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24 Crushing the German Advance in American Industrywar, Germany had made the industry almosta state institution. The Germanproducers in chemical lines were combinedin two cartels, representing an aggregatecapitalization of ten billion dollars, andthe American industry was thus put incompetition, not with the individual Germanproducer, but with the German Empireitself. Its system was to confine allchemical research and important productionwork to Germany itself, while itsarms reached into every other countryfor purposes of distribution.the sole voting power. All the stock is inthe control of a committee of votingtrustees, under whose direction there willbe granted the use upon equal terms bythe entire industry of the processes andproducts covered by the patents, so asto prevent the monopoly by any onemanufacturer of the patented products.Under the power granted by the secondamendment to the Trading with theEnemy Act, which I have recited, theAlien Property Custodian seized fourthousand five hundred German patentsin the chemical industry alone, and conveyedthem to a corporation known asthe Chemical Foundation, Incorporated,which was formed by the association ofnearly all the dye and chemical trade—both producers and distributors—for thepurpose of acquiring the patents. Thisis a corporation which has a capital stockof four hundred thousand dollars preferred,and one hundred thousand common.No single interest has more thanone share of the common stock, which hasThe corporation has released the Governmentof the United States from alldamage claims for alleged infringementsof these German-owned patents by reasonof the use of the inventions by the governmentin the production of war materials.It seemed obvious that the UnitedStates should not be called upon to payroyalties to its enemies for the manufactureof explosives or other necessary warmaterials employed in a war for whichthe owners of the patents and theirfriends were responsible. The licensefees for the use of these patents will beused by the Chemical Foundation for theadvancement of chemical and allied industrialsciences by research. I have nodoubt that the organization of this institution,which was the result of a patrioticeffort on the part of an ambitious industryto carry out a well-defined governmentalpolicy in co-operation with theAlien Property Custodian, will prove •the most important step yet taken forthe upbuilding of industrial chemistry inAmerica. Tariff protection has provedutterly unavailing in the past. The patentswhich have been transferred to theChemical Foundation include many Germanpatents taken out as late as 1917,and even in 1918, as well as many applicationsstill pending. They include theresults of the research, upon which mustbe based the manufacture of any newdyes which the Germans are now able toproduce and market. Accordingly, theChemical Foundation will be able to protectthe American industry for a considerableperiod, for new chemical productsonly appear several years after patentsare taken out, and a few years will sufficeto put the American industry in a placewhere it can hold its own.The British and French have adopteda system of licensing imports, whichamounts to an embargo against Germandyes, but the American plan of operationunder the Chemical Foundation willdoubtless prove quite as effective. Theopportunities which the Foundation offersto competent research scientists areexpected to exceed those of any institutionunconnected with industry, and itmay well be possible that great benefitsto humanity may result from this researchwork. Discoveries of curativemedicines of great value may be hopefullyanticipated. At any rate, the planputs the American industry firmly on itsfeet, and the students of chemistry inAmerica may now go forward in the developmentof the science for commercialpurposes, with the knowledge that theirefforts will not be forestalled nor stifledby the German chemical octopus whichhas so long deprived the chemists of everycountry of the incentive to individualeffort.