STATE TECHNICAL SERVICES ACT OF 19 65

GOVERNMENT

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89-15 H E A R I N G S

BEFORE TH E

SUBCOMMITTEE ON COMMERCE AND FIN AN CE

OF TH E

COMMITTEE ON

INT ERSTATE AND FOR EIGN COMMERCE 

HOU SE OF RE PRESENTATIV ES

EIGH TY -NINTH CONG RESS

FI RST SESSION

ON

H .R . 3 4 2 0

A BILL TO PROMOTE ECONOMIC GROWTH BY SUPPORTING 

STATE AND REGIONAL CENTERS TO PLACE THE FIND INGS

50-474

U.S. GOVERNMEN T PR IN TI NG OFFIC E

WA SHING TO N : 196 5
nt.

CO M M IT TE E ON IN TE RST ATE AN D FO RE IGN CO MMER CE

OR EN H ARR IS , Arkansas, Chairman

H A R L E Y O. ST A G G ER S, West Virginia 

W A L TE R RO G ER S, Texas

SAM U EL N. F R IE D E L , Maryland 

T O R B E R T H. M ACD O N ALD , Massachusetts 

JOHN JA RM AN , Oklahoma

LE O W. O’ B R IE N , New York

JOHN E. MO SS , California

JO HN D. D IN G E LL , Michigan

PAU L G. RO G ER S, Florida

H O RACE R. K O R N E G A Y , North Carolina 

LIO N E L VAN D E E R LIN , California 

J. J. P IC K L E , Texas

F R E D B. R O O N E Y , Pennsylvania 

JOHN M. M U R P H Y , New York 

D A VID E. SA T T E R F IE L D III, Virginia 

D A N IE L J. R O N AN , Illinois 

J. OLI VA H U O T, New Hampshire 

JA M ES A. M A C K A Y , Georgia

JOHN J. G IL L IG A N , Ohio

CH A R LES P. F A R N S L E Y , Kentuck y

JO HN B E L L W IL LI AM S, Mississippi

W. E. Williamson, Clerk

Kenn eth J. Pai nt er , Assistant Clerk

7 T ‘ --t. Professional St af f

'AlirnrtEw Stev enson

, K ur t BorchaRdt

‘ \ \ _ _ _ _ _ _

SU B C O M M IT T E E ON C O M M E R C E

W IL LIA M L. SPR IN G ER, Illinois 

J. AR T H U R YO U N G E R , California 

SAM U EL L. D E V IN E , Ohio

A N CH E R N ELSEN , Minnesota 

H AST IN GS K E IT H , Massachusetts 

W IL LA R D S. CU R TIN , Pennsylvania 

G L E N N CU N NIN GH AM , Nebraska 

JA M ES T. B R O Y H IL L, North Carolina 

JA M ES H A R V E Y , Michigan 

T IM LE E C A R T E R , Ken tuck y 

HOW AR D H. C A LL A W A Y , Georgia

James M. Menoer, Jr. 

William J. Dixon

and F in a n c e

,• X T O R B E R T H. M A C D O N A L D , Massachusetts, Chairman

JOHN D. D IN G E LL , Miphjgan H AS TIN GS K E IT H , Massachusetts

J. 6LIV A H U OT, New Hampshire W IL LA R D 8. CU R TIN , Pennsylvania

CH A RLE S P , F A R N S L E Y , Ken tucky

n
C O N T E

Commerce, Department of____________________________________

Comptroller General of th e United States________________________

Sta tem ent of—

▼ Arnold, Chris, associate execu tive assistant for the Society of LandGrant Colleges____________________________________________

Brown, Hon. George E., Jr., a Representative in Congress from the

Sta te of California__________________________________________

Bunting, J. Whitney, dean, College of Business Adm inistration and 

Graduate School of Business Administration, University of Georgia.

Caldwell, John T., chancellor, North Carolina State University_____

Calhoun, John C., Jr., vice chancellor for programs, Texas A. & M.

University, College Statio n, Tex______________________________

Connor, Hon. John T., Secretary of Commerce___________________

Conte, Hon. Silvio O., A Representative in Congress from the State

of Massachusetts___________________________________________

Corman, Hon. James C., a Representative in Congress from the S tate

of California_______________________________________________

Easton, Dr. D. Mack, dean of th e E xtension Division of the University

of Colorado_______________________________________________

Faiman , Dr. Robert N., dea n of the College of Technology, University

of New Ham pshire_________________________________________

Giles, Robert E., General Counsel, Department of Comm erce_____

Hollomon, J. H erbert, A ssistant Secretary for Science and Technology,

Dep artm ent of Commerce___________________________________

Lunch, Milton F., general counsel, National Society of Professional

Engineers_________________________________________________

Mackay, Hon. James A., a Representative in Congress from the State

of Georgia________________________________________________

Maunder, Sydney T., electrical engineer, visiting lecturer, University

of Massachusetts, Amherst, Mass____________________________

McVicker, Hon. Roy H., a Representative in Congress from the 

Sta te of Colorado__________________________________________

* Pa tto n, William D., legislative counsel, National Society of Professional Engineers____________________________________________

Pepp er, Hon. Claude, a Representative in Congress from the State of

Florida ___________________________________________________

Pickle, Hon. J. J., a Representative in Congress from the State of

* Texas_____________________________________________________

Ratchford, Dr. Brice, dean of the university extension, University of

Missouri__________________________________________________

Schmidhauser, Hon. John R., a Representative in Congress from the

Sta te of Iowa ______________________________________________

Stephens, Hon. Rob ert G., Jr., a Representative in Congress from the

State of Georgia____________________________________________

Wegner, Waldo W., director for the Center for Ind ustrial Research 

and Service, Iowa Sta te University, Ames, Iowa________________

Westerlund, Barton A., Ph. D., associate director, Ind ustrial Research

and Extension Center, University of Arkansas__________________

in

Fact

1

45

83

2

9

6

8

70

15

83

70

51

16

9

11

70

70

16

16

109

83

64

49

109

45

86

70

13

87

94

88
IV CONTENTS

Additional information sub mitted for t he record by—

Commerce Departme nt: t General statem ent about existing State programs of tech nical 1

’

ag®

assistance to ind ust ry___________________________________ 42

Letters from Hon. Joh n T. Connor, Secretary----------------- _ ... 41, 122

Office of Sta te Technical Services, proposed staffing to be b uilt up

during first year, table . . ------------------ ------------------------------

Con necticut Development Commission, letter from LeRoy Jones,

managing direc tor----------------------------------------------------------------

Consulting Engineers Council, lette r from Leonard K. Crawford,

president________________[ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Council of Economic Advisers, lette r from Gardner Ackley, Chairman. 

Lederle, John W., president, University of Massachusetts, l ett er from. 

Mississippi Research & Develop men t Center, letter from Robert F.

Dye, acting dire ctor________________________________________

Mullins, David W., president, University of Arkansas, lette r fro m----

National Association of Manufacturers, statem ent of---------------------

Nation al Society of Professional Engineers, proposed ame ndments to

H.R . 3420________________________________________________

New England Council, sta tem ent of Jam es S. H ostetle r------------------

Taylor, George A., letter from ---------------------------------------------------

123

130

125

123 

10

126

124 * 

128

112

121

127 T

1
STATE TECHNICAL SERVICES ACT OF 1965

TUESDAY, JU NE 1, 1965

H o u se of R e p r e s e n t a t iv e s,

Su bco m m it tee on C om mer ce an d F in a n ce

of th e C om m it te e on I n ter sta te an d F o r eig n C ommer ce ,

Washington, D.C.

The subcommittee met, pursuant to notice, a t 10 a.m., in room 2123, Rayburn House Office Building, the Honorable Torbert H. Macdonald 

(chairman of the subcommittee) presiding.

Mr. Macdonald. The hearing will come to order.

The subcommittee meets this morning to receive testimony on H.R. 3420, a bill which would permit the Federal Government to participate with State governments, universities, and industries within particular State s in stimulating the industrial and economic growth of States and regions in the Nation through the application of science and technology. This proposed legislation resulted from President Johnson’s direction to the Dep artm ent of Commerce to explore new ways to speed the development and dissemination of new technology. In his Economic Report of January 1964, the President 

sta tes:

The Federal Government provides major supp ort for the research and develop­ men t which underlie our striking technological advances. In the past, much of our research and deve lopm ent has been connected with national defense. Now, 

as military outlays level off we face— A challenge to apply the Nation’s growing scientific and engineering resources 

to new socially profitable uses; and An op portunity to accelerate the technological progress of our civilian industries. The Federal Government shou ld join w ith private business a nd our universities in speeding the development and spread of new technology. I have directed the De partm ent of Commerce to explore new ways to accomplish this.

What I have said in substance has been transmitted to us in correspondence from the Dep artm ent of Commerce. This morning we will have the pleasure of hearing from Secretary of Commerce John T. Connor, who is accompanied by J. Herbert Hollomon, Assistant Secretary for Science and Technology. I believe tha t it is generally recognized tha t the bill does not get down to specifics. We hope to, and expect to, make a record which will establish for all of us the pros and cons of legislation of this kind. 

This is a significant and far-reaching subject. At this time I will call to the witness stand a friend and colleague of mine from the great Commonwealth of Massachusetts, the Honor­ able Silvio O. Conte, who has introduced a bill H.R. 770S, which is identical to the bill introduced by the distinguished and able chairman of our committee, H.R. 3420, and also to bills H.R. 3960 filed bv the gentleman from California, M r. Roosevelt; H.R. 4235 by Mr. Cohelan of California; H.R. 4810 by the gentleman from Georgia, Mr. Stephens;

l
2 STATE TE CH NI CA L SER VIC ES ACT OF 19 65

H.R . 4879, by the gentl em an from New Ha mp shire, ou r colleague on

the subcomm itte e, Mr. H uot; H.R . 4963, filed by t he gentlem an from

Califo rnia, Mr. Miller ; H.R . 6026 filed by the gentlem an from California , Mr. Corman; H.R . 7335 filed by Mr. McVicker, of Colorad o;

H.R. 7339 filed by the ge ntl em an from Pennsylva nia , Mr. Fu lto n;

H.R . 7474 filed by the ge ntl em an from M arylan d, Mr. M athias;

H.R . 7498, filed by th e gentl em an from Flo rid a, Mr. Pepper; H. R.

7501, filed by the gentl em an from Iow a, Mr. Schm idh auser; and

H.R . 8049 filed by the gentl em an from Califo rnia, M r. Brown.

(H .R. 3420, and repo rts the reo n, follows:)

[H .R. 3420,89th Cong., 1st sess.]

A BIL L To prom ote economic grow th by supporting State an d regional centers to place the findings of

science usefully i n the hands of American enterprise <■

Be it enacted by the Senate and House of Representatives of the United States of

Am eric a in Congress assembled,

D EC LA R A TIO N O F P U R P O S E v

Sectio n 1. That Congress finds th at wider diffusion and more effective application of science and technology in industry are essential to the growth of the 

economy, to higher levels of employment and to the competitive position of 

United States products in world markets. The Congress also finds that the benefits 

of federally financed research, as well as other research, must be placed more 

effectively in the hands of American business and enterprise. The Congress 

further finds that the several State s through cooperation with universities, communities, and industries can contribute significantly to these purposes by providing technical services designed to encourage a more effective application of 

science and technology to both new and established industries. The Congress, 

therefore, declares that the purpose of this Act is to provide a national program 

of incentives and support for the several States individually and in cooperation 

with each other in their establishing and maintaining State and regional technical 

service programs designed to achieve these ends.

D E F IN IT IO N S

Sec. 2. For the purposes of this Act—

(a) “ Technical services” means activities or programs designed to enable 

businesses and industries to acquire and use scientific and engineering information 

more effectively through such means as—

(1) analyzing problems of regions and industries to determine new opportunities for applying technology;

(2) preparing and disseminating technical rerorts, abstracts, computer 

tapes, microfilm, reviews and similar scientific or engineering information, 

including the establishment of State or regional technical information centers 

for this purpose;

(3) providing a reference service to identify sources of engineering and

other scientific expertise; and *

(4) sponsoring industrial workshops, seminars, training programs, extension courses, demonstrations and field visits designed to encourage the 

more effective application of scientific and engineering information.

(b) “ Designated institution” means the institution or agency in each partici- ~

pating State, which has been designated as administrator of the program for such

State under section 3 of this Act.

) (c) “Qualified institution” means (1) an institution of higher learning with a

program leading to degrees in engineering or business administration which is

accredited by a nationally recognized accrediting agency or association to be

listed by the United States Commissioner of Education, or such an institution

which is listed separately after evaluation by the United States Commissioner of

Education pursuant to this subsection; or (2) a State agency or a private, nonprofit institution which meets criteria of competence established by the Secretary

of Commerce and published in the Federal Register. For the purpose of this

Act, the United States Commissioner of Education shall publish a list of nationally

recognized accrediting agencies or associations which he determines to be reliable
STATE TE CH NICA L SER VIC ES ACT OF 1 9 6 5 3

authority as to the quality of engineering or business education or training offered. When the Commissioner determines that there is no nationally recognized accredit­ ing agency or association qualified to accredit such programs, he shall publish a list of institutions he finds qualified after prior evaluation by an advisory com­ mittee, composed of persons he determines to be specially qualified to evaluate the training provided under such programs. (d) “ Participating institution” means each qualified institution in a State, which participates in the administration or execution of the State technical 

services program as provided by this Act. (e) “ Secretary” means the Secretary of Commerce or the official to whom the Secretary has delegated all or part of the authority in this Act. (f) “ State” means one of the States of the United States, the District of Co­ lumbia, the Commonwealth of Puerto Rico, or the Virgin Islands.

P L A N S AN D PR OGRAM S

Sec. 3. Any State which wishes to receive Federal payments under this Act in support of its existing or planned technical services program shall designatet under appropriate State laws and regulations, an institution or agency to ad­ minister and coordinate that program and to prepare and submit plans and pro­ grams to the Secretary of Commerce for approval under this Act. If the institu, tion or agency designated by each State is not a State university or land-gran- college entitled to benefits under the Act approved July 2, 1862, or the Act of August 30, 1890, and Acts amendatory and supplementary thereto (1 U.S.C. 301- 329), the Governor or other competent State authority shall furnish the Secretary a written statement of his reasons for designating such other institution or agency.

Sec. 4. The designated institution shall prepare and submit to the Secretary in accordance with such regulations as he may publish— (a) At the beginning of each five-year period, a five-year plan which may be xevised annually and which shall (1) outline the technological and economic con­ ditions of the State taking into account its region, its industry, and its industrial potential and identify the major regional and industrial problems; (2) identify the general approaches and methods to be used in the solution of these problems and outline the means for measuring the impact of such assistance on the State or regional economy; and (3) explain the methods to be used in administering and 

coordinating the program. (b) An annual technical services program which shall (1) identify specific methods, which may include contracts, for accomplishing particular goals and outline the likely impact of these methods in terms of the five-year plan; (2) contain a detailed budget, together with procedures for adequate fiscal control, fund accounting, and auditing, to assure proper disbursement for funds paid to the State under this Act; and (3) indicate the specific responsibilities assigned to each participating institution in the State.

Sec. 5. The Secretary shall not accept a five-year plan for review and approval under this Act unless the Governor of the State or his designee determines and certifies that the plan is consistent with State policies and objectives; and the Secretary shall not accept an annual technical services program for review and approval under this Act unless the designated institution has, as certified thereto 

by the Governor or his designee— (a) invited all qualified institutions in the State to submit proposals for providing technical services under the Act; (b) coordinated its programs with other States and with other publicly supported activities within the State, as appropriate; (c) established adequate rules to insure that no officer or employee of the State, the designated ins titution or any participating institution, shall receive compensation for technical services for which funds are provided under this Act from sources other than his employer and shall not otherwise main­ tain any private interest in conflict with his public responsibility; (d) determined that matching funds will be availab le from State or nonFederal sources; (e) determined that such technical services program does not provide a service performed as prac ticably by private technical services, professional 

consultants or private institutions; (f) planned no services specially related to a particular firm or company except insofar as the services are of general concern to the community, State 

or region; (g) provided for making public all reports prepared in the course of fur­ nishing technical services supported under this Act or for making them available at cost to any person on request.
4 STATE TECHNICAL SERVICES ACT OF 19 65

APP ROV AL BY SECRETARY OF COMMERCE

Sec. 6. The Secretary shall review each five-year plan and each annual program submitted by the designated institution under section 4, or by the regional 

or interstate institution under section 7, and shall approve only those which

(1) bear the certification required by the Governor or his designee under section 5;

(2) comply with regulations and meet criteria that the Secretary shall promulgate

and publish in the Federal Register; and (3) otherwise accomplish the purposes

of this Act.

REGIO NAL OR INTERSTATE PROGRAMS

Sec. 7. Two or more States may cooperate in administering and coordinating 

their plans and programs supported under this Act, in which event all or part of 

the sums authorized and payable under section 11 to all of the cooperating States 

may be paid to the institutions or persons authorized to receive them under the 

terms of the agreement between the cooperating States. When the cooperative 

agreement designates a regional or interstate institution to act on behalf of all of <

the cooperating States, it shall submit to the Secretary for review and approval 

under section 6 a regional or interstate five-year plan and annual regional or 

interstate technical services program which, as nearly as practicable, shall meet 

the requirements of section 4 and section 5.

Sec. 8. Notwithstanding the provisions of section 11, the Secretary is authorized *

to increase by 10 per centum the amount which he approves for any regional or 

interstate technical services program submitted under section 7. Such additional 

amount may be paid without requiring matching funds from State or non-Federal 

sources.

Sec. 9. The consent of the Congress is given to any two or more States to enter 

into agreements or compacts, not in conflict with any law of the United States, 

for cooperative efforts and mutual assistance in establishing regional or interstate 

institutions under section 7 for accomplishing the purposes of this Act.

ADVISORY COUNCIL

Sec. 10. Each designated institution and each regional or interstate institution 

shall establish an advisory council for technical services, the members of which 

shall represent broad community interests and shall be qualified to evaluate 

programs submitted under section 4. The advisory council shall review each 

annual program, evaluate its relation to the purposes of this Act, and report its 

findings to the designated institution and the Governor or his designee. Each 

report of the advisory council shall be available to the Secretary on request.

ADMINISTRATION AND PAYMENTS

Sec. 11. There is authorized to be appropriated such amounts as may be 

needed to carry out the purposes set forth in this section.

(a) From these amounts, the Secretary is authorized to make an annual payment to each designated institution, regional or interstate institution, or person 

authorized to receive payments in support of each approved technical services 

program. Maximum amounts which may be paid to the States under this subsection shall be fixed in accordance with regulations which the Secretary shall 

promulgate and publish in the Federal Register from time to time, considering 

(1) population according to the last decennial census; (2) industrial and economic 

development and productive efficiency; and (3) technical resources.

(b) The Secretary may reserve an amount equal to not more than 20 per

centum of the total amount appropriated each year under this section and is 

authorized to make payments to any designated or participating institution for /

technical services programs which he determines have special merit or to any

qualified institution for additional programs which he determines are necessary

to accomplish the purposes of this Act, under criteria and regulations that he

shall promulgate and publish in the Federal Register.

(c) An amount equal to not more than 5 per centum of the total amount 

appropriated each year under this section shall be available to the Secretary for 

the direct expenses of administering this Act.

(d) No amount paid under subsection (a) shall exceed one-half of the cost of 

the approved annual technical services program of the State, and for each dollar 

paid under subsections (a) and (b) there shall be available for expenditure on 

each approved program at least $1 from State or non-Federal sources: Provided,

Tha t the Secretary may pay an amount not to exceed $25,000 a year for each
STATE TE CH NICA L SER VIC ES ACT OF 19 65 5

of the first three fiscal years to each designated institution to assist in the prep ara­ tion of the first five-year plan and the initial annual technical services programs, without regard to any requirement of this section. (e) At the end of each fiscal year, all remaining amounts which are appro­ priated for payments to the States under subsection (a) and which have not been obligated for payments to the States a t that time, shall be available to the Secre­ tary for payments under subsection (b), until expended.

Sec. 12. The Secretary is authorized and directed to aid the States and regions in carrying out their technical services programs by providing reference services which a State or region may use to obtain scientific, technical, and engineering information from sources outside th e State or region, for the purposes of this Act. There is authorized to be appropriated each fiscal year such amount as may be necessary to provide the services authorized in this section.

Sec. 13. The Secretary is authorized to establish such policies, standards, criteria, and procedures and to prescribe such rules and regulations as he may deem necessary or appropriate for the administration of this Act.

L IM IT A TIO N S

Sec. 14. (a) Nothing contained in this Act shall be construed as authorizing a departm ent, agency, officer, or employee of the United States to exercise any direction, supervision, or control over, or impose any requirements or conditions with respect to the personnel, curriculum, methods of instructions, or administra­ tion of any educational institution. (b) Nothing contained in this Act shall be deemed to affect the functions or responsibilities under law of any other department or agency of the United 

States.

EV A LU A TIO N

Sec. 15. Within five years from the date of the approval of this Act, and prior to the end of each five-year period thereafter, the Secretary shall appoint a public 

committee, none of the members of wrhich shall have been directly concerned with the preparation of plans, administration of programs or participation in programs under this Act. The committee shall evaluate the significance and impact of the program under this Act and make recommendations concerning the program. A report shall be transmitted to the Secretary within sixty days after the end of 

each five-year period.

A N N U A L R E PO R T

Sec. 16. Each designated institution or regional or interstate institution shall make an annual report to th e Secretary on or before the first day of September of each year on the work accomplished under the technical services program and the status of current services, together with a detailed s tatem ent of the amounts received under any of the provisions of this Act during the preceding fiscal year, 

and of their disbursement.

T E R M IN A TIO N

Sec. 17. Whenever the Secretary, after reasonable notice and opportunity for hearing to any institution receiving funds under this Act finds th at— (a) the institution is not complying substantially with the provisions of this Act, with the regulations promulgated bv the Secretary, or with the approved annual technical services program; or (b) any funds paid to the institution under the provisions of this Act have been lost, misapplied, or otherwise diverted from the purposes for which 

they were paid or furnished. the Secretary shall notify such in stitution that no further payments will be made under the provisions of this Act until he is satisfied tha t there is substantial compliance or the diversion has been corrected or, if compliance or correction is impossible, until such institution repays or arranges for the repayment of Federal funds which have been diverted or improperly expended.

Sec. 18. Upon notice by the Secretary to any institution that no further pay­ ments will be made pending substantial compliance correction or repayment under section 17, any funds which may have been paid to such in stitution under this Act and which are not expended by the institution on the date of such notice, shall be repaid to the Secretary and be deposited to the account of the appropria­ tions from which they originally were paid.

SH O R T T IT L E

Sec. 19. This Act may be cited as the “State Technical Services Act of 1965”.
6 STATE TECHNICAL SERVICES ACT OF 19 65

G e n e r a l C o u n sel o f t h e D e p a r t m e n t of C o m m er c e,

Washington, D.C., March 15, 1965.

Hon. O r en H a r r is ,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D.C .

D ea r M r. C h a ir m a n : This is in rep ly to your request for the views of this

Department concerning H.R. 3420, a b ill to pro mote economic growth b y s upp orting State and regional centers to place the findings of science usefully in the hands

of American enterprise.

H.R. 3420 is for the same purpose as the draft of legislation sub mitted to the 

Congress by thi s Dep artm ent on Janu ary 15, 1965. The Depar tment urges 

early enactm ent of H .R. 3420 for the reas ons set forth in th e statem ent of purpose 

and need submitted to the Congress with our d raft bill. A copy of th e statem ent 

of purpose and need is attached for you r convenient reference.

We have been advised by the Bureau of the Budget th at ena ctm ent of this 

legislation would be in accord with the prog ram of the President. M

Sincerely,

R o b er t E. G il e s .

St a te m e n t o f P u r po se an d N e e d on P ropo se d Sta te T e c h n ic a l

Se r v ic es Ac t o f 1965

This proposed legislation is in response to President John son’s direction to the 

Departme nt of Commerce to explore new ways to speed the development and 

dissemination of new technology. In his Economic Report of Jan uar y 1964, the 

President stated:

“The Federal Government provides major support for the research and development which underlie our striking techno logical acdvanes. In the past, much 

of our research and development has been connected with nation al defense.

Now, as military outlays level off we face—

“A challenge to apply the Na tio n’s growing scientific and engineering 

resources to new socially profitable uses;

“An opportunity to accelerate the technological progress of our civilian 

industries.

“The Federal Government should join with private business and our universities 

in speeding the development and spread of new technology. I have directed the 

Department of Commerce to explore new ways to accomplish this.”

G EN ER A L D E S C R IP T IO N

The proposed State Technical Services Act of 1965 would enable the Federal 

Government to make grants to States in support of programs to achieve more 

effective commercial use of th e findings of science and technology. This would 

be done through technical services programs, planned locally, designed specifically 

to place these findings into the hands of local businesses and enterprises.

To qualify for Federal matching funds, a State would designate an institution 

or agency responsible for preparing a nd administering technical services programs 

within the State. A regional ins titu tion could be designated where two or more 

States wish to join in a cooperative program (10 percent more Federal supp ort 

would be available for regional institu tions). State and regional programs 

would be form ulated and pu t into effect with local or regional initiative and re- *

sponsibiiity. All qualified institutions in the State could participate .

N EED FO R T H E PR OGRAM

A close examination of the modern American economy reveals a number of w'

recurring themes—all of them related in some degree to th e impo rtance of having 

effective mechanisms for introducing the results of science and technology into 

commercial use. For example:

The competition we face in both domestic and world markets is increasingly based on a high level of technology, not solely on lower lab or costs.

The most successful competitors, whether at an international level, industrywide, or among individual companies, are those who have learned to use 

new technology effectively.

The cost of new technology, in t he form of technical manpower and equipment, has been rapidly rising.

Opp ortunities to participate in benefits of technology have not been 

equally available in the various regions of the United States.
STATE TECHNICAL SERVICES ACT OF 1965 7

Substantial expenditures for specialized research and development in 

support of national defense and space missions have not met the full range of 

industrial needs for technology. The vast increase in the Nation’s total research and development effort have not eradicated long-term unemployment and economic decline in many 

parts of the country. Technology cannot be effectively diffused merely by giving information to a potential user. There must be means for active interchange between 

those using and those furnishing information. There are many factors involved in complete solutions to the broad problems outlined above. Common to all of them, however, is the need for institutions and mechanisms at the local level, specifically designed to bridge the gap between the most advanced technology, wherever it exists, and the industrial practices 

of the local region.

O B JE C T IV E S

Through this program and with the cooperation of universities, communities and industries, three objectives will be served: (1) strengthening the Nation’s economy by upgrading industries through the utilization of advanced technology, thereby generally expanding the industrial base; (2) increasing employment by facilitating industrial’s use of technology and the manufacturing of new products which result; and (3) enhancing the competitive position of U.S. products in 

world markets. The proposal is based on the premise of strong local support and local initiative. The proposal is designed to stimulate local economic programs, utilizing local specialists and applying local resources with Federal matching support and encouragement. Distinct contributions to the economic vitalit y of our Nation will be made by those who are closest to the problems which the program is 

designed to meet.

H O W T H E PR OGRAM W OULD O PE R A T E

A State wishing to participate in the program would designate an institution (generally a State unive rsity or land-grant college) to administer and coordinate 

the State’s technical services program. The designated institution would prepare a 5-year plan, outlining the tech­ nological and economic situation in the State, the major regional and industrial problems, and the means to be used in assisting in their solution. The designated institu tion would also prepare an annual technical services program, covering the objectives for the first year, the budget, and the responsi­ bilities assigned to each qualified institution participating in the program. Up to $25,000 per year for each of the first 3 years may be paid to the designated institution to assist in preparing the first 5-year plan and the initial annual 

programs. An advisory council would be established by the designated institution to evaluate and report on the 5-year plan and the annual technical service program. The 5-year plan and the annual program would be submitted to the Secretary of Commerce. Federal matching funds would be made available to the desig­ nated institution to support those programs found by the Secretary to meet legal requirements and to further the purposes of the act. The maximum annual paym ent in support of any State program will be limited by a formula to be established by the Secretary, taking into consideration three criteria: (1) Popu­ lation according to the last census; (2) industrial and economic development and productive efficiency; and (3) technical resources. Supplementary matching grants, totaling up to 20 percent of the amount appropriated each year, may also be made to support programs which the Secretary determines have special merit. These provisions are designed to assure tha t the program’s benefits will be widely diffused throughout the Nation while at the same time reserving sufficient dis­ cretion to the Secretary to assure tha t funds are granted only in support of ade­ quately developed programs which will in fact advance the purposes of the act. The formula to be established by the Secretary will be based on objective considerations such as the proportion of working population gainfully employed, the ratio of assets of individual establishments to employees, urban population, industrial population, numbers of scientists and engineers, and the physical research facilities used for industrial purposes. The formula will be weighted to provide funds to States and regions where industrial development has lagged behind its potential and where technical resources are weak. The population criteria will be applied in a manner which will permit even the smallest States to 

participate in a meaningful program.
8 STATE TECH NIC AL SERV ICES ACT OF 19 6 5

New plans are inquired at 5-year intervals, although they are to be revised if 

necessary. Annual technical services programs must be submitted to the Secretary of Commerce each year in order to qualify for annual matching funds. 

In administering the program and approving plans, the Secretary would consult 

with other agencies of the Federal Government as appropriate. An annual report 

is required at the conclusion of ea ch year.

Once in operation, there is a wide variety of technical services which might be 

offered by the various institutions participating in the program within a particular 

State. For example, a technology diffusion program oriented to the needs and 

problems of a specific industry dominant in one State or region might offer workshops, seminars, and demonstrations in order to bring existing technology to local 

entrepreneurs for use in plants within the region. A technology dissemination 

and referral center could offer two types of services: (1) technical reports abstracts, bibliographies, reviews, microfilm, computer tapes, and the like; and (2) 

referral to sources of scientific and engineering expertise in the fields of interest 

to the local industry. Such a center would be in continuous interaction with 

local business and industry, so that its services will be pertinent to the local 

economy. These examples by no means exhaust the list of possible technical 

services that might be offered in any State program. The range of services can 

be as wide as the range of industrial and technological interests in this country, 

and, within the bounds of the act, is only limited by the imagination and initiative 

of the persons who develop the State program.

CO ST

The cost to the Federal Government of the proposed program is expected to 

be in the range of $5 to $10 million for the first year and such amounts as may 

be necessary for effective future programs which the States j ustify to the Secretary 

of Commerce.

All funds made available to States for technical services, except regional incentives, would be matched at least equally by non-Federal funds. Direct Federal 

expenditures would be limited to expenditures for administration, to be held to 

less than 5 percent of the cost of the program, and for reference services to aid 

the States and regions in collecting and processing technical information for 

dissemination to industry under the act.

These funds will be an investment in promoting the economic growth and widespread industrial development of the entire Nation.

Comptroller General of the United States,

Washington, D.C., March 15, 1965.

B-156076.

Hon. Oren Harris,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives.

Dear Mr. Chairm an: By lette r dated February 16, 1965, you requested our 

report on H.R. 3420. The stated purpose of this measure is to promote economic 

growth by supporting State and regional centers to place the findings of science 

usefully in the hands of American enterprise.

While we have no special information that would assist the committee in its 

consideration of the merits of H.R . 3420, we offer the following comments on 

certain aspects of the measure:

Inasmuch as the grants made to the institutions described in the bill would 

involve the expenditure of appropriated funds, it is our understanding that these 

expenditures would be subject to audit and review by this office, with such reports 

to the Congress as may be deemed necessary under the provisions of the Budget 

and Accounting Act, 1921 (31 U.S.C. 53) and the Accounting and Auditing Act 

of 1950 (31 U.S.C. 67). We note, however, that the bill would not expressly 

grant the Secretary of Commerce or the Comptroller General the right to examine 

pertinent books, records, and documents of the institutions and agencies receiving 

Federal grants under the provisions of the bill. We believe that access to such 

records is necessary for the adequate administration and audit of a grant program, 

and we therefore suggest that the bill be amended by including a section substantially as follows:

“ Each recipient of a grant under this a ct shall keep such records as the Secretary 

shall prescribe, including records which fully disclose the amount and the dis-
STATE TECHNIC AL SERVICES ACT OF 19 65 9

position of such grant, the to tal cost of the related approved program, the am oun t 

and nature of the cost of the program supplied by other sources, and such oth er 

records as will facilitate an effective audit.

“The Secretary and the Comptroller General of the United States, or any of 

their duly authorized representatives, shall have access to any books, documents, 

papers, and records of the recipient tha t are pertinent to amounts paid under this 

act.”

Section 5(g) of H.R. 3420 would require that all reports prepared in the course 

of furnishing technical services supported under the bill be made public or be 

made available at cost to any person on request. It is not clear whether, for th e 

purposes of the bill, the cost of the reports is intended to include only the costs of 

printing and distribution or the full cost of preparing the reports, including research, administrative, and other costs.

Section 11(c) provides that up to 5 percent of the total amount appropriated 

each year shall be available for direct expenses of administration. We believe 

that funds for administrative expenses should be provided by the Congress each 

year in a specified amount on the basis of the proposed program for such fiscal 

year.

We have no further comments to make concerning H.R. 3420.

Sincerely yours,

J o se ph C a m p b e l l,

Comptroller General of the United States.

E x e c u t iv e Of f ic e of t h e P r e s id e n t,

B u r ea u of t h e B u d g et, 

Washington, D.C ., M ay 28, 1965.

Hon. O r en H a r r is .

Chairman, Committee on Inte rsta te and Foreign Commerce,

House of Representatives, Washington D.C.

D ea r M r. C h a ir m a n : This is in response to your request for the views of the 

Bureau of the Budget on H .R. 3420, a bill to promote economic growth by supporting State and regional centers to place the findings of science usefully in the 

hands of American enterprise.

You are advised that enactment of H.R. 3420 would be in accord with the Presiden t’s program.

Sincerely yours,

P h il l ip S. H u g h e s,

Assistan t Director fo r Legislative Reference.

Mr. Macdonald. A t this tim e I recognize the gen tlem an from 

Massachusett s, Mr. Co nte .

STATEMENT OF HON. SILVIO 0. CONTE, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. Cont e. Mr. Ch air man , memb ers of the com mittee, it is cer ­

ta in ly a pleasure to ap pe ar before this subcom mittee chaired by 

my good frie nd and able Con gressm an colle ague from Mass achuset ts, 

Tor by Ma cdo nal d. M r. Ch airma n, in order to save tim e I will 

subm it my stat em en t and also a le tter from Dr. Lederle, pre sident 

of the Un ive rsi ty of Massachusett s.

Mr. M acdonald. W ith ou t objection, it is so ordered.

(The doc ument s referre d to follow:)

R e m a r k s of H o n. Sil v io O. C o n te

Mr. Chairman, members of the subcommittee, I wish to thank you for the 

opportunity you have afforded me this morning to testify in behalf of my bill 

II.R . 7708, which I introduced on April 28 of this year. M y bill is identical to the 

one introduced by our colleague from Arkansas, Congressman Harris.

It was a pleasure to introduce a bill which would promote the economic growth 

of not only my district—the First Congressional District, but also of my State,
10 STATE TECHNICAL SERVICES ACT OF 19 65

Massach usetts; and the country. The bill would accomplish this by providing 

federally supp orted Sta te and regional centers under a Sta te Technical Services 

Act. These centers established at a local university, a Sta te agency, or a priv ate 

nonprofit institu tion would be required to meet certain crite ria of competence 

ins titu ted by the Secretary of Commerce and published in the Federal Register.

In many respects this bill is similar in concept to the Agricultural Extension 

Act. Under th at act, farmers are able t o go to State institutions in order to find 

solutions to their problems. Under the provisions of this act, H.R . 7708, businessmen would now be able to receive help a t State ins titution s or regional institution s 

to meet the demands of an ever-increasing technology.

These centers would place th e findings of science and technology in the hands of 

businessmen. I am particularly pleased th at it would, most likely, place such 

information in t he hands of small businessmen. They are the ones who are most 

often unable to meet the pressing problems which the y face, because of lack of 

funds, or simply because they do not k now where to tur n.

It is axiomatic th at wider diffusion and more effective applicatio n of science and 

technology in industry and business is essential to the growth of the American 

economy. It is necessary if we are to ma intain and increase present levels of 

employment. It is necessary is we are to successfully compete for world markers, 

while maintaining a high level of income. And the time has come, gentlemen, 

when it is necessary th at the benefits of federally financed research, as well as 

research financed in other ways, be placed in the hands of American businessmen 

and enterprises. To insure the most effective operation of such a pla n as proposed in my bill, it is imperative th at it be one which is developed on a State or 

regional level. This has also been proposed in my bill. The States, thro ugh 

cooperation with their universities, their communities, and their industries can 

best determ ine the needs of their indu stries and how th e modern developm ents in 

science and technology can most effectively be applied to meet the needs of new 

and old industries an d of large and small industries.

Gentlemen, in the Commonwealth of Massach usetts alone, there are approximately 8,800 small businesses. These are the people who would benefit the most 

from the workings of this act. These are the people who are too small to maintain 

the ir own staffs of technicians and research specialists. Under the provisions of 

my act they would be able to call upon the assistance of the Sta te or regional 

institutions for help th ey now ca nnot afford because of the size of th eir operations.

However, I have personally observed the dea th of many firms in my district 

and in my State. A textile firm, successful for 50 years, was forced to close its 

doors. A papermill was also forced to shut down its operations. I believe th at 

if technical help had been available to these firms of the natur e envisioned under 

the provisions of the bill now before you, the story migh t have been different. 

The loss to the State and to the community and the families comprising them 

would have been avoided. I am certain th at you have also seen similar closings 

and similar losses suffered in your distric ts and in your State s.

I, therefore, respectfully urge th at the members of this subcomm ittee report 

favorably to the full committee on the provisions of my bill. I do not believe 

th at we should delay in providing the type of help which would be m ade available 

under the provisions of my bill to those who need it. I am certain th at in the 

years to come this bill shall be looked upon as a major boon to industry and 

business.

Thank you, gentlem en, in allowing me to express my views on this matter this 

morning.

T he Commonwealth of Massachusetts,

University of Massachusetts,

Amherst, May 27, 1965.

Hon. Silvio O. Conte,

House Office Building ,

Washington, D.C.

Dear Representative Conte: The Sta te Technical Services Act of 1965 

(S. 949 and H.R. 3420) proposed a most significant potential contribution to our 

urban, industrial society. The University of Massachu setts strongly endorses 

the bills and hopes that you will s upport them for the future welfare and prosperity of th e Commonwealth.

Briefly, as you know, the proposed ac t would gra nt matching funds to make 

more readily available the latest technologies and discoveries for the benefit of 

local businesses and industries. Under such an act, the university would work
STATE TECHNICAL SERVICES ACT OF 19 65 11

with other accredited engineering and business schools to form plans where scientific and technological information may be pu t into the hands of private ind ustry and business in order for them to operate more efficiently. Through such means, our institutions of higher educ ation can aid in the im­ provem ent of the economy of Massachusetts, strengthening employment, growth and prosperity. In the two areas of improving present manufacturing and in new product development, the proposed act can aid our commercial enterprises 

in a material manner. Advanced technology make s manufac turing and distribu tion processes con­ tinuously subject to obsolescence. The adv ent of the stainless steel razor blade is an example wherein a Massachusetts firm, the Gillette Co., had to respond quickly in order to meet the competition. Under th e proposed act, our scientists and engineers might assist in providing greater leadtime for our industries in 

moving to meet such competition. New product development has become an important factor in economic vitality. Some industries report th at from 30 to 50 perc ent of the ir current productio n is in products th at were no t on the market 20 years ago. Massachusetts indus­ tries must be assisted in maintaining their progress in this dynamic area of 

competition. Other States have, on a State-supported basis, modest programs similar to th at envisaged in this act. New Hampshire, for example, has 10 full-time staff in the ir engineering experiment station. Georgia has 50 people aiding State indu s­ tries and has just opened its fifth branch office to provide this type of technical services. Iowa’s cente r has 10 full-time people, and North Carolina has a 

$200,000 budget for such purposes. There are 8,900 industries in Massachusetts, of which 8,800 have less than 1,000 employees and are, therefore, too small to m aintain fully their own technical and research service staffs. These bills will provide an impetus to the general court to cooperatively sup port a program of comm unication and assistance be­ tween campuses and commercial enterprise so th at compete nt technical assistance 

can be made readily available. The University of Massachusetts, recognizing the problem, has alrea dy com­ mitted some funds to the purpose of aiding Massachusetts industries. But this level of assistance must be sub stan tially increased if our service and contributio n to business in the State is to have a real imp act and widespread constructive result. We would hope for your active sup port and favorable vote on this 

legislation.

Sincerely yours,

J ohn W. L e d e r l e, P re sid e nt.

Mr. Harris. Mr. Chairman, I would like to join in welcoming our 

colleague, Mr. Conte, to these hearings this morning, and to thank him for his interest in this important and visionary program, which also has practical realities included in it. I am very glad to welcome 

him as one of the sponsors of the supporting legislation.

Mr. Conte. Thank you, Mr. Chairman.

Mr. Macdonald. The next witness is our colleague from California, 

Hon. James C. Corman. Mr. Corman, we will be glad to hear you 

at this time.

STATEMENT OF HON. JAMES C. CORMAN, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Corman. Mr. Chairman, I appreciate this opportunity to 

testify in support of the State Technical Services Act. The State Technical Services Act is landmark legislation whi'di will be of immense value to our entire Nation. But the programs made possible under this bill are of immediate and particular use in those communities in which there are a well-developed industrial enterprise based upon the effective utilization of modern science and technology. The 22d District of California, which I have the honor to represent, plays a major role in meeting our national commitment in the fields
12 STATE TECHNICAL SERVICES ACT OF 19 65

of space research and exploration as well as in defense. I hope you 

will pardon my pride in reporting that in the first 8 months of fiscal 

year 1965, the 22d D istrict has received $267,632,000 in prime contracts from the National Aeronautics and Space Administration alone.

This represents a 12-percent increase over the entire preceding fiscal 

year. Mr. Chairman, these contracts were earned by the hard work 

and talent of our creative business leaders and highly skilled engineers 

and scientists.

This tale nt and technology must also be p ut to work to satisfy the 

expanding needs of civilian production. This is essential for two 

reasons: both the public and private needs of our economy require the 

contributions that can be made by systems engineering and scientific 

discovery. This is the path to full production, full employment, and »

economic well-being for the United States. Second, those valued 

citizens who are now engaged in space and defense work must be 

protected from the erratic rise and fall of Government procurement.

We do not advocate the spending of one dollar on Government contracts tha t is not clearly required by the national interest. We have 

made tha t abundantly clear in our opposition to the awarding of 

contracts as a means of aiding depressed areas. But we must also 

be sure that the years of experience and knowledge th at now supports 

the space and defense efforts will be constantly engaged in useful and 

productive work.

The State Technical Services Act is a significant step in assuring 

the use of tha t human resource. The act would enable the Federal 

Government to make grants to States in support of programs to 

achieve more effective consumer use of science and technology. This 

would be done through locally planned technical services programs 

designed specifically to place these findings in the hands of local business. To qualify for the Federal matching funds, a State would 

designate an institution or agency responsible for preparing and 

administering technical services programs within the State.

The designated institution would prepare a 5-year plan, outlining 

the technological and economic situation in the State, the major 

regional and industrial problems, an d the means to be used in assisting 

in their solution. I might note th at the State of California through 

its Office of Planning and the Economic Development Agency has 

already undertaken this type of preparation.

The designated institution would also prepare an annual technical 

services program, covering the objectives for the first year, the budget, ,

and the responsibilities assigned to each qualified institution participating in the program. The 5-year plan and the annual program 

would be submitted to the Secretary of Commerce for his review.

For example, a technology diffusion program oriented to the needs y

and problems of a specific industry might offer workshops, seminars, 

and demonstrations to bring existing technology to local businessmen 

for their use. A technology dissemination and referral center could 

offer two types of services: (1) technical reports, abstracts, microfilm, 

computer tapes, and the like, and (2) referral to sources of scientific 

and engineering expertise in the fields of interest to the local industry.

Such a center would be in continuous interaction with local business 

and industry, so th at its services will be pertinent to the local economy.

These examples do not exhaust the Emits of possibility which are only 

bounded by the imagination and initiative of the planning organization.
STATE TECHNICAL SERVICES ACT OF 19 65 13

I am convinced that American private business can continue to 

provide the goods, services, and the employment required in our free 

society. Government can and should exert every effort to help 

private industry do the job. Enactme nt of the State Technical 

Services Act will result in more jobs, new products, and a strengthened 

capacity for the United States to meet its responsibilities to freemen 

at home and abroad.

Thank you, Mr. Chairman.

Mr. Macdonald. Are there any questions? If not, we thank you 

for your testimony, Mr. Corman.

Mr. Corman. Tha nk you for the opportunity, Mr. Chairman.

Mr. Macdonald. The next witness is our colleague from Iowa, the 

Honorable John R. Schmidhauser. Mr. Schmidhauser, we welcome 

you to the committee.

