probably a classic example of Government-sponsored R. & D. enhancing a company's profit capabilities.

Today, we are a leading producer of commercial ship radar, the basic knowhow for which we gained from the Navy work

a Ratheon official says:

The commercial work is in addition to the radar Raytheon turns out for the military

he added.

The most shocking disclosure to me is the practice of the Department of Defense of giving away public money without getting in return any rights whatsoever, not even a license.

After studying this program, I have discovered some interesting facts:

One is that the Department of Defense is sharing in the cost of "contractor initiated general research and development programs. This is an expense which had previously been borne by industry. Two is that the firms receiving this handout are among the largest in America.

The reason for this policy of assisting huge firms in promoting their independent research efforts, as given by Gen. Marcus Cooper to your committee, is that it will hasten technological development.

This suggests two important questions:

1. Is this against the law? The disposal of Government property cannot be for the exclusivity and benefit of any one individual or firm, but must be for the benefit of all the people of the United States unless there is specific statutory authority.

In this instance, the people of the United States got no specific product or service. Any benefit to the people is only a remote possibility. This program, however, is of direct benefit to certain individual contractors.

2. Even if it were legal, and I am not so sure about that, is this program good public policy? I submit that it is poor public policy. It gives a favored contractor an unearned competitive advantage. It enables him to become larger at the taxpayer's expense. It frustrates and offsets our whole antitrust program, and it is just unnecessary. If the ordinary rewards are not enough to elicit the desired technological changes, then the Government itself should develop its own capabilities to do so. The Department of Agriculture, the Atomic Energy Commission, the Tennessee Valley Authority, have shown that the Government can make greater contributions than the private sector in certain fields. Why cannot the Department of Defense do the same?

Is it not about time that the great U.S. Government should start developing an inhouse capability of managing its missile program instead of delegating this governmental function to a private company? Isn't it about time that the Department of Defense began to develop capable technical people who can evaluate the "sales pitches" of the private firms who are making of Uncle Sam an incredible "sucker" for their own gain? Air Force Under Secretary Joseph V. Charyk admitted that the Air Force has very few experts who are able to check contractors' claims, thus making the Air Force, in particular, vulnerable to defense contractor "salesmanship."

Mr. Chairman, in his farewell address to the Nation, ex-President Eisenhower, a military man most of his life, warned that:

In the councils of Government, we must guard against the acquisition of unwarranted influence * * * by the military industrial complex. The potential for the disastrous rule of misplaced power exists and will persist.

The Military Establishment today has greater power than any organization in our history. It spends about $42 billions annually, more than 50 percent of the total national budget. About half of this sum, or $21 billions, is devoted to military procurement. About 10 percent of our entire labor force is occupied by defense.

Let us now see what is happening to the $21 billions allocated to military procurement.

Of the $21 billions being spent for military procurement, about $15.4 billions is being spent with 100 giant corporations.

About half of the $15.4 billions, or $7.6 billions, is being spent with 10 of these huge corporations alone.

Now, Mr. Chairman, almost 90 percent of the $21 billions being spent on the procurement of goods, is being handed out by military officers to industry without competitive bidding. In addition, about $7 billions is being handed out in this way for research and develop

ment.

In other words, a relatively small number of military procurement officers can spend billions of dollars on the basis of their own judg

ment.

Furthermore, Mr. Chairman, the Department of Defense has frequently refused to supply information and in some instances has even given misinformation to Congress.

Since 1947, the Congress has been recommending that the system of awarding contracts without competitive bidding and with little regard to the value in the open market be abandoned except on rare occasions.

The military insists that the needs of national security make these noncompetitive contract awards necessary.

Just about half a century ago, the United States charged the DuPont Co. with having acquired and dissolved 64 gunpowder companies and that this company had a 100 percent monopoly in supplying the Government with military smokeless powder.

Both the Army and the Navy defended this situation and insisted that to allow competition would undermine our national security. The military services are still singing the same old refrain.

They were wrong a half century ago and they are still wrong today. If private industrial organizations are unwilling to render service to the United States in its defense efforts for a fair and reasonable profit, they are guilty of monumental shortsightedness. If this Government fails to survive, there probably will be no private business and no private businessmen. Total loss will then be the price they have paid for their cupidity.

I, therefore, urge the passage of S. 1176, which I described and analyzed in my opening statement before your committee.

I believe that it will protect the equities of the Government and private firms doing business with the Government. It will aid our economic growth and help arrest the trend to monopoly.

