10 MISC. PUBLICATION 570, U. S. DEPT. OF AGRICULTURE 



sions, and administrative regulations have aimed at the maintenance 

 of competition. Nevertheless, the existing industrial organization is 

 characterized by a relatively high degree of price and wage inflexi- 

 bilities, and numerous restrictive practices. The real problem for the 

 future, therefore, is how the American people, through acts of their 

 Government, can progressively select out those restrictions which 

 tend to reduce employment and production, and adopt measures and 

 procedures for eliminating them. For instance, it long has been con- 

 sidered a stimulant to employment for governments to grant patents 

 to inventors as a means of encouraging more inventions and more pro- 

 duction than otherwise might be expected. But the question still 

 arises as to whether the terms of these patents restrict production. 

 Changes may need to be made in the provisions for issuing future 

 patents, including periods of time to which they apply and conditions 

 for extension or renewal. 



Patents fall into two general categories: Those involving basic 

 changes in design, which generally require considerable amounts of 

 capital and a period of years to develop and exploit, and those involv- 

 ing minor variations in design which can be exploited with small 

 amounts of capital in a relatively short time — especially by concerns 

 already in production. The time period allowed for patents in the 

 second category should be much less than for those in the first, and 

 should be drastically reduced for both types. For basic patents or 

 for basic changes in design, the inventor might be given the right 

 to renewal for a moderate period, on the condition that the patent is 

 properly used. The Patent Office might well be given the power to 

 revoke a patent or compel the licensing of it Avhenever its use is being 

 suppressed by the owner or is being made the basis for restricting 

 production and employment. 



A positive program to equalize the competitive struggle between 

 large and small business could be an important supplement to a 

 revision of the patent laws as a means of expanding production and 

 employment. Small business often finds it impossible to finance the 

 expensive research programs necessary for its survival and expansion 

 in competition with big business. A comprehensive Government pro- 

 gram of industrial research, comparable to that of agricultural experi- 

 ment stations, supplemented with technical advice and financial assis- 

 tance to small business firms, would be both an aid to expanding 

 new investment in industry and a significant step in preserving the 

 competitive system. It is especially important that the results of 

 research by Government be placed in use in such manner that they 

 contribute as much as possible to new and expanding employment, 

 and not be allowed to strengthen any monopoly position of private 

 firms. 



A vigorous enforcement of the Sherman Anti-Trust Act will con- 

 tinue to be influential in encouraging competition. This act is aimed 

 primarily at preventing the development of combinations in restraint 

 of interstate commerce. It can be one significant instrument in keep- 

 ing the door of opportunity open for new business ventures, and, 

 hence, for new investment and employment opportunities. 



Tariff rates need to be revised with a view to eliminating special 

 privileges which aid in restricting industrial production, consump- 

 tion, and employment. International cooperative action to lower 



