the sample from the BOASI lists and the sawmill area sample, see Appendix A.)

4. Cavassing Methods Used in the Surveys

The report forms for the annual surveys were distributed and, for the most part, returned by mail. An important exception to this procedure was made in the case of the small highly mobile Eastern sawmills which were canvassed by field enumeration.

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The mailing, collection, screening for completeness and consistency, and follow-up of reports for all independent and small multi-unit companies were handled entirely by the various Field Offices of the Bureau. For the large multiunit companies, these operations were conducted directly by the Census Bureau in Washington. facilitate screening of the reports, the field offices were provided with a series of editing checks patterned after those used by respondents. (See Form MA-100 Item 11.) Those manufacturers failing to send in reports and those whose reports were revealed by these checks to be incomplete or otherwise inadequate were reached by letter, telephone, or (in some few instances) by personal visit.

5. The Annual Survey Establishment Report Forms

One standard report form, MA-100, was sent to all establishments included in the 1951 Annual Survey. (For the prior survey years sawmills and planing mills were canvassed on Form MA-110, which called for information on production and stocks of rough lumber in addition to the items included on the standard form.)

a. Comparison with the 1947 Census Forms:

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The annual survey report form represents, for the most part, an abridgement of the standard schedule used in the 1947 Census of Manufactures. The basic statistical measures of manufacturing activity, such as employment, pay rolls, shipments, cost of materials, etc. were defined in essentially the same way as for the 1947 Census. Consequently, historical series published in this report may be considered to be comparable, except as specifically noted in the tables. Three 1947 Census inquiries--analysis of pay roll ended nearest October 15, electric energy generated and sold, and highway-type motor vehicles in use--were dropped entirely, and one new inquiry - products bought and resold without further manufacture--was added to the annual survey form. Other important changes made in the report form were: (1) the provision for reporting value of shipments in terms of approximately 1,000 product classes, instead of some 6,500 individual products, as was the case in the 1947 census; (2) the substitution of product class reference lists, on the basis of which respondents entered on the report forms (in addition to the value of shipments figures) descriptions of the product classes and their codes, in place of pre

on previous census forms; and (3) the addition of a check list of questions at the end of the form to enable respondents to examine their figures for completeness and accuracy before submitting their reports.

b. The 1951 Report Form:

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The 1951 report form differed from those used for the prior survey years in some respects: (1) Force-account construction workers" added as a separate category in the functional distribution of employment item; (2) merchandising activity (cost and value of resales) was treated as a separate item on the 1949 and 1950 report forms, but was integrated with the cost and shipments sections of the 1951 report form; (3) the metals consumed inquiry, included in the prior year reports, was omitted from the 1951 form since a substitute source of data was available from the NPAF-1 and 103 surveys (See Section 11, Metals Consumed, below); (4) in the product inquiry (Item 10) an additional column was provided in which the respondent was requested to report value of shipments for 1950 as well as for 1951. The 1950 product class estimates appearing in this volume were derived from the 1951 Annual Survey reports. (See Section 9, below).

The limitation of the Annual Survey budget required the substitution of a single basic product inquiry for the more than 200 different product forms, each containing a preprinted list of products, used in the 1947 Census. This drastic simplification of the product inquiry made it desirable to use a reference list, containing the principal classes of products made in each of the major segments of manufacturing activity, to assist respondents in reporting their shipments of products. The product class reference list also was used as a device to achieve "self-coding" of product information by respondents, as they were asked to assign appropriate 5-digit product class codes shown on the reference list to their products, as well as report the value of shipments for such products.

The Annual Survey of Manufactures product classes are generally comparable to those published for the 1947 Census. In 1947, the approximately 6, 500 individual products for which statistics were

classes. Both the 1947 Census product descriptions and to a lesser extent, the annual survey product classes, were reviewed and approved by a number of interagency committees set up within the Federal Government. In addition, trade association officials and company representatives from nearly all industries had actively participated in assuring that the commodities and classes as defined were realistic in terms of business practices and records.

