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AN ANALOGY

An analogy from the field of scientific manpower is illuminating. The number of foreign scientists and technologists who immigrate to this country is relatively small, but, as the careers of Fermi, Einstein, Von Neumann, Teller, and a few others demonstrate, their contribution has been large and profoundly important.

At the moment, the tariff laws insulate the U.S. educational system from the equivalent influence of good ideas in the equipment field.

We do not believe that this kind of insulation of the American educational system is good for the country's welfare, and urge you to implement the removal of these tariff restrictions as rapidly as possible.

I would like to add that from the viewpoint of a consumer of and a user of this scientific equipment, it is extremely important that in my position a person be able to buy, secure, and use this equipment in as simple and direct form as possible.

Mr. KING. Thank you very much Professor Jensen.

Dr. JENSEN. Thank you.

Mr. KING. Mr. Land is the next witness. You may proceed, Mr. Land.

STATEMENT OF H. A. LAND, SIEMENS AMERICA, INC., NEW YORK, AND PICKER X-RAY CORP.; ACCOMPANIED BY DR. LOTHAR SEIFERT, PHYSICIST, SIEMENS AMERICA, INC.; AND DR. WILLIAM LORANGER, PHYSICIST, PICKER X-RAY CORP.

Mr. LAND. Mr. Chairman, I will try and be brief in this matter. My name is Hans A. Land. I am an attorney with offices at 1730 K Street NW., Washington, D.C. I am here, having been retained to present the views of Siemens America, Inc., and of Picker X-Ray Corp., with regard to H.R. 8664, and H.R. 15271, introduced by Mr. Curtis.

I have on my left here a physicist, Dr. Seifert, on the executive staff of Siemens America. On my right I have another physicist, Dr. Loranger, on the executive staff of Picker X-Ray Corp.

Siemens America, Inc., is a Delaware corporation with principal offices at 350 Fifth Avenue, New York, N.Y., selling, among other Siemens products made in Germany, about 35 to 45 electron microscopes in the United States annually, of which between 80 and 90 percent go to nonprofit organizations.

Picker X-Ray Corp. is a New York corporation with offices at 1275 Mamaroneck Avenue, White Plains, N.Y. It is the exclusive sales agent for the United States of Associated Electrical Industries, known as AEI, for their English-made electron microscopes, and last year they sold 12 in the United States, 11 of which went to nonprofit organizations.

I ask gentlemen not to confuse electron microscopes with microscopes which you have seen here today. We are talking about electron microscopes as an instrument costing in the range of $30,000 to $50,000 apiece, and a highly sophisticated instrument.

Picker and Siemens each has a substantial investment in its own. technical service operation, built up to guarantee service and mainte

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nance for these highly sophisticated instruments which they sell throughout the United States.

Now, both corporations fully support the spirit of the Florence agreement, and the intent of the bill to implement that agreement, but they do believe that the bills present some difficulties, and wish to offer some comments.

Under the present law, two types of scientific articles are specifically exempted from duty if they enter the United States for the use of a nonprofit organization. They are, broadly speaking, one, isotopes and two, electron microscopes. The exemption is contained in item 854.10 of the Tariff Act of 1963.

H.R. 8664 and the companion bill seek to exempt each of a much wider list of scientific articles from duty if they are for the use of a nonprofit organization, provided that no such article of equivalent scientific value is being manufactured in the United States. This list includes electron microscopes.

At the same time, H.R. 8664—although leaving item 854.10 stand otherwise specifically deletes electron microscopes therefrom.

The net effect is that, whereas at present isotopes and electron microscopes enter duty free, subject to the sole condition that they be for the use of a nonprofit institution, the proposed changes would continue that status for isotopes, but would impose a new and additional condition on electron microscopes, namely, that no electron microscopes of equivalent scientific value is being manufactured in the United States. It is the position of Picker and of Siemens that the situation existing at this time, whereby electron microscopes enter duty free on the sole condition that they come in for the use of a nonprofit institution, is sound, and that it should not and need not be changed.

It is our view that in the specific case of electron microscopes a broad, general comparison to determine "equivalent scientific value" is not possible.

The fact of the matter is that a number of electron microscopes are available to potential users in the United States, of foreign as well as of domestic manufacture. All of these instruments show such differences in characteristics and specifications when compared to each other that one or the other is best for a particular type of scientific endeavor. Depending on the kind of problem to be solved, a scientist involved with that particular problem will consider one specific electron microscope best suited for his particular work.

This is not a matter of taste or whim, but the result of an informed judgment as to the best tool to be applied for the most efficacious solution of a specific scientific problem.

It is our understanding that German and British customs legislation and regulations implementing the Florence agreement fully reflect this factual situation.

In Germany, to hark back to the discussion had before here this morning, the importing institution files a declaration with the local collector of customs stating that in its view the item is to be accorded duty-free entry because no item of equivalent scientific value of German origin is available, and the German customs regulations specifically state that the particular application is to be the criterion of the availability of equivalent scientific equipment.

In short, it is not realistic to speak of equivalent scientific value generally, or across the board, in the case of electron microscopes.

Siemens and Picker are informed that this opinion, according to which the specific problem and the particular application determine which of the available, complex instruments is best under all the circumstances, has also been made known to this committee by a substantial number of respected members of the scientific community in this country.

It is respectfully requested that such communications received by Mr. Mills in his capacity as chairman of the committee be made a part of the record.

Mr. KING. Without objection, the staff will review the letters and any new material therefrom will be made a part of the record.

(The letters were reviewed and essentially express the same point of view presented by Mr. Land. These communications are on file in the Committee on Ways and Means legislative file on this legislation.) Mr. LAND. These communications are unanimous in their import, according to which scientists having a need for the use of an electron microscope for the purpose of scientific research should not be forced to adhere to some common but meaningless denominator, but should be able to use the instrument best suited to assure the efficiency and success of their individual labors.

Consequently, it is recommended that H.R. 8664 be amended by inserting in line 23 on page 8, immediately following the word "except": "electron microscopes and", and by deleting lines 23 and 24 on page 10 of the bill.

We also feel, Mr. Chairman and Mr. Curtis, that the proposed method of determining the existence of domestic electron microscopes of equivalent scientific value is unrealistic.

A standard of equivalent scientific value applied generally to the broad spectrum of electron microscopes is meaningless. The fallacy of establishing such a common denominator for electron microscopes is compounded by the method proposed to determine it.

The best and the only proper judge of the nature of a particular scientific problem and of the specific tool to be used to aid him in solving that problem is the scientist concerned therewith, where the tool is a sophisticated, complex instrument, as, for example, an electron microscope.

What kind of scientists are we talking about? We are talking about pathologists, biologists, metallurgists, zoologists, virologists, biophysicists to name but a few users of electron microscopes-all of them specialists and highly qualified.

To substitute the decision of an administrative official for the judgment of such a scientist under these circumstances is highly questionable. In effect, the qualified scientist is told that a Government official knows best which of a number of highly complicated instruments is to be used by a highly specialized and skilled scientist for a particular purpose-in spite of the fact that it is the scientist who is most familiar with the nature of his problem and the complex apparatus available to help him solve it.

Such interference with the scientist's freedom, we submit, is dangerous both as a matter of principle and for the continued effectiveness of research in the United States.

Consequently, it is recommended, as an alternative to the first recommendation, that the application by a recognized, approved non

profit organization for duty-free entry of a certain, particular electron microscope be treated as conclusive evidence that the particular item is, in fact, best suited under all circumstances for the particular purposes of that applicant.

If it is thought desirable, the application by the nonprofit institution may be required to include a statement that the applicant has investigated competing domestic equipment before making the application.

We also feel, Mr. Chairman and Mr. Curtis, that adequate methods exist in the agreement which the bill seeks to implement to afford desired protection for American manufacturers of electron microscopes without resorting to the procedure proposed by H.R. 8664.

The United States is entitled, under the provisions of the reservation contained in the protocol annexed to the agreement which the present bill seeks to implement, to suspend, completely or partially, duty-free entry as to any product covered by the agreement if it is imported into the United States in such relatively increased quantities and under such conditions as to cause, or to merely threaten, serious injury to the American industry producing a like or directly competitive product.

It is believed that the U.S. Government would have ample safeguards at its command to protect itself and American manufacturers by suspending duty-free entry of scientific equipment, if a fair hearing establishes at any time that serious injury is caused or threatened to be caused to American industry as specified in the protocol to the Florence agreement.

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Lastly, Mr. Chairman and Mr. Curtis, we fear that enactment of H.R. 8664, as drafted, and without amendment, would lead to the creation of a domestic monopoly in the specific situation of electron microscopes.

If it were to become the law that a nonprofit organization, in order to purchase an electron microscope, must apply to the Secretary of the Treasury, possibly under regulations promulgated by him, who in turn forwards copies of such application-if made in proper form— to the Secretary of Commerce and to the Secretary of Health, Education, and Welfare, with the Secretary of Commerce thereupon publishing a notice in the Federal Register to afford interested parties and additional Government agencies an opportunity to present their views, and with the Secretary thereupon taking into consideration these views and those of the Secretary of Health, Education, and Welfare, making a determination which will-in effect either grant or deny duty-free entry, you will:

(a) Establish a standard which, applied to electron microscopes, is meaningless and fallacious;

(b) Initiate an unwise and dangerous procedure by substituting an administrative decision for a scientific judgment in a complex scientific question;

(c) Cause these undesirable effects on scientific research without any economic necessity therefor; and

(d) Aid and abet in the creation of a monopoly by one of America's corporate giants.

Because, gentlemen, the effect of the provisions of H.R. 8664 and the procedure outlined therein will-as a practical matter-severely

curtail, if not end, importation by nonprofit institutions of electron microscopes.

This will not advance the cause of research in the United States. It will benefit, in fact, no one but a private interest one single American manufacturer, the Radio Corp. of America.

Let it be noted that RCA had total gross sales last year of over $2 billion, and that RCA is estimated to possess about 50 percent, more or less, as its share of the American market of electron microscopes. Surely it is not the intention of this committee to report out a bill which, with respect to electron microscopes, does little or nothing to further the public interest and benefit.

Mr. Chairman, these two physicists, both of them experts, are available for any questions which you or Mr. Curtis may have and they have come here from New York to answer your questions.

I thank you.

Mr. KING. Thank you, Mr. Land.

I think you have previously identified the gentlemen for the record, have you not?

Mr. LAND. I did.

Mr. CURTIS. I have no questions.

I just appreciate your testimony. It is very helpful.

Mr. KING. Thank you, Mr. Land.

Mr. LAND. I have, Mr. Chairman, a list of the individuals, all scientists, who addressed the committee. Should that be made a part of the record?

Mr. KING. Without objection that will be made a part of the record, Mr. Land. Thank you again.

(List follows:)

The following scientists are known to Siemens America, Incorporated to have made their opposition to H.R. 8664 known to the Committee:

Raymond A. Allen, M.D., associate pro- | Hans Ris, professor of zoology, the fessor, Department of Pathology, University of Wisconsin, Madison, University of California, Los An- Wis. geles

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professor of biophysics, the University of Chicago, Chicago, Ill. Isidore Gersh, research professor, the School of Veterinary Medicine, University of Pennsylvania, Philadelphia, Pa.

Phillip J. Halicki, Ph. D., Electron Microscope Laboratory, Scripps Institution of Oceanography, University of California, San Diego, Calif. James H. MacAlear, Ph. D., executive officer, Electron Microscope Laboratory, University of California, Berkeley, Calif.

Frank A. Pepe, associate professor of anatomy, the School of Medicine, University of Pennsylvania, Philadelphia, Pa.

B. E. F. Reimann, Dr. rer, nat., Electron
Microscope Laboratory, University
of California.

Abel L. Robertson, M.D. Ph. D., pro-
fessor of experimental pathology,
Cleveland Clinic Foundation.
Dr. Werner Schreil, University of
Rochester, N.Y.

George D. Sorenson, M.D., assistant
professor of pathology, School of
Medicine, Washington University,
St. Louis, Mo.

Gareth Thomas, associate professor of
metallurgy, Department of Mineral
Technology, University of California,
Berkeley, Calif.

Dorothy F. Travis, Ph. D., research
associate, Orthopedic Research Lab-
oratories, Massachusetts General
Hospital, Boston, Mass.

Robley C. Williams, chairman, Department of Molecular Biology and associate director, Virus Laboratory, University of California, Berkeley, Calif.

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