and the President. This new agency should be built upon the existing structure of the organizations named by would be so reorganized that it will become an entirely new agency.

Another principle of administration that should be required by the authorizing legislation is that the new agency shall make full and complete use through contracts and reimbursable working agreements, of the personnel and facilities of existing governmental departments and agencies rather than attempting to build, by transfers or outright hiring, entirely new and complete functional services within its own structure.

Let me give an example or two. The various agencies of the Department of Agriculture are the world's greatest depository of technical, scientific and professional knowledge and skill on all matters relating to farming and farm life. This Department, through its Office of Foreign Agricultural Relations, can bring to use by the new agency the full resources of this great group of agriculturists and of the cooperating land grant colleges, State experiment stations and extension services.

We need United States agriculture, as such, to participate in the implementation of programs. The Department of Agriculture, through its field offices, could do a great deal to provide for this participation and could do the work of interesting farm families in overseas technical-assistance work and could supervise the training of farmers from other countries brought to our farms by the expanded technical-assistance program I have recommended.

The same general principle holds with respect to the Public Health Service of the Federal Security Agency.

We should push out as much of this foreign economic development work as we can to the UN and to its specialized agencies. We should encourage these international agencies to take on these additional duties just as rapidly as they can efficiently and effectively. Doing so will relieve our efforts of any stigma of imperialism.

Provision should be made in the legislation for the appointment of a Public Advisory Committee on Foreign Economic Affairs and an Interagency Board made up of an official from each of the major Federal departments and agencies concerned with economic problems of foreign relations.

This we believe to be the minimum foreign-economic-assistance program that the United States can with safety and good conscience undertake annually for the next several years. It is a program that is urged by humanitarian motives, moral principles, and enlightened self-interest. It is the minimum program that we can embrace to hasten the ultimate establishment of a brotherhood of prosperous democratic nations living together in peace. It is the way to greater strength for democracy, prosperity, and peace.

(Attachments A, B, C, and D are on file at the committee.)

STATEMENT OF E. C. EARLE, COUNCIL FOR INDEPENDENT BUSINESS

A searching analysis of section 509 indicates that it is not germane to the purposes of this act for the following reasons:

(1) It will be difficult to negotiate a tripartite agreement with Britain and France because it will appear that the authority endowed the United States Government by a law incorporating this section would enable the Government to set up a complete defense through superficial information and data that might have been recorded prior to the application for a patent in the case under consideration. (2) It is difficult to understand why it is proposed to give memoranda, written descriptions, or drawings which might have been filed in the usual course of business in the large integrated Government organizations on the same legal status as patents.

(3) The exclusive remedy an inventor has under this section for an infringement on his patent under these conditions is to bring suit against the Government of the United States in the Court of Claims. Apparently this means that an employee of the Federal Government can disclose the invention to any company or individual and that company or individual can then proceed to violate the patent without any fear of the inventor being able to recover damages from him or it.

(4) The practice if established by law would be diametrically opposed to the principles now in use in the adjudication of commercial patents. It is now the practice in litigation contesting the validity of patents to require proof of a public

use or publication at least 1 year prior to the filing of an application for the patent involved.

(5) It permits piracy of the inventor's concepts providing the invention has gone indirectly to the Government or if the inventor cannot establish absolute proof that he is the one who brought the invention to the Governmentt.

(6) By throwing the case into the Court of Claims, where many inventors have been ruined by the many years that elapse before the case is adjudicated, it injects the possibility of delay beyond reason before the inventor can obtain a remedy.

(7) The question arises as to why the United States Government with all its power and wealth requires a special program to protect itself against only the inventor.

(8) It is contrary to the principles set up by the Constitution, article I, section 8-Patent basic statutes.

(9) The statement beginning after the period, line 1, page 16, "Except as otherwise provided by law, such teaching shall not impair the property in such information" is gratuitous and obviously untrue. Anyone with the slightest knowledge of patent law and litigation will realize that the statement by individuals whether or not in the employ of the Government that they were in possession of the teaching prior to the granting of the patent would certainly weaken if not destroy the patentee's claim. Furthermore, it is obvious that if such statements or testimony were instrumental in negative action by the Court of Claims, then the patentee would face the citing of this action of the Court of Claims as a defense and probably an effective defense against any action he might bring against any individual or company to defend his patent.

(10) This provision would obviously have a much more damaging effect on small and independent businesses than it would on the giant integrated companies. Reason: The big company is equipped with laboratories and technicians and finances to develop original ideas and has a legal staff to protect these original ideas and developments before it takes them to the Government. The individual or small company, on the other hand, frequently does not have the funds or facilities to do this research and development and must of necessity disclose his ideas to some Government agency in order to secure a development contract.

(11) This provision would obviously discourage individual inventors from taking their creative ideas to the Government.

(12) It would serve to encourage the Government to build up a secret file to be used against inventors to save the Government from paying just claims against the inventor.

SUGGESTED MODIFICATIONS SECTION 509, S. 1762

Delete beginning after the period line 12, page 15, and continuing through line 3, page 16.

Delete section (d) beginning line 11 through line 16, page 16, and substitute for it the following:

"(d) This section shall not confer a right of action on anyone or his successor or assignee when the invention was made while—

"(i) the inventor was in the employment or service of the United States and was employed to invent and make an invention within the scope of the defined employment; or

"(ii) the inventor was specifically assigned to a task having as it object the devising, the improving, or the perfecting of methods or means for accomplishing a prescribed result and made an invention within the scope of the assignment."

STATEMENT ON THE POINT 4 PROGRAM ON BEHALF OF THE DETROIT BOARD OF COMMERCE

The Detroit Board of Commerce, hereinafter known as we, representing the many vast and diversified industries and businesses operating within the Detroit area whose connections and investments are extended throughout the entire world, has been concerned for the past several years with the current postwar problems as manifested in the instability of the world's currencies, dollar shortages, periodically recurring international economic crisis, the Communist threat to the world peace and security, and the efforts and attempts by the

Nation in finding a solution or solutions that will end or alleviate the present world problems.

The Detroit area is the center of mass production and the world's largest producer of the industrial products destined for world markets. Members of this organization export over $1,250,000,000 in products each year to the markets of the world. This represents over 10 percent of the entire United States yearly exports. Detroit is likewise a major consumer of raw materials and products produced throughout the world. Over 300 imported items are needed for the production of a single automobile.

While the economy of the United States and to some extent, the world, is dependent upon the strength and continued high employment of the mass production industries, the economic well-being of these industries, the city of Detroit and the State of Michigan is dependent upon a high level of international trade and a relatively free and competitive access to the world's markets. Over 800 Michigan firms are engaged in some form of world trade and hundreds of other Detroit and Michigan firms and industries, not actively engaged in exporting or importing, utilize raw materials from abroad or fabricate for firms exporting the finished product. It has been estimated that one out of every seven employees in the Detroit area is employed as a direct result of world trade. Retail and wholesale merchants depend upon the continued bigh purchasing power of these workers.

The administration has asked Congress for $8% billion for foreign aid this year. If Congress accepts to administration's request, Michigan will be expected to pay $407,150,000 or $64.60 per person and $150.30 per taxpayer.

We of Detroit and Michigan fully appreciate the tremendous stake we have in world trade and affairs and in the attempted solutions to the current post and prewar problems now plaguing the world's commerce, the world economy and the peace and security of this Nation.

On January 20, 1949, President Harry S. Truman first enunciated an idea for a new foreign aid program designed to aid the development of the backward and underdeveloped nations of the world. "Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas.' As a result of the intense interests of the members of the Detroit Board of Commerce in world conditions and foreign aid programs and as a result of the vast experience of the businessmen and industrialists of this organization in the field of international trade and investments, we respectfully request all interested in the so-called point 4 program to review the following comments and suggestions representing the views of the board of directors of the Detroit Board of Commerce. 1. We are completely in sympathy with the proposal by the President to assist in every practical way possible the development of the less developed areas of the world. Communism is not defeated by words, but by deeds. We must improve the lot of the peoples of the world where standards of living are below normal. We recognize that the point 4 program derives its primary importance from the national interests in the United States, as, therefore, an implement of national defense.