STATEMENT OF HON. JOHN R. SCHMIDHAUSER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA

Mr. Schmidhauser. I want to thank the distinguished chairman 

and the other members of the committee for providing me with the 

opportunity to speak on behalf of the State Technical Services Act 

which I have introduced (H.R. 7501) along with a number of my 

colleagues. I believe this act would be of tremendous importance 

to the further development of our economy.

The proposal currently before this committee would enable the 

Federal Government to make grants to States in support of programs 

to make better commercial use of the latest findings of science and 

technology. These programs, planned and carried out locally, would 

place technical findings in the hands of local business and industry.

I believe the services provided—which inlude identifying new opportunities for applying technology to the advancement of regions and 

industries, preparing and disseminating scientific or engineering information, and facilitating its use—would help to distribute on a wider 

and more equitable basis our tremendous reservoir of scientific information and knowledge. The end result would be a strengthened 

national economy. This goal has long been a primary objective of 

legislative actions. Most Americans agree t ha t as a nation, we share 

four major economic goals:

1. To promote our economic growth;

2. To improve our competitive position in world trade;

3. To encourage regional economic growth so tha t all can share 

in the benefits of an expanding economy; and

4. To achieve and maintain a high level of employment 

throughout the Nation.

It is my belief that this bill will facilitate the attainment of these 

much desired objectives. Although we are in a position to attain 

these goals, our success depends on a continuing advance, nationwide 

and industrywide, in our use of the results of modern science and 

technology. At the present time, however, regions of our country 

share unequally in our general prosperity. I believe the facts indicate tha t the economic problems of these regions are closely correlated 

with a slower rate of industrial growth and industrial use of advanced 

technology. Even within industries, there is a sharp variation in the 

level of use of advanced technology. This is the current situation

50-4 74—65-----2
14 STATE TECH NICA L SER VIC ES ACT OF 19 65

in spite of the great recent increase in research and development. 

Furthermore, we have only started to tap the possible benefits to the 

economy as a whole which can be derived from our expenditures in 

the fields of defense and space.

President Johnson recognized this problem in his Economic Report 

of Jan uary 1964 in which he said we must accept a “* * * challenge 

to apply the Nation’s growing scientific and engineering resources to 

new socially profitable uses * * *” and directed the Secretary of 

Commerce to “* * * join with private business and all universities 

in speeding the development and spread of new technology.”

I believe the Technical Services Act would promote this great goal. 

The S tate technical service program proposed in this legislation would 

apply broadly to all industries, all relevant technologies, and all 

States and regions. It would work, in each region, with existing local 

technical information centers and extension programs, and will draw 

on central technical information facilities for input to its own efforts. 

The emphasis is on the application of technology to economic problems and the general education extension proposal would broadly 

support many kinds of educational programs. I believe this is an 

approach which would add increased support to our 4 ^ -year period 

of constant economic expansion. Furthermore, it would speed the 

decline in our unemployment rate because of the increased number of 

jobs which would be generated.

I also would like to say that it is my belief tha t from this program 

will emerge new business, improved processes and products, and new 

services. Furthermore, this act will help make American products 

from all areas of the Nation, including those from my congressional 

district in southeast Iowa, more competitive in the rapidly expanding 

world markets.

This program also will help fill the urgent need for highly trained 

people to bridge the gap between what has been discovered in the 

laboratory and what can be used on the production line. We also 

need special mechanisms and institutions to translate the results of 

science into the language of applied technology. This will be accomplished by the State Technical Services Act of 1965.

It is my deep conviction that the solutions to the problems facing 

our great Nation rest on a set of new concepts of cooperation and on a 

creative attitud e toward the problem-solving process. By cooperative effort, such as th at envisaged by this bill, 1 am confident that we 

will see our free economy expand for the benefit of all Americans.

In conclusion, I respectfully request the committee to approve this 

legislation and to favorably report the State Technical Services Act.

Than k you for this opportunity to speak on behalf of this most 

promising program.

Mr. Macdonald. Are there any questions? If not, we thank 

you for your appearance, Mr. Schmidhauser.

Mr. Schmidhauser. Thank you, Mr. Chairman.

Mr. Macdonald. The next witness is our colleague from California, the Honorable George E. Brown, Jr. Mr. Brown, we will be 

glad to hear you a t this time.
STATE TECHNICAL SERVICES ACT OF 19 65 15

STATEMENT OF HON. GEORGE E. BROWN, JR., A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Brown. Mr. Chairman, I have introduced H.R. 8049, which 

is one of the bills that is before this committee for consideration today, 

proposing the establishment of a system of State technical service 

centers. My purpose in introducing and supporting this proposal is embodied 

and well stated in the declaration of purpose in the bill, itself, which 

I know you are familiar with. This declaration of purpose would 

place Congress on record as believing tha t “wider diffusion and more effective application of science and technology in industry are essential 

to the growth of the economy, to higher levels of employment, and 

to the competitive position of U.S. products in world markets.”

It also goes on to state that our research efforts should be placed in 

the hands of American business and enterm^"<J5MyxX expresses the 

belief that cooperation between the Statesywtf-v *'b‘h^ z

J*ommunities, 

and industries can provide encouragemeidftpV “a more emVtive application of science and technology to both and establishe^jindustry.”

This proposal would provide a nat ura l prxjgrani of iircintives to 

stimulate this cooperation. 1 28

Mr. Chairman, there are many uncoordinated efforts by Federal 

agencies, by universities, or by industry \S hbta in thia Arfemination 

of the massive store of developments, disb vW?^. tslKCechnical information that we have gained through bilhoTft of dftflars in research 

efforts. I am particularly familiar with the efforts of the National Aeronautics and Space Administration in this regard, through its technology utilization centers, and have hopes of being able to stimulate 

the placement of one of these centers in southern California. This, 

of course, would not adequately bring the technology of the Dep artment of Defense or the Atomic Energy Commission, for instance, to 

southern California at the same time. Other departments and agencies have technical information services 

of their own, and I am sure that some are available to southern Californians. A central coordinating institution tha t could properly 

combine and evaluate the information from all of these sources would, 

of course, be invaluable to local business and industry.

There is no NASA Technology Utilization Center west of Oklahoma. 

The large industries that are most involved in defense contract work 

seem, for the most part, to be quite self-sufficient in relation to development of their own technological needs. The gap arises insofar as 

smaller or even new industries might be concerned. The Federal funds that are spent on research are provided by the 

people of this Nation, and the people of this Nation are entitled to 

have the benefits of this research made available in as broad a manner 

as possible for those who might be able to make use of it. I do not 

believe there is any disagreement on this point.

The need for increased industrial development and growth is, 

likewise, unchallenged, and it is my belief th at these technical services 

centers would be a great help in fulfilling this need.
16 STATE TECHNICAL SERVICES ACT OF 19 65

I would like to urge that one admonition be given to the institutions 

operating under the State Technical Services Act in preparing their 

plans and in developing means to overcome the problems which this 

act is designed to meet. This would be an expression by the committee tha t the interests of small business should be kept constantly 

in mind.

Those who are most in need of this type of assistance and who would 

be most likely to utilize new and novel developments are our small 

businessmen. They are less captured by the rigidity tha t so often 

enmeshes many of our larger corporations. In addition, the small 

business is much less able to conduct its own research and development operation. The large corporation, on the other hand, is not only 

capable, b ut does rely on its own resources for new developments since 

it can control the direction of the research.

I would strongly urge the committee to recommend passage of the 

State Technical Services Act of 1965. Thank you.

Mr. Macdonald. We appreciate your appearance and testimony, 

Mr. Brown.

Mr. Brown. Thank you, Mr. Chairman.

Mr. Macdonald. I would like to welcome here and recognize the 

Honorable John T. Connor, Secretary of the Department of Commerce, and say to the Secretary t hat it is a great pleasure to have you 

here. This is to my knowledge the first time you have appeared 

before the Subcommittee on Commerce and Finance, and I personally 

am looking forward to seeing you many times and I hope for many, 

many years.

Welcome to the committee.

STATEMENT OF HON. JOH N T. CONNOR, SECRETARY OF COMMERCE, ACCOMPANIED BY J. HERBERT HOLLOMON, ASSISTANT

SECRETARY FOR SCIENCE AND TECHNOLOGY; AND ROBERT

E. GILES, GENERAL COUNSEL

Secretary Connor. Tha nk you very much, Mr. Chairman.

Mr. Harris. I share the sentiments of our distinguished colleague, 

chairman of this subcommittee, Mr. Macdonald, in extending a warm 

welcome to the distinguished Secretary who is appearing before this 

committee. He was here last week before another subcommittee of 

this committee. As the chairman indicated so well a moment ago, 

I think we will have him coming back from time to time. We look 

forward to it with pleasure on each occasion.

Apparently this warmth expressed by the chairman to the distinguished Secretary of Commerce must be reminiscent of some of 

the New England background and inheritance. Perhaps if there is 

as much to Cape Cod as mentioned a moment ago, the subcommittee 

might do well to see what it is like sometime.

Kir. Macdonald. I think that is a wonderful idea.

Secretary Connor. Tha nk you, Chairman Harris.

Mr. Chairman, members of the subcommittee, in addition to Dr. 

Hollomon, Assistant Secretary for Science and Technology, I also 

have with me Mr. Robert Giles, General Counsel of the Department 

of Commerce.
STATE TECHNICAL SERVICES ACT OF 19 65 17

I appreciate the opportunity to appear before you this morning in 

support of H .R. 3420, the proposed State Technical Services Act of 

1965. The proposed legislation would authorize Federal grants to the 

States under a cooperative program to spread the findings of science 

and technology throughout American business and enterprise. Its 

purpose is to speed industrial and economic growth of the State s and 

the country generally through a better application of our technical 

and scientific knowledge.

Merely having knowledge in existence—in the possession of a 

relatively few experts—is not enough. Our scientific and technical 

know-how, which is constantly expanding and improving should be 

communicated to, and made available to, business firms throughout 

the Nation. This must be done if the American economy is to realize 

its full potential from science and technology. We believe th at this bill, if enacted, will help to increase the industrial streng th of the entire country, including those areas which are 

now economically weak. It will stimulate an increase in technical manpower and employment opportunities. It will enhance our competitive position in world markets. It will stimulate creation of 

new businesses and industries. This bill is in response to President Johnson’s direction to the 

Department of Commerce. In his Economic Report of 1964, the 

President said:

The Federal Governmen t should join with private business and ou r universities in speeding the deve lopm ent and sprea d of new technology. I have direc ted the Department of Commerce to explore new ways to accomplish this.

This bill will accomplish what the President asked to be done. The 

program which we propose would work in the following way: To 

qualify for Federal matching funds, a State would name an institution 

or agency to prepare and administer a technical services plan and 

program for that State. We have called the institution or agency 

responsible for planning and administering the State program the 

designated institution. It could be a State university or a State 

agency. Two or more States could also join in a cooperative program 

and name a regional institution.

The first task for the designated institution would be to prepare a long-term plan covering a 5-year period outlining the technological 

and economic prospects in the State, the major regional industrial problems faced and the ways and means a program can help solve them. The amount of $25,000 a year in Federal funds for the first 3 years, on a nonmatching basis, could be made available to the 

State to help prepare the first plan and the initial annual program. 

The State or regional programs would be planned with the advice of 

broadly based advisory committees reflecting the local or regional 

interests. All qualified institutions in the State would be invited to 

participate in the planning.

The bill defines “qualified institution” as institutions of higher 

learning which have accredited programs in engineering or business 

administration and those which are competent nonprofit organizations 

and State agencies. These would all be invited to participate. The 

Sta te’s technical services program would outline a budget and assign
18 STATE TECHNICAL SERVICES ACT OF 19 65

responsibilities to each qualified institution which participates in the 

program.

After the planning is completed, the designated institution would 

submit the 5-year plan and the annual program to the Secretary of 

Commerce through the Governor of the State. The Governor would 

certify tha t the plan and program had been developed under procedures and guidelines set out in the bill, which would include proper 

coordination, adequate rules to avoid conflicts of interest, assurance 

of non-Federal matching funds, and care in avoiding special treatmen t 

to particular firms.

Federal funds would be paid to support approved programs meeting 

the legal requirements and the purposes of the bill. The grants could 

be as much as one-half of the amount of the State program, with the 

remainder coming from State or non-Federal sources. However, 

maximum amounts paid to the State s would be fixed by regulations, 

taking into account population, industrial and economic development, 

and productive efficiency and technical resources. This kind ot 

flexibility is necessary to respond to the needs of the States and to 

encourage imaginative and creative local programs. No State could 

receive more than its limit, but could get less depending on th e merit 

of its proposals. Regional programs could be allotted an extra 10 

percent of the amount approved for payment to the participating 

States.

Up to 20 percent of the Departme nt’s appropriation for this activity 

could be used to make direct payments on a matching basis for programs th at have special merit or are truly national in scope.

A S tate’s long-term plan could, of course, be revised periodically 

and new plans would be drawn up at 5-year intervals. The annual 

programs implement the long-term plan; but they must be submitted 

each year to qualify for annual funds. In administering the bill we 

would establish a small administrative unit responsible to the Assistant 

Secretary for Science and Technology. We would, of course, consult 

and coordinate this work with other Federal agencies, as appropriate. 

After each 5-year period, a public committee would evaluate the 

impact of the legislation and make any recommendations necessary 

to improve it, or possibly to terminate if, if the States by that time 

are successful enough in stimulating resources to carry the program 

on their own.

I have described how the legislation would work. For what it 

would accomplish we might first look to the major imbalances tha t 

exist in the use of advanced technology. These imbalances occur 

among regions of the country and among firms within major industries. 

Also our large expenditures for national defense and space exploration, 

while justified for their direct, ends, are limited in the extent to which 

they contribute to the productivity of the rest, of our economy. 

Some industries are unable to adapt to new technology. Other 

companies within very prosperous industries do not take advantage 

of the latest technology available, perhaps because they have no way 

of finding out what it is.

The imbalances, the dislocations and the differences between the 

healthy and the unhealthy industries create conditions which can 

result in serious national problems. The regions of the country 

which are economically most successful and the companies and the 

industries that have thrived did not achieve their healthy position
STATE TECHNICAL SERVICES ACT OF 19 65 19

only by discovering new knowledge in a laboratory—they achieved 

it by actually putting new or advanced technology to work in their 

own plants. The proposed legislation would not support scientific research or 

industrial research, nor would it be concerned with developing proprietary products or processes. Its purpose is to promote wider use 

of the results of research. There is a wide variety of technical services 

that can be offered to serve this purpose. These would specifically 

be drawn up by the S tate or region to meet the needs of the region or 

of the industry within the State or region. We think better results 

will occur in the regions and industries through this local initiative 

rather than by Federal direction.

For example, a principal industry of a State or region might benefit 

from demonstration models of the latest technology pertinent to the 

area or from practical workshops or seminars designed to upgrade 

the training of businessmen and their key skilled technicians. Or 

possibly a program should stress a new advance in technology affecting 

a large number of industries or businesses in the State or region. For 

example, seminars and demonstrations on new metal welding techniques would be useful to such local business interests as automotive 

mechanics, wrought iron furniture manufacturers, household appliance 

manufacturers, and construction engineers, as well as others.

Another service which could stimulate a more efficient use of technical data might function through a technical data and referral 

center in a State. This center could make available technical reports, 

abstracts, bibliographies, computer tapes, and other data of particular 

importance to business throughout the State. Equally important it 

could refer businessmen to experts and consultants whom they could 

retain. Technology can also help in business management, as well as 

in engineering and production. For example, a program to introduce 

managers to the uses of computers in planning better market surveys 

or for planning their supply or distribution operations would be a 

very valuable service.

Having shown how the program works and what it might accomplish, let me turn to some revealing facts to show why we need it.

Regarding our balance of trade, it seems clear tha t with the highest 

paid labor force in the world, American products having a high labor 

content are increasingly at a competitive disadvantage. Imports are 

successfully competing in our domestic markets, even in high technology products such as machine tools, scientific instruments, office 

and computing machines, motors and generators, railway equipment 

and aircraft. In 1963, the manufactured machinery which was 

exported from the United States to the European market averaged 

50 percent higher in productivity than machinery installed domestically. This means tha t European plants are in the process of becoming more productive than our own. One of the most effective steps 

we can take to reverse this trend is to stimulate innovation and 

technological improvement in our own manufacturing enterprises. 

Spreading technology through programs possible under the bill would 

thus help our position in world trade.

In the free enterprise system we always assume tha t inefficient 

producers quickly lose their share of the market and go out of business. 

Many believe tha t new techniques which improve productivity 

swiftly move through an industry, almost automatically. We find,
20 STATE TECHNICAL SERVICES ACT OF 19 65

however, tha t is is not necessarily so. There is a tremendous spread 

in productivity between the most productive firms and the least 

productive firms in some industries which we have studied. (I 

mentioned this imbalance earlier.) In the machine toolbuilding 

industry, for example, the most recent d ata available indicates tha t 8 

manufacturers out of 100 averaged $18.90 in dollar value added to 

their product for each man-hour of labor; 28 of the 100 averaged less 

than $5. This means th at a few modern plants are highly productive 

but a large fraction of establishments are using obsolete techniques 

which reduce their competitive position, particularly in world markets. 

The same pattern exists in other selected industries and we have 

reason to believe tha t it exists in nearly every other industry over 20 

years old.

Technological improvement is a very complex process. It does not 

occur readily. It is made more difficult by the risks inherent in 

innovation. It is also costly, particularly since the cost of basic 

research and development is rising more rapidly than the price of 

manufactured goods. In a modern industrial mation such as ours, 

technical activity and economic well-being seem to go hand in hand. 

With the results of so much expensive research being inefficiently used 

throughout the country, it is easy to see why imbalances have developed and why there is now a national need for a program to spread 

the results of science and technology to all regions, industries, and 

businesses.

We might ask why the proposed legislation seems to call on universities to perform this function of disseminating technology. We 

feel t ha t knowledge about the results of research and teaching skills 

are both essential to effective technical services programs. More 

often these skills are found at the universities throughout the country. 

Through engineering schools, the universities are major sources of 

scientific and technical knowledge. Many universities have demonstrated their ability to stimulate new technology in activities such as 

their agricultural extension programs. Certainly, the States which 

now have successful economic development programs regard university participation as being highly desirable for success. But we 

do not take the position that universities are the only technical 

resource which could be used in State programs. Other institutions such as nonprofit, technically oriented institutions, foundations, 

as well as appropriate State agencies, are all excellent resources for 

carrying out the programs.

In conclusion, Mr. Chairman, the State Technical Services Act, 

if enacted, will permit some important steps to be taken to place 

the results of costly research and development into the hands of those 

who will benefit. It would significantly aid in spreading technology 

for the public good. I have explained how it will work, what it 

could accomplish and why it is desirable and needed. In contributing 

to our economic growth, to an increase in job opportunities, and to 

an improvement in our international competitive position, the programs under the legislation would be well worth their cost.

I strongly urge this committee to act favorably on this bill.

Mr. Macdonald. Thank you, Mr. Secretary.

As you say, and you have explained in some measure how the plan 

would work, and what it would accomplish and why it is desirable 

and needed, to use your words. One question did come to my mind
STATE TECHNICAL SERVICES ACT OF 19 65 21

as you made your statemen t and while I don’t mean to sound like the 

distinguished gentleman from Iowa, one of our colleagues, I was 

wondering how much this program would cost if it were adopted, 

that is, the cost to the Federal Government.

Secretary Connor. Mr. Chairman, we have estimated that the 

cost in the first year will be about $9 million to get the program 

started. We have estimated that over the 5-year period for which 

this initial planning would be contemplated, the cost would be approximately $140 million.

Mr. Macdonald. Do you have any breakdown of how those 

costs would be allocated to the various sections of the Department or where the money would go?

Secretary Connor. No, sir. We don’t have a breakdown on a 

State-by-State basis which would be meaningful. As I have indicated 

in the testimony, we would work out a formula which has not been 

completed yet which would establish a minimum amount which would 

go to each of the 50 States and then a maximum worked out on a basis 

such as population. But this has not been completed yet.

Mr. Macdonald. Well, as I understand it, obviously it would be a 

voluntary program on the part of the 50 States.

Secretary Connor. Yes, sir; tha t is right. Each State would 

have to take the initiative in order to qualify for participation in the 

program on a matching basis. The Federal Government would 

contribute no more th an 50 percent of total cost of an approved plan.

Mr. Macdonald. Then I would take it you would be really hard 

put to find out how much it would cost unless you knew how many 

States are going to participate.

Secretary Connor. Th at is right. We can only make some rough 

estimates at the present time based upon our understanding of the 

amount of interest in the States and their ability to respond to the 

availability of such a program within the first few years after passage 

of the bill.

Mr. Macdonald. Right. Has the Department put out any tentative feelers or asked for expression of opinions from the various 

States, the departments of commerce of the various States, as to what 

degree they would be interested in such a plan?

Secretary Connor. Mr. Chairman, Dr. Hollomon has had several 

meetings with respect to the need for such a program and this legislative proposal has engendered a considerable amount of interest.

I think it might be interesting to the committee if Dr. Hollomon 

would give some description of those meetings and what responses 

have been obtained.

Mr. Macdonald. I am sure the committee would be glad to hear 

them.

Dr. Hollomon. Thank you, Mr. Chairman. My name is J. 

Herbert Hollomon. I am Assistant Secretary of Commerce.

We have had a number of meetings with representatives of each of 

the States who are responsible for economic development activities in 

the States, with business groups, and with professional groups of 

various kinds. We wrote, on a number of occasions, to the Governor 

of each State asking for his comments upon the bill and how it might 

be administered.

Our present guess is that approximately 30 to 35 States would be 

in a position to begin some activity under the bill within the first year.
22 STATE TECHNICAL SERVICES ACT OF 19 65

This would be modest in some States and more dramatic in others. 

There are six or seven States in which fairly active programs of this 

type are now underway. They have the manpower; they have people 

who have been doing some planning. There are a number of States 

tha t have introduced proposed legislation into their own legislative 

bodies, in anticipation of this bill, giving a utho rity to the Governor 

or to a certain State agency to provide for the matching funds.

Mr. Macdonald. If 1 could ask at tha t point, how many States 

have done this, do you know?

Dr. Hollomon. I know of at least two tha t have done that. So, 

to answer your question directly, I would think that something of the 

order of 30 States could participate within the first year, but not to 

their maximum capabilities. The bill calls for a nonmatching payment of $25,000 a year to each State for a 3-year period to provide the 

State with funds to sta rt planning its program.

Mr. Macdonald. Maybe I didn’t follow the testimony closely 

enough, although it is a fine statem ent and I tried to follow it as 

closely as possible, but what would be the relationship between the 

universities in the various State s and the State governments themselves?

Dr. Hollomon. The present plan calls for the institutions tha t 

would actually carry out the plan to be generally colleges and universities which offer, as a minimum, a qualified engineering degree or 

qualified degree in business administration. The purpose of the 

State agency is to bring together the institutions in the State, which 

1 have just mentioned, and decide what each one wishes to do in 

terms of the industry of the local area of their institution.

It is the intention of the bill tha t the technical services provided 

under the bill would be carried out. principally by the Sta te’s technical 

universities and colleges. The purpose of the State institution is to 

bring together the plan for the whole State.

Mr. Macdonald. Well, for a concrete example, I don’t mean to 

sound parochial, but in Massachusetts, with which I am familiar, we 

have Harvard, Northeastern, Massachusetts Institute of Technology, 

and perhaps others-----

Dr. Hollomon. University of Massachusetts.

Mr. Macdonald (continuing). And I take it tha t the State’s function would be to sit down with representatives of each one of the institutions tha t I have mentioned, perhaps others, and ask them what 

sort of plan they have or ask them for a consensus of what a plan 

should be. Is th at it?

Dr. Hollomon. The Governor-----

Mr. Macdonald. Or each university and-----

Dr. Hollomon. The Governor of the State would designate one 

institution in the State to be responsible for making the plan. That 

institution would have subm itted to it the specific programs for all 

of the various institutions that you just mentioned.

The purpose of having only one agency do the planning is to assure 

that if M IT wishes to do something in a certain area of the State, it 

isn’t identical to what the University of Massachusetts would do, or 

is not identical to what some other institution in the State would do.

The second purpose of having the designated institution is to find 

out what the problems of the State are.
STATE TECHNICAL SERVICES ACT OF 19 65 23

Mr. Macdonald. Wouldn’t tha t cause friction perhaps between 

the various institutions? As a concrete example, at the Boston City 

Hospital—once again I hope I am not sounding parochial, but one 

illustration will go to the general thought I have in mind—at the 

Boston City Hospital, Harv ard, Boston University, and Tufts Medical 

School all use tha t hospital for training their students and they are 

in the midst right now of a headline type of hassle as to who should 

run the hospital. And I was wondering if just designating one institution out of, say, five, wouldn’t lead to some controversy?

Dr. Hollomon. This was recognized in the various correspondence 

we have had and in our discussions with many people. The bill, 

therefore, says tha t the State may designate as the planning agency 

either a land-grant college, a State university, or a State agency, 

either one or the other, for making the central plan for the State.

Mr. Macdonald. In that case that would take away the nationally 

recognized leader—Massachusetts Institu te of Technology—and give 

it to the University of Massachusetts which is the only land-grant 

college.

Dr. Hollomon. No, sir. I went to MIT. I will be parochial, 

too, if I may. It is a lan d-grant college, too. MI T strangely enough 

is a land-grant college in the State of Massachusetts.

Mr. Macdonald. You learn something every day.

Dr. Hollomon. I did, too. I didn’t know it until after I had 

been graduated for 20 years.

Mr. Macdonald. Now, to take it down to just two institutions, 

however-----

Dr. Hollomon. For the designated agency, that is correct, sir.

Secretary Connor. But, Mr. Chairman, in a particular State where 

the Governor has the kind of problem you indicated, if he so desires 

and if there is a State agency such as an agency for economic development or an outstanding organization that has emphasized technical 

activities, he could designate one or the other of those. So the 

Governor will have a great deal of flexibility. But in the instance 

where he departs from the land-grant college or the State university, 

then there has to be some kind of an objective justification for doing so.

Mr. Macdonald. The matching funds from the Federal Government go only to the designated institution, is that right?

Dr. Hollomon. Matching funds go, through the designated institution, to whichever qualified institutions carry out the programs.

Mr. Macdonald. All participating institutions.

Dr. Hollomon. Yes, sir.

Mr. Macdonald. Mr. Springer?

Mr. Springer. Mr. Secretary, you may have answered this, but 

I want to be sure. How much do you estimate the program to cost 

for each 1 of the first 3 years.

Secretary Connor. The first year’s estimated cost, Congressman 

Springer, is $9 million and for the 5-year period tha t we are talking 

about here, the estimated cost would be $140 million, assuming

{

larticipation by the States in accordance with some assumptions we 

lave had to make. Th at is the maximum cost, sir.

Mr. Springer. In the neighborhood of about $28 million a year 

average for a 5-year period; tha t is correct?

Secretary Connor. It is hard to give an average because this will 

be an accelerating program. But we estimate that the maximum 

cost once it gets underway is $40 million a year.
24 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Spr inge r. Ri gh t now do yo u exp ect this to be a conti nuing 

program?

Secre tary Connor. We would hope so, sir; but we reco gniz e th at 

Congress will wa nt to tak e a loo k at it from tim e to tim e. Our 

suggestio n is th at the authoriza tio n in this bill be subject to review 

by C ongress at the end of a 6-y ear period so th at the 5-year pla n th at 

is conte mp lat ed in the bill for each St ate could get underw ay. WTe 

also suggest th at the re be a review by the kin d of na tio na l advisory 

comm itte e th at is conte mp lat ed in the bill and th at its findings be 

ava ilab le to the Congress to de ter mi ne wh eth er or no t th e whole 

pro gra m sho uld be continu ed.

Mr. Spr in ge r. Mr. Secre tary, wha t would the pro gra m cos t for 

the first 3 y ears?

Se cre tar y C onnor. Our estim ate is $9 million the first yea r, it 

it acc elerate s int o the ord er of mag nitude of $15 to $20 million, as I 

rem em ber it, the second year, an d the n in the order of $20 to $25 

million in the third y ear.

Mr. Spr in ge r. $9 million ap proxim ate ly the firs t year, $20 million 

the second year, and appro xim ate ly $25 million the third year?

Secre tar y Connor. $25 to $30 million.

Mr. Spr in ge r. Th en $9 million the first year, $20 million the 

secon d year, an d $30 million the th ird yea r, is th at about rig ht?

Se cre tar y C onnor. I would like Dr . Hollomon to give a few------

Mr. Spr in ge r. Let ’s ha ve him . Th is is his bra inc hild. He has 

talked to me ab ou t it.

Dr. H ollomon. Not e ntirely my brainchild, sir. The numb ers the 

Secre tar y has given you presum e th at all the State s would pa rti cipa te 

in the pro gra m to the full am ou nt. We made est imate s on the basis 

of each St at e pa rticip ati ng in th e pro gra m fully , so these would be 

maxim um am ounts . Th e approx im ate am ounts which the Secre tary 

has given you, are $8 or $9 million the first ye ar, $20 million the second 

year, $30 million the third year, going up to the full autho riz ed pro ­

gra m at the end of the fourth- an d fift h-y ear period.

Mr. Spr in ge r. All rig ht. Mr. Hollomon, since you are talkin g 

on this, I think you are the expert. How man y cen ters do you 

an tic ipate in each Sta te?

Dr. H ollom on. Mr. Springer, there are appro xim ate ly 200 in stitu ­

tion s in the Un ite d State s th at give bac helors degrees in enginee ring 

th at are accre dited at the pr es en t tim e and an ad dit ion al 25 or so 

th at do n’t give engineering degrees but give the bachelo rs degree in 

business ad mi nis tra tio n. So, no t counting the few insti tutio ns , 

the qualified non profit in stitu tio ns and St ate agencies th at mi gh t be 

included in the bill, the to tal th at could possibly pa rtic ip at e are of 

the ord er of 200. It wou ld be my guess th at even wi th the full 

implem entat ion of the bill, no more th an half of those wou ld actua lly 

be involve d.

Mr. Spr in ge r. You are thinking in ter ms of appro xim ate ly a 

hu nd red i nstitution s?

Dr. H ollomon. Yes, sir; of th at order.

Mr. Spr in ge r. All rig ht. Now , how man y St ate agencies— I 

un de rstand they also qualify , is th at correct?

Dr . H ollomon. Th e qualified insti tutio ns are insti tutio ns th at 

either give a degree in business admi nistr ation or in engineering, or 

nonprofit insti tutio ns w ith certa in qualifications. Th e St at e agencies
STATE TECHNICAL SERVICES ACT OF 19 65 25

in this case are the agencies th at could make the plan for the State b ut 

would not necessarily participate.

Mr. Springer. Would they share in the funds?

Dr. Hollomon. Not if they do not meet the criteria which I just 

stated.

Mr. Springer. But they are eligible for funds, State agencies, 

if they qualify?

Dr. Hollomon. Yes, sir.

Mr. Springer. And it is possible that they could qualify and not 

a public institution, is tha t correct?

Dr. Hollomon. Would you clarify the question?

Mr. Springer. It is possible that the State agency would act 

instead of an institution in some States; is tha t correct?

Dr. Hollomon. To do the planning, yes sir.

Mr. Springer. To do the planning only?

Dr. Hollomon. Yes, sir. Only to do the planning.

Mr. Springer. But as far as the actual gathering of the research 

and being the center for it, tha t would be in the nature of a State 

university.

Dr. Hollomon. Not necessarily a State university—any institution tha t gives a degree in engineering, business administration, or 

certain notprofit research and development institutions.

Mr. Springer. The center then would be a university?

Dr. Hollomon. You can almost say tha t unqualifiedly.

Mr. Springer. Now, you anticipate tha t there would be approximately 100?

Dr. Hollomon. Yes, sir.

Mr. Springer. Would there be any State tha t you know of at this 

moment which could not qualify?

Dr. Hollomon. No, sir.

Mr. Springer. Is it your belief tha t everyone of the 50 States 

could qualify?

Dr. Hollomon. Yes, sir; if they did the necessary planning and 

took some initiative.

Mr. Springer. Is it your thought, Mr. Hollomon, this would be a 

permanent agency of the Dep artm ent of Commerce?

Dr. Hollomon. Mr. Springer, we have tried to, as the Secretary 

indicated, place in the bill the requirement that the program be 

reviewed at the end of a 5-year period to see how and under what 

conditions it is successful. It is my personal feeling that, in time, the 

initiative for a program of this kind should increasingly fall upon the 

States and industry. My own view is tha t we ought to take a look 

at the problem at the end of the 5-year period. Some States will 

have difficulty getting started with a full 5-year plan by the very 

nature of things. I think it depends very much on the degree to 

which the individual States and universities take the initiative and 

make plans.

Mr. Springer. Now, is it your thought to gather industrial and 

technological research for industries and business? Am I stating this 

correctly?

Dr. Hollomon. To gather the information tha t is available about 

it, but not the research itself. Th at is correct.

Mr. Springer. Would you keep a category index of research?
26 STATE TECHNICAL SERVICES ACT OF 19 65

Dr. Hollomon. We would not do tha t but I think tha t is one of 

the important things tha t might develop in a State plan—to know 

exactly what research is going on in the field tha t they select and 

provide tha t information to industry.

Mr. Springer. Now, is this agency—we will say tha t it is X 

University in Iowa—will they gather research and data only within 

the S tate of Iowa?

Dr. Hollomon. No, sir. Pertinent information from the whole 

country would be gathered.

Mr. Springer. They will gather research-----

Dr. Hollomon. Information.

Mr. Springer. Information?

Dr. Hollomon. Right.

Mr. Springer. Wherever it may be tha t they think is useful in 

Iowa.

Dr. Hollomon. That is correct, sir.

Mr. Springer. Now, is there any central location, either in 

existence now or you plan to pu t in existence, which will be a central 

agency for all of this information?

Dr. Hollomon. Yes, sir. The hill calls for the establishment of a 

referral center in the Department of Commerce so tha t the information 

collected by Iowa, to follow your example, concerning a particular 

industry, can be put together and made available to Massachusetts 

or Maine so that there is no duplication of the information that is 

collected in the States. Other State s and other universities could, 

of course, call upon tha t central referral center. I believe this is one 

of the most important aspects of the bill. It will provide for such a 

central referral center.

Mr. Springer. Is there at the present time any either private or 

public agency trying to put this together in one central agency.

Dr. Hollomon. No, sir. Not to my knowledge.

Mr. Springer. You are sure of this?

Dr. Hollomon. Not to my knowledge. I am as sure as I can be.

Mr. Springer. May I say as an example, why I am bringing this 

to your atten tion, the Subcommittee on Health and Science which is 

a tremendous field in research-----

Dr. Hollomon. Yes, sir.

Mr. Springer (continuing). Last week opened this up. We found 

out tha t—well, I believe it was the Bureau of Medicine, and I think 

this is in NIH-----

Dr. Hollomon. Yes, sir.

Mr. Springer. They have now s tarted a computer system and it 

was my understanding tha t this computer system now computes all 

of the articles on research in medicine, in any way, each month and 

that apparently—and this is only by title—this is not the article nor 

the substance of this—just the title and maybe three or four lines 

telling about it—th at this computer system is the only way they can 

do i t and that at the end of each month this compiles, I forget how 

many volumes per month. Now, is this what you have in mind?

Dr. Hollomon. No, sir. The primary problem is to determine 

what the needs of the local industry are and to provide information, 

not necessarily coming from research but coming from technical 

activities of any sort, to make the industries of the region knowledgeable about the resources tha t are available. Let’s take a similar
STATE TECHNICAL SERVICES ACT OF 19 65 27

example, although not in the medical field. In the Department of 

Commerce there is a thing called the Clearinghouse for Federal 

Scientific and Technical Information tha t puts out computer tape 

reports and abstracts for all of the reports tha t come out of the Federal 

Government’s large research and development program, other tha n 

medicine.

This information is not generally readily available to small industries or large industries, throughout the whole of the country. One 

of the things tha t this program would do would be to make that 

information available to the universities and they would, in turn, 

provide it in a useful form to local industry. That is one of the 

purposes of the bill.

But tha t is only information developed in the federally supported 

research and development programs.

Mr. Springer. Now, will this program in its category do that which 

is in writing or will there be a field group to visit the factories and 

industries to find out what they are doing?

Dr. Hollomon. There could be a field group. Each State would 

do what it feels is most effective. This is not going to be mandated 

by the department or by the Federal Government. In the case of the 

small program tha t is underway in Georgia, they have a field group 

which goes out and provides talks, seminars and information to the 

industry in the State of Georgia. In the State of Iowa, which has a 

program under way, they have a central information service of the 

kind you described—not to collect all the information but only the 

information they believe is most pertinent to Iowa industry.

So there are two different examples of programs.

Mr. Springer. So this would be two examples of what would be 

done.

Dr. Hollomon. Th at is what might be done if th e State felt it was 

important.

Mr. Springer. Now, would it be in order for an industry to come 

to the central agency, whatever it may be, in the State of Iowa, and 

to seek information about their own particular industry? Is tha t 

right?

Dr. Hollomon. Yes, sir.

Mr. Springer. Is there anything in the natu re of this program 

which goes out and advise scommunities on how they may get industries, or anything like that?

Dr. Hollomon. Only in the sense tha t the program calls for doing 

technical and economic studies, if these are believed to be im portant 

to the State. This may be valuable to bringing new industry. If a 

State has particular opportunities for new products and services or 

particular resources, then this program would permit the dissemination of th at technical information to potential new industries.

Secretary Connor. Excuse me. Jus t following th at up, Congressman Springer, I think the actual promotion of th e State to industry 

elsewhere in order to attra ct tha t industry to the State would have 

to be done through the State resources other than those provided in 

the bill. This bill would have nothing to do with the promotion of the 

State.

Mr. Springer. Do you seek to advise a local community of what 

will fit their own-----

Dr. H ollomon. Only from a technical point of view. For example, 

what sort of technical opportunities there are in the State?
28 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Springer. We will say Des Moines, some small town near 

Des Moines, asks for a survey by this agency. Do you go out and 

make a field survey, a t Lawrenceville, Kans., we will say, to determine 

what would fit tha t community? Is tha t a part of this program?

Dr. Hollomon. I think this program could carry out special 

technical studies of th at sort; yes sir.

Secretary Connor. But it would have to be a part of the State 

plan. It wouldn’t be ordained from Washington.

Mr. Springer. Does the State as a part of this aid the overall plan?

Dr. Hollomon. Yes, sir.

Mr. Springer. Could you give me an example of what that overall 

plan may be?

Dr. Hollomon. The overall plan would consist first, as indicated 

in the bill, of some analysis of the kind of industries in the State and 

the kind of technical problems th at the State has. It would indicate 

how each of the qualified institutions of the State would participate, 

what kind of programs each university would have, and how i t would 

insure that they don’t overlap; tha t is, three institutions doing the 

identical thing within the State. It would indicate that the State 

has sought either State funds or industrial funds as its matching 

part of the program, tha t is has set up an advisory committee for the 

State program with industrial as well as university representatives 

and it would indicate how they are going to measure the success of 

the program. Tha t is the kind of State planning in general terms 

tha t would be submitted.

Mr. Springer. They don’t set up a plan to determine that southern 

Iowa would fit this and middle Iowa would fit this and northern Iowa 

would fit that.

Dr. Hollomon. No: I would not think so in that detail.

Mr. Springer. Tha t is all, Mr. Chairman.

Mr. M acdonald. Mr. Harris.

Mr. Harris. I will defer to the other members of the committee 

at this time, Mr. Chairman.

Mr. Macdonald. Mr. Huot?

Mr. Huot. Nothing a t this time.

Mr. Macdonald. Mr. Farnsley.

Mr. F arnsley. Doctor, I went to the University of Louisville which 

got its land grant from the Commonwealth of Kentucky in 1798. 

I think we had better stick together or the Federal land g rant schools 

will take over. They are coming fast.

I think your program is wonderful. Unlike most things the 

Federal Government does, instead of doing harm I think it will do 

good. I think the people will think you are spending money. In this 

case it isn’t spending money but investing money because this money 

will come bouncing back many times over in increasing tax revenues. 

I can’t see anything wrong with it.

There is another way to spend money to make money. This committee set up an international trevel bureau, the U.S. Travel Bureau. 

From my information from my experts back home, overseas governments and airlines and steamship lines spend four times as much to 

lure our people to their countries as we spend to lure them to our 

country and to nobody’s surprise, they get four times as many tourists 

who spend four times as much money and that knocks the whole 

thing out of balance.
STATE TECHNICAL SERVICES ACT OF 19 65 29

Ten percent of the money overseas visitors spend goes directly to 

the Federal Government for taxes, so that if we plow back half of what they spent last year we would be spending maybe $15 or $20 million bringing them in whereas we are now spending 3 or 2. And in 2 or 3 years the balance of payments would be balanced. Have you had a chance to look into this question or is this under 

your purview, Mr. Secretary?

Secretary Connor. Yes, Congressman Farnsley. The U.S. Travel 

Service is within the Department of Commerce. We did ask for an increased appropriation this year but it was turned down. I would hope tha t next year at appropriations time we will have such a strong case tha t we will be able to get the support for a larger appropriation from the appropriate subcommittee of the Appropriations Committee. The travel program in my opinion is extremely important. The U.S. Travel Service has authorization for programs designed to bring foreign visitors to this country. I think this is extremely important now because of our balance-of-payments deficit. This could help considerably in that. It would also help because of the income generating activities that would be stimulated by these foreign 

visitors. So we are emphasizing it.

We plan to give it even more emphasis in the future.

Mr. Farnsley. Thank you, Mr. Secretary. Good luck.

Secretary Connor. Thank you.

Mr. F arnsley. It is important.

That is all.

Mr. Macdonald. Mr. Springer?

Mr. Springer. Mr. Secretary, will the effect of this program be to 

consolidate the efforts of other agencies of the Federal Government 

in this field?

Secretary Connor. Congressman Springer, at the moment no othe r 

agency of Government is performing this kind of a function. We think that by moving now, this program will make it unnecessary for other programs to get into the field and it will stimulate within each State the centralization of this kind of planning and program making. I don’t think we could say that it will eliminate anything tha t is now going on, but looking down the road 20 or 30 years, it will be an 

economical and efficient way of doing this.

Mr. Springer. Now, according to my information, NASA is spending about $5 million a year, this year, to get its information out to industry. AEC has some money also, as does the Department of Defense, Health, Education, and Welfare I know; and Agriculture 

rather a considerable amount.

Secretary Connor. That is right. Those programs are designed 

to encourage the use of the information, particularly technical infor­ mation, that comes from those programs. They are promoting the use of that kind of information to get a side benefit from the condu ct 

of the work itself.

Mr. Springer. Well, now, do you visualize that your agency is 

going to combine any of this?

Secretary Connor. We will make use, Mr. Springer, of the information that is available from those programs but the emphasis in our 

program is at the other end of the spectrum.
30 STATE TECH NICA L SER VIC ES ACT OF 19 6 5

Our program contemplates tha t within each State, the people 

responsible in that S tate will look at the needs of the State and draw 

up a plan which can be submitted and approved. Then as that plan 

goes forward for implementation, the technical information that conies 

out of the NASA program and the others you have mentioned can be 

funneled into that State to the extent that it fits in with their program 

and the information is needed. But the information used in that 

State will not be limited, by any means, to what emerges from those 

specific Government programs.

Mr. Springer. Do you visualize tha t the information that these 

five agencies that I have named—th at you are going to pick up that 

information in your central agency here in Washington; is that right?

Secretary Connor. Yes; very definitely. That information will 

be available, but it may have no relationship whatsoever to the needs 

of a particular State. Tha t State may need technical information 

from completely different fields in which none of those five agencies 

play any role.

Mr. Springer. Thank you, Mr. Chairman.

Mr. Macdonald. Mr. Harris.

Mr. Harris. Mr. Secretary, I want to tha nk you for your presentation here today, and for your very frank and candid discussion cf the 

problem. T am somewhat sympathetic to this. T think you have a 

program tha t could contribute a great deal to technological developments. We have long since come to the point where in all parts of 

our Nation this information has to be made available. We must 

strive for a balanced economy in our expanding economy, expanding 

Nation, expanding population, and expanding methods of transportation and communication. As to the latter, other phases of our 

development in this country have not kept pace with communications 

and transportation. If 1 have any criticism, which I must say in all 

frankness, to your proposal here, it is the lack of a positive approach. 

It seems to me the program th at you have presented here is so general, 

as was indicated by the chairman of the subcommittee at the outset, 

that I am fearful as it goes on this could take off in an entirely different 

direction from what you have outlined. Here as I look into it, I 

think you have a program tha t is not duplicated in any way regardless 

of the innumerable and vast research programs that we have. Is 

there any other program in any field where there is a required cooperative program of States?

Secretary Connor. No, Mr. Chairman. This is a new approach. 

By looking to the State for a study of its industry deficiences and the 

opportunities within that State , we are taking a completely different 

tack from what has been done before.

