Dean Street. My business address is Mount Hope Machinery Co., 42 Adams Street, Taunton, Mass. I am a graduate of the Massachusetts Institute of Technology. From graduation until 1941, I was employed as a mechanical engineer, except for 2 years in the United States Army, and 3 years in an unsuccessful business venture. I have taken out a number of patents. I was working on the first patent while I was still at the institute.

At the risk of appearing boastful, I believe my personal experience is the best proof I know that the patent provisions of these bills are definitely harmful, maybe fatal, to world supremacy of the American standard of living and perhaps even to maintenance of our national independence.

After I was honorably discharged from the Army as a captain, I returned to work as a mechanical engineer at the place where I had been employed prior to the war. At the end of about a year, I raised some money by selling stock to my friends and acquaintances, and started a business making stove bolts. This was an unsuccessful venture, because it was a small enterprise, employing about a half-dozen people, attempting to compete in a mass production market without any fundamental improvement in products or processes. At the end of the 5 or 6 years the business went through bankruptcy with total loss of whatever money was put in the venture. I went back to work as a mechanical engineer for the largest local concern.

I had learned the lesson that merely duplicating ex'sting facilities for the manufacture of an article in normal supply contributes nothing to the benefit of the country and the laws of business soon remove it. The only chance of making a success of a new business is to provide something that is better or cheaper than previously available. I spent my spare time trying to think of something to make that would be better than existing competing articles so that I might get back into business. It was 16 years after my first business failed before I saw an opportunity to get into business again. During this time I took out several patents in the course of my work and assigned them to my employers. In this case I secured a license to manufacture an article under a patent owned by someone else. I was able to get this license because I agreed to pay a higher patent royalty than someone else would pay. The only reason I could do this was because I had the exclusive right to make and sell this device and I knew that during the life of the patent I would have a monopoly on this device. I could not have risked borrowing money to put it into a device that anyone else could make and deprive me of my business just as soon as I had demonstrated that it was a good item.

With the bread and butter provided by the sales of this device, I then went to work experimenting to make other items on which I could secure patents that would permit me to get on my feet and further establish myself in business before anyone else had the right to use them, by reason of the patents expiring. At the present time, the first of these new items which I patented, represents a larger part of our business than the item on which the business was founded. This new item is being used in this country and abroad in the textile, paper, plastic film, and tire-cord industry, and is definitely lowering the cost of production of these items manyfold compared with the cost of the item itself. My business furnishes employment for 35 to 50 people,

The example cited is typical of the ordinary way in which businesses are started under the incentive of our present patent laws. There is nothing remarkable about them. It is the natural result of cause and effect.

When a law has demonstrated its ability to produce the best results in the world as our own patent law has done, it would seem obvious that anyone attempting to change it would have to prove beyond a shadow of doubt that the country would be benefited by the change and that his past actions and associations cast no suspicions on his patriotic loyalty.

The patent provisions of these bills definitely permit the Government to put anyone out of business who is progressive enough to be producing modern patented items. It is definitely a fundamental step toward the communistic state. Government-owned patents are inconsistent with a democracy. Do not permit the Government to hold any patents.

J. DOUGLAS ROBERTSON.

STATEMENT OF CLARENCE E. BEACH, CONSULTING ENGINEER, BINGHAMTON, N. Y., TO SUBCOMMITTEE ON PUBLIC HEALTH, SCIENCE, AND COMMERCE, OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE PUBLIC HEARINGS ON NATIONAL SCIENCE FOUNDATION BILLS, H. R. 12, H. R. 185, H. R. 311, H. R. 359, H. R. 1845, H. R. 2308, H. R. 2751, AND S. 247, WITH RESPECT TO PATENT PROVISIONS OF THE BILLS

Mr. Chairman and members of the subcommittee, by name is Clarence E. Beach. My home address is Binghamton, N. Y.

I am a professional engineer in private practice. My activities include development of products proposed by clients, with a view of most effectively meeting needs of prospective customers and facilitating economical manufacture.

Before your committee acts upon the bill above referred to, I urge your consideration of the following statements.

Enactment of II. R. 12, in its present form, will place upon one man (the Director) responsibilities for making decisions the effects of which may well be devastating to incentive for undertakings which are of incalculable importance to the well-being of our entire country.

As H. R. 12 now reads, the Director would be given power to institute procedures which an endangered party would be unable to have set aside until he had suffered irreparable injury.

In fact, only a person with extensive resources would have any prospect of being able to succeed, even after years of work, in any effort to be released from the effects of procedures such as might be undertaken pursuant to the powers granted to the Director under this bill-no matter how unfair and unreasonable such procedures might prove to have been.