I make no claim that it is the one perfect solution, or that it is perfect beyond improvement. It does, however, provide a solid basis for the development of a sound and equitable policy for Government procurement of contractor services in research and development activities. I shall be pleased to cooperate with the committee and its staff in the consideration of any perfecting modifications which the committee may, after study, believe to be warranted.

In particular, I hope that consideration will also be given by the committee to the additions recommended by the Assistant Attorney General when he testified before your committee on April 21.

Before I conclude I would like to reveal my disappointment in those newspaper publishers and editors who are, in my judgment, hiding this issue from public view. This issue, perhaps more than any one other factor, explains our failure in outer space. Here is the key to American military failures and Soviet supremacy. Yet, the great newspapers of America are ignoring the stories filed by their correspondents who discuss this issue.

Some of these same newspapers have editors and publishers who have participated as members of a committee carrying the proud banner of the "right to know." I am guessing, but I believe this is correct. Such a committee argues and quarrels with legislators that they are entitled to know what happens in every closed-door executive session of any committee They go so far as to suggest that they are entitled to know any thought that enters a legislator's mind if he dares to communicate it to one of his fellow public servants.

Yet, here is an example of an issue of enormous significance which is concealed from public view and carefully held away from public inspection in most great newspapers. To be sure, this issue has been discussed in the trade journals. Here is a copy of the Federal Bar Journal for winter (1961), in which the entire issue is devoted to this problem, containing a discussion of both sides of the argument. The American Bar Association Journal will give similar treatment in its July 1961 issue. The Wall Street Journal has reported both sides of the argument.

But what great daily newspapers have given this matter the benefit of full discussion? Only the St. Louis Post-Dispatch and the Memphis Press-Scimitar, to my knowledge, have given any intelligible discussion of this issue to ordinary, everyday people, so they might understand the argument. Perhaps the New Orleans Times Picayune can also be described as participating in reporting the activities of a Senator from the State in which that paper is published.

But how about the great New York papers, the Washington papers, the Boston papers, the Chicago papers, the Houston papers, the San Francisco, Los Angeles, Denver papers? Have they even for a moment given a fair presentation of both sides in order that the public might weigh this issue? The great St. Louis Post-Dispatch, highly respected among journalists, has reported only one story on this vital problem of such potentially revolutionary impact upon our lives, and it was an objective, fair article.

In other words, here is this gigantic issue of public concern which, in my judgment, can be decided wrongly only if the public is not informed about it. Yet, to this moment, the discussion is limited almost entirely to special pleaders and special interest groups who have an ax to grind.

Even so, Mr Chairman, I believe we will succeed in informing the public about this one. When you are right and telling the truth, the public does not have to hear it a dozen times to know that it is correct.

I find some sympathy with the right-to-know committee and I have expressed sympathy to Mr. Wiggins of the Washington Post and others. I agree that the newspapers have a right to know. I only plead with them to agree with me that the public also has a right to know.

Thank you, gentlemen.

Senator HART. Senator, I know that you have spoken out of the very deepest conviction. It is literally true that to the extent that this issue has become the subject of general public conversation, more than any other person, you are responsible for it.

Senator LONG. Well, Mr. Chairman, let me say this. If the public finds out about this issue, the way things are going, they will have to find out about it without the newspapers.

But I do want to say this, that it is my feeling that the St. Louis Post-Dispatch, and I think the Memphis Commercial Appeal—perhaps the New Orleans Times Picayune-I suspect some efforts have been made to try to persuade them to slant this issue. (The material referred to is as follows:)

[From the Congressional Record, May 29, 1961]

ECONOMIC FREEDOM AND FEDERAL PATENT POLICY

Mr. LONG of Louisiana. Madam President, the subject of economic freedom, what it is and what it implies, is an especially important one at this time, because the value, the efficiency, the humanity of this system is being questioned and even attacked not only in those parts of the world which are hostile to us, but also in our own country. It is therefore necessary to review briefly the heritage of our free, private enterprise system.

I do not think that we can hope to understand the problems and policies of our own day if we do not know the problems and policies out of which they grew.

I suspect that damage has been done not only to our historical culture, but also to our practical insight by an indifference to our intellectial past. Such indifference, unfortunately, has become characteristic for most of us. We have be come so absorbed in our daily activities that we have been unable-and even perhaps unwilling-to concern ourselves with relating our activities to the social philosophy we profess to believe in.