Mr. Harris. Well, it has appeal to me because of its broad application. One of the criticisms I have of NASA as an example, or 

AEC, you can take any of these scientific programs we have, they 

seem to just fit into certain sections of the country, and we have experienced in the past during the days of our military program, meaning our defense program and so forth, there were general applications 

of this development all over the country. You saw it in Illinois, you 

saw it in Massachusetts, in New York, in California, some in Arkansas, 

in Missouri, all other the country. It was sort of a thing tha t reached 

out to meet the national needs.
STATE TECHNICAL SERVICES ACT OF 19 65 31

Now we have these programs of large, vast, and im portant research 

programs, that seem to fit Florida or Houston or California, and we are 

seeing all of the development pulling our population into these particular areas. In my judgment it is going to cause difficulty one of these 

days. It is going to make it necessary to meet the problems tha t are 

going to those particular sections.

Now, obviously they are getting the benefit out of it. There is a 

little trickle here and yonder. There is a little AEC project I think 

with various private companies in northwest Arkansas in cooperation 

with the University of Arkansas, but it isn’t anything like a program 

to provide the immediate benefits that are being derived by the immense resources of this Nation out of each other. So th at from tha t 

standpoint this certainly does appeal to me. I observed in section 5 

you provide tha t the Secretary shall not accept a 5-vear plan—I want 

to ask you something about that in a minute, Mr. Springer has but I 

want to develop it a little furth er—for review and approval under this 

act unless the Governor of the State or his designee determines and 

certifies tha t the plan is consistent with the State policies and 

objectives.

Now, it seems to me t ha t puts the responsibilities right back down 

in the State and if a given State says we do not w ant to keep up with 

the rest of the country, that is our decision. But if we want to in 

our competetive system try to maintain a balance and keep up, and 

we have a far-looking Governor who wants to do something for his 

State, he has an opportunity in cooperation with the institutions of 

the State, it seems to me there are great possibilities that could come 

from this.

But I do have some problem with your approach here where you 

say an institution may be designated to do this planning, or an 

agency as the case may be.

It would seem to me if it is really going to be the kind of a program 

tha t you set out here, if it is provided tha t this planning program 

would be through a State agency and not an agency or an institution, 

as the case may be, then one or all the institutions who desire in 

that State could, with the cooperation of the agency set up or designated by the Governor to plan this program, give a better balanced 

program and we would avoid the things that Mr. Macdonald mentioned a while ago.

I mentioned that for your consideration because I feel tha t you 

could in this way have something positive that the State will work 

toward. They will set up a program for the planning. We did t hat 

in the hospitalization program. It worked very well. We did it 

in the mental health and retardatio n program which is coming along 

now very well. There is a definite responsibility and they don’t 

have the bickering back and forth of this or tha t institution trying 

to get the advantage within the State, by arguing “let everything 

be channeled through me.”

Then if the agency with the cooperation of one or more institutions 

develops its plan, which you provide here, and submits it to you 

for your consideration, that plan will say that the University of 

Arkansas is in a position to do so and so or MIT is in a position to 

do so and so and the University of Illinois, Northwestern University, 

whatever the case might be, then you would have it before you and
32 STATE TECH NICA L SER VIC ES ACT OF 19 6 5

here this State will say through this planned program we are in a 

position to cooperate in trying to carry it out, and it seems to me that 

with that kind of approach you might have a more positive approach 

to a final solution to the problem.

Secretary Connor. Well, Chairman Harris, as you know, the facts 

vary widely from one State to another. There is enough flexibility 

in the language of the bill so tha t the Governor of the State, looking 

at the factual situation in his State, could make tha t designation if 

he has an appropriate State economic development agency or some 

similar agency. On the other hand, if he has a concentration of people 

in a State university or a land-grant college, who are particularly 

interested in this kind of economic development, then he could designate such an institution. So there is considerable latitude in the 

statute.

Now, perhaps as you say we should give i t-----

Mr. Harris. This latitude at this particular stage and the flexibility tha t you are talking about.

Now, Mr. Springer mentioned a moment ago our health program. 

Without any implications or even indicating tha t I give any thought 

to it at all, we set up an advisory committee and so far as the applications of these research programs that I have had come to my attention, 

time after time it is a rath er unusual thing that, members of the advisory committees seem to always come out and have express grants 

made to the universities that they represent.

Now, human nature works the same in every place and I think 

tha t we have got men of honesty and integrity on these advisory 

committees but we left the loophole there for these applications to be 

made and for the implications to arise. I just don’t believe that 

we can get great results unless we do try to put this into focus. 

We would like to have nothing but the highest integrity and the 

confidence of everybody going into it, and it seems to me tha t tha t 

would be the way to do it. You have your agency now, the Governor. 

The Governor can use whatever he wants to, whatever agencies, He 

may have one—in my State they had the department of welfare in 

this other program. It might be the commissioner of education in a 

State. I don’t know. It might be the AIDC in the State. It 

might be some other agency. Let the Governor have that responsibility. And with the educational institutions or the other programs 

in the State, industry and all cooperating, they can develop a plan 

in my judgment, On the other hand, it seems to me the human, 

reaction is going to be, as Mr. Macdonald mentioned a moment ago 

if MIT gets it Boston College is not going to be looking at MIT 

through rose-colored glasses. They are going to get the clearest 

vision they can to see what is going on. And I just question in my 

own mind—I hope you don’t mind—what you are going to run into.

Secretary Connor. Chairman Harris, this is an extremely important point. I think you have put your finger on what could be a 

difficulty. Within some State s there is great rivalry between or 

among the educational institutions and in a particular situation the 

Governor, if he has a State agency available, might well prefer to 

designate State agency in order to avoid the kind of-----

Mr. Macdonald. If he doesn’t have, let him set up one.

Secretary Connor. Yes, sir. He can. But this deserves some 

more thought. So let’s think about it further, if you don’t mind.
STATE TECH NICA L SER VIC ES ACT OF 19 65 33

Mr. Harris. Yes, sir. I just believe that this thing ought to he 

put in focus a little hit more clearly than is proposed as I have gone through the hill, and I tried to analyze some of the provisions. Now, you mentioned earlier that the institutions for higher learning would he qualified if they offered degrees in engineering or business administration. Further down in the same paragraph, bottom of page 3, you mentioned nationally recognized accrediting agencies or associations determined by the Secretary, to he reliable auth ority as to the quality of engineering or business education or training offered.

Now, who do you intend to include in tha t group?

Dr. Hollomon. Mr. Chairman, there is, in the case of engineering 

with which I am more familiar, an organization called the Engineer’s 

Council for Professional Development which accredits the curriculum, the faculty, and the degree of competence of engineering schools in the country. It determines that their resources, their facilities, their curriculum meet certain minimum standards. There is a similar one, 

and 1 am not as familiar with it, for business administration. rPlie 

hill says that the U.S. Commissioner of Education would determine 

whether qualified accrediting agencies existed. If there were none, he would make a list of qualified institutions. But there are officially 

designated accrediting institutions tha t-----

Mr. Harris. This means that these agencies referred to would he 

for accreditation only.

Dr. Hollomon. That is correct.

Mr. Harris. And it would not mean that they would he considered 

as an institution and would be a part of this program.

Dr. Hollomon. They would he qualified to participate in the program that sets the minimum qualifications, Mr. Chairman.

Mr. H arris. Well, now, that bothers me a little.

Dr. Hollomon. Perhaps J misunderstood.

Mr. H arris. If they are set up for the purpose of accreditation of 

institutions T don’t see why they should he possible participants in 

the program.

Dr. Hollomon. T think there was a misunderstanding.

Secretary Connor. The national accreditation organizations would 

not he participants in the program.

Dr. PIollomon. I misunderstood you. Secretary Connor is correct.

Mr. Harris. This means, then, tha t would be utilized by the 

Commissioner of Education or the Secretary as the case might be. "The Commissioner of Education, in its publishing of the list, would use these institutions, accreditation agencies for the purpose of determinging who was accredited.

Dr. Hollomon. Tha t is correct. I misunderstood your question.

Mr. Harris. Yes. I wanted to be sure of that.

Secretary Connor. Chairman Harris, as the program in each State 

goes along, the conduct of technical service programs involving say, three or four institutions might lead to some overlapping if they were not coordinated. For instance, the central agency could say to University Y, “Well, now, you keep going ahead in this field but because university X over here has already gone so far, you should veer off to the right or left or you don’t have to go forward.” In 

other words, some kind of central coordination will he needed to avoid 

inefficiencies.
34 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Harris. Well, afte r the plans have been developed and submitted, the program suggested, and so forth, and you approve it, 

now, would an application come from the institution through the 

designated agency?

Secretary Connor. In the particular State, yes, it would.

Mr. Harris. Yes. Or if it is an institution designated it would 

have to go through that institution?

Secretary Connor. That is right, sir.

Mr. Harris. And if the University of Arkansas decided it wanted 

to carry on a certain particular research program in technology, 

this would be made available to all business, not only within tha t 

State, as I understand, but all over the United States.

Secretary Connor. Well, the purpose of the plan in Arkansas 

would be to help business in Arkansas but once the information was 

pulled together and made available, say, by the University of Arkansas, 

to business in Arkansas, tha t very information would get recorded at 

the Federal level so tha t-----

Mr. Harris. And if the University of Illinois wanted it, it could 

have it.

Secretary Connor. Th at is right.

Mr. Harris. Now, tha t particular application, then, would have to 

come through the State agency or an institution.

Secretary Connor. That is right, sir, as part of the plan.

Mr. Harris. And it would come to you.

Secretary Connor. From the Governor of the State, tha t is right.

Mr. Harris. And it would have to carry a proviso giving assurances 

tha t the State or some other source would provide one-half of the total 

amount of the application.

Secretary Connor. Th at is right, at least one-half. And tha t 

one-half or more from the State could either come from State funds or 

from contributions from businesses, industries, and even nonprofit 

organizations within that State.

Mr. Springer. Would the chairman yield at tha t point for 

clarification?

Mr. Harris. Yes.

Mr. Springer. Did you say tha t one-half share would come from 

the institution itself?

Secretary Connor. The Sta te’s 50 percent or more share could 

come from State funds or from contributions from private industry 

within the State or from the funds of nonprofit organizations such as 

the Ford Foundation, and so forth.

Mr. Springer. But the institution itself could not contribute its 

own 50 percent.

Secretary Connor. It wouldn’t be expected to but I don’t recall 

whether there is any auth ority for it.

Mr. Springer. Thank you, Mr. Chairman.

Mr. Macdonald. Will the chairman yield?

Mr. Harris. Let me finish this. I don’t see any language here 

tha t prohibits it.

Secretary Connor. I think you are right, Mr. Chairman. It is 

not prohibited and if in a particular case the Sta te’s share were not 

available from the other sources, I wouldn’t see any prohibition 

against a particular university making the contribution.
STATE TECHNICAL SERVICES ACT OF 19 65 35

Mr. Harris. Apparently it would seem to me if the State wanted 

to provide its 50 percent or more for a particular program through the 

university channels, there would be no objection to tha t or there 

would be no prohibition to it.

Secretary Connor. No, sir. There is no prohibition. The bill just 

says tha t the State’s contribution would be available from State or 

non-Federal sources. The wording is broad enough to include the 

kind of contribution you are talking about.

Mr. Macdonald. On that, I would just like to comment, universities are pretty good in raising money but they don’t seem as good in 

spending money. So I don’t think it would be much of a problem. 

But what I wanted to ask you in connection with what the chairman 

of the full committee was discussing with you is this: I can understand 

the relationship between the State, State agency or institution and 

the Federal Government, but I don’t understand, and I don’t think 

anybody has given testimony pertaining to the relationship between 

the Federal Government and a given region. You keep talking in the 

bill of region-Federal participation. Could you explain that for the 

committee, or for me at least?

Secretary Connor. Yes, Mr. Chairman. Let’s take the Mountain 

States as a possible regional grouping. It is quite conceivable that 

several of the Mountain States might get together and prepare a 

plan which could qualify for the matching grant under the bill.

Mr. Macdonald. Would there be just one agency for the region?

Secretary Connor. Probably.

Mr. M acdonald. Who would appoint that agency? If there were 

several States in a region; take Appalachia for instance.

Secretary Connor. The authority in the bill for these appointments 

rests with the appropriate authority in each S tate which could be the 

Governor. So the Governors by agreement could get together and 

decide who would be the representative of the region if there is a 

regional plan.

Mr. Macdonald. And how does the bill, if it does, and if it does 

not—I haven’t seen it—how would the Department define region?

Secretary Connor. There is no geographical definition. It is 

really left to the discretion of the States themselves bv the provision 

tha t two or more States can get together for a regional plan.

Mr. Macdonald. Well, I don’t want to carry this too far, but 

theoretically, all 50 States could say they were a region, a region of the 

United States. I don’t quite understand what value the breakdown 

for region brings to this bill.

Secretary Connor. Dr. Hollomon has had some discussions which 

I think will be helpful here.

Dr. Hollomon. The purpose of the regional activity is the following: Any two or more States, if they decide t hat they could carry out 

this plan, or any part thereof, best by joining together, could make an 

agreement to join together to make a plan for the two or more States.

Let me give you a specific example. I think it is easier to deal with 

specifics in this case. There is consideration being given in New 

England, for example, tha t instead of having a separate referral center 

for industrial information in each State in New England, at different 

institutions in each State, the States would get together and have one 

central place where this information was readily available. With
36 STATE TECHNICAL SERVICES ACT OF 19 65

the close distances in New England, that might be very effective. 

The State Governors could agree tha t one institution in the several 

States would provide this central function.

They don’t need to combine all of th eir Sta te’s plans. They just 

combine that central function and if they do so, this bill would encourage them by permitting the Secretary to give them 10 percent 

additional for that purpose. This is economy.

Mr. Macdonald. If I follow you, then, the region would be merely 

used as a clearinghouse.

Dr. Hollomon. If that is desirable. Right. In other words, if 

two States tha t had essentially identical problems agreed tha t they 

wouldn’t duplicate themselves and they agreed to do something 

together, we would encourage this in order to try to prevent duplication in the States. But this doesn’t mean tha t you would have 

every State getting together on their whole program.

Mr. M acdonald. Well, to go forward with your illustration, in 

New England, do you look to just one institution being designated, 

say MIT being designated-----

Dr. Hollomon. No, no. Not at all. Only for-----

Mr. Macdonald. Could I finish my question?

Dr. Hollomon. I am sorry.

Mr. Macdonald. Or would there be in each one of the States an 

institution and then regionally they would correlate the information?

Dr. Hollomon. That is correct.

Mr. Macdonald. Is that the function of the region?

Dr. Hollomon. Yes; that is one function of the region.

Mr. Macdonald. And each time the region appears here in the 

bill it does so in that frame of reference?

Dr. Hollomon. Yes, sir.

Mr. Macdonald. As a clearinghouse, not as a representative to 

gather the information-----

Dr. Hollomon. Right.

Mr. Macdonald (continuing). For each State. Am I correct.

Dr. Hollomon. Tha t is correct, depending on the agreement. This 

would be purely voluntary on the part of the State Governors.

Mi-. Harris. Now, just two other points that I would like to mention: No. 1 has to do with the planning program. As I understand, 

this would authorize you, Mr. Secretary, with the proper application 

before you, to approve $25,000 a year for not to exceed 3 years to each 

designated institution to assist in the preparation of a program. 

Does that mean that each institution that would like to participate in 

this would be permitted to develop plans by that institution?

Secretary Connor. No, sir. It does mean tha t for each of the 50 

States, the Governor could designate one institution or State agency 

and tha t agency or institution would then make application to the 

Secretary of Commerce for $25,0 00 per year, not exceeding 3 years on 

a nonmatching basis, to provide the initial plan.

Mr. Harris. I would like to call your attention tha t in this particular provision you do not mention "and/or agency.” You said "designated institution.”

Secretary Connor. I use th e expression as it is defined in the bill 

in section 2(b).

“Designated institution ” means the ins titu tion or agency in each participating 

State which has been designated as administrator of the program * * *.
STATE TECHNICAL SERVICES ACT OF 19 65 37

Mr. Harris. T see. In other words, each State could receive for its purpose, without matching, $25,000 a year for a period not to exceed 3 years.

Secretary Connor. Yes, sir; that is correct.

Mr. Harris. And that is for planning purposes only.

Secretary Connor. Yes, sir; to get it started.

Mr. H arris. Now, it seems to me you have stressed 5-year plans 

in here.

Secretary Connor. Yes, sir. The bill is drafted on the assumption tha t 5 years would be a reasonable period for the initial preparation of the plan, for the inclusion of the participating institutions, and then carrying forward the plan. It provides time for a review by a dis­ interested advisory group to see whether the program is worth con­ tinuing in its then present form or whether changes should be made.

Mr. Harris. Well, I just wondered if it would not be better to 

have the program—it seems like this is sort of a trial and-error thing anyway at the present time—I don’t think it could be considered visionary as such, and I think it is a practical approach, but I am just wondering whether it would not be better if we could provide a 3-year program and get it underway and have an oppo rtunity to see how these institutions are going to react to it, how the States are going to co­ operate with it and develop the program prior to going into a program tha t would, well, be, I suppose, definite and where they could evolve into something that would turn out to be something other than the 

purpose of this bill.

Secretary Connor. Well, Mr. H arris-----

Mr. Harris. I would feel much bette r about it from my own personal viewpoint if we could do that. We have on this committee adopted, I might say to you, somewhat of a pattern on these programs of 3 years and then review. We have done that on several. One reason we did is because two or three programs got completely out of hand. Tt was not intended that they be plummeted into the kind of situation that we find today. So this committee decided tha t it would be a lot better for the programs and for the country if we took a look after 3 years to see how we are getting along.

Secretary Connor. Chairman Harris-----

Mr. Harris. We adopted a program 2 years ago of the medical assistance program, medical and dental program. Now we are coming back for an extension to that program. Now we have an opportunity to see how is is getting along. T understand it is doing very well and I think there is going to be more enthusiasm generated for it. \\ e are going to start hearings on the extension of that program June 10 of this year. Of course, it has another year to run but there is some technicality about it that makes it necessary to have a review now. We find a lot of reaction to it that is highly favorable, where if we had let the thing go along by itself, the first thing you know, it would have gotton way out of hand and I don’t believe we would have the strength that we have in it now. I just wondered if we might not be better 

off if we didn’t approach this this way.

Secretary Connor. Chairman Harris, T think in most situations this point of view is completely sound. The problem here is that for its administration, the program depends upon actions taken in all 50 States. With many State legislatures meeting only once every 2 years, and with some States finding this a new concept, our estimate
38 STATE TECHNICAL SERVICES ACT OF 19 65

is tha t it will take a period of time for this program to get fully underway. Thus it differs considerably from a program that is administered 

by a Federal Government agency. This is why we are recommending 

this longer period of time.

Mr. Springer. Mr. Chairman, would you yield?

Mr. Harris. Yes, indeed.

Mr. Springer. Mr. Secretary, have you or Mr. Hollomon given 

thought to how long you think it would be before the States did 

implement this program?

Secretary Connor. All 50 States, if they are so inclined?

Mr. Springer. Yes. I think this is rather important for the 

committee to know that if you have an opinion.

Dr. Hollomon. It is our guess tha t it would take approximately 

3 years. By the fourth year all of the States will have had opportunity 

to organize a full program.

Mr. Springer. How many do you think would implement it within 

a year?

Dr. Hollomon. A guess, Mr. Springer. My guess is something of 

the order of 10 to 15 within the first year. Perhaps more.

Mr. Springer. Two more years to get in the remaining 35, so to 

speak?

Dr. Hollomon. Right. I think it is very desirable to have the 

program subject to review. In this case in which the States have to 

take some action and an agency or institution has to be appointed, 

my own feeling is that a 5-year review might be more effective, but, of 

course, this is something for the committee to consider.

Mr. Springer. Thank you, Mr. Chairman.

Mr. Harris. I just have a feeling that we might be better off and 

develop a better program by working together and keeping everybody 

informed as it develops and progresses.

Dr. Hollomon. I do, too, sir.

Mr. Harris. If it looks like in a couple of years from now it is 

going much faster than you had ever anticipated, that then would 

be the time to bring all forces in with the information about how it 

is getting along. I would be interested in the comments of some of 

these people representing the institutions and the States as we go 

along with the hearings, but right now I just have a feeling that 

we might be b ette r off to approach it in this way. I would like you 

to think about it any way.

Secretary Connor. Thank you very much. We shall do so.

Dr. Hollomon. Thank you, Mr. Chairman.

Mr. Harris. I think that is all at this time, Mr. Chairman.

Thank you very much, Mr. Secretary.

Secretary Connor. Thank you.

Mr. Springer. Mr. Chairman, may I ask a question?

Mr. Macdonald. Mr. Springer.

Mr. Springer. Mr. Secretary, if there has been any criticism of 

this, as I talked to the members who have tired to become acquainted 

with this bill, it is this overall feeling which I think the chairman has 

expressed very well, that there are parts of this bill which seem to be 

rather indefinite.

Now, when Mr. Hollomon briefed me on this in my office, I thought 

he did as good a job as he probably could just talking. A great 

more has come out here today which it seems to me is more favorable
STATE TECHNICAL SERVICES ACT OF 19 65 39

to vour cause than after I read the bill and after talking about Mr. 

Hollomon. I suppose that always comes as a result of hearings. But if there are any ways in which you think you could alter this bill 

to nail it down tighter, I think it would be extremely helpful. Now, I think one of the problems that, the chairman hasn’t said to you, but certainly which has occurred to me, is tha t if we go to the floor with this bill, I can imagine a million questions are going to be asked on this bill; and to be frank with you, I don’t know whether 

r could answer them all—tha t is, whether I can answer them all 

credibly so that at least my people would feel that this was the bill which justified itself. Now, if they could have heard the hearings here, they might have come to a different conclusion but this is the one problem as I read this bill which has bothered me more than anything else and I merely pass th at along to you. But I think you 

felt a little bit of th at here already today.

Secretary Connor. Yes. Congressman Springer, we are in this 

dilemma. We can get much more specific in dictating the kind of plans that, a State would be limited to but we are fearful tha t if we do that, it will become a program of Federal dictation and not, therefore, responsive to the needs in the individual States. On the other hand, if we go through the procedure we have described and let a plan emerge from each of the 50 States, we recognize that, these plans are going to differ markedly one from the other. We are unable at the moment to describe them except, in general language 

and this raises the problem that, you have put your finger on.

Mr. Springer. Correct. Now, may I commend you for keeping 

this essentially in the hands of the States because I think it won’t be of much help unless you do, but within those limitations, can you nail 

it down any tighter? I do n’t know—you can’t say tha t today but this 

is something for your staff to think about.

Secretary Connor. We will take another look at it because we 

recognize this problem, sir. So thank you very much. We will 

look at it.

Mr. Macdonald. In tha t vein, one of the things tha t I am sure 

will be of interest to our colleagues in the full House as it is to us here is vour assertion that the bill represents in part a solution to longtime unemployment, national pockets of poverty, and so forth. Having read the bill and having had our discussions, I don’t see really how this proposal would affect pockets of poverty or unemployment in general in any meaningful way. Could you elaborate as to how the 

Department feels it will go to the problem of unemployment?

Secretary Connor. Mr. Chairman, in quite a few parts of the 

country, the latest technological advances nave not been put to use. As a result, using the illustration tha t Chairman Harris used recently, the places where this technology are in fact being used are pulling 

people from other States. We think that if, within a State that has not fully used new tech­ nology, there is a program which results in improvement of the economic development potential of tha t State, the result will be the formation and growth of more businesses which will keep the skilled 

people a t home in tha t State . This is our expectation.

Mr. Macdonald. But isn’t the other side of the coin utilized by 

another department of the executive branch, which reports tha t
40 STATE TECHNICAL SERVICES ACT OF 19 65

technological improvements translated into the word “automation” 

is causing unemployment?

Secretary Connor. The extent of unemployment related to automation, of course, is a matter of considerable debate and concern. 

As we have pointed out in our testimony, even within a particular 

industry that is characterized by small businesses, the use of the 

technological information available varies widely from one company 

to another. Usually the companies that are making best use of the 

latest technical information are growing most rapidly and therefore 

become big companies whereas the ones not using this information 

stay small companies. So it is a broader problem than the automation 

problem as I see it.

Mr. M acdonald. Well, I don’t want you to feel tha t 1 am unsympathetic to the bill. I think as you said earlier it is a new 

approach and one th at should be explored in any event, but I couldn’t 

agree more with the chairman of our full committee in saying tha t it 

should be certainly subject to review if it doesn’t work out in the way 

that the Department hopes that it will.

Secretary Connor. We agree with that concept. It is just a 

question of which period of time is most appropriate.

Mr. Macdonald. This seems like a picayune question

Mr. H arris. Would the gentleman yield there again? I think 

it is very important. Don’t you think we could after, say, approximately 3 years, get the States and institutions, industry,and everyone 

enthusiastic, particularly in certain parts of the country, and then 

come back here, say, in about 3 years? Don’t you think we could 

develop a much better program, have more information as to what 

we could utilize and how best it could be utilized?

Secretary Connor. My personal opinion, Mr. Chairman, is that 

you could do that at the end of 3 years.

Mr. Harris. What I am afraid of is, if you go to this thing for a 

period of 5 years, as you are talking about now, we run right into 

what Mr. Springer mentioned a moment ago. And that is a limitation that would be placed on it along with your planning and trying 

to accelerate it all at the same time. I am afraid it might handicap 

the program. It might discourage some of the States. It might 

discourage some of the institutions. You may not get as much 

enthusiastic support of it as you hoped and you feel now that you 

have.

Secretary Connor. I thin k there is a lot of sense in what you say. 

I think at the end of 3 years the experiences of the States that take 

the lead would be very valuable in pointing the way for the other 

States to follow.

Mr. Macdonald. My last question, and I don’t mean to get away 

from the broader aspects of this bill, but on page 9 you say:

A st art li ng f act is t h at in 1963 th e m an ufa ct ur ed mac hi ne ry which was e xp or te d 

fro m th e United Sta te s to th e E uro pea n m ar ke t av er ag ed 50 per ce nt high er in 

pro ducti vit y th an mac hi ne ry in st al le d do mes tic ally .

Now. why would that be?

Secretary Conner. Dr. Hollomon is familiar with this specific 

situation.

Dr. Hollomon. This was as a result of the analysis of U.S. exports 

of various machine tools and machinery. It appears as if the Euro-
STATE TECHNICAL SERVICES ACT OF 19 65 41

pean people pa rti cu larly hav e dem and ed and go tte n more pro ductive 

machinery. Th is is sim ply a m atter of the sta tis tic s on the ty pe of 

machines exported. Mr. MacDONALD. You mean to s av t hat o ur American m anufacturers 

when they a sk for a ma chi ne are ask ing fo r less pro ductive machi ner y 

th an are th e Eu rop ean s?

Dr. Hollomon. App aren tly on the average th at is the case.

Now, of course, th at does not mean eve ry comp any, but this is 

ap pa rently what th e exp ort sta tistic s indicate.

Mr. M acdonald. Well, for my own infor ma tio n, since I will be 

dea ling in this sub ject for awhile, who compiles these statist ics and 

how are they compiled?

Dr . Hollomon. Th ey are compiled by the Business and Defense 

Services Ad minis tration.

Mr. M acdonald. Are the re any furth er que stio ns?

Mr. F arnsley. Mr. Secre tar y, yo ur proje cts are the only two I 

kno w about, thi s one and the tou rist thing, th at probably hav e a h ard wa y to go because they do n’t cost enough. You are proposing to spe nd money to make money . 1 hope you keep on this way. But I am a new boy in this tow n and J foun d out alr eady unless it costs $30 or $40 million it has got no chance. Ju st be b rav e and keep it up.

Mr. M acdonald. Mr. Secre tary, on this very optim istic and ha ppy 

note, I would ju st like to say tha nk you very much, and Mr. Hollomon, 

for appearing before us tod av. Tom orrow the hearings will he resu med at 10 o’clock. Th ey will be held in room 2218 at which time I un de rst an d we will be hearing 

from the universities and othe r priva te witnesses.

Secre tary Connor. Tha nk you.

(Th e following le tter w as later receive d from Se cre tar y Connor:)

The Secretary of Commerce,

Washington, D.C., June 14, 1966.

Hon. Oren Harris,

Chairman, Interstate and Foreign Commerce Committee,

House of Representatives, Washington, D.C.

Dear Mr. Chairman: At the recent hearings before your committee on our proposed State Technical Services Act, you raised some important and helpful points and requested that I consider them and respond to the committee. You inquired whether it would not be desirable to limit the authorization for this program to 3 years, s tating quite properly tha t it would be helpful for Congress to review the activities of the program afte r a reasonable period of initial experience. I would like to suggest a 5-year period of authorization rath er tha n the sho rter term of 3 years. As stated in our testimony to the committee, we believe many of the States will not be able to fully implement the program until at least the third year. Since our proposed program is based on an overall 5-year-plan approach by the States, I am fearful tha t if t he initial congressional authorization for this program is only 3 years, the interest and commitment of the States to develop the best overall programs would be adversely affected. We must keep in mind th at th e Sta tes themselves will have to raise, eithe r from public funds or private sources, at least half of the costs of their programs. Therefore, I hope you will favorably consider an authorization for a term of 5 years. Another point you raised at our hearings related to the amount of appropria­ tions to be authorized. No specific limit is contained in the administration bill. However, as we testified, we anticip ate th at the total expenditure over a 5-year period, assuming the gradual participation of all States, would not exceed $140 million. Therefore, I suggest for your consideration th at if you conclude a specific limit or authorization is desirable, this be set at $140 million for the 5-year 

period. I would like to say th at we would have no objection if a provision were incor­ porated in the bill to require the Department to report annually to the Congress
42 STATE TECH NICA L SER VIC ES ACT OF 196 5

on the program. It seems to me this would go far to achieve the objectives implicit in the suggestion th at this authorization for the program be limited to 3 

years. Further, the Department of Commerce would, of course, be happy to 

cooperate at any point during the term of the program in formal hearings before 

your committee concerning our experience and a dministration of th e bill.

Another question which came up at our testimony related to the choices available to a State in selecting an agency or institution to plan its program. I believe 

this is fully answered by sectio n 2(b) of the bill which defines the “designated 

ins titu tion” as the agency or institu tion in each participating State which has 

been designated by the State. In other words, the adm inistration bill gives to 

each State full flexibility in choosing tiie planning agency for its program. The 

designated institution does not have to be a university or academic institution. 

It may be such an institution or it may be a nonacademic Sta te agency.

I believe one other point bro ugh t out during the hearings was w hether we could 

be more specific in describing the kind of programs th at the States would carry 

out under this proposed legislation. Section 2(a) of the bill contains what we 

believe is appropriate sta tutory description of the kinds of activity that would 

comprise a State program. We do not believe it would be desirable to attem pt 

to be more specific in the bill itself. We take this position because we believe 

that Sta te officials should have sufficient flexibility to propose the exact activities 

most needed and most useful to their own State.

However, in an effort to clarify our own think ing as to the kinds of programs 

which we think would be suitable under this legislation, I am enclosing a description of the specific programs now in operation in four States on a modest scale. 

These are generally illustrative of the kinds of work which might be undertaken 

under this bill.

Thank you very much for your interest and help in connection with this proposed legislation. Please let me know if we can furnish any other information. 

Sincerely yours,

J o hn T. C o n n o r, 

Secre tary of Commerce.

G e n e r a l Sta tem en t A b o u t E x is t in g Sta te P rogr am s o f T ec h n ic a l

Assis t a n c e to I ndust ry

The task of coupling advanced science and technology to industrial use is best 

underta ken by local institutions specifically charged with bringing new technology 

to bear on local industrial and economic problems.

There is considerable experience in industrially oriented programs from which 

to draw. About 28 S tate s now operate university-industry programs of various 

kinds. All are small in comparison to the need and opp ortu nity in their regions, 

but a few stand out because of the ir greater scope a nd effectiveness to date. Of 

these, four have been chosen for illustration. They represent four of the many 

different styles of operation which may be used, with equal effectiveness, in 

different regions. The programs described are only a partial list, and are included 

because they an* comparable to the kinds of activities envisaged by the State 

technical service program.

Iow a

The Center for Industrial Research and Service at Iowa State University was 

established in July 1963, as a pa rt of the university’s college of engineering. The 

stated goal was to assist in the indu strial growth of Iowa thro ugh the following 

three functions:

(а) Coordination of industrial needs with the techn ical capabilities and 

specialties available in the State and, particularly , those available through 

the staff and facilities of Iowa Sta te University.

(б) Assist with special problems facing industries in Iowa by full-time 

staff assigned to work dire ctly with the center.

(c) Publication of technological inform ation from research and extension 

activities relating to the ind ustrial climate and growth of Iowa.

During the past 18 months the following accomplishments can be noted:

(а) Over 1,500 calls have been made on Iowa industries.

(б) A wide variety of cases and problems, totaling over 460, have been 

handled.

(c) Most of the consulting firms and other professional groups in the 

Sta te have been cataloged for reference, including:

1. Engineers.

2. Architects.
STATE TECHNICAL SERVICES ACT OF 19 65 43

3. Paten t attorneys.

4. Certified public accountants.

5. Testing laboratories.

6. Advertising agencies.

7. University professors.

(d) An information retrieva l system has been pu t into use.

(e) Reports of completed research have been prep ared on a num ber of 

subjects. A summary of the 460 cases handled to date indicates the type of work being 

done. Fifty-six percent of th e cases came from business firms an d m anufacturers, 

32 perc ent from individuals, 8 percent from other Gov ernm ent agencies, 2 percent from development groups, and 2 perc ent came from trade associations and 

miscellaneous sources.

Georgia

The development division at the Georgia Institute of Technology was established in 1956 as pa rt of the engineering experiment station , with a main office 

in Atla nta and field offices in other cities.

The overall goal of the division is to develop the natural, human, and manmade resources of Georgia and the Southeast. Operations cover several major 

fields including industrial technical services, manpower resource analysis, and 

industrial economic analysis. Areas of staff specialization include chemical engineering, civil engineering, electrical engineering, industrial engineering, management engineering, mechanical engineering, textile engineering, textile m anu facturing, agricultural economics, area development, business administration, business 

education, chemistry, economic geology, economics, geography, ind ustrial management, journalism, library science, marketing, and sociology.

A basic data unit provides research reference sources for the staff as well as for 

outside groups. In add ition to these contin uing activities, special studies of 

statewide resources an d overall development problems are conducted periodically. More tha n 250 majo r technical assistance projects for business and industrial 

firms have been completed b y the industrial services staff and field office personnel. 

About 2,000 requests a year are received for information, and a backlog of 10 to 

15 requests for technical assistance is not uncommon. These requests usually 

develop without direct solicitation. Recently, this program has been expanded 

under the auspices of the Associated Industries of Georgia, an association of most 

of the major industrial firms in the State.

Professional consulting firms in the area are kept fully informed of progress and 

activities through an advisory council which meets monthly with members of the 

ins titute staff. Without exception the response of con sultants has been favorable. 

North Carolina

The industrial extension service of th e school of engineering a t North Carolina 

Sta te University was established by the State in 1955 to achieve a greater utilization of North Carolina’s raw materials, and to develop its small industries.

The staff provides the following types of services, among others:

(а) Technical studies, analyses, and assistance.

(б) Industrial film lib rary .

(c) Information distribution.

(d) Workshops a nd sho rt courses.

Many of th e requests for technical assistance are generate d by small chemical 

producers.

Wisconsin

University of Wisconsin, university extension division, chairm an, Mr. Paul J. 

Grogan. The university extension division operates thro ugh the depar tment of engineering of th e University of Wisconsin. By far, the greatest effort is in th e education 

extension area.

The northern Wisconsin development project staff has the following objectives: 

(1) To work closely with firms, providing man agem ent counsel on a continuing basis in specialized areas such as engineering, production methods, 

product development, finance, and marketing. These companies are chosen 

on the basis of grow th potential, need for assistance, and managem ent 

cooperation. Technical assistance is available from private and univ ersity 

consultants, University of Wisconsin extension specialists, and Sta te and 

Federal specialists. An integra l pa rt of this objective is the “demonstrat ion” 

concept, or the use of project findings to illustrate to other firms th e growth
44 STATE TECHNICAL SERVICES ACT OF 1965

which can be realized by application of improved managem ent and engineering methods.

(2) To provide short-term assistance to other firms and to economic 

development groups in nor thern Wisconsin.

(3) To provide an advisory and referral service aimed at interpreting the 

broad range of assistance available from the University of Wisconsin and 

approximate Federal and Sta te agencies, as well as private sources.

(4) To encourage the development of local forms of perm anent sup por t 

for this type of service to the business community.

Mr. Macdonald. The hearing will stand adjourned until 10 

tomorrow.

(Whereupon, at 11:55 a.m., the committee was adjourned, to 

reconvene at 10 a.m., Wednesday, June 2, 1965.)
STATE TECHNICAL SERVIC ES ACT OF 1965

W ED N ESD A Y , JU N E 2, 19 65

H ouse of R e pr e se n t a t iv e s,

S u bco m m it tee on C om mer ce an d F in a n ce

of the C om m it te e on I n terst a te an d F o r eig n C om mer ce ,

Washington, D.C.

The subcommittee met, pursuant to recess, at 10 a.m., in room 2218, Rayburn House Office Building, Hon. Tolbert H. Macdonald (chairman of the subcommittee) presiding.

Mr. M ac do na ld . The hearing will come to order.

The first witness today will be our very able and hardworking 

colleague from Florida, Mr. Claude Pepper.

STATEMENT OF HON. CLAUDE PEPPER , A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF FLORIDA

Mr. P e p p e r . Thank you Mr. Chairman and members of the committee. I want to take this opportunity to thank you and the other distinguished members of this committee for allowing me to take a 

few moments of your time to voice my support for the proposed Technical Services Act of 1965 which the committee is considering 

today. I am one of a number of Members of the House who had introduced this legislation. I am in complete agreement with the stated purposes of this bill. It is vitally important that we make the fullest possible use of the technological knowledge arising from our massive postwar research and development efforts. The fullest use of this information is essential for the continued growth of our domestic economy, and it 

is even more important, if that is possible, to the maintenance of the 

competitive position of our goods in the world markets.

The ability to maintain an expanding volume of U.S. exports, in turn, is our main hope for eliminating our chronic balance-of-payments problem within a framework of freer trade, travel, and investment 

throughout the world. If we look back to the period just before World War IT, we find that 

the bulk of our Nation’s research and development activity was both supported and performed by private enterprise. In 1940, Federal spending for research and development amounted to only $74 nillion, or a little under 1 percent of total Federal spending. But, since then and especially since the middle 1950’s, the Federal investment in research and development activities has mushroomed to a level of approximately $15 billion a year, or 16 percent of the total Federal 

spending in the current fiscal year, fiscal year 1965.

45

5 0 -4 7 4— 65— 4
46 STATE TECH NICA L SERVICES ACT OF 19 65

Might I interpolate, Mr. Chairman and members of the committee, 

to say tha t I recall when we set up a resolution of the Congress which 

originated in the Senate on the National Cancer Institu te in 1937.

At tha t time hardly anything was being spent by the Federal 

Government in the field of research in the area of cancer. The first 

appropriation was $500,000 and tha t went ahead until 1946, when I, 

in the Senate, and former Senator Neeley, in the House, introduced 

a bill to appropriate $100 million to remain available until spent, in 

the field of cancer research.

A year or so later we came up with the first Federal appropriation 

of about $8 or $9 million and the following year it went up to $14 

million.

Since th at time it has continued to rise.

A little while after we had gotten the defense program underway, 

why, my attention was called by Mrs. Albert Lasker of New York, 

who has done so much in the health research field, to the fact that the 

Federal Government was spending only $6,000 a year, as a total 

expenditure, in the whole field of research in heart and circulatory 

diseases which killed 1 out of 3 of our people and we started then a 

program to give some Federal funds. Mrs. Lasker and I brought the 

heart specialists for a hearing before the Senate Appropriations 

Committee. One million dollars were put in by the Senate Appropriations Committee by Senator Styles Bridges who was then chairman. 

The House reduced that to $500,000. But that was the first substantial appropriation which was made in the field of heart research. 

Previously we had been appropriating only $6,000 a year.

Some of those here, and your distinguished committee chairman, 

Mr. Harris, particularly, will recall just how relatively recently these 

Federal research programs have gotten underway and how great the 

expansion has been and how meaningful it is to the country, I believe, 

that we have them and how constantly and significantly helpful it has 

been in the field of research, both health and economic research, to 

have Federal participation.

Private research and development spending has also risen during 

this period.

According to estimates made recently by economists that the 

Battelle Memorial Institute, a highly respected midwestern scientific 

research organization, it is conservatively estimated tha t privately 

supported R. & D. amounted to around $5 billlion in 1964. And it 

should be noted tha t much of our Federal support goes for research 

and development work performed in private industrial and university 

laboratories.

Nevertheless, it is obvious tha t the Federal Government now plays 

a dominant role in the research and development field, supporting 

close to 75 percent of our total national investment of $20 billion a 

year, and tha t this gives the Federal Government a heavy responsibility for seeing that the fruits of this massive research effort are not 

wasted.

We have an obligation to see tha t the fullest use is made of the 

technological knowledge developed on this great investment in scientific and engineering labor.

I am very anxious tha t we do everything we can to insure the 

effective civilian utilization of the knowledge gained in the course of 

our space and defense research efforts. I am aware tha t both the
STATE TECHNICAL SERVICES ACT OF 19 65 47

Department of Defense and the National Aeronautics Space Administration are actively promoting the spinoff of their technical developments for use in the civilian economy, but I think we must do more. 

I think we must do more to achieve a bet ter regional dissemination 

of this information, and I think tha t we must do more to engage the active cooperation of our State governments, local committees, and 

industrial groups in the effort to make better use of this knowledge.

We are considering in this Congress a number of broad programs 

to encourage greater Federal, State, and local cooperation in such 

areas as medical care, transportation, pollution control, city planning, 

education, housing, and others. And in many of these programs we 

are giving special attention to assuring a better geographic distribution 

of the opportunities and advantages being generated. We should approach this problem of the greater utilization of 

available technological knowledge in this same spirit—so tha t the 

boons of scientific discovery will be made available to the economic 

interests throughout our country, and will be made available to them 

through a program encouraging self-help and S tate and local initiative.

I believe the program envisaged under the Technical Services Act of 

1965 will contribute importantly toward this double objective of 

greater and more balanced economic growth throughout the country.

Now, Mr. Chairman, may I interpolate again. We know, of course, 

tha t knowledge is interrelated if not interdependent and tha t if 

knowledge is generated in one area, the chances are it will have an 

effect upon other areas.

Just for example take what the influence of World War II in the 

development of the small vehicle has been upon the development of 

small vehicles in other aspects of our economy.

I hope if I mention a personal incident you will not mind. When 

the first, jeep was brought here to the Capitol, Senator Robert Reynolds 

of North Carolina was chairman of the Military Affairs Committee 

as it was then called, of the Senate and he and I got into that jeep 

and we rode up the steps of the Capitol from the White House direction, all bumping up and down those long steps. [Laughter.]

This is the first time I had ever seen an automobile, as it were, 

going up a flight of stairs and we were all out there looking at this 

new vehicle, the jeep which had come into use to serve, primarily, 

a military purpose. Now we have every kind of little vehicle. This is just a very 

crude illustration of what research has done, primarily for military 

purposes, but at least in terms of potential value to other aspects of 

the community. k

Mr. Harris. Is that, the reason they are used by mail carriers 

also? [Laughter.]

Mr. Pepper. Maybe so, maybe so.

I will just say this, too: You will agree, I am sure, that if we had 

had the little modern motorbikes when we were young, and riding 

bicycles, we would have saved a lot of pedaling. [Laughter.] In the 

State of Florida and its Third Congressional District, which I have 

the high privilege of representing, we have seen the economic benefits 

of new and expanding industry developing from a science-oriented 

base. Innovation and a high degree of technical efficiency are the 

hallmarks of the growing company, the company tha t pays bet ter
48 STATE TEC HNICA L SERV ICE S ACT OF 19 65

wages, cre ate s new products and new ma rke ts, and act s as a spin- for 

com mu nity and nat ional economic growth.

The Techn ical Services Act of 1965 can help more of our com panies, 

especially o ur smaller businesses, become rapi d growth , high efficiency 

ope rations . They can bring ou r un iversit y scientists and engineers, 

our economic develop men t gro ups, and our in du str y gro ups into closer 

coo peratio n for the benefit of every St ate and the Na tio n as a whole.

In addit ion to wha t this pro gra m can co ntrib ute to ou r domestic 

well-being, to a rising prosperity for our people, and bet te r earn ings 

for our busines s enterprise s, its contrib ution to our overall nat ional 

efficiency can b e extremely im po rta nt in the a iea s of foreign tra de and 

nation al sec urity.

A more efficient economy can enable us to sell more goods in increasingly comp etitive world ma rke ts. It can ena ble us to ma ke a larger 

co ntr ibuti on ou t of our rap idl y expan din g economy for the developmen t of less fortu na te nations throug ho ut the world. And in any 

inter na tio na l crisis it can give us a stronger ind ustrial foundation for 

the defense of our liberties.

Mr. Ch air ma n, it is my belief th at the Techn ical Services Act of 

1965, which was proposed by the Presi dent and which I and 13 oth er 

Members of the House are spo nso ring, will make a far-reach ing contri bu tio n to our nat ional prosperity, sec uri ty, and progres s far exceeding its costs.

This com mittee is to be hig hly com mended for act ing so prom ptly 

in scheduling h earings on thi s ve ry im po rta nt matter. It is my hope 

th at the com mittee , following caref ul stud y of the hill, will see fit to 

recommend its app roval, and th at the Congres s will take affirmative 

action at the earliest possible da te.

Our Na tio n has benefited immense ly from the tech nological revolu ­

tions of the past. This pro gra m will give us greater ass ura nce that 

we will c ontin ue to adv ance on th e bro adest tech nologic al base in the 

yea rs to come.

Th an k you very much.

Mr. M acdonald. Th an k you, M r. Pep per.

Mr. P ep pe r. I would only ad d, Mr. Ch air man and me mb ers of th e 

comm itte e, th at basically wh at this legislation pro poses to do is to 

brin g abo ut a closer re lation ship betw een th ose who are genera tin g this 

great mass of knowledge and those who are engaged in the business 

of the app lica tion of th at knowledge in practic al way s in various 

aspects of our econo my in o ur co un try . I would like to th an k y ou very 

much, Mr. Ch airma n, and m em bers of th e comm itte e, for th e privilege 

of being here.

Mr. M acdonald. Th an k you, Mr. Pepper. We have certainlv 

enjoyed your app earance nere to da y and 1 co ng rat ula te you on your 

sta temen t.

Mr. P ep pe r. Th ank you.

Mr. M acdonald. Are the re an y question s of the gentlem an from 

Florida?

Mr. H arris. Mr. Ch air ma n, I wan t to say th at I am glad to be 

here durin g the prese nta tion of ou r colleague from Flo rida. I am 

sorry I wo n’t be able to sta y for t he p res entat ion of our colleague from 

Colorado.

Mr. P ep pe r. Mr. Ch air ma n, m ay I be pe rm itted to say th at the 

distinguished cha irm an of the m ain com mittee, the pa rent comm itte e,
STATE TECHNICAL SERVICES ACT OF 19 65 49

has done, if not more than anybody in the Congress, certainly as much 

as anybody in the Congress to broaden the frontiers of knowledge in all aspects of research and I want to take this opportunity to commend him for the leadership that he has given.

Mr. Harris. Than k you very much. I would add to my colleague 

that I do have some pride in the fact that I participated in the establishment of the National Science Foundation, back in the early 

forties—I had forgotten how long ago it was.

Mr. Pepper. I remember that.

Mr. Harris. But we all know the tremendous contribution that it 

has made to the welfare of the Nation and of the world so I cannot help hut have a little pride and a lot of satisfaction out of the small contribution J made to that program. For various reasons I am very happy about some of the things tha t we have achieved in this com­ mittee with the help of many others, including members like the gentleman from Florida, and what we hope to be able to achieve 

through the efforts of this committee. T, as chairman, could stay in this committee for a long while but T want to get this man at a meeting of the Rules Committee. 

[Laughter.] We have got a rule we are seeking so I have to take him with me 

over there. Let me just say what you have seen here this morning is some indication of the reason why the University of Arkansas sought him 

out as a professor of law back in the days I am not going to mention [laughter] although he is older than 1 am, hut it is before I got out of 

school.

Mr. Pepper. 1924 and 1925—that was one of the happiest experiences of my life.

Mr. M acdonald. Thank you very much, Mr. Pepper.

Mr. Harris. Is Dr. Caldwell here? 

l)r. Caldwell. Yes.

Mr. Harris. 1 want to take the opportunity to say hello before I 

leave and to some others who may be here. I hope I will be back 

later, Mr. Chairman, if I amnible to.

Mr. Macdonald. Fine, Mr. Chairman.

Is the Honorable Roy H. McVicker from Colorado here?

Mr. McVicker, we will be glad to hear you at this time.

STATEMENT OF HON. ROY H. McVICKER. A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF COLORADO

Mr. McVicker. Mr. Chairman, it is indeed a great honor and 

pleasure that I appear today to testify on behalf of my bill, H.R. 7335, designed to promote economic growth by supporting State and regional centers to place the findings of science usefully in the hands 

of American enterprise. This hill would permit the Federal Government to join with State governments, universities, and local industry in stimulating the industrial and economic growth of States and regions in the Nation 

through the application of science and technology. The bill is addressed to the economic problems about which we 

read every day—long-term unemployment, regional pockets of 

poverty, industries which are losing their competitive positions, and
50 STATE TECHNICAL SERVICES ACT OF 19 65

increasing foreign competition in both domestic and world markets. 

These problems point to the increasing need for developing mechanisms to bring the latest developments in technology into the production lines and plants of our local industry.

Just as the problems are local, so should be their solution. This 

would establish mechanisms concentrated on the local level, utilizing 

local leadership, local initiative, local resources, and local participation. Federal funds, on a matching basis, woidd be used to encourage the establishment or expansion of local institutions specifically 

destined to meet the needs of the local economy.

A State wishing to participate in the program would designate 

an institution, either a State university or agency, to administer 

and coordinate the State’s technical services program. This institution 

would prepare a 5-year plan, outlining the technological and economic 

situation in the State, the major regional and industrial problems, 

and the means to be used in assisting in their solution. The institution 

would also prepare an annual technical services program, including 

the objectives for the first year, the budget, and the responsibilities 

assigned to each qualified in stitution participating in the program.

The 5-year plan and the annual program would be submitted 

to the Secretary of Commerce. Federal matching funds would be 

made available to the designated institution to support eligible 

programs. The Secretary of Commerce would establish a formula 

designating the maximum annual Federal payment, taking the following criteria into consideration: (1) population, (2) level of industrial and economic development and productive efficiency, and 

(3) technical resources.

His formula will be weighted to provide funds to States and regions 

where industrial development has lagged behind its potential and 

where technical resources are weak. The population criteria will be 

applied in a manner which will permit even the smallest and least 

populous States to participate in a meaningful and profitable program.

There are a variety of effective programs of university-industry 

cooperation in operation in 28 States at the present time. One 

especially notable program is conducted. under the auspices of the 

Denver Research Institute, an integral part of the University of 

Denver which engages in sponsored research for Government and 

industry. This institute offers ample evidence of the potential 

effectiveness of programs that the subcommittee is now considering. 

To stimulate the process of technology transfer, the DRT has developed a highly motivated staff of engineer-economists, engaged in 

effectively interpreting the significance of scientific and technological 

advancements to the commercial entrepreneur. These economists 

are studying new techniques for coupling technological innovations 

with potential users in industry, thereby providing the bridge between 

the generation of advanced technology and its use in technologically 

oriented as well as underdeveloped industries. In addition, these 

men are carrying out fundamental research on the processes by which 

technology is diffused and applied, seeking new ways to accelerate the 

transfer of knowledge into use.

The Denver Research Institute consists of seven operating divisions: 

chemistry, electronics, electromagnetic propagation, industrial economics, mechanics, metallurgy, and physics. Research interests in 

these divisions cover a complete spectrum from basic investigations
STATE TECHNICA L SERVICES ACT OF 19 65 51

to directed developmental efforts. A number of large research 

programs are also conducted by the institute outside the divisional 

structure.

But such programs, effective as they are, are still small in comparison to the need and opportunity in their regions. If we are to 

promote our economic growth to the fullest possible extent ; if we are 

to achieve and sustain a high level of employment throughout our 

Nation; and if we are to improve our competitive position in world 

trade—the hiatus between the technological developments in our 

laboratories and their application in our industries must be erased. 

I believe this bill will accomplish much toward the end of nurturing 

our economic growth and prosperity.

Mr. Macdonald. Are there any questions? If not, we thank you 

for yor appearance, Mr. McVicker.

Mr. McVicker. Thank you, Mr. Chairman.

Mr. Macdonald. The next witness is 

vice chancellor for programs at the Texas

Station, Tex.

STATEMENT OF JOHN C. CALHOUN, J] 

PROGRAMS, TEXAS A. & M. UNIVE; 

TEX.

Mr. Calhoun. Mr. Chairman, I have a which

I believe the clerk has distributed to you, and light certain

points. It is a pleasure, Mr. Chairman and members of the committee, to appear before you today to speak on behalf of H.R . 3420 

the State Technical Services Act of 1965.

My name is John C. Calhoun, Jr. My home is in College Station, 

Tex. I am vice chancellor for programs at the Texas A. & M. University system, which is the land-grant university for the State of 

Texas. The institution for which I work has a number of programs 

in the area covered by this bill, some of which I will describe, but I 

wish to emphasize, I do not appear here on behalf of that institution. 

The comments which I express and the recommendations which I 

make are a matter of personal analysis and opinion.

I have taugh t university engineering courses from the sophomore 

through the graduate level, have supervised research projects, and 

have taugh t continuing education courses. Experience as a department head, as a dean of engineering, as a director of an engineering 

experiment station, and as a director of an engineering extension 

service have brought me in contact with both opportunities and 

problems in the advance and use of technology. In a consulting 

capacity with a number of industries, I have dealt with the problem 

of updating personnel. Recently, as president of the Society of 

Petroleum Engineers of AIME , I initiated a stud y on continuing 

education to examine the need of members of this professional 

society for maintaining their professional quality through current 

awareness of advances in technology.

It is from this general background that I offer my comments this 

morning about the proposed State Technical Services Act of 1965.

I believe this proposed legislation is needed, and I recommend to 

you that you give favorable consideration to its enactment. It will
52 STATE TECHNICAL SERVICES ACT OF 19 65

provide the stimulus for a general advancement in technology that 

will not come about in any other way.

First, I would like to give you some of the general reasons why I 

am in favor of this legislation. Second, I want to indicate a few 

things I think could be done in Texas, based on the programs that 1 

now see in operation. And, finally, I will make a few suggestions for 

improvement in the details of the proposed act.

Our Nation is making a considerable investment in research and 

it is important that this investment pay dividends. The realization 

of benefits through the use of research findings is not,however, an 

automatic process. It is necessary tha t we apply efforts to the job 

of using new knowledge.

Research has actually become an industry of its own and is carried 

on most efficiently on a large scale in highly organized programs. The 

individual research man is still the key to much of our advancement 

but his environment is more and more tied to a research team.

In addition, the execution of sophisticated research requires rath er 

complex and sometimes very sophisticated apparatus or access to 

special environments such as those of the atomic nucleus, the ocean, 

or the atmosphere. The individual researcher or the small research 

organization find it difficult to maintain the spectrum of tools and 

specialties to make research fruitful.

These changes make research itself more efficient, and allow the 

research worker to be highly creative and motivated. These forces 

at the same time have a tendency to isolate research from its ultimate 

application. Research can new sustain its own internal growth as 

an end unto itself. Its full use in our day-to-day industrial world 

will not be achieved unless we specifically give attentio n to the matter.

There is also a critical size that is an important consideration to the 

conduct of research. The large corporation will be able to sustain its 

own research organization with the necessary breadth for it to be vital. 

The small company cannot. This sharp distinction between those 

industries of sufficient size to carry on their own research activity 

and those that cannot leads us to a very real situation of have versus 

have not industries. 'The latter must look to sources outside their 

own organizations for technological stimulation.

It is important that the bridge from research activity to applications and use of technology in private enterprise be narrowed rather 

than widened. Our attention to the flow of information from a basic 

research investment to utilization has been primarily from the 

academic research field into the graduate student program; from 

federally supported contract and national laboratory research into 

Federal programs; from the large industrial and corporate laboratory 

into the large corporate business. There is essentially no bridge to 

carry research information from the academic or Government laboratory to the small industry or to the isolated individual engineer.

The little that is done has been generated through some of the 

State engineering experiment stations and the not-for-profit research 

foundations working in localized areas on localized subjects.

In my opinion a larger part of our economic activity and organized 

technology exists in smaller units than we ordinarily realize. A 

large number of companies are not only too small to have research 

organizations, but are too small indeed to have engineers or professional technological employees of any type. There are also many
STATE TECHNICAL SERVICES ACT OF 19 65 53

examples of individuals who make poor or ill-advised investments that never get off the ground because they are isolated from tech­ nology. Industrial development is more and more related to what conies out of the research laboratory and to the advances that we make therein. In addition, many individual engineers, some of them employed by large companies, work in isolated places where they do not have an opportunity to stay up with the main stream of technological events. In Texas there is a group of public institutions also that are in need, in my opinion, Mr. Chairm an, of technological information. In Texas, for example, there are 11,000 industries that do manu­ facturing of some sort. At least SO percent of these have less than 500 employees. In other words, they are classified as small businesses. In Texas also, we have 431 cities over 2,500 in population. Of these, 410 are in the category of 2,500 to 50.000 people. Only 21 are 50,000 or over, a size th at gets to the point where the community 

can muster their own technological advice. Even among the highly organized professions such as tha t of petroleum engineering with which I am most familiar, there are a large percentage of individuals who are in relatively isolated situations. A survey done for the Society of Petroleum Engineers last year showed tha t 26 percent were employed at locations more than 50 miles from a university and, presumably, from an opportunity to undertake continuing education, and over 50 percent were more than 50 miles away from a university with a department of petroleum engineering— 

tha t is to say, the field of technology of their specific interest. Twenty percent of those in this profession were employed over 40 miles away from the nearest location where a professional group of their cohorts would hold periodic meetings. This distribution is in spite of the fact that the petroleum industry has a relatively high percentage of large corporations and highly organized research 

laboratories. The picture tha t I am portraying is of a research activity which has become highly organized and highly sophisticated and which, because of its nature, must be carried on in large groupings with an internal rather than an external orientation. On the other hand, a surprisingly large number of small industry units, of individual professionals, and of organized municipalities not only do not have research organizations but have little technological capacity to identify their needs. They have no access to research findings other than those they stumble upon. The situation, in fact, is not too unlike 

the regional imbalances t ha t exist in our national growth. I do not see any existing agencies, either Federal or local, that are directed to alleviate this specific problem; namely, the absence of a bridge between our growing research investment with its body of technological knowledge and our small industries, our isolated indi­ vidual professional, or our municipalities struggling with our technological age. There has been much talk about continuing education for the in­ dividual engineer over the last 10 or 15 years and there has been a general recognition tha t the individual engineer is not keeping up. There has not been a parallel attention paid to the equivalent lag on the part of the small in dustry or the small community and to the fact 

that they are not keeping up.
54 STATE TEC HN ICA L SER VIC ES ACT OF 19 65

We need, first, to rec ognize th is problem .

Th en, we need an age ncy or ma chine ry t o focus on the problem and 

con solida te the ind ividual efforts th at have sprung up within the 

State s. Along with thi s focusing ma chine ry we need to provide 

sti mula tio n for the small busin ess ma n, the small co mm unity , and the 

ind ividual enginee r to help the ms elv es. Th ey need to be provided, 

however , with analy tic al help and with the backgro und ma terial 

necessary for the m to iden tif y where th ey stan d, how far they lag 

behind th e best curre nt kno wle dge and wh at is available for them to 

ma intain pace with the re st of techno logy. Not the least of the 

req uir em ents is the necessity for pla nning and pre dic tio n. Many of 

the sm all industries now going on a year-to -year basis have no idea at 

all how th ey ma y have to change in order to be in business 5 yea rs 

hence.

I see the St ate Tec hnical Services Act, therefo re, as being directed 

tow ard filling these kin ds of needs.

Now, let me tell you a lit tle ab ou t some of our pro gra ms at Texas 

A. & M. Un ive rsity and wha t I see as some specific are as for which 

we could use add itional assista nce .

The Texas Engineering Ex pe rim en t Station, Tex as Tr an sportatio n 

In stitu te , Tex as Engineering Exten sion Service, the Texas Eng ineers 

Lib rary, and Texa s A. & M. Un iversit y Office of Co nti nuing Ed uc ation are all engaged in the type s of activ itie s outlin ed as tech nical 

services in the proposed legisla tion . Let me point ou t th at each one 

of the se, however, is e ngaged in a very sm all fraction of wh at is covered 

in this legislation. Our fun ds are lim ited and we have not been able 

to carry on these programs cover ed in the legislation at the intens ity 

needed, or on a total geo graphical cove rage basis.

Our industr ial economics research division has been doing area 

dev elopment studies, marke tin g r esearch studies, and ind us try analy sis 

for a nu mb er of yea rs. Th is staff of 6 full-tim e resear che rs and a 

tech nical librarian , du rin g the pa st 2 years, have done are a develop ­

me nta l pro gra m studie s for 10 small Texas com mu nities and have 

carried on 1 regio nal stud y com posed of 5 counties. During the same 

period they have also conducted 8 ma jor mark eti ng res earch pro jects 

for in du str ial firms in T exa s a nd hav e a nswered m ore th an 100 individ ­

ual inquiries pertaining to marke t inform atio n.

This pro gra m opera tes on an an nu al bud get of $75,000, of which 

about $10,000 is State fun ds, seed money , so to speak, and the re ­

mainder is paid in by indu strie s, com mu nities and individuals who 

mak e use of the pro gram.

One of th e big deficiencies in this program is th at it is almost 

impossible to undertake reg ion al studies. There are no logical sponsors for regional studies. Cities will sup port economics resear ch into 

their own com mu nity econom ic base, bu t th ey will no t very ofte n 

give su pp ort to the ana lysis of a region. There are 14 economic 

regions in Texas identified by Federal agencies and it would be very 

des irable to undert ake basic res earch studies of the economic a trr ibutes 

of e ach of thes e regions.

Th is kind of pro gram th at is car ried on by this econ omic survey 

sys tem tells wh at techno logical and reso urce base there is to work 

from if one wishes to stimu late new or exis ting ind ustry .

Th e Texas Engineering Ex ten sio n Service specializ es in extension 

pro grams and special courses, and this is a diffe rent kin d of program ,
STATE TECHNICAL SERVICES ACT OF 19 65 55

directed at bringing the latest technological information to the a tten ­

tion of working industrial people. This spring, for example, the service initiated four new programs: industrial radiography, telephone technology, electronics and project managing for mechanical con­ tractors. These courses are using the latest technological changes which we can work into the course including nuclear and computing, techniques. Approximately 14,000 persons enroll each y ear in train ­ ing programs and short unit courses conducted by the engineering extension service, and of these about one-third are already employed in Texas industry. Our m ajor limiting factor here is lack of funds to organize new reference and instructional material. And, incidentally, of this program about one-third of the funds are State-appropriated funds and about two-thirds are generated from fees and charges made 

to the participants. The Texas Engineers Library for years was the focus of engineering reference work of professional engineers in Texas. Unfortunately, lack of funds have required tha t this unit be terminated. Special requests for library searches and bibliographies from practicing engineers of Texas were handled through this library, but it has been inactive for about 6 years. It should be resumed and this is one of 

the things we would like to do. Since 1953, all literature search as needed by the Texas Highway Department has been conducted at Texas A. & M. by the librarian of the Texas Transportation Institute. This particular function is sup­ ported by the highway department. This is an example of what can 

be done if you know that there are the means to do it. One of the more dominant programs tha t has contributed immensely to the application of new science and engineering to Texas industry and public service institutions in recent years has been our data processing center. Through its special courses, computer tapes, 

reports and individual relationships with industries, a large input has been made to the advancement of industrial technological competency. To date, however, this has been localized to those groups who have 

seen the need and have been willing to support the activity. There 

is no general support available. The many short courses and conferences which have been carried 

on through our office of continuing education during the past 12 months include a protective relay engineers conference, a process 

industry instrumentation conference, a water and sewage course, a traffic engineers conference, a highway engineers course, and a special 

course in reservoir engineering and well drilling, respectively. These particular conferences and courses are directed especially to the transfer of new science and engineering to operating personnel, most 

of whom are engineers or engineering technicians. One of the biggest drawbacks to the dissemination of advanced 

technological knowledge through these seminars and conferences is the large effort to initiate a program. It takes much more to put the program in orbit than to keep it going. Many times a needed program doesn’t get off the ground simply because the stimuli cannot be focused nor available time and funds diverted from existing programs to launch the new program. One of our greatest needs in this respect is for individuals who can do analytical work on given subject matter 

areas, condense the appropriate material into up-to-date programs, and organize the format to make this information available to industrial groups.
56 STATE TECHNICAL SERVICES ACT OF 19 65

It is also very difficult at the present to survey the existin g level of 

a technology as i t is practiced withi n a given indu str y. Fo r exam ple, 

one could ask: “W hat level of chem ical engineering tech nolog y is now 

in use by t he smaller refineries throug ho ut the S tate of T exas? ” This 

questio n ca nn ot be answ ered un til a surve y is un de rta ke n. At the 

mom ent we hav e no funds to un de rta ke such sur veys and to the best 

of my knowledge, such funds are gen erally lack ing throug ho ut the 

Na tion. Th is applies to all areas of technolo gy.

In sho rt, I say th at our s ociety seems to tak e the position th at it is 

up to the ind ividual engineer or the ind ividual small indu str ialis t, or 

the ind ividual small mu nic ipa lity , to seek ou t their own salva tion. 

In most instan ces , however, the se people do not know where to star t. 

Gen erally, they d on ’t know how far behind th ey are. One of the first 

tas ks we face therefore is to establish some meth od an d means by which 

ind ividual sma ll industr ies, eng inee rs, or cities can measure their own 

techn olog ical standing . Th is is one of the things we would em bark 

upon in Tex as.

One of the small business ma n’s problems when he knows th at he 

need s help is where should he go once he know s this. Th ere are no 

organized technological clinics to whi ch the small indu stry can appeal 

for aid. We need organized, talented groups on a St ate or regi onal 

basis to ana lyze given ind ust ries an d given technologie s to deter mi ne 

the actua l stat e of the a rt and th e pa rti cu lar im pacts upon this which 

will produc e change. We have no t applied our analy tic al ab ility to 

learn where our technological illne sses exis t and wh at we may do 

about the m. This is anoth er thing we w ould like to do in Tex as.

Conse quently, in our S tate 1 believe we w ould not only be rea dy to 

un derta ke th e creation of a St at e plan, bu t I would prop ose a few 

specific program s. First , I would emp hasize studie s th at look at 

regions ins tea d of ind ividual cities in ord er to evalu ate th e ava ilab le 

ind ust rial base and resource base. Second, 1 would pro pose surv eys 

and analyse s of th e sta te of tec hnolo gy as it is currentl y pra cticed, and 

an evalu ation of the gap betw een curre nt pra ctice and th e bes t level 

of knowledge. And third , I wou ld sup port th e establishm ent of 

analy tical tea ms and groups to do th e bac kgroun d wor k and to 

organize pro gra ms so th at both th e small ind ustriali st an d th e ind ividual technologist would be sti mulated to seek assista nce .

Fin ally , let me com men t on a few changes th at I would suggest in 

the act itself. I believe these suggestion s will impro ve the act 

alth ough I emp hasize, 1 do not th in k the y are critical.

In th e first place, I think its pur poses ought to be bro ade ned so as to 

include placing t he findings of science usefully in t he han ds of American 

civic and pub lic service i ns titutions as well as in the han ds of industry .

In th e seco nd place, 1 would delete the las t sen tence of section 

2(c)(2) so th at the Comm issio ner of Ed ucati on will not em bark upon 

the ac tiv ity of acc rediting ed ucational programs.

Th ird . I would limit the formula basis for det erm ining allo tm ents to 

State s to (a) current pop ulation and (6) cur ren t ind ustrial develop men t

Fo ur th, I would be more specific as to the nam ing of th e “designa te d” institu tio n in each Sta te for prepara tio n of a St at e plan. 

Eith er on e pa rti cu lar ins tit ut ion in each St ate should be nam ed or the 

choice sho uld be plac ed in the hand s of the Governo r of each Sta te.
STATE TECHNICAL SERVICES ACT OF 19 65 57

In summary, Mr. Chairm an, I believe this is a significant peice of 

proposed legislation and I urge your favorable consideration of it. 

I think we are ready to use the support effectively in Texas. I thank you for the opportunity to make this statement.

Mr. Macdonald. Thank you very much, sir, for a very fine 

presentation here today. As you were speaking a couple of thoughts came into my mind. You kept referring to the benefits that small 

communities would gain from this proposed bill.

Mr. Calhoun. Yes.

Mr. Macdonald. I have read and reread the reports about the bill 

and I don’t quite follow the way in which a small community would 

benefit.

Mr. Calhoun. Well, sir, I spoke about small communities because 

I think they, as well as the individual engineer and the small industry, are three “institutions” that are in the same position. This bill as it 

is now would cover the small community only indirectly—actually it 

wouldn’t cover it as such.

Mr. Macdonald. No.

Mr. Calhoun. But I think it is all part of the same problem and 

I make the suggestion tha t the bill be broadened to include them. I am not talking about social problems of the community. I am talking about technology as it is practiced in the community. The 

man who runs the sewage disposal plant, the water supply system, or the people who carry on street improvement programs and other matters that involve technology are all as much in need of being at the 

forefront of technological information as are the people in small 

industry.

Mr. Macdonald. Well, don’t you think, to speak in terms of a 

concrete instance and to use your example of the engineers who run certain types of municipal services, tha t such persons might have a particular journal and/or trade association through which they could 

exchange this information?

Mr. Calhoun. Yes; m any of them belong to the American Public 

Works Association, or they belong to the Society of Civil Engineers, or the American Institute of Architects or other professional groups. 

But the professional organizations working on these matters recognize the same kind of lag that 1 have pointed out and tha t is the reason that my own association went into the study of what could be done 

to upgrade the individual practicing engineer. My own opinion, is th at in general cities, particularly those of small 

size of 2,500 to 5,000, just really cannot afford to hire engineers; or maybe they can just hire no who has the job on a “firefighting basis.” In other words, his tota l time is consumed in just taking care of the little day-to-day things tha t come up. It takes a lot of time to look after just those things that keep the average citizen satisfied without clobbering the administration. There is no group of really analytical 

people, however, available.

Mr. Macdonald. Which administration are you talking about? 

[Laughter.]

Mr. Calhoun. The city administration.

Mr. Macdonald. Oh.

Mr. Calhoun. I think there is a real problem in the small community and whether this bill can cover it or not is up to you gentlemen. 

As it is presently written it does not.
58 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Macdonald. Well th at is an interesting observation.

The second point I would like to raise with you is something that we 

were discussing yesterday with the Secretary of Commerce, and I 

don’t know if any of you gentlemen were in the room or not.

Mr. Calhoun. I was not.

Mr. Macdonald. But I asked the Secretary a question about the 

natural rivalry tha t might come about if the Government were to 

appoint one university as being their agent in this held. We know of 

the great rivalry between Texas A. & M. and-----

Mr. Calhoun. And the University of Texas?

Mr. M acdonald. Yes.

Mr. Calhoun. Right; and the University of Houston and soon . 

All of these are publicly supported institutions, of course.

Mr. Macdonald. They are all land-grant institutions.

Mr. C alhoun. No; they are not all land grant but they are all 

publicly supported.

Mr. Macdonald. Well, we have noted rivalry in that field—I 

have seen some of it myself, right on the field. [Laughter.] And 

very harsh [athletic] rivalry it is, too.

I must say it is to be commended from tha t point of view, but do 

you think that the bill as now written would tend to settle those 

rivalries or do you think tha t those rivalries would be strengthened 

because of the fact that the State governments would have to initiate 

such programs by appointing one of their number as the designated 

institution for purposes of this proposed act?

Mr. Calhoun. No, I don’t think this would increase any rivalry.

Mr. Macdonald. Well, perhaps it would be impossible to increase 

it. [Laughter.]

Do you think this would have a divisive effect?

M r. C alhoun. No, sir, I don’t think so at all. Those of us in 

educational work recognize tha t there is much more to do in our 

Nation and in our State and region than we can all do together, and 

we recognize that some institutions have attributes that others don’t 

have. Whereas one institution will be foremost in a medical program 

another institution will be foremost in an engineering program.

Mr. Macdonald. I take it tha t you feel Texas A. & M. would be 

foremost in an engineering approach?

Mr. C alhoun. Well, 1 don’t think that this is a fair conclusion. 

[Laughter.]

Mr. C alhoun (continuing). To draw. I think tha t Texas A. & M. 

has a very good engineering program but there are other good engineering programs in Texas.

If you are asking me how T would proceed to designate these institutions, say in Texas, I would say tha t I would prefer to leave that 

up to the Governor or somebody else who made a good analysis of 

where the S tate plan could best be put together. I do not think that 

is evident at this time.

Mr. Macdonald. Well, T agree with your conclusion that eventually 

it will come down to that, but with reference to the bill as now written, don’t you feel that if one institution is goin<j to be designated, 

no matter how self-sacrificing the other institutions might be, the 

others might feel slighted and therefore not be as cooperative, at 

least not quite as wholeheartedly?
STATE TECHNICAL SERVICES ACT OF 19 65 59

Mr. Calhoun. Oh, no, not at all. We don’t feel a bit slighted when 

the University of Texas is designated to receive a program or grants 

from the Federal Government for a medical program because we 

realize-----

Mr. Macdonald. Yes, sir, but this is a little different if you 

follow what I am saying. In this instance, as I read the bill, somebody—a Federal czar as I am sure he would be known in Texas— 

[laughter]—would look over the educational institutions and say: 

“I designate institution A,” for example, “as the foremost engineering 

school in Texas, to receive these funds.”

Don’t you think tha t this would bring an instinctive reaction from 

the other eligible institutions in Texas?

Mr. ( 'alhoun. Well, let me comment on it this way: In the first 

place I don’t read this bill to the effect that a Federal agency would 

make a determination tha t a given university is the best engineering 

university. I hope that it would make a determination tha t a given 

university is in the best position to put together this plan and this 

would call for competence in various stages of engineering, an understanding of what is involved in research, in technology, and an understanding of what the total industrial situation is, and experience in 

working with industry and in carrying on continuing education courses, 

so that you would have to make more than an assessment of its 

engineering quality. You have to make an assessment, I hope, of the 

institution best qualified to carry on the plan. I think tha t if this 

determination were made on a good analytical basis there would be 

no divisive effects and I am sure that we would all be willing to work 

for the good of the State in this respect. But frankly, as far as I am 

concerned, although when it comes down to designating, I am always 

interested in seeing mv institution up there in the front, I am more 

interested in seeing this job done for the State of Texas. I believe 

that all of our faculty and our people feel the same way.

Mr. Macdonald. I hope you are correct. [Laughter.]

Mr. Calhoun. I th ink we are.

Mr. Macdonald. One other question: Yesterday, in discussion 

with the Secretary and his assistant I asked what a region was and 

the Secretary said “two States” would be the minimum region. 

Yet, I read in your statement here th at there are 14 regions in Texas.

Now, I know that Texas is a big State, but [laughter] that does 

not quite jive with what was said yesterday.

Mr. Calhoun. Well, Mr. Chairman, I think you can get many 

different definitions of a region. The definition that 1 gave you is 

tha t which I obtained from the people in charge of the economics 

research program who advised me that one of the Federal agencies 

has designated 14 economic regions in Texas.

Now I don’t know on what basis.

It would seem to me tha t a region, in the terminology of this bill, 

will depend upona

 particularly, technology. If one looks at technology 

from one point of view we are a single cohesive nation and technological community today—tha t is, our technological community is a 

national technological community at this time without regions.

However, one could look at certain small industries and you will 

find in a given area you have a group of electronic industries, for 

example, and in another area one might find a grouping of materials 

industries or metal-forming industries.
60 STATE TECHNICAL SERVICES ACT OF 19 65

Again, if one is examining the state of the technological art one 

would have to identify regions differently.

I don’t read “regions” in the sense that I would like to consider 

them as being predetermined by geographical boundaries, but rather 

determined by technological practices.

Under the terminology that I read in the act “regions” means 

more than one State but I simply was trying to tell you the problem 

as I see it in Texas.

Mr. Macdonald. But you said “about 14 regions.”

Mr. C alhoun. Th at’s right, as I see our problem in Texas.

Mr. Macdonald. Well, wouldn’t the region to include Texas, also 

be comprised of Oklahoma and the rest of the Southwestern States?

Mr. Calhoun. Well, it depends. *

Mr. Macdonaid. They have problems in common.

Mr. Calhoun. It depends on what you are talking about.

Now, if we are talking about certain aspects, let us say, of petroleum 

production, then you might want to talk about the problem in relation <

to t.lie entire Southwest. If you are talking about another kind of 

technological problem you might be talking simply about the Permian 

Basin which is essentially entirely within Texas.

However, If you are talking about another kind of problem having 

to do with flowing wells you would be talking about the gulf coast.

Mr. Macdonald. Yessir; but if you are just talking about petroleum, you would be talking about Saudi Arabia as well as Texas, 

wouldn’t you?

Mr. Calhoun. It depends on whether you are trying to improve 

technology as it is practiced and this is the inten t of this particular 

act, as I see it, which is to stimulate the level of technology practice 

within America so tha t we will not only be better internally but better 

competitively speaking externally.

Mr. Macdonald. Well, I guess that touches the heart of it. So 

tha t you feel th at the “regional” concept has this as its purpose.

Mr. Calhoun. Yes. I feel tha t the regional thing, as I read the 

bill, or as I interpret it, would mean more than one State. I probably 

should not have used the word “region” in talking about Texas, but 

I was simply trying to point out tha t one of the problems we have in 

carrying on our program is tha t to date we have only been able to 

deal with localized communities and one thing we want to do is deal 

with the problem on a broader level. We want to get support which 

we do not now have simply because you cannot pin down anybody t

who can see it on a “regional” basis.

Mr. Macdonald. One last question—and I know other members of 

the committee want to ask you some questions—on page No. 12, you 

say tha t you would like to delete the last sentence of section 2(c)(2) ,

so that the Commissioner would not get into the question of accrediting.

Mr. Calhoun. Yes.

Mr. Macdonald. As I understand it, you feel tha t the Commissioner of Education, Mr. Keppel, should not be doing that. But I 

want to point out this is what is actually being done right now by the 

professional and scientific groups.

Mr. Calhoun. That is where I think it should be done but that is 

not the way I read th at sentence.
STATE TECHNICAL SERVICES ACT OF 19 65 61

Mr. Macdonald. Th at is what the Secretary said yesterday; that 

is how it is being done now.

Mr. Calhoun. Well, the way T read tha t sentence is tha t if the 

Secretary cannot find anybody who does this, then the Commissioner 

of Education would em bark upon tha t phase; the accreditation, with 

a national advisory group.

Mr. Macdonald. Well, T don’t think tha t is correct. T feel this is 

a very important point, frankly, not just for this committee, but when 

we bring it to the floor I am sure many of our colleagues will w ant to 

comment on it.

Mr. Calhoun. I don’t have the hill in front of me but that is simply 

in accordance with my own reading of the sentence.

Mr. Macdonald. Yes; b ut I think we should have this cleared up 

so tha t when you repo rt to Congressman Teague, who is a very 

illustrious alumnus of your school-----

Mr. Calhoun. Thank you.

Mr. Macdonald (continuing). That this won’t he an issue.

Mr. Calhoun. I now have the bill, Mr. Chairman, and on page 

Ko. 4 the sentence reads:

W he n th e Co mmiss ione r de term in es th a t th er e is no nat io na lly reco gn ized 

ac cr ed itin g ag en cy or as so ci at io n qu alified to ac cr ed it su ch prog rams, he sh all 

pu bl ish a lis t o f i nst it uti ons he finds q ualified a ft er pr io r ev al uat io n by a n ad vi so ry 

co m m itte e, comp osed of pe rs on s he d eter m in es t o be sp ec ially qu ali fie d to e val uate 

th e tr ai nin g pr ov id ed unde r su ch prog rams.

Mr. Macdonald. Right.

Mr. Calhoun. Now, this to me indicates that under certain conditions the Commissioner of Education would set up an Evaluation 

on Accrediting Committee, or whatever it might be.

Mr. Macdonald. No, sir.

Mr. Calhoun. Th at would have to go through the process.

Mr. Macdonald. You are wrong.

Mr. Calhoun. Well, OK . I am glad.

Mr. Macdonald. I hope that you agree with me tha t you are 

wrong about it because it says “when the Commissioner determines 

tha t there is no nationally recognized accrediting agency” and of 

course that was already settled at the hearing yesterday when it was 

brought out that there were two engineering groups and also a business 

administration group.

Mr. Calhoun. And of course there is the National Commission on 

Accrediting which looks at the whole accrediting activity.

Mr. Macdonald. Well, wouldn’t tha t take care of your objection 

then?

Mr. Calhoun. Well, sir, the only point I want to make is this: 

If there is a nationally recognized accrediting agency or agencies, then 

this sentence has no meaning.

Mr. Macdonald. Well, you are the expert in this field and I am 

asking you, because my knowledge in this particular area is basically 

limited to the testimony th at was presented at the hearing yesterday.

Mr. Calhoun. Well, there are accrediting agencies.

Mr. Macdonald. In engineering?

Mr. Calhoun. Yes, sir; the Engineers Council for Professional 

Development.

Mr. Macdonald. Right.

59- 474—65----- 5
G2 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Calhoun. And there is also an accrediting agency for business 

programs.

Mr. Macdonald. Right.

Mr. Calhoun. And there is an accrediting agency for veterinary 

medicine, and for architecture, and so on. There are a whole lot 

of them.

Mr. Macdonald. Right. And from the fact that these are already 

in existence, would t ha t not cover your objection?

Mr. Calhoun. I hope it would cover it, but there is the sentence 

in here and it says th at under certain conditions the Commissioner of 

Education could set up an evaluation team. At least, tha t is the 

way I read it. Now, if I am assured tha t the Commissioner of 

Education will not get into the accrediting function then I am very 

happy , but all I see is the words in front of me. Th at was all I was 

reading—the words of the act.

Mr. Macdonald. But the language on page 4 says tha t “where 

there is no nationally recognized accrediting agency” and in the two 

instances tha t you have brou ght up there are.

Mr. Calhoun. Let us make my point clear.

Mr. Macdonald. Yes.

Mr. Calhoun. Whether there is or there is not, in my opinion I 

don’t believe the Commissioner of Education should get into the 

evaluation or accrediting of programs and it seems to me this provides 

an opportunity for the Commissioner of Education to embark upon 

evaluation. 1 see no reason for it to be pu t in the act.

Mr. Macdonald. Oh, yes sir, only in the absence of such an 

agency-----

Mr. Calhoun. Well I don’t believe there is any absence. I 

believe it is covered.

Mr. Macdonald. Well then, you withdraw your objection?

Mr. Calhoun. Well, this sentence has no meaning. Either the 

sentence has no meaning, tha t is, it is not required to be in there 

because it is covered, or there is some aspect tha t is not covered and 

the Commissioner of Education will get into the accrediting.

Mr. Macdonald. I don’t follow you.

Mr. Calhoun. Well, either accrediting is covered by other agencies 

or it is not covered. If it is covered then there is no point having that 

sentence in there. There is no need for it.

Mr. Macdonald. Well, just say for example that there was an 

internal dispute in the Engineering Accrediting Agency and they 

dissolved themselves.

Mr. Calhoun. All right, let ’s just suppose for the sake of argument 

that happens.

Mr. Macdonald. This language would then cover it, would it not?

Mr. Calhoun. Well, I won’t press the point. But the way I 

read it, it seems to me th at i t would bring the Commissioner of education into the accrediting function. If I am assured that this is not so and tha t the Commissioner of 

Education would not intend, or tha t the Dep artm ent of Commerce 

would not intend anything of the sort, and that is not the way it 

should be interpreted here, then I am happy.

Mr. Macdonald. It isn’t, though. I am happy with you. [Laughter.] But the point is th at it doesn’t m atte r wha t your feelings are 

or my feelings-----

Mr. Calhoun. Righ t.
STATE TECHNICAL SERVICES ACT OF 19 65 63

Mr. Macdonald (continuing). If it is written into the law.

Mr. Calhoun. Right.

Mr. Macdonald. But you are protected here, and I would like 

to be sure tha t you will not go away to alert the Texas delegation, which is one of our largest in the Congress, th at there is some sort of 

Federal control as to who would be accredited or no t accredited. We recognize that in the field of such ^specialists as engineering or business administration the people who do accrediting have done a fine job, and I am sure it is not the intent of those here or in the 

Congress as a whole to try to change th at.

Mr. Calhoun. I am pleased to know it is not the intent of this bill 

through tha t sentence to bring the Commissioner of Education into 

accreditation.

Mr. Macdonald. But I don’t want to go too far. I say tha t I 

believe, and I did not introduce the bill, but I believe that this sentence was introduced to cover any contingency if the association that does the accrediting for some reason, and let us hope that this does not 

arise, no longer could handle it.

Mr. ( 'alhoun. Well, let us hope that no such contingency develops.

Mr. Macdonald. Excuse me?

Mr. ( Ialhoun. Let us hope no such contingency develops.

Mr. Macdonald. Yes. Are there any questions from any of the 

other members?

Mr. Huot. There was a point brought out yesterday and I believe 

it was discussed to some extent earlier. Tha t is your fourth point 

that the designation should be a little more specific.

Now how would you feel about the agency of the State rather than 

the learning institutions—an agency like research and development ?

Mr. Calhoun. It is my personal opinion that the educational 

institutions are in the best position to put together these plans. I 

thin k they have the maximum knowledge as to what is the state of technology, as to what the directions of technology are and how they develop and as to what the procedures and methods should be t ha t 

will best solve the problems. 1 believe tha t this State plan is more properly in the field of th e educational institution than of any State 

agency.

Mr. Huot. I would agree with tha t except that it was brought o ut 

that where there might be competition in a State it might solve the 

problem. I am, however, concerned over the accreditation and the section 

that you were speaking about, No. 4, is only a protection sentence 

but on page 3, at the bottom , from line 21 on, there seems to be no problem where the accreditation agencies exist so this sentence that you are concerned about would not seem that it would have any occasion to be used except in the case of an emergency or some contingency such as has been referred to.

Mr. Calhoun. I am w illing to take the chairman ’s interpretation 

of tha t.

Mr. Huot. We wTere so assured by the statement of the Secretary.

Mr. Calhoun. Thank you.

Mr. Huot. That is all, Mr. Chairman.

Mr. Farxsley. No questions, Mr. Chairman.

Mr. Macdonald. Thank you very much.
64 STATE TEC HNICA L SERVICE S ACT OF 19 65

The next witness is Mr. Sidney T. Maunder, visiting lecturer from 

the University of Massachusetts at Amherst, Mass. Before you 

begin, Mr. Maunder, I would like to say tha t we welcome you here.

Mr. Maunder. Thank you.

Mr. M acdonald. Your reputation has preceded you.

Congressman Conte who introduced a similar bill has discussed the 

situation with me and has said that you were coming, informing me 

of your background. We are very happy to have you here.

Mr. Maunder. Thank you very much, Mr. Chairman.

STATEMENT OF SYDNEY T. MAUNDER, ELECTRICAL ENGINEER,

VISITING LECTURER IN ELECTRICAL ENGINEERING, UNIVERSITY OF MASSACHUSETTS, AMHERST, MASS.

Mr. Maunder. In introducing myself I would like to say that I 

am going to speak from different aspects from those heretofore. In 

general, I am going to speak about the subjects covered in my prepared statement.

I have been in General Electric, a large industry, for almost a 

lifetime. I was manager of engineering of a General Electric plant 

and I have designed and my engineering section has designed many 

pieces of electrical and electronic equipment and, as such, 1 have 

recognized the speed with which we can get the newest technical 

information.

Now that I have retired from General Electric and am a visiting 

professor a t the University of Massachusetts, I see the slowness with 

which technical information gets into the hands of industry and into 

the final product.

Also, I speak to you today as a man who has talked with many 

industrialists in the Commonwealth of Massachusetts, from the big 

industries to the little companies of which the former man spoke, and 

I recognize many of their problems.

1 speak to you in favor of this act and I ask your careful attention 

to it and your support of it.

This act will provide communication channels, faster communicacation channels, into the hands of, as I see it, the people who are able 

to use th at information in the final product.

In the text tha t I have given you I use very homely and out-of-date 

illustrations. I particularly have one in mind. A little homely 

because you and I can understand it. Mother had a paring knife and 

it had a wooden handle. It was held on with two rivets; it was a 

wonderful tool. About 40 years ago, through the advent of plastic, we 

saw the paring knife come out with a plastic handle and it was a 

failure initially. It melted in hot water. Maybe my mother or my 

wife used hotter water than they should have, but here was a poor 

manufacturer changing from the wooden handle to the plastic handle. 

He thought he had made a step forward, but he made a step backward. 

Now, it took some time before they had corrected the trouble with 

the plastic handle.

I use tha t homely illustration because in most of our products 

there are many little items that go to make up the total product and if 

anything goes wrong in any element of tha t total product the product 

is no ffood.
STATE TECHNICAL SERVICES ACT OF 19 65 65

As I state later in my text, there is a changing process and f also 

want to speak of this in a homely manner: I am going to talk about 

the painting of the product.

Most products except glass have to be painted for acceptance as 

a final product. How can this product be improved in a painting 

procedure? Well, obviously, we have gone away from the brush; 

we have gone to dipping or spraying. There is flow painting; there is 

electrostatic painting and with each of these new processes there are 

different elements. Which of these new processes shall we use in the 

product to improve it, to lower the cost, to make it more useful? 

Can we change the material at the same time that we change the 

process? Now, this is just one little process that I am speaking about 

but it is illustrative of many processes tha t go into making up the 

product.

At one time, in making electronic gear I had trouble with paint 

which I think illustrates this point very well so I put it in the text. 

The paint came off, flaked off some electronic gear. What was wrong? 

