The Washington times., 1922-07-03
US. S.EXPECTS To
FACE 100000
PATENT DEFICIT
Probe Ordered for Wedpes-
day After Consultation
With Daugherty.

The Government will not move to
recover the patents of the Chemical
Foundation. ordered Investigated by
President Harding, until the return
to Washington on Wednesday Of Col.
Thomas w. Miller. the alien prop
erty custodian, and Attorney Gen
eral Daugherty.
Col. Miller has arranged to confer
with the Attorney General upon his
return here and then will agree on
the procedure to be followed in de-
manding OF officials of the Founda-
ton, the return to the custodian of
all patents, copyrights and trade
marks which were seized by the
Government during the war and
later sold for a nominal sum TO the
Foundation.
At the Department Of Justice 1t
was declared the investiga ton OF the
Foundation is continuing. The IN
vestigation Is expected TO develop
facts of a sensational character. but
It is said that these may not be made
public while the case Is near grand
jury stage.
Expects Big Deficit.
When the allen property custodian
and the Department OF Justice
begin TO carry out President Hard
ings order they expected to find
that something more than 5000, ,0DO
Of the foundations assets have been
dissipated in the little more than
three years II has been organized.
In addition to the $273,000 paid
the alien property custodian's office
for the 100000 900 worth Of patents,
etc, turned over to 1t. the founla'
ton up to January l. 1922, had ex.
pended 1928 900 additional expendi.
lures the past six months, bringing
the total considerably higher.
The foundation had to start with
in the spring of 1919 approximately
SASS, 900 Of paid in capital stock.
Royalties collected on the patents
transferred to 1t approximate $500.
900. The foundation today faces a
deficit representing the difference
between these cash resources o!
$685., 900 and the more than $500. .000
expenditures noted in the foregoing
The deficit January was $500. 900
but royalties collected since that
time in excess Of expenditures have
reduced II to somewhere around
$50. 900 to $50. 900, II is said.
Here are some Of the expenditures
Propaganda. S264.000; salaries and
office expense. $l50.000; legal and
patent fees, $50 goo.
Brought Sixty Suits.
To wipe out this deficit and re
store a part Of the working capital
put up by the almost $50 stock
holders was the motive prompting
the foundation to bring approx
! mately sixty suits a fortnight age
against the United States Treasury
and licensees under the patents fol
| the $500, 900 OF royalties paid into the
Treasury by licensees through the
Federal Trade Commission. Under
the trading with the enemy act thest
royalties would have reverted to the
licensees in event claim for them waf
not filed and suit instituted before
July 2.
The Chemical Foundation filed
these suits as owner Of the patents
II the Government succeeds in it's an
nounced intention Of setting aside
the sale to the foundation and title
. to the patents Is restored to the origi
nal alien owners by Congressional
! legislation for the return Of all seizet
! properties. these accrued royalties
will revert ultimately to these origi
! nal owners. They will have claim moi
/ only to the royalties in the Treasury
but also those collected by the foun
| dation, which the Government is de
manding be turned over to the AlieT
Property Custodian.
Prior to the sale Of these patent.