Even granting, for the purposes of discussion, that the Director will be a man fully lacking in desire for anything which will benefit him personally, and completely free from tendency to be influenced (consciously or unconsciously) by close personal friends or former business associates (and it is not safe to assert that no such man lives?) there would be so great a multitude of important matters concerning which he would be required to make the controlling decision (under the requirements of this bill) that he would constantly have to rely exclusively upon reports and recommendations made to him by others.

It is only reasonable to presume that, under such circumstances, those upon whom the Director would be compelled to rely would, inevitably, include persons who would make recommendations of character which would:

(1) Benefit enemy countries by impairing the effectiveness of our industries. (2) Destroy competitors of friends or employers.

(3) Gratify private grudges.

(4) Attempt to inaugurate destructive economic policies, which policies are based upon ideals of a highly impractical nature.

In this connection it should be noted that although laws have been enacted for the purpose of guarding against infiltration into government agencies by persons having purposes subversive to the safety of our Government and people, a number of important ones of such laws are (by this proposed bill) made inapplicable to appointees of the Director.

Without such protection as is provided by these laws, the dependability of those appointed by the Director would be at the mercy of the influence of persons who could (maliciously or ignorantly) urge appointment of those whose mistaken ideas, prejudices and/or selfish interests would prompt misleading reports and recommendations.

With the heavy duties imposed upon the Director, it would be impossible for him to devote sufficient time to investigate each member and employee to an extent such as a man who is both capable and conscientious would deem highly important.

Because of the hazards that would be present in a Foundation established in accordance with the bills referred to, any person having occasion to make substantial investments of time, effort and money in projects having possibilities of great public benefit will be dissuaded from embarking upon development of such projects, whenever such persons realize the danger of having their work and investment swept away at the caprice of one man, as could well be expected if a Foundation is organized as contemplated by these proposed bills.

In this connection it should be recognized that the greater the potential benefit a given project might be expected to give to the country at large-the greater the

likelihood that the provisions of the law proposed by this bill would be invoked for effecting practical confiscation of the entire project.

Such confiscation would be calculated to wipe out all prospects of pecuniary advantage of any extent at all commensurate with the risks which would have to be taken in expenditure of time, effort, and money if the project is to be brought to a usable stage of development.

In fact, any peson or group who might bring such a project to a successful culmination could only look to the possible generosity of one man (The Director) for any worth-while compensation, other than at the termination of litigation extending through years and in which they would be opposed by a governmentally financed organization.

It is well recognized that only a minor proportion, of such development projects as are undertaken, ever come to a successful stage of development. Hence, unless there is prospect of a return substantially in excess of the original cash investment (which is all that the Director is likely to see his way clear to grant to the ordinary applicant) there is no incentive for devoting a large amount of time and effort, and incurring an extensive cash investment, if the possible return is likely to be limited to a figure based upon the cash investment. Because of the foregoing facts, the effect of the enactment of any of these bills will inevitably be opposite to the purpose expressed in the preamble, in the words "To promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes." Considered from still another angle, the results of enactment of any of these bills would be highly objectionable in that they contemplate the setting up of an addiional bureau in the Federal Government, at very substantial cost to the taxpayers, which bureau would not be calculated to accomplish any results which would be beneficial to others than those thereby placed upon the public pay roll. This is so because every proper and worth-while purpose which might be accomplished by a Foundation organized as contemplated by these bills may be obtained by utilization of governmental facilities already in existence.

In view of each and all of the foregoing facts, I respectfully urge that your committee withhold its approval of these bills; and I further urge that you recommend that these bills be not enacted.

Respectfully submitted.

BINGHAMTON, N. Y., April 19, 1949.

CLARENCE E. BEACH.

STATEMENT OF GEORGE H. ELWELL, OF NEW HAVEN, CONN., OPPOSING BILL H. R. 12, NATIONAL SCIENCE FOUNDATION

The writer opposes the House bill 12 in any form:

Because it is indefinite and its intent is to create just another research agency with unlimited activity save only that in the field of atomic energy, the Foundation proposed creating an authority capable of tendency to help exhaust the Treasury and burden corporate and masses of living beings with heavy taxation; Because of its confiscatory nature with regard to wanted real and personal property including patents owned by business and individuals;

Because that, while the bill gives the appearance of being confined to basic research, it is conceded that applied research would be undertaken in instances of assumed need and in opening up the functions of the Foundation to all groups, including social activities;

Because that among those who advocate the passage of such a bill are men like Dr. Harlow Shapley, who has a long record of affiliation with groups labeled as communistic by the House Un-American Activities Committee. It would seem more than possible that under such influence the Foundation might create a Division of Social Research (one of such "other sciences" H. R. 12 bill, secs. 7, 4) establishing a bulwark of defense in favor of socialized medicine which has little approval of the people at this time; and

Because the bill H. R. 12 gives too great authority to the Director, substantially that of a dictator, especially with regard to confiscatory rights in the forceful acquisition of property of business and that of individuals.