Dr. BURGESS. We would hate to go, to nothing on publications on statistics of exports and imports.

Senator DIRKSEN. That I can understand. But since this is the one source to which business and industry must look for authentic information on the subject, certainly we cannot allow this thing to deteriorate to a point where it is not going to be useful for anybody.

Dr. BURGESS. Could I suggest we have Dr. Watkins, who looked at these things last fall with a group of people he selected for that, say a few words? The foreign-trade statistics attracted his attention. Dr. WATKINS. Mr. Chairman, our committee was very much concerned with the process of erosion that the foreign-trade program has been subjected to. I will quote a sentence or two. "These postwar retrenchment programs have forced the Bureau continually to cut its program to fit its fund. Efforts have been made to meet the insistent and mounting demands upon it by both governmental agencies and private users in the face of increasing price and wage levels and work load over the past 8 years without corresponding increases in appropriations." "The consequences have spelled successive abandonment of programs and successive lowering of standards of quality and comprehensiveness despite gains in efficiency in tabulating methods and equipment." We strongly urge that additional funds be made available to the Bureau of the Census to restore that very significant census program.

Senator DIRKSEN. Where did the Randall Commission get its figures when it started out on this foreign economic policy expedition? Dr. WATKINS. I am not familiar with the work of the Commission in detail, but the Bureau of the Census is the source.

Senator DIRKSEN. It would have to rely on this, wouldn't it?

Dr. WATKINS. Yes. There is no other source.

Senator DIRKSEN. If this was not well rounded and current and thorough, a commission conceivably might find itself persisting in error because the premise from which it started was wrong or incomplete?

Dr. WATKINS. There is no question about that. Likewise, the Tariff Commission, in administering the tariff laws, is dependent on the Bureau of the Census for basic information with respect to the peril points and escape clauses.

Senator DIRKSEN. That is all.

SPECIAL SURVEYS OF MANUFACTURES AND OTHER BUSINESSES

Senator SALTONSTALL. The next item is "Special surveys of manufactures and other businesses." Last year you had $1,500,000, which was a new item, and this year you asked the budget for $1,342,000. You were allowed $650,000, and the House cut out the whole item as the Chair understands it.

These special surveys of manufactures and other businesses, why are they essential to be continued?

Dr. BURGESS. With the lack of the complete census of manufacturers, business, and mineral industries they do give annual figures on a sample basis for the country as a whole.

Senator DIRKSEN. This is not the mineral industry item?

Dr. BURGESS. Primarily, it is manufactures and business. The $12 million in fiscal 1954 is treated together as it is published in the

budget. I have broken it down to $1,300,000 for manufacturers and business, and $200,000 we assigned to agriculture. That is, we were given $12 million for all of that.

Senator SALTONSTALL. Let us leave out the agriculture.

Dr. BURGESS. If we think of this as $1,300,000, then, in 1954, it gets down to half of that. We were able to cut that because part of the $1,300,000 was spent in establishing a new sample for population and trade surveys. We also carried on under the appropriation in 1954 the 1953 annual survey of manufactures which has been taken annually, getting the funds through the NSRB, NPA, various sources from 1949 for each year on.

MEANING OF "SPECIAL SURVEYS"

Senator SALTONSTALL. Why do you use the words "special surveys"? If this is a job you want to do, particularly a job at a time when business has been declining a bit, why do you call it special surveys? Why is it not necessary?

Dr. BURGESS. They are necessary surveys. The term "special surveys" is related to the way the appropriation was referred to last year by the House and the Senate. We were then asking for complete censuses of manufactures and business.

Mr. ALEXANDER. These were substituted for the complete censuses. This program was developed by the Congress when they failed to appropriate funds for the complete censuses of business and manufactures and substituted this program of spot checking.

Senator SALTONSTALL. We did that last year?

Mr. ALEXANDER. That is correct.

Dr. BURGESS. We are trying to follow that.

Senator SALTONSTALL. What you people want to do is keep on spot checking?

Dr. BURGESS. We would rather take full censuses. If we cannot have the full censuses, we get some value out of the special survey of manufactures which comes to $300,000 and a survey of retail trade, wholesale trade, and business services.

SPOT CHECK SURVEY PROCEDURE

Senator SALTONSTALL. That was done for the first time last year. Could you describe very briefly for the record how that is done?

Dr. BURGESS. The census of manufactures gets about 275,000 establishments around the country. We ask for a report of their products, employees, and so forth. The products are divided down a long way. In contrast to this for our annual survey we select some of the establishments, taking all the larger establishments over 250 employees and decreasing proportions of the smaller ones, so that we have forty-five to fifty thousand establishmenst submitting reports on a simplified form. We get a baby version, if you will, of the census of manufactures which will cover two-thirds or more of the manufacturing employees of the country, and by raising it up you get a good estimate of the entire production of the country. We do not go as far, we do not spend as much money to get similar figures for the others, wholesale, retail and service trades.

Senator SALTONSTALL. What do you do when you get that?

Dr. BURGESS. Those are published.

Senator SALTONSTALL. As spot checks?

Dr. BURGESS. They are published under the annual survey program. Primarily, we publish the figures with explanation of what they mean in the way of definition of terms, and so forth.

Senator SALTONSTALL. Take one business. The business we get quite a lot of in Massachusetts is electronics. Suppose you make a spot check of electronics. How does that come out in the census? Does that come out as up from last year or down?

Dr. BURGESS. We can show that. As the result comes out, we can prepare back figures for a series of years.

Senator SALTONSTALL. Is that done regionally, too?

Dr. BURGESS. That shows by regions.

Senator SALTONSTALL. So a man in the Illinois region, like Senator Dirksen, could tell how electronics were doing in his area, and I in New England could do the same?

Dr. BURGESS. There are breakdowns by major industries.

Senator SALTONSTALL. Take machine tools, which is a national industry. Does that show your sampling of machine tooling in various sections of the country?

Mr. GRIEVES. I cannot speak for sure for machine tools, but generally speaking, the sample is not big enough to get State and metropolitan area figures for individual industries, particularly the smaller ones. That is the job of the complete census of manufactures which can show the full detail for each industry in each State, in each city, and so forth. The sample gives fairly good national totals, less detail for regions, some detail for States, and practically no detail for any city. Senator SALTONSTALL. This is done entirely by mail?

Mr. GRIEVES. Yes, sir.

Senator SALTONSTALL. In other words, you would take a machinetool company like the Norton Co. in Worcester and send it a certain questionnaire?

Mr. GRIEVES. Yes, sir. One of its employees might also advise us on the design of the schedule. In this instance, that happens to be the case.

Dr. BURGESS. The Advisory Council on Federal Reports for the Bureau of the Budget serves as adviser looking over these forms from the point of view of business.

EFFECT OF HOUSE CUT ON BUSINESS CENSUS

Senator SALTONSTALL. So if the House figure were carried forward, you would have no money for this service at all?

Dr. BURGESs. That is correct.

Senator SALTONSTALL. This is a new service. Last year there was a cutback from a more complete business census?

Dr. BURGESS. Not quite that. We have been carrying it out in 1949, 1950, and 1951 as well as 1952.

Senator SALTONSTALL. You have been carrying it forward each year? Dr. BURGESS. But it has not appeared in the appropriations. Dr. WATKINS. Defense funds were made available to the Bureau in years prior.

Senator SALTONSTALL. So this information has been furnished each year and the funds came from the Department of Defense?

Dr. WATKINS. Or the National Security Resources Board or the Office of Defense Mobilization.

Senator SALTONSTALL. Last year they came from the Department of Commerce, but the work has been carried forward for the last 5 or 6 years?

Mr. GRIEVES. That is true only for the annual survey of manufactures. The rest of this project was new last year.

Senator SALTONSTALL. The purpose of it is to give some idea to people who are in a business or who want to do business with that firm as to whether business is looking up or down?

Dr. BURGESS. The people who supply it and the people who sell to it and people who buy from it and the industry itself.

Senator SALTONSTALL. That is a proper service of the Government in building up the business of the country?

Dr. BURGESS. Very much so. I may say that before I came in 15 months ago with the Census, I was with the Western Electric Co. I saw electronics. Of course, the Western Electric Co. is in that. Senator SALTONSTALL. I have heard of it.

