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Systems engineering is not an inexpensive way to solve problems. The State of California paid $100,000 for each of its four studies. I am advised that this same amount in the Apollo project bought no more than a calculation of the velocity Apollo will need to escape the gravity of earth. I think it should be noted, also, that all four of these companies made substantial investments of their own funds in our projects.

But while the short-term cost of systems development is high, our studies indicate tremendous long-term savings.

In waste management, for example, it would cost $100 million to develop a new system. The new system would cost $1,500 million a year to operate, as against a $1 billion yearly cost for present methods. But we would have a net gain of some $3 billion a year because we would cut the damage caused by pollution.

In data collection, we would spend $130 million over a 10-year period to develop a new system. But the system would cut Čalifornia's paperwork bill by three times that much in its first year of operation.

As a matter of national policy, the Federal Government has invested some $22 billion over the last 9 years in the race for space, which gives us some relationship. It puts in perspective some of the things that you are seeking with your bill. In doing so it has concentrated more research scientists and engineers in the aircraft and missile complex than exist in all of the chemical, drug, petroleum, motor vehicle, rubber, and machinery industries combined. The scientists of the space industry have demonstrated that their talents can serve causes other than space.

I submit that the engineering needs in other fields where the broad public welfare is at stake are as urgent as those in space. And I agree with Senator Nelson's thesis that we have the scientific manpower to pursue a guns-and-butter policy, if necessary.

When I appeared before your committee in July of this year with the first preliminary report on California's aerospace studies, I said that over the centuries men have stumbled on new minerals and new techniques and then hunted for a way to use them.

These studies make it clear that we have progressed to a point where we can reverse that process. We can now decide what must be done to cope with a problem facing man and design a system to do it. This is, in my opinion, an exciting turning point in man's history.

Thank you very much.
Senator NELSON. Thank you, Governor Brown.

I neglected to mention before you started your testimony that we have on my far right Mr. Millenson, who is minority clerk of the Senate Committee on Labor and Welfare, and he is here today representing Senator Javits, of New York, who was unable to be here and is a member of this subcommittee.

Governor Brown. May I introduce Harold Walt, deputy director for the California Department of Finance, who is in charge of this planning program for the State of California.

Senator NELSON. You stated that you spend $300 million a year in waste disposal. Is any of that being spent for research?

Governor BROWN. I don't know whether this is included within that figure, whether any moneys are being spent on research, but we are taking advantage of many of the Federal programs in connection with research. We are doing research at the University of California.

In the smog program, for example, we have a research program here in Los Angeles. We have one at the University of California. Our air quality studies are being researched.

In water pollution, in connection with the building of this great water project, the legislature has authorized a substantial sum of money for research on the effect of this new program on water pollution in San Francisco Bay.

I can't give you those figures. Maybe Mr. Walt can help me. Can you give me that?

Mr. Walt. Senator, $300,000,000 does include a great deal of research on air, water, gases and pollution. The university, as the Governor said, is primarily responsible for this, but we have our water quality control board interest sources, an agency in the State also working on this and perhaps a third of this magnitude is devoted to power research.

I might say the professionals in this field welcome the new approach offered by Xerojet-General Corp. in their study, and the study is really a combination of the efforts of the systems engineers, the water and waste specialists, and the State government. Together they work to produce a product none could produce individually.

Senator NELSON. I think in that project the waste management study is a classic case of using this kind of a method. People raise the question all of the time about

the cost. The testimony before the Subcommittee on Air and Water Pollution, of which I was a member for 2 years, is that air pollution is doing $11 billion damage in this country, so we could well afford to put a few billion into research for purposes of prevention.

