Section 182 (b), providing for due notice to the public before the issuance of any license for utilization or production facilities which generate commercial power is lacking as to both breadth of notice required and provision of specific procedures in connection with license applications to assure full protection of the rights of interested parties. It also lacks specific recognition of those interests whose rights may be affected by Commission action or whose participation may be in the public interest.

To cure these deficiencies, where generation of nuclear-electric power is the primary purpose involved, we believe the section should be amended to provide that notice of applications shall also be sent to municipalities, and to public and cooperative electric systems within transmission distance; that, in case of protests, conflicting applications, or proposals for special conditions, interested parties shall be accorded opportunity for intervention, hearing, petition for rehearing, and appeal, in general accord with the procedures now prevailing under Federal power legislation; and that the Commission may admit as parties interested States, State commissions, municipalities, public and cooperative electric systems, or representatives of interested consumers or security holders, or any competitor of a party to such proceedings, or any other person whose participation may be in the public interest.

Section 182 (c), providing for preferred consideration to applications for facilities which will be located in highcost power areas in the United States, lacks a similar provision which has been the policy of the Government since the Federal Power Act became law in 1920, according preferred consideration to public bodies where their applications conflict with those of privately owned systems. We believe this lack should be overcome to bring the section into line with established Federal power policy.

Section 183, providing specific terms which must be included in licenses for the ownership and operation of facilities for the utilization or production of special nuclear material or atomic energy, is completely lacking in provision for Federal accounting control of licensees where such licenses are not also engaged in the transmission of electricity or sale of electricity in interstate commerce for resale. Such accounting control should be vested in the Federal Power Commission which is responsible for such regulation over licensees for hydroelectric power developments, and is provided for, with enforcement authority, in sections 301, 302, 304, and 306 of the Federal Power Act. We believe that the bill should be amended to make these sections applicable to licensees for atomic power development.

Section 185, providing for the issuance of construction permits to applicants whose applications are otherwise satisfactory to the Commission, should be specifically subject to the same procedural safeguards, assuring interested parties full opportunity for notice, hearing, and appeal before issuance, as are provided in connection with the issuance

of licenses under section 182. We believe that the section should be amended to make the same procedure specified in section 182 mandatory before construction permits are issued.

The parallels between electrical energy from nuclear and hydropower sources were called to the attention of the committee in earlier hearings during the summer of 1953 by a member of the Federal Power Commission and again during the present hearings by Chairman Kuykendall of the Federal Power Commission, who supplied a detailed analysis of pending atomic energy legislation. This material will be found in lation. This material will be found in part II of the committee's recent hearings at pages 1124 through 1133.

In view of the Federal proprietary interest and congressional authority in the field of atomic energy, the Federal Power Commission observes:

It becomes pertinent to test any legislative proposals with respect to non-Federal development of atomic energy to see whether the public interest in atomic energy is protected and benefited as adequately as the Congress of an earlier generation sought to do for the Nation's interest in waterpower (p. 1128).

eral construction and operation of nuclear powerplants where required in connection with Federal regional programs.

The Electric Power Liaison Committee might well be composed of one representative each of the Federal Power Commission, the Securities and Exchange Commission, the Rural Electrification Administration, the Tennessee Valley Authority, The Bureau of Reclamation, the Bonneville Power Administration, the Southwest Power Administration, the Southeast Power Administration, and the Corps of Engineers, with an independent chairman appointed by the President, by and with the consent of the Senate, serving at the pleasure of the President.

This committee would advise with the Atomic Energy Commission in connection with all activities directed at the development of development of power from nuclear energy with a view to assuring its maximum contribution to the general welfare. Such advice would include assistance in the formulation of standards as

specific problems arise. But depend

ence on ad hoc decisions alone for the determination of standards affecting the

The grant of the (license) privilege should depend not solely on the negative consideration that national defense will not be harmed, but on the affirmative ground of benefit to the public interest in electric power and other products of the operation of nuclear reactors as well (ibid.).

Unfortunately, the present bill, reflects nothing of this advice from the Nation's outstanding independent power agency, but relies mainly on negative considerations in licensing. The analysis of the Federal Power Commission is sufficient to indicate that the bill is still complete, so far as it comes within the scope of power policy.