Didn’t we degrease the unit before painting? Did we use the wrong 

element in the paint? Had we not dried it well enough? All these 

things were considered—what of the combination of things had gone 

wrong? Being a big organization we called in our next higher level 

which was a paint expert by career and he came down and he could 

not find out what was the trouble. But he went to the vendor’s 

plan t and they worked a day or two together and solved the difficulty.

How can this same thing be accomplished in a small company? 

How can they get technical help instantly? How can they get 

technical help in depth when it is needed? How can they get information from the people who know about this pain t in my illustration 

and its application?

The next area I am going to talk about is “new products.” As 

we read the financial reports of many, many manufacturing companies, 

the president or the chairman of the board is most happy to point 

out that 27 percent of the products the company is now making 

were not available 10 years ago. In other words, through science 

they have developed new products and because of technology, ability, 

and marketing skills these new products are available to the public 

which were not available to the public a decade or more ago.

How can we help in the development of new products?

Well, this goes to the area of technological climate.

I want to spend just a minute or two talking about technical 

climate because unless you understand it then you will not understand 

its implications.

Mr. Chairman, you and the former speaker were talking about 

a small community of an engineer or two; such engineers are in a 

technical climate all by themselves. Such a man has no one to talk 

to except, as was pointed out, at a regional meeting, perhaps, and I 

am using the wrong word here, but a regional technical meeting 

having technical climate which is the climate where engineers and 

physicists and scientists like to work. This is where they can get 

furth er education, where programs are provided in technical schools 

and where they can advance and improve their technical competence; 

and perhaps programs which lead to a d octor’s degree may be undertaken.

This is the climate where there is rapport with other engineers.
66 STATE TECHNICAL SERVICES ACT OF 19 65

Now, if you are an engineer in a small community, who can you 

talk to except yourself, and be in a technical sphere or in a technicalbrotherhood basis? Rapport with other engineers helps to stimulate 

progress among each other.

Of course a technical climate is often made better by research 

facilities. If you are an engineer in a small plant and you have certain 

research facilities you may want at times bigger equipment which is 

not available to you but if one of your brother engineers in the same 

community and in a different p lant has tha t facility there will be an 

exchange of uses of this equipment and of the art so th at this makes a 

terrific technical climate. It is one thing tha t breeds new ideas—it 

breeds new products; it breeds a situation where the engineer will 

want to stay in that community and other industries may move into 

that community because they see it has a good technical climate.

It is one where, as you see a product, then you see a second level of 

the product, or another element of it tha t has never been developed 

and so a new industry may be born out of this technical climate.

Now here we have some of the things within the scope of the Small 

Business Administration, I realize, b ut new industries must be helped 

through the incubation period.

The industrialist will have a terrific community in which to produce 

a new product tha t he knows will sell in the millions across the country. 

He may have a lack of certain things and some of the small companies 

fail, to our regret, so how can the channels be kept open so tha t they 

may be helped before they reach a period where they are going to fail 

and so tha t the channels of communication between the education 

centers of the universities and industry can help them in this regard.

Mr. Chairman and gentlemen, I speak for several kinds of small 

industries and manufacturers of products; I speak for the University 

of Massachusetts in asking for support of this bill; I speak for myself 

as a citizen and a former man in industry.

I ask for your support.

Mr. Macdonald. Thank you very much, Mr. Maunder.

(The prepared statem ent of Mr. Maunder follows:)

Remarks by Sydney T. Maunder, E.E., Visitin g Lecturer in Electrical

Engineering at University of Massachusetts, Amherst, Mass.,

J une 2, 1965

Gentlemen, I come before you to speak for II.R. 3420. I speak based on a 

varied background: (а) I was manager of engineering of a General Electric pla nt and thu s saw the 

speedy flow of technical knowledge in a large ind ustrial company.

(б) I have talked with many ind ustrialists, both of large and small companies, 

in the Commonwealth of M assa chusetts and th us can relate some of their problems 

and tell you how th e passage of th is act would improve the ir operation .

(c) As an engineering professor. I see available techn ical information tha t is not 

being used to the fullest by ind ustry. Passage of this act will provide comm unication channels for the quick flow of 

technical inform ation into local han ds. These channels in some States are not 

now available . This bill will provide an impetus to the States to set up these 

channels. Specifically, I see the need for industrial semin ars, workshops, 

demonstrations, and extension courses. While the above are lecture-stud ent relationships, yet there are other services 

in the reference area that should likewise be enlarged: Technical libraries, library 

searches, reports, microfilms, and information centers. Let us look at several industrial situatio ns and observe what could be accom ­

plished if the entire country were set up under this act.
STATE TECHNICAL SERVICES ACT OF 19 65 67

IM PR OV E TH E PR ODUCT

To keep abreast of the market, each manufacturer must be constantly improving his product. What we are now making is constantly being made obsolete or n on­ competitive by advancing technologies. If the newer technologies are not made available to our industries, our products and businesses will slowly die. As an example, you and I have witnessed the adven t of the stainless steel razor blade. This would have caused a loss of business if Gillette had not aggressively atta cked the technical problems related to this innovation. So if a competitor makes an improvement and we do not, then the competitor will gain an important commercial advantage over us.

LO W ER TH E PR O DUCT CO ST

Each aggressive manufacturer is striving not only for an improved product, bu t also for lower cost. Here I shall limit m y discussion to the lowering of costs by product design change or change in material. Each element in the design of the product must be studied to see if new and lower cost materials cannot be us ed . If the product were a kitchen paring knife with the traditional wooden handle riveted in place, we would consider whether the handle could not be changed to a molded plastic handle. Will this handle warp in hot water? Will it be as sturdy 

as the ones our mothers used? Will it sell? Extensive knowledge of the plastic materials and vendors is necessary to assure that the departure from the old to the new will be a reduction in cost without a sacrifice of product quality or impairment of sales appeal. Here is an area where experience of others who are experts is not only most helpful, but essential. Further, it is recognized that when the costs are reduced, the product becomes more available to more people and, thus, the unit volume will increase.

IM PR OVE D PR O CE SS ES

Changes in the manufacturing processes can, likewise, make an important im­ provement in the product or a reduction in the cost or a reduction in the manu­ facturing cycle. Consider a crude illustration: the painting of the final item. How can this be done quicker? Are ovens required for baking to speed up the manufacturing cycle, or can the product be air-dried? What new paint materials and technology will provide a chance to use a new process? Shall we air-dry, dip, or flow paint? What new modes of paint application are now developed that are practical and applicable to our product? In this illustration, an industrywide workshop might be the best mode of con­ veying new solutions to old problems which are common to many companies.

NE W PR ODUC TS

Some industries in their annual reports sta te that 30 to 50 percent of the pro­ duction they are now' making were not on the market 20 years ago. Our industries likewise can conceive of new products and how to make them if the technical climate is conducive tow ard such inventions. This climate is achieved if the men of the industry can be kept abreast of the latest technologies and of scientific discoveries w hich they might apply toward new products so that they might devise 

such new items. As science advances, there are always new products coming into being. One must become aware of those products that fit into his owrn manufacturing or marketing pattern. Here is a place where a university can early point out the need for a new product to a specific manufacturer whose tools and skills fit this new' item.

IN D U STR IE S TH A T A RE D YIN G

You have observed, personally, the death of many firms in your own area. A textile firm, successful for 50 years, closed its doors because of antiquated machines, low prices, foreign competitors, the public desire for materials other than traditional w’oods, and higher labor costs. A papermaking plant closed because the machinery was antiquated; the building was too small for new machinery and the management misjudged the market. If technical help had been available to the managements of either of these firms earlier, it is conceivable that they might not have closed their doors.
68 STATE TECHNICAL SERVICES ACT OF 19 65

N E W IN D U S T R IE S

In the general case, a small group of people had an idea for a new prod uct or 

service and sta rte d a company; but shortly thereafter, they had troubles which 

were due to some of these weaknesses:

(а) Too little financing.

(б) Unbalanced, technical, managerial, or entrepreneurial tale nts, it is 

recognized th at if one element is weak or missing, success is difficult to attain.

(c) Unwise service or production (it did not meet a need).

(d) Immature use of funds and manpower.

(e) Change in th e competitive situatio n.

(/) Pro duct not fully developed.

(<7) Bad unbalance of raw materials or parts.

(A) Marketing difficulties.

To help solve many of these difficulties, the new business had no one to turn to. 

Private consulting service is not available to help them; because, usually, the 

small firm has no funds to spend. However, as incipient new businesses, each 

Sta te should do all it can to get them throug h their early times and troubles. 

Here free services from the campus should be made easily available to aid and 

guide them.

SM A LL IN D U S T R IE S

In the Commonwealth of Massach usetts arc 8,800 small industries, and most of 

these are profitable. In thi s group, business is good and increasing each year. 

Profit is fine, cash flow excellent and the ir aggressive managem ent believes that 

it is on top of the com petitive situation and th at the plant has kep t pace with 

technical improvements in machines, processes, and materials.

But often this is not the case, for man agem ent in its prosperity has been too 

smug and may have overlooked some aspects of the business; or in some instances, 

they need techn ical help which they can not find and are unable to hire. Let me 

illustrate an imaginary case:

Parts of a prod uct were glued together. The man ufacturer depended on the 

vendors of the adhesive to supply th at which would do the job best. However, to 

his dismay he found th at his competitor’s product was better because of a superior 

adhesive. To whom could he tu rn to for knowledge, in depth on adhesives, their 

application, and use? Research to find a better adhesive would tak e too long and 

cost too much. However, if there were an adhesive expert available to recommend 

a solution, their problem could be readily solved. Where is th at expert to be 

found?

Small businesses are the backbone of o ur economy. We must do all possible to 

help them grow.

GOOD T E C H N IC A L CLI M ATE

First, let me define “good technical clim ate.” It. is a small area where engineers, physicists and other technical people like to work because it presents 

specific advan tages to them :

(а) Fu rth er education. A good university with a top-grade college of 

engineering is a logical center of thi s area. It must provide evening courses 

leading perh aps to a doctor’s degree.

(б) Ra ppo rt with other engineers and technical people. This gives a 

stimulus between friends toward solution of problems and creation of new 

ideas or patents. These friend s mig ht not even be in the same companies.

(c) Inform ation centers on new processes or materials.

(d) Research facilities over and beyond the scope of those in their own 

company.

If there is such an area of good tech nical climate, then this is likewise an area 

of stim ulating technical growth; an are a which does not lose its technical people; 

an area producing goods having a high technical content; and finally, an area of 

high economic growth.

Such an area, furthermore, will at trac t new industries and, likewise, will tend 

to keep the present industries from moving away.

O T H E R W O RLD AR EA S

Some area s of th e world and some S tates have learned how to use the new technologies effectively. They provide most formidable competition to those areas
STATE TECHNICAL SERVICES ACT OF 19 65 69

where the use of technology is 'the least. Some States alre ady have modest 

program s similar to th at in this bill and some of these areas are alre ady showing 

good economic growth.

EC O N O M IC B E N E F IT S

This act will be a stimulus on each State legislature so t ha t manpower can be 

made available to provide a prop er channel of communication between the campus 

and industry. This in turn will provide improvem ent in the product and service 

so th at the economic growth is advanced . As our product improves and our 

costs are lowered, our world com petitive position will be improved.

CO NCLUSI O N

The University of Massachusetts has already recognized the technical problem 

existing and has already com mitted some funds toward the end of helping the 

industries and thus lift our economic level. We are willing to increase this 

commitment.

As the designated spokesman for the University of Massachusetts on this act, 

I ask for your active support of this bill. Further, as a man from industry and 

from the faculty who has studied this act and its implications, I likewise ask your 

passage of this act.

Mr. Macdonald: Any questions of Mr. Maunder?

Thank you very much, sir.

Our next speaker is Chancellor John T. Caldwell, of N orth Carolina 

State University, and I think he is accompanied by Dr. Brice R atchford, dean of the University Extension, University of Missouri.

Mr. Caldwell. Yes, sir; and two other persons.

Mr. Macdonald. And Dr. J. Whitney Bunting, dean of the College 

of Business Administration, University of Georgia.

Mr. Caldwell. He is not here.

Mr. Macdonald. And Dr. Robert N. Faiman, dean of the College 

of Technology, University of New Hampshire?

Mr. Caldwell. Yes, sir; th at ’s right. And Dr. D. Mack Easton, 

dean of the Extension Division of the University of Colorado.

Mr. Macdonald. Doctor Easton is here?

Mr. Caldwell. Yes, sir.

Mr. Macdonald. Is Dr. Barton A. Westerlund here with you?

Mr. Caldwell. No; he is not here this morning.

Mr. Macdonald. Would you all come forward. Is this going to be 

a joint presentation?

Mr. Caldwell. Well, I am going to give the testimony and the 

other gentlemen will join me in answering the difficult questions tha t 

you may have. [Laughter.]

Mr. Macdonald. You certainly have very wonderful geographical 

distribution.

Mr. Caldwell. Yes, we do, New Hampshire, North Carolina, 

Missouri, and Colorado—that is pretty good.

Mr. Macdonald. Right. You are all very welcome here this 

morning.

Mr. Caldwell. And Mr. Chris Arnold, who is associate executive 

assistant for the Society of Land Grant Colleges, is also here.

Mr. Macdonald. I would be happy to have him step up.

Mr. Caldwell. Thank you.
70 STATE TECHNICAL SERVICES ACT OF 19 65

STATEMENT OF CHANCELLOR JOH N T. CALDWELL, NORTH CAROLINA STATE UNIVERSITY; ACCOMPANIED BY DR. BRICE

RATCHFORD, DEAN OF THE UNIVERSITY EXTEN SION, UNIVERSITY OF MISSOURI; DR. ROBERT N. FAIMAN, DEAN OF THE

COLLEGE OF TECHNOLOGY, UNIVERSITY OF NEW HAMPSHIRE:

DR. D. MACK EASTON, DEAN OF THE EXTENSION DIVISION OF

THE UNIVERSITY OF COLORADO; AND CHRIS ARNOLD, ASSOCIATE EXECUTIVE ASSISTANT FOR THE SOCIETY OF LAND

GRANT COLLEGES

Mr. Caldwell. I am John T. Caldwell, chancellor of the North 

Carolina State University at Raleigh, N.C. I am here today to 

present testimony on behalf of H.R . 3420, the Technical Services 

Act of 1965, on behalf of the National Association of State Universities 

and Land-Grant Colleges. This association has a membership of 97 

major universities and colleges, at least one of which is located in 

each State and in Puerto Rico. As of last fall the total membership, 

all but two, being publicly controlled institutions, had a combined 

enrollment of 1,400,000 students, which is about 28 percent of the 

total enrollment in all American institutions of higher education. 

At the graduate level we g rant more than 55 percent of all doctoral 

degrees.

The institutions I represent here today, Mr. Chairman, have for 

many years been interested in and concerned about the type of 

program that the Department of Commerce hopes to organize under 

the Technical Services Act of 1965. We very much appreciate 

therefore this opportunity to discuss with the members of this committee the proposed legislation.

Our interest in this type of program stems basically from the early 

acceptance by America’s public universities of the ideal of faithful 

service to the needs of their communities and the Nation. It is in this 

insistence on the ideal of service tha t we can understand Justin 

Morrill’s inclusion of the word “pra ctical” and the famous phrase 

that he wrote into the act of 1862 which established the land-grant 

institutions over a hundred years ago:

* * * in orde r to promote the liberal and practical educatio n of th e industrial 

classes in the several pursuits and professions of life.

The public universities were to be useful institutions, useful to the 

people, to the States, and to the Nation.

Tha t this concept of usefulness was to be extended beyond the 

campus and the classic disciplines, tha t is the ivy curtain between 

town and gown was to be torn down, was seen early in pioneering programs for agricultural research and extension. This priority was a 

logical choice for a country in which some three-fourths of the people 

were engaged in farming.

You will recall tha t the land -grant college act provided that there 

should be in each State a university the main point of which was to 

teach agriculture and the mechanical arts as we call them today.

The pioneering attem pts of individual professors in individual 

institutions were formalized on a national level in 1887 with the 

passage of the Hatch Act for agricultural research and in 1914 

with the passage of the Smith-Lever Act for agricultural extension.
STATE TECHNICAL SERVICES ACT OF 19 65 71

I do not need to dwell on the effect of these programs on the 

economy and life of our countiy before this committee. By any 

measure, they furnish one of the greatest success stories of all times. 

Of all the details that could be cited in support of this statement, 

one seems to be able to summarize all the others by this particular 

statement: our farm population today totals just about the same as 

it did 100 years ago. Tn 1863 those farmers fed a population of a 

little more than 30 million people. Today they feed about ISO million—6 times as many—well enough to make weight control a 

necessary national preoccupation [laughter]. And I should add 

“surpluses.”

Evaluated solely in the release of producted energies for other 

pursuits, these programs surely add up to the best investment our 

country has ever made. It also adds up to a measurable increase 

in productive efficiency greater than tha t achieved in other areas of 

the American economy.

The public institutions early attempted to extend these types of 

programs and services to other important areas of the national 

economy, and especially to those areas involving engineering and the 

industrial arts, within the limits of the available resources.

By 1914, 12 of these institutions had established engineering experiment stations and engineering extension services had been organized in many of them on an informal basis, as no funds were available. 

In 1905, as a result of insistent requests from small manufacturers for 

help, the first of several unsuccessful attem pts to obtain Federal help 

for such programs was made with the McKinley bill calling for engineering experiment stations, following the pattern of the Hatch Act, 

for the agricultural experiment stations.

Despite inadequate financing, these early attempts at the local 

level, produced important results. Starting as early as 1894, a 

ceramic industry was started in Ohio as a result of pioneering efforts 

by Ohio State. North Carolina State achieved the same results a 

few years later in North Carolina. Penn State had organized industrial extension programs by 1907, including the public relations for 

industrial employees and industrial economics for company officials.

Efforts to obtain Federal help continued through the Newlands hill 

in 1915, the Smith-Howard bill in 1917, the McNary bill in 1929, the 

Arentz and Haugen bills in the 1930’s and bills by Representative 

Green, Senator Mead, and others in the 1940’s. Throughout the 

debates on these attempts, everyone agreed to the need, which was well 

expressed in 1950 by II. Thomas Hallowell, then vice president, now 

president of the Standard Pressed Steel Co., of Jenkintown, Pa. Mr. 

Hallowell said:

Programs such as the ones offered by the land -grant colleges and univ ersities can help industry improve its competitive position by improving its ability to 

produce * * * This ability to produce is industry’s one control of inflation, 

and so on.

Despite the almost universal agreement of need, no action was taken 

at the Federal level for reasons tha t had nothing to do with either 

the need or the value of the legislation.

The success of the programs in agriculture does give some hint of 

the progress that might have been made if one of them had been 

enacted into law.
72 STATE TECHNICAL SERVICES ACT OF 19 65

There are several new factors intensifying the need for the Technical Services Act of 1965. It has been stated to you many times and 

I do not need to dwell on it, but we should remember the great burst 

of new knowledge tha t is coming forth from the enormous input of 

Federal moneys into research in many areas of knowledge and not only 

as a result of Federal effort but by some State effort. Dr. Calhoun 

spoke of this earlier and very few of the results of the publicly supported research can be picked up and applied directly to an industry 

or a company. There has to be a conversion process.

Second, American products m ust increasingly compete in domestic 

and world markets with products from foreign companies and we know 

that West Germany, Japan and several other countries have a highly 

advanced technological society and are spending large sums of money 

to insure continued top technological performance. A very modest expenditure in this country might have great results.

Thirdly, research and development have increasingly gone largescale. Big industries can do their own, or most of it, bu t small 

industries cannot.

The universities are in a bet ter position to take on this important 

assignment than ever before. I say this of my own institution and 

it is true of those all over the country. Over the years, the universities have gradually intensified their relationships with the professions and with industry and, a t an increasing rate, in the last few years. 

Most of our member institutions have continuing extension programs 

in either engineering and technology or in business management, and 

many have programs in both. All of our institutions have expressed 

interest, and feel there is a need for sharply expanded extension programs in these fields and are ready to move forward as funds become 

available. May I add that I think we work together very effectively, 

but we would respond more specifically if you would like us to do so, 

Mr. Chairman, to the question tha t you asked earlier of Mr. Calhoun.

The existing programs have yielded hundreds of examples showing 

how entire industries and individual firms have been assisted in expanding, solving problems and in increasing profits through educational programs. While the existing programs are accomplishing 

much, they are seriously inadequate. They are inadequately supported and dependent upon fees.

The second difficulty with such programs is their uncertainty.

Uncertainty which stems from their uncertain financial basis. You 

cannot employ top-level people, able people, to perform the services 

with an inadequate budget. The Federal support, plus matching 

local appropriations, would provide a solid basis for developing a 

significant and meaningful program. We have several institutions 

represented here today, Mr. Chairman, and you have already heard 

examples of what can be done. We would be happy to expand on 

this if you like.

By virtue of the funds provided under this act being channeled 

through colleges and universities, it is assured tha t the program will 

be largely locally controlled. Within the broad framework of the act 

as before you, colleges and universities which are qualified to participate are free to develop with the industry which is important in their 

area programs of value and significance. The integrity of the institutions is in no way impared or compromised. We looked for this 

possible impairment in the legislation but we find tha t it is not there.
STATE TECHNICAL SERVICES ACT OF 19 65 73

Most universities have advisory committees for their several 

extension programs. With our own industrial expansion program we 

have an advisory committee of 1.5 persons with some rotating membership representing many segments of industry in North Carolina. 

They meet quarterly to review what is going on and make suggestions 

as to what is needed and where we could put our efforts the next year 

and in general give us a review of our programs and some advice.

The combination of university sovereignty, local advisory committees, and involvement of the industries in planning programs that 

will affect them provide the necessary safeguards not only for keeping 

the program locally based and controlled, but also sound and in the 

public interest.

An effective educational program to increase the level of technology 

will require people from several fields. In addition to different types 

of technologists, management specialists m ust be fully involved and 

this legislation recognizes that. Management of a firm may not 

need to know the details of new technology, but it must understand 

what it will do for the firm and the method of making use of the 

technology at minimum cost and for maximum benefit.

The types of technological and management personnel needed 

varies from industry to industry, and, obviously, can include many 

different specialists. Our faculty does include many such different 

specialists. Our faculty does include many such different specialists. 

Increasingly faculty members have appointments which provide 

for spending part time at teaching and part time at either organized 

research or extension work, or both. These arrangements often vary 

from year to year or may be changed even during the year. This 

provides the flexibility within the university to assemble whatever 

team of specialists is needed for a particular program for as long as 

they are needed.

Now for some specific comments on the act, itself.

Representatives of our association, gentlemen, served on a task 

force which was assembled by the Department of Commerce more 

than 2 years ago to begin exploring the idea of this Technical Services 

Act.

Our association has had its own committee for the last year and one 

half to advise with th e Department of Commerce on the design of this 

program. Many of the suggestions which we have offered have been 

included in the act. While no bill is ever entirely satisfactory to 

one group, we think it is an excellent act and in the interest of the 

national economy and the universities and should be passed.

There are several features in the act which have particular merit. 

It is so written tha t all of the institutions of higher education which 

have real competence to assist industry can participate in the program. 

At the same time, it provides a framework for administration within 

the State, which will avoid duplication and should pool the knowledge 

resources of the State toward the common objective of improving 

the level of technology of industry in the State.

Another outstanding feature is permitting institutions in more than 

one State to cooperate and have their allocation of funds increased 

by 10 percent. This fits into the regional question which was spoken 

about earlier. In many parts of the country it will be desirable for 

institutions of higher education in two or more States to cooperate 

and this act provides an excellent incentive for them to do so. As I
74 STATE TECH NICA L SER VIC ES ACT OF 1965

see it, the word “region” is used in two sections of the bill, in the 

statement of purpose in the earlier part of it, in section No. 2, where 

it defines the purposes of the act and technical services, is said to mean 

activities or programs designed to enable businesses and industries to 

acquire and to use scientific and engineering information more effectively through such means as:

(1) Analyzing problems of regions ancl industries to determine new opportunities for applying technology and, (2) preparing and dissem inating technical 

reports, abstracts, computer tape s, microfilm, reviews and similar scientific or 

engineering information, including the establishm ent of State or regional technical 

inform ation centers for this purpose.

Then it is used again over in section 7, “regional or interstate 

programs” and I assume that it is referring specifically to programs 

tha t might serve the community like Kansas City which is in two 

States served by Kansas State University and the University of 

Missouri and so it might reach into other parts of the metropolitan 

community. I find no real ambiguity in the use of the term.

While tlie majority of the funds will be allocated under a formula 

to be developed by the Secretary of Commerce, 20 percent of the 

total appropriation is reserved for the Secretary to make grants for 

experimental and national programs.

This provides flexibility while at the same time providing a strong 

continuing base of support for the colleges and universities. This is 

good.

We urge you to pass this act and to fund it. The universities I 

represent will continue to do all they can within the limits of their 

resources. They ask your support for this program so they can 

change this to read “within the limits of their competence with 

adequate resources.”

Mr. Chairman, we are very pleased to respond to any questions 

that you or any member of the committee may have.

Mr. Macdonald. Thank you very much, Chancellor. Actually, I 

say, without the usual protocol of complimenting witnesses which is 

pro forma, this is an excellent statement and one that 1 have looked 

forward to because it does set out the association position very clearly 

and straightforwardly.

1 just have a couple of questions and the first one is: Do you think 

this program should be restricted just to land-grant colleges?

Mr. Caldwell. No, sir.

Mr. Macdonald. Why do you say that?

Mr. Caldwell. Let me make sure t hat you and I understand each 

other on this m atter of land-gran t colleges.

Mr. Macdonald. Yes.

Mr. Caldwell. The bill as now written provides tha t these be 

located in a university or, as an alternative—and I presume that this 

means if the Governor or somebody at the State wants to present its 

program on a different basis—then it would have to justify using some 

other type of public agency, such as a nonprofit agency.

I think it ought to be in the universities. In the United States 

we have in every State in the Union at least one State university and 

at least one land-grant university in the technical sense of having 

been established under the authority and the sections of the LandGrant College Act of 1S62 and some of the States they are the one 

and tlie same university. The University of Wisconsin, for example,
STATE TECHNICAL SERVICES ACT OF 19 65 75

is the Sta te’s land-grant university. The University of Massachusetts 

I am reminded is the Sta te’s land-grant university there although 

MIT-----

Mr. Macdonald. Right, Harvard—incidentally, MIT is a landgran t college I found out yesterday.

Mr. Caldwell. Th at’s right; it is a land-grant university, yes.

Mr. Macdonald. But Harvard College University is not.

Mr. Caldwell. No, not in the sense of this term “land-gran t 

university.” The term “land-grant university” derives from the act of 1S62 wherein the Congress of the United States furnished to every State 30,000 acres of Federal land for every Senator and Representative it then had entered in the Congress of the United States. If they had two Senators and three Representatives then the State got 150,000 acres of land which th ey could sell at $1.25 per acre which they would 

convert in a permanent endowment. [Laughter.]

Mr. Macdonald. I knew tha t the Congress had some good purpose. 

[Laughter.]

Mr. Caldwell. There was to be at least one college to teach 

agriculture and the mechanical arts—this was the land-grant college 

of 1862. There have been, historically, seminary grants in earlier days through Federal funds and there was the Northwest Ordinance of 1787 where there had been some Federal funds committed to 

education.

Mr. Macdonald. Yes, sir; but what I was concerned with was 

whether you felt there should be research to land-grant colleges.

Mr. Caldwell. No, sir.

Mr. Macdonald. Under this language—you do not?

Mr. Caldwell. No, sir. If you will look at it, you have two types 

of institutions—under 2-b regarding the “designated” institutions, 

meaning the institutional agency in each participating State which has been designated as administrator of the program for each State 

under section 2-----

Mr. Macdonald. So as you read the bill, you say that is not so.

Mr. Caldwell. No, sir. In Texas, for example, it could be 

decided tha t the University of Texas was going to be the agent or 

Texas A. & M. was going to be the agency.

Mr. Huot. The only restriction should be tha t it would have a 

degree in engineering and a degree in business administration.

Mr. Caldwell. It should include those, yes, qualified institutions.

Mr. Macdonald. Then I have been beating a dead horse because 

I spoke for a day or so about just that. Aly second question, and perhaps my last one, is on page 8-----

Mr. Caldwell. May I just interrupt for a moment, Mr. Chairman, 

before we leave that.

Mr. Macdonald. Yes.

Mr. Caldwell. If you will read section 3 in this act it says that 

any State which wishes to receive Federal payment under this act in support of its existing or planned technical services and programs shall designate under appropriate State laws and regulations an institution or agency to administer and coordinate tha t program and to prepare and submit plans and programs to the Secretary of Commerce for 

approval under this act.
76 STATE TECHNICAL SERVICES ACT OF 19 65

Now, the institutional agency designated by a State must be “a 

State university” or “land-grant college entitled to the benefits under 

the act approved July 2, 19C2” — they are not synonomous. This is 

an either/or provision.

Mr. Macdonald. And/or.

Mr. Caldwell. That is and/or. [Laughter.]

Mr. Macdonald. I see we have a lawyer present.

Mr. Caldwell. Right, right. But tha t decision would have to be 

made within the State, as to whether it would go to one of the universities or the other. For example, take Oklahoma, where you have 

Oklahoma State University and the University of Oklahoma and in 

Mississippi you have Mississippi S tate and the University of Mississippi. These are separate, and the decision would have to be made 

at the State level, then submitted to the Secretary of Commerce as 

to which one would be designated to administer these funds. I 

assume th at this would mean tha t it would be a local decision as long 

as the institutions complied with the terms of the act, and the Secretary of Commerce would be able to accept recommendations and in 

fact obliged to do so.

Dean Ratchford. But there is a difference.

Mr. Macdonald. Would you identify yourself, please sir?

Dean Ratchford. Yes, I am C. Brice Ratchford, Dean of the 

university extension, University of Missouri. A number of institutions could be qualified and the qualified institution may get a larger 

share of the money than the designated one. What I mean is this: 

the only advantage the designated one would have would be tha t 

they had to do the planning and for tha t they would get $25,000 

which wouldn’t cover it. [Laughter.]

Tha t would be to administer the planning and it would be either 

public or private institution but any one qualified could participate 

fully in the on-going program, any qualified institution.

The only advantage of the designated institution is that they are 

going to have to take on a bigger responsibility for which they get 

$25,000 .

Mr. Macdonald. And some very favorable publicity, no doubt.

Dean Ratchford. Well, that may be or maybe not. I think a 

point was made on tha t recently.

Mr. Caldwell. And some control.

Dean Ratchford. The point that was made earlier in respect of 

higher education institutions. I think somebody mentioned earlier 

there is no difficulty in getting them to work together among the 

academic people even though on football days it might not appear to 

be that way but we do exchange students and semesters and professors.

Mr. Macdonald. Yes, I understand that. It was also pointed out 

yesterday, and I don’t know if any of you gentlemen were here, but 

there has been some difficulty among some distinguished colleges in 

and around the Boston area in regard to their medical program, and 

they are having a great hassle which is in the front pages of the 

Boston newspapers.

Mr. Caldwell. Yes.

Mr. Macdonald. And I quote—as to control the Boston City 

Hospital because Harvard University and Boston University and I 

believe Turfs University-----

Mr. Caldwell. Yes, Tufts.
STATE TECHNICAL SERVICES ACT OF 19 65 77

Mr. Macdonald (continuing). Use the facilities at the medical 

school to train their medical students at the Boston City Hospital and I am ashamed to admit it but I know it is the fact, each one is vying for position so tha t their own personal choice would be in charge of the program and the other two schools would have to come under that 

man who is designated to be in charge. I thought tha t the language of this bill perhaps might lead to the same situation. That is what I wanted to get your opinion on.

Dean Ratchford. There may be difficulties, but the alternative 

universities getting together versus the State agency which is not educationally oriented and does not have the competence in this particular broad range tha t is needed, is the main point and I thin k if you presented these alternatives unanimously they would say: 

“Let us work it out.”

Mr. Macdonald. Well, you mentioned, Dean, that the designated 

institution receives only $25,000. Is that factual?

Dean Ratchford. Th at is in the bill for the designated agency.

Mr. Macdonald. Well, are there no fringe benefits that might 

accrue?

Dean Ratchford. No sir, no sir—that is the only fringe benefit. 

The rest of it would be developing programs in the institutions that are best equipped to handle it and then tha t would be on the basis of merit but the only fringe benefit for the designated university wju ld 

be this one and, as I say, it would not cover the cost.

Mr. Macdonald. Well that brings me to the question tha t I was 

going to ask you next, Chancellor.

Mr. Caldwell. Yes, sir?

Mr. Macdonald. You state on page 8 of your statem ent that you 

think this is an excellent act, one tha t is in the interest of the national economy, and that the universities would be benefited by it and tha t it should be passed. I wonder how specifically this would help the 

universities.

Mr. Caldwell. Well, it helps the universities only in this sense, 

if I may answer your question, Mr. Chairman. I think it helps uni­ versities only to do the job they have been trying to do. We respond to a public need. Right now we have a program at our institution th at is an industrial extension service, and we are always straining to help people to do their job. We need more funds and it would help us to do the job. But really it doesn’t help the universities in perhaps the sense you were thinking of. We want this to help the economy 

which is what our efforts have been directed toward.

Mr. Macdonald. Well, sir, I am just quoting your statements, 

as you understand.

Air. Caldwell. Yes, I understand, I understand. And really 

this is to help the economy and to help the coun ry which is the only purpose of the universities, as a matter of fact. They are not selfserving operations.

Mr. Macdonald. I can only agree and ask if there are any other 

questions. [Laughter.]

Mr. Huot. I don’t have any questions but I would like to con­ gratulate Chancellor Caldwell and to express my appreciation and pleasure that the University of New Hampshire is so well represented 

here today through Mr. Faiman.

50—474—6! 6
78 STATE TECH NICA L SER VIC ES ACT OF 19 6 5

When we are talking about regions I think the University of New 

Hampshire probably stands out in its area and only recently the 

Kellogg Foundation gave an amount of almost $2 million to the 

University of New Hampshire as designated agency for continuing 

education which is a m atter of some credit for our university.

Going back to the state ment tha t was made earlier I could only 

regret the aspect of this weight control with which I am personally 

involved. [Laughter.]

Mr. Macdonald. I was about to say tha t the university and 

college which I attended is always being attacked for not being a 

nonprofit, or rather being a self-serving institution in tha t everything 

they own is tax free, and they own apartment houses and city blocks.

Mr. Caldwell. Yes, sir.

Mr. Macdonald. This, of course, is in Boston, and they are 

expanding in various fields, not necessarily always academic fields— 

in real estate as a matter of fact.

Mr. Caldwell. Yes.

Mr. Macdonald. They have been accused very often of being 

self-serving, very self-serving.

Mr. Caldwell. Yes.

Mr. Macdonald. Because they show a good large profit in their 

operations, which I don’t suppose should be held against them.

Mr. Caldwell. Oh no—certainly not.

Mr. Farnsley. MIT, for the record is not a land-grant institution 

in the sense tha t the witnesses used the term. It is unimportant, 

but-----

Mr. Macdonald. MIT is no t unimportant. [Laughter.]

But I was told by the witnesses yesterday tha t it was a landgrant college.

Mr. Caldwell. MIT was on of the founder members of our 

association of land-grant colleges.

Mr. F arnsley. Then I mus t be mistaken.

Mr. C aldwell. Yes.

Mr. Farnsely. I understood that it was a land-grant college, 

State land grant.

Mr. Caldwell. That is right.

Mr. F arnsley. Well, can’t a State land-grant college join your 

lodge? [Laughter.]

You just said M IT is a State land-grant college.

Mr. Caldwell. Well let me try to explain it—originally it was 

Massachusetts itself tha t designated MIT to receive some of these 

Federal funds to perform some of the job tha t is outlined in the Land 

Grant Act. It is the same as New York State—New York State 

has never had a publicly supported land-grant university but they 

contracted with Cornell to perform these functions.

Mr. Farnsley. MIT is not a Federal land grant, then—I don’t 

know where I got tha t [laughter] but it belongs to your organization?

Mr. C aldwell. Yes.

Mr. Farnsley. Could an institution, that only has State landgrant funds join your association?

Mr. Caldwell. Let me say this-----

Mr. Farnsley. Because I have got an applicant. [Laughter.]

Mr. C aldwell. Our association has two groups of members: Statesupported universities, such as the University of Oklahoma and the
STATE TE CH NI CA L SER VIC ES ACT OF 19 65 79

University of Mississippi, then separate land-grant institutions that 

were established under the 1862 act of Congress, such as North Caro­ lina State University, Oklahoma State University, Texas A. & M. University and so on. In several States these are one and the same 

institutions. Now there are only two mavericks in the whole group which were designated by State legislatures at the outset to receive and to per­ form some of the land-grant functions contemplated by the 1862 act 

and they are MIT and ( 'ornell.

Mr. Farnsley. But they didn’t get any of the Federal land?

Mr. Caldwell. No, sir; they got some of the funds and the proceeds from them which are held by the States themselves. They did not receive the funds in the first place but were designated instead to perform certain functions.

Mr. Farnsley. Now, I know I should know what this bill means 

and I realize tha t I should not be asking you about it, but if the State designates them, what do you think tha t means?

Mr. Macdonald. If 1 could answer that, Mr. Farnsley-----

Mr. Farnsley. Well, it could be anybody.

Mr. Macdonald. No; it couldn’t be anbody. They have to be 

accredited.

Mr. Farnsley. Where does it say that?

Mr. Macdonald. It says it in here.

Mr. Caldwell. No, sir; it doesn’t say it. It doesn’t say they 

have to be accredited and tha t is a little problem tha t I had with the bill, as a m atter of fact. We ought to get this cleared up.

Mr. Macdonald. Well, I would agree with you. It is a very good 

point.

Mr. Caldwell. Would you allow Dean Ratchford to take care of 

this one?

Mr. Macdonald. Yes.

Dean Ratchford. A designated institution means also that it has 

to be qualified.

Mr. Macdonald. Which translated means “accredited.”

Mr. Farnsley. Where does it say that?

Dean Ratchford. In the section, well-----

Mr. Caldwell. No; it doesn’t say that; you say.

Mr. Macdonald. Page 3, section (b) states they have to be-----

Dean Ratchford. Yes.

Mr. Macdonald. Yes; you have to relate it back from the other 

section.

Dean Ratchford. Well, I think you have a significant point. 

Some of us served on the task force tha t helped to develop this bill and I know the inten t all the way through was that a designated in­ stitution would be selected from among qualified institutions and the 

qualified definition is quite tight.

Mr. Macdonald. If you will permit me because we have some 

other witnesses, but I just feel we ought to clear this point up, because I think it is important. On page 3 it sta rts with section (b) and then 

it goes down to (c) and it says:

“Qualified institu tion” mea ns (1) an institution of higher learning with a program leading to degrees in engineering or business adm inistration which is accre dited by a nationally recognized accrediting agency or association to be listed by the U.S. Commissioner of Education, or such an institution which is listed separately after eva luation by the U.S. Commissioner of Education pursuant to this subsection.
80 STATE TECHNICAL SERVICES ACT OF 19 65

So it ju st can’t be any one—you couldn’t invent a college to benefit 

from this.

Mr. Farnsley. You read the definition of “qualified institution” 

Mr. Chairman, b ut you didn’t read—and I am not fussing, I am your 

friend [laughter] but you didn’t read all of it. It says, “If the Secretary of Commerce will approve of it. ” And this could be lots of things. 

I still want to know where it says a designated institution must also 

be qualified.

Dean Ratchford. Mr. Chairman, I think I would agree with that 

and I would suggest tha t one addition be made in paragraph (b); 

namely, that the designated institution meet the qualifications of a 

qualified institution.

Mr. Macdonald. Excuse me?

Dean Ratchford. Add to the (b) paragraph that a designated 

institution meet the requirem ents of qualified institutions as spelled 

out in section (c).

Mr. Farnsley. Well we all know tha t a qualified institution would 

be any nonprofit organization th at the State and the Secretary of 

Commerce is willing to approve of.

Dean Ratchford. This is handled in paragraph (d) on page 4.

Mr. Macdonald. Th at’s right, but it goes back over now to the 

other section and it says exactly what you said should be said.

Dean Ratchford. Th at’s right. I know we meant for it to be 

there.

Mr. Farnsley. Well, what does it say?

Mr. Macdonald. Well, if you will look at page 4.

Mr. Farnsley. All right.

Mr. Macdonald. Under the section there for plans and programs, 

and I don’t know if it is necessary to read it into the record but I 

suppose it would do no harm. It says:

Section 3. Any State which wishes to receive Federal payments under this act 

in support of its existing or planned technical services program shall designate, 

under appropriate State laws and regulations, an institution or agency to administer and coordinate that program and to prepare and submit plans and programs 

to the Secretary of Commerce for approval under this act. If the institution or 

agency designated by such State is not a State university or Land-grant college entitled to benefits under the a ct approved July 2, 1862, or the act of August 30, 

1890, and acts amendatory and supplementary thereto, the Governor or other 

competent State authority shall furnish the Secretary a written statement of his 

reasons for designating such other institution or agency.

And then you go from section 4 as to why it is an accredited 

institution.

Mr. Caldwell. Section 2-b has a little phrase in there which defines participating institutions as meaning “the institution or agency 

in each participating State, which has been designated as administra tor of the program for such State under section 3 of this act.”

Mr. F arnsley. Well, that is what I want to see. Where is tha t 

piece, sir?

Mr. Caldwell. This is section 2, subsection b and it is on page 3.

Mr. F arnsley. That is the participating State, though.

Mr. Macdonald. Well, participating institution means each qualified institution in the State which participates in the administration 

or execution of State technical service programs as provided for by 

the act.

Mr. Caldwell. Th at’s right.
STATE TECHNICAL SERVICES ACT OF 19 65 81

Mr. F arnsley. Bu t the only thing you have to do about that is, 

if the State wants it, write a letter.

Mr. Macdonald. No, it says “qualified.” Maybe we ought to 

take this up in executive session.

Mr. Caldwell. It ought to be cleared up a little more, Mr. 

Chairman, in my opinion.

Mr. M acdonald. Yes.

Mr. F arnsley. Well, what do you think it means now?

Mr. Caldwell. Well, I think it is intended to mean that the 

designated institu tion must be a qualified institution in order to partici­ pate as an administering agency or participating agency.

Mr. F arnsley. Bu t qualified could be-----

Mr. Caldwell. I think it should be made a little more explicit.

Mr. Farnsley. A qualified institution could be any institution 

tha t the Commissioner of Education is willing to certify.

Mr. Macdonald. Oh no, if you will permit me, Mr. Farnsley-----

Mr. Farnsley. I will. You are the chairman. [Laughter.]

Mr. Macdonald. If you will yield, the fact of the matter is that 

it has to be, as we discussed with the gentleman from Texas, it has to be accredited by either an engineering society which I have forgotten 

the name of——■

Mr. Caldwell. The Engineers Council for Professional Development.

Mr. Macdonald. Yes, or the Business Administration Society.

Mr. Farnsley. You are talking about designated institutions.

Mr. Macdonald. Yes.

Mr. Farnsley. Bu t if the Governor writes a letter to the Secretary 

saying that he wants an institution designated you never could reject 

his note and I don’t care what it is the law says.

Mr. Macdonald. I think a Federal commissioner could reject his 

note.

Mr. Farnsley. Well it doesn’t say so. It says if there is no 

accredited agency then the Governor or other competent State author­ ity shall furnish the Secretary a written statement with his reasons for 

designating such other institutional agency.

Mr. Macdonald. I am sure tha t tha t would never happen in 

Kentucky.

Mr. Farnsley. Oh, yes, it would. We have got something called 

Spindletop where anything is likely to happen. [Laughter.]

Go ahead.

Mr. Macdonald. Well, thank you very much for coming.

Mr. Caldwell. Tha nk you very much, Mr. Chairman.

Mr. Macdonald. We appreciate your testimony.

Now, gentlemen, the House is in session and I know th at many of you people have come from great distances to testify before this committee, but under the rules of the House we should not be sitting here when the House is in session without the permission of the House. Therefore, I am going to ask if it is possible for Dr. Westerlund or Dr. Wetner or Mr. Hostetler to come back tomorrow morning?

Mr. Hostetler. I will be unable to appear but I would like my 

statement to be incorporated into the record as if it were read.

Mr. Macdonald. Yes, certainly. You are representing the New 

England Council for Economic Research and Development?

Mr. Hostetler. Yes, Mr. Chairman.
82 STATE TEC HN ICA L SER VIC ES ACT OF 19 6 5

Mr. Macdonald. Thank you very much. Your statement will be 

incorporated as part of the record.

Mr. Hostetler. Thank you.

Mr. W esterlund. Mr. Chairman, I shall be unable to appear in 

the morning, perhaps, but I would have one of my associates represent 

me.

Mr. Macdonald. Tha t would be perfectly satisfactory. With 

that understanding then we will adjourn until tomorrow morning in 

this room at 10 o’clock.

(Whereupon, at 12:10 p.m., the committee was recessed, to reconvene at 10 a.m., Thursday, June 3, 1965.)
STATE TECHNICAL SERVICES ACT OF 1965

THU R SD A Y , JU N E 3, 19 65

House of Representatives,

Subcommittee on Commerce and Finance of the

Committee on Interstate and Foreign Commerce

Washington, D.C.