One problem involved in this approach in the 1949-1950 Annual Surveys was the failure to define each product class in terms of all of its constituent products. For some classes, this made it necessary for respondents to assume their own definitions in order to report a breakdown of their value of shipments. This difficulty was overcome, in part, in the 1951 annual survey by issuing a supplemental manual to the larger companies. This manual, "List of Individual Products by 1951 Product Classes," specified the more important products included in each product class.

6. Classification of Establishments into Industries

a.

Method of Industry Classification:

An establishment is assigned to, or classified in, an industry, generally on the basis of the principal products made. The products made by each establishment are grouped according to the industries to which they belong,' and the group

of products accounting for the principal portion of the total value of shipments of the establishment determines its industry classification. This group

of products is said to be the primary products of the establishments as well as of the industry which it defines; all other products made by establishments classified in the industry are referred to as secondary products. (For a description of each of the manufacturing industries see Appendix C, "Industry Descriptions, " 1947 Census of Manufactures, Volume I, II, or III.)

manufacturing activities, national totals for these products as published are understated to the extent of such nonmanufacturing production.

b. Historical Shifts in Classification:

Difficulties arise in the assignment of industry classification to establishments wherever their major activities change from one period to the next. For example, if in 1947, the value of an establishment's output consisted of 51 percent creamery butter and 49 percent natural cheese, it was classified in the Creamery butter industry. However, if these percentages are reversed in 1951, application of the principal activity rule would require shifting of 100 percent of the statistical data for the establishment in the current year to the Natural cheese industry because of a slight change in its activity. If the establishment is large, the statistics for the Creamery butter industry might show a marked, but largely artificial decline and the statistics for the Natural cheese industry a corresponding increase as a result of this transfer of the establishment's data between

industries.

In order to minimize such distortions from one report period to the next and at the same time compile current industry data, some modification was made for the annual surveys in the general rule of classifying establishments on the basis of principal products reported in the current period. Small establishments (generally defined as those with fewer than 100 employees) were retained in the industry in which they were classified in the 1947 Census. Large establishments (generally those with 100 or more employees) that showed a change in their major activity from the previous period were also retained in their 1947 classifications unless the shift in major activity was significant. "Significant changes were defined by a rule that tested the effect of changing the industry code on both historical comparability and current industry levels of activity. This rule gave equal importance of "weight" to the effect of each such establishment on the estimates of current year industry levels and on the industry trends between years. Where changing the code minimized this joint effect, the current code was assigned; where the 1947 code minimized this joint effect, the 1947 code was retained. This procedure resulted in greater comparability of 1947, 1949, 1950, and 1951 general statistics.

7. Coordination of Census-BOASI Employment Data a. Differences in 1947 employment totals:

In the 1947 Census of Manufactures, published United States totals of the number of manufacturing establishments and of employment were significantly lower than the corresponding 1947 Old- Age and Survivors Insurance program totals, or those of other Government series. Much of the difference could be accounted for by (1) differences in scope (i. e., the Census figures did not include

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data for central administrative offices and auxiliary establishments of manufacturing concerns, logging camps, small sawmills, small "custom" producers, and certain other groups of establishments), (2) undercoverage in the Census, estimated approximately 1.5 percent of total manufacturing employment, and (3) classification of some establishments as manufacturing by BOASI and as nonmanufacturing by Census because of differences in types of activities reported to the two agencies. In addition, some of the difference could be ascribed to the fact that BOASI employment totals (actually an approximate figure for many establishments) covered the mid-March pay roll, while Census employment represented an average of 12 monthly figures. There were, however, apparent discrepancies between the two employment series at the State and county levels, as well as by industry classification, which could not be accounted for by these differences of scope or reporting period.

