The Penn's Grove record., 1919-09-26
How Germany Killed American Dive
Industry

Continued from page 9
and the charter is so framed that IN
der the patents non-conclusive licenses
can be granted on equal terms to all
proper applicants, and must be grant
ed to the United States free of cost.
The company is capitalized at $780,
900, of which $500, 900 is to be 6 per
cent cumulative preferred stock and
100000 common stock, also limited to
6 per cent dividends. The first presi-
dent of the Chemical Foundation (Inc.)
will be Francis P. Garvin, of the New
York bar, to whose clear vision and in
defatigable industry | am chiefly in
debted in the working out of this plan.
BY Executive order obtained under
the provisions of the act, / have sold
to this company for the sum of $780,
900 approximately $500 patents, the
remaining $250,000 has been provided
for working capital so that the COM
pany may be able to commence i'm
mediately and prosecute with the ut
most vigor infringement proceedings
whenever the first German attempt
shall hereafter be made to import into
this country. The charter of the cor
poration provides that surplus income
is to be used for the retirement of the
preferred stock and thereafter for the
advancement of chemical and allied
science and industry. The price thus
paid was necessarily determined some
what arbitrarily; the great majority of
the patents were presumably value
less. The value of the remainder was
entirely problematical and impossible
to estimate. Substantially the entire
industry having combined for the pur-
pose of this purchase, it would have
been impossible on public sale to find
as a bidder any legitimate manufac-
turer. No other bidder could, there
fore, have been found on public
sale except some speculative individ-
ual who might have bought them for
purposes practically amounting to
commercial blackmail. The combina-
ton was not Objectionable to public
policy since it was SO organized that
any genuine American, whether a
stockholders of the company or not,
could secure the benefits of the patents
on fair and equal terms.
1t is submitted that the organiza-
ton of this institution constitutes the
most important step that has been
taken for the protection of the new in
dustry. Tariff protection has proved
utterly u~navailing in the past. The
German industry as hitherto organ
lied, and still more as now organized,
has had so much to gain by extending
it's foreign trade and by destroying the
industry in other countries that it
would undoubtedly give away its
goods in this country for nothing IN
order to recover the American market.
The Chemical Foundation, however,
should prove a power sufficient to dis
courage in a most effective manner
any German attempts in this direction.
If, as their newspapers boast, the Ger
mans have during the war worked out
entirely new dyes superior to their
past productions, the protection afford
ed by it will be invaluable. 1t has
been the uniform experience of the in
dustrv that the introduction of new
| classes of dyestuffs follows only
several years after the patentlng OF
the original inventions on which their
manufacture depends. Accordingly,
the later dyes of today depend largely
upon the patents of three or four years
ago. The patents transferred to the
Chemical Foundation include many
German patents of 1917 and even of
1918, and also many applications still
pending. These patents undoubtedly
include the results of the research upon
which must be based the manufacture
of any new dyes which the Germans
are now able to produce and market.
Accordingly, at the very least, the IN
stitution will be able to protect the
| American industry for a considerable
period, and this should be all it needs.
1t appears to be the universal view
of the more competent manufacturers
in this country that, given five years
of freedom from German competition,
the American industry a hold its
own. Probably only a measure such
as the embargo which appears to have
been imposed by the British and
French against all foreign dye m
portations a furnish this protection
to the degree necessary to insure the
safety of the American industry; but
short of such an embargo, the Cheml-
cal Foundation would seem to furnish
all the aid that possibly can be given.
At the same time the new institu-
ton promises an incalculable beneht
not only to the dye and chemical in
dustries but to the whole American
manufacturing world. The opportun-
tiles which it can offer and the rewards
which it cen hold out to competent
research scientists should far exceed
those of any institution unconnected
with industry, and it may well, there
fore, form the nucleus of the greatest