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As you look back to history, you will notice that every forward step involves the getting of more information. It has been put through, and there has been no retrograde act. Nobody has asked the census to do less than in previous years.

The United States, I think it may be safely said, although we have things to learn from foreigners, has constantly taken the lead in census operation.

The first national census in 1790 was provided for constitutionally. From 1830 on our census shows a study of figures in regard to production. We had a notable census in 1860—an extraordinary censusthe best in the world at the time, and we have gone on expanding the census.

Up to 1900 this country has been decidedly more interested in the locating of our national resources than any other problem, and for that reason it has been perfectly natural that the bulk of our interest has been to get agricultural production, mining production, manufacturing production. It is perfectly logical that that be the case.

Since 1900, we have been going steadily and inevitably into a new period in the economic history of the United States. We are bound from now on to pay much more attention than we have in the past to the problem of our internal markets, and that is primarily what we are asking now as the first step to be taken. That is why it has interested me so much to listen to this conversation, being anxious to get more information on these problems.

I have a great deal of sympathy with the point Mr. Rankin and the others raised. We need more information than this census will give you. This is the first step practically into a new field. The idea which some economists and statisticians have is we shall put a census taker behind every single producer in the United States. It can not be done as probably we might wish, but we should like to know vastly more upon just the questions you are raising.

You are raising this question from a practial standpoint of your constituents. We should like to know more of the facts. We should like to know not merely the question of production from the farmers, but we should like to know the various lines through all the intermediate steps.

We know what the manufacturer does. We have not got the detailed information we ought to have as to the kinds of commodities he is getting and his disposition of them. We have no information at all upon what happens after it leaves the manufacturers' hands. We know his total sales and total production, but now we come to this great market in the United States. There is the gap. That is really the problem we have to face.

I had, as I said, expected opposition. On the contrary we are finding an increasing demand for these censuses by cities. There are more applications than there is any possible means of carrying out. Not merely manufacturers, but retailers and manufacturers want to know, and one reason why America has led in census work is that we have been an intelligent country. America has led primarily-and I say this as an economist-has led because we have been interested enough to know that after a point you can not guess. You must know. We are demanding more knowledge,

Several years ago a small group of economists were invited by the Census Bureau to act as consulting representatives, and they pointed out that one of the chief deficiencies of our present census is this problem of selling through the retail and wholesale outlet

That does not cover the whole problem of distribution. There are intermediate steps which are not yet covered. I am not sure it is wise to ask too much at once. We are asking for knowledge about retail and wholesale outlets which we have not had before.

We have reached the point where we must know. We know something about our foreign exports. Our foreign exports cover 10 per cent of our whole market. Ninety per cent of out market we know nothing about, and we are making a sensible beginning and starting with the retail and wholesale outlets. It is extremely important from the standpoint of the economist, and I believe of great consequence to business men.

Mr. JACOBSTEIN. Will you tell what you want, Dean Gay, in the main?

Doctor. Gay. The main items are included in this present test census, which gives us about all we can ask for at present. They are giving the number of establishments. Mr. JACOBSTEIN. You are asking more than that, are you not?

Doctor Gay. No, not at present. We shall be glad to get more, but bit by bit we ought to feel our way. Our business men say now that they are overflooded with questionnaires. We can not use them too far. We can not ask too much. We are getting the number of establishments, the employees, salaries and wages of employees, inventories, average, and on December 31, sales from stores, independently owned and chain stores, merchandise outlets for all classes of stores, all classes of commodities.

I remember the Department of Commerce when I was down here visiting a couple of years ago had a very considerable manufacturer of electrical appliances apply to it. He came down asking about. his outlets in New England, and felt quite sure he knew the outlets in New England. He was immensely surprised to know of his very inadequate information, because the information in the hands of the department indicated six or seven times more than the amount he knew about. He had no conception of how electrical appliances were being sold, not only through hardware and electrical stores, but in drug stores and all manner of places. That will be brought out. We will find for the benefit of dealers and for the public what the various outlets are, so that the markets can be known.

Mr. JACOBSTEIN. To what extent do you think the Federal Government ought to go on spending money to collect and disseminate information for the benefit of the trade, occupation and businesses, which some folks think they ought to collect for themselves. What is your idea about that? How far would you go? Where would you stop.

Doctor Gay. Well, it is impossible to say exactly, but I am not interested from the standpoint of trade. I am interested so we can understand the problem of distribution. There are very serious wastes in our distribution in the United States. We really know nothing, have no real information how to handle the problem until we get some basic facts, and we are asking for those.

In the second place, and as far as the trades are concerned, the real problem for this country will not be done only by economists, but by cooperation among manufacturers, retailers, and wholesalers in intelligently, wisely and effectively handling their problem. They can not do this now unless they know their problems. I am not speaking merely of the big folks. I am talking even more in reference to the smaller people.

There are two classes in this country that the Government ought to help—the farmers and small retailers. These are the men who have no means of helping themselves. Congress is largely considering taking care of the farmer. It has done nothing for the small man who has no chance of getting into the economic life except in small retailing. A man starts out in a small way in a business concern.

In Baltimore more than half of the retailers are doing a very small business, and they do it blindly. They do not know if they should start in Baltimore or Washington or move to Oklahoma. They have no idea where they ought to go. It is going to be possible to tell these people that we have enough grocery stores in one place. They will not crowd into an overcrowded location. That seems to be a matter which should be of the very greatest use to the smaller men who can not take care of themselves. They can not get this knowledge.

I do not know that I want to add much more than I have, except to say that the economists of this country and statisticians are to a man back of this project. They want this done. This is a beginning, and a very useful beginning. It does not cover it all, but bit by bit can be added. I would like to see more done for the manufacturer, but this is one step further.