Dr. BURGESS. I had charge of helping the company use the census figures and sending in the company's reports to the Census.

Senator SALTONSTALL. That is sensitive to Illinois. Senator Dirksen, have you any questions?

ADVANTAGES OF ANNUAL SURVEY OF MANUFACTURES

Senator DIRKSEN. Dr. Burgess, how extensively used are these figures that are developed by this annual survey?

Dr. BURGESS. The annual survey of manufactures is used very extensively within the Government. It is basic for getting weights. Of course, they would rather go back to a complete census. The survey helped the Bureau of Labor Statistics in revising the wholesale price index. It is used by business in various ways.

Senator SALTONSTALL. If you did not do this job, what agency would do it?

Dr. BURGESS. I do not think it could be done by any other agency in the Government or outside.

Senator SALTONSTALL. No private agency would get up comparable data?

Dr. BURGESS. We have mandatory authority in the Census Bureau under the legislation so we can tell people to report. We have not actually put people in jail, but the fact we have that authority gives the people an idea this is something that is really wanted.

Senator SALTONSTALL. When was this so-called intensive review committee set up to explore this whole statistical gathering problem? Dr. BURGESS. A basic memorandum that I was one of the signers of, was dated April 1953, and the committee was completed by October 1, 1953.

Dr. WATKINS. Senators, I would be glad to answer that question and say just a bit about this report. I want to make clear I am not here as an employee of the Bureau of the Census or of the Department of Commerce. All the members of this intensive review committee were named by the Secretary of Commerce from outside the Government. As a matter of fact, each one of us was designated by his boss, since the boss of each one of us got a letter from the Secretary of

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Commerce asking that our services be lent to the Secretary to make this appraisal of the program for the Bureau of the Census and to submit recommendations to him.

The committee was completed on October 1, 1953, and we submitted this report to the Secretary of Commerce on February 16. It was publicly released on the 1st of March.

INTENSIVE REVIEW COMMITTEE MEMBERSHIP

Senator SALTONSTALL. What is your own business? I probably should know, because you are a distinguished man.

Dr. WATKINS. Thank you very much. I am director of research of Dun & Bradstreet in New York, and I would like to identify all my colleagues on the committee. There were nine of us. Prof. Murray R. Benedict, professor of agricultural economics of the University of California, as our expert on agriculture; Mr. John W. Boatwright of the Standard Oil Co. of Indiana, manager of their distribution economics department, Chicago; Mr. Stephen DuBrul, executive in charge of business research staff of General Motors Corp., Detroit; Peter Langhoff, vice president and director of research of Young & Rubicam; and J. A. Livingston, financial editor of the Philadelphia Evening Bulletin. Mr. Myron S. Silbert is vice president of Federated Department Stores. Lazare Teper is director of the research department of the International Ladies' Garment Workers Union; and Merrill Watson is executive vice president of the National Shoe Manufacturers Association.

The committee consisted of men from outside the Government owing no allegiance to the Bureau of the Census or the Department of Commerce. We were asked to survey the programs of the Bureau of the Census from the standpoint of their importance in the functioning of the American economy. We have submitted our report in February to the Secretary. We listed 51 recommendations with respect to the programs of the Bureau of the Census. I think it is fair to say that the committee concluded that the programs of the Bureau of the Census are absolutely essential to the effective functioning of the American free-enterprise system.

AUTHORIZATION

Further, that the American economy has been seriously damaged by the neglect of the census programs in recent years. We noted in this document that the 80th Congress had enacted very wise legislation in 1948, and the 81st Congress in 1949 and 1950 in authorizing a carefully planned and staggered program of censuses over the period of a decade, a very businesslike scheduling of these censuses to try to even out the workload as much as possible to provide the basic information on which both public policy and private policy must make their decisions.

I hope that you, Mr. Chairman, and you, Senator Dirksen, and your associates on the committee will read the philosophical statement we have in this document, an 11-page chapter called Statistical Programs in a Free Society, in which we go down to what we regard as the fundamentals as to the meaning and importance of the program of economic intelligence in providing these basic censuses.