Mr. GRAHAM. Well, that didn't have much bearing on it. I still could put this on the market without interfering with that patent, because it was an old patent.

The CHAIRMAN. But I understood you to say that it was because of that patent that you can't get the protection that you want for this. Mr. GRAHAM. I know; it was an old patent, but nevertheless that was an old patent, so this would be an old patent, so anybody could copy it.

The CHAIRMAN. But if the life of that old patent had not expired, it would be possible for you to acquire it and enter into an agreement with the holder of that patent, and then you would have the patent protection that you say you need.

Mr. GRAHAM. Well, I may understand it a little wrong as far as this 20-year idea, but as it is now, some of our patents-I have had one 6 years before I got it issued, one I had several interferences with, and that will make 23 years on that one.

The CHAIRMAN. That is exactly the point. The suggestion has been made that the period during which a patent may be permitted to remain in the application state should be shortened, or if it remains in the application state, that the term of exclusive use shall be cut down, so that altogether the period is 20 years.

Mr. GRAHAM. I think I would be in accord with that 20-year idea. I believe it would be better for the average small fellow who is trying to make both ends meet.

The CHAIRMAN. It is very interesting in the light of your experience and in this respect.

Dr. LUBIN. I am interested in the baker. Did you have a search made on that device before or after you built the instrument?

Mr. GRAHAM. That is where I stuck my neck out a little wrong. I usually do, but I did not on this one, and then the funny part of it is, after I made the search, it was about a $60 search, I had no reference, but when I was down here one time and I was looking through the Patent Office and found it myself.

The CHAIRMAN. If there are no other questions, the witness is excused. We are very appreciative.

(The witness, Mr. Graham, was excused.)

Mr. DIENNER. Mr. Chairman, may I call my next witness. It is Mr. Baekeland. Will you please be sworn, Mr. Baekeland?

The CHAIRMAN. Do you solemnly swear the testimony you are about to give in this proceeding shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. BAEKELAND. I do.

TESTIMONY OF GEORGE BAEKELAND, VICE PRESIDENT OF THE BAKELITE CORPORATION, NEW YORK CITY

Mr. DIENNER. Mr. Baekeland, will you please state your full name and occupation?

Mr. BAEKELAND. My name is George Baekeland. I am vice president and secretary of the Bakelite Corporation, and president of two of its subsidiaries.

Mr. DIENNER. Will you please tell us your education and training for the position which you now occupy?

Mr. BAEKELAND. I received an A. B. degree from Cornell, an E. M. from the Colorado School of Mines. I practiced mining engineering until 1923-24, when at the request of my father I gave up my profession with some reluctance and went to work for the Bakelite Corporation. I have been with Bakelite Corporation since that time, and, well, a jack of all trades, and my experience has been somewhat rounded and full, I think.

Mr. DIENNER. Are you familiar with your father's earlier work preceding the invention of bakelite?

BACKGROUND OF BAKELITE CORPORATION'S FOUNDER

Mr. BAEKELAND. Well, the earliest work that brought him any prominence was done at a time when I was about born, or perhaps a year or two previous to it. He invented Velox paper in the early nineties. He went into partnership-it was not a corporation or à company, a pure partnership with a man who put up the necessary money. At the time my father had only recently resigned as professor of physics and chemistry and had gone into photographic research work, following work he had done as a student in photochemistry. The result was his invention of Velox paper, or photographic paper to which he gave the name Velox, which was manufactured under this partnership arrangement.

He took out no patent; it was a secret process. The business was small, of course. He alone knew the formula, although there was a written formula sealed, I believe, I am not sure of that, in escrow in case he died. He himself mixed the emulsions daily that were used for the making of this photographic paper.

Perhaps some of the members of the committee will recall that in the early days of photography it would take about half an hour in sunlight to get a print. This Velox paper made a print instantaneously, and in that way greatly added to the improvement in the art.

