e our job at Commerce is to operate
est and to help business in every possible

1. Get the best brains I can find to examine into the functions
and objectives of the Bureau of Standards and re-evaluate them in
relation to the American Business Community and other agencies

of Government. This is a job that we should do, and I guarantee

it will be done, and your Gomittee will always be thoroughly
posted as to the actions we are taking;

2. As quickly as I can find the money in the budget, I am
going to put a group of scientists in the Bureau who have never had
any connection with this matter and tell them to test this thing in
every conceivable way--even to the extent of field tests in actual

operation; and

3. I am going to direct the withdrawal of Circular 504 and
all other circulars and technical reports dealing with battery additives
until such time as those tests are completed.

Thank you.



U. S. DEPARTMENT OF COMMERCE
WASHINGTON 25, D. C.

TEXT OF A STATEMENT BY SECRETARY OF COMMERCE SINCLAIR
WEEKS TO THE SELECT COMMITTEE ON SMALL BUSINESS OF THE
UNITED STATES SENATE, ROOM 457, SENATE OFFICE BUILDING
TUESDAY, MARCH 31, AT 2 P.M.

Gentlemen:

Even before I came to Washington, my mail in Boston was
heavy with people telling me that an outfit in Oakland, California,
making a product called AD-X2 to prolong battery life through re-
ducing sulphation was having tough sledding in Washington. Your
Committee, in fact, issued a report on the subject last December.
One of the first things I did was to ask Mr. Sheaffer, Assistant
Secretary for Domestic Affairs, to make a full and impartial
investigation. He and his men have gone through file after file
extending over the past five years.

Exhaustive examination of the files shows:

1. When this manufacturer put his product on the market
in 1948, he was confronted with a pamphlet prepared by the National
Bureau of Standards--No. 302--condemning all battery additives.
This pamphlet was for sale by the Government Printing Office and,
therefore, easily obtainable for distribution by anyone interested in
combatting the sale of the new product.

2. When he asked for tests to prove the merit of his product,
the National Bureau of Standards resisted making further tests, stating
that, basically, the product was the same as others previously tested.
The manufacturer, under these circumstances, could only tell his cus-
tomers that his product had not been tested by the National Bureau
of Standards and, therefore, pamphlet 302 did not apply to it.

3. The files show that scientists in the National Bureau of
Standards were in touch with and worked closely with individuals and
organizations who might have had an interest in the final outcome,
submitting their work to them previous to publication and seeking
their advice and guidance. In response to the National Better Busi-
ness Bureau's request that Circular 302 be strengthened to "combat
the flood of battery dopes" came a statement from Dr. Condon, then
head of the National Bureau of Standards, which was widely circu-
lated, There also came, in 1951, a new Circular, No. 504, from the
National Bureau of Standards to supersede No. 302. This was adver-
tised through press releases by the Department of Commerce as being
available at 15¢ from the Government Printing Office. It sold!

4. While the manufacturer was having no luck getting the
National Bureau of Standards to run tests which would show that his
Product was different from previous additives tested and had merit,
I find the National Bureau of Standards suggesting to the National
Better Business Bureau that tests would be made if requested by

Comm~-DC--15953 (over)



the Federal Trade Comission. The Federal Trade Comission
very promptly docketed the case-~and the Post Office followed through
later--although in all this period I can find no evidence of one single

complaint by a user of the product. On the contrary, there are a

great many testimonials from users stating that the product was saving

them money by prolonging the life of their batteries. Many of these

statements were made by reputable firms operating trucks, busses |
and tractors, as well as industrial equipment depending on batteries.

I further find that the Oakland Better Business Bureau circulated

their findings of no complaints as to “product, personnel or methods ¢
of doing business."

5. The manufacturer claims that, to this date, he has not been
able to get the National Bureau of Standards to run a test that would
show the merit of his product. A test was agreed upon, but 10
modifications in the procedure were made by the National Bureau of
Standards.

6. The manufacturer had independent tests made by the U. S.
Testing Company of Hoboken, New Jersey--controlled field tests
extending over a period of 362 days. These tests rendered credible
the experience reported by consumers.

7. Your Committee enlisted the aid of the Massachusetts
Institute of Technology whose findings differed in some respects from
the National Bureau of Standards‘ findings, even if, as some claim
(including MIT) they cannot be interpreted as being so broadly favor-
able to AD-X2 as was done in the report of your Committee dated
December 18, 1952. However, Dr. Weber of MIT states that exten-
sive field tests might show the value of the product, Presumably,
this statement puts believability into the U. S. Testing Company's
report.

8. The present status of the matter is that there is a suspended
fraud order against Pioneers, Incorporated, Mr. Ritchie, his wife,
and Mr. Hager, Vice President of the firm, in the Post Office
Department. After issuance on February 24, 1953, it was sus-
pended by Postmaster General Summerfield at my request in order
that I might investigate further. There is also an open docket in
the Federal Trade Commission

Throughout this whole matter runs the fact that the National
Bureau of Standards is the keystone on which other agencies of the
Government depend. The Post Office calls it their "Supreme Court"
on questions of fraud in a case like this. The Federal Trade
Commission relies on its tests in a similar manner, The Bureau,
which is supposed rove nor condemn a product, has, by
its very setup, the ‘e the introduction of a new product on
Lift: prevent a product's being advertised by
de Commis ple labeled "fraud"

d the use o If this power is objectively and
ctly used, it has great value to all the people of this Nation. »

However, if the peers s foot Slee a business starting in against
itself up against something
r of the U. S. Government,

ae |



ry

Unless the small businessman knows a very great deal about Govern-
ment, or has the finances to employ experts, he is obliged to quit.

I cannot bring myself to believe that the people making AD-X2
have the intent to defraud--and without intent, I do not see how there
can be fraud.

I know that this business has suffered severely at the hands of
certain bureaucrats. Infact, it isva wonder they are in existence at all
after five years of struggle. Your Committee might want to re-examine
the legislation giving the Federal Trade Commission very broad powers
in matters like this.

I am not a man of science, and I do not wish to enter into a
technical discussion or be accused of overruling the findings of any
laboratory. But as a practical man, I think:

That the National Bureau of Standards has not been
sufficiently objective, because they discount entirely the
play of the market place and have placed themselves in a
vulnerable position by discussing the nature and scope of
their prospective reports with the very people who might not
want to see the additive remain on the market, and when their
reports and results of texts were questioned, discussed the
matter with other scientists, engaged by your Committee
to make separate, objective findings.

I cannot help but wonder how many similar cases have never
been heard about--how many entrepreneurs who were convinced they
have a good thing for the people, who, whether they knew it or not,
were licked before they started--and by their very own Government
to whom they paid high taxes:

It can generally be said that there are no complaints but, on
the contrary, many testimonials to the fact that the product is good
and has saved the users money. As a practical man, I do not see
why a product should be denied an opportubity in the market place.

I believe that the purpose of the Congress in establishing the Bureau
of Standards and in giving powers to such agencies as the Federal
Trade Commission and the Post Office Department to act to prevent
unfair practices and the perpetration of frauds, was that they should
be operated or their powers should be exercised in the interest of the
general public and that such interest should be substantial and
specifically and positively shown to be adversely affected before the
power is used.

At this point, Pioneers, Incorporated, has a long way to go.
It has to make its peace with the Post Office Department. It has to
get off the hook with the Federal Trade Commission. It has to fight
its way back in to customers it has lost, including the Government.
It probably has to get financing to replace the funds lost through
fighting the Government so far.

Because I feel that the Commerce Department's skirts are
not entir ct
prejudicial action against Pionee

=-15953