that an area about two-thirds the size of Rhode Island had been made subject to this formula, and about $800 million had thus been saved and returned to the Treasury. I believe that the chairman is interested in such economy measures.

In addition, I have devoted myself to the preservation of the public's interest in their navigable streams and rivers, through multipurpose river valley development.

These concerns led me to take an active part in the debates on the atomic energy and space communications legislation of 1954 and 1962, where large amounts of intangible patent property and technology belonging to the U.S. taxpayer were at issue. They have also prompted me to introduce bills in the 88th and 89th Congresses to correct the continuing violations of congressional patent policy by the National Aeronautics and Space Administration. In addition, I have been able to participate in the consideration of the economic aspects of patent policies by the Select Committee on Small Business during the past 3 years.

As the chairman pointed out, on the first morning of the hearings, the issues are complicated, and it is difficult to gain an understanding of all of their facets.

It is a source of satisfaction that it is possible for me to participate in the "great debate" on patent policy. I shall try to assist the subcommittee by relating my experience and explaining my views on the bills before you and the broad questions which I feel they raise.

SIGNIFICANCE OF THE ISSUES

In my judgment, the sheer amount of public property the subcommittee is dealing with is enough to elevate the significance of a congressional decision to the level of those made in the Northwest ordinances, the homestead acts, and the land-grant college legislation. A little later, I shall show how all the public property disposed of under these great acts of Congress was worth less than $1 billion. Yet, we are talking here about property being paid for out of taxes at the rate of $15 billion a year.

Any congressional declaration of policy in this field will be looked upon as a watershed in the philosophy of this country. It will have far-ranging and unforeseen effects on the climate of opinion for decades to come. Senator Norris, in his autobiography, made the following statement:

"The early twenties brought the American people to their knees in worship at the shrine of private business and industry.

"It was said, and accepted without question by millions of Americans, that private enterprise could do no wrong.

"The next 12 years was to produce one of the great classic struggles of the legislative branch of the National Government, the battle of the Tennessee Valley Authority, better known as TVA." ("Fighting Liberal," by George W. Norris, ch. 2.)

After the breakthrough forged by Mr. Norris, and his colleagues in the legislative and executive branches during the 1930's, there was a good deal of forward-looking legislation in the interest of all of the people of this country, wherein patent rights were retained by the Government and made freely available to the public.

It seems to me, Mr. Chairman, that the exigencies of World War II and the cold war have made the wheel come full circle. We now hear considerable advocacy of the position that only the largest private corporations are fit custodians of property developed at public expense. I submit that we who have been in public life for some time, and have seen these cycles of publicity, and what passes for "public opinion," have a solemn obligation to protect the statute books of this country from the notion that private business can do no wrong.

There is, secondly, significance of a very material nature in the disposition of public property worth $15 billion a year. The way Congress distributes these valuable commercial rights will have a measureable impact on the structure of our economy, the balance between small, medium sized, and large businesses, the trends toward concentration and monoploy, and the relative power of the civilians and the military in controlling our Government.

Third, this legislation, by proposing to repeal the public interest patent sections of many benchmark acts of Congress threatens to undo the work which many of

us have fought for, and devoted our careers in Congress to, over the span of the last 30 years.

May I comment on these three points in reverse order.

EXISTING STATUTORY SAFEGUARDS OF THE PUBLIC INTEREST SHOULD BE PRESERVED

As you are aware, section 11 of S. 1809 would, under the label and in the guise of "technical amendments," sweep away patent provisions of 10 laws enacted by Congress since 1935. The patent sections in this legislation were not "technical matters" when they were considered by the various committees of this body and of the House of Representatives. They were not "technical matters" when they were debated on the floor of the Senate, in the press, and throughout the country. They were not "technical matters" when they were signed in the law of the land by our Chief Executive.

As was observed by the distinguished junior Senator from Alabama and the chairman of the Commitee on Small Business, Senator Sparkman, on the floor of the Senate on July 24, 1954:

"In other words, these private power and industrial companies want to determine who should be licensed to receive the benefits of discoveries and inventions financed primarily by the Federal Government and also what price they should pay to receive these benefits. This a tremendous amount of power which could be used to stifle competition by excluding small producers and distributors of electricity.