The paper, of course, became strongly competitive with the old types of paper on the market at that time, and the Eastman Kodak Co., on two occasions, came to my father and his partner with a desire to purchase the business. They were reluctant, however, to part with their business, but finally, when it became a nice running business and the troubles were over and it became routine manufacture, I think my father became a bit bored with the whole thing, and it was decided to sell on the third attempt by the Eastman Co. to purchase, so the whole thing was sold, lock, stock, and barrel, and my father dropped out of that business and went into the thing that he wished to do.

He was then quite comfortably off. In fact, for those days he was quite a wealthy man. He devoted his time to chemical consulting work and at his home in Yonkers he converted an old barn, a stable, where he carried on work in a number of fields, and at the time of the Russo-Japanese War, among other things he was working on synthetic camphor. Natural camphor had become very high-priced owing to the Japanese War. He was not the only one, however, who was working at that time on that particular problem. He was also working on synthetic shellac. Shellac, as you may know, is a product from an insect in India.

DISCOVERY OF THERMOSETTING PLASTICS

Mr. BAEKELAND. The result of those researches led him to certain observations and conclusions, and following these he developed the first thermosetting plastic. Perhaps I might just explain that a little bit, because this business on which I am going to touch today is really the foundation of the plastics industry as we know it. Until my father's invention of these synthetic resins which were thermosetting, plastics were what we call thermoplastics; they never became hard except on cooling, they were cold setting rather than heat setting, rather than thermosetting. The plastics in use then were shellac (it is still used for making Victrola records, it was then used for making a number of things besides Victrola records) and the other one was hard rubber. Hard rubber was at that time used as an electrical insulator in electric installation, which of course had not developed to its present stages, but it was used in the main electric insulators aside from porcelain and glass.

The trouble with these old plastics was that upon heating they always softened, just as when one puts a Victrola record near a radiator or in the sun it will soften and fold over. Of course such a plastic as that has very great limitations because so many insulators and other products which can be made of plastics have to withstand higher temperature than normal temperature.

This was an entirely new plastic in this sense. The old plastic was put into a warm mold and as soon as it became plastic, until it was cooled it remained plastic, so while it was in the mold the mold had to be chilled, and then having become chilled it could be opened and the piece could be taken out without becoming deformed in handling or setting down on the bench. That applied to the shellac and to the hard rubber plastics then in use.

The curious and unique thing about these new plastics that were introduced by my father was this: The technique was very much the same; it is placed into a hot mold; the heat of that mold begins to fuse or soften this plastic so that when pressure is applied to the die, to the mold, the plastic flows through the mold and takes the form and shape of a mold, but continued heating in that mold does something that hadn't happened before. Continued heating brought on a chemical reaction within the material itself in the mold and it set up hard and then having reached that point the mold could be opened, the piece taken out at a temperature so hot that it isn't convenient to handle, and there was no deformation and no more change, and any further heating would never soften that material again.

Unlike shellac and hard rubber, after this material is once set-The CHAIRMAN (interposing). What is it, the amount of heat or the length of application?

Mr. BAEKELAND. A combination of the two; low temperature takes longer; high temperature requires a shorter time.

After the material had once become cured it couldn't be dissolved and softened with solvents. Shellac, hard rubber, and those things are all subject to being dissolved in ordinary organic solvents. So was this new plastic that my father invented, in its initial stage, but once it had been heated and set it wouldn't soften and couldn't be dissolved in any solvent.

Since then there have been certain solvents, but they are very unusual things, so that for all intents and purposes these materials are not attacked by solvents, oils, alcohol, benzine, anything of that kind, and they are not affected by heat.

IMPORTANCE OF BAKELITE IN AUTOMOBILE MANUFACTURE

Mr. BAEKELAND. They made possible things that have never been possible before. Mr. Kettering testified here I understand last week. He recognized he could not have made a self-starting lighting system without these Bakelite molding materials. In a motorcar the insulators are subject to quite high temperatures and they are also covered with grease, oil, or gas, and what not, and those two things would have ruined any known insulator except glass or porcelain, which were not at all adaptable to automobile installation; they are very cheap materials and if they were to be used today they would have been used in the past. This material or these materials of plastics have made possible the development of a great many things which today we see in all business and which are only possible owing to the peculiar characteristic of these materials.

It is the combination of characteristics which has given them the very wide use and utility which they have enjoyed. These first materials, first resins, invented by my father were patented, patents issued in 1909, they were applied for in 1907; they went through the office in 2 years, which is rather good time-or less than 2 years. A business seemed to be indicated from what was at hand and my father with his own money and with the money of friends whom he invited in, formed a company in 1910, General Bakelite Co., to begin the manufacture of these materials.

The company was financed by the original stockholders privately and it might interest this committee to know that although this company has grown and has increased its investment and plants and all that, several times to a very great degree, there has never been another cent put into the business and the company has never borrowed money, never put out a bond issue. The stockholders were not greedy and they were sensible; they saved from earnings when they began to make earnings, enough to keep up and continue the research work that was necessary, additions to plant, increasing the selling force, and they have always maintained or had maintained, or rather the tax laws made possible, a conservative and sensible dividend policy.

Fortunately none of them were people who wished to get an inordinate amount of money; they were more interested in getting good materials and seeing that the business was sound and managed in a sound and sensible financial way.

To digress for a minute, it might interest the committee to know that as a result of that policy in the year 1931 and '32, when we were in the midst of the depression, out of surplus, out of sums saved from past earnings, we built a four-and-a-half-million-dollar plant, at a time when business was at a standstill; we placed orders, gave men employment, and built a four-and-a-half-million-dollar plant. That was only possible through this policy that had been carried on through the years.

The CHAIRMAN. Was there any displacement that you know of? Mr. BAEKELAND. Displacement?

The CHAIRMAN. Did the development of this industry displace any other industry?

Mr. BAEKELAND. The only thing it did was to-I think it cut down the hard-rubber business, which was a small business at that time, anyway, because of the few materials, the few articles that were displaced in hard rubber by these Bakelite products were offset-well, I should say a thousandfold by the new products that were made which were never made of hard rubber.

The CHAIRMAN. Then we are to understand that as a result of this invention, and the development of this industry, we have new uses which in the main are not substitutes for any other uses?

Mr. BAEKELAND. Oh, yes; entirely so.

The CHAIRMAN. And new materials which are actually not substitutes for old materials?

Mr. BAEKELAND. It has created a new business and it has created new products which never had been made, and as a matter of fact today could not be made without these materials.

Mr. PATTERSON. In other words you are telling us, Mr. Baekeland, that new employees-you took on new employees and it helped the unemployment situation?

Mr. BAEKELAND. Yes.

Mr. PATTERSON. How many byproducts have you from the original plastic invention, or secret process?

USE OF BAKELITE IN 35 MAJOR INDUSTRIES

Mr. BAEKELAND. How many products are made today? Well, I didn't believe it would be possible to answer that question until the other day I asked in our office whether we had such a record, and I found we did. We sell to 35 major industries and they have a record. at the office of the articles made in each industry and they amount to over 15,000 different articles.

Mr. PATTERSON. Different articles?

Mr. BAEKELAND. Yes. For example, a radio tube base would be one article; a safety-razor handle would be a second one; a switch plate would be a third. There are 15,000 such made of our plastics.

The CHAIRMAN. Now of course in each one of those instances which you have mentioned, the Bakelite is a substitute for something else? Mr. BAEKELAND. There were no radio tube bases in those days. The CHAIRMAN. Certainly there were razor handles?

Mr. BAEKELAND. Safety razors? There were no safety razorsoh, yes; they were just coming in. That replaced brass. The CHAIRMAN. How about your light-switch plates?

Mr. BAEKELAND. They were brass.

The CHAIRMAN. So there was a little substitution?

Mr. BAEKELAND. A little substitution, but over all very little substitution; it is mostly new business.

Mr. PATTERSON. Over all you are pretty well convinced that you helped the unemployment situation?

Mr. BAEKELAND. Oh, yes; no question about it.

Mr. DIENNER. Mr. Baekeland, have you some samples of articles that you could exhibit? I think that would be very interesting.

Mr. BAEKELAND. I might have some here; they may give a clearer idea of what we are talking about.