Both Bureaus agreed that there was need to coordinate their statistical programs in order to provide the public with comparable and consistent employment series. It was believed, too, that if such coordination could be accomplished while at the same time preserving the confidential nature of the data supplied by employers to the two Bureaus, an important step would have been taken towards the goal of a more unified and improved Federal Statistical program. The first coordination efforts by the two Bureaus were directed primarily toward resolving differences in 1947 industry codes assigned to single-unit establishments. In addition, comparison of the 1947 statistical data for individual multi-unit concerns showed that the two Bureaus often received different establishment. reports from some of the largest multi-unit companies,

b. Coordination in the annual surveys:

It was realized that the achievement of a high degree of coordination in manufacturing statistics would require a case-by-case comparison of the total number of employees reported and of the industry and geographic codes assigned. Such a project was undertaken in connection with the 1949 Annual Survey of Manufactures and involved about 30,000 of the largest establishments covered in this survey. Employees of the Bureau of Old- Age and Survivors Insurance assigned to this work were sworn in as Census Special Agents, and thus became subject to the Census laws protecting the confidentiality of reported data. Similarly, to retain the confidentiality of the OASI records, selected Census employees were authorized to work on the OASI file. These persons compared the information reported to the two agencies for most companies included in the annual survey sample. Individual annual survey reports were matched to OASI records developed from the Social Security tax returns. This matching operation involved reconciling apparent differences in industry codes and location

In terms of size classes of establishments, however, the difference between the 1951 employment figures of the two agencies was minor for the "large" establishments (250 employees or more) and, accordingly, was proportionately larger in the medium size and small establishment size classes (under 250 employees). This pattern by size categories was confirmed in terms of establishment counts. The counts of large establishments by the two agencies are virtually identical, while the small and medium size establishment counts show a difference of approximately 15,000 between the two series.

seemed to offer real possibilities. The two aggregates were built up by different procedures from partly different sets of basic records and reports. Differences in the procedures used to develop these aggregates made it unduly expensive to maintain a complete coordination of the universes for the host of small establishments. Efforts to account for the different results have been only partly successful. More costly and painstaking efforts to run down the detailed reasons for the difference do not seem to be justified. On broad lines, the differences in methods of compilation described below are known to account for at least part of the difference in aggregate estimated employment.

Certain groups of establishments were included in the BOASI universe for 1951 but were not included in the Annual Survey after 1949, either because they were initially considered to be inconsequential, or because it was not feasible to identify them for inclusion. These groups consisted of the following:

(1) Establishments (principally "births" since 1947) that BOASI originally included in its "unknown"' industry classification or in nonmanufacturing classifications but subsequently recoded into manufacturing.

(2) Births classified as manufacturing by BOASI, but classified as nonmanufacturing by the Census Bureau, on the basis of the Annual Survey reports received from a sample of such birth establishments. Although BOASI corrected its industry codes for the specific establishments included in the Annual Survey, it had no information by which it could correct its codes for all the births represented by the sample.

(3) Certain categories of manufacturing companies that had shut down at sometime in the past but that subsequently resumed operations without being separately identified in the BOASI records.

(4) Certain categories of "successor" companies (principally independent or single-unit companies that had changed the trade names of the establishments when they assumed ownership).

The effect of these differences between the County Business Patterns universe and the universe represented by the Annual Survey sample cumulated from year to year. Coordination of these problem groups was not attempted, however, because of the high costs involved, and because the evidence available from experience in the earlier Annual Surveys indicated that the establishments in question accounted for a negligible proportion of total manufacturing employment. It is possible that the expansion in manufacturing activity from 1950 to 1951 greatly magnified the relative importance of some of these groups, notably the "reactivated" companies (group 3) and the successors (group 4). Limited studies that could be made of this point led to inconclusive results. Similarly, no precise measure is available of the amount contributed to

the 1951 discrepancy by the establishments which BOASI reassigned from the unclassified category into manufacturing (group 1) and the establishments which were classified differently by the two agencies (group 2).

