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lb CHAPTER V11 CONTROL OF RESEARCH EXPENDITURES IN INDUSTRIAL LABORATORIES The material on which this section is based is largely that collected by Mr. Maurice Holland of the Engineering Division of the National Research Council in a survey of the research laboratories of the American Telephone and Telegraph and the Western Electric Com- panies, the General Electric Company laboratories at Lynn and at Schenectady, the Dupont laboratories, and the Edison laboratories, This information which Mr. Holland kindly placed at the disposal of the writer was supplemented by conference with Mr. Edward B. Craft, Chief Engineer of the Western Electric Company in charge of the Bell System laboratories; and by correspondence with Dr. S. E. Sheppard of the Kodak Company laboratory at Rochester, New York. As the Thomas A. Edison laboratories center about Mr. Edison personally, the following paragraphs, which undertake to give some general conclusions on the methods of financial control of the indus- trial laboratory, do not include those laboratories. Research in industrial laboratories is projected on a scale far greater than that found in any one state government, and probably greater than in all of them combined. The annual expenditures for research in the principal industrial laboratories range from one million to ten million dollars. While state research is figured in terms of thousands of dollars, industrial research is figured in terms of millions. The Telephone research laboratories occupy the whole of a thirteen-story building in New York, comprising a floor area of 400,000 square feet. The personnel is made up of more than three thousand workers, of whom about sixteen hundred are scientists, engineers, and technicians, the remainder draftsmen and other assistants.44 Industrial research has been accepted by the great corporations as an indispensable element of their business organization. It has proved its value in the financial return which comes from the investment. In this respect it occupies a more favorable position than research in state governments, where the financial return from support of research laboratories is evident only in indirect results which cannot readily 44A description of this laboratory may be found in an article by E. B. Craft, The Bell System Research Laboratories, in Electrical Communication, vol. II, no. 3, pp. 153-163, January, 1924. 114

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IN STATE GOVERNMENTS 115 be figured. Boards of directors appropriate for research as they appro- priate for maintenance of a sales or production force. In-the industrial laboratory there is a fairly sharp separation of the scientific and administrative phases. The head of the laboratory is usually a scientist who devotes himself almost exclusively to the con- duct and supervision of scientific investigation. The assistant director of the laboratory is usually also a man of scientific training, but he gives his attention primarily to matters of administrative concern, such as the recruitment of personnel, the making of the budget, assignment of space, handling of supplies and materials, and similar work. It is generally accepted that the two types of work call for different types of mind. The industrial laboratories are financed by the manufacturing units or by the affiliated corporations which support the laboratories. In every case there is a reasonably well-defined yearly program which is the basis of the budget estimates. The budget is made up usually by the administrative head of the laboratory and before being sent to the Board of Directors is submitted to a high administrative officer or committee for approval. It is usually based on past expenditures with such additions as seem desirable; the largest item is naturally personal service. The choice of projects is determined in; part by problems arising in the field. The laboratories exist for the purpose of improvement of the processes involved in each case, and their work is naturally directed either to eradication of defects in service or to economies in production or operation, although much attention is necessarily given to new discoveries. Priority of projects is usually determined by the head of the laboratory; but in the case of the American Tele- phone laboratories it is determined by Mr. J. J. Carty, Vice-President in charge of research and development. Authorization for the use of funds set aside for research is usually made by an administrative authority outside of the laboratory. In the case of the General Electric Company this authority is an Engi- neering Committee; in the Telephone Company it is the Department of Research and Development, of which Mr. J. J. Carty is the vice- president in charge. Special authorization is uniformly required for an increase of funds over the original estimate; but in no case is a project limited to this estimate. A record of expenditures is frequently kept against the per cent completion of various projects. Purchasing of general supplies is usually handled by the Purchasing Department; special equipment and supplies are ordinarily purchased directly by the laboratory. Much of the special apparatus is constructed by the laboratory itself. .

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116 FINANCIAL CONTROL OF RESEARCH The question of printing is not a problem with the industrial labora- tory. In many cases publicity is not desired or permitted; in other cases the professional journals carry the results of the experiments. The technical personnel is drawn from the various technical insti- tutions, scientific and engineering societies and from recognized spe- cialists in different fields. The professional requirements are ordi- narily fixed by the administrative head of the laboratory. Promotion is usually wholly from within the service by successive stages, but there exists no rigid classification. Salaries are adjusted to the special circumstances that may prevail. The range of salaries is much wider than in either the State Bureau or the University. The qualifications of candidates for research positions are passed on both by the director of the laboratory and by the administrative head, and sometimes by the group leader with whom the candidate will work. In general it may be said that research is organized much more effectively in industry than in state government. The idea of research is accepted in industry as an indispensable adjunct to the business and is supported on a much more generous scale than in government. Salaries are higher, there is wider opportunity for promotion and advancement, and there exists an esprit de corps which comes from a large group of highly trained men engaged in research work. In the industrial laboratory the petty irritations which loom perhaps too high in state government are largely absent. The necessity for an annual or biennial appearance in search of funds before a body of laymen, or before politicians, does not exist. Administrative and scientific work are much more edectively separated. Nor is the industrial laboratory hampered by any of the public responsibilities in the way of regulating conduct which sometimes fall to the government labora- tory; and the equipment of the industrial laboratory on a scale which the government laboratory cannot parallel.