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Mr. GOFF. What the Senator has given, though, is an example of this buy-and-sell business. If the fellow went through the motions of buying it from the farmer and then took it someplace and sold it at a profit the profit would be the difference that he got for the transportation.

Mr. MEYER. That is the format; yes, sir. But the point I am making this is an exempt commodity.

Senator ALLOTT. This is a particular exempt commodity; that is

correct.

Mr. MEYER. But in any other commodity the same thing would happen.

FICTITIOUS SHOPPING ASSOCIATION

Senator MAGNUSON. One of the real problems are these so-called fictitious shopping associations.

Mr. GOFF. That is one of the real problems also.

Senator MAGNUSON. That is one of the real problems in this field. Mr. GoFF. By the way, the General Counsel just nudged me to tell me that he just argued one of these buy-and-sell cases in the Supreme Court where we have taken it up there where the fellow was making his profit from transportation. He wasn't in the grain business, He was selling transportation.

Senator MAGNUSON. Well; all right, then.

Now, as soon as the House passes the bill when it is ready we will come back again and discuss more of the specifics on this matter, and Congressman Thomas told me last week that he thought he would be able to report his bill by May 10 and maybe get that on the floor the middle of May, so you can anticipate we can come back toward the end of May or the first part of June, but we hope to get this done this year by July 1 so that you can know what you are doing.

Mr. GOFF. That will be very much appreciated.

(Discussion off the record.)

Senator MAGNUSON. I do want to compliment you in taking this regulatory lag in the disposition of formal cases and getting it down to within some time limit and I think that is very good.

Mr. GOFF. We worked very, very hard so

(Discussion off the record.)

Senator MAGNUSON. Put in the record the costs of the reporting. (The information referred to follows:)

COSTS OF CONTRACT REPORTING

The Interstate Commerce Commission receives two copies of the transcript of each hearing without cost to the Commission. The present contract provides a charge to the public of $0.65 a page for regular copy. Information with respect to the number of copies sold is not furnished to the Commission. However, assuming a minimum of one copy of each hearing is sold, the cost incurred by the public would be $323,300.

Senator MAGNUSON. We will adjourn.

(Whereupon, at 10 a.m., Friday, May 1, 1964, the committee adjourned subject to call of the Chair.)

INDEPENDENT OFFICES APPROPRIATIONS FOR 1965

MONDAY, MAY 4, 1964

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met, pursuant to recess, at 8:45 a.m. in room S-128, U.S. Capitol Building, Hon. Warren G. Magnuson (chairman) -presiding.

Present: Senators Magnuson, Young of North Dakota, and Allott.

NATIONAL SCIENCE FOUNDATION

STATEMENT OF DR. LELAND J. HAWORTH, DIRECTOR, ACCOMPANIED BY DR. DETLEV W. BRONK, CHAIRMAN OF THE NATIONAL SCIENCE BOARD AND PRESIDENT, THE ROCKEFELLER INSTITUTE, NEW YORK, N.Y.; DR. JOHN T. WILSON, DEPUTY DIRECTOR; DR. BOWEN C. DEES, ASSOCIATE DIRECTOR (PLANNING); DR. RANDAL M. ROBERTSON, ASSOCIATE DIRECTOR (RESEARCH); DR. HENRY W. RIECKEN, JR., ASSOCIATE DIRECTOR (SCIENTIFIC PERSONNEL AND EDUCATION) AND ACTING DIVISION DIRECTOR FOR SOCIAL SCIENCES; DR. GEOFFREY KELLER, DIVISION DIRECTOR FOR MATHEMATICAL, PHYSICAL, AND ENGINEERING SCIENCES; DR. HARVEY J. CARLSON, DIVISION DIRECTOR FOR BIOLOGICAL AND MEDICAL SCIENCES; DR. HOWARD E. PAGE, DIVISION DIRECTOR FOR INSTITUTIONAL PROGRAMS; GORDON LILL, MOHOLE PROJECT DIRECTOR; DR. BURTON W. ADKINSON, HEAD, OFFICE OF SCIENCE INFORMATION SERVICES; DR. JACOB PERLMAN, HEAD, OFFICE OF ECONOMIC AND MANPOWER STUDIES; DR. THOMAS O. JONES, HEAD, OFFICE OF ANTARCTIC PROGRAMS; DR. ARTHUR ROE, HEAD, OFFICE OF INTERNATIONAL SCIENCE ACTIVITIES; AARON ROSENTHAL, COMPTROLLER; WILLIAM J. HOFF, GENERAL COUNSEL; JAMES KING, HEAD, OFFICE OF CONGRESSIONAL AND PUBLIC AFFAIRS; LUTHER F. SCHOEN, BUDGET OFFICER; AND DR. HENRY DAVID, OFFICE OF SCIENCE RESOURCES PLANNING

APPROPRIATIONS, FISCAL YEAR 1964, ESTIMATES, FISCAL YEAR 1965

Senator MAGNUSON. The committee will come to order. This morning we have the National Science Foundation. Dr. Haworth is here, and Dr. Bronk is here, and other members of the staff. Dr. Haworth has a reasonably short statement but, for the purposes of the record, your appropriation for 1964 was $353,200,000, for 1965

31-706-64-pt. 1-33

the budget estimates were $487,700,000, or an increase of $134.5 million, less $80,000 on a revised estimate.

STATEMENT OF THE DIRECTOR

We will be glad to hear from you and hear your statement, Doctor. Dr. HAWORTH. First, Mr. Chairman, I would like to tell you that this is the last time that Dr. Bronk will be with us. He is retiring from the Board.

Senator MAGNUSON. I was going to mention that a little later on. We are sorry to see him go. But he will be around, we will be calling on him. He is like a fire horse, you cannot keep him quiet too long, and when we need him we will call on him.

Dr. HAWORTH. If I may, I would like to say on behalf of the Foundation that we regret this very much.

Do you want me to proceed?

Senator MAGNUSON. Yes, go right ahead with your statement. Dr. HAWORTH. Mr. Chairman, it is a pleasure to appear before this committee to discuss the Foundation's appropriation request for fiscal year 1965. Present with me today are members of the staff of the National Science Foundation and Dr. Detlev W. Bronk, Chairman of the National Science Board.

ROLE OF SCIENCE AND TECHNOLOGY TODAY

I believe it may help to place the Foundation's budget request in perspective if I start by discussing briefly what I believe to be the role of science and technology in the life of our country, the overall responsibilities of the Federal Government for promoting science and technology, and the proper role of the Foundation in helping to meet those responsibilities.

All of us recognize that over the past few decades the impact of science and technology upon our lives has increased almost immeasurably. In national defense they are vital. They are the essence of our space program. They are largely responsible for the rapid improvements in our living standards, from food, clothing, shelter, and other necessities to recreation, entertainment, and other luxuries. Our scientific and technological attainments play an important role in determining our position among the nations of the world.

Continuing progress in science and technology is essential to the public welfare and hence is a matter of concern to all the people. To assure this progress is, therefore, clearly a concern of government. In modern times conditions require the government to take a direct and active role.

MAJOR OBJECTIVES OF FEDERAL GOVERNMENT ROLE

I believe that the role of the Federal Government in science and technology involves three major objectives:

The first is to assure that the scientific and technological health of the country is first rate; that is, that we have a vigorous and healthy base upon which the whole social and economic progress can flourish. In the long range, our progress depends upon two elements, the constant augmentation of the fund of scientific knowledge derived through research, especially basic research, plus a vigorous program of educa

tion with particular emphasis upon higher education, to be sure that we have a constant stream of new, vigorous young scientists and engineers to carry out the various programs that are so essential to us.

A second objective is to develop, or have developed, end itemshardware, processes, and so forth-that the Federal Government needs directly for its own purposes. At the present time these fall mostly in the areas of defense and space.