9. NEED FOR A DIVISION OF CIVILIAN POWER
APPLICATION

Our concern goes not alone to the omission of public interest safeguards in omission of public interest safeguards in power licensing. If the use of nuclear energy as a source of commercial electric power is to be accorded the consideration which its importance warrants, this which its importance warrants, this should be reflected in the statutory organization of the Commission. It cannot be left wholly to the discretion of the Commission which may be at any given time, and is now, weighted in favor of playing down the Government responsibilities in this field.

Specifically, we believe there should be a statutory Division of Civilian Power be a statutory Division of Civilian Power Application, counterbalancing the statutory Division of Military Application, with positive responsibility for the commercial development of nuclear electric power by Federal or non-Federal public and private agencies.

There should also be an Electric Power Liaison Committee, corresponding with the Military Liaison Committee, with provision for full cooperation between the Atomic Energy Commission and those Federal agencies responsibile for carrying out other phases of Federal power policy. This would provide a basis, now lacking in the bill, for Fed

and use would be unsatisfactory in the extreme. It is for this reason that we favor amendments which would authorize and direct the Division of Civilian Power Application and the Federal Power Commission, in their respective spheres, to apply substantially the same public interest safeguards in connection with the licensing of atomic powerplants as are applied in licensing hydroelectric developments under the Federal Power Act.

The Nation's interest in ample supplies of low-cost electric power to meet the requirements of an expanding economy is great. It reaches into every farm home and commercial or industrial establishment. It makes the difference between vigorous and retarded regional development. It is a vital factor in the economical operation of farms. It contributes to continually rising living standards. All this has been emphasized in many official reports, including that of the President's Materials Policy Commission, which made an exhaustive analysis of the future requirements of our civilization.

The quality of the legislation which opens the atomic-energy resource to development as a part of the country's total energy economy will have a profound effect on the attainment of these goals. We are convinced that enactment of the present bill without mature consideration of the changes which we propose would be a disservice to the people of the United States. No delay required to perfect the bill to meet the requirements of the general welfare could result in a minute fraction of the losses that would inevitably follow an illconsidered transfer of atomic-power development to private monopoly.

10. PASSING THE BUCK ON MONOPOLY
PREVENTION

The fact that electrical utilities are more or less natural monopolies in the areas they serve makes it unlikely that

the antitrust provisions in section 105 of the bill will have any important bearing on the licensing of utilities for atomic power production and distribution. Indeed that section empowers the Atomic Energy Commission, with the approval of the Attorney General, to exempt such classes or types of licenses as it may determine would not significantly affect the licensee's activities under the antitrust laws.

With regard to the provisions of section 105 generally, we believe it is a mistake to relieve the Commission of the affirmative responsibility contained in the McMahon Act, and deleted in this bill, to exercise its licensing authority in a manner to prevent the growth of monopoly or restraint of trade. Section Section 7 (c) of the McMahon Act reads in part: Where activities under any license might

serve to maintain or to foster the growth of monopoly, restraint of trade, unlawful com

petition, or other trade position inimical to the entry of new, freely competitive enterprises in the field, the Commission is authorized and directed to refuse to issue such license or to establish such conditions to

prevent these results as the Commission, in consultation with the Attorney General, may determine. The Commission shall report

promptly to the Attorney General any infor

mation it may have with respect to any util

ization of fissionable material or atomic energy which appears to have these results.

Section 105a of H. R. 9757 would per

mit the Commission to suspend or revoke a license only after a court of competent jurisdiction has found a licensee to be guilty of violating the antitrust laws. It seems to us that here the Commission

locks the barn after the horse is stolen. In a new, developing field of industrial endeavor, resort to the cumbersome and protracted procedures, sometimes extending over many years, which eventuate in final adjudication of antitrust violations, can have little effect in assuring the maintenance of free competitive enterprise.

Section 105c of the bill does add a procedure whereby some preventive action can be taken against monopoly or restraint of trade. It is left to the Attor

ney General or the Federal Trade Commission to determine whether "the proposed license would tend to create or maintain a situation inconsistent with the antitrust laws." In the event of such a determination, the applicant is permitted to file a petition with the Federal Trade Commission for a hearing, and if the Commission finds adversely, the applicant would have recourse to the

courts.

We are uncertain as to the legal effect of a court finding which would put an applicant in a position "inconsistent with the antitrust laws" without necessarily being guilty of violating the antitrust laws. In any event, we see little validity in the arguments which led the sponsors of the bill to relieve the Atomic Energy Commission of the affirmative responsibility cited above.

A review of Federal statutes demonstrates rather convincingly that many departments and agencies of the Federal Government are charged by law with such positive responsibility and authority to prevent or discourage monopoly or

other restraints of trade, or to actively promote competition and participation by small business, in various fields of endeavor. It is specious reasoning, in our opinion, to say that the Atomic Energy Commission, as the agency charged with the administration of the atomic energy program, should pass wholly on to others the responsibility for taking steps to insure equality of opportunity by all businesses, large and small, to participate in that program and to share the privileges and benefits arising from it.

11. LIMITING ACCESS TO PATENTS

the Congress in legislating patent privileges.

The committee has reverted substantially to the position taken by President Eisenhower when he said in his message of February 17, 1954, to Congress:

Until industrial participation in the utilization of atomic energy acquires a broader base, considerations of fairness require some

mechanism to assure that the limited number of companies, which as Government con

tractors now have access to the program, cannot build a patent monopoly which would exclude others desiring to enter the field. I hope that participation in the development of atomic power will have broadened sufficiently in the next 5 years to remove the need for such provisions.

or discoveries.

The patent question is one of the most controversial in the atomic-energy field. It arose in the very beginning, when the drafters of the McMahon Act decided to make an outright ban on patents for inventions or discoveries which concerned the production of fissionable material or

the utilization of such material in atomic

weapons. In the nonmilitary field patents could be granted, but were subject to a public-interest declaration under stated conditions, in which case the Atomic Energy Commission and its

licensees automatically were entitled to their use, with reasonable compensation to the owner. This constituted a form of compulsory patent licensing.

Since the licensing provisions of the McMahon Act were never utilized, and the Commission acquired practically all of its patents through arrangements with its contractors, who were operating with public funds, the public-interest provision remained a dead letter. It is this feature which H. R. 9757 adopts with modifications, broadening the permissible area of private patenting and authorizing others to have access to the patented inventions or discoveries under

certain conditions.

An earlier version of the pending bill proposed to remove the ban on patents in the production of special-fissionable-material, whether for industrial or weapons uses, leaving only the patent weapons uses, leaving only the patent ban on utilization of special material in an atomic weapon. The provision for The provision for public-interest declarations also was eliminated, in effect opening up the whole nonmilitary atomic-energy field and part of the military-for private patenting without any obligation to license others in the use of the patented inventions or discoveries.

We commend the committee majority for withdrawing those earlier provisions and for recognizing in the report-page 9-that the dangers of restrictive patent practices are present because few firms may be involved in the atomic-energy program for the immediate future. The fact that a few large industrial corporations, as contractors to the Atomic Energy Commission, have acquired an overwhelming head start on would-be competitors by virtue of technical knowhow acquired on the inside is enough to warrant the utmost care on the part of

While we believe that the President's proposal for compulsory patent licens

ested industrial concerns are on a more equal footing in their acquisition of skills and experience in atomic technology, we believe both the President and the sponsors of this bill are unduly optimistic in the hope that a period of 5 years will suffice to reach that stage. It will take at least 5 years to construct a sufficient number of reactors for making comparative evaluations of performance, and it will take at least 5 years more to accumulate the economic and engineering data for these evaluations.

The Congress would be better advised, as an able patent attorney and former deputy general counsel of the Atomic Energy Commission testified before the committee, to strike the September 1, 1959, termination date and leave open the time for legislative removal of compulsory licensing. The Congress could then enact the necessary legislation at

such time as a broadened industrial base for atomic energy became evident. At the very minimum the period of compul

sory patent licensing should extend for

10 years.

The question next arises whether the language of the bill is designed to make effective the compulsory licensing of patents or whether it is designed to make

this process difficult and unusual. Although it is not easy to judge the effect of the prolix and unduly cumbersome provisions in this regard, we are inclined to the conclusion that the compulsory licensing provision is an extremely limited guaranty of accessibility to patented inventions.

Perhaps the simplest way to establish compulsory licensing would have been to

carry over the provision in section 11 (c)

(2) of the McMahon Act which provides that whenever any patent is declared by the Atomic Energy Commission to be affected with the public interest, not only is the Commission automatically licensed to use the invention or discovery covered by the patent-a provision retained in the present bill-but any person licensed by the Commission automatically is licensed to use the invention or discovery covered by the patent.

Under section 152 of the pending bill, whenever a patent has been declared affected with the public interest, the Commission automatically is licensed to use the invention or discovery covered by such patent, but another person desiring to use the patented invention

or discovery must apply to the Commission for a patent license, which shall be granted to the extent that the Commission finds that the invention or discovery is of primary importance to the conduct of an activity by such person authorized under the act.

In other words, the initiative and the burden of proof now would lie with the applicant who must demonstrate to the satisfaction of the Commission that the use of the invention or discovery is of primary importance to his business. The limiting aspect of this requirement was brought to the attention of the committee in earlier hearings by Caspar Ooms, a patent attorney, formerly United formerly United States Patent Commisioner and chairman of the AEC Patent Compensation Board. Mr. Ooms, who suggested patent revisions in the McMahon Act very similar to those now embodied in H. R. 9757, testified before the committee last July; pages 458-459, that by eliminating the automatic licensing feature of the McMahon Act even though a patent is declared affected with a public interest:

Each applicant for a license must demonstrate separately that the license is necessary to effectuate the policies and purposes of the act. This restriction is maintained to make the invocation of this licensing power an exception and an infrequently used device. It is intended to guard against the fear that the inventor who is willing to devote his resources to making developments in this field would be compelled to share his contributions with his competitors and to insure that he will be required to give licenses only in the extreme and infrequent situation where that is necessary to accomplish the designs of this legislation.

Before a patent reaches the stage of being declared affected with the public interest, several other conditions are interposed by H. R. 9757. In the first place the patent owner is entitled to a hearing before such declaration. Presumably he could present arguments why the patent should be withheld from the public interest sphere, and if overruled, could appeal to the courts under the Administrative Procedure Act, as provided in section 181. Court action, conceivCourt action, conceivably, could consume a goodly portion of the 5-year period in which the compulsory licensing requirement obtains.

Secondly, declaring a patent "to be affected with the public interest" would be optional or discretionary with the Atomic Energy Commission, whereas under the McMahon Act the declaration is mandatory provided two conditions are met. The pertinent provision of the McMahon Act follows:

(1) It shall be the duty of the Commission to declare any patent to be affected with the public interest if (A) the invention or discovery covered by the patent utilizes or is essential in the utilization of fissionable material or atomic energy; and (B) the licensing of such invention or discovery under this subsection is necessary to effectuate the policies and purposes of this act.

In contrast, section 152a of the pending bill provides:

The Commission may, after giving the patent owner an opportunity for a hearing, declare any patent to be affected with the public interest if: (1) the invention or discovery covered by the patent is of primary importance in the production or utilization

of special nuclear material or atomic energy; and (2) the licensing of such invention or discovery under this section is of primary importance to effectuate the policies and purposes of this act.

It will be noted that under the present bill the concept of "primary importance" applies to two conditions, whereas in the McMahon Act the mere fact of utilizing fissionable material or atomic energy satisfies one of the conditions. Under the present bill, conceivably, the Atomic Energy Commission could decide that an invention or discovery is of primary importance in the atomic-energy field but is not of primary importance to effectuate the purposes of the act. "Primary importance" is a strong phrase, and its importance" is a strong phrase, and its strength is doubled in section 152a of the strength is doubled in section 152a of the bill. We can conceive that many inventions or discoveries would not meet the double-strength criterion and yet be important.

Furthermore, it must be borne in mind that what may be of primary importance to the small business may not be of primary importance to the Atomic Energy Commission or to the atomic-energy field generally.

