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the Government. I have paid creditors over $100,000 on top of that, and on top of that the Internal Revenue Division moves in now to hold the $300,000 that is there, because they are challenging my income return of 1940, and I was ordered in just 10 weeks after I made my filing to bring in all of my records for examination. They thought that we might be delayed somewhat, but we rushed over here. I told my attorneys, “Let us go; let us have an examination. I know what the game is."
And, gentleman, they had not even pulled my return out of the files and I had to furnish them with a copy. They did not even know a thing about my return or what it looked like. They had not looked at it. It took them almost a week to locate it, and look it up.
So, if you think, gentlemen, that this bill here is going to make it any better for us engineers in going to the Court of Claims, or any different from the experience I have had with the War Department and the other departments, or that it means something good for the national-defense program, I want to say that it does not mean a thing to me but trouble. I am going to wash my hands of all new military developments, because of this bill, gentlemen. I cannot live long enough to win litigation from the Government, even if I have all of the legal rights in my favor.
Now, the gentlemen who have preceded me have told you something about the law. I have looked at this bill which was given to me the other day by Colonel Watt. I examined it carefully and took it to my attorneys also, and the only thing that I can see under this bill in the way of patent that might be necessary is that you might take over alien-owned patents. They might be taken over by the Government, but certainly not American-owned patents. You cannot shoot a gun, fly a plane, or feed a man; you cannot do a single thing with a patent for the national defense; you have nothing but a title, an intangible thing.
And if I may make a suggestion it is that your section 2 is not the section you mean in your proviso, but section 3, because it
“On the basis of compensation to be determined in accordance with section 2 of this act."
It is section 3. That is, section 3 is the compensation section of the act. That is probably just an oversight.
However, if the bill goes through as it is, I am quite sure that there will be no way of getting compensation under section 2. That merely provides that the Secretary of War or the Secretary of the Navy can take action. I make the suggestion that if there is a question of a foreign- or alien-owned patent, or foreign or alien patent rights to be taken over by the United States under this act, that there should be a determination as to such patents. They should be open to public use. In other words, I think if the Government can sell the patents that you are holding out an opportunity for men in our departments who want to be dishonest to grab off a patent under the prestige of the Government and turn it over to somebody on the outside. That is what happened to mine after I was put under the Secrecy Act in 1917. They were taken and given to people on the outside, who could not in some cases even manufacture the articles. My company got no money and I got no money for any patent rights in those cases. I am still trying to get something for those patent rights.
I do not believe that the Government should become a patent broker.
The CHAIRMAN. In other words, Mr. Barlow, you are suggesting that the paragraph relating to patents there be confined to alienowned ?
Mr. BARLOW. Alien owned and foreign patents, and in that case we should remember we had a question of alien-property grabs during the World War, and there was a big scandal over it, because, as you know, a lot of property was given over to fellows who were particularly interested in that kind of property and that kind of patents. I do not believe that the Government should enter into or encourage that kind of crooked business, or that that power should be given to the Government, and that is what this bill will do, because there are a lot of people on the outside of the Government who would like to have certain patents under this confiscatory business, and they believe that this is a nice way to get somebody else's patents. There is a “nigger in the woodpile” here somewhere.
I would include in this bill a statement to the effect that no American-owned, or American patents, or United States patents, shall be considered as coming under this act, because you already have the law in reference to those in the Secrecy Act.
Senator SCHWARTZ. What law do you refer to?
Mr. BARLOW. I refer to the act of June 25, 1910, amended July 1, 1918.
Supposing that I should want to go ahead—and I do want to go ahead—but supposing I want to go ahead with the actual production of the glmite high explosive. I couldn't get a single dollar from anyone who might want to finance me. They would say, “Barlow, you simply haven't got a chance. You can't go ahead with this. You will be put under secrecy. You can't even defend yourself.”
They will say, "Your patents are not worth a dime. Some competitive explosive company will probably get them. We will just have lost every dime that we put in. Besides that, if we now file under the Secrecy Act and talk about our business we are going to all be subject to the penitentiary when the war is declared."