"In my mind this is the meat, the core, of the legislation which is now proposed to amend the 1946 Atomic Energy Act. * * * There are other issues, but we must not lose sight of the big show-the attempt of these industrial giants to obtain exclusive private patents." (Congressional Record, vol. 100, p. 11789.)

Mr. Chairman, patent rights to public property are still the "big show," and section 11 is an attempt by private business and its representatives to steal the show.

A little later in my testimony I will show how few companies-actually only about two or three dozen-stand to receive the lion's share of these public patent rights.

I have searched the Record for compelling reasons for undoing the 10 legislative provisions that section 11 proposes to extinguish. I have looked for studies; for empirical data. I have yet to find any reasons or data. The simple explanation, I suspect, is that they do not exist. On the contrary, the evidence I have found points uniformly toward the retention of these provisions on their merits.

TITLE POLICY HAS SHOWN ITS WORTH

Let us take a hard analytical look at the consequences of the "title" and "nontitle" patent policies, beginning with the oldest sections in point of time, those dealing with agriculture and forestry.

First, let me say to the subcommittee that I am familiar with the problems of a State in transition between an agricultural and industrial economy. The economy of the State of Oregon is quite similar to the economy of a State like Arkansas in many ways:

In its reliance on agriculture and forest products.

In the fostering of industrialization, based largely on byproducts and new developments in the technology of the agriculture and forestry fields.

In its recreation industry, stemming from location astride the Pacific flyway, as Arkansas lies along the Mississippi flyway.

The passages of the 1962 Industrial History of Arkansas regarding the State's efforts to plan for compatibility among these elements could just as well have been written about my State.

The patent policies of the Department of Agriculture, which were worked out laboriously over 80 years, and are embodied in the 1935 and 1938 acts, have a direct bearing on such economic activity. As is well known, this legislation carried forward the policy originally set forth upon the Department's establishment. In 1862, the Department was "required to acquire in diffuse of the people of the United States useful information on subjects connected with agriculture, in the most general and comprehensive sense of that word, and to further, to procure, promulgate and distribute among the people new and valuable seeds and plants." (Organic Act of 1862, 5 U.S.C. 411.)

The 1938 act established four regional utilization research laboratories, to search out new outlets and wider markets for farm products. In accordance with this philosophy, the patent policy of the Department of Agriculture has been to retain ownership in the Government, so that access can be given freely to any responsible person or business concern.

What have been the results of this policy? As President Johnson stated in his farm message in February:

"Thirty years ago, over 7 million American families lived on the farm. Today 3% million families feed a population that has grown by 50 percent. Enough food is left over to fight hunger among free people all around the globe." (H. Doc. No. 73, 89th Cong., 1st sess.)

And as Vice President Humphrey noted in his remarks to the Farmers Union in March:

"The American consumer now is enjoying food at the lowest cost of any people in the world in terms of human effort expended.

"The miracle of American agricultural efficiency is leaving its imprint in every area of the world.

"We now are exporting at a $6-billion annual rate.

"Agriculture is our greatest dollar earner in foreign trade today.

"Food is power. Abundance and the ability to produce abundance-is one of our most valuable assets of strength in the world today." (Speech of Vice President Hubert H. Humphrey at March 15, 1965, convention of the National Farmers Union, Chicago, Ill.)

My State has realized direct economic benefits from the inventions and processes which have arisen out of Government-financed research. They have enabled the forest product and agricultural industries to maintain and increase their competitiveness, in the face of substitute materials and processes. Let me mention a few instances:

1. The reversible circulation kiln, which in the words of this subcommittee "constituted a very significant contribution to the lumber producing and woodusing industries, and is now used by large and small companies to achieve "great improved moisture quality control * ** (for) about 40 percent of the total lumber produced in the United States."

2. The plywood processes called impreg and its compressed counterpart, compreg. Manufacture of these materials under Department license is now a multimillion-dollar industry.

