they will say, "We think you paid a little too much." Of course, it is awfully hard in a trade of that sort. If you bargain on just what a thing is worth, you may not get it at all. Against the vice of asking is the virtue of not giving. The other man might not want to sell to you. It might be to the advantage of the whole system to pay a little more for this one corner. Now, the regulating commission can decide what is the fair value. The company takes the risk of having paid 10 per cent too much or 20 per cent too much and will suffer in the long run. On the other hand, there are many properties acquired that do not have any return, but they have to be acquired because they fit into a situation. It would be very difficult to go before a commission and say, "Here, we are going to spend $5,000,000 or $10,000,000 and have no immediate return on it." The Government must protect the people, and we are quite in favor of it, by watching our properties; but they must give us that flexibility and facility to carry on our business to the best advantage of a general communications system.

Senator WHEELER. If you have those conditions and were subject to regulation in Spain

Mr. BEHN (interposing). That would not happen there, of course. Senator WHEELER. But in the United States here I can not see any reason why, for instance-I can appreciate the situation might arise in some foreign country.

Mr. BEHN. Yes; I was picturing the foreign situation that might arise.

Senator WHEELER. The situation might arise in some foreign country with which our people would not be familiar at all.

Mr. BEHN. Yes, sir.

Senator WHEELER. Or perhaps it would be difficult to get the facts. But with reference to the United States, I can not see any reason why a commission should not have power to regulate your capital investment in the United States.

Mr. BEHN. Senator, on that, perhaps, it would take a good deal of time, because it is a moot question and can be argued on both sides, and I feel that the communication business-it seems rather peculiar to say it is in its infancy, because it seems like rather an old man to speak of it as an infant; but I believe the telegraph business has been rather stagnant in this country. In telegraph systems very few big improvements have been made in the last 20 years. I believe we are on the eve of extraordinary improvements in the transmission of record communications. I can picture to you a situation where it will be possible for the sender to send his message, and the one who is to receive it will not be at home, but the receiver will receive it when he arrives home; it will stay in suspense if the party is out at the time, and he will when he returns turn on a faucet and get his message. Now, all of those things are coming. It will cost millions of dollars and many of those millions of dollars will not show any return immediately. If you want the benefits for the people of the United States, and if you think these consolidations will not result in increased rates, I advocate and recommend that you give these companies, whether it is our company or any other company, every possible facility to develop these improvements, and increase its facilities.

Senator WHEELER. The only question, then, would be whether you had an intelligent commission or did not have an intelligent commission that could foresee the things they should see.

Mr. BEHN. But the responsibilities of the commission, no matter how intelligent they are-it is very difficult for them to consent to a $5,000,000 investment. The investment of $5,000,000, or $10,000,000 in research which may turn out to be a flop. And we have many flops in this business; many flashes in the pan, and have to go out and start all over again. But the development is coming, a very extraordinary development, we anticipate in its relations to this country and many other countries.

The CHAIRMAN. Are there any other questions by the committee? Senator DILL. One other question I want to suggest: You say that when this contract is completed with the Radio Corporation, you propose to file it with the Attorney General. You have not any hope of being able to draw a contract that will get around section 17, have you?

Mr. BEHN. Absolutely not.

Senator DILL. I thought not.

Mr. BEHN. Absolutely not.

The CHAIRMAN. Are there any other questions?

Senator WHEELER. I thought perhaps the Attorney General would give him carte blanche to draw a contract.

Senator DILL. The President said not.

The CHAIRMAN. The committee will stand adjourned until the call of the Chair.

(Whereupon, at 12.05 o'clock p. m., the committee adjourned to meet at the call of the chairman.)