If the "public interest" feature of the patent survives the objection of the owner and the hearing procedure, and meets the double test of primary importance under section 152a, then a person may apply for a license under 152b, which requires still a third test of primary importance.

In the event the Commission fails to make a "public interest" declaration, prospective or actual licensees or persons otherwise authorized may apply to the Commission under section 152c for a patent license for the use of a patented invention or discovery. The Commission then undertakes to hold a hearing sion then undertakes to hold a hearing within 60 days-section 152d-and must issue the license-section 152e-if it finds that the invention or discovery meets three tests of "primary importance" and an additional condition.

The application that can survive this procedure will be an impressive one indeed. The patent attorneys may derive more satisfaction from section 152 than the would-be user of the invention.

In issuing a patent license under section 152e, the "primary importance" of which is triple-tested, still the Commission itself would not be automatically licensed to use the invention or discovery.

We believe the same privilege of automatic licensing for Commission use should apply here as in the case of "public interest" patents under section 152b.

In the event the Commission turns down a patent license application for failing to meet the three primary importance criteria under sections 152a and 152b, it is unlikely that a license application for the same invention or discovery under section 152c would ever come within reach of meeting the three primary importance criteria of section 152e. The unlikelihood is the more apparent in case two or more applicants desire the use of the same patented invention, for the Commission would then be faced with the dubious proposition under section 152e (3) that the use by each is "of primary importance to the

Failure to enact this provision undoubtedly would be a deterrent to research. It would appear that those desiring to utilize patented inventions or discoveries in research would have to go through the cumbersome procedures of applying for a patent license under section 152 c, d, e, f, and g. The elimination of this patent ban in research, for reasons which are not clear to us, is contrary to the recommendations of the Atomic Energy Commission. We believe the provisions should be reinstated.

Other questionable features in the patent sections we note as follows:

While patents are banned in the case of inventions or discoveries useful solely in the utilization of special nuclear material or atomic energy in an atomic weapon, they are not banned in the production of such material. Since special nuclear material can be utilized both for weapons and nonweapons, apparently a producer of such material could get a patent on basic production processes whether the material is used for weapons or not. We do not believe that the area of patentability should extend to inventions or discoveries that affect the weapons field.

Although drastic penalties are provided for violations of certain provisions in the bill, no penalty is provided for failing to report inventions or discoveries under section 151c, which could involve matters of strategic significance to the atomic-energy program.

The Patent Compensation Advisory Board, created under section 156a, being advisory only, apparently could not be delegated authority to make final decisions, as under the McMahon Act, in the event the Commission found itself bogged down with matters of compensation, awards, and royalties to the detriment of major responsibilities.

12. BUILT-IN SUBSIDY FEATURE

Section 2h of the bill makes this finding:

It is essential to the common defense and security of the United States that title to all special nuclear material be in the United States while such special nuclear material is within the United States.

Accepting as fundamental to the legislation this finding, which is implemented in section 52 and other sections of the bill, nevertheless we wish to point out some of its implications for the development of atomic-energy enterprise.

What this bill proposes in effect is to relinquish the Federal Government's exclusive ownership rights in the facilities which produce or use nuclear material but to retain its exclusive ownership rights in the material itself. As a consequence, the incidents of private and

public ownership are intermingled in such a way that not only may vexatious problems of administration and accounting control arise, but the private companies licensed for a maximum period of 40 years to own and operate production facilities-atomic reactors-legally can depend on the Government to compensate them adequately for whatever they produce during the life of the license. This constitutes a built-in subsidy for licensed atomic enterprise until about the year 2000 A. D. The subsidy implications have been recognized and objected to by industrial spokesmen appearing before our joint committee.

Since the Government, under the bill, owns any nuclear material which now or may hereafter be produced in privately owned plants, it cannot refuse to take and pay for what is produced. If the Government pays less than the cost of production in a given plant, the action would, in effect, be confiscatory. Therefore, the provision in section 56 of the bill that the Atomic Energy Commission shall pay the same fair price to all licensed producers of the same material means that the highest cost and least efficient producer will set the pace on price schedules.