I think most people who have not given consideration to this kind of approach to the problem don't recognize that until you have a total evaluation of all of the courses of pollution this country-air and water and pesticides, and any other—plus the evaluation of the cost to the country of permitting pollution to continue to damage resources as a consequence, and until you have an estimate of what it would cost to eliminate the pollution by bringing all of industry and all of the municipalities and the treatment of this pollution to the highest state of the art, and then until you have made a massive investment in research in all fields for new methods and techniques for disposals of wastes and neutralizing the effect of wastes, and until that has been done by a very careful method of systems analysis, we aren't prepared to proceed. And it doesn't do any good for us to take the pollutants out or the air and put them in the water.

It doesn't do for St. Louis to clean up the water they take from the Mississippi when all of the water above them also is polluted.

I think the finest example of this case is where the techniques of the systems analysis and engineering can be applied in order to give us the basic information necessary to have some judgment of the scope of the problems that confront us, and then the information necessary to work out some techniques to meet the problem.

Governor Brown. I agree with you 100 percent. Let me give you one specific example here in California : We have this smog situation here on which we have made great progress. Every automobile sold

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in California this year must have an exhaust device; they must have it on their crankcase. Every used car that is transferred must have it on its crankcase. It is an industrial waste we have cut down, but in order to really get rid of 70 percent, according to the studies, it will cost $65 for every used car in the State plus an installation fee. The device would cost $65 and probably an inspection fee.

So you take the 9 million automobiles in the State of California and take, say, $100, to each one of those cars of our State, and this is $900 million that we will pay to get rid of smog in the State of California.

Now, it is entirely possible that there is some other form of engine that could be developed with that $900 million; possibly an electric engine of some kind. I don't know what it is, but I think you have to think in terms, not of the next year or 5 years, to get rid of this situation, because your automobiles are going to continue, and that 30 percent will still be there, and pretty soon, with new automobiles whatever we eliminated we will accumulate from the new cars that are coming in. So over the next 20 to 25 years we may have revolutionized the type of gasoline engine we have at the present time, in order to avoid pollution of the atmosphere.

So these are things we are going to have to study, and I think that study on waste disposal pointed that out very well.

Senator NELSON. I think you are certainly correct. There has been very inadequate research in the field of the control of exhaust from automobiles. Maybe with some extensive research you may solve, totally solve, the problem.

On the pollution there might be a combination of an internal combustion engine. Obviously, they are going to have to convert some source of power such as the fuel cell, but at least we won't know until we have made an extensive inyestment in research.

But it turns out to be the responsibility not of any single industry or any single type of industry, but it is going to have to be the responsibility of funding in terms of the Federal Government.

Do you have any questions?

Mr. MILLENSON. Are the current Federal funds available for research by the States inadequate to cover the cost of systems analysis research?

Governor BROWN. What was that?

Mr. MILLENSON. Are there funds for systems analysis available from any source of the Federal Government now?

Governor Brown. Yes. The Aid to Education Act provides for research, and we can put that money into any research contracts that we feel would meet the criteria set by the act.

I think that we have given to the Coordinating Council for Higher Education, the State board of education, the use of Federal funds at the present time for systems engineering research into education in all of its phases.

Mr. MILLENSON. Are there Federal funds available for research in the field of waste management !

Governor BROWN. I think there are some under the Clean Air Act. I think we can get $1 million from that.

I don't know the effect of the Muskie bill. There are research funds in the Muskie bill on water pollution; and there are some, I can't tell you what they are, but there are certainly funds available for research.

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Mr. Walt, Senator—we have one person that coordinates all of the Federal programs with the State programs. I can't keep up with them all, including the poverty programs.

Mr. Walt. I might add to what the Governor said. We feel one of the great benefits of this enlightened legislation is to bring to bear in one spot the magnitude of funding necessary for a real systems evaluation of the program. There are, as the Governor said, already Federal accounts providing funds, such as the Clean Air Act, a Law Enforcement Assistance Act, and these are bits of legislation, but the problem, sir, is the amount of money really is inadequate for a true systems evaluation of the problem.

The clean air bill provides only $400,000 for example, for planning the type of studies throughout the country.