Thirdly, the Federal Government should encourage and, as appropriate, assist in practical developments that are in the general public interest, for which the public as distinguished from the Government, is the customer. These include public health, agriculture, and developments contributing to our general well-being and economic prosperity in such fields as energy, water resources, conservation, transportation, and so on, where for one reason or another the private sector of the economy cannot or does not carry out the developments by itself.

RESEARCH AND DEVELOPMENT EXPENDITURES

The expenditures made by the Federal Government in carrying out these broad objectives are commonly lumped under the heading: "Research and Development." The gross total of Federal expenditures for research and development increased from $74 million in 1940 to about $12 billion in 1963.

Senator MAGNUSON. Does that include R. & D. in Defense, too? Dr. HAWORTH. That includes all R. & D.

Senator MAGNUSON. I see.

Dr. HAWORTH. In fact, there are some that you might almost call testing.

Senator ALLOTT. What?

Dr. HAWORTH. Testing.

Senator MAGNUSON. Weapons testing.

Dr. HAWORTH. In 1963, these expenditures were about 13 percent of total Federal expenditures as compared to about 1 percent in 1940. The magnitude of Federal expenditures in this area and the rapid rate of increase in research and development expenditures are the subject of much congressional and public interest. I would emphasize, however, that the gross total of research and development expenditures are not a true measure of Federal support for the advancement of science. Although significant amounts are included for scientific research and education, by far the largest sums are expended for specific applications of current technology.

CATEGORIES OF RESEARCH AND DEVELOPMENT

The very broad range of scientific and technological activities. ncluded in research and development customarily are divided into hree categories- basic research, applied research, and developmentlthough the boundaries between them are not precise, and different people may apply different terms to the same or similar programs. In general, however, "basic" research seeks an understanding of he laws of nature without regard to the ultimate applicability of the esults; "applied" research is carried out with practical objectives in nind, although they may be very general ones; and "development" is he systematic use of knowledge directed toward the design and

production of useful prototypes, materials, devices, systems, methods, or processes. Development includes the construction and testing of so-called hardware, often of a large and complex nature, including in the Federal program such things as military weapons, space devices, nuclear reactors, and many others.

These distinctions are, of course, not always sharp and there is overlap. Basic research is often inspired, in part at least, by the belief that information in the general field may have utilitarian value. Contrariwise, research motivated by possible applications may well be very fruitful in a basic sense.

All three areas of activity are important. Applied research builds on the result of basic research. Development builds on both. The more complete our basic knowledge the easier the task of applied research and of development. The debt owed by technology to the more basic science is returned. Many fields of basic and applied research are made possible or more fruitful through new technological developments. For example, much of modern research is made possible by electronic devices originally developed for radio, television, radar, and so forth. Special materials, such as metallic alloys, plastics, and ceramics, countless industrial devices and many other things of practical importance serve as important tools for research. The range of possible research is broadened and the cost is greatly lessened by these contributions.

PROPORTION FOR APPLIED RESEARCH

By far the largest portion of Federal expenditures for research and development is for applied research and development intended to result in specific end items required by Federal agencies to carry out their missions in defense, space, and other programs or for the benefit of the general public. The justification for these expenditures must be weighed in terms of special agency missions, including consideration of alternative means for accomplishing those missions. Senator ALLOTT. Mr. Chairman, could we interrupt at this point? I see a chart here, and I have not had a chance to examine it yet, but wouldn't this be a good place to take a look at this?

Dr. HAWORTH. I actually have a place for it a little later, whichever you would like.

Senator ALLOTT. All right.

Senator MAGNUSON. Let us look at it a little later. Let us go on.

RESPONSIBILITIES OF NATIONAL SCIENCE FOUNDATION

Dr. HAWORTH. The responsibilities of the National Science Foundation lie in the area of the first general objective I have discussed, that is, the development of a vigorous and healthy base on which to build the science and technology of the future. Only a very small part of the Federal research and development total is for basic scientific research. This small portion, however, is essential to the continued progress of our whole scientific enterprise. Basic research is important in several senses: first, it has very great intellectual and cultural value; second, it is the ultimate foundation of all technological advances; third, it is intimately involved in the education and training of first-class scientists and engineers.

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