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(Witnesses: Olmsted, Lovering.)
Some of the reports which are issued by the Department of Agriculture are duplicated by the Census Office; and surely it would be a matter of sound economy to prevent the duplication of what is supposed to be practically the same information. In view of the absolute unreliability of the estimates of the Department of Agriculture in regard to acreage in cotton, I am sure that the consensus of opinion of cotton manufacturers and cotton merchants would favor the absolute discontinuance of all estimates by the Department of Agriculture in respect to the acreage or the yield of cotton. It seems to me there is no excuse whatever for having the Department of Agriculture continue these estimates in regard to the yield of cotton crops when the Census Office publishes at frequent intervals reports on the cotton which has actually been ginned of each crop. The census figures are facts, while the figures of the Department of Agriculture are nothing but guesses, and frequently very bad ones.
In view of the constant misleading errors which have been made by the Department of Agriculture in respect to acreage in cotton, it seems to me that it would be wise to have the acreage of cotton ascertained by the Census Office. Prominent gentlemen largely engaged in the cotton trade, as factors who sell cotton for the planters, exporters who buy cotton for export, and cotton buyers who buy cotton for our domestic mills, have written me recently, and the consensus of their opinion is that the reports of the Department of Agriculture in respect to the acreage, the condition, and the yield of cotton should be discontinued, because they tend to greatly disturb legitimate business by causing sudden and great fluctuations in the price of cotton.
I beg to inclose copies of some of the letters which I have received, and invite your especial attention to them. They are from gentlemen of high standing, as you may easily ascertain by referring to any volume of Commercial Reports, which I am sure the Washington bank with which you deal would place at your disposal.
I invite your especial attention to the letters from John M. Parker, esq., who is one of the most prominent cotton factors and commission merchants in New Orleans, and at the same time a planter himself; and to the letter of Gen. William W. Gordon, of Savannah, who is one of the best-known cotton factors of that city.
Should you desire them, I can furnish you with many other letters of the character of the ones which I now send to you, or can send the original letters themselves, if desired.
The Hon. Edward D. White of the Supreme Court will tell you in regard to my standing and character. Yours, very truly,
ALF. B. SHEPPERSON. Mr. OLMSTED. Yes; I know him. I want to say, in connection with that, that the National Association of Cotton Manufacturers have negatived all that by their action in the last convention. Mr. Lovering, who is the president of the New England Association of Cotton Manufacturers ?
Mr. LOVERING. Mr. McColl.
The CHAIRMAN. I will simply say here that I think that letter states the whole situation from his point of view.
Mr. OLMSTED. Yes.
The CHAIRMAN. And I have some other correspondence, not a great deal; some favoring and some opposing the continuation of the reports.
In the first place, I think you had better state, Mr. Olmsted, when you made this change in the method of work of your Department.
Mr. OLMSTED. The change in the manner of expressing the estimates in a definite unit?
The CHAIRMAN. Yes; in the manner in which you are now putting out your information.
Mr. OLMSTED: Yes, sir. . As soon as I was placed in a position where I could see the inner workings of the office I discovered what seemed to me to be this wholly inadequate way of expressing the estimate, and when it became time to make the December estimate I had formulated The CHAIRMAN. December of what year?
(Witnesses: Olmsted, Lovering.)
Mr. OLMSTED. December, 1905-I had formulated a plan of expressing it in a definite unit instead of a vague, indefinite unit. I secured, after considerable discussion and persuasion, the consent of my immediate superior, who was favorably inclined to anything that would improve the service, as soon as he saw what I was driving at. After consultation with other gentlemen I secured the adoption of this method, and in the December estimate of 1905 we did express the number of bales that we thought would be produced that year in a definite unit, a bale of 500 pounds gross weight; and I will say that we came within 4.7 per cent of the actual fact, as we found some months later by the Census Bureau report. So that it was pretty close, you see-reasonably close.
The CHAIRMAN. Since December, 1905, you have given the estimates on that basis?
Mr. OLMSTED. No; we did not make any other estimate of that kind until December, 1906. The intervening estimates on our other subjects are not dealt with by the Census Bureau at all.
The CHAIRMAN. Then the only estimate you had made prior to the letter written by Mr. Shepperson on March 31, 1906, was the one you made in December, 1905!
Mr. OLMSTED. The only quantitative estimate was that of December, 1905; yes, sir. That man knew that when he wrote that letter, and he knew also when he wrote that letter, that we were within about 4 per cent of the actual fact, as actually discovered later. What is the date of that letter, by the way?
The CHAIRMAN. March 31, 1906.
Mr. OLMSTED. Perhaps he did not know it then, because it had not been developed; the Census Bureau had not made its final report at that time.
The CHAIRMAN. What I wanted to get at was whether or not the letter written by Mr. Shepperson was either before or about the time when you had made this change.
Mr. OLMSTED. It was after we made the change, because we made the change in December, 1905.
The CHAIRMAN. Exactly so.
Mr. OLMSTED. And that letter is written in March, 1906; was it not?
The CHAIRMAN. Yes.
Mr. OLMSTED. It was after we had made the change, and after we had expressed our estimate in a definite unit.
The CHAIRMAN. But you had not made any intervening estimates prior to this letter of his?
Mr. OLMSTED. No, sir; between our December quantitative estimates and the writing of the letter we had made no estimates at all regarding cotton.