3. Of great interest is the turpentine derivative patented by the Department, and which is now licensed to at least three companies and is produced commercially at the rate of over 2 million pounds per year with a market value of over $1 million. This substance accounts for virtually all synthetic rubber for automobile tire treads. (Source of this material: "Patent Practices of the Department of Agriculture," preliminary report of the Subcommittee on Patents, Trademarks and Copyrights, 87th Cong., 1st sess., pp. 37-39.)

As an appendix to my remarks, I will place in the record a description of other Agriculture Department inventions which have substantially benefited the lumber industry, one of which accounts for about 7 percent of all woodpulp production.

I am impressed also by the benefits which the Southern Utilization Research and Development Division has brought to the cotton industry by virtue of the 23 patents it has obtained. The cotton carding apparatus, which Time magazine declared to be "the first major improvement in cotton carding equipment in 60 years," has resulted in a savings of between 2 and 5 percent. This has eliminated 50 percent of the usual waste and saved more than $40 million annually for the U.S. cotton textile industry.

The Department has also registered outstanding successes with the development of wash and wear and wrinkle resistant finishes. These processes account for the use of about 800,000 bales of cotton, and according to a report to Secretary of Agriculture Ezra Taft Benson continued "to hold the greatest promise for expanding or retaining markets for cotton." (Utilization and Research, U.S. Department of Agriculture, October 14, 1960.)

Other patents cover the discovery of a process to make cotton flame resistent. During World War II alone, the military used more than 700 million yards of flame resistant fabric and the potentiality for this type use is unbounded.

TITLE POLICY DOES NOT IMPEDE COMMERCIAL DEVELOPMENT

In 1960, the patent policy underlying these advances was examined for the then Secretary of Agriculture, Ezra Taft Benson, by Roy C. Newton, retired vice president for research of Swift & Co., one of the largest food processing concerns in the world. Mr. Newton's remarks on the question of the relation of title policy to commercial utilization are very interesting, and I quote: "(the only complaint that) has to do with domestic patents arises from the fact that a company cannot get even a temporary exclusive license to compensate it for the expense of commercializing a product of the (Department of Agriculture). These people will say that it inhibits the very objective of the research which is to market new products of agriculture, because no one will put up the necessary capital for such a new venture without some exclusivity to protect it. A few leading questions, however, usually develop the fact that they will go into the venture if their competitors are making a success out of it and if the invention is good enough to be very promising to their competitor, they will try to beat him to it. It is doubtful, therefore, that this policy is a serious handicap to commercialization of new developments by utilization research." (Department of Agriculture

Utilization of Research.)

This is how a spokesman of big business, in a position of governmental responsibility appraised the Agriculture title patent policy. The Department itself pointed out to this committee in 1961 that the policy of reserving title and granting free access by licenses best serves the public interest by making the benefits of its research "freely available to the farmers, food processor, consumer, farm product manufacturer, and all of the members of the general public." (Patent Practices Report, p. III.)

This story of the title policy of the Agriculture Department which has had an opportunity to mature during the 30-year period that our generation has been in the Senate, and has been an outstanding success in every sense of the world. Are we now at the point where we should turn our backs on what this wise policy has accomplished?

A glimpse at the future of agricultural products as raw materials for the chemical industry, provided in the Industry & Engineering Chemistry Magazine in May of 1962, convinces me that we are not. The magazine pointed out that industry has, in the past, done a good job in utilizing agriculture byproducts such as cotton linters, soy bean oil, and tall oil from pine trees under patents assigned by the Secretary of Agriculture. In fact, it estimates that the value to commercialized products and processes under these Government patents amount to about $2.5 billion as against the total cost of research plant and facilities and operations of about $170 million. This is a ratio of return upon invested capital of 14.7 to 1.

But we promised to look ahead. The article states: "From the chemical industry viewpoint, the future holds tremendous potential for using greater amounts of agricultural raw materials. Most segments of the industry believe that the ready availability, low average cost, and presence of chemical configurations obtainable in synthetics only a high cost (or not at all) will lead to increased chemical uses for certain agricultural uses.

"Opinion is virtually unanimous that all realization of the potential of agricultural raw materials hinges upon a continuing and vigorous program of research and development."

Mr. Chairman, these developments on the horizon promise to make our agriculture even more the wonder of the world, and they can make the wonder state a participant in this exciting story.