I contend, gentlemen, that the trouble that I have had with the Government in regard to my patents and contracts with the War Department, as I have told you, has resulted in the stopping of practically every effort of mine, not voluntarily, but because I can't move, in the development of munitions for this Government in this emergency which we are now in. I can't get a dollar put into the business.
I contend that I have proven as a fact that I have detonating control of, not a new explosive, but a basically old one, 50 years old, the most dangerous and powerful type of explosive that there is; that I have brought its development to a practicable military explosive without the loss of its power and to where it is the safest of all explosives.
I performed for 81/2 hours before the press on that occasion I worked before the cameras, doing everything that was conceivable to passed experts to explode that stuff, without getting a single explosion unless I used a special type of detonator.
My demonstrations were considered impossible. I heard the Military Affairs Committee told by the highest explosive authority of
the Bureau of Mines, Professor Huff-he said, “He may do that a thousand times, but sometime he is going to get blown up.” I asked Professor Huff, “Did
you ever hear of an accidental explosion with TNT or dynamite? Did you ever hear of an airplane wreck or automobile wreck? Why not do away with everything that we might have an unexpected explosion on?”
Now, gentlemen, I have shown you of this committee that glmite is, according to your own Government Bureau, the Bureau of Standards, 33 percent more powerful than TNT. It is only one-half as expensive as 11-cent dynamite. You are now paying several dollars a pound for TNT, and you can't get it in volume required.
Right here we could break the bottleneck on high-explosive production in America today, because there is no limit to the amount of the glmite type of explosives available. Every sawmill, every sawdust pile, every paper mill in America, every furniture factory, is making the ingredients for it.
But I can do nothing to develop the glmite production now, Senators. I cannot move on it for the simple reason that this kind of bill ties me up; and I ask you gentlemen in all seriousness to consider taking out this patent phase of this bill. You already have laws which will permit you to use any invention for the benefit of the Government.
The CHAIRMAN. Thank you very much.
STATEMENT OF CARL H. MOTE, PRESIDENT, NORTHERN INDIANA
TELEPHONE CO.; PRESIDENT, COMMONWEALTH TELEPHONE CORPORATION
The CHAIRMAN. I believe, Mr. Mote, that you are the president of the Northern Indiana Telephone Co. What is your residence ?
Mr. MOTE. 5685 Central Avenue, Indianapolis.
After coming to Washington, I have been able over the week end to read a bit of the testimony that was given here. I read the examination of Judge Patterson.
I may say that I was struck in reading his testimony by the emphasis that was placed upon the details—with which, of course, this committee is concerned—the details of this bill, of this bill or a similar measure, if enacted and recommended for passage, such as machine tools in southern California, in which Senator Downey was deeply interested, and rightly interested. I have read a bit of the evidence and have heard the last two witnesses on the subject of patents.
It has seemed to me that there is involved in this proposed legislation issues that far transcend the matters which the committee has considered heretofore.
As a citizen, as a taxpayer, as a corporation executive and manager, I ask, What were the reasons for urging Congress to enact S. 1579?
Such a measure has never been necessary in the history of this country during any war it has ever fought. In our last war “to make the world safe for democracy” and “to end all wars,” the President was empowered during the war to operate certain privately
owned property, especially transportation and communication; but that, I believe, is as far as his power went. He did take over the railroads and communication facilities; and it was years after the war before these properties recovered from the disasters inflicted upon them during the period of Government management. Moreover, in 1941 we are not yet in war.
What, I ask, are the special circumstances or conditions today which make such a measure as S. 1579 necessary?
I understand the original bill was introduced June 2 at the instance of the War Department with the approval of the Navy Department, the Office of Production Management, and the President. I understand a substitute bill has come from the War Department since these hearings began.
Just why is it believed in 1941 by anybody in America that the confiscation of privately owned property is necessary or proper? Is it because the ruling oligarchy wants to engage in a foreign war that is known to be unpopular and that this ruling oligarchy believes it necessary first to strip our citizens of all their property in order to crush their resistance and eliminate their opposition? Or, is it because the prospect of a foreign war offers the ruling oligarchy a mask behind which this oligarchy can accomplish the collectivization of all privately owned property and introduce America to the Marxian state?