We further realize as the various regions of the world prosper and progress, they will in turn become an ever-increasing market for American products in proportion as their resources are developed, purchasing power increased and standards of living improved. Thus a twofold benefit will accrue to both the less developed areas and to business and industry in the United States. A high level of international trade means peace and prosperity for all.

American industry has been developed to a high standard of production. We have plants capable of great production which must be operated to their normal capacity in order to employ American labor to the fullest extent and to make available their products to the various areas of the world in need of these goods for their own development and use. To have continued prosperity in the United States, it is necessary to seek sales in the export field. Many of the world's markets are near their peak while others have not or have just begun to indicate their potentialities. In many cases they require power, water and transportation, etc., before they will be desirable or of potential value to American labor and industry. If propertly developed, the greatest markets of the world, hitherto virtually untouched, will rapidly become markets for American industry.

The average citizen of Cuba purchased American goods to the amount of $98 per person per year, according to the Department of Commerce, 1947. It is estimated that 2 million people in the western area where electricity, power and roads are available, buy 90 percent of the imports from the United States, while the people in the undeveloped area are buying approximately 10 percent.

In 1947 exports to Cuba totaled $491 million. The average purchase per person per year in the prosperous area is approximately $220. There are some 2 million people in the prosperous area so they account for $440 million of the $491 million. If the purchasing power of the 3 million people in the backward areas were raised to the same level as those in the developed area, exports from the United States to Cuba would increase $631 million or to a total export per year of $1,170 million. It would seem apparent that in improving and developing the backward areas of Cuba the United States exports would increase $698 million per year

If this can be done in Cuba for the 5 million population it would be apparent that the 20 million peoples of the Caribbean area, if given proper help for their development, would increase the amount of exports from the United States to approximately $24 billion.

We also realize that the political stability of such areas will be definitely served as their resources and their economy are developed. It follows, therefore, that it is in the interests of the United States to implement the President's program.

2. We believe that the point 4 program should be thought of as an extension to the less developed areas of the world of American technical know-how and private investment, such as has been going on for years. Billions of dollars of American capital are now at work around the world, in many instances in cooperation with local capital, and is achieving the very results which the President is seeking.

We agree with the Presidant that a new emphasis should be given to this type of cooperation between American know-how and capital along with the skill and capital of overseas countries, with particular direction toward those areas that have vast underdeveloped potentialities and where the need for economic development is particularly great, and where raising standards of living will result in a stronger bulwark against the inroads of destructive political and economic ideologies.

3. We recognize that there is a sphere for Government action as well as for private enterprise. Only if the two go hand in hand, each to its appointed task, will the hopes and ambitions held for the point 4 program ever be realized.

In matters of health, port facilities, government, sanitation, education, and in other fields beyond the scope and authority of private enterprise, the United States Government has a tremendous field for action.

In working out programs for the development of basic services, such as agriculture, sanitation, and vocational training, we support the methods developed by the Institute of Inter-American affairs that is, "services" jointly staffed and largely locally financed.

4. We believe that there is also a semigovernment field for action in which such organizations as the International Bank for Reconstruction and Development and the Export-Import Bank have and can continue to perform an important role in the development of the various areas of the world in need of their services.

We believe that the Export-Import Bank could further serve to implement the point 4 program in two ways:

(a) By direct loans to developments in underdeveloped countries where it would be difficult or impossible to obtain the loans from private sources and where American engineering firms can prove to the satisfaction of the bank's officials that such loans are of a self-liquidating productive nature and are a good business risk.

