NATIONAL DEFENSE RESEARCH COMMITTEE I9 



results may not be worth the cost. If the Committee were to confine its 

 operations to those areas with the greatest possibiUty of success, it would 

 stay out of fields where successful research might yield the greatest benefit. 

 Ideally, the best scientific imaginations in the country should be given free 

 play on problems of military value without being harassed by excessive 

 supervision or the observation of forms designed for other occasions. 



Yet Government funds were being expended. In times past, there had 

 been abuses in the expenditure of some Government funds, and for the pre- 

 vention of such abuses in the future a formidable mass of regulations had 

 been devised. The heart of the contract problem was to reconcile the need 

 of the scientist for complete freedom with assurances that Government funds 

 would not be improperly expended. One of the most significant contribu- 

 tions of NDRC and OSRD was the writing and administration of a form 

 of contract which reconciled these two requirements. 



The development of the contract form will be treated in detail in a later 

 chapter. One early decision of the Committee must be mentioned here, how- 

 ever. It was the adoption of the principle that research should not in itself 

 yield a financial profit. Inasmuch as academic institutions are not run to 

 earn financial profits, no difficulty was anticipated or experienced in obtain- 

 ing recognition of this principle in contracts with such institutions. In the 

 case of industrial establishments, the same principle was applied upon the 

 theory that profit is a function of the production activities of an industrial 

 establishment, not of its research department. There was no difi&culty in 

 obtaining recognition of the no-profit principle on the part of large indus- 

 trial concerns with well-established production departments. The principle 

 did render it difficult for the Committee to work with small industrial or- 

 ganizations, especially where the desired research was of a type which 

 would not be likely to fit into such productive capacity as the company 

 possessed. 



While the no-profit principle was accepted by the Committee, it did recog- 

 nize that research should pay its own way. There was early discussion as 

 to whether the NDRC contracts should pay the full cost of the research 

 done under them, including a proportionate part of the indirect expenses 

 incurred by any going concern, or only those direct costs added to opera- 

 tions as a result of the NDRC contract. The decision taken at the outset to 

 pay the full cost was amply justified by experience. 



A difficult problem which arose immediately was the disposition of patent 

 rights on developments made as a result of NDRC contracts. The point is 

 one which is treated at considerable length in later pages. It may be noted, 

 however, that the differences of opinion with respect to patent rights con- 

 stituted a serious stumbling block in the negotiation of NDRC contracts 

 for several months. The net effect would have been seriously to delay NDRC 

 operations except for the fact that potential contractors began research under 