The fact that the Commission is obligated by the same section to consider the value of the material for official Government use in determining a fair price, constitutes no ground for paying less than it costs to produce the material. Conceivably, by some happy turn of international events, the Government's requirements of material for atomic weapons could be drastically reduced; and new dicoveries of source materials or greatly improved processes of production in the Government's own plants could yield a surplusage of material, reducing its value to the Government to virtually nothing. Still the Government would have to take the material it owns off the hands of private producers at a price fair to them for the 40 years during which they may be licensed to do business.

Even though the Commission can establish guaranteed fair prices for only 7 years at a time, as provided in section 56, the Commission is not thereby relieved of the obligation to pay fair prices throughout the life of the license. If the Commission, to forestall the possibility that it may be saddled in the future with huge amounts of nuclear material it does not need or want, insists on writing into licenses under section 53e or section 183 a cancellation provision against such contingencies, or issues licenses for a much shorter period than 40 years, it is obvious that few firms would be persuaded to enter the field under such uncertainties.

Again, to forestall such conditions, the Commission might easily persuade itself to grant licenses to only a handful of the largest or most efficient producers, thereby denying wide access to competing industrial firms or other interested sectors of industry.

The intertwined complexities implicit in the obligation to compensate producers for the material automatically owned by the Government and to charge

licensed users for such material, create further subsidy possibilities.

Section 53 deals with the Commission as a distributor of special nuclear material to qualified applicants, including licensees under section 103; while sections 52 and 56 deal with the Commission as a purchaser of special nuclear material from licensed producers who produce such material in the burning of the nuclear fuel secured from the Commission. In the first instance, the Commission is authorized to make a reasonable charge; in the second, to pay a fair price. But the vague generalities set up in lieu of standards to guide the Commission in determining both these critical figures leaves a degree of discretion in the administrative body that would enable it to pay considerably more for the production than it charged for the original supply of special nuclear material, thus affording private utilities, let us say, subsidies of undetermined magnitude for their participation in the development of nuclear power. Such subsidies resulting from dual transactions might well escape the public eye.

The Federal Power Commission analysis submitted by Chairman Kuykendall, in pointing out the lack of legislative standards and the subsidy possibilities for electric utilities in the sections discussed immediately above, added this note:

If subsidies are to be permitted, consideration should be given to the question of the desirability of provisions for passing the benefits of such subsidies on to the public. (Hearings, pt. II, p. 1131.)

The legal ramifications of the intermingled incidents of public and private ownership in nuclear-producing facilities have not been explored by the committee. We venture to suggest that private firms, including utilities, may very well find themselves subject to a variety of Federal statutes affecting Government business in private plants, including the Walsh-Healey Act and other labor standards laws, inasmuch as the nuclear material used in their operations will be Government property.

13. OMISSION OF LABOR-MANAGEMENT

PROVISIONS

Labor strikes at the Oak Ridge and Paducah plants of the Atomic Energy Commission at the very time when comprehensive legislation to revise the Atomic Energy Act is before the Congress, serves to highlight an area of legislative concern which the sponsors of islative concern which the sponsors of H. R. 9757 have completely ignored.

Chronic discontent and frequent strife are attributes of employment in atomic occupations. The labor unions in these occupations believe they are unduly handicapped by the use of secrecy and security as a weapon of management to bludgeon their members into submission and to distort or nullify the procedures of collective bargaining. Many union representatives believe, too, that the Atomic Energy Commission has been completely oriented to the management side in labor disputes.

Whether or not legislative provisions can be written to alleviate the persistent sore spots in atomic labor-management relations, certainly the legislation

can at least provide for more effective labor-management representation in the councils of the Atomic Energy Commission. The American Federation of Labor representative who testified before our committee on two separate occasions, has voiced the federation's belief that steps toward this end would have a salutary effect. He also observed-hearings, part I, page 278:

It is worth noting that the membership of the Atomic Energy Commission and other top jobs in that agency have been filled by individuals drawn from the legal profession, Government, business, and finance. Corporation lawyers, investment bankers, Government bureaucrats would seem to be blessed in some mysterious manner with a genius for administering atomic-energy affairs that has been denied to trade-union leaders and officials. We believe that in the ranks of organized labor there are many able and public-spirited administrators who could bring a fresh view to the Atomic Energy Commission and its work and perform a very useful service.