The committee met, pursuant to notice, at 10 a.m., in room 22IS, 

Rayburn House Office Building, the Honorable Torbert H. Macdonald, chairman of the subcommittee, presiding.

Mr. Macdonald. The hearing will be in order. Our first witness this morning will be our colleague from Georgia, 

the Honorable James A. Mackay.

STATEMENT OF HON. JAMES A. MACKAY, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF GEORGIA, PRES ENTING

STATEMENT OF J. WHITNEY BUNTING, DEAN, COLLEGE OF

BUSINESS ADM INIS TRA TION AND GRADUATE SCHOOL OF

BUSINESS ADMINISTRATION , UNIVERSITY OF GEORGIA

Mr. Mackay. Mr. Chairman and members of the committee, Dr. J. Whitney Bunting, dean of the College of Business Adminis­ tration and Graduate School of Business Administration of the University of Georgia in Athens, Ga., asked me if I would present his statement to your committee on behalf of the American Associa­ tion of Collegiate Schools of Business and the Division of Business Administration of the National Association of State Universities and Land-Grant Colleges. I have gone over this testimony with him and I would like to associate myself with the views that are expressed therein because although the University of Georgia is not located in my district, Emory University with a very strong school of busi­ ness administration is situated therein. It is a brief statement and 

I would like to read it.

Mr. Macdonald. Very well.

Mr. Mackay. Mr. Chairman and members of the committee, mv name is J. Whitn ey Bunting and I am dean of both the College of Business Administration and the G raduate School of Business Admin­ istration of the University of Georgia. I am appearing before you in the capacity of chairman, committee on Federal legislation, American Association of Collegiate Schools of Business; vice chairman, Division of Business Administration, National Association of State Universities and Land-Grant Colleges; and as a member of the subcommittee on legislation of the latter body. These two groups include in their membership the leading schools of business administration at the college and university level, both public and private. The member83
84 STATE TECHNICAL SERVICES ACT OF 19 65

ship of the American Association of Collegiate Schools of Business is 

currently 117 institutions fully accredited and performing quality 

education for business. The National Association of State Universities and Land-G rant Colleges includes 97 publicly supported institutions with either colleges of business administration (or departments 

or divisions) included in its division of business administration. 

Statistics indicate tha t approximately 20 percent of all students 

pursuing higher education in the United States are enrolled in the 

field of business administration. Moreover, the faculties of business 

administration in these colleges and universities comprise the largest 

source of talent to carry out the goals and objectives of the State 

Technical Services Act. Through teaching, research, and consultation, 

these faculty members provide a tremendous resource for economic 

and business development in the areas of service which each purports 

to cover.

Although I should like to suggest, on behalf of my colleagues, one 

very important change or modification of proposed H.R. 3420, I wish 

to emphasize quite vigorously our support of the passage of this bill. 

We believe tha t the future economic and business development of the 

Nation, its States, regions, and communities is dependent in large 

part upon our ability to place in the hands of businessmen the great 

body of knowledge tha t is constantly being developed through research into economic and business operations. Moreover, much of 

this new knowledge must be analyzed and adpated for the use of the 

many diversified types of business institutions. This requires interpretation and application tha t can best be provided by the personnel 

in our collegiate schools of business in this country.

American business and industry is today a complex and dynamic 

process. Moreover, other nations of the world are also making great 

strides in business know-how and techniques, thus creating a degree 

of competition in world markets that will become increasingly heavy 

as the years go by. Many of our business firms must have firsthand 

knowledge of this new methodology if they are to succeed and prosper. 

Yet much of this new knowledge is locked away where it can do no 

economic good.

Millions of dollars of research money is being provided by the 

Federal Government to support space era growth and development. 

Much of the results of these research projects constitutes knowledge 

and information tha t could be tremendously useful to our business 

society when it can be placed in the proper hands with proper advice 

and assistance. The State Technical Services Act does provide a 

mechanism through which this knowledge can flow into the national 

business economy, thus serving as a strong force for rapid economic 

advancement and development. Our Nation cannot afford to place 

any roadblocks in the pathway of new knowledge into the business 

enterprise.

The schools and colleges of business administration which I would 

represent would respectfully suggest a broadening of the wording of 

H.R. 3420 so t hat it will more nearly represent a solution to national 

economic need. It is true tha t the act does specify tha t a qualified 

institution in the terms of the act should have an accredited college 

of business administration. However, much of the remainder of 

the act seems directed to the schools of engineering and, perhaps, 

engineering extension. We feel this to be a serious error.
STATE TECHNICAL SERVICES ACT OF 19 65 85

Perhaps a major difficulty is the titling of the measure, “Sta te Technical Services Act.” Public connotation of the term “technical” immediately restricts activity to the area of science and engineering. It is true that such information is a vital part of any program of in­ formational aid to business. Yet this is not the only area of potential informational support needed, nor is it even the major area. Pra cti­ cally every business process today is technical in nature, whether it be accounting, finance, management, marketing, or even labor rela­ tions. The application of scientific methods, procedures, and equip­ ment to the solution of business problems and to aid in the develop­ ment of the economic process is a matter of fact, now. It seems to the colleges of business tha t this has not been properly recognized in the bill currently before this committee, H.R. 3420. For example, a new mechanized technique in accounting provided to an industry or business is truly a “technical service.” The application of com­ puters to management decision-making is a “technical service.” The application of new knowledge reached through research in the behavioral sciences is a “technical service.” Even the de­ velopment of ethical conduct in business situations could be a “tech­ nical service.” Yet the wording of the proposed act before you does not offer strong evidence tha t these areas should be construed as technical services. We respectfully suggest that the House Committee on Interstate and Foreign Commerce give additional consideration 

to this matter. We further suggest added recognition to the role of the colleges of business administration in the implementation and administration of 

the program. As indicated earlier in this testimony, the faculties of the colleges and universities engaged in higher education for business provide the greatest reservoirs of talent to apply technical services in the broadest possible sense to the solution of business problems. They have a history of strong interest in economic development in all areas of this Nation and it is their wish to continue this tradition. If H.R. 3420 is passed and becomes the law of the land, we foresee no other successful possibility for the objectives of the act than by the full and complete utilization of the colleges of business administration along with other academic areas of our universities such as engineering, 

extension, agriculture, and arts and sciences. May I reemphasize, on behalf of the associations that I represent, tha t we are strongly in accord with the goals and objectives of H.R. 3420. We believe it can have meaningful implication for the future development of our economy. We feel that the plan to make avail­ able “technical services” to business and industry is long overdue. But we respectfully ask tha t the committee consider most seriously: 1. A more detailed statement or definition of technical services to include all advances of knowledge related to business practice; 

and, 2. A more specific inclusion of the role that colleges of business administration must play in the proper implementation of the act.

Mr. Macdonald. Thank you very much, Mr. Mackay.

Are there any questions?

Mr. Harris. I think probably it should be pointed out, as I understand this to be, th at it does include business administration along 

with engineering.
86 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Mackay. I think he makes that point, Mr. Chairman, in the 

front of the act but apparently he has some fear tha t too narrow a 

construction would be placed on it. As I understand his testimony, 

he wishes the language to be not capable of the restrictive construction.

Mr. Harris. Did he overlook the definition of what a qualified 

institution is?

Mr. Mackay. I did not unde rstand tha t from his testimony. 

Rut he mentioned in the latte r pa rt of the act t hat he thought it should 

be expanded and broadened and also the definition of the technical 

services.

Mr. Harris. Technical services according to the definition means 

activities or programs designed to enable business and industries 

to acquire and use scientific and engineering information more effectively through such means as, and it goes ahead and describes what is 

provided— even industrial workshops, seminars, and training programs. Then it provides for a “qualified institution,” which would 

participate, means one of higher learning with a program leading to 

degrees in engineering and business administration. 1 really call this 

to your attention in order th at it m ight get into the record.

Mr. Mackay. I think tha t may be the reason for the testimony, 

to be sure th at the legislative history shows tha t it is the in tent of the 

committee that this broad inte rpre tation be applied.

Mr. Harris. Actually I complained somewhat the other day to 

the Secretary that the whole bill was too general and too broad. What 

we need to do is to get it down in more precise terms so we would 

know just what would develop. I thin k there is a lot of merit to it 

and it should be developed on the basis that the Congress as well as 

the institutions and business industry and everyone else would know 

what it will do.

Mr. Mackay. I feel the illustrations Dean Bunting has given are 

very helpful in pointing out the variety of technical services. He was 

very sorry that he could not be here personally.

1 have enjoyed sitting in for a Pli. D.

Mr. Harris. Thank you, Doctor.

Mr. Macdonald. Mr. Farnsley.

Mr. Farnsley. I agree thoroughly that it ought to be clear. I 

think your statement says th at the social sciences ought to be allowed 

to help in this and the behavioral sciences. I believe this very 

strongly. I believe tha t any accredited college or university ought 

to have a chance to help, because the psychology departm ent, sociology 

department, and economics department often can contribute as much 

as the engineering or school of business.

Mr. Macdonald. Thank you, sir.

Mr. Mackay. Thank you.

Mr. Macdonald. The next witness is our colleague on the full 

committee, the Honorable J. J. Pickle of Texas. Mr. Pickle, welcome 

to the subcommittee. We will be glad to hear you at this time.

STATEMENT OF HON. J. J. PICK LE, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF TEXAS

Mr. Pickle. Mr. Chairman, I appreciate this opportunity to 

appear before this committee today in support of a vital measure which 

in my opinion, would help coordinate the dissemination of business
STATE TECHNICAL SERVICES ACT OF 19 65 8 7

and scientific da ta to intereste d busines s and go vernmental agencies. H.R . 3420 is a bill designed to plac e the findings of science into the ha nd s of American en ter prise more effectively and efficiently. Tt seem s t hat th is bill w ould pro vide vital clearing houses fo r the co mp ila­ tion and dis tributio n of significa nt research dat a th at our free en terpris e system is co ns tant nly dem and ing. As I see it, thi s bill wou ld in no wav cre ate comp etition within the busines s world, or comp eti tio n betw een free enter pri se and Go vern­ ment. Ra ther, it wou ld achieve a more effec tive application of the findings of scientific res ear ch, and thereb y impro ve our N at io n’s 

comp etitive position in wor ld ma rke ts. Th is proposal could m ean much to m y S tate of Te xas. Fo r ex amp le, th e Un ive rsity of Te xas is a rap idl y grow ing research cente r and is co ns tantly enga ged in valua ble scientific studie s. If efficiently assembled and com piled in a research cente r or clearin ghouse—as pro vided for in this bill— these findings could be d issem ina ted throu gh ­ ou t our State for the use and bene fit of all seg ments of our economy. Altho ugh I ha ve n’t ha d an o pp or tunity to hear all of the testimon y on thi s bill, I con sider th e proposal a gen erally good and sou nd approa ch —p artic ularly to the problem of coord ina ting the dissem inatio n of scientific and business research dat a to all concern ed.

Mr. Macdonald. Th e ne xt witn ess is our colle ague from Geo rgia, 

the Honorab le Ro be rt G. Stephens, Jr. Mr. Ste phens , we are ha pp y 

to have you ap pe ar toda y.

STATEMENT OF HON. ROBERT G. STEPHENS, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Mr. Ste ph en s. I t is a condition of mo dern tim es th at no na tio n 

can hope to achieve a stea dy rate of gro wth in its econom y with ou t havin g ava ilab le the resources of science and tech nology. Th is pr e­ req uis ite applies to the variou s regions of the wor ld. It is tru e of 

ind ividual nat ion s, an d it is tru e of all the St ates in America. Research and de velop ment must be full supp orted. Ed uc ation mus t prepare young peo ple for the co ns tantly cha nging need s of the society . Th ere mus t be a climate in which tech nological change can come ab ou t with the leas t displa cem ent and the broa de st benefits. Bas ic to an effective relati on ship between science an d the economy, however , is the me chanism for p ut tin g the res ult s of science int o the 

hands of those who can put the new knowledge to practic al use. Recognizing th at new scientific inf orm ation does no t get p ut to use 

au tomati cally or quick ly by local ind ust ries, m an y of our State s are try ing to stimula te their economic gro wth by developing coo per ative pro gra ms between indu strie s and unive rsities to bri ng ab ou t the practic al use of science. I am pleased to be able to say th at the S tate 

of Geo rgia has been am ong the leaders in this effort. N ot all of the St ates, however, have ha d th e resources, eit he r financia l or insti tutio na l, to set up adeq ua te pro gra ms. Ev en the more successful S tates ar e n ot able to su pp ort prog ram s wh ich optimize their cap abilities. Th e proposed St ate Techn ical Services Ac t of 

19C5 is intended to supp lem ent local fun ding, by me ans of match ing gr an ts to the State s, th er eb y fu rth er sti mulating and ena bling the 

dev elo pm ent of effec tive pro gra ms in all of the States.
£ 8 STATE TECHNICAL SERVICES ACT OF 19 65

I believe that the program envisaged in this bill is one tha t our 

States can support. It is not a Federal program run in Washington. 

Instead, it stresses initiative on the part of each of the States. It 

stresses the development within each of the States cf a long-range 

plan for stimulating business and industrial growth by exploiting local 

resources. It would provide for and encourage the diversity among 

State programs which reflects the diversity of the States themselves.

Gentlemen, those of us in Georgia know the benefits to be derived 

from the proposed program. I urge tha t this bill, the proposed State 

Technical Services Act of 1965, be enacted into law.

Mr. Macdonald. Mr. Stephens, we thank you for your appearance 

and testimony.

Mr. Stephens. Thank you, M r. Chairman.

Mr. Macdonald. Dr. Barton A. Westerlund, director of the Research and Extension Center, University of Arkansas.

Mr. Harris. Mr. Chairman, I would like to say tha t Dr. Westerlund is here representing the University of Arkansas, our land-grant 

school in our State, that is very much interested in this program.

Dr. Mullins made a statement recently on the need for some such 

program of this kind. I had the privilege of being present and listening to his dissertation on the subject. Dr. Westerlund is a former 

president of Florida Business Research, Inc. I am sorry our colleague, Mr. Rogers of Florida, is not here to join in welcoming Dr. 

Westerlund to the committee.

He formerly taugh t at the University of Arkansas, having received 

his Ph. D. degree from tha t institutio n, and is presently associate 

director of the University of Arkansas Industrial Research and Extension Center, which is a part of the College of Business Administration, I believe, of the University of Arkansas.

Dr. Westerlund is here to give his views out of the experience he 

has had as to the importance of this program.

STATEMENT OF BARTON A. WESTERLUND, PH. D., ASSOCIATE

DIRECTOR. INDUSTRIAL RESEARCH AND EXTEN SION CENTER,

UNIVERSITY OF ARKANSAS

Mr. Westerlund. Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, I am Barton 

Westerlund, associate director of the University of Arkansas Industrial Research and Extension Center, a part of the College of Business 

Administration.

I am offering a statement concerning the College of Business 

Administration’s point of view regarding the importance of S. 949 

and H.R. 3420 to the development of Arkansas and, of course, the 

Nation.

The State of Arkansas has made considerable economic progress in 

recent years. In the 4 years, 1959-63, Arkansans increased their 

total personal income a phenomenal 26.5 percent. The major impetus 

to this truly great increase has been the rise in the wages and salaries 

paid by business.

However, Arkansas, as a result of her late emergence as an industrial 

State, continues to have a low per capita income relative to the Nation. 

In 1963 the Arkansas per capita income was $1,607, or 65.6 percent of 

the national per capita income of $2,449.
STATE TECHNICAL SERVICES ACT OF 19 65 89

Perhaps since the family is the typical consumption unit, Arkansas’s 

economic status is more adequately portrayed by family income. In 

1959 the census rep orted there were 42 counties in which the median family income was less than $3,000 annually. At th at time the median 

family income for the Nation was $5,657 and $3,184 for Arkansas.

Even though Arkansas has progressed greatly in recent years, and 

new businesses have been organized—some have been brought into the 

State—there has been an employment loss due to inefficiencies of 

existing businesses. A great boost to the economy would occur if 

we could prevent furth er employment losses in existing businesses.

A partial answer to avoiding further employment decreases is to 

bring sound managerial advice as well as technological knowledge to 

these firms. Often the problem is not lack of technical skill but 

rather lack of business skill; for example, in the marketing of products 

and in the financing of the firm.

Arkansas can accelerate its economic growth if local businesses 

grow and prosper. Among the most important requirements for 

successful business growth is the need to develop and inform management. Management development can be achieved through a combination of formal education, short courses, and counseling services.

The need for expert guidance in today’s complicated business 

problems has become increasingly apparent. Large-scale business 

has been able to obtain the advice of various types of experts as the 

need arises. Many small businessmen are unable to obtain such 

services, however, or being unfamiliar with advantages obtained 

from such services, are reluctant to seek advice. Therefore, public 

agencies can serve as a means of introducing the small businessmen 

to the use of outside assistance.

Our State has pioneered in this field. The University of Arkansas 

established the industrial research and extension center, a part of the 

College of Business Administration, in 1955, at the same time the 

general assembly established the Arkansas Industrial Development Commission. The industrial research and extension center’s objectives are (1) to assist the Arkansas Industrial Development Commission and other development agencies by providing an organization 

with a wide background of research and technical skills; (2) to provide 

local development groups and communities with advisory services, 

research and assistance on technical problems; and (3) to provide a 

coordinating agency within the university structure for economic 

research and management training programs.

The industrial research and extension center has engaged in several 

types of extension services during the past decade. It has provided 

a limited counseling service to small businessmen throughout its 

history. It has also offered a variety of management education 

programs and, together with other organizations, has provided formal 

management counseling services.

Its first experience in the latter field was a jointly sponsored program 

with the Arkansas State Chamber of Commerce, which in 1958 resulted in a published repo rt entitled “Helping Arkansas Manufacturers Expand.”

Dr. Winston C. Beard refers to this report in describing the program 

as follows:

“The limitations of manag ement itself are the chief problems of small manu­ factu rers as viewed by bankers and outside observers.” This conclusion was reached after case studies of 22 small manufacturing firms in a recent join t stu dy
90 STATE TECHNICAL SERVICES ACT OF 19 65

by the Arkansas State Chambe r of Commerce and the University of Arkansas’s 

Industrial Research and Extension Center. Far overshadowing the financial 

handicaps of these firms, most of which had been selected as having promising 

expansion potentials, were four management limitations. Three concerned the 

training, staffing, and succession of management within the firm. Thejfour th, 

and major limitation, was the failure to seek and use outside advice.1

Under the provisions of the Small Business Administration grant 

programs in 1959 and 1960, the Industrial Research and Extension 

Center, together with three other agencies—Arkansas Industrial 

Development Commission, First Arkansas Development & Finance 

Corp., and the Arkansas State Chamber of Commerce—conducted 

counseling programs for Arkansas businesses. The objective of this 

program was to determine the most effective means of counseling 

small firms. Experiments were conducted in mass counseling and 

individual counseling. Mass counseling or conferences are both 

useful and feasible according to this study. Forty companies received 

counseling by means of three “clinics,” and 80 percent of the participants appreciated the value of the information presented to them and 

expressed a desire to atten d additional seminars on subjects pertinent 

to their industries. The individual advisory services were limited 

and brief, usually involving between 2 and 5 man-days of time for 

a preliminary visit and a specific consulting service. The cost usually 

was between $200 and $1,000.

Various types of consultants were used. In the followup study 

management firms receiving the consulting services were asked their 

opinion concerning the usefulness of this type of service. The preponderance of opinion was tha t these advisory services were of real 

value to their operations. In 1963 managers of two of the firms 

receiving this advice were designated “outstanding small businessmen” 

by the President of the United States.

Because of the industrial research and extension center’s unique 

qualifications of personnel and experience, the university, with the 

concurrence of the commission on coordination of higher educational 

finance, and on the recommendation of the Arkansas Economic Expansion Study Commission, asked the legislative council and the 

Arkansas General Assembly to provide funds for the expansion of the 

business extension and technical services division of the industrial 

research and extension center. A modest appropriation was granted 

for the next biennium with the inten t tha t additional funds might be 

obtained from the Federal Government under the proposed Technical 

Services Act.

In Arkansas major benefits from H.R. 3420 and S. 949 will come 

from the application of modern techniques of accounting, marketing, 

financing, production management and personnel management to the 

problems of the relatively small Arkansas business concerns in all 

fields of business. This includes retailing, banking, manufacturing, 

and the service businesses such as those that serve the tourist industry. 

Of course, manufacturing firms and some other businesses will benefit 

from new scientific and engineering technology that will be made 

available under the proposed Technical Services Act.

We think the industrial research and extension center should have a 

minimum of six regional offices staffed with appropriate management 

and technical advisers to serve business under the State Technical

i “ An E xperiment in Advising Small Manufacturers" by Winston C. Beard (assistant professor of finance, 

the University of Texas, formerly on the staff of the University of Arkansas Industrial Research and Extension Center), p. 1.
STATE TECHNICAL SERVICES ACT OF 19 65 91

Services Act of 1965. Eco nom ic stu die s of the major indu str ies of 

each region will need to be ma de and case stu dies of repr es en tativ e busines s firms of eac h type of business in each region will be nee ded to determ ine th e n at ur e of th e problems facing thes e b usiness concerns.

Th e economic and case studie s will furnish the teaching materials needed for man ag em en t sem inars and workshops. In ad dit ion , bv the use of members of the staff and consultants the indu str ial research and extension cente r hopes to bring a nu mber of representativ e bu si­ ness firms in the various lines of busine ss u p to a h igh level of efficiency so th at they could be used as demo nstra tio n cente rs for the pa rtic ipa nts of the m an ag em en t sem inars and workshops.

In summ ary, S. 949 and II .R. 3420 will m ake it possible for Ar kansas 

to hav e a com plete an d effective pro gra m th at will cre ate mo re jobs at high er wages. I t will fill the gap in our presen t pro gra m which 

pract ica lly ignores th e problem s of the business concerns alread y op era tin g in Ar kansas—m ostly home-ow ned business concerns. Th e tho usands of sma ll business concern s which domi nate the Ar kansas 

economy are de sperate ly in need of the ben efits th at latest develop ­

me nts in business an d science can contr ibute . I might add th at in Arkan sas this ac t ha s the su pp ort of th e 

Arkan sas Ba nkers Ass ociatio n and the St ate cham ber of com merce. I should like to mak e one fu rth er com me nt. We have t he s up po rt 

for thi s legislatio n fro m groups such as t he S ta te ch am ber of com merce and the Arkan sas Ba nk ers Association. In addit ion , I would like to offer to the com mittee these two stu die s to which I re ferred concerning 

th e counseling tec hniqu es used un de r the SBA programs.

Mr. Macdonald. Th ey will be incl ude d.

Mr. H arr is. Obser vin g th at th ey are pamp hle ts, they migh t be 

included in the files of th e com mittee. Le t the com mittee deter mi ne if it would be ap pr op riate for them to be included in th e rec ord . Otherwise, let them rem ain for th e inf orma tio n of the comm ittee 

in the files.

Mr. M acdonald. Ve ry well. Tha nk you, Docto r. I wa nt to 

co ng rat ula te you on yo ur statem en t and also p oint out a fact t hat I am 

sure you know. Our distinguished an d beloved chair ma n of the full comm itte e is 

from Arkan sas and ce rta inly A rka nsa s could no t have somebody here in th e Congress who prote cts the interest of Arkansa s to my very person al know ledg e bet te r than the chairma n of our full com mittee. I am sure yo ur words and yo ur supp ort of this bill will be very 

car efully noted by our cha irm an.

M r. West erlund. I appre cia te tho se rem arks, Mr. Ch airma n. I 

do wa nt to mention th at all of us in Ar kansas do app rec iate Mr. 

H ar ris’ efforts in this reg ard .

M r. M acdonald. You are ve ry wise to do so.

M r. C urt in. M ay I ask a que stio n, Mr. Ch air man?

Do cto r, have you es tim ated how mu ch you would need from th e 

Federal Governm ent each year to ca rry ou t th e purpo ses of this act 

as you outline in yo ur sta temen t.

M r. West erl und . Th is is ra th er difficult to say. The St ate 

ap prop ria ted a mo des t s um , I th in k $54,000 for the first year operat ion and $56,000 for th e sec ond , w ith th e idea of begin nin g a p ilot p rogra m, 

because we feel, of course, that we cann ot go into a full-blown prog ram 

immedia tely . We ha ve to have some fu rth er experience and we
92 STATE TECHNICAL SERVICES ACT OF 19 65

expect within a matter of 2 years to have a much larger program if it 

proves feasible. I would like to point out to you tha t we believe 

that the industrial research and extension center will have to broaden 

some of its professional talent. We need to obtain the services of 

other people from other colleges and the graduate institute of technology within the university. This would be a coordinated university 

program as far as we are concerned.

Second, we would expect to use outside consultants. We foresee 

tha t this would be a method of actually increasing the use of consultan ts because we coidd only isolate the problems and perhaps demonstra te what might be done and from then on the best interests of the 

businessmen would be served by using private consultants.

Mr. Curtin. But you are not able to put a dollar mark on how 

much you would ask of the Federal Government to accomplish this.

Mr. W esterlund. We would hopefully expect to receive matching 

funds, possibly to the same amount tha t we have appropriated from 

the State legislature for this purpose in the early stages of the program. I have examined various copies of the bill throughout its 

progress as it evolved and realize there have been various suggestions 

as to the amount of money. Not really fully anticipating Federal 

participation we had thought our programs would require a million 

dollars a year in order to do this job effectively in a State such as 

Arkansas, but this could not be accomplished immediately.

Mr. Curtin. You mean a million dollars from Arkansas and a 

million dollars from the Federal Government or a total of the million 

dollars?

Mr. Westerlund. A tota l of a million dollars is an estimate of 

what it would be in 5 years. That is some time ago and perhaps we 

would revise our estimates now.

Mr. Curtin. Thank you.

Mr. Harris. As a matter of fact, you would be limited by the 

amounts available from the State.

Mr. Westerlund. That is right.

Mr. Harris. If it were available now then the maximum under the 

action of the State legislature would be $54,000.

Mr. Westerlund. Tha t is right.

Mr. Harris. From the Federal Government. You would be 

guided, of course, by the limitations placed on you as to the availability of local funds.

Mr. Westerlund. That is right. There has been some discussion 

whether or not there should be some fees paid by businesses taking 

part in courses and tha t type of thing.There have been a number of 

points of view on this. There are a number of different plans in 

operation today in the various States.

Mr. Harris. Would your center be the agency th at would develop 

the plans under the proposed bill?

Mr. W esterlund. I should imagine it would.

Mr. Harris. Or would the AIDC be the organization?

Mr. Westerlund. No; I am sure it would be within the university 

structure.

As I mentioned to you before, Mr. Harris, this would be an overall 

university program and we would involve personnel from other colleges as well as the university under the terms of the act.
STATE TE CH NICA L SERVICES ACT OF 19 65 93

Mr. Harris. I do not believe we have another institution in our 

State that offers courses in engineering and business administration.

Mr. Westerlund. They do in business administration, sir, but 

they do not have a college of business administration, as such.

Mr. Harris. But they do not in engineering.

Mr. Westerlund. The first 2 years, but not a full course. So, 

most likely if there is any institution of higher learning designated, the 

University of Arkansas would be so designated.

Mr. Harris. Thank you, sir.

Mr. Macdonald. Mr. Farnsley.

Mr. Farnsley. It has long seemed to me unfair tha t there was not 

a service available to businessmen tha t parallels the service available 

to the farmer, such as the research in the State or land-grant universities with the county agent to channel that knowledge to the farmer. 

Is the service tha t you furnish one tha t is parallel to that?

Mr. Westerlund. It is somewhat parallel but much more limited 

financially.

Mr. Farnsley. If you had the money it is the same principle.

Mr. Westerlund. Th at is right.

Mr. Farnsley. How much engineering do you need?

Mr. Westerlund. This is something we really do not know as yet. 

We have had chemical engineers, mechanical engineers, and water 

geologists and other people on our staff at various times. In addition 

to that we have drawn on the staff of the college of engineering.

Mr. Farnsley. Is there any doubt in your mind tha t the schools 

of business administration should be the captain of the team and call 

on the necessary technicians from engineering and from social and 

behavioral sciences?

I do not want to lead the witness. I want to know what you think 

about it. Who should be the captain of the team?

Mr. Westerlund. Th at is a very difficult question. I really 

believe tha t this is a new form of organization that we have here, 

and I think the businessman is accustomed to those who are business 

oriented.

Mr. Harris. If the gentleman will yield, under the bill whoever 

the Governor designated would be the captain. Th at would be left 

up to the decision within the State, as I understand.

Mr. Westerlund. Yes, sir.

Mr. Farnsley. There is a strong indication that the captain be, 

1, engineering; and 2, school of business.

Mr. Harris. I do not think so. T believe it leaves it to the Governor to designate.

Mr. Farnsley. I agree tha t is true in the bill. I am not trying 

to find out what the bill says, but what the witness feels is desirable.

I was hoping he would say his outfit was the proper captain of the 

team but he seems to be too modest.

Mr. W esterlund. Mr. Farnsley, according to the action of the 

State legislature it was evident tha t they thought such back about 

10 years ago.

Mr. Farnsley. Than k you, sir.

Mr. Macdonald. Doctor, I just have one question, and I 

know you were here yesterday and it is in the same reference. On 

page 5 you talk about the studies to be made of the industries of each

50 -4 74 — 65------ 7
94 STATE TECHNICAL SERVICES ACT OF 19 65

region and repeat each region now and again. I was wondering what 

region you had in mind as far as Arkansas would be concerned.

Mr. Westerlund. At Arkansas we have done a preliminary State 

economic plan and have divided the State into various regions.

Mr. Macdonald. In other words, this would be regions within the 

State of Arkansas.

Mr. Westerlund. Yes.

Mr. Macdonald. And not as the gentleman from the Department 

of Commerce said the region would be two or more States.

Mr. Westerlund. This does not present a real complication. 

For instance, we might want to cooperate with the area around 

Memphis in eastern Arkansas and the area around Texarkana in 

Texas. These can be worked out. I do not think they are mutually 

exclusive.

Mr. Macdonald. My question goes to the fact tha t if a Governor 

designates an agency within a State, 1 do not quite see how he could 

designate a regional area. Tha t would take cooperation between the 

various States.

Mr. Westerlund. It would be an interstate type of compact 

which could be arranged and very logically in some cases.

Mr. Macdonald. I now repeat my question: What region would 

you think Arkansas would be in?

Mr. Westerlund. I really do not know how they would designate 

it. We are officially in the west south central as far as the census is 

concerned. I do not believe these are the regions they are talking 

about. I believe it is necessarily a bit ambiguous and vague because 

many times a region is a region because it thinks it is a region, an 

economic unit rathe r t han a political unit.

Mr. Macdonald. Thank you, Doctor.

Mr. Westerlund. Tha nk you.

Mr. Walter W. Wegner.

STATEMENT OF WALDO W. WEGNER, DIRECTOR FOR THE CENTER

FOR INDUSTRIAL RESEARCH AND SERVICE, IOWA STATE UN IVERSITY, AMES, IOWA

Mr. Wegner. Thank you, Mr. Chairman. I am Waldo Wegner, 

director of the Center for Industrial Research and Service, Iowa 

State University. Iowa State is the land-grant university in Iowa 

and we have been in operation since 1963 as I will tell you. You have 

a full statement from me which has considerably more detail than I 

will present to you now. It has some percentages of the type of 

projects we have handled in our 2 years of existence and some other 

details 1 did not feel would be on a time basis practical here.

Mr. Macdonald. Would you want them included in the record?

Mr. Wegner. I would like to have the original statement included 

in the record, if I may.

Mr. Macdonald. Without objection, it will be included in the 

record.

(The statement follows:)
STATE TE CH NICA L SER VIC ES ACT OF 19 65 95

A R ep o r t on th e C e n t e r f o r I n d u stria l R esea r c h an d S e r v ic e (C IR A S ), 

I ow a’s Se r v ic e O rg aniz ati on fo r I n d u str y

The need for technological aid and assistance to industry has existed in Iow a 

for sometime; however, it has become more e vident in the last few years because 

of the growing industrialization of the State. Iowa has many and varied ind ustries, bu t they have, in general, been sheltered by the broad umbrella of agric ulture . In recent years, however, the umbrella seems to have been turned over. 

The total value of annual agricultural productio n in Iowa in 1964 was $2,600 

million and this figure continues to grow each year.

The problems of growth in many cases, however, require solutions using en ­

gineering or scientific technologies.

Almost daily some segment of industry—corporation or individual—makes 

inquiry at the university for tech nica l assistance and guidance. In the pas t, or 

more specifically, prior to the esta blishment of CIR AS, such inquiries usually 

had been only superficially answered, if a t all. This fact highlighted the need 

for techn ical assistance to industry.

As these needs were recognized and the pressure for some type of assistance 

increased, the question arose as to the role a univ ersity should play in helping 

solve th ese needs, particularly the role Iowa State University should play.

To aid in making the decision as to the natu re and exte nt of this role, four engineering staff members visited some of the major research and development 

institutes, centers, parks, and industrial programs which seemed to be having 

an impact on indu strial growth in the ir areas.

Those men studying the problem soon set out at least four basic technical 

assistance needs t ha t existed:

1. Counseling, consultation, and guidance.

2. Specific problem solutions and aids.

3. Long-range research and planning.

4. Education and training.

It became evident to these men th at a direct aid to industry program at Iowa 

State University would have to be conducted by a group devoted specifically to 

this purpose. They believed th at the institutes and the research parks, which 

they visited, did not quite do the job that Iowa State University would have to 

do for the State of Iowa. The problem was then to set up an organization which 

could undertake a distinctly different role tha n had heretofore been atte mpted.

After the scope had thu s been narrowed down by the committee, they proposed 

that, the following program of univ ersity activities relating to industrial aid be 

ini tia ted :

1. The establishment of a cente r in the college of engineering for the 

specific purpose of helping industry directly with its problems. This center 

would consist of a core of full-time employees who would provide technical 

assistance and service to parties interested in the development of industry 

in the State.

2. Qualified persons in engineering, science, business, economics, technical 

counseling, and research would be employed directly by the center and 

would be supplemented by oth er part-time staff on a consulting basis.

The functions of this group would be to counsel with industry on special 

problems, to advise regarding app ropriate procedures for prod uct development, 

marketin g and production, and to conduct research and testing programs where 

necessary. In addition, the group would provide technical and managerial information thro ugh publications and conferences specially oriented for industrial use. 

The counseling services would be free, although research or special projects would 

be paid for by the interested industry, depending on the need and the industrial 

potential for the State. In general, funds for the center would be provided from 

State appropriations.

Through the cooperative efforts of university and indu strial personnel, the 

proposal for the estab lishm ent of a center for a direct aid to industry was incorpora ted in the university’s reque st to the State legislature in 1963. The legislature 

accepted the challenge and approp riated $250,000 for the first 2 years for a program 

of engineering and technical assistance to Iowa’s growing industry. The program 

was named the Center for Ind ustrial Research and Service (CIRAS).

CIRAS opened its doors on July 1, 1963, with one employee. This man was 

a civil engineering graduate who temporarily was located in the dean of engineering’s office. It was my privilege a nd good fortune to be offered the position of the
96 STATE TEC HN ICA L SER VIC ES ACT OF 19 65

first dire ctor of this new program. I took over these duties as the director on a 

part-time basis on September 16, 1963, and moved into the office in which we 

are presently located on October 1, 1963. At th at time my office included three 

desks a nd four chairs. The Iowa State University administration did not, nor did th e dean of engineering and the four engineering staff members who had made the outline which I 

presented to you earlier, han d me a form at with the order th at there was my 

organization chart—do something with it. They welcomed me to the campus, 

indicated th at I must operate under the administrative rules of the university, 

and th at my main job would be determined by the needs of the Sta te of Iowa for 

service to industry. With this kind of confidence from the adm inistra tion and 

the genuine support of the engineering college, CIRA S became active.

The CIRAS appropriation for the biennium, as indicated above, was set at 

$250,009. The administration had, of necessity, rathe r arb itrarily set up a 

budget for the first year of $100,000 and of $150,000 for the second year.

We ha d been in operation for no more t ha n 2 weeks when a committee from the 

Consulting Engineers Council of Iowa visited the office. They had previously 

indicated a serious misgiving and concern for the establishm ent of such an operation at Iowa State. It is my und erstanding th at this objection originated in the 

natio nal offices of th e CEC. I welcomed the opportu nity to discuss the program 

with this committee and offered to app ear on a panel discussion of the program 

of CIR AS at the annu al meeting of the State association of the consulting engineers. This panel discussion included a consulting engineer, the director of the 

Iowa Development Commission, an industrialist, and myself. The opportunity 

to discuss the program with th is group of men was one of the m ost valuable public 

relation tools th at a new organization could have been offered. I was also then 

given an opportu nity to partic ipate in the same typ e of program at the annual 

meeting of the Iowa Engineering Society, which is the Sta te c hapter of the N ational 

Society of Professional Engineers, and reached the many engineers who are not 

consulting. This gave the consultants that were members of the Natio nal Society 

of Professional Engineers a check on whether or not I would tell the same story 

twice.

I am happy to say that I count the consulting engineers and the engineering 

profession as a whole to be the stro nge st backers of the program which we have 

set up in Iowa. I believe th at as 1 discuss the operation of CIR AS you will 

understand why they have become boosters for the program. I understand that 

NSPE had indicated opposition to the original technical services bill b ut it is with 

a great deal of pleasure that I read to you the NSP E policy approved by the 

executive committee regarding engineering inform ation dissem ination programs.

“The National Society of Professional Engineers endorses legislation and other 

activities designed to stimulate and assist the dissemination of current engineering 

inform ation to industry through Sta te education al institutions and other sources 

at the Sta te and local level.

“Federal assistance to the States for this purpose will serve to stim ulate the 

economy and the efficient use of engineering technology and will be to the benefit 

of the general public through higher levels of employment, improved standards 

of living, and more efficient production for a competitive position in world markets.

“Legislation to accomplish this purpose would insure that the Federal Government, thro ugh its financial assistance should not support engineering research or 

provide services-to proprietary interests. Engineering information gathered and 

disseminated under the program should be made available to the general public 

and indu stry on a broad and general basis. An advisory council, including representation from the engineering profession, and industry, should be established at 

each level of operation of the program to monitor it for policy guidance and 

general direction.” I would like to take the rest of my time with you today to discuss the relationship between CIRAS and industry, or a client, and then give you a brief report 

of the things that we are establish ing in the office for the future handling of 

problems. Problems to be solved and questions to be answered come to t he CIRAS office 

either thro ugh personal conta ct, telephone, call, or by correspondence. One or 

more members of the CIRAS staff review the problem presented to determine 

its scope and type (marketing, managem ent, prod uct development), and the 

length of time tha t they estimate it would take to solve the problem or find the 

answer. If it is obvious th at it is a problem that will take more tha n 2 or 3 

man-days to solve, the staff auto matically attem pts to find a consultant, or a firm 

of consultants, tha t is in business in the State of Iowa and has the ability and the
STATE TE CH NICA L SER VIC ES ACT OF 19 65 97

experience to solve the problem. We att em pt to give the names of a t least two or three firms or individuals in each case if we have this num ber on record. If the firm or individual with the problem negotiates a con tract with one of the firms or individuals referred to him by CT RAS, we t hen step out of the picture. Occasionally we find tha t we do not have a firm of co nsultan ts recorded which has the capabilities and experience of handling a problem sub mitted to us. We the n att em pt to find a professor with the knowledge and background to do the job. CI RAS cannot lose sight of the fact th at the majo r responsibility of Iowa State University is to educate the youth of Iowa. We, therefore, make it a practice in most cases to con tact the head of the dep artment and check on the academic load of th e professor or professors whom we wish to recommend to the CI RAS client. If we find th at one professor is heavily loaded with academic work, we must then use only the name of the professor with comparable experi­ ence and a lesser academic load. When we do find the man th at is available for this consulting job, we try to get him together with the CI RAS client and hope th at they will n egotiate a con trac t to the mutual benefit. Occasionally we will have a situ atio n where we are unable to find the talent in the Sta te that is capable of giving the proper answer to the trou bled industry or individual, we then, very grudgingly, go out of State on referrals. In all situations, it is the desire of CI RAS to put those industries, or individuals, with problem s in touch with t he firms or individuals who can solve their problems. In the situations jus t discussed, we have assumed th at all industries, or indi­ viduals, who have come to CI RAS are able to pay for the services of a consultant. We do, however, have situ atio ns where small firms or individuals and some fairly good sized firms, are having financial difficulties, and find themselves unable to pay for the services of such a consultan t. In these cases, CI R AS can serve in 

one or two ways: 1. We can utilize to the fullest extent the ability of our own staff. 2. We have a limited amount set up in our budget to reta in specialists or professors as consultan ts to aid in areas where our staff is not adequate. In these situations the work is done w ithout charge to the indu stry or the client. This action is justified by the fact tha t employment is imp ortant to the local comm unity, and the industry is imp ortant as a tax source to the State. There­ fore, we believe that we are justified in attemp ting to keep this industry alive for 

IowaOne area of concern in our organizatio n was th at of duplicating the efforts of other Sta te and Federal activities. We find th at we are working very closely with the Iowa Development Commission. One acitvity of IDC is the Iowa De­ velopment Commission Founda tion (IDCF), Inc., which has been established to aid inventors within the S tat e by helping them with p ate nt search and paten t ap­ plications, prep aration of models and prototypes of inventions, and development and placement of these inventions into production. Quite naturally our efforts are bent toward assuring th at these inventions will be manufac tured within the 

Sta te of Iowa. CIRA S works very closely with this group and at the time th at it is ready to tak e an invention to a manufacturer, it is almost mandatory th at we make con­ tac ts with the industry thro ugh CI RAS representatives working together with men from the I DCF, Inc. The Iowa D evelopment Commission Foundat ion, Inc., has relieved a grea t deal of p ressure and time-consuming effort from the staff of 

CIRAS. Since July 1963 CIRAS has completely furnished its office and established office procedures for operation. One of the first items in our plan was to obtain for our files a complete roster of the consulting engineers and consulting firms in the State . This was done via the q uestionnaire route. We continue to gather d ata on these people including a resume of the principals of the firms, a list of work done, capa ­ bilities, and the value of the ir projects. We also have a fairly complete roster covering the education, qualifications, and the experience in production and re­ search of the professors in the College of Engineering at Iowa Sta te University. We are now gathering this same information from the professors in the other col­ leges. We expect to have th is same type of da ta on the professors tha t are willing and have a desire to help with our program in the other State-owned institutions of higher learning in Iowa, as well as the privately owned colleges and universities. We have gathered similar facts on the certified public accountants, the pa tent attorneys, testing laboratories, advertisin g agencies, and architects. We will also tab ula te information on other professions whom we expect to be using on a referral 

basis.
98 STATE TECHNICAL SERVICES ACT OF 19 65

In establishing the format for the operation and organization of CIRAS, it was 

considered to be practically impossible to get the operation off the ground if we 

did not make personal contact with the industry th at now exists in the State. 

We, therefore, divided our Sta te into four sections and placed qualified field representa tives into these specific area s. The major assignment of these field representa tives until completed, is to gathe r pertinent d ata on every industry in the 

State.

We have stayed with SIC classification of industry and this is our bible for determining where conta ct should be made. The information th at the field representa tives gather from these Iowa companies includes all pertin ent data which 

will be beneficial in handling requests for various types of help. Our field representatives also discuss with in dustry any problems which they may have. However, the majo r assignment on the initial contact in addition to advising industry 

of the availability of CIRAS, is to gather this information which we place on a 

retrieval system in our office.

The present staff of CIRAS is made up of nine men and two women. The 

adm inistrative staff consists of myself and my secre tary, who is responsible for 

my dictation, typing, and filings. Another stenographer serves the other professional staff in headquarters and acts as receptionist for the CIRAS office. She 

also does the clerical work on the re trie val system.

We have an industrial engineer who also has a masters degree from th e H arvard 

School of Business and is responsible for the product development, production 

line organization, taxes, financial problems, and indu strial management.

Another man in the office is a marketing specialist with minor degrees in advertising and economics. His field of operation is th at of marketing and advertising. He is responsible for the professional review of all the records before they go 

into the retrieval system. He also has the responsibility of establishing the format 

for CIRAS brochures and reports.

The staff engineer is a mechanical engineer with experience in two industries. 

He is filling th e billet which we have set up for a young man with 4 or 5 years’ 

experience, who has a family and who is desirous of returning to the university 

for an advanced degree. We are able to pay him a bit more than the usual 

stipend of a scholarship. His major job, besides the professional assignments 

given him. is to make the actual con tact with the professors of th e other colleges 

of Iowa State on a counseling basis. This requested counseling time by the staffs 

of the various colleges has been given unstintinglv. We find ourselves using the 

tale nts of the professors in home economics, science, agriculture, and veterinary 

medicine very often.

The other staff member working out of CIRA S headquarters is a chemical 

engineer who handles assignments along his professional line. He came to us 

with a background of experience in the rare-earth field. He is on the staff of 

CIRAS and the chemical engineering department on a half time basis with each.

The field representatives include one civil engineer, with a background of many 

years in municipal design, construction, operation, and administration, as well 

as background of industrial experience in product development, productio n line 

organization, and sales.