Apart from the coverage and classification divergences described above, it must be recognized that the two agencies get distinctly different types of reports for many establishments, often prepared by different organizational units in each company-in one case, as a means of implementing the collection of social security taxes, and in the second case, to produce statistical reports of employment, wages paid, and hours worked to the Bureau of the Census and other statistical agencies. For example, some small companies, which properly should be classified as multi-units but were processed as single-unit companies, may have included only their manufacturing employment in their Annual Survey report, but included their nonmanufacturing employment as well in their BOASI report.

While the detailed results published from the Annual Survey of Manufactures may be 1 or 2 percent too low, for the reasons described above, they are internally consistent, since they are compiled from the same set of reports.

8. Employment and Pay Roll Data Collected in the Annual Surveys

a. Coverage:

The Annual Survey of Manufactures employment figures for operating establishments have been coordinated with BOASI program records for consistency in classification, coverage, and statistical accuracy. It is possible, therefore, to relate the Annual Survey data to total manufacturing employment figures and taxable pay roll data of BOASI (within the limits described in the section above). Although the Annual Survey collects reports from operating establishments only (i. e., factories, plants, and mills), and not from separate administrative offices and units auxiliary to manufacturing, the employment and pay roll data for these latter activities (which account for only 2 percent of total manufacturing employment) are obtained from OldAge and Survivors Insurance program records.

To account for total employment in manufacturing activity, therefore, the estimates derived from the 1951 Annual Survey have been combined with 1950 employment and pay roll data for administrative offices and auxiliary units, as compiled from Old-Age and Survivors Insurance programrecords. The resulting total "all industries" manufacturing employment figures are shown in the

It should be noted that the BOASI tabulation of 1951 employment data had not been completed at the time the Census Bureau prepared its Annual Survey release tables in the fall of 1952. The recently completed BOASI tabulations indicated that central administrative office and auxiliary employment actually rose 25,000, from a 303, 000 level in 1950 (as shown in the above table, as well as in all general statistics tables in this volume) to a 328,000 level in 1951, which total will appear in the forthcoming publication of the 1951 County Business Patterns.

b. Definition of "All Employees':

"All employees' comprise all full-time and part-time persons on the pay rolls who worked or received compensation for any part of the four selected pay periods covered during 1949, 1950, and 1951, including persons on paid sick leave,

to the sum of the three employee classes for which statistics were collected in the 1947 Census, namely, “Production and related workers, "Force-account construction workers, " and "Administrative, sales, supervisory, technical, office and all other personnel.

c. Definition of "Production and Related Workers":

"Production and related workers" comprise working foremen and all non- supervisory workers (including leadmen and trainees) engaged in fabricasting, handling, packing, warehousing, shipping, maintenance, repair, janitorial and janitorial and watchman services, product development, auxiliary production for plant's own use (e.g., power plant), record keeping, and other services closely associated with these production operations of the establishment.

d. Definition of "Force-Account Construction Workers":

"Force-account construction workers" comprise employees of the establishment who are engaged in construction of major additions or alterations to the plant, and are utilized as a separate work force.

e. Definition of "All Other Employees":

"All other employees" comprise nonproduction personnel of operating manufacturing establishments, including those engaged in the following activities: executive, purchasing, finance, accounting, legal, personnel, cafeterias, medical, professional, and technical activities, sales, salesdelivery (e. g., routemen), advertising, credit, collection, and installation and servicing of own products, routine office function, factory supervision (above the working foremen level).

f. Monthly vs. "Average" Employment Totals: The annual survey report forms requested employment of each manufacturing establishment in the sample for the pay roll period ended nearest the middle of each quarter, except that the middle of March was selected for the first quarter to facilitate the comparison of Census and Bureau of OldAge and Survivors Insurance employment statistics (as described in Section 7 above). An average employment figure was calculated for both "All employees" and "production workers" from the four reported monthly figures. The 1947 Census averages, on the other hand, were based on 12 monthly figures.

"Total wages and salaries for the year, reported for all employees in operating manufacturing establishments, are defined as the gross earnings of such employees, including commissions,