Mr. LOVERING. Did you not make an estimate of the condition in August?
Mr. OLMSTED. In August? Oh, yes; we made one in August; but you see that is in March.
Mr. LOVERING. Did you not make an estimate of the acreage in August?
Mr. OLMSTED. No; not in August. We made one in June.
(Witnesses: Olmsted, Lovering, Zappone.)
Mr. OLMSTED. Yes, sir.
Mr. OlMSTED. This letter was written in March, 1906, you see. That was after this letter had been written.
Mr. ZAPPONE. As a matter of fact, at the time this letter was written you had not had time to get any verification of the December report?
Mr. OLMSTED. I am not sure when the Census Bureau final report was issued showing the quantity of the crop, but I think it was about that time.
The CHAIRMAN. I think that is the point which you wanted to bring out.
Mr. LOVERING. When do you revise your estimate of the acreage? You make one in June, you say.
Mr. OLMSTED. I shall revise the estimate made in last June, if I can get data to revise it on, this coming June. I will not make any more estimates on cotton; we are through with cotton.
Mr. LOVERING. Not intermediately?
Mr. OlMSTED. No. I was not in charge of the Bureau; I was not chief of the Bureau then.
Mr. LOVERING. I mean during the last year.
Mr. OLMSTED. I have been since June 16, but that estimate was made before I came in. That was made on June 3.
Mr. LOVERING. When you made your estimate as to the quantity of cotton in December, was that based on your estimate of acreage made in June, or did you include the factor of abandoned acreage?
Mr. OlMSTED. We considered all those things, Mr. Lovering; but we also considered what I regard as a very helpful source of information, and a reliable one—the census ginners' reports made up to that time.
Mr. LOVERING. Oh, unquestionably.
Mr. LOVERING. Since you have made use of the ginners' reports I think you have not had much complaint.
Mr. OLMSTED. Well, I have made considerable use of them this year. I think there has not been much complaint, either. It is a great help to us.
The CHAIRMAN. What is that?
Mr. LOVERING. Since he has made use of the Census Bureau report of the ginning I think there has been very little or no complaint from manufacturers.
Mr. OLMSTED. es; I have not had any at all.
Mr. LOVERING. As to the December estimate of the quantity of cotton ?
Mr. OLMSTED. I have not had a single complaint. I have had nothing but commendation. I have received many compliments.
Mr. LOVERING. There have been none made in the House here, either?
Mr. OLMSTED. None whatever.
Mr. LOVERING. The motion that was made in the House either to suspend or to make another estimate was prior to that time?
Mr. OLMSTED. Yes, sir.
(Witnesses: Olmsted, Lovering.)
Mr. LOVERING. And none has been made since ?
The CHAIRMAN. I was going to say that, as I understand it, from your point of view there has been a very pronounced improvement?
Mr. OLMSTED. Oh, undoubtedly.
Mr. OlMSTED. Oh, undoubtedly. We feel that way; we are confident about it.
The CHAIRMAN. And so far as your Department is advised, you have not received anything but approval ?
Mr. OLMSTED. Oh, yes; we have received some criticism. When I put out my December estimate, for instance, it was bitterly denounced by officials of the Southern Cotton Growers' Association and by some people who were interested in a high price for cotton. They said it was too big; that I had overestimated the crop tremendously, and all that sort of thing. I did not pay much attention to them, because I knew what our estimate was based on; that it was based on better data than we had ever had before, because we had the Census Bureau figures that I had used in connection with all my other information. I had more information than any ten private agencies or any fifty private agencies in the country, and I knew that so far as the available information was concerned my estimate was bound to be pretty near right; it could not help it.
The CHAIRMAN. And it so developed ?
Mr. OLMSTED. Yes; it has so developed up to this time, so far as we now know. We will not know the exact facts until next March or April, because the final report of the Census Bureau will not be issued until then; but when it is issued it will prove whether our estimate is anywhere near the fact, and I think it will be, so far as it ever has been. What do you think about it, Mr. Lovering?
Mr. LOVERING. Oh, I quite agree with you. The only matter I have any doubt about is this matter of publishing the condition of the crop. The unit that you adopt is an unsatisfactory basis.
Mr. OLMSTED. That is the scientific basis that has been recognized by statisticians all over the country,
Mr. LOVERING. It is absolutely unscientific, however. Do you not think so?
Mr. OLMSTED. Oh, it is absolutely scientific. I think it is the most scientific basis we could possibly have adopted. It is the result of many years of experience and testing on the part of the ablest statisticians of the world, and has been tried out, and there is no system that will supplant it.
Mr. LOVERING. You have to determine what the normal crop is?
Mr. OLMSTED. Yes; the normal crop is what would be the full crop in any particular given section; and every man in that section knows that who produces that crop, and he reports on that basis.
Mr. LOVERING. What would you say, for instance, in Texas, was the normal crop ?
Mr. OLMSTED. It would depend on the different sections. tion of Texas
Mr. LOVERING. In southern Texas, say?
(Witnesses: Olmsted, Lovering.)
Mr. OLMSTED. It produces in some sections a bale to the acre, I am told, while in other sections it will only produce from seven-eighths to three-quarters of a bale an acre. In another section of the country the farmer expects, if he has good luck, to make half a bale to an acre.
Mr. LOVERING. Would you say that the whole of Texas would average 200 pounