given exactly the same benefits of this legislation that the manufacturers get. They are not getting it to-day, and the distribution of products, agricultural products, is just in chaos and you can not tell about it. You can read the records of this department or any other department, and you will not be able to tell.

Now, a most unfortunate situation grew out of the Department of Agriculture attempting to give the carry over of cotton, you understand. They took the distribution figures of the United States given out by your department and got hold of some European figures and bolstered up the carry over of cotton considerably more than it amounted to, and drove the price of cotton down. It cost our farmers hundreds of thousands of dollars overnight.

If we are going to pass this law, I want this census of distribution of farm products and dairy products just as thorough as that of manufactured materials.

The CHAIRMAN. Is not that in this list?

Mr. SURFACE. Dairy products are included. When you go to the retailer you must deal with the products he handles.

Mr. RANKIN. Why did you not do this?

The CHAIRMAN. There is included groceries and delicatessen.

Mr. RANKIN. Take this cottonseed proposition. You can take these figures and read them until doom's day, and you can not arrive at anything like a definite conclusion as to the amount of cottonseed that is produced. The thing we want is a census of distribution of this material up to the time it goes into the hands of the manufacturers, and then if you want to carry it from there on that will be all right.

Mr. SURFACE. That is a very important phase that should be covered, to my mind. I think the distribution of industrial products would be the way to get at it, that is, the products which industry buys, where they buy them and how much.

Mr. RANKIN. Why could you not take it in this way: Get the distribution of all farm products as far as they go as raw materials, until they go in the hands of the manufacturers.

Mr. SURFACE. That will be possible.

The CHAIRMAN. Is not that already in the bill?

Mr. RANKIN. I do not think so.

The CHAIRMAN. That goes to the primary product.

Mrs. KAHN. I think that is covered.

The CHAIRMAN. When this product gets to be Quaker Oats it becomes a grocery, and then it goes to the retailer.

Mr. SURFACE. You can go to the Quaker Oats Co. and find out how much oats they bought.

Mr. RANKIN. The Government departments are neglecting it, and it is an unjust discrimination against the men who produce this material. I will take this cottonseed proposition. About 500,000,000 bushels of cottonseed were produced in the United States last year. It is the easiest crop in the world to arrive at. There are 33 bushels to each bale. It is just as easy as any figures you can make. You do not give that in the numbers of bushels that are sold or that are produced. You do not show how many are kept on the farm; how many are used for planting purposes. You do not show the number of million bushels that are used for feed, but

Mr. BROWN. So far as I know it was. I have no criticism.

Mr. RANKIN I noticed in the post-office examinations a man may make 80 per cent for his experience and only 20 per cent for his education and efficiency.

In other words, a man who can barely write his name, if he is considered by the examiner to have had sufficient experience of the right kind that was most favorable at that particular period, might make 75 or 80 without any education at all. Is that true?

Mr. BROWN. He has got to be able to do more than write his name, because he has got to fill out an application blank. Mr. RANKIN. Do you take into consideration, when you rate his experience, his small abilities.

Mr. BROWN. We most assuredly do.

Mr. RANKIN. And misconduct.

Mr. BROWN. Yes, many a man is thrown out of the examination because of that.

Mr. RANKIN. Would you count the paying of money to one supposed to have political authority, moral turpitude? Would you call that a moral turpitude suffixient to bar him?

Mr. BROWN. If it were brought to our attention, yes. Those things rarely come to us.

Mr. RANKIN. Brought to your attention. Would you not have sufficient foresight to make a thorough investigation?

Mr. BROWN. We do if it is brought to our attention.

Mr. RANKIN. When you suspect these things, do you not make it your business to investigate the matter?

Mr. BROWN. Not on mere suspicion. We have no money to spend on mere suspicion.

Mr. RANKIN. Just to what dignity does that suspicion have to rise to make activities on the part of the Civil Service Commission? Mr. BROWN. If while the papers from an examination are being rated it comes to the commission's attention that one of the candidates has paid money to secure his appointment, the rating is suspended and an investigation to determine the facts is made.

Mr. RANKIN. You heard that in reference to my State. I will not name the post office, but I want to know if the Civil Service Commission has made a very thorough investigation of the buying and selling of post offices in the State of Mississippi.

Mr. BROWN. Not so far as I know.

Mr. RANKIN. You have not, have you?

Mr. BROWN. No, sir.

Mr. RANKIN. There is a case pending now. I will not put it in the record, but if you will call I will give you facts where a man, a postmaster down there, was out of a job, and another man went to him and I understood by some connection was to pay him $1,500 for the place. He paid him $300 down and was to pay $100 a month for 12 months. With that suggestion before you would that rise to sufficient dignity of moral turpitude for you to make a thorough investigation of it?

Mr. BROWN. Yes.

Mr. RANKIN. You represent the commission here.

Mr. BROWN. That would be a case which ought to be very carefully considered and investigated personally afterwards.

Mr. RANKIN. Well, Mr. Brown, I have not looked over the questions for these other examinations. Do they bear the same proportion to the experience and mental qualifications?

Mr. BROWN. Many of them do. It differs with different examinations and different places. Now in a position like postmaster we do consider that experience in the organizing and handling of a business is an important factor.

Mr. RANKIN. But you say another thing: If I were to suggest to you and put you on trace of where to find this information, information substantiated, allegations that these post offices were bought and sold before the examination was ever held, and that by some stroke of luck it invariably panned out to fit the sale transaction, would you not think that it would be sufficient to go a little further with your investigation, going on down the line and seeing if there is not some underground connection?

Mr. BROWN. Personally I would be glad to if we had the money to do it.

The CHAIRMAN. Have you not money enough to conduct investigations in your Bureau?

Mr. BROWN. We have to scrape around.

The CHAIRMAN. Then you want to take on the added burden of the

census.

Mr. BROWN. The great bulk would not involve additional exA lot would be appointed without examination.

pense.

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The CHAIRMAN. If they were to be appointed without examination, what is the use of turning it over to the Civil Service?

Mr. BROWN. We think there is an open door for abuse, which has been used in the past.

The CHAIRMAN. To a pretty small extent.

Mr. BROWN. It opens the door to politics and personal pressure, which we do not think ought to be involved.

Mr. LOZIER. Is there any provision in the civil service law or in the Executive order by which these eligibles are certified to the department in the case of postmasters; for instance, is there any regulation which will permit the Civil Service Commission to recall their certification, if they find that it was based upon false statements in the application, false representation by the applicants, or find facts which, if known to the commission, would have prevented their being certified in the first instance?

Mr. BROWN. I believe so. I would like to refresh my memory as to the terms of the Executive order before I say absolutely, but I believe there is no question.

Mr. LOZIER. I have in mind a case where such a certification was made by the commission to the Post Office Department, and then when the matter was called to your attention they found the party made false statements. They addressed a communication to the Post Office Department stating that if they had known these facts they would not have certified this name as an eligible, and in this case the Post Office Department passed the buck to the Civil Service Commission by saying "Here is their certificate. We are going to act on it."

The Civil Service Commission tried to recall that appointment, calling attention to the false statements in the application, and the

Post Office Department assumed it was a closed incident because they had received a certificate from the Civil Service Commission. I am wondering if there is any regulation or rule or law by which a case of that kind could be remedied.

Mr. BROWN. I think-I do not know-I say I think it is some time since I read the Executive order, but I think we could withdraw the certification.

The CHAIRMAN. We will adjourn now until 10.30 o'clock tomorrow morning.

(At 11.45 o'clock a. m. the committee adjourned until to-morrow, Wednesday, January 18, 1928, at 10.30 o'clock a. m.)

HOUSE OF REPRESENTATIVES,

COMMITTEE ON THE CENSUS,
Wednesday, January 18, 1928.

The committee this day met at 10.30 o'clock a. m., Hon. E. Hart Fenn (chairman) presiding.