Although the legislation cannot dictate whom the President should appoint to the Commission, at least it can provide for a labor-management advisory committee, coordinate with other advisory committees provided in the bill. Such a committee might well be composed of equal numbers of management and labor representatives, with a public chairman appointed by the President, by and with the consent of the Senate, and serving at the pleasure of the President.

The fields of interest and attention on the part of the labor-management advisory committee would encompass more than assistance in promoting healthier attitudes toward collective bargaining problems in an area hedged in by difficult security requirements.

The whole difficult area of personnel security, which would involve, under this bill, investigations by the Civil Service Commission and the FBI of the character, associations, and loyalty of privately employed persons having access to restricted data, might well come under the continued scrutiny of the labor-management advisory committee.

Assistance could be provided in the application of safety standards, adequate workman's compensation provisions, and other protective measures in licenses for new and hazardous atomic occupations.

Studies and preparatory steps could be undertaken to minimize the impact of atomic enterprises in industries or areas whose populations depend on competing activities for a livelihood. The economic distress of the coal-mining industry, for example, might become even worse by the substitution of atomic fuel for coal in generating electrical power.

The framers of the McMahon Act had such eventualities in mind when they wrote a requirement for the 7 (b) report discussed above. The special Senate Committee on Atomic Energy reported in 1946-79th Congress, 2d session, Senate Report No. 1211, page 20:

The committee is aware, nonetheless, that the sudden introduction of certain devices utilizing the power released by nuclear fission might precipitate profound economic

disorganization. Great industrial installations representing nationwide investments, employing many thousands of workers, might be rendered obsolete.

14. COMPLICATING INTERNATIONAL

ARRANGEMENTS

We stated at the outset our conviction that international matters relating to atomic energy would be better treated in legislation separate from that which seeks to open the atomic field to domestic private enterprise and profit-making opportunities. Our dependence on foreign sources of uranium, our mutual defense requirements, our moral and economic obligations to assist less privileged nations, our never-ending search for world peace-all these would seem to pose problems of an order and magnitude that press more urgently for solution than how to make a profit from the atom.

Some years ago our Government outlined a plan for the international control of atomic weapons. The plan embraced procedures, carefully drawn, to provide for the gradual transfer of our atomic facilities to international control without endangering national security. It was conceived that the international atomic authority would maintain an inspection system to make sure that no nation would deviate from the control arrangements for aggressive ends.

The Soviets would have no part of this plan. In those days, especially before they had atomic weapons, they insisted that such weapons be banned outright by treaty rather than put under the control of an international authority. Nor did they take kindly to the idea of inspectors coming behind the Iron Curtain. In the face of persistent and stubborn refusal by Soviet Russia to consider a control agency, our plan became dormant.

But the United States has never abandoned as a stated policy its willingness to participate in a really effective program of atomic armament control. The goal may be too remote for achievement in our time, but certainly we should do nothing to throw obstacles in the way of that achievement. Whether the creation of vested ownership rights in atomic facilities by private persons will narrow our opportunities to negotiate in matters which may determine the life or death of civilized society is a question deserving of our most earnest consideration.

When President Eisenhower proposed in an address to the United Nations General Assembly the creation of an international agency to develop peacetime uses of atomic energy, new hope was kindled among peoples everywhere that somehow this might be a vehicle for promoting world peace. Even the Soviets did not dare to ignore the compelling force of this appeal for cooperative peaceful endeavor.

Reportedly, our Secretary of State entered into preliminary discussions with the Soviets on the President's proposal. So far as we know, nothing productive resulted from those meetings. Although the dismal record of Soviet intransigeance leaves little to hope for, we see nothing to be gained by clothing the door entirely to possible participation by

Section 124 of the bill would seem to close that door. Whereas the President would be authorized to enter into an international arrangement with a group of nations providing for international cooperation in the nonmilitary applications of atomic energy, and to cooperate with that group in specific atomic endeavor, the proviso is entered that the cooperation must accord with the conditions presented in section 123.

: Section 123 requires that agreements for cooperation cannot be undertaken until a series of conditions are fulfilled until a series of conditions are fulfilled by the other nation or nations involved, including acceptable security safeguards and standards. It would be utterly unrealistic to suppose that Soviet Russia could ever comply with the security and other requirements laid down in section 123, even though the atomic pool is intended for nonmilitary uses.

The international atomic pool provision comprising section 124 seems to be a last-minute insertion to suggest that the bill is intended to implement President Eisenhower's proposal. Actually, the legislative requirements, if any, of the atomic pool proposal never have been communicated to us. President Eisenhower in his February 17 message to the Congress making recommendations for legislation to facilitate cooperation in atomic affairs with other nations, stated as follows:

These recommendations are apart from my proposal to seek a new basis for international cooperation in the field of atomic energy as outlined in my address before the General Assembly of the United Nations last December. Consideration of additional legislation which may be needed to implement that proposal should await the development of areas of agreement as a result of our discussions with other nations. (83d Cong., 2d sess., House Doc. No. 328, p. 4.)

Not only would section 124 preclude the "new basis for international cooperathe "new basis for international cooperation" which the President seeks; the wording of the section is confusing and self-contradictory. It would authorize the President to enter an international arrangement, which by definition in section 11k excludes any agreement for cooperation; and yet section 124 requires that an agreement for cooperation is necessary if the desired cooperation is to

be exercised.

The United States might very well find itself in the position under section 124 of consummating agreements with other nations without being able to exercise the cooperation promised by the agreement unless such cooperation conformed rigidly to the formula contained in section 123.

If the contention is that the President could further the atomic pool idea by the conventional treaty route, or by an international agreement-which requires approval by both Houses of Congress under the bill-independent of section 124, then it is difficult to see what purpose the then it is difficult to see what purpose the section serves, except a restrictive one.

The President has broad authority now to negotiate treaties under the Constitution. Section 124 attempts to prescribe a rigid and more restrictive formula of negotiation upon the President and his

negotiate treaties in our opinion should be left unfettered, subject always, of course, to Senate debate and final ratification.

No additional authority is conferred upon the President by the second method embodied in the term "international arrangement,” i. e., “international agreement." The President already has the right to send to Congress any international agreement for legislative approval.

Section 124 on its face seems to authorize the President to "enter into an international arrangement with a group of nations," but the proviso requires compliance with the provisions of section 123, which provides for bilateral agreement only between the United States and an individual nation on all peacetime exchange of nuclear material or nuclear information. The reference therefore to a "group of nations" is misleading because of the proviso. Again it is restrictive and inflexible rather than helpful. It could prove to be embarrassing.

proposal evidently contemplated a single While President Eisenhower's original international atomic pool for peacetime purposes under one universal agreement, our country may be obliged, or may wish, to proceed by smaller group or regional stages, particularly in view of the Soviet Union's negative response. If the negotiations must be undertaken through a bilateral approach, then the language of section 124 which on its face indicates a multilateral agreement, again becomes ambiguous and restrictive on the President.

Section 124 appears to us a premature attempt to legislate in a delicate field where international diplomatic negotiations are pending, and it conflicts with the President's admonition in his message to the Congress that legislation to implement the atomic pool proposal "should await the development of areas of agreement as a result of our discussions with other nations.”

Section 123, which sets forth a method of cooperation other than treaties or international agreements, is the principal section of the bill dealing with the authority of the President to make executive agreements on the international plane. The President cannot make any such agreement unless it is approved by the Atomic Energy Commission or in case of agreements relating to defense and military matters, by the Department of Defense. Note that the Atomic Energy Commission is an independent agency whose members serve, not at the pleasure of the President, but for a fixed statutory term.

We seriously question the subordination of the President's authority in the conduct of foreign affairs to the judgment of officials who may not be in a position to weigh the importance of countervailing risks, as is the President. In the present juncture of world affairs it cannot be assumed in case of doubt that no agreement is preferable to the only obtainable agreement, even though the obtainable agreement has not all the provisions which those charged with the technical judgments would like it to