products is offered to the public, including the low-priced goods, and the adoption of the standards results in substantial economic benefits, which are shared with all branches of the industry, and with the consuming public, it is difficult to conceive of an association becoming involved in any legal difficulties so far as the Federal Anti-Trust Laws are concerned. The Attorney General of the United States has expressed the opinion that an association may properly standardize qualities, grades, processes, machinery, and technical terms, as long as such activities are not used as scheme to curtail production or enhance prices, and do not have the effect of suppressing competition.70 Any association which projects its standardization program in a fair, competitive spirit need not fear the possibility of prosecution. But any association which attempts to employ this method as a device for the elimination of competition must expect inevitably to be called to account, for the Supreme Court has repeatedly stated that it will not permit a restraint of trade to be accomplished by any subterfuge or indirection.

70 See letters of Hon. Herbert Hoover, Secretary of Commerce, Feb. 3, 1922, and Hon. H. M. Daugherty, Attorney General, Feb. 8, 1922, Appendix J.

CHAPTER VII

INDUSTRIAL RESEARCH

Value of Research.-The value of organized research, not only to industry, but to the national welfare is receiving wide recognition.

These words of Samuel Gompers, President of the American Federation of Labor, are significant of the broadening attitude of Labor.

"To-day no one disputes the fundamental service which research makes to progress and to maintaining the fabric of civilized life. Whatever help research and science can offer, Labor will welcome." 1

Indicative of the modern business man's opinion, is this statement of John J. Carty, Vice-president of the American Telephone and Telegraph Company:

"The importance of scientific research to our American industries can not be exaggerated. . . . Enough is already known to justify me in saying, that unless the manufacturers of the United States establish research departments as integral parts of their own internal organizations, our industries will tend to fall behind those of other countries." 11 2

Could the attitude of Labor and of Industry toward this great activity be more emphatically stated?

The Facts Fortify Such Opinions.-The remarkable coöperation of science, industry and government in Germany, a story not yet fully told, not only placed that country, within a few years, in the forefront of industrial powers, but also gave her a paralyzing control over great portions of American industry, largely by reason of the exclusive possession of processes and methods evolved from scientific research. The representative of

1 Leaflet, Personnel Research Federation, August, 1921; issued by National Research Council.

2 "Science and Industry," John J. Carty, Vice-president, American Telephone & Telegraph Co., Cir. 8, National Research Council, p. 2.

the German government, a short time prior to our entry into the war, was able to cable his government that they had in their possession the power to throw out of work four million men in this country. The governments of England, of France, and of Japan, have recognized the tremendous value of organized research to the nation, in times of peace as well as war, and have organized great central research laboratories to serve their industries. The British government maintains that research is "the main, if not the only, source of fresh productivity in industry, and it is only by increased productivity the world will find its way out of its present economic difficulties." 4 There is a world-wide recognition of the importance of science, as a practical working force in furthering national welfare. It is not an exaggeration to say that the future progress of the American industry, to a considerable extent, depends upon the effective application of scientific knowledge, in a practical way, by business men, to the problems of industry. Our great corporations, such as the General Electric Company, the American Telephone & Telegraph Company, the Eastman Kodak Company, and others, maintain great laboratories on which they have spent huge sums for research work. It is recognized by the officers of such great business organizations, that the "contributions of pure science, as a whole, become of incalculable value to all the industries."' 5

One invention in the research laboratory of the E. I. DuPont de Nemours Company effected a net saving to the company of one million dollars in five years. The total expenditures of the DuPont research organization for the years 1912 to 1918, was $6,051,000, and the calculable saving, disregarding those benefits which could not be figured in dollars and cents, but

3 Address, Francis P. Garvan, former Alien Property Custodian, Journal of Industrial and Engineering Chemistry, October, 1921.

4 Report, Committee of the Privy Council for Scientific and Industrial Research, 1920-1921, p. 15.

5 "The Relation of Pure Science to Industrial Research," John J. Carty, Vice-president, American Telephone & Telegraph Co.; Science, October, 1916, vol. 44, No. 1137, pp. 511, 518: or Cir. 14, National Research Council; see also address, "Industrial Research," Frank B. Jewett, Chief Engineer, Western Electric Co., before Royal Canadian Inst., Cir. 4, National Research Council, p. 3.

The

which were very important, amounted to $82,401,000. Western Electric Company's laboratory now occupies a half million feet of floor space in a building especially designed for it and the staff has grown from several trained men to several thousand employees drawn from the universities and research laboratories of the world. Several huge laboratories have been founded by the larger electrical manufacturing concerns and the vast sums spent upon them annually, to quote an authority "return to the industry, and through the industry to the public, improvements in the art which taken altogether have a value many times greater than the cost of their development.

Fifty industries, employing over four million people, are dependent upon the coal tar derivative chemical industry, an industry which is the offspring of scientific research. Indeed many great industries, such as the electrical industry, the cottonseed oil industry and the phonograph industry, have developed as a direct result of effective, continuous research work.

But the huge laboratories of our greatest business concerns cannot be financed by smaller manufacturers. How are the thousands of smaller business enterprises to maintain themselves in competition? They must keep abreast with progress or perish after a long period of futile competition of a type which injures the industry and harms the reputation of the product. They must constantly strive to improve their products and their processes. The only sane course of action is coöperation,—coöperation with their competitors in the trade organization of their industry, and coöperation through that organization with the agencies available for research work.

Numerous associations in this country have engaged in research activities which have reduced costs, enlarged demand, and stimulated progress in the industry. The brick manufac

• "Industrial Benefits of Research," Chas. L. Reese, Chemical Director, E. I. DuPont de Nemours Company, Cir. 18, National Research Council, pp. 6, 11.

7 “Industrial Research," F. B. Jewett, Chief Engineer, Western Electric Co., Bull. 4, National Research Council.

8 "Science and the Industries," John J. Carty, Vice-president, American Telephone & Telegraph Co., Cir. 8, National Research Council, p. 4. 9 H. E. Howe, pamphlet and exhibit, prepared under the auspices of the National Research Council, p. 16.

turers began research work on a small scale in 1898 and even with insignificant expenditures results "of the utmost financial value, which have saved thousands of dollars in losses have been obtained." 10 The English government has adopted its great plan of coöperative research through associations because of its recognition of the value of wisely conducted research in increasing efficiency, reducing costs and enlarging the productivity of the nation.11

Field for Coöperative Industrial Research. The field for coöperative research is almost unlimited.

Library. One of the simplest activities, not only of great value of itself, but also a necessary basis for any economic research program is the establishment of a complete library of the technical literature of the world as it relates to the industry.12 Theodore N. Vail has well said "By carefully avoiding a duplication of work and by utilizing all that pioneer investigation has done, the fruitfulness of research can be greatly increased." In the trade and technical publications of the world, there is a vast accumulation of valuable data, setting forth the successful and unsuccessful results of endless researches the world over. This fund of information is practically lost to the world, because of lack of adequate digests and indexes. Costly research work often doomed to failure, is being constantly duplicated as a result. The mere collection, codification, and distribution of such data, as it relates to a particular industry would be of tremendous value. It would substitute the knowledge of the world for the knowledge of the individual manufacturer. It would furnish the starting point for the research work of the industry. The Alloys Research Association, working with the National Research Council, is now accumulating a complete library of metallurgical literature of the world, which is being completely

10 Address, Edward Ortman, Jr., Twenty-seventh Annual Convention, National Brick Mfrs'. Assn., March 5, 1913.

11 Report, Committee of the Privy Council for Scientific and Industrial Research, 1920-21, pp. 13-34.

12 "Organization of Industrial Research," Arthur D. Little, Proceedings, American Society for Testing Materials, vol. 18, Part II, 1918. Reprint: "Topical Discussion of Coöperation in Industrial Research," National Research Council, p. 24.