Another field man is an industria l administration graduate, who came to us 

from Collins Radio Co. in Dallas, Tex.

The third man is an industrial engineer with experience with Eastm an Kodak 

Co. in Rochester, N.Y

The fourth field man. wdio will join us on the 15th of June, has a background 

of a gricultural engineering. His experience has been in indu strial research with 

the Farm Equipment Institu te, grain-processing machinery, and advertising and 

sales. This then gives you some idea of the qualifications which wre have tried 

to incorporate into the limited staff which we are able to retain.

W e are convinced that the field organization is imperative in accomplishing 

the mission of CIRAS. The fa ct t ha t the field men have made over 2,700 co ntac ts 

with various industries in the Sta te of Iowa, will bear out this belief. We have 

also sent o ut two large mailings of a brochure, of which I have a few’ available in 

case you are interested. Good stories have appeared in the newspapers and indus trial magazines of the State. These actions have resulted in over 670 inquiries 

of various types.

We also believe tha t it is im por tant th at CIRAS be generally known throug hou t 

the State. W ith this in mind, I have appeare d before more than 85 groups, such 

as service clubs an d industrial developm ent organizations, and have told th e story 

of CIRA S to over 4,700 people.
STATE TECHNICAL SERVICES ACT OF 19 65 99

The source of the first 670 inquiries received and handled by CIRAS are as 

follows:

Source of projects: Perc ent

From business firms and manufacturers_________________________ 61

Individuals __________________________________________________ 30

Other Government agencies___________________________________ 6

Development gro ups__________________________________________ 3

To tal_____________________________________________________ 100

Method of handling p rojects:

CIRAS and ISU staff research_________________________________ 60

Referred to con sultants (including engineers, CPA’s, architects, testing labs)__________________________________________________ 26

Referred to university professors (as a consulting pro jec t)--------------- 14

To tal_________ __________ ____ __________________ ................. 100

Types of problems associated with projects:

Technical___________________________________________________ 47

Manage ment________________________________________________ 20

Inventions an d new products__________________________________ 15

M ar ke ting _________________________________________________ 12

Prod uction__________________________________________________ 4

Design_____________________________________________________ 2

To tal_______________ 100

On April 23 of this yea r, CIRAS held the first meeting of its advisory council. This group consists of 21 men at the p rese nt time with 12 of them coming to the council from industry and of this 12, 2 of them are doubling in brass as repre sen ta­ tives of in dustry and the Iowa Engineering Society. Two representatives of t he Consulting Engineers Council of Iowa a nd the rem aining seven include a represen­ tat ive of the Certified Public Accountants in Iowa, the Iowa Ma nufacturers Association, the Iowa Development Commission, the Des Moines Register & Trib une, and representatives one each from the State University of Iowa, the State College of Iowa and Iowa Sta te University, outside of the college of engi­ neering. At the first meeting of this council, a chairman and vice chairman were selected, bylaws were discussed and will be prepare d for the next meeting. We believe th at this group can serve as a sounding board for the a ctivities of ClR AS and more closely coordinate our efforts to the needs of indu stry in the Sta te. CIRA S is not a pan acea for all problems connected with indu strialization of Iowa. In fact, it is only a small part. It does, however, open one channel of comm unication with ind ustry and makes possible a direct and positive contribu ­

tion by the univ ersity to the futu re health of Iowa ’s economy.

Mr. Wegner. The State of Iowa is this month completing its 

second year of operating the Center for Industrial Research and 

Service, CIRAS, Iowa’s service organization for industry. CIRAS 

is administered through Iowa State University, Ames, Iowa. I would like to present to you today a brief rundown on the operation and accomplishments of the past 2 years by this new organization. I would also like to indicate to you how I believe the Technical Services 

Act of 1965 will be of assistance to the Iowa program and the Federal 

program in other States of the United States. The problems of industrial growth require solutions using engineering 

and scientific technologies. This is obvious from the fact th at almost daily some segment of industry, corporation or individual, makes in­ quiry a t the university for technical assistance and guidance. In the past, or more specifically in Iowa, prior to the establishment of CIRAS, such inquiries usually had been only superficially answered. This situation highlighted the need for technical assistance to industry.
100 STATE TECH NICA L SER VIC ES ACT OF 19 65

CI RA S counsels with ind us try on sp ecial problems, advises regar din g 

ap prop ria te procedures for product dev elo pm ent , marke tin g, and produ cti on, and conducts res earch and tes tin g pro gra ms when necessa ry. 

In addition , CIRA S provide s tec hnica l and ma nageria l info rma tion 

throug h publications an d conferences specially oriented for indu str ial 

use.

The counseling serv ices are wi tho ut charge, alt hough res ear ch or 

special projects would be paid for by the inter ested ind ustry , depending on the need and the indu str ial po ten tia l for the State . In ge nera l, 

fun ds for the c enter are pro vided from St ate appro priation s.

This typ e of pro gram was app roved by the Iow a St ate Legislatu re 

in 1963 and the y ap prop ria ted $250,000 as a gen eral line in the budget 

of Iow a State Un ive rsity for the opera tion of CI RA S for a 2-year 

period.

It was my privilege an d good fortun e to be offered the position of 

the dir ector of t his new p rogra m. I too k over these duties on October 

1, 1963.

Th e Iowa State Un iversit y admi nis tra tio n did not, nor did the 

dean of engineering or the fou r enginee ring staff members who ha d 

don e the initial stud y an d planning hand me a for ma t with the ord er 

th at here was my organiz ation ch ar t—do som eth ing with it. Th ey 

welcomed me to the cam pus, ind icated th at 1 mus t opera te und er the 

ad mi nis tra tiv e rides of the unive rsity and th at my main job would be 

determined by the needs of the St ate of Iowa for serv ice to ind ust ry.

Th is typ e of freedom of opera tion was a major fac tor in ge tting 

the opera tion und erw ay in a sho rt period of time.

1 believe this typ e of flexibility is avai lab le in t he Tec hnical Service s 

Act of 1965, a nd it is my opinion th at it is one of the real necessities 

for sat isfactor y acc om plishm ent of the purpose of the bill.

We had been in op era tio n for no more than 2 weeks before a com ­

mitt ee from the Co nsultin g Eng ineers Council of Iow a visited the 

office. (I think at this po in t I shou ld po int ou t th at I am a grad ua te 

eng ineer and a reg istere d professional engineer in the States of Iow a 

and Minneso ta. I hav e been active in the Iow a Engin eer ing S ociety 

and the Na tional Soc iety of Profe ssion al Engin eer s for ma ny years 

and have served as presiden t of the Iow a Engin eer ing Soc iety and 

vice pre sident for the Nor th Ce ntral Region of Nationa l Soc iety of 

Profession al Eng inee rs. I am also a member of t he Am erican Soc iety 

of C ivil Eng inee rs.)

Th e Consu ltin g En gin eers Council of Iow a had previously ind ica ted 

serious misgivings and conce rn ab ou t the est ablishm ent of such an 

opera tio n as C IRAS at Iowa State . It is m y u nd ersta nd ing th at t his 

objec tion orig inated in th e natio nal offices of the CE C. I welcomed 

the op po rtu nity to discuss the pro gram with this comm itte e and 

offered to appear on a panel discussion ot the pro gra m of CIRA S at 

the annu al meeting the th eir St ate association. Th is pan el discussio n 

inc lud ed a con sulting eng ineer, the dir ector of the Iow a De velop me nt 

Com mission , and an indu str ialis t and myself. Th e op po rtu nity to 

discuss the program of C IR AS with this group of men was one of the 

mo st valua ble public rel ati ons tools th at a new org aniza tion could 

have bee n offered.

I was also given an op po rtu ni ty to pa rti cip ate in the sam e typ e of 

pro gra m at the annual me eting of the Iow a Engin eer ing Society,
STATE TECHNICAL SERVICES ACT OF 19 65 101

which is the State chapter of NSPE, here I reached the many engineers who are not in consulting. This also gave the consultants who 

were members of the National Society of Professional Engineers an 

opportunity to check on whether or not I would tell the same story 

twice. I am happy to say that I count the consulting engineers and the 

engineering profession as a whole to be the stanchest backers of the 

program which we have set up in Iowa. It is my belief that this group 

of people, the professional engineers and consulting engineers, stand 

to gam more than any oth er group outside of industry from the operation of CIRAS.

Problems to be solved and questions to be answered come to the 

CIRAS office either through personal contact, telephone call, or by 

correspondence. One or more members of the CIRAS staff review 

the problem presented to determine its scope and type (marketing, 

management, product development) and the length of time tha t they 

estimate it will take to solve the problem or find the answer.

If it is obvious tha t the problem will take more than 2 or 3 man-days 

of work, the staff automatically attempts to find a consultant, or a 

firm of consultants, that is in business in the State of Iowa and that 

has the capability and the experience to solve the problem. We

attem pt to give the names of at least 

hi each case, if we have this number 

If the firm or individual with th 

with one of the firms or individual 

then step out of the picture.

In order t hat we might do a good' 

was necessary to gather as much i 

put together and set it up on a retr: 

would be available when questions i 

Working toward this goal we have a roster 

and consulting firms in the State of Iowa.

s or individuals

s a contract 

CIRAS, we

felt tha t it 

s possible to 

fern so tha t it 

with CIRAS. 

onsulting engineers 

In this information we 

have the data regarding a resume of the principals of the firm, a list 

of the work done, capabilities, and the value of their projects. We 

also have a roster covering the education, qualifications, and the 

experience in production and research of the professors in all of the 

colleges at Iowa State.

We are now in the process of planning how to gather this same 

information on the professors in the various private colleges in Iowa, 

as well as the other State-owned institutions of higher learning.

We have gathered similar facts on the certified public accountants, 

the patent attorneys, testing laboratories, advertising agencies, and 

architects. We will also tabu late information on other professions 

whom we expect to be using on a referral basis.

We are putting together a rather complete record of every industry 

in the State. This information includes all pertinent data which we 

believe may be of value in understanding the industrial capabilities, 

potential, and problems.

These data are being gathered by the four field representatives of 

CIRAS. Our total staff, including the four field representatives, is 

nine men and two women.

Occasionally we find that we do not have a firm of consultants on 

record which has the capabilities and experience of handling the
102 STATE TECHNICAL SERVICES ACT OF 19 65

problem submitted to us. We then atte mpt to find a professor with 

the knowledge and background to do the job. CIRAS cannot lose 

sight of the fact tha t the major responsibilities of the State’s institutions of higher education are to educate the youth of Iowa. We 

therefore make it a practice in most cases to contact the head of the 

department and check on the academic load of the professor or 

professors whom we wish to recommend to the CIRAS client. If we 

find th at one professor is heavily loaded with academic work, we must 

then use only the name of the professor with comparable experience 

and a lesser academic load. When we do find a professor who is 

available for the consulting job, we try to get him together with the 

CIRAS client and hope they will negotiate a contract to their mutual 

benefit.

In all situations, it is the desire of CIRAS to put those industries, 

or individuals, with problems in touch with the firms or individuals 

who can solve their problems. We are definitely middlemen.

As a sounding board for checking results of past performance and 

planning for future activities, CIRAS has organized an advisory council. This group consists of 21 men. Twelve of them come to the 

council from industry and of this 12, 2 of them are doubling in brass 

as representatives of industry and the Iowa Engineering Society. 

Two representatives of the Consulting Engineers Council of Iowa 

and the remaining seven include a representative of the certified 

public accountants in Iowa, the Iowa Manufacturers Association, the 

Iowa Development Commission, the Des Monies Register & Tribune, 

and representatives, one each from the State University of Iowa, the 

State College of Iowa, and Iowa State University outside the college 

of engineering.

We favor the adoption of the Technical Services Act of 1965. If 

the act is passed we anticipate the following benefits:

1. It will enable us to more adequately cover an area of great 

concern to the CIRAS staff and to industry, that of new product 

development, pu tting into practice some of the research and development of past and present years.

2. It wifi allow us to work more closely with the engineering extension service to develop and schedule conferences which wifi benefit 

industry.

3. It wifi aid us in working out a cooperative program with the 

other educational institutions in the State of Iowa.

4. It wifi promote a closer tie and ultimate regional development 

between neighboring States.

5. It wifi enable us to establish a much more personal distribution 

system for research and development information available currently 

through the Federal Government.

6. This act wifi offer an incentive for establishment of industrial 

service centers in those States currently without such groups.

7. Existence in all States of these groups wifi greatly facilitate the 

application of past, present, and future research development.

These are only a few of the obvious benefits which such a program 

would offer to the States. It could serve to aid in opening up a new 

channel of communication between industry, the Federal Government, 

and the individual States.

Mr. Macdonald. Thank you very much for your fine statement,. 

Mr. Wegner.
STATE TECHNICAL SERVICES ACT OF 19 65 103

I was wondering why Iowa would actually benefit from this since 

they seem to be doing very well in this field at the moment.

Mr. Wegner. We very definitely need some expansion in some 

areas. As I indicated we need to be able to work on product development.

Mr. Macdonald. How would this bill affect that?

Mr. W egner. If we could work on a matching-fund basis with 

what we have and what they had authorized in the State legislation, 

we then could to more work in this area.

Mr. Macdonald. Presently, how much is allocated to you from the 

State budget per year?

Mr. Wegner. We star ted with $100,000 the first year and $150,000 

for the present year and the budget will be very similar to this in the 

next biennium.

Mr. Macdonald. As I understand it, the Federal Government 

would contribute between $100,000 and $150,000 each year.

Mr. Wegner. That is right.

Mr. Macdonald. Therefore you would be able to double your 

service?

Mr. Wegner. Double the service; th at is right, sir.

Mr. Macdonald. Do you think tha t this is necessary or do you 

think what you are doing now pretty well covers the needs of the 

people of Iowa?

Mr. Wegner. We are very definitely limited, sir. We need to 

have a more adequate distribution system for the information tha t is 

coming out of Washington, for instance. We also need to have or 

rather we are doing practically nothing in product development now 

because we just do no t have the staff or facilities to do it.

Mr. Macdonald. What is product development?

Mr. Wegner. Product development is taking an invention after 

you have a model or a prototype and getting it to the point where it 

is ready to be manufactured. There are many things tha t have to be 

eliminated and improved on an invention or product before it goes into 

manufacturing and the start of spending a lot of money on tooling by 

the industry.

Mr. Macdonald. You mean to say someone invents a new sort of 

machine?

Mr. Wegner. That is right.

Mr. Macdonald. And you would aid him in getting that produced?

Mr. Wegner. We will try to get him—if he does not have the 

money to develop this and there are a lot of people th at come into this 

picture without a dime—if through the elimination of a lot of products 

we come up on some two or three that need fu rther development, we 

will take it just as far as we have to before th at can go to an industry. 

This is what we hope to do with this type of thing.

Mr. Macdonald. Wha t form does your aid take in product 

development?

Mr. Wagner. So far we have one firm in the State of Iowa tha t does 

this type of thing. So far the people that have had products have 

been able to pay a small amount for this development, and this firm 

has been able to take care of it.

We have done about three projects that we have worked with our 

own people. We have had to use part of our small budget to develop
104 STATE TE CH NICA L SERVICES ACT OF 19 65

this and one of them will result in a new industry in the State within

the next 6 months.

Mr. Macdonald. I am just taking this because I am sure when and 

if we bring this to the floor we will be asked similar questions. If the 

Federal Government comes into the picture as they would under this 

bill, who would approve what you are doing with the money?

Mr. Wegner. The designated institution.

Mr. Macdonald. It would not be controlled, as you see it, from 

Washington.

Mr. Wegner. No, absolutely not.

Mr. Macdonald. I hope you spread tha t gospel to your Iowa 

delegation because I know a t least two of the members of the delegation will raise this question. *

Mr. Wegner. I would love to know this because we have talked 

to them and the bill is very definitely set up so tha t it is to be controlled by the State designated institution. This is the way it 

should be very definitely. «

I feel quite strongly about this, as you can tell, because it could 

not have any other controls, really.

Mr. Macdonald. No other controls are necessary.

Mr. Wegner. Tha t is right.

Mr. Macdonald. And none are provided in this hill as you read it.

Mr. Wegner. That is right. You will notice tha t 1 differed a 

little with the previous speaker in tha t I believe a broad brush in 

the bill will enable you to get this program underway and will end 

up in a be tter use of this program.

Mr. Macdonald. Since we are exchanging information, I can also 

point out to you tha t a very broad brush makes it very difficult to 

pass a bill on the floor of the House.

Mr. Wegner. I understand that, sir.

Mr. Macdonald. Mr. Curtin.

Mr. Curtin. Thank you, Mr. Chairman.

Aside from the product development angle of your work, it appears 

to me that the main purpose of CIRAS is to conduct a rather elaborate 

referral service.

Mr. Wegner. Yes; this I would say is better than 50 percent of 

our work at the present time.

Mr. Curtin. Is it a situation of some industry or some business 

having a problem, so they get in touch with you and you refer them 

to the proper consultants who you feel can help them? .

Mr. Wegner. Yes.

Mr. Curtin. Do such people pay those consultants?

Mr. Wegner. Yes; they develop a contract between the industry 

and the consultant and then we step out of the picture. c

Mr. Curtin. Do you people get a p art of th at fee?

Mr. Wegner. No; no fee at all.

Mr. Curtin. What has it cost you to run CIRAS since you have 

been organized?

Mr. Wegner. $100,000 in the first year and $150,000 this year and 

our budget will be comparable, $150,000 plus just a little bit for the 

next biennium. That is $150,000 a year.

Mr. Curtin. On this product development idea—do you get any 

reimbursement for the money you have had to spend in that feature 

of your work?
STATE TE CH NICA L SER VIC ES ACT OF 1 9 6 5 105

Mr. Wegner. This is a detail we are working on. This is one of 

the real problems this advisory council will have to take hold of and 

help me with, because trving to determine where and how these charges 

are to be made is a detail th at will be taken care of. Believe me every 

product does not develop and become a success. If we spend some 

money on a product and it becomes a success and they start making 

profit there should be some means provided whereby they would pay 

back the cost of the job that CIRAS has done for them.

Mr. Curtin. Then it is your ultimate plan, that you would be 

reimbursed for any outlay you have made in this product development 

feature of your work?

Mr. Wegner. Tha t is right.

Mr. Curtin. Tha t is all, Mr. Chairman.

Mr. Macdonald. Mr. Farnsley.

Mr. Farnsley. Thank you, Air. Chairman.

When you say industry, does th at include the service industries?

Mr. Wegner. Yes. We stay with the SIC classification which is 

used here in Washington. We feel we have to do this because the 

Iowa Development Commission is also in the same classification. We 

cover and once in awhile it becomes a bit obnoxious to some of the 

fieldmen because I ask them to call on some of the industries tha t they 

feel we are not going to have any calls from, but we feel we have to 

make and have in our record every classification that they include in 

their record and the SIC classification.

Mr. Farnsley. I do no t know anything about that. That covers 

everything?

Mr. Wegner. That covers just about everything tha t you can 

think about on this type of thing. We work through out services 

I think more closely through getting the information on our retrieval 

system where we think we will be able to use their services and to 

refer clients to them to solve problems.

Mr. Farnsley. When you say services, you have lost me.

Mr. Wegner. By services, I am thinking in terms of the CPA’s 

and groups like that. Is this what you are thinking of, sir?

Mr. Farnsley. No. I am sorry.

Mr. Wegner. What were you thinking of?

Mr. Farnsley. I am such a laymen, I cannot even ask the question. 

When I think of service industries, I think of restauran ts, drycleaners, 

colleges, and things like tha t.

Mr. Wegner. We do not go into the business areas at all such as 

merchants and this type of thing.

Mr. Farnsley. You call that business rather than service industry, 

is that right?

Mr. Wegner. Right.

Mr. Farnsley. When I listen to you, I think schools of engineering 

should be in charge. When I listen to other people from the business 

schools, I think they should be in charge. So, I am open on this 

subject.

Is there a conflict? Are there two different areas, or what is it 

all about?

Mr. Wegner. I do not think there has to be a conflict a t all, Mr. 

Farnsley. Actually, one or the other has to be the designated institution, as I see it, and that institution then has to pull this program
106 STATE TECH NICA L SER VIC ES ACT OF 19 65

together, utilizing every one of the other service groups such as the 

school of business and this sort of thing. We do not have a school 

of business at Iowa State, bu t the State University of Iowa does have 

a good school of business. If we are named as the designated institution, we will work in the 5-year plan a program utilizing all of their 

services. When a problem conies up for the school of business, we 

will refer to them this problem.

Mr. Farnsley. I am not trying to put words in your mouth. 

I'am really trying to learn. Is it possible that the school of business 

concerns itself more with what I call service industries and you call 

business, and the engineering concerns itself more -with manufacturing, 

which you call industry?

Mr. Wegner. There is no separation of it, sir. They tie so closely 

together.

Mr. F arnsley. You are a Governor, and you have in your State 

a school of business and a school of engineering, both of equal competence. Which do you designate?

Mr. Macdonald. Which did you graduate from?

Mr. Wegner. I would definitely say the engineering. Let me 

elaborate a bit on that, if I may. We have found tha t in the inquiries 

we have had, a much higher percentage of them are in the technical 

area. By technical, I mean those whereby we would have to go to 

the college of engineering for help if we could n ot find a consultant. 

I would say tha t definitely it would belong in the school with a 

college of engineering.

I am not saying it would not work the other way, because one of 

them has to take the lead and utilize the other facility. Of course, 

I am prejudiced.

Mr. Farnsley. An engineer can advise you on things tha t I would 

call economic, and in sociology.

Mr. Wegner. Right. We would go into the science and humanities 

group for help in that. I think you might be interested, too, that we 

have crossed every line at the university on inquiries that have come 

to us. We have gone to the psychology department. We have had 

to go to the agriculture department. We have had to go to the home 

economics department. We find it has to be crossed this way.

Mr. Farnsley. Than k you, sir, for your testimony.

Mr. Macdonald. I would like to add tha t I think Mr. Farnsley has 

a very good point. It seems to me the training given by a business 

school and tha t given by a school of technology are completely at 

opposite ends of the pole. I did not write the bill, and perhaps I 

should be directing this question to the Department od Commerce, 

who are so interested in it, but there seems to me to be a great divergency in the skills of, say, the Massachusetts Institu te of Technology 

and the Iowa business school.

Mr. Wegner. As I see this bill, it is to set up an organization 

whereby these things can be tied together. I think this is a decision 

the Governor has to make as to who can best tie it together.

Mr. Farnsley. But he is a layman. He does not know.

Mr. Wegner. He has to have his advisers.

Mr. Farnsley. Who are always laymen.

Mr. Wegner. I do not believe it has to be separated as a school of 

business and a school of engineering.

Mr. Macdonald. It is in the bill.
STATE TECHNICAL SERVICES ACT OF 19 65 10 7

Mr. Wegne r. It is. It says they m ust ha ve a school of b usin ess or 

a college of enginee ring . This is one of the req uir em ents. Th e wa y 

I reason it ou t is th at they believe the se are the two areas— and we 

have found this to be tru e— either the tec hnica l design are a or th e 

ma rke ting and business area. We think the se a re th e im po rtan t ones. 

One of th ese gro ups should be in charge of adminis tering this bill for 

you in the Sta te.

Mr. Macdonald. Wo uld you think a comp rom ise the grou ping of a 

business school plus a school of technology, wou ld be more sensible?

Mr. Wegne r. I do no t think it is necessa ry. I think if you ha ve 

one organization------

Mr. Macdonald. Fo r example, I am s ure I could nam e you th ou ­

san ds of graduates of Harva rd Business School who would n ot kno w a 

machine tool from a riv et.

Mr. Wegner. Right.

Mr. M acdonald. H ow can they advise on problems th at deal with 

pro duc tion?

Mr. Wegner. Th ey m ust h ave on their s taff either an engineer o r a 

person with tec hnica l bac kgrou nd so th ey can have th at serv ice 

available. I have a man on my staff who is an ind ust rial engineer 

an d is a Harva rd Scho ol of Business Ad mi nis tra tio n gra duate .

Mr. F arnsley. He is both?

Mr. Wegne r. He is both, yes, sir.

Mr. Macdonald. B ut th at is unu sual.

Mr. Wegne r. Th is is unusual.

Mr. F arn sley. H ow much staff do you hav e?

Mr. Wegne r. I ha ve nine men and two women. Of those nine, 

four are field rep res entative s.

Mr. Farnsley. Ca n you run down rig ht fast the ir trainin g? 

Yo urs is engineering?

Mr. Wegne r. Mine is civil engineering with backgroun d in constr uc tio n, design, an d municipal admi nis tra tio n. 1 just told you 

ab ou t this industrial man with a business bac kgroun d. I hav e a 

man with a ma jor in ma rke ting and adv ertising, and a minor in 

economics. I have a mec hanical engineer. In the field I hav e a 

civil engineer who has had experience in indu str y. I have an indu str ial ad minist rator which basically is school of business typ e of 

dev elopment. I have an ind ustrial engineer, and I am gettin g an 

agric ult ura l engineer with a backgro und in agricu ltural prod uc t 

dev elopment. Th en I have a chemical enginee r who has joined us 

from the r are earth s field of ind ustry.

Mr. Macdonald. Yo urs is a typ e of opera tion th at is no t spelled 

ou t in this bill, bec ause by the terms of the bill it says the Governor 

sha ll appoint an in stru men t of the S tate, either a n acc redited engine ering school or an accre dit ed busin ess school. W ha t you are saying 

and wh at you have done seems very rea son able. You have go tte n 

people from different skilled bac kgroun ds. I do no t see th at the 

Mass achuset ts In st itute of Technology, as a con crete exam ple, if 

des ignated by the Go vernor of Ma ssa chusetts, wou ld the n go an d 

ge t a lot of people from the Harva rd Business School to help the m.

Mr. Wegne r. If th ey do no t have an ad eq ua te bu dget to ha ve a 

staff similar to this.

Mr. Macdonald. I th in k the y have the budget.
108 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Wegner. I think they could handle it, but I am thinking of 

smaller areas where they have only one man or a man on half time 

from one of the colleges to do this type of job. If this is the situation, 

then they have to do just what we have done, develop a roster of the 

availability of the talents in the State tha t they represent. You do 

with what you have, and then you do the best you can with the 

funds tha t are available.

Mr. Macdonald. Mr. Keith, have you any questions?

Mr. Keith. No questions, Mr. Chairman.

Mr. F arnsley. I might ask one more question. You say you have 

an industrial management man. What kind of school did he go to?

Mr. Wegner. He to ok industrial administration at Iowa State.

Mr. F arnsley. Th at is not in either the business or the engineering t

school?

Mr. Wegner. It is in the science and humanities at the present 

time.

Mr. Farnsley. So, of your whole staff, you have one man out of 

business school and one man out of science and humanities, and the 

background of the rest is engineering, except that one engineer has 

another degree.

Mr. Wegner. Right.

Mr. Farnsley. I bet the guy who came from the school of business 

has his staff set up the same way. I am not fussing, but this is just 

the way things work. Believe me, I am a friend. The engineer’s 

chief competence is in design and what, did you say?

Mr. Wegner. In design and product development and administration.

Mr. Farnsley. What does tha t mean?

Mr. Wegner. I should change that. In production line management. This is work in the industry itself, out in the factory.

Mr. Farnsley. How much competence does the engineer have in 

what you call business and I call service industry?

Mr. Wegner. We try to find men who have a background in some 

of this, but their training does not always indicate that.

Mr. Farnsley. The school of business would be the first place to 

go to for that?

Mr. Wegner. Right. Tha t is where I would go for my help.

Mr. Farnsley. What percent of the dollar gross national product, 

if you know—there is no reason you should—is manufacturing and 

service? # Mr. Wegner. I can tell you how they compare in two areas in 

Iowa, for instance. The two areas that we are talking about are agriculture and industry products. In 1964, the actual cost of the products of agriculture was $2,600 million; and this has pretty well leveled $

off on a plane. Then for 1964 the value of the products of industry 

amounted to $8 billion, and we are on a rising curve there. This does 

not answer your question.

Mr. Farnsley. When you say “industry,” you mean “manufacturing” ; do you not?

Mr. Wegner. Yes.

Mr. F arnsley. Fortune magazine said a few months ago, projecting 

some work done by a man at Princeton, tha t “by 1985, one sector of 

the service industry,” which they call the “knowledge industry,” 

which is schools, colleges, publishing, radio, and television, “would be
STATE TECH NI CA L SER VIC ES ACT OF 19 65 109

half the gross national prod uct.” Tha t leaves all the other service industries—stores, beauticians, you name it—and manufacturing was 

a small segment.

Mr. Wegner. I cannot argue with that, sir.

Mr. Macdonald. Thank you very much, Mr. Wegner.

Mr. Donald Marlowe, dean of engineering and architecture of Catholic University, and chairman of the Legislative and Government Affairs Committee of the National Society of Professional Engineers.

STATEMENT OF MILTON F. LUNCH, GENERAL COUNSEL, NA ­

TIONAL SOCIETY OF PROFESSIONAL ENGINEERS, ACCOMPAN IED BY WILLIAM D. PATTON, LEGISLATIVE COUNSEL

Mr. Lunch. Thank you, Mr. Chairman. I am not Dean Marlowe. I regret to say he could not return to day, Mr. Chairman, because of a conflicting engagement, and I have been requested by him to present his statement on behalf of the 

society, if th at is agreeable to the committee. My name is Milton F. Lunch. I am general counsel of the society. I have with me Mr. William D. Patton, who is the legislative counsel 

of the society. I will read Dean Marlowe’s statement. Mr. Chairman and members of the subcommittee, I greatly appreciate the opportunity to present the views of the National Society of Professional Engineers on H.R. 3420, the proposed State 

Technical Services Act of 1965. My name is Donald E. Marlowe. I am dean of engineering and architecture at Catholic University, a registered professional engineer, and chairman of the Legislative and Government Affairs Committee 

of the National Society of Professional Engineers. Our society is composed of more than 63,000 members, all of whom are qualified under applicable State engineering registration laws. The society’s membership is affiliated through 53 State and territorial 

societies, and more than 450 local chapters. We are particularly interested in the program proposed in H.R. 3420 because of its potentially great impact on the entire engineering profession. As a technical information dissemination program—which is what we have been told by administration officials is intended—we believe it would be of great benefit to industry, to the engineering profession, and to our society as a whole. However, if administered to provide federally subsidized technical or engineering services in direct competition with private firms or individuals, we believe the program would be highly detrimental, not only to the engineering profession b ut to the entire system of American enterprise intended to 

be helped by the bill. Our society’s views on this legislation can best be understood by reference to a policy statem ent approved by our executive committee on April 7, 1965, dealing with Federal assistance to States for engineer­ ing information dissemination programs. Th at policy state ment 

reads:

The Nation al Society of Professional Engineers endorses legislation and other activities designed to stim ulate and assist the dissemination of current engineering information to industry thro ugh State educational institutions and other sources 

at the S tate or local level.
110 STATE TECHNICAL SERVICES ACT OF 19 65

Federal assistance to the States for this purpose will serve to stim ulate the 

economy and the efficient use of engineering technology and will be to the benefit 

of th e general public through higher levels of employment, improved stan dar ds of 

living, and more efficient production for a competitive position in world markets.

Legislation to accomplish this purpose should insure th at the Federal Government, thro ugh its financial assistance does not support engineering research or 

provide services to proprietary interests. Engineering inform ation gath ered and 

disseminated under the program should be made available to the general public 

and indu stry on a broad and general basis. An advisory council, including 

representation from the engineering profession, and indu stry, should be established 

at each level of operation of the program to monitor it for policy guidance and 

general direction.

Measuring the provisions and stated purpose of H.R. 3420 against 

these general principles, the National Society of Professional Engineers endorses the bill and supports its enactment. We strongly urge 

adoption of certain clarifying language, however, to assure tha t the 

bill will fulfill its intended information purposes and not be used as 

authority for Government-financed competition with private firms 

and individuals.

“ tec h n ic a l se r v ic e s”

We recommend tha t the phrase “technical services,” where it 

appears throughout the bill, including the title set forth in section 19, 

be amended to read “information services”. While this is basically 

a change in form, and not in substance, we believe it is very important, 

and would help materially to assure the correct interpretation and 

application of the bill’s provisions.

“Technical services” are defined in section 2 on page 2, line 15, of 

the bill as “activities or programs designed to enable business and 

industries to acquire and use scientific and engineering information 

effectively” through various designated means. The emphasis 

throughout the bill itself, is on the dissemination of information. 

Even the preface to the bill states tha t its purpose is “to promote 

economic growth by supporting State and regional centers to place 

the findings of science usefully in the hands of American enterprise.” 

The use of the term “technical services,” then, introduces ambiguity 

which we feel is dangerous. Technical services, in its common meaning, implies services such as those rendered by professional engineers 

and other technical people in private practice. -

Since th e phrase “technical information” more accurately describes 

what is intended, we urge that it be used instead. This will help 

avoid the danger of the bill’s being misinterpreted to put the Government in direct competition with engineers in private practice.

SE CT IO N 5( e)

We recommend, too, tha t section 5(e) which is on page 7, line 5 of 

the bill, be amended to eliminate several similar ambiguities. Tha t 

section now provices that the Secretary of Commerce shall not accept 

an annual program for approval unless it is certified that the administering institution has “determined tha t such * * * program does not 

provide a service performed as practicably by private technical 

services, professional consultants or private institutions.” This 

language is a highly important part of the bill. It constitutes the 

only specific safeguard against possible use of the legislation as authority for providing services in competition with private firms or
STATE TECHNICAL SERVICES ACT OF 19 65 111

individuals. Yet, the limiting phrase “ as practicably” is so subjective, and subject to such broad interpretation, that it would give the administrator in each Stat e almost complete and unlimited discretion in applying— or not applying— the entire section in any given case. While some discretion is necessary in the administration of any legis­ lativ e program, we believe that “as practicably” is far too broad, and 

that a different standard should be provided. Another ambiguity in section 5(e) is created by use of the word “ performed.” This word apparently would include services which have been performed, or which are being performed, but it would seem to exclude services which may be performed. Since there are many services which are not actually being performed by private firms or individuals today, but which readily can be, when the need arises, we feel the word “ performed” should be eliminated from the bill. Otherwise, it could result in the development of Government-financed competition with professional engineers in private practice. Both of these potential problems— created by the phrase “ per­ formed as practicably”— could be avoided, we believe, by changing section 5(e) to read: “ determined that such program does not provide a service available from private technical services, professional consultants or private institutions.”

SE CTI ONS 5(f) AN D 2(a )( 2)

The other amendments our society feels are necessary relate to 

section 5(f) and section 2(a)(2) of the bill. Section 5(f) on page 7, line 9 of the bill, requires that wThen an 

annual program is submitted for approval the State certify that the administering institution has “planned no service specially related to a particular firm or company except insofar as the services are of general concern to the community, State or region.” We fully support the portion of this section prohibiting services specially related to a particular firm or company. However, we feel the exception which follows is so broad that it weakens the prohibition almost to the point of destroying it. Practically all technical information services— whether they are specially related to a particular firm or not— can be held to be of general concern to a community. We recommend that this exception be dropped, and that section 5(f) simply require the State to certify that it has “ planned no services specially related to a particular firm or company, public work, or other capital project.” We suggest that “public work or other capital project” be included so that the section will conform to other provisions in the bill limiting 

services to businesses and industries. Finally, we recommend th at subsection 2(a)(2) which is on page 2, line 21, be reworded to clarify its meaning and thereby reduce the possibility of its being interpreted as authorizing services in competi­ tion with private firms and individuals. We suggest that this part of the definition of technical services— or, to use our recommended language, “ information services” — be revised to read: “ establishing State or regional technical information centers to prepare and dis­ seminate reports, abstracts, computer tapes, microfilms, reviews, and similar scientific and engineering information.” This change, w-e believe would make the meaning of the subsection clearer, and bring language into greater conformity w-ith the other parts of section 2(a).
112 STATE TECHNICAL SERVICES ACT OF 19 65

In brief summary, Mr. Chairman, the National Society of Professional Engineers supports enactment of H.R. 3420, but urgently 

recommends adoption of the clarifying amendment we have proposed 

here to help assure that the legislation achieves its intended purpose.

With these amendments we think this would be an excellent bill, and 

one which recognized and protected the diverse interests involved, 

while helping to provide industry with the scientific and technological 

information it must have if our economy is to prosper and grow.

We appreciate this opportunity to present our views on this importan t legislation, and will be happy to furnish any additional information 

or comment the committee may desire.

With the committee’s permission, I would like to submit for the 

record, and for the committee’s convenience, a 1-page attachm ent 

to this statement listing the specific amendment we have proposed.

Mr. Macdonald. Without objection, the attachment will be included in the record at this point.

(The material follows:)

Amendments to H.R. 3420 Proposed by the National Society of Professional E ngine ers

1. Substitu te “technical inform ation” for “technical services” thro ugh out the 

bill as follows:

Page 2, lines 5, 11, 15.

Page 4, lines 10, 21.

Page 5, line 22.

Page 6, lines 11, 16, 24.

Page 7, line 7.

Page 8, lines 13, 18.

Page 9, line 6.

Page 10, lines 10, 20.

Page 11, lines 3, 12-13.

Page 12, line 25.

Page 13, line 12.

Page 14, lines 8-9.

2. Amend section 5(e) to read: “ (e) determined th at such prog ram does not 

provide a service available from priv ate technical services, professional consultants or private institutions.”

3. Amend section 5(f) to read: “ (f) planned no services specially rela ted to a 

particu lar firm or company, public work or capital project.”

4. Amend subsection 2(a)(2) to read : “ (2) establishing State or regional 

technical information centers to prepare and disseminate reports, abstracts, 

computer tapes, microfilms, reviews, and similar scientific and engineering 

information.”

Mr. Macdonald. You have certainly stated the position of B

the National Society of Professional Engineers very clearly, bu t I have 

some questions in my own mind if the position is correctly stated.

As written, you feel, apparently, tha t the bill would put the Federal 

Government or the State government in direct competition with #

engineers? I do not quite understand that.

Mr. Lunch. We suggest, Mr. Chairman, that it would be possible.

This would be administered at the State level, and we read the 

language of the bill tha t it would certainly be possible under the 

present wording in some places for a designated institution in its 

program to undertake engineering-type programs which are normally 

performed by private consulting engineers.

Let me give you a specific example. The language in the bill refers, 

as I read in the statement, to an exception. You recall there is a 

prohibition tha t the plan may not include certain types of services.
STATE TEC HN ICA L SERVICE S ACT OF 19 65 113

Then there is an exception which says, paraphrasing, except where 

it is in the broad general community interest. Under this exception 

it is certainly possible, as we read it, tha t an institution in a State 

could say:

A certain city, a small municipality in a State, needs a new water system. Under this bill we can provide this service. We can design a new water system 

for this comm unity.

We are told by the administration officials with whom we have conferred that this is not the intent ; tha t this is not the purpose. We are 

sure this is correct, but we suggest tha t the language of the bill be a 

little more specific to avoid the possibility of this type of thing occurring.

» Mr. Macdonald. Actually, unless my analogy is incorrect, you

would say that a lawyer hired by the Government to work for the 

Government, in the service of the Government, say a labor lawyer 

working for the National Labor Relations Board, who helps individuals

* who need help because the law has been broken, would be in competition with private lawyers. Is th at right?

Mr. Lunch. If I follow your analogy, which I think may be a good 

one, Mr. Chairman, having some relaitonship myself to the legal 

operations, a lawyer for the National Labor Relations Board will certainly converse with a person or a firm or a company that has a problem under that law to advise him of what the law provides, what his 

rights are and what the procedures are in administering tha t law. 

This is perfectly proper, normal and accepted.

On the other hand, if this lawyer working for the NLRB undertook 

in the name of the NLRB to go ou t and consult with a private company on its labor relations policies, I think you would hear quite an 

uproar from the American B ar Association.

Mr. Macdonald. On the contrary, it happens every day, because 

usually a company has a private law firm representing them. When 

the law has been violated or there is reason to believe that perhaps 

it has been violated, tha t is exactly the process tha t is followed.

Mr. Lunch. Right.

Mr. Macdonald. The Government lawyer talks to the company’s 

lawyer and either he gets them to change what they are doing or, if 

they insist on doing it, he brings it to a forum in which it is decided 

who is right, the Government lawyer or the company lawyer.

Mr. Lunch. I am afraid I did not make my distinction clear.

• This is all in connection with whether the company has violated 

certain provisions of the Labor Relations Act. It is the function 

of that agency and, therefore, th e function of this lawyer to deal with 

tha t problem. My analogy was tha t if this lawyer from the NLRB,

** in the name of the NLRB, gave general advice on labor policy to a

company, having no relationship to a charge of unfair labor practice 

or certification of elections or anything else covered by the law, he 

would be going outside of the function of tha t agency.

Mr. Macdonald. 1 do not want to get involved in these labor 

relations problems, but once again I point out it is exactly the function 

of the Board to make known the application of the Taft-Hartley law.

Mr. Lunch. I agree.

Mr. Macdonald. He does th at. A regional attorney goes out and 

gives speeches in which he goes into detail about w hat can and cannot 

be done under the law.
11 4 STATE TECH NICA L SERVICES ACT OF 19 65

Mr . L unc h. We are in full agreement, Mr. Chairman .

Mr . M acdonald. I will not pursue it because I have made my 

point.

Secon dly, what I had in mind is that it would seem to me that this 

would give employment perhaps to members of you r Soci ety of 

Professional Engineers by reaching a new market. If the testim ony 

which has been given before the committee is to be believed, and I 

think it should be belie ved, it reaches a whole new market of people 

who have not been able to ava il themselves of the services of professional engineers or hav e not had the money to. Th at is the intent 

of the bill, in my judgment.

Mr. L unc h. We are sure this is correct.

Mr . Macdona ld. I would think it would help the professional 

engineers, not injure them.

Mr. L unch. I think this is true, and I would like to point out, Mr. 

Chairma n, if it is not clear, tha t we are endorsing the bill.

Mr. M acdona ld. I am hap py to hear that.

Mr. L unch. We are definite ly endorsing the bill. We are only 

sugge sting what we thin k is some helpful or clarifying language to 

deal with some concerns th at have been expressed.

Mr. M acdonald. Cou ld I ask y ou a question on tha t point? Wh at 

if all your amendments which have been read into the record and have 

been made a part of the record in your attachment, are not adopted? 

Would the engineers still endorse the bill?

Mr. L unc h. I would say those who are in priv ate practice would be 

greatly concerned. Frankly , I cannot predict what the society’s 

board of directors would do in the ultimate, but the priv ate practice 

segm ent would be concerned about the possible dangers here of opening the door to competition through the Government, which we are 

told and we believe from the language of the bill is not intended.

Mr. M acdona ld. I am sure it is not intended.

Mr. L unch. All we hav e tried to suggest is tha t some language 

changes would help to clarify the meaning and intent of the bill.

I listened with great interest this morning to the discussion and the 

questions raised by the members of the committee which seemed to 

me to raise a ver y fund amental point which I thin k is relev ant to our 

presentation. Th at is whe ther this bill is really a techn ical information dissemination progra m, which we understand it to be, or wh ether 

it is intended to be something much broader and get into the general 

areas of aid of all kinds and types to business. I would jus t like to 

comm ent on that earlier discussion, that it seems to us as we read the 

lang uage of the bill, par ticu larly the definition of techn ical services 

whic h refers to utili zation of scientific inform ation, even though 

business schools are mentioned as being qualified, the real purpose of 

this bill, as we see it, throughout, is to provide a program of dissemination of technical and scientific information as distinguished from 

accou nting , personnel, la bor relations, or other m anagement problems.

I jus t venture as my own comment— it had not occurred to us in 

our committee deliberations this was a problem, so this is strictl y 

my own comment, and I address this somew hat to Mr. Farnslev, who 

indicated considerable interest in this point— tha t these other areas 

are being taken care of to some extent through the Small Business 

Adm inistratio n programs and perhaps other programs in the Gov ernment, and if this element becomes a major factor in the history of this
STATE TECHNICAL SERVICES ACT OF 19 65 115

bill, then I think it is a change from what was originally intended, to 

open up a complete aid to industry program involving marketing, 

production, labor relations, legal problems, accounting problems, 

warehousing, packaging. There is almost no end to the list of problems of industry and of service industries tha t could be encompassed 

here if tha t is the final outcome.

Mr. Macdonald. Since you are putting it on a very iffy basis, I 

will ask you an iffy question. If tha t were the case, do you think it is 

necessarily wrong per se tha t the Federal Government or State 

government try to help business?

Mr. Lunch. No; I do not think it is necessarily wrong. I know the 

Government is doing a considerable amount of work in this area today 

throu gh the Small Business Administration, to name just one. The 

question before the committee on this point I think is whether they 

want a broad bill of general assistance of this type or whether, if our 

understanding is correct, this is to be a limited-purpose bill to provide 

basically a system for the dissemination of technical information.

Mr. Macdonald. I know business for many years has said it is 

discriminated against; that every other segment within the United 

States is helped and business is not helped.

Mr. Farnsley. Persecuted.

Mr. Macdonald. I would not go tha t far. Businessmen are not 

that rabid in may area. But they do feel that they are not helped 

to the extent others are by the Federal Government.

Mr. Lunch. Their complaint may be fully justified.