Really, what we are talking about is in the order of $10 million a year for one State. The advantage of research of this magnitude in California is that the results are immediately transferred to other States. So we feel that the great step forward you have taken is to focus in one place money earmarked for systems evaluation at the various social problems rather than using the various bits of Federal legislation, which incidentally provide for systems analysis.

Senator NELSON. Are there any funds for grants to industry to engage in research in the development of new devices for disposal ? For example, that is, money for research to produce a better

Mr. MILLENSON. Garbage disposal ?
Senator NELSON. Or what have you.

Mr. Walt. Yes, sir. There is one bill, the State Technical Service Act, which we are very pleased with. The University of California has been designated by the Governor as the administration agency. The purpose here is to bridge a present gap between the research of colleges and universities and private industry, which needs to use this research. So, through this legislation we hope to get funds into industry for means of developing salt-waste disposal plants and water desalinization plants, and so forth.

Senator NELSON. Is there money available, or would there be money available in any of these programs for total waste-management evaluation?

Mr. Waut. No, there is not.
Senator NELSON. You have anything else to add, Governor?
Governor Brown. No, that is all, Senator.
Senator NELSON. I appreciate very much your taking this time.
Excuse me. You have some more questions?

Mr. MILLENSON. Yes. Governor, referring to section III of the Nelson bill, and that is S. 2662, it says:

The Secretary of Labor (hereinafter referred to as the “Secretary") shall carry out the purposes of this Act by

(1) making appropriate grants to States, and

(2) by entering into appropriate arrangements (whether through grants or contracts, or through other agreements) with universities or other public or private institutions or organizations,

Now, with respect to the grant of State programs under subsection (1), there is no provision in the bill for specific allocations to the States. As you know, in legislation before Congress, we provide the money evenly on some basis.

* * *" to

Do you have any thoughts as to whether this measure should be changed to make any special proportionate allocations to all the States, so each State might have an opportunity to get some of these funds í

Governor BROWN. I would rather have Mr. Walt answer that question.

If you will

Mr. Walt. Our feeling, sir, is that the allocation to States should be on the basis of excellence and on the value of the product with results of such grants.

We feel the distribution of Federal funds for this type of research should not be made on the basis of geographical or political ways, but rather which State is best, by its own investment, prepared to give the best product to the Federal Government.

We would urge the allocations be on a competitive basis, open and free competition, among the several States, and not allocated on a pro rata basis.

Mr. MILLENSON. You just used the words "*** how each State by its own investments * * *»

Now, that brings up another question, if I may, sir. This bill provides for grants to the States, but it provides no matching-fund arrangements.

Do you feel by your words “* * * by its own investment point this up that there should be some matching-fund arrangement, as we have in so much other Federal legislation ?

Governor Brown. My answer to that would be during the experimental period, during the period that we are really starting out, that it should not be on a matching basis. I think if we put it on a matching basis, this might deprive some other areas that are excellent in other categories, but could not provide the necessary funds, and it would prevent them from moving into that field.

Mr. MILLENSON. In the light of what you say, would you feel that possibly we could have a higher Federal matching, say 90 percent during the first year, to encourage States to enter into this program, but still not require too much of their funds, and then have a lower Federal matching in the later years of the program? Would you still feel that way?

Governor Brown. I put that in the same category, really, as the work you are doing in space. And in that connection, this is not a State program. It is a national program. And I think that the way we have to regard the space-age engineering contracts from here on out, I think we have to regard them as national, perhaps, rather than to think in political lines, State political lines, on this thing.

Mr. MILLENSON. One other question, if I may, sir. You mentioned the studies being undertaken by Mayor-elect John V. Lindsay in New York with respect to the problems of that great city. And here in the bill we speak of engineering approaches to be applied to national or local problems of the type which the Secretary might designate.

The bill, however, provides only for the making of appropriate grants to the States. It does not apply to the making of any grants to cities, such as New York City. You referred to Mr. Lindsay's own efforts, and I assume your own Mayor Yorty here in Los Angeles might be of a mind to undertake such programs.

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