(b) By the encouragement of private American capital in overseas investments by means of the "Guaranty principle." That is, by freeing American foreign investments from the risks other than the ordinary every-day risks involved in domestic investments. By this we mean, (a) freedom from the unusual risk of inconvertible currencies, (b) freedom from the unusual risk of loss of investment in whole or in part on account of political contingencies such as confiscation, seizure, destruction, fluctuating and devalued currencies or forced abandonment due to the act of any government which prevents the further transaction of business.

5. We further believe that a special committee consisting of American businessmen, industrialists, and engineers, should be organized to assist the ExportImport Bank in its work of implementing the point 4 program. The ExportImport Bank should not approve any specific projects under this program until a report on that project had been filed by this committee.

6. We are definitely opposed to any scheme for vast global spending on a Government level. We do not believe that the objectives of this program can be

achieved merely by pump priming the world economy with additional billions of taxpayers' money. While this was necessary during the immediate postwar years for the providing of funds for emergency relief for the war-torn nations of the world, such expenditures now would accomplish little in the way of permanent development or progress and could have a most serious adverse effect upon the economy of this country which is already heavily burdened by taxation.

7. We believe the term “backward and underdeveloped" is wrong for it connotes lack of progress. In many of these regions, to the contrary, there is great progress. It is only that this progress has but recently begun and the potentialities are so great. A hundred years ago the United States in comparison to other nations was likewise an underdeveloped area. There are, in fact, some areas in the United States today that could yet be classified as underdeveloped.

We would like to point out that many areas will never develop, both for economic, political, and geographical reasons. To attempt to force development would be a costly mistake and would inevitably result in failure.

8. We believe that this new program must be operated on a business level and not on a governmental level. Businessmen and industrialists in these countries generally have a more intimate knowledge of what is needed with regard to business and industry to bring about lasting improvement than do the governments.

We especially stress the need for help other than money. By this we mean the voluntary aid which could be given by American management in the way of technical help and know-how. It will be impossible for the United States Government to act as other than a clearinghouse for industrial projects. Such projects must be handled on an industry to industry basis, the details to be worked out by industry itself.

Since industrial skills and modern technology are largely the possession and property of private enterprise, it is submitted that the only way these talents can be put to work effectively is to bring the American entrepreneur into direct contact with his counterparts in foreign countries.

9. We believe that the obstacle of double taxation which faces private United States capital when it ventures out of the United States must be ended. Every dollar of private capital that goes abroad decreases by an equivalent amount the need for Government loans and grants. This flow of private capital should be encouraged rather than discouraged as is the case at the present time.

10. We believe that some tax inducements might well be given to firms and individuals investing their capital abroad. For example, an arrangement might be worked out and authorized by Congress whereby, through appropriate treaties, both the United States and any country which is host to any United States foreign investment would consent to accelerated amortization, for domestic income-tax purposes, of the actual investment required. We have in mind the 5-year writeoff of war plants, privately constructed, which was provided for in tax laws during World War II.

In addition to a 100 percent write-off for tax purposes, of any approved foreign investment in facilities within a maximum 5 years, we would also recommend the instantaneous write-off of any remaining balance in the event that, due to the outbreak of hostilities, in the host country, or in case of riot, revolution, administrative decree or otherwise, the transaction of business becomes impractical.

11. We believe that there must be changes in the United States customs and tariff laws. If United States firms are to invest abroad, they must import a vast amount of extraneous business material that always flows between the home office and subsidiary or branch plants. At the present time, outmoded United States customs regulations and laws restrict this flow of vital business material. The law must be changed so that this material may be imported freely into the United States.

Customs laws and tariffs in the United States must be made more conducive to the importation of goods from abroad. If we are to encourage production in the world, we are assuming a moral obligation to likewise open our doors to the purchase of this increased production. If we refuse to do this, then the entire program will falter and the world will again find itself involved in another major depression.

12. We believe that prior to taking any tangible steps for the implementation of the point 4 program, Congress should pass the Meader bill which provides for the establishment of a bipartisan commission to investigate and report on ways and means that unreasonable barriers to overseas private investments may be removed.

If these barriers are discovered and removed, much of the need for Government assistance may be dissipated. We would like to stress that business and industry 87360-51-50