Aiding Business and Economic Research in Collegiate Business Schools

Washington, D. C. The subcommittee met at 10 a. m., pursuant to call, in the committee room, Capitol, Senator Morris Sheppard (chairman of the subcommittee) presiding.

Present: Senators Sheppard (chairman of the subcommittee) and Pepper.

Senator SHEPPARD. The subcommittee will come to order.

This subcommittee has been appointed to, consider Senate bill 1308, Seventy-fifth Congress, first session, introduced by myself. The bill is entitled "A bill to aid business and economic research in connection with collegiate schools of business in the several State and Territorial universities."

The bill be set out at this point. (The bill is as follows:)

[S. 1308, 75th Cong., 1st sess.]

A BILL To aid business and economic research in connection with collegiate schools of business in the several State and Territorial universities

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to aid in acquiring and diffusing among the people of the United States useful information on subjects connected with business, and to promote scientific investigation respecting the principles and application of economics to the conduct of business, there shall be established under the direction of the college or school of business administration, or departments of colleges in which such subjects are included in each State university, a department to be known and designated as a business research station (or bureau): Provided, That in any State in which there is no State university the United States Department of Commerce, after a careful survey of the situation in connection with the Board hereinafter to be created, shall designate the institution in which the business research station (or bureau) shall be located.

SEC. 2. That it shall be the object and duty of said business research stations (or bureaus) to conduct original researches, investigations, or experiments bearing directly upon the problems of business involved in the production, manufacture, preparation, use, distribution, financing, and marketing of the products and services of commerce and industry and including such researches as have for their purpose the establishment and maintenance of a permanent and efficient business structure, and such economic investigations as have for their purpose the development and improvement of the standard of living of the people of the United States, and to have printed and dessiminated the results of said researches.

SEC. 3. That in order to secure, as far as practicable, uniformity of methods and results, it shall be the duty of the United States Secretary of Commerce 1

to furnish forms for the tabulation of results of investigation or experiment, to indicate from time to time such lines of inquiry as to him shall seem to be most important, and, in general, to furnish such advice and assistance as will best promote the purpose of this act. It shall be the duty of each of said stations annually, on or before the 1st day of February, to make to the president of the university or college a full and detailed report of its operations, a copy of which report shall be sent to each of said stations, to the Secretary of Commerce, and to the Secretary of the Treasury of the United States.

SEC. 4. That bulletins or reports of progress shall be published by said stations at appropriate intervals, and sent to such persons as may request the same so far as the means of the station will permit. These publications of said stations and the correspondence relating to the operations of the stations shall be transmitted in the mails of the United States, free of charge of postage, under such regulations as the Postmaster General may from time to time prescribe.

SEC. 5. That for the purposes of paying the necessary expense of conducting investigations and experiments and printing and distributing the results as hereinbefore prescribed, there is hereby authorized to be appropriated to each institution as defined in section 1 a sum not to exceed $20,000 for the fiscal year ending June 30, 1938, and similarly a maximum for each succeeding year as follows: $30,000 for the fiscal year ending June 30, 1939; $40,000 for the fiscal year ending June 30, 1940; $50,000 for the fiscal year ending June 30, 1941; $60,000 for the fiscal year ending June 30, 1942; and $60,000 for each fiscal year thereafter. The sums hereby authorized, upon certification by the Secretary of Commerce that the institution has met the standards set for participation in these funds, shall be paid annually in equal quarterly payments on the 1st day of January, April, July, and October of each year by the Secretary of the Treasury to the treasurer or other officer duly appointed by the governing boards of said State or Territorial universities to receive the same, the first payment to be made on July 1, 1937.

SEC. 6. That to enable the Secretary of Commerce to enforce the provisions of this Act, ascertain whether the expenditures are in accord with its provisions, coordinate the work of the Department of Commerce with that of the State and Territorial universities and business research stations in the lines authorized in this Act, and make report thereon to Congress, there is hereby authorized to be appropriated to the Department of Commerce to be administered by the Bureau of Foreign and Domestic Commerce a sum not to exceed 4 per centum of the total appropriation in any given year as indicated in section 5 of this Act.

SEC. 7. That nothing in this Act shall be construed to impair or modify the legal relation existing between any of said universities and the governments of the States in which they are respectively located.

SEC. 8. That the grants of moneys authorized by this Act are subject to acceptance by the governing bodies of the institutions to which these grants are made.

SEO. 9. That for the purposes of administering this Act there is hereby created a Board of seven members consisting of competent authorities selected by the Secretary of Commerce from State university schools of business. This Board shall set up standards for qualifying schools and approve such schools for participation in the fund appropriated under this Act. The term of membership on this Board shall be seven years, the first appointments to be made as follows: One for one year, one for two years, one for three years, one for four years, one for five years, one for six years, and one for seven years, their successors in each case to be appointed for seven years. The compensation for service on the Board shall be $25 per day and mileage of 5 cents for each mile to and from place of meeting.

SENATOR SHEPPARD. The subcommittee is composed of myself as chairman and Senators Pepper, Lee, White, and Gibson.

The committee will be glad to hear from Dr. Gee, by way of beginning. Dr. Gee, will you come forward?

STATEMENT OF DR. WILSON GEE, DIRECTOR, INSTITUTE FOR RESEARCH IN THE SOCIAL SCIENCES OF THE UNIVERSITY OF VIRGINIA

Senator SHEPPARD. Please give your full name and address to the reporter.

Mr. GEE. Wilson Gee; director of research, University of Virginia. Senator SHEPPARD. Proceed in your own way, Doctor.

Mr. GEE. Mr. Chairman, it is my judgment that, as modest in comparison with some other measures as it may appear in the appropriation it carries, this bill, S. 1308, is in its potentialities of service to the future national welfare one of the most significant pieces of constructive legislation at present before the Congress of the United States. Briefly, the following are my reasons for this statement.

For several years now it has seemed to me that the United States Department of Commerce should more nearly follow, in the research and extension phases of its program in relation to the business interests of the country, the example of the Department of Agriculture in its similar relationships to American agriculture. I do not need to inform gentlemen as well conversant with the agricultural developments of this country as you just what the Department of Agriculture has done in the past several decades for the farmers of the United States. From a research standpoint, beginning with the Hatch Act in 1887, together with the Adams Act in 1906, the Purnell Act in 1925, and the Bankhead-Jones Act of 1935, the Federal Government has made available large sums of money for local research in agricultural problems, both of a production nature and of an economic and social character. The results of the activities of these experiment stations, together with the research done in the Department of Agriculture itself, have given to the American farmers a body of information adapted to their local needs and forming also the basis of sound national policy that transcends that furnished by any other government in the world.

In addition, still more money has been made available by the Federal Government through the Smith-Lever Act of 1914, and supplementary measures of a similar nature, for the Federal and the several State agricultural extension services. You know, without my elaboration, of the great influence which has been exerted by the farm and home demonstration work through this entire country.

My sincere conviction is that it would have been impossible to have conceived and put across the magnificent program of the A. A. A. had it not been for the accumulated knowledge of years of research by the agricultural experiment stations and the Department of Agriculture, and the development of the splendid body of technically trained personnel manning them and the extension services. The wide differences between the effectiveness of the A. A. A. and the N. R. A. are largely to be accounted for because of these differences in the methods and effectiveness of functioning of the two branches of the Federal Government responsible for the commercial and the agricultural interests of the Nation.

Since the Census of 1880 the products of the manufacturing and commercial interests of this country have totaled a sum greater than that in our agricultural production. This development has, during the past half century and more, grown with acceleration, so that the

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