Part 8

2nd. Expenditures and receipts on account of the sales of Patent rights and licenses, and compromise of infringements.

The Patentee manufactured and sold about 2,000 machines, and a few other articles at a cost of materials and labor $195,292.88 Shop and Tools 12,500.00 One-quarter of patentee's time and expenses 9,008.22 ___________ $216,801.10

The receipts on account of the sale of these manufactures were:

Cash for Reapers $216,607.90 Cash for parts of Reapers 22,416.58 Notes and Book Accounts 11,388.23 Cash for Corn Crushers 1,135.25 Discount and Interest 2,327.84 ___________ $253,875.80

The result of the manufacturing business is an excess of receipts over expenditures of $37,074.70. This statement, however, allows nothing for manufacturer's profits. An allowance for such profit ought to be made but in this case the object is to eliminate from the gross receipts such profits as have in any manner accrued from or by reason of the inventions claimed in the patents. Now receipts or profits that result from business talents or skill in manufacturing or in financeering are not receipts or profits in any manner accruing from or by reason of an invention. In the case of Seymour and Morgan vs. McCormick-Howards Reports Vol. 16 p. 480, the Supreme Court of the United States held that the ruling of Judge Nelson that the whole profits of the manufacture of Reaping machines in which one small part of the machines infringed a patent was to be considered as accruing from the use of the patented part was erroneous, and that a reasonable manufacturer's profit for the use of the Capital so, in addition to the actual cost of the machine must first be deducted from the gross receipts, and if then there was any excess, that might be assigned to patents. This decision I should deem binding and conclusive upon the subject even if I did not think that the values of business capital and talent are as fairly charges against the receipts of business as the values of a business house or tools.

In this case there is only an excess of $37,074.70 of the receipts over the expenditure or something less than 14 per cent upon the gross amount of sales. This is a very inadequate profit for manufacturing and selling, but it is all there is, and it is all that I can allow.

If the excess of the receipts over the expenditures had amounted to three times fourteen per cent, I should have had no hesitation in allowing the whole of it for manufacturer's profit, and should not have deemed it more than a reasonable allowance in view of the testimony of Long, which shows that his firm have made a profit of over fifty per cent after paying patent fees, on their manufacture of reapers.

It seems to be supposed from the reference which has been made to Commissioner Holt's decision in the case of McCormick's application for the extension of his patent of 1845, that he entertained views at variance with those I have expressed as to the justice of allowing manufacturer's profits as a part of the expenditure, and as an offset against the receipts, but a careful examination of that opinion will show clearly that Mr. Holt was not willing to allow a charge for the use of Capital, and for wear and tear of machines (which are the Constituent elements of a manufacturer's claim to allow for profit) and then, again allow a second or duplicate charge for the same things under the name of manufacturer's profits. This is the extent to which Mr. Holt goes, and I fully agree with him.

The expenditures on account of the patents and the sale of rights and licenses under the same are:

For three quarter of patentee's labor and expense $27,024.68

For sundry legal and traveling expenses 44,562.88 __________ $71,587.56

The receipts on the same account are:

Cash for licenses, sale of rights, etc. $92,788.38

Notes and unsettled accounts 23,748.89 License fees estimated for 1861 10,000.00 ___________ $126,537.27

showing that the receipts exceed the expenditures by $54,949.71 or $13,737.42 for each of the four patents.

This I can have no hesitation in pronouncing to be a totally inadequate compensation for inventions of such great value and importance.

After a most laborious examination and careful consideration of the whole matter, it appears to my full and entire satisfaction, having due regard to the public interest therein, that it is just and proper that the term of the said reissued patents No. 449, No. 451, No. 742, and No. 917 should severally be extended by reason of the patentee, without fault or neglect on his part, having failed to obtain from the use and sale of his said inventions a reasonable remuneration for the time, ingenuity and expense bestowed upon the same and the introduction thereof into use.

The list of licenses under these patents show the acquiescence of the principal manufacturers in the justice of Hussey's claims. The list shows that the manufacturers of Reapers have made large profits, and that Hussey's improvements are the foundation of their success. It is certainly just and equitable that Hussey's heirs should be allowed to participate in the advantages of using his own inventions to an extent more nearly commensurate with the merits of those inventions.