If the title policy of the last 30 years had not existed, the picture would not be so bright. If it is reversed now, it would be a great disservice to our States and their people.

A similar Government title policy with free access by licenses was adopted by the Tennessee Valley Authority. As a result, this Nation leads the world in technology of fertilizer production. I think it is interesting to note that there are half dozen plants in the State of Arkansas which are using one or more TVA licenses on fertilizer as the basis for their entire operation, and there are nine companies in Arkansas which receive quantities of TVA-produced fertilizer materials for direct distribution, or for upgrading of their own products. A list of these concerns will also be made available.

A similar story could be told, I suppose, in nearly every State of the southern region of this country, and I believe that this subcommittee holds the proxies of

their southern colleagues when it comes to changing the patent policy of the Tennessee Valley Authority. It occurs to me that many of these Senators will have something to say in their own right should this matter come to the Senate floor.

S. 1809 WOULD UNDERMINE ACCEPTED ATOMIC ENERGY POLICY

Now may I comment on the patent policy of the Atomic Energy Commission, which surely has international and national implications as well as regional and State ones. I recall on July 17, 1954, during my first speech on "The New Giveaway: Atomic Energy," when I asked the question: "Are we to make use of the lessons taught by those great liberals who have gone before us, who in their day, too, were attacked and abused as dangerous, creeping socialists, who were charged with an attempt to set up some type of state economy, when all they were trying to do was to write into the law checks which would protect the public interest of the people of the United States against a private utility monopolistic combine."

At that time I quoted a newspaper columnist by the name of Thomas Stokes who wrote in the Washington Star of July 16, 1954:

"It may sound somewhat melodramatic that Congress is on the eve of one of the great legislative decisions in its long history. "But that hardly seems an exaggeration * ** unless the bill as it was presented to the Senate *** is amended to protect the public against the monopoly that some experts believe is inherent in its patent and other provisions, then future generations may be in for a lot of headaches."

The fight that we made at that time was similar to the fight to withstand private attempts to take over the Grand Coulee site and the Muscle Shoals damsite. I said then, and I feel now, that: "We are fighting for expanded free enterprise economy which requires the efforts of the Nation to harness the waterpower and the atom to produce low-cost waterpower and the other blessings they bestow. We are fighting for the people's right in their streams and the technology developed with their taxes."

In 1954 we were successful: we followed in the great work of George Norris and Theodore Roosevelt, Gifford Pinchot, Charles McNary, and Dill and Couzens and Senator George of Georgia. The seeds of this policy are just beginning to bear fruit. I should like to place in the record as appendix II an article from the Wall Street Journal of July 20, describing the proposal for construction by a private company for the State of New York of a multipurpose surfside reactor on Long Island. This plant will not only generate power, but purify a million gallons of water a day, and produce isotopes for medical uses.

I stated in 1954 and would like to state again:

"I would like to know whether there has ever been a finer example of that kind of cooperation directed at full use of resources of a region and to build up a region and to build up our great country that is found in Tennessee Valley Authority or the Bonneville Administration * *

"These programs enjoy the real American concept of progress in which the Federal Government as a partner provides only its services which the local people could not perform well or could not perform at all themselves. Never had the people found any programs so well calculated to foster and simulate and support a healthy flowering of private enterprise throughout the country. "Backward peoples throughout the world [have been] flocking to our shores to learn how to follow our pattern * * * [as] an important key to achieve a higher and better civilization." (Congressional Record, vol. 100, p. 12147.) And I can add our atomic energy development, under a "title" policy to this list. Thirty years from now, when desalinized water, and abundant power for the developing nations of the world become increasingly critical, the wisdom of the Congress in the field of atomic energy will surely be cataloged as "one of the great legislative decisions of its long history."

Is this the kind of policy the Congress should reverse by a "technical amendment"?

I read with interest the statement by Dr. Hornig at page 33 of the transcript implying that this reversal would benefit the public interest, since the agency could compel contractors to insure licensees and there is a possibility of the AEC taking title to more patents on nonatomic byproduct patents.

Dr. Hornig does not mention, however, that the Atomic Energy Commission is strongly opposed to S. 1809, and feels that section 152 of the Atomic Energy