Government can also advantageously conduct or support some applied research provided such research (1) is important to national safety or health or is of some other broad national concern, and (2) is also something which private industry is not doing and cannot well be expected to do on private financing. Generally speaking, applied research is done best by industry and is the natural field of industry. Government should encourage research in industry (1) by staying out of this field, and (2) by giving positive incentive to research in industry through support of basic research, development of scientific talent, modification of tax laws to make all research and development and patent costs clearly deductible as current expense, support of our basically sound patent system subject to improvements in, but not emasculation or, the patent laws, formulation of a uniform and fair, realistic patent policy respecting research financed in whole or in part by Government, and clarification of Government patent enforcement practices."-New York. "A reasonable increase in Federal support of research over the prewar level is justified but should be directed at expansion of fundamental investigations rather than at immediately practical objectives. It is doubtful that a new Federal program could be activated in time to contribute materially to the short-range problems of postwar reconversion. Special emphasis should be placed on the dissemination of technical information in proper form for use by smaller companies. In this connection it is the writer's opinion that greater reliance could be placed on help from trade associations to guide the development of such programs. By this means better planning of any work that is undertaken will result and better orientation of the information for use by smaller business will be assured."-New York. "Generally we feel that federally supported scientific research can have little effect on reconversion because of the time element. As regards its need in preparation for postwar activity we believe it should be limited to two classes of endeavor: (a) Continuous development, through cooperation of armed forces and industry, of up-todate war matériel, chiefly by trial orders; (b) continued research by Department of Agriculture in- soil and water conservation, reforestation, and new crops. Other research we think is most efficiently done by industry and other private institutions under competition. We are not very familiar with existing Government research laboratories but believe that as stated most research can be best done by private. institutions with financial support from Government where required results are not apt to develop commercial products and would not therefore be undertaken under the competitive system. Our definition of private institutions would include private industrial research laboratories on a contract basis and nonprofit research foundations and educational institutions on a contract or grant basis.”—Ohio. "To a large extent, both immediately and over a long range. The amount to be based on such sums that are necessary for the fulfillment of definite programs. The result of the war has proven the value of scientific research. We believe that the economic and social future of this country and probably of the world will be enhanced by the pursuit of scientific research and development with their consequent application to industry and commerce. There should be no set-up whereby a handful of tremendously large organizations would receive the major benefits of either research subsidy or applications of scientific research and development. Such factors should be made available to all industry, both large and small, and therefore the commonwealth of all people. There is no corner on brains. Often smaller concerns have eminently able scientists and engineers whose full talents are not materialized because the smaller concern finds the primary necessity of production paramount in its activities and therefore cannot afford to give a free rein for development and research to its talented employees. If Government support were made available to these smaller companies, it would enable them to turn loose their talent on scientific development and research projects, which then, in turn, could benefit all the people. It could be simply enough worked out in that the smaller concern would have to prove its validity as a research organization and therefore its right to a subsidy or support. We believe that the smaller concerns that can prove their validity would tackle such research and development programs at a minimum cost and with a maximum result, because such companies are fundamentally business-minded and know the importance of costs and business administration. They have been schooled in doing much with limited resources."-Connecticut. APPENDIXES APPENDIX A LETTER FROM SENATOR HARLEY M. KILGORE TO MR. MAURY MAVERICK UNITED STATES SENATE, August 29, 1945. Mr. MAURY MAVERICK, Smaller War Plants Corporation, Washington, D. C. DEAR MR. MAVERICK: The Subcommittee on War Mobilization of the Senate Military Affairs Committee, of which I am chairman, and the two subcommittees of the Senate Commerce Committee, which are headed by Senator Magnuson and Senator Pepper, respectively, have agreed to hold joint hearings at an early date on the various legislative proposals for the promotion of science and research both for national defense and for civilian purposes. We are desirous of securing opinions of representative manufacturers and businessmen before acting on this legislation. Inasmuch as your organization is in continuous contact with representative sections of business, we should appreciate your having several keymen of your technical advisory service ascertain from businessmen themselves what they feel are the various kinds of technical and research aids which would be most helpful in meeting the reconversion and postwar problems. Attached are some questions on which we should like to have opinions. Name: H. M. KILGORE, Chairman. APPENDIX B LIST OF QUESTIONS ASKED Manufactures Company: POSTWAR RESEARCH AND TECHNICAL INFORMATION 1. To what extent is federally supported scientific research needed by industry (1) immediately and (2) over a long range in order to facilitate reconversion or otherwise prepare for postwar activity? 2. To what extent should the Federal Government support research programs in the following categories: (1) Immediately and (2) over a long range? (a) Industrial research (power, manufacturing, housing, etc.)? (b) Agricultural research (industrial products, new foods, etc.)? (d) Basic or fundamental research? (e) Transportation research (aircraft, etc.)? (f) Communication research (television, etc.)? (g) Military research (weapons and counter measures)? (h) Other research? 3. To which of the following organizations should Federal Government funds be provided for research: (a) Government's own existing research laboratories? (b) New research laboratories to be built and operated by the Government? (c) Private industrial research laboratories on a contract basis? (d) Nonprofit research foundations and educational institutions on a contract or grant basis? 4. Where it is desirable for the Federal Government to undertake or support search, to which organization and to what extent should (1) the programing d (2) the administration be assigned: (a) Existing agencies or departments of the Government? (b) A central scientific agency of the Government? (c) Other? 5. To what extent should the Federal Government undertake to disseminate nonconfidential scientific and technical information: (a) Relating to its own research and development activities? (b) Obtainable from other sources? 6. Should such nonconfidential information be made available to industry through: (a) Existing agencies or departments of the Federal Government? (b) A central scientific agency of the Government? (c) Other? 7. Other comments: Interviewed by:. APPENDIX C LETTER FROM MR. MAURY MAVERICK TO SENATOR HARLEY M. KILGORE SMALLER WAR PLANTS CORPORATION, Washington 25, D. C., October 1, 1945. Hon. HARLEY M. KILGORE, United States Senator, Committee on Military Affairs, Chairman, Subcommittee on War Mobilization, Washington, D. C. DEAR SENATOR: In accordance with the request embodied in your letter of August 29, 1945, I immediately dispatched five of our key technical advisory consultants to 200 manufacturers, both large and small, geographically distributed throughout the country. These manufacturers were each asked the questions which you attached to your communication. The information obtained has been a free expression of industry, which I am sure will be of some assistance to the Subcommittee on War Mobilization and the two subcommittees of the Senate Commerce Committee which are headed by Senator Warren G. Magnuson and Senator Claude Pepper in their joint hearings on the various legislative proposals for the promotion of science and research. Comments from the industrialists interviewed appear to be extremely interesting and may be of value to you in your deliberations. Twenty-six pages representing excerpts from these comments are attached. The manufacturers interviewed expressed keen appreciation of the Government's interest in obtaining the benefit of their thinking on this important subject. Generally speaking, their comments lead me to the following conclusions: There is an appreciable agreement in all sections of the country that Government-supported scientific and general industrial research are urgently needed for industry in particular, but for the Nation in general, if employment and standards are to be maintained and improved. Many of the industrialists interviewed expressed the opinion that Government must sponsor research, particularly basic research, because of the drying up of funds heretofore available from people of wealth who now find themselves unable to contribute funds for research because of the tax laws. Seventy-three percent of all those interviewed favor the establishment of a central scientific Government agency to administer the project. The large companies in favor average 70 percent and the small 75 percent. In connection with dissemination, 64 percent of all those interviewed believe this should be done by the same central agency. The large companies in favor average 65 percent and the small 64 percent. On behalf of the SWPC staff, permit me to express my appreciation for the opportunity to have been of service to you. Respectfully, MAURY MAVERICK, Chairman and General Manager. The CHAIRMAN. Next we have Mr. Bruce K. Brown. TESTIMONY OF BRUCE K. BROWN, VICE PRESIDENT IN CHARGE OF DEVELOPMENT, STANDARD OIL CO. (INDIANA) Mr. BROWN. In view of the time, Mr. Chairman, I am going to shorten my statement as much as I can. The CHAIRMAN. Will you identify yourself for the record? Mr. BROWN. My name is Bruce K. Brown. I am currently employed as vice president in charge of development of Standard Oil Co. (Indiana), at Chicago, Ill. The CHAIRMAN. May I ask a question at that point. As vice president in charge of development, you mean of research development or field development? Mr. BROWN. Of all technical research and development. The CHAIRMAN. Your job is as the head of the research and development department? Mr. BROWN. That is right, sir. The CHAIRMAN. Thank you. Go ahead. Mr. BROWN. I would like to take time to say why I think the establishment of a foundation is so important from the standpoint of science generally. Departing from my statement, I will just say, in view of the time, that I am personally convinced The CHAIRMAN (interposing). Are you going to brief your statement? We will put the entire statement in as part of the record. (The portion of Mr. Brown's statement which he did not read, was made a part of the record and follows:) I wish to present an appraisal of the proposal to create a national research foundation from the standpoint of one interested in industrial research and applied technology. While the views I shall express are my own, I have taken the trouble to ascertain that they are shared in whole or in large part by a number of other persons interested in applying research and technology to private enterprises, both large and small. I have been active in the field of applied chemical technology since 1920. I have observed this field from five different angles. My first job was with a small, highly successful, highly individualistic scientific enterprise-the C. F. Burgess Laboratories, of Madison Wis. A small research staff devised many patentable improvements in dry batteries. We manufactured and sold those batteries at a profit and in addition, we collected patent royalties from larger manufacturers because they wished to use our inventions. Second, I worked for a medium-sized chemical manufacturing enterpriseCommercial Solvents Corp. That company, too, developed unique processes, sold unique products, risked venture capital in research, obtained patents, sued on those patents, and was sued by other patent holders. Third, I practiced chemical patent law and solicited patents on new inventions. Some of these inventions were the property of individuals, some of small enterprises, and some of great corporations. Fourth, from 1929 until November 1941, and again since December 1944, I have been employed by a large corporation engaged in a highly competitive field. It has a long and enviable history in applied petroleum technology, and has constantly and for decades offered its patentable improvements for license to all persons upon reasonable terms. Fifth, and finally, for over three wartime years I had the privilege of serving under Petroleum Administrator Ickes and his deputy, Ralph Davies, as the Assistant Deputy responsible for petroleum refining technology, particularly the 100-octane gasoline production program. This experience gave me an opportunity to gain some appreciation of the problems, the workings, and the attitudes of the Federal Government. I endorse Dr. Vannevar Bush's report to President Truman, entitled "Science, the Endless Frontier." The report has been explained by prior witnesses, and its recommendations have been advocated by distinguished scientists, educators, Government officials, and industrialists. However, I should like to mention certain points of the report which are significant to industrial research and applied technology in private enterprise. Science and technology advanced tremendously during the past 5 years, but as I see it this advance was achieved on a forced and rather artificial basis. A shortage of technically trained manpower was offset by working extremely long hours. A shortage of the natural type of revenues for scientific education and basic research in nonprofit institutions was offset by tremendous Federal expenditures for war research in those same institutions. Now that the war is over we will begin to feel keenly the shortage of scientific personnel and the shortage of funds for basic research. Dr. Bush's report indicates that the total of all expenditures for research and development (both private and public) were $345,000,000 in 1940, having increased 215 percent since 1930. Industry research, which represented $234,000,000 of the total, had doubled within the decade; that is, was 200 percent of what it had been in 1930. Research paid for by Federal and State Governments had increased to 280 percent of the 1930 figure. However, the research expenditure made by colleges and universities had increased only about 50 percent during the decade. The fact that the colleges and universities had failed to keep pace is alarming because all other research has to depend on those sources for its personnel and much of its truly basic research data. From the War Mobilization subcommittee report of July 23 it would appear that during the war period 12.5 percent of the estimated total direct Federal research expenditure, or $257,000,000, was channeled through universities, colleges, and private research institutes. This is some measure of the funds that were necessary to keep their research activities at a high pitch. These educational institutions and foundations-largely cut off from their prewar sources of income by tax laws and economic changes but partially subsidized in war time by Government grants for research-are apt to be in a sorry plight, postwar, unless they are helped, and industrial and applied research, and even Government-sponsored research, cannot last long unless there is a constant stream of new talent entering it. Private industry is too diverse to be very articulate but, as a group, it well recognizes the direct connection between research, new processes and products, jobs, and profits. The National Research Council recently made a survey of the postwar research plans of a number of industrial organizations. The results of its survey were reported in Industrial and Engineering Chemistry for August 1945, and while the specific numerical data cited are somewhat complex, the findings can be fairly summarized by saying that the companies approached, both large and small, intended, in the immediate postwar era, approximately to double their research programs. Thus a big upswing in privately financed industrial research and applied technology is indicated. Problems to be solved are already cataloged and venture money is in the bank ready to be risked. However, these plans to enlarge industrial research programs will dry up and blow away unless they are fed by continuous streams of well trained technical personnel. Such |