The character of the opposition to these applications, in which but a single manufacturer has entered an appearance is such, as greatly strengthens this view, and I feel constrained to regard this tacit assent, of the great body of manufacturers to these applications for extension, an additional evidence of the soundness of my own conclusions. As it is also a fitting and merited tribute to Obed Hussey, now in his grave, for the invaluable contributions his genius and industry have made to the improvements of the age.

The said four patents, Nos. 449, 451, 742 and 917, are accordingly extended for the term of seven years from the 7th day of August, 1861.

S. T. SHUGERT, Acting Commissioner of Patents. United States Patent Office, Mar. 1, 1861.

A BRIEF NARRATIVE OF THE INVENTION OF REAPING MACHINES

And an Examination of the Claims for Priority of Invention

The object aimed at in this examination is to ascertain as far as reliable evidence within reach will establish the fact--and before the evidence may be lost--to whom belongs the credit of first rendering the Reaping and Mowing Machine a practical and available implement to the American farmer; not who theoretically invented a machine for the purpose, that may have worked an hour only, and very imperfectly for that short period, and was then laid aside; but who rendered it an operating and efficient machine that was proved by successive years in the harvest field, capable of doing its work, and doing it well; better than either the scythe or cradle.

The object is not to detract from the merits fairly claimed by any inventor; but it is to examine into some of the rival claims, furnish the evidence that has satisfied our own minds, and leave it for others to judge for themselves. We would not intentionally deprive an inventor of his often dearly bought and hard-earned fame--the creation of his own genius--for it is more prized than even fine gold by many. But it is equally just that merit should be acknowledged, and the meed of praise awarded, where it is honestly and fairly due; and to this end we propose and intend to examine into the evidence closely and critically. It may also be right to remark that we have no private or pecuniary interest whatever, in these, or any other patent claims.

As to the theoretical portion of the business, the enquiry might be greatly extended; indeed for past centuries, as we have imperfect accounts of Reaping Machines being used by the Romans. If the ancients were successful in making a practical implement for Reaping, by horse, or ox power, as some ancient writers assert, we certainly have no correct and reliable account of a machine that would be considered efficient or useful at the present day; a machine to save or tear off the heads only--as described by Pliny and Palladius--would more properly be termed a gathering machine, and not at all suited to the wants and habits of modern farmers.

It was not until near the close of the past, and within the present century, so far as we can learn, that the subject again claimed much attention of the inventive talent of either this, or foreign countries. Of some half a dozen or more attempts made in Great Britain, and recorded in Loudon's Encyclopedia of Agriculture, the Edinburg Encyclopedia, and other similar works, all, or nearly all, relied either upon scythes or cutters, with a rotary motion, or vibrating shears. And although there was "go ahead" about them in one sense of the term, as it was intended for the "cart to go before the horse," none of them appeared to have gained, or certainly not long retained, the confidence of the farmers; for at the exhibition of the "World's Fair in London," the whole Kingdom could not raise a Reaping Machine;--a practical implement which was considered worth using and exhibiting.

That the idea was obsolete there, and had been unsuccessful, is clearly proved by the fact that the English journals and writers of that period, without a single exception, spoke of the American Reapers--after the trials!--as "completely successful"--"taking every one by surprise"--"their reaping machines have astonished our agriculturists"--"few subjects have created a greater sensation in the agricultural world than the recent introduction into the country of the reaping machines"--the "curiosity of the crowd was irrepressible to witness such a novelty, even to stopping the machine, and trampling the grain under foot," etc., etc.--Much more and similar evidence is at hand; but better need not be produced to prove the entire failure of reaping machines in Great Britain, as late as 1851. We would also refer the curious to Rees' Cyclopedia, for a very brief account of what had been effected;--a few paragraphs only are written on reaping machines, but several pages are compiled as to the use of the scythe, sickle or reap hook, and reaping fork. The Doctor refers to Plunknett's Machine by name, as being "somewhat on a new principle, the horse drawing the machine instead of pushing it forward as was the old mode of applying the power." The machine is fully represented in the Farmers' Dictionary; and he winds up the account as follows: "But the success with which they have been attended has hitherto been far from complete;" again, "Other machines of this kind have still more lately been invented by other persons [meaning of course his own countrymen] but without answering the purpose in that full and complete manner which is necessary in this sort of work."