The CHAIRMAN. We have before us this morning some gentlemen from the Department of Commerce, who have come in response to an inquiry. I called on the Secretary of Commerce yesterday afternoon in respect to the explanation of the new features in the bill with regard to distribution. If you have read the bill you will find it applies to a census of population, agriculture, manufacture and distribution, and distribution is the new feature of the bill. I thought it would be well for the committee to learn from the department the features of that and the desirability of it.

We will now hear from Mr. Surface.

STATEMENT OF FRANK M. SURFACE, ASSISTANT DIRECTOR, BUREAU OF FOREIGN AND DOMESTIC COMMERCE, IN CHARGE OF DOMESTIC COMMERCE WORK, DEPARTMENT OF COMMERCE

The CHAIRMAN. Please state your name and position.

Mr. SURFACE. Frank M. Surface, Assistant Director of the Bureau of Foreign and Domestic Commerce, in charge of domestic commerce work.

Our bureau is interested in this census of distribution, because we are studying problems of marketing and distribution from the angle of the elimination of waste, and attempting to assist distributors to better their methods in various ways.

Now undoubtedly the matter has been brought to your attention many times that the margin between the cost to the producer and the cost to the consumer is too large. We have a lot of propaganda on that matter. That is undoubtedly true. There is a large margin in there. We have made some rough estimates of it.

The CHAIRMAN. You mean the producer, the manufacturer, and the ultimate purchaser.

Mr. SURFACE. Yes, sir. There is a large margin in there. We have made some estimates to the effect that there is wasted at least eight billions of dollars in unnecessary crosshauls and unnecessary motions

in the matter of distributing products in this country. That I think is very conservative, yet it is double our total export trade.

There are possibilities of reducing some of that. The studies that have been made indicates this waste is due very largely to ignorance, much more to lack of information than it is to questions of profiteering and matters of that kind.

The CHAIRMAN. Will you describe it to the committee? As far as I can understand it at the present time this distribution refers, I may say, to the retailer.

Mr. SURFACE. To the retailer and wholesaler; yes, sir.

The CHAIRMAN. And not to the original producer.

Mr. SURFACE. No, sir.

The CHAIRMAN. For agricultural products.

Mr. SURFACE. It refers to the distribution of all products. As the thing has been worked out, I presume it has been explained to you by the census people.

The CHAIRMAN. We have not gone into distribution to any extent. We are going into it.

Mr. SURFACE. In the experiments that have been tried out, this was an attempt to get at the volume of business done by retailers, the number of retailers in different lines and wholesalers. For instance, we have no information as to what is the volume of the retail trade in this country. There have been some estimates made.

The CHAIRMAN. Eight cities were taken as an experiment. Mr. SURFACE. A few cities were taken in an experimental way, and that relates to getting information from the wholesaler and retailer, the agencies who are distributing commodities.

Now it is our experience from the studies we have made that the thing we need is to eliminate some of this waste in distribution; and the thing we need to do that is more information. We have no statistics regarding the volume of trade, or practically no statistics at all on distribution. We have lots of material on production. The census of manufactures every two years takes an inventory of our production activities, but there is not a single commodity you can follow through from the producer to the retailer. We lose sight of every commodity once it is produced.

The CHAIRMAN. The spread between a bushel of wheat, we will say, from the time it leaves the producer, the farmer, until it gets to the consumer, is very great, is it not?

Mr. SURFACE. Well, it is rather large.

The CHAIRMAN. As I understand it the spread between the wheat and the miller, the seller, the producer of the bushel of wheat and the miller is by no means as great as the spread between the miller and the ultimate consumer.

Mr. SURFACE. Yes, sir; actually it is larger.

The CHAIRMAN. I mean the percentages.

Mr. SURFACE. Yes; probably in percentages. There is, of course, a lot of labor, and a lot of work performed from the time the wheat goes into the mills until it is milled and baked, but there are many cross hauls in the process of finding distributors, and it passes through many hands, and there are many ways in which there is a loss.

What I am arguing is that we need more information about the processes of distribution, that we have almost no information on it at the present time. We have information on agriculture. We have