I suspect both these reasons are motivating our bureaucrats in Washington. I have been told that bureaucrats already have told your committee that this measure is necessary for defense and necessary to obtain the proper response from labor. These are reasons stated in such general terms that they are difficult to analyze or answer, and it ought to be obvious that they are quite insincere and hypocritical, else there would be more particularity, more revealing facts given to the members of this committee.
I don't believe the confiscation of any privately owned property is necessary for the defense of the country, and I do not believe labor demands any such un-American measure. I don't believe labor is wholly without knowledge of what happens finally to labor when the state undertakes to stamp out the rights of private property. At the beginning of the French Revolution there were new dealers who wanted to confiscate all privately owned property and change everything, including human nature. The French trade-unionists who cheered such proposals lived to see their unions dissolved, after which they were compelled to walk the streets without work and in deep despair.
Certainly, the Government has the right to use all our property in times of common peril but there are methods by which the use of such property can be acquired without giving the President any more arbitrary power over the lives of our citizens.
I have long been amazed at the lack of courage exhibited in America by its foremost business executives and managers to resist the aggressions of political bureaucrats and revolutionists in Washington. I think the foremost business executives and managers of America have betrayed their stockholders, their bondholders, and their employees and that individually and collectively they ought to be discharged for their indifference. I say this partially because of the allegation which I understand has been made to this com
mittee that the President already has the power which this bill in its original form undertook to give him. I say it also because such a measure as this ought to have brought every business exec.utive in America to Washington with monkey wrenches and lead pipe, and it would if they were worth their pay as trustees for their stockholders, their bondholders, and their employees.
The only “defeatism” in America which I consider important is the defeatism of the American businessman who has seemed to be resigned to the oblivion which has been prepared for us if we engage in a shooting foreign war and if we do not soon begin to wrest the political controls from Washington bureaucrats.
This measure, or any measure now a law, if applied and administered by the President, marks the end of the world so far as I am concerned and, I believe, so far as the members this committee are concerned. None of us will live to see a return of the America we have so deeply loved.
A week ago I spent 2 hours in New York City with the president of the National Industrial Conference Board, Dr. Virgil Jordan. I consider him not only the foremost American economist but, above all, a citizen of great patriotism and courage. I had talked with him a little more than a year ago. A speech which he made at Philadelphia on February 24, 1940, had given me goose pimples when I read it. On September 1, 1940, Dr. Jordan wrote a foreword to the Twenty-fourth Annual Report of the National Industrial Conference Board. I never heard it referred to in the Presidential campaign when we had the candidates of the two major political parties running in tandem. But this is what Dr. Jordan wrote on September 1, 1940:
To many men of insight and integrity in the American community it seems that after 7 years of persistent dissipation and demoralization of its resources by a subtle, comprehensive, and carefully planned political conspiracy, the American Republic, like the French, has been destroyed and replaced by military dictatorship, and after little more than five generations the great American experiment in free, creative community life has been ended for an indefinite period.
To many such men, however, hopeful that they may prove mistaken, the application of “emergency” legislation of conscription and confiscation of the community resources by the State immediately preceding a national election sounds ominously like the death rattle of the American Republic. They must see in it the symptoms of advanced political degeneration and social disintegration, signifying the collapse of personnal independence, self-discipline, and capacity for voluntary cooperation in the American community.
Dr. Jordan used a label. He labeled the Government in Washington, D. C., as a "comprehensive and carefully planned political conspiracy."
With the candidates of the two major political parties in America running in tandem, in 1940, it is apparent now why the Republican National Committee did not use Dr. Jordan's penetrating language as a deciding weapon against the New Deal. With a thousand-ton tank available for a blitzkreig on the New Deal, the Republican. National Committee used popguns instead, and these popguns annoyed Mr. Willkie more than Mr. Roosevelt' because Mr. Willkie was right behind Mr. Roosevelt and on the same bicycle.
I cannot improve upon the language Dr. Jordan has used, "comprehensive and carefully planned political conspiracy." This language explains what I think and explains why I am opposed to such: