these scientific bureaus and to advise the executive and legislative branches 

 of Government as to the policies and budgets of Government agencies 

 engaged in scientific research. 



This board should be composed of disinterested scientists who have no 

 connection with the affairs of any Government agency. 



Industrial Research 



The simplest and most effective way in which the Government can 

 strengthen industrial research is to support basic research and to develop 

 scientific talent. 



The benefits of basic research do not reach all industries equally or at 

 the same speed. Some small enterprises never receive any of the benefits. 

 It has been suggested that the benefits might be better utilized if "research 

 clinics" for such enterprises were to be established. Businessmen would thus 

 be able to make more use of research than they now do. This proposal is 

 certainly worthy of further study. 



One of the most important factors affecting the amount of industrial 

 research is the income-tax law. Government action in respect to this subject 

 will affect the rate of technical progress in industry. Uncertainties as to the 

 attitude of the Bureau of Internal Revenue regarding the deduction of 

 research and development expenses are a deterrent to research expenditure. 

 These uncertainties arise from lack of clarity of the tax law as to the proper 

 treatment of such costs. 



The Internal Revenue Code shoidd be amended to remove present uncer- 

 tainties in regard to the deductibility of research and development expendi- 

 tures as current charges against net income. 



Research is also affected bv the patent laws. They stimulate new invention 

 and they make it possible for new industries to be built around new devices 

 or new processes. These industries generate new jobs and new products, all 

 of which contribute to the welfare and the strength of the country. 



Yet, uncertainties in the operation of the patent laws have impaired the 

 ability of small industries to translate new ideas into processes and products 

 of value to the Nation. These uncertainties are, in part, attributable to the 

 difficulties and expense incident to the operation of the patent svstem as it 

 presently exists. These uncertainties are also attributable to the existence of 

 certain abuses which have appeared in the use of patents. The abuses should 

 be corrected. They have led to extravagantly critical attacks which tend to 

 discredit a basicallv sound svstem. 



It is important that the patent svstem continue to serve the countrv in the 

 manner intended by the Gonstitution, for it has been a vital element in the 

 industrial vigor which has distinguished this Nation. 



The National Patent Planning Commission has reported on this subject. 

 In addition, a detailed studv, with recommendations concerning the extent 

 to which modifications should be made in our patent laws is currently being 

 made under the leadership of the Secretarv of Commerce. It is recommended, 

 therefore, that specific action with regard to the patent laws be withheld 

 pending the submission of the report devoted exclusively to that subject. 



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