The CHAIRMAN. Could not the Census Bureau, in their census of manufactures, cover those things if they saw fit? Have they authority?

Doctor Gay. I do not know.

The CHAIRMAN. The bill, of course, is very large in what it allows them to do. It does not define what they shall do. So far as taking the manufacturing census, of course they prescribe themselves what they will take.

Doctor Gay. Mr. Chairman, may I add one word to that: I imagine it is not so much in the expressed provision of the bill as it is in the appropriation that is given. A certain number of questions can be asked in a given appropriation, and other questions must be omitted.

The CHAIRMAN. The chairman and members of the committee realize that.

Mr. JACOBSTEIN. Out of the experience of Harvard, what is your experience in getting information from retailers? We know the splendid work your school has done in getting material together from retailers. To what extent can you get this information, and what reliance can you place on the data secured.

Doctor GAY. The graduate school of business administration started years ago, and they obtained some figures on the cost of distribution. They went to the concerns, associations, and through the associations got their backing to go to the individual dealers, wholesalers of shoes and groceries, and then we had to induce them. We found we could not do it by letter, but we had to send out a staff of salesmen. We sent out our own men who were specially trained, and we have discovered in the figures we have collected that, they are very important. During the war the Government had oniy the Harvard figures to operate on. We discovered it is generally only the upper strata who want to give us figures. It is impossible to get figures from the great majority. They can not keep accounts and can not be induced to do it. We are getting the cream of the business to give the figures to us.


Mr. JACOBSTEIN. I have read your reports. I am interested in that work. Should we not spend-I am not sure and I am asking for information-would it not be wiser to use that same amount of money that we are going to spend in getting information from retailers, instead of getting it universally from all retailers, spend that same amount of money in intensive study later by the Census Bureau, picking out certain commodities or businesses and getting information that is accurate and worthwhile, rather than getting it haphazardly?

Doctor Gay. I have a very clear judgment on that point. We are making an interesting sample at Harvard. The chief thing that sample needs is just that thing Doctor Surface spoke of, certain measuring sticks. I do not know what percentage of the grocers in the United States are active. We do not know the number of groceries. There are certain basic facts which can only be obtained by the United States Government. We want to get fundamental facts.

The CHAIRMAN. You think under the authority of the Government these facts could be obtained.

Doctor Gay. There is no other way.

The CHAIRMAN. You said you had some difficulty in Harvard from the humbler merchants in getting these figures.

Doctor Gay. Yes, but the people of the United States have confidence in the census.

Mr. JACOBSTEIN. Could we get the profits and other data from coal people?

Doctor Gay. I should not recommend the Government attempting to make that inquiry. It will block the whole business. The first step is to do what we are doing now. Bit by bit when the people realize this information is valuable they will demand it.

Mr. JACOBSTEIN. What will be the effect after we have made these studies and you have revealed the spread between the retail price and the price the farmer gets? Will it alleviate the problem or intensify it?

Doctor Gay. I do not know now. Mr. JACOBSTEIN. I have been informed that the spread between the farmer and the manufacturer is very great.

Doctor Gay. May I ask if you know those figures? I do not know them. Mr. JACOBSTEIN. I do not know them. Doctor Gay. It is impossible to do anything but guess at them.

Mr. JACOBSTEIN. If these statistics are going to reveal the information that some of us think it will reveal, an enormous spread indicating an enormous cost in distribution, it is not going to make the farmer feel good.

Mr. SURFACE. I think it is very important, but if the farmer knows it is being done by legitimate cost of actual distribution, he can not complain very much. A large part of the cost is necessary. That is one of the important facts. There are wastes. We will not know what the wastes are and can not stop them and can not check useless wastes until we have knowledge.

Mr. JACOBSTEIN. There will be resistance from those who do not want to give it.

Doctor Gay. I thought I would find it here. I was asked to speak at the annual meeting of the chambers of commerce on the same subject, and I thought there would be opposition of business men. They must answer the census. I thought there would be opposition. Quite the contrary. They gave that unanimous backing. Mrs. Kaun. They are that upper crust.

The CHAIRMAN. These samples were prepared by the Census Bureau and chambers of commerce, or with the National Chamber of Commerce. There seems to be some unanimity of thought.

Doctor Gay. I can speak for the economists and statisticians. They know this is necessary, if we are to know about the distribution system in the United States. I can not speak for manufacturers, but I believe I can say this, 10 years ago there would have been opposition in the chambers of commerce, and now it is disappearing. They want the information. It is necessary for the intelligent management of business to-day. That is the real problem.

The CHAIRMAN. We will adjourn until 10.30 o'clock to-morrow morning.

(At 12.05 o'clock p. m., the committee adjourned until to-morrow, Thursday, January 19, 1928, at 10.30 o'clock a. m.)


Thursday, January 19, 1928. The committee met at 10.30 o'clock a. m., Hon. E. Hart Fenn (chairman), presiding.

The CHAIRMAN. I think, in order to expedite matters, we will proceed at once, and we will hear Mr. Ogg first. STATEMENT OF W. R. OGG, REPRESENTING THE AMERICAN


The CHAIRMAN. Will you please state your name and whom you represent.

Mr. Ogg. William R. Ogg; representing the American Farm Bureau Federation.

The CHAIRMAN. Are you located here in Washington? Mr. Ogg. Yes, sir; I am assistant to the Washington representative, 601 Munsey Building

Mr. Chairman and members of the committee, the interest of our organization, of course, in this bill centers mainly around the agricultural schedules, and in our desire to secure as adequate and accurate information as we can concerning agriculture.

There are just a few features of the bill that I would like to call your attention to and suggest a few changes..

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