It is no exaggeration to say that it is impossible to understand the evolution and the meaning of Western liberal civilization without some understanding of classical political economy, by which I mean the general body of principles of governmental action or inaction regarding economic activity of the two great Scotch philosophers-David Hume and Adam Smith-and their followers.

These men and their ideas are historically important. They exercised a profound influence on the public opinion of their country in their time. They were responsible, directly or indirectly, for many far-reaching legislative and administrative changes. Even today, in innumerable ways of which we are seldom aware, their outlook continues to affect ours. It is indeed unfortunate that more of us do not have an understanding of the system which once dominated the social thought of the Western World and which still dominates our thought in this country.

Although the English classical political economists differed on many issues, they all believed in private property and free enterprise.

If we had asked any classical economist: first, to what final end economic activity should be directed; or secondly, by what ultimate criterion its success was to be estimated, I do not think the issue would have been in doubt.

"Consumption," said Adam Smith, "is the sole end and purpose of all production, and the interest of the producer ought to be attended to, only so far as it is necessary for promoting that of the consumer" (Adam Smith, "Wealth of Nations," Cannon's ed., vol. II, p. 159).

James Mill was no less emphatic. He says:

"Of the four sets of operations: Production, distribution, exchange, and consumption, which constitutes the subject of 'Political Economy,' the first three are means. No man produces for the sake of producing and nothing further. Distribution, in the same manner, is not performed for the sake of distribution. Things are distributed as also exchanged, to some end.

"That end is consumption" (James Mill: "Elements of Political Economy," third ed., p. 219).

The classical system was unequivocally opposed to any fostering of producer interest as such.

We should remember, however, that consumption is to be understood as both present consumption and consumption in the future: that is, investment.

We should also note that by consumption is meant not only the consumption of private individuals, the benefit of which is limited to themselves, but also the consumption of Government services such as defense, the benefit of which is enjoyed by all of us. From Adam Smith onward, it was recognized that such services might be "in the highest degree advantageous to a great society"-Adam Smith in the work cited, volume II, page 214.

The great contribution of the classical economists, however, was their proposal for the achievement of this end, and for this they recommended what has been called the system of economic freedom.

Now what do we mean by this term?

This system can be defined in this way: Given a certain framework of law and order and certain necessary governmental services, the classical economists conceived that the object of economic activity is best attained by a system of spontaneous cooperation. As consumers, the citizens should be free to buy what they please. As producers, or as laborers, they should be free to use their property or labor in ways which, in their judgment would bring them the maximum reward in money or satisfaction. In their view it is the impersonal mechanism of the market which harmonizes the interests of the different individuals. It follows, therefore, that a prime object of policy should be to insure the freedom of trade and industry, and to sweep away obstacles to this spontaneous cooperation where they exist.

This idea of freedom was central to the whole classical system, and it inspired their crusade against what they considered to be abuses of authority. It dictated their conception of what should be the positive functions of the state. As I see it, the belief in the system of economic freedom rested on two bases: First, belief in the desirability of freedom of choice for the consumer; and second, belief in the effectiveness in meeting this choice, of freedom on the part of producers.

These ideas are interwoven in our subconscious thinking; they form the basis of our free, competitive enterprise system.

The first belief is simple; it is based on the view that the adult consumer is the best judge of his own interest-with some exceptions, however: the consumer, for example, must be protected from fraud

For example, Ricardo: "Proposals for an Economical and Secure Currency: Works," edited by McCulloch, page 408, Ricardo followed Adam Smith in approving the Government stamp on plate and himself approved interference to insure the purity of drugs and the competence of doctors.

The argument for freedom of producers is more complicated. The motive for production is considered to be self-interest. But the guidance of this motive so that it conduces to the interest of the general public, is viewed as a product of the mechanism of the market and the forces of competition. The system of free markets was to be the rough discipline whereby the forces of self-interest were guided and held in check.

If we place these men in their proper historical setting, we can see that they were reformers. The system of economic freedom was not just a detached recommendation not to interfere; it was an urgent demand that what were thought to be hampering and antisocial impediments should be removed and that the immense potential of free pioneering individual initiative should be released. The founders of our economic system were both individualists as regards ends and, with due reservation, individualists as regards means. For them an organization of production based, in the main, on private property and a competitive market was an essential complement to a system of freedom.

They did not believe that such a system was a product of nature that it would come into being if things were just left to take their course. On the contrary, such a system can come into being only if things are not left to take their