Mr. Macdonald. I was wondeiing if you think they should no t be.

Mr. Lunch. No, sir; not at all. I am not saying that. I am 

merely saying that, to me at least, this is a different concept than the 

concept tha t we believe was intended to be written into this bill, 

which is a bill to provide for the dissemination of technical information 

to industry through the State institutions.

Mr. Macdonald. Where does it say tha t in the bill?

Mr. Lunch. The definition on page 2, starting on line 15, says:

technical services means activities or programs designed to enable businesses and industries to acquire and use scientific and engineering information more effectively.

Then it spells out the various means of doing this, but tha t is the 

basic definition.

Mr. Macdonald. You are putting emphasis on the word “information,” and I would put emphasis on the words “ acquire and use.”

Mr. Lunch. You have to say acquire and use something, though.

Mr. Macdonald. Yes; scientific and engineering information.

Mr. Lunch. The question, I think, is whether it is contemplated 

that this language, “scientific and engineering information,” would 

encompass packaging problems. It might be. There might be a 

technical problem there, or accounting problems.

Mr. Macdonald. We do not have to read the whole bill, b ut just 

paragraph 1:

analyzing programs of regions and industries to determine new opportunities for 

applying technology.

I t is not strictly information.
116 STATE TECH NICA L SERVICES ACT OF 19 65

Mr. Lunch. Again I come to the definition, Mr. Chairman, which 

to me is the controlling thing in what they can do under this program. 

What they can do under this program is provide programs-----

Mr. Macdonald. I think if you go to (4):

sponsoring industrial workshops, seminars, training programs, extension courses, 

demonstrations and field visits-----

Mr. Lunch. As I see it, these (1), (2), (3), and (4) listed subsections 

are means to carry out what it says in section 2(a).

Mr. Macdonald. Which is how to run a business most effectively 

in a modern technological era. I think that is the sum and substance 

of the bill. So, it is not just putting out a newspaper saying there are 

3 million people with incomes of under $2,800 in the southeast section 

of Massachusetts. I think it goes much further than that, and should.

Mr. Lunch. May I point out, Mr. Chairman, for instance, in 

subsection (2) under 2(a), again you see the language “and similar 

scientific or engineering information.” Then under subsection (3), 

“to identify sources of engineering and other scientific expertise.” 

Under (4), referring to the workshops and seminars, “the more effective application of scientific and engineering information.” To me, 

the bill is shot through with this.

Mr. Macdonald. You emphasize the word “information,” and I 

emphasize the word “ application.”

Have you any questions, Mr. Keith?

Mr. Keith. 1 share your concern for the potential competition 

tha t this measure could give to private firms in the business of analyzing problems of regions and industries. The object of such analytical processes to determine new opportunities for applying technology, acquire and use scientific and engineering information more 

effectively. What they do to accomplish this very worthwhile objective couid be interpreted by industry and private engineering 

firms as a potential threat to a legitimate business.

I would like to ask you, therefore, the question: Would you, as an 

association, withdraw your support if none of your amendments 

prevailed? Would you vote for the bill in its present form?

Mr. Lunch. Fortunately or unfortunately, I am not in a position 

to cast a vote.

Mr. Keith. We are quibbling here. Would you support it, instead 

of “vote” ?

Mr. Lunch. Yes, I understand your question. I really cannot 

answer it, Mr. Keith, because this would have to be determined by 

the society’s board of directors. All I can say is th at I think, having 

discussed this at great length with our various committees and groups, 

the consulting segment would be greatly concerned if something was 

not written in to clarify what they see is a possible danger.

I would like the record to be clear, Mr. Chairman, tha t we are not 

saying this will happen. As a matter of fact, we know it has not 

happened in the Iowa program. I may be a little prejudiced here 

because Mr. Wegner is a former vice president of our society, a very 

esteemed member, and he understands this problem thoroughly and 

I am sure he would lean over backward to avoid its happening.

I also know in his program, as he stated, this activity in Iowa has 

actually helped the consulting engineers. There is no question about 

it.
STATE TECHNIC AL SERVICES ACT OF 19 65 117

Mr. Macdonald. That is the point I tried to make earlier.

Mr. Lunch. But Mr. Wegner, unfortunately, perhaps, cannot run 

this program in every State . We have confidence tha t many other engineers will be just as diligent as he, but there is this potential that in some places, in some circumstances, the program can be interpreted, if I may use the illustration, to provide the design of a water system 

for a municipality in a State, when this is not intended.

Mr. Macdonald. Everyone is entitled to their own opinion about 

a bill and its effect, but I think tha t is terribly farfetched. Where could be read into this bill tha t a waterworks system could be pre­ pared by the State together with matching funds from the Federal 

Government?

Mr. Lunch. In the language which provides for certain exceptions, 

which is section 5(f), if I may turn to that. Starting on page 6, 

section 5 has a number of restrictions. The Secretary will require these to be set out in the plan. Section 5(f) is one of the restrictions.

Pla n no services specially rela ted to a particular firm or company, except insofar as the services are of general concern to the community, State or region.

All we are saying is th at a water system or a sewer system or a highway system or an electrical system for a municipality is certainly of general concern to the community, and if some administrator 

wished to do so, he could read this language to say this is a matter of general concern to the community and, therefore, we are not restricted 

and we can do this.

Mr. Macdonald. I would point out to you, because you have to 

read back to the beginning of section 5, any Governor, at least any Governor of Massachusetts, who decided to build a water system for 

any city or town in Massachusetts would not be reelected.

Mr. Keith. If he came from Boston?

Mr. Macdonald. No, i t would not matter if he came from Boston 

or not. Obviously, tha t is a community responsibility, as you point out. It would take a great stretch of this language for it to fit the illustration you used, to do something for a community which is build­ ing a plant or giving that sort of assistance to a community. I respect­ fully beg to disagree and say that I think you are completely wrong 

in that interpretation.

Mr. Lunch. I do not think we disagree too much, Mr. Chairman. 

I think we agree on the intent. I am glad to have it in the record 

tha t this is the intent. Perhaps the only place where we disagree is 

tha t we say it could happen.

Mr. Macdonald. I say it could not happen.

Mr. Lunch. Similar things have happened undei certain statutory 

language where an administrator at si me level reads it a different way than the committee in Congress intended. We are just trying to pin this point down as well as the other main point we make. I think this 

a basic policy decision for the committee.

Mr. Macdonald. T agree with you in principle tha t the bill is 

written in fairly broad and perhaps too broad language. If I had any 

fault to find with the bill, and I do have some, it is th at it is too bioad in language. But I think your illustration is even broader than the 

language.

Any further questions, Mr. Keith?

Mr. Keith. No, thank you, Mr. Chairman.
118 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Macdonald. Mr. Farnsley?

Mr. Farnsley. When you say “industry,” you mean manufacturing?

Mr. Lunch. We understand the bill to be aimed primarily, Mr. 

Farnsley, at the manufacturing industry.

Mr. Farnsley. I am not asking what you think about the bill, 

sir. In your presentation you use the term “industry.” What does 

tha t mean?

Mr. Lunch. I would say it encompasses primarily manufacturing, 

but may also include transportation, communications, distribution, 

and similar activities.

Mr. Farnsley. The bill says business and industry, so paparently 

it makes the same distinction you do. All the service industries and 

everything else, but manufacturing, transportation, and so forth. 

When the bill says “technical services,” this means scientific services, 

not the social sciences, not psychology. In other words, you consider 

them n ot scientific and, therefore, not eligible under this bill?

Mr. Lunch. They are not.

Mr. Farnsley. Is tha t correct, sir? Is tha t what you say?

Mr. Lunch. That is conect. They may be scientific if you think 

of it in terms of social sciences, but they are no t scientific in terms of 

this bill.

Mr. Farnsley. Under this bill, it is not technical.

Mr. Lunch. Tha t is correct.

Mr. Farnsley. I am not fussing. I want to clear it up. I am 

try nig to help you. I am trying to get the engineers out of it. You 

say t ha t you are afraid tha t under this bill some State, some administrator, some institution might be tempted to design a waterworks.

Mr. Lunch. They could.

Mr. Farnsley. Which, in your opinion, would be the most apt 

to be tempted to design a waterworks—the Harvard School of Business 

or the Massachusetts Institute of Technology?

Mr. Lunch. That is a loaded question.

Mr. Farnsley. Yes, sir.

Mr. Macdonald. I think there is only one answer.

Mr. Lunch. Both being very eminent and distinguished institutions, I do not think either one would get involved in a situation like 

that.

Mi. Farnsley. I thank you.

Mr. Macdonald. Mr. Curtin?

Mr. Curtin. Thank you, Mr. Chairman.

Sir, if you delete subsection (4) hi the description of technical 

services, does not the remainder of section (a) p retty well define the 

functions of a private firm of consulting engineers? In other words, 

do not consulting engineers do practically everything set forth under 

(a) hi behalf of a client, with the possible exception the provisions of 

subsection (4)?

Mr. Lunch. I think they do, to some extent at least, not all of 

them bu t various private firms often analyze problems of industry 

or are retained by a regional authority or a State agency or a local 

agency to make a feasibility study or an economic study. This is 

very commonly done; yes, sir, (2) preparing and disseminating 

technical reports. I do not know that tha t quite fits into our discussion. This is a method of disseminating something which you have
STATE TECHNICAL SERVICES ACT OF 19 65 119

done. Certainly (1) applies to your point. (3) I think very likely 

would apply to private firms. They could and very often do a 

research job to identify sources of information. This is not unusual. 

I agree with you, I do n ot think (4) applies. Normally a consulting 

firm would not sponsor or put on seminars, although they might be 

retained to work up certain technical seminars or programs for industry, for continuing education purposes or something of tha t nature. 

But not usually.

Mr. Keith. Have you heard of Science Research Associates?

Mr. Lunch. I think I have seen the name or heard the name.

Mr. Keith. They are an educational consulting firm which does 

this kind of work that you just referred to. The company was 

recently picked up by IBM for $38 million, and is implementing the 

Job Corps training program for upgrading citizens so they can find 

jobs in industry. They will undertake any program, I think, without 

any reservations.

Mr. Lunch. Yes, I aih sure there are many organizations th at 

would undertake and do undertake presently various training programs for various clients.

Mr. Curtin. So, you are really saying, then, that the description 

of technical services, with the subsections as is, could apply to the 

work of a private consulting firm of engineers?

Mr. Lunch. Yes, sir; I think tha t is correct.

Mr. Curtin. In relation to a private contract of such a private 

firm with a client who wanted certain information?

Mr. Lunch. I think in many cases they do and certainly they could 

do almost all of the things tha t are indicated here.

Mr. Curtin. That is all, Mr. Chairman.

Mr. Macdonald. I thank you for appearing before us, and in 

conclusion I would like to point out the amount of money in the bill 

I think would v itiate against the problems tha t your society thinks 

might occur. There is not tha t much money involved.

Mr. Lunch. If I may comment, Mr. Chairman, I think this is an 

open-end bill as far as money is concerned. There is a provision for 

$25,000 to each institution to develop a plan, but the actual implementation program is open end. It merely says Congress shall appropriate 

such funds as are necessary or some language of t ha t type. This is a 

general authorization.

Mr. Macdonald. The authorization would be included in the bill. 

The Secretary of Commerce yesterday, if I recall his testimony, said 

that the first year was $30 million.

Mr. Dixon. He was using the figures $10, $20, and $30 million 

for the first 3 years.

Mr. Macdonald. With $30 million at the top to be spread among 

50 States, I do not think you can build many waterworks.

Mr. Farnsley. Mr. Chairman, do you think under this bill these 

agencies could contract to do these things? I think they could. 

The University of Louisville is working with the engineers all the time. 

They take contracts to do engineering work. Could not these agencies 

contract to do engineering work and thereby have extra money?

Mr. Lunch. I would give my opinion. I think they could, 

Mr. Farnsley. I see nothing in the bill to prevent the institution 

from doing some of this function by contract with any other organization, whether it be another university or private firm, or industry.
120 STATE TECHNICAL SERVICES ACT OF 19 65

Mr. Macdonald. In my discussion with Mr. Wegner, I pointed 

out that if the Governor of Massachusetts selected Harvard Business 

School, they would have to contract some things out to engineers 

because they do not have the engineering services in tha t business 

school.

Mr. Lunch. I would assume it would be contemplated in most 

programs tha t there would be some contracting for specialized 

assistance.

Mr. Keith. As a matter of philosophy, I would like to ask a 

question here. In the provision tha t you mentioned with reference to 

$25,000 a year for each of the first 3 fiscal years, without any restriction.

It would be an outright grant would it not?

Mr. Lunch. It is my understanding it would be an outright grant t

to help the institution develop a plan for submission to the Secretary.

Mr. Keith. Can you imagine any State anywhere, knowing they 

could apply for a $25,000 grant, which is really a $75,000 grant, not 

making the application? r

Mr. L unch. It would be very difficult to imagine that situation.

I say this from the standpoint of having been exposed to similar 

programs over the years. Most States, I think, would logically feel 

they might as well get their proper share. Congress has authorized 

it. I do not mean to say this in a cynical way. I am sure the intention in all cases would be to develop a good, constructive program.

Mr. Keith. It has always been my belief that if any program of this 

sort is good enough for the State to undertake a serious study, they 

should be required a t least to pu t up matching funds so the State pays 

for some of the value it receives. We had this problem, you may 

recall, Mr. Chairman, in the case of educational TV. The bill originally was written to provide $10,000 for every State, regardless of 

whether or not they wanted educational TV or needed it. I feared, 

and the committee shared my concern, th at any State, even though it 

was working jointly with another State, would find some way to use 

tha t $10,000. The Governor would have the authority to undertake 

a contract with a private firm to conduct a study which would result 

in a recommendation to go ahead or not to go ahead with the program 

which would follow. The same thing could exist here. I am somewhat concerned tha t any Secretary would make such a broad or 

unrestricted approach as this.

Mr. Lunch. This would be a personal opinion, Mr. Keith. I would 

feel, as you do apparently, that if a State is seriously interested in >

developing such a program, $25,000 is not a large sum of money for

most States, or I wiiould say even all States, if they are really serious, 

or half of tha t amount, for them to pu t up a matching fund to get the 

thing started. I would assume that most States would be willing to 

do this if they were really serious about developing a good program.

Mr. Keith. We are talking of roughly $1,250,000 a year times 3, 

which would be $3% million.

Than k you, Mr. Chairman.

Mr. Macdonald. Thank you.

Mr. Lunch. Thank you very much, sir.

Mr. Macdonald. The statement of James S. Hostetler, of the 

New England Council, will be submitted for the record at this point.

(The statem ent follows:)
STATE TECHNICAL SERVICES ACT OF 19 65 121

Statement of James S. Hostetler of the New England Council

Mr. Chairman and members of the committee, my name is James S. Hostetler 

and I am appearing on behalf of the New England Council, a private, nonprofit 

organization with offices in Boston, Mass. The council is composed of 2,200 

members drawn from business, labor, education, and government within New 

England, and is devoted to the development of a sound and dynamic region through utilization of all human, natural, and material resources. With New 

England’s economic development as a focus, the organization seeks to identify 

the region’s broad public interest and to promote appropriate programs of action 

to implement its findings. Since its formation at the recommendation of the New England Governors in 

1925, the council has sought common, regionwide solutions to the six Sta tes’ 

problems and has supported opportunities for regional development. The council is, therefore, interested in H.R . 3420, the proposed State Technical Services Act of 1965.

The proposed bill would authorize the Federal Government to make grants to 

States to support programs to make better commercial use of the latest findings 

of science and technology. These technical services programs, planned and executed locally, would put this important information in the hands of local industry and business. To qualify for Federal matching funds, a State would designate 

an institution or agency to prepare and administer the technical services programs within the State. However, section 7 of the bill would provide authority for two or more States to cooperate to designate a regional institution and 10 

percent more Federal assistance would be available for the regional institution 

through nonmatching Federal grants. All qualified institutions in the State or 

region could participate.

The rapidly changing role of science and technology and its impact upon eco­ nomic growth has long been recognized as an important asset in the New England 

area and the rapid growth of new technical enterprises, many of which have 

arisen as a result of federally sponsored activities, has made an important contribution to the New England economy. More is possible. In recognition of 

the increased importance of science and technology in regional economic development, the New England Council has recently established a committee on science and technology under the chairmanship of Richard S. Morse and with representativ es from the industrial-academic-financial community. This committee is 

studying w ays to enhance the effectiveness of the New England Council through the improved use of new technology and advanced management concepts. We 

believe that an important aspect of such activities involves the use of systems 

management methods and a high order of technical planning on a regional basis.

We fully recognize the importance of Federal activities in the field of research 

and development and are aware of technological advances resulting from programs 

of Federal departments and agencies, including NASA, AE C, the Departments 

of Defense, HEW, and Interior, and others. It is, however, abundantly clear 

that such activities, regardless of their scientific significance, are, in fact, useful 

to the community only insofar as new products and processes can be introduced 

into the civilian sector.

This process of introduction should be accelerated by the proposed bill with at 

least the following advantages to the New England region:

1. By upgrading further our industries through making more readily 

availab le information about recent technological developments, the region’s 

economic and industrial base should be broadened and strengthened.

2. Facilitating the industrial use of new technology and the manufacture 

of new products should increase employment in the region.

3. The competitive position of New England products should be enhanced 

on the world market. Commercially significant products will not evolve from research programs without a strong cooperative effort including universities, communities, industries, and 

the Federal Government. We think such cooperation to be most effective should 

take a regional form. Cooperation on a regional scale has become increasingly 

important in trying to fashion adequate solutions for such complex and diverse 

problems as ground and air transportation, stream and air pollution, recreation, 

and power development. New England with its wide experience in successful 

interstate achievement, can be expected to implement the technical services proposal in a way designed to make maximum use of interstate cooperation.

While New England has unique educational facilities and technical competence, 

it is important that these resources be made available to the region as a whole,
122 STATE TECHNICAL SERVICES ACT OF 19 65

particularly to areas and industries more remote from and less familiar with ad ­

vances in science and technology which may have special relevance for them.

With changes in the character of our defense effort and perhaps its dollar value, 

the problem of technology transfer becomes even more urgent. New England ha s 

many examples of large defense facilities or industries dominating a local area’ s 

economy. Better diffusion of new techniques and knowledge can help in the 

diversification and strengthening of local industry’ and help prevent economic disaster from occurring should a defense closedown or cutback occur.

Accordingly, we believe II.R . 3420 can contribute to the continuing efforts of 

New England to find improved means to strengthen all segments o f its economy 

and all geographical units in the region, and in the process make an even more 

significant contribution to the overall economic growth of the country.

Mr. Macdonald. All witnesses having been heard, the hearing is 

adjourned.

(The following material was submitted for the record:) i

T he Secretary of Commerce,

Washington, D.C., Ju ne 22, 1965.

Hon. T orbert H. Macdonald,

Chairman, Subcommittee on Commerce and Finance of the Committee on Interstate p

and Foreign Commerce, House of Representatives, Washington, D.C.

Dear Mr. Macdonald: I am happ y to provide you with the additional information you requested in your letter o f June 3, 1965, as to our plans for implementing the State Technical Services Act of 1965.

To develop and carry out the Department’s responsibilities under the act, I 

propose to establish a new organizational unit (tentatively entitled the Office of 

State Technical Services), headed b y a Director who will report to the Assistant 

Secretary for Science and Technology. The Director will be an individual well 

experienced in engineering or scientific administration, and the position will 

probably be established at the GS -18 level.

The Office of State Technical Services will be responsible for carrying out all 

functions under the act. Its major functions will include:

1. Allocation of funds to each State to assist in the development of its 5- 

year plan for technical services, as authorized by section 11(d ); consultation 

with States on plan development;

2. Review and approval of State plans and programs, and allocation of 

annual Federal matching grants to designated institutions, as authorized by 

section 11(a );

3. Development and approval of “special project” grants, as authorized 

by section 11(b);

4. Encouragement of regional and interstate programs, and allocation o f 

additional 10 percent grants, as authorized by section 8;

5. Development and issuance of rules and regulations pertaining to 

Federal grants for State technical services, as required by sections 6, 11, and 

13;6. Development of a reference service to assist States to obtain scientific, 

technical and engineering reports, advice, and consultation, as authorized by 

section 12.

The act provides that the costs of the first five functions listed above cannot •

exceed 5 percent of the funds appropriated to carry out activities under section 11.

Tota l staffing for these “ direct administration” functions for the first year of the 

program will be limited to 21, with an additional 11 positions required for the 

technical reference service. f

The Department will take full advan tage of its existing staff resources in carrying out the act. Most administrative support services (budget, personnel, etc.) 

will be obtained from the Department’s central administrative staffs. The new 

Office of State Technical Services will rely on the Clearinghouse for Federal 

Scientific and Technical Information to service State requests for technical 

publications and to help stock the technical reference depositories many States 

will establish. Under the act, the Clearinghouse will also expand its documentation services to cover selected areas of research sponsored by business and universities, as well as federally supported research. The Office of State Technical 

Services will reimburse the Clearinghouse for these additional costs it will incur, 

and the Clearinghouse may consequently need to expand somewhat its clerical 

employment to perform its contracted work. The Office will itself provide, or 

obtain, the technical consultation, training, and other forms of referral assistance 

which States request.
STATE TECHNICAL SERVICES ACT OF 19 65 123

The above info rmation covers in p art the questions raised in your let ter as to th e 

relationship of the Clearinghouse to the Sta te techn ical services program. The 

Clearinghouse now has a staff of 292, and a budget of about $4,400,000 an nua lly. 

This includes $1,130,000 in direct appropriations, $1,100,000 derived from sales 

of documents, $2,100,000 estim ated reimbursements from the De partm ent of 

Defense for processing unclassified DOD research repo rts, and app roxima tely 

$85,000 from the Nation al Science Fou ndation for specialized doc umentatio n 

projects. The predom inant functions of the Clearinghouse are the system atic 

collection, organization, and dissemination of federally supported research reports , 

and the translation of foreign research and technical journals. Their experience 

and capability in documen t storage and retrieval will be of grea t value in carrying 

out H.R. 3420, b ut the Clearinghouse will not be responsible, nor can it be, for th e 

development and execution of the total program envisaged by the act.

The detailed information you requested as to titles, grades, and salaries of t he 

added positions is attach ed. As in any new program requiring a high level of 

professional competence, we expect delays in filling many of the positions shown. 

Therefore, the staffing level indicated would prob ably not be reached until the 

program had been in operation for abo ut a year. The grades shown reflect our 

best estimate at this time, and may vary somewhat, depending upon the duties 

and qualifications of employees actually selected. Position titles indicate duties 

required during th e setup phases of the pro gram; however, we will stress flexibility 

and cross-assignments to make maximum use of the small but highly compete nt 

staff we expect to recru it.

I appreciate the interest your committee has shown in this act, and hope we ha ve 

provided satisfactory answers to your questions.

Sincerely yours,

J ohn T. Connor, 

Secretary of Commerce.

Offic e of State Technical Services

Proposed staffing to be built up during 1st year

T it le a nd grade Num be r Ann ua l

salary

Direc tor, OS-18............................................. ............................... 1

1

3

6

6

1

1

1

1

3

4

4

$24,500 

21,445

1 18,935 

116,460 

» 14,170 

16,460 

12,075 

8,650 

7,220 

i 6,050 

i 5,000 

i 4,480

D ep uty Director, GS-1 7_______________________ _ . . . . .

Senior pro gra m ma nager , OS -16 ______ __________

Engin eerin g an d pro gra m an alys ts, GS -15 .................. ........................

En gineering a nd pro gram a na ly sts, GS-14_______ __________ ____________

Leg al adv iser, GS-15__________________________

Adm in istra tiv e officer, GS-13................ ..................................

St atist ical a ssista nt, GS-11______________ ________

Secre tary, GS -9.......... ....... ............ ................ . ........

Secre tary GS -7___________________________ . .

Cle rk- ste nogra pher or cle rk, G S -5 .. ............................. . .......

Clerk -stenograp her o r clerk, GS- 4________________

Tota l......... ........................................ .................................. . . 32

« E ach.

The Chairman of the Council of Economic Advisers,

Washington, June 7, 1965.

Representative Torbert Macdonald,

Chairman, Subcommittee on Commerce and Finance, Committee on Interstate and

Foreign Commerce, U.S. House of Representatives, Washington, D.C.

(Attention: Mr. Williamson).

Dear Mr. Macdonald: I wish to offer this letter in support of H.R. 3420, 

the proposed State Technical Services Act, and to have this letter placed in 

testimony.

Technical change has contributed more than any other factor to our longrun 

economic growth. In its 1964 annual report, the Council of Economic Advisers 

sta ted “The crucial elem ent in the rise of our materia l well-being has been the 

progressive utilization of our ever-growing store of knowledge of the world in 

which we live.” Since th e tu rn of the century, the Na tion’s real GNP has grown 

at an average rate of 3^ percent a year—an eightfold increase within a single 

lifetime. It is difficult to estimate precisely how much of this growth has resulted 

from technical improvements and how much has resulte d from increases in the
124 STATE TECHNICAL SERVICES ACT OF 19 65

available inputs of capital and labor. However, priv ate estim ates have attributed to technical progress as much as one-half of the growth of real GN P or seveneighths of the growth in real ou tput per man-hour. Although it is by far the best single measure of longrun growth, real GNP unde rstates true longrun growth in two imp ortant respects. First, it takes incomplete account of the value of the many new and improved prod ucts that have become available over the years. Second, it does not value the increased leisure which technology has made possible at the same time we have been increasing our production of goods and services. Analysis of real GN P therefore und erstate s somewhat the true longrun importance of technical change. In the coming years, the Nation will be increasingly dependent on the rapid growth and spread of new technology to maintain a high and sustained rate of economic growth. Since 1957, the economy has operated with sub stantial slack. Since 1961, primary attention has rightly been directed to fiscal and monetary measures th at help to create employm ent opportunities for idle workers and productive facilities. We have still not achieved our full employment goals and we must not relax our efforts to do so. However, as the gap between potential I

and ac tual o utpu t is gradually narrowed, greater attentio n must be paid to meas­ ures th at will increase p roductivity, and raise the growth of the potential. Such measures can perm it us to extend our 4-year record of rapid and sustained expan­ sion. At the same time, they will help to prev ent the buildup of inflationary pressures a nd they will gradually improve our balance of payments. By speeding f

the application of new technology througho ut the coun try, the State Technical 

Services Act should be a major step in this direction. It is now fully recognized th at governments have majo r responsibilities in promoting the growth and spread of new technology. The Federal Government finances two-thirds of th e Nation’s v ast research and development effort. Gov­ ernmen ts a t all levels make su bstantial c ontributions to the financing of ou r educa­ tion al system. The State Technical Services Act will provide a unique cooperative State-F ede ral program, designed to make modern technology available wherever it can be profitably employed. Studies have shown th at inno vatio ns frequently tak e years or decades to spread throughout industry. As modern technology becomes more complex and specialized, it becomes more important to have im­ proved channels for its dissemination to all poten tial users. The Sta te Technical Services Act should provide an im porta nt new channel for the rap id sprea d of 

modern technology. The Federal Government has majo r program s to help speed t he development of depressed regions of the country. The availability of technical manpower and specialized technical services is an important facto r in developing the potentia l of low-income areas. By increasing the availability of know-how in all regions of the country, the State Technical Services Act will be an imp ortant facto r in spreading prosperity to all parts of th e Nation. It is important th at the act will provide programs that are tailored to local needs and opportunities. This will permit the programs to serve the goal of regional development much more effec­ tively tha n would be possible by artificially spread ing Government research and development contracts around the country . Most Government research and development contracts are intended to f urther specific n ational defense and other needs. They should, therefore, be place d where these natio nal needs will be best served. Regional needs can be best met through the State Technical Services 

Act. The State Technical Services Act clearly cannot solve all our problems of •

economic growth. But i t can be an important instrum ent in furth ering natio nal and regional growth, price stability, and an improved balance of paym ents. I hope your comm ittee can report favo rably on the bill, and th at Congress will 

speedily ena ct it into law. ?

Sincerely,

G a r d n er Ac k ley.

U n iv e r sit y of Ar k a n sa s,

Fayetteville, M ay 31, 1965.

Mr. W. E. W il lia m son,

Clerk, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D.C.

D e a r E d : Tha nk you for your l etter of May 24 suggesting tha t I might like to comm ent for the record or app ear in person as a witness during the committee hearings on H.R . 3420 (technical services). Previous commitm ents will not
STATE TECHNICAL SERVICES ACT OF 19 65 125

allow me to testify. As you may know, in March of this year I wrote to Oren Harris, chairman of the committee, expressing our interest in and support of the 

program outlined in the act. The National Association of State Universities and Land-Gran t Colleges has taken the position th at the interest of various Federal departments and agencies in extension programs within their particular fields of responsibility— including industrial extension— be recognized and supported either in general legislation or in separate legislation designed as a part of a comprehensive program. We see the Technical Services Act of 1965 as an important part of a comprehensive 

extension program. Scientific research and development conducted or supported by Federal agencies are creating new technologies and improved engineering know-how more rapid ly than present mechanisms for their general dissemination are making it available to American industry. We believe that the Technical Services Act will create an effective means for placing the findings of science and engineering usefully in 

the hands of American enterprise. Developments in the field of agriculture provide ample evidence of the contri­ bution which the Agricultural Extension Service has made in this important a spect of our national life. The means provided by the Technical Services Act for carrying out a comparable function in the industrial, business, and economic areas have great potential for making significant contribution to the economic development of Arkansas and the Nation. The university has been active in industrial and economic development of Arkansas through programs carried on by the College of Engineering, the Engi­ neering Experiment Station, the Graduate Institute of Technology, the College of Business Administration, the Bureau of Business and Economic Research and the industrial research and extension center. We would welcome the opportunity through cooperation with the Federal Government to expand and strengthen these activities which are so essential to the economic and industrial development of 

Arkansas. I am pleased at this additional opportunity you have provided me to express mvself concerning the State Technical Services Act. Perhaps this letter may be useful in the hearing before the committee. Warm personal regards and every good wish.

Sincerely,

D avi d W. M u llin s, Pre si de nt .

C on su lti n g E n g in e e r s C ounci l,

Washington, D.C., Ju ne 21, 1965.

C ongr es sm an Ore n H a r r is ,

House of Representatives,

Washington, D.C.

D ea r C on gr es sm an H a r r is : Consulting Engineers Council has reviewed S. 949 and H.R. 3420, the State Technical Services Act, and is pleased to present to you its testimony on the bill. We respectfully request that you note several suggested amendments at the end of the statement which we sincerely believe will improve the effectiveness of this bill. The following is the prepared statem ent: S. 949 and H.R. 3420: To promote economic growth by supporting State and regional centers to place the findings of science usefully in the hands of American 

enterprise. Consulting Engineers Co uncil of the United States, represents 1,600 independent firms of consulting engineers in private practice throughout the country. As the national organization representing the private engineering practitioner, CE C supports efforts to speed the economic growth of the country through effective use of our technical and scientific knowdedge. Initiative in encouraging and directing a greater distribution of technical knowledge to business and industry will contribute to the expansion of the economy and the grow’th of our private 

enterprise system. This will enhance economic growth and private enterprise only to the extent tha t it does not at the same time compete w’ith the private business community which it is trying to help. To this extent Consulting Engineers Council cautions against any provisions in this legislation which would result in the providing of technical services by public bodies or agencies or tax-exempt foundations w’hen the same services are provided by taxpaying, private consulting engineering 

firms and research laboratories.
126 STATE TECHNICAL SERVICES ACT OF 19 65

The providing of technical services to business, industry, and Government is an 

area in which the private engineering community has long been preeminent.

The wide range of highly diversified and specialized professional engineering 

talent available in private engineering firms and laboratories has in large measure 

contributed to the Nation’s technical achievements and fund of knowledge.

Faced with the constant need of maintaining the utmost in efficiency, economy, 

and expertise, the engineer in private practice has taken an a ctive lead in providing 

a wide range of specialized engineering services in industrial plant modernization, 

design of buildings, and the planning and design of public works projects and 

military installations.

No engineering problem— whether it is the design of a small piece of specialized 

equipment for automation or the economic feasibility study and planning of a 

multimillion-dollar hydroelectric powerplant— is outside the expertise of the 

modern engineer.

To assure that proper safeguards are present in this legislation to preclude 

Government-financed competition by public bodies with private engineering 

firms and individuals, CE C suggests the following amendments: *

SEC TIO N s (e )

Change the present wording: “ Determined that such technical services program 

does not provide a service performed as practicably by private technical services, 

professional consultants or priva te institutions;” to read:

“ Determined that such technical services program does not provide a service 

that is now available or could be made available as practicably by private technical 

services, professional consultants or private institutions;” .

SEC TIO N 5(f )

Add the italic words to the present wording:

“ Planned no services specially related to a particular firm or company public

work, or other capital project except insofar as the services are of general concern to 

the industry and commerce of the community, State or region;” .

The amendment to section 5(e) is suggested to provide for the occasion when a 

technical engineering service which is not now available is perfected to the point 

tha t it is offered as a service to the public. The present wording, it is felt, does 

not take into account the offering of future technical services.

The amendment to section 5(f) regarding “ public work or other capital project” 

is offered so that the section will conform to other provisions in the bill limiting 

services to business and industries. The amendment suggesting the addition of 

the words “industry and commerce” is offered to remove any implication that 

specific technical services under this act would be provided directly to a community, municipality, State agency, or other public body. Such an interpretation 

would lead to a direct competition with private engineering firms which perform 

on a contract basis much of the engineering services for all branches of government 

at the Federal, State, county, and municipal levels.

In summary, Consulting Engineers Council and the American Council of Independent Laboratories, which represents private laboratories, respectfully recommend adoption of the clarifying amendments to help assure tha t the legislation 

achieves its intended purpose. CE C and AC IL believe that this bill, if enacted, 

will provide encouragement to a broader dissemination of technical knowledge • ’

now available in engineering and science.

We would be pleased to know of your views to these suggestions and to benefit 

by suggestions you may have. We would be most appreciative of any consideration you may give this statement. If CE C can be of any service, we would be 

most happy to cooperate in any way. '

Sincerely yours,

L eo nar d K. C raw ford, P re si de nt .

M is sis s ip p i R ese arch & D ev e lo p m e n t C e n t e r,

Jackson, Miss., June 17, 1965.

Hon. Oren H arr is,

Chairman, Committee on Interstate and Foreign Commerce, Rayburn House Office

Building, Washington, D.C.

D e a r C on gres sm an H a r r is : On behalf of the Mississippi Research & Development Center, a State agency doing research dedicated to economic development, I wish to express support of H.R. 3420, the proposed State Technical
STATE TECHNICAL SERVICES ACT OF 19 65 127

Services Act of 1965. The proposed legislation will be a vital step toward e sta blishing the mach inery which will enable us, as a country, and us, as a State, to come to grips with the tasks associated with the dissemination of technology and 

its utilization. I speak in terms of a “t ask ” because, in reality, it is just that. Today, the 

United States is making fantastic strid es in science and technology, particularly in the research and development effort in space and the military. In doing so, we are also growing in competence and capa bility to solve problems. Yet, in countless instances, new developments a nd technological changes do n ot show up in, or fail to be tran sferred to, areas of civilian technology. We can draw a comparison, which may not be an infallible one, but which I believe is indicative. For a number of years now, dollars going into R. & D. have been increasing faste r than the gross national product. I am convinced th at this lack of keeping pac e is, at least partially, due to lack of transfer of ideas from one field to anoth er— from those generating and developing them to those who could use them. The proposed Sta te Technical Services Act would go a long way toward such 

a transfer as is referred to here. Such a techn ical services program mig ht be though t of as an extension effort for science and technology and a parallel, al­ though not alto gether similar, to the agricultural extension effort. The ac t would provide for State and regional programs geared, or designed, to serve the various sections of the country (the program serving Maine would necessarily contain features unique for Maine b ut which, perhaps, would be totally u nrealistic for Mississippi—because the in dustrial problems a nd opportunities are different). Mississippi’s ind ustrial employment only recently exceeded agricultural em­ ployment. Although we would not and should not discount the con trib ution of agriculture to the Mississippi economy, we must think increasingly of ourselves as an indu stria l Sta te producing goods and services. It would be our hope th at , through such measures as the S tate Technical Services Act, we could im prove the productivity by which goods and services are made available to our people. I would apprec iate yo ur notifying the members of the committee of my support 

for H. It. 3420 an d including this letter in teh official record.

Sincerely,

Robert F. Dye,

Acting Director of the Center, and Secretary, Mis sissippi Research and

Development Council.

The Thayer School of E ngineering,

Dartmouth College, 

Hanover, N.H ., June 8, 1965.

Hon. J ames C. Cleveland,

House of Representatives, Washington, D.C.

Dear Mr. Cleve land: Thank you for your letter of May 14. It was a 

distinct pleasure meeting you and to observe your diligent approac h to the 

problems at hand. I am very apprecia tive of what I saw. It may be too late to respond to the suggestion th at in a Technical Services 

Act, II.R . 3420, I have reservations abo ut section 5(c) which begins at line 21 on page 6. I suspe ct th at this in intended to prev ent a professor from receiving compensation twice for the same service, and of course I heartily concur th at this should be preven ted. However, section 5(c) jeopardizes any professor who does legitim ate consulting work on his own, as he is permitted to do by his uni­ versity, if his ins tituti on is a designated or par ticipating institution. It possibly could make it illegal for him to receive any funds for his consulting work even though th at work is separate, independent, and ethically perm itted on a consu lting con trac t direc tly betw een the professor and an industrial enterprise. If this were narrowly inte rpreted, by the present wording no professor would be safe in undertak ing a consulting con trac t if his institu tion belonged to this scheme. It also indicates th at he must not mainta in any private interest in conflict with his public responsibility. Public responsibility can again be narrowly interp reted if one wishes to hold th at a professor should con trib ute all his efforts free of charge in spite of the fac t th at consulting work has trad itionally been regarded 

as a commodity in the market.

Tha nk you again for your interest.

Sincerely yours,

George A. T aylor,

Professor of Engineering and Management.
128 STATE. TECHNICAL SERVICES ACT OF 19 65

St a t e m e n t of th e N a tio n a l Asso cia tio n of M a n u fa c t u r e r s

The National Association of Manufacturers appreciates this opp ortuni ty to 

present its views with respect to the Sta te Technical Services Act of 1965, H.R. 

3420. The purpose of this bill is “to promote economic growth by supporting 

Sta te and regional centers to place th e findings of science usefully in the hands 

of American ente rprise.”

We agree with the framers of thi s proposed legislation th at “wider diffusion 

and more effective application of science and technology in ind ustry are essential 

to the growth of the economy.” We do not agree, however, th at the proposed 

legislation is th e only or the best means of accomplishing th at purpose.

Some supp orters of the proposed legislation believe, according to testim ony 

now in t he record, th at th e prim ary inte ntion of the bill is to provide a “technical 

information dissemination program.” The U.S. Dep artm ent of Commerce 

established recently a Clearinghouse for Federal Scientific and Tech nical Information to disseminate to scientists, engineers, libra rians and managem ent, through 

a monthly publication, new, unclassified Government tech nical information. 

It will contain an unduplicated index of the records of the Atomic Energ y Commission, the National Aeronautics and Space Administration, and the Department 

of Defense.

In add ition, there are more tha n 2,600 business a nd professional publications, 

serving every" conceivable occu pation, issued regularly in the United States. 

Their purpose is to inform those inte rested in the field of the lat est technological 

developments through articles and advertisements.

Scientific and engineering information, it seems to us, is more widely available 

today tha n ever before. If add itio nal dissemination of information was all that 

was deemed necessary, such a program could be more readily and economically 

established through State or regional offices of the U.S. Departme nt of Commerce. 

These offices could gather the material and make it available to all.

The majo r thr ust of the proposed legislation, however, is to make the available 

scientific and engineering information useful. To this purpose, seminars, workshops, training programs, extension courses, and dem onstrations to make the 

“technical reports, abstrac ts, computer tapes, microfilm, reviews, and similar 

scientific and engineering info rma tion ” more effective are proposed. This, in 

effect, calls for an education program.

In recognition of this, the bill prov ides dollar-for-dollar matchin g grants by th e 

Dep artm ent of Commerce to the Sta tes for the establishment of a technical 

services program in a univ ersity, preferably a Sta te university, or land-gra nt 

college. We understand t ha t the to ta l cost of th e program would be in th e neighborhood of $70 to $80 million annually.

The Association of State Universities and Land-Grant Colleges in its supp ort 

of the proposed act cited the need for large-scale research and development, and 

stated, “The university can perform for industry the same R. & D. function they 

have performed so effectively for agriculture.”

Others testifying on behalf of universities referred to services th at could be 

provided to business, such as, “research and assistance on technical problems,” 

and “to conduct research and testing program s where necessary.”

These institutions, in making the dissemination of the technical information 

useful to in dustry, recognize th at research, development, and tes ting are necessary 

to convert our scientific advances t o effective commercial app lication though these 

activ ities are not mentioned specifically under the broad programs to be established under section 2(a)(4) of th e proposed bill. To the extent they would be 

allowed to perform such services with the assistance of Governm ent funds they 

would be competing with private organizations offering similar services.

Section 5(e) of the bill is designed to prevent any of the broad programs stated 

in the bill from competing with private enterprise. It provides that the designate d ins titu tion certify it has “determined th at such technical services program
STATE TECHNICAL SERVICES ACT OF 19 65 129

does not provide a service performed as practicably [emphasis added] by private 

technical services, professional consultants, or private institutions.” The phrase, “as practicably” is subject to such broad interpretation that State administrators would have almost unlimited discretion. In fact, lower cost, brought abou t by the subsidization, would undoubtedly be sufficient justification for institu tion of the proposed programs. This alleged safeguard then provides little, if any, 

actual protection. We understand that limited programs of the nature of those to be established by the proposed bill have been operated by some States for a number of years. In addition, numerous colleges and universities offer day and evening extension courses covering a broad range of technologies. Thus, with a high level of technological education available to the businessman if he so desires, the need for this legislation has not been sufficiently justified in our opinion. We submit that it is not the lack of programs or dissemination of information that limits the growth potential of small business. It is a well documented fa ct that small business problems center around two factors— lack of management 

skills, and inadequate financing. One of the stated underlying assumptions for the need of such a program wa s contained in the 1964 Economic Report of the President. “The Federal Government provides major support for the research and develop­ ment which underlies our striking technological advances. In the past, much of our research and development has been connected with national defense. Now, 

as military outlays level off, we face— “ * * * a challenge to apply the Nation’s growing scientific and engineering 

resources to new socially profitable uses; “ * * * an opportunity to accelerate the technological progress of our civilian industries.” Approximately $15 billion is spent annually by the Federal Government for research and development for national security and about $5 billion is spent by 

industry for civilian or commercial purposes. However, under Government research and development contracts the Gove rnment in most cases, owns the patents to new7

 inventions wrhich were derived from 

such expenditures and toda y the Government owns more patents than anyone else. From time to time the Senate has adopted amendments to bills— which provide Government funds for research and development— that require the Government to take title to all patents resulting therefrom, except under unusual circumstances. A bill, S. 1899, to this effect has been introduced in the Senate. It is a rare instance, that an invention made in pursuit of national security requirements can be adapted for civilian or commercial use without the expenditure of considerable time and money for further research and development. However, if the Government owns the patent, there is little incentive to make these expendi­ tures if the patent right to exclude others from using the invention is not exercise- able. The rights to Government-owmed patents are available to all, but the incentive to risk funds to develop and market such inventions is lacking. Should Government patent policy, now subject of hearings in the Senate, result in an act to vest the patent rights in most cases in private hands, rather than Government, large research efforts and funds would be employed to transfer the new scientific and engineering discoveries to useful civilian needs. This 

effort and expenditure would dwrarf those contemplated in the proposed legislation. Since dissemination of technical information is more widely available than ever before, and since no effective safeguard is provided in the bill to prevent subsidized competition to private industry, and since this bill misreads the primary needs of small business, and since “ more effective application of science and technology in industry” can be accomplished readily by revision of Government patent policy— we believe the proposed State Technical Services Act of 1965 is an unnecessary Federal operation and should not be enacted.
130 STATE TECHNICAL SERVICES ACT OF 19 65

Sta te op C o n n e c t ic u t,

D e v e l o p m e n t C o m m is si o n,

Hartford, Conn., May 27, 1965.

Hon. O r e n H a r r is ,

Chairman, Interstate and Foreign Commerce,

House Office Building,

Washington, D.C.

D ea r C ong ressm a n H a r r is : It has been brought to the atten tio n of the 

Connecticut Development Commission th at the State Technical Services Act is 

scheduled for hearings before the House Committee on Interst ate and Foreign 

Commerce during June.

The purpose of this letter is to convey th e supp ort of the Connecticut Developmen t Commission for this legislation. The commission believes th at the State 

Technical Services Act will significantly advance Con necticut’s economy and, more 

imp orta ntly , the economy of the Nation.

If the Connecticut Development Commission can be of any assistance in 

atta ining the early enactme nt of this legislation, please do not hesitate to con tact *

me.

Sincerely yours,

L e R oy J o n e s, M a n a g in g D ir ec to r.

(Whereupon the subcommittee adjourned at 12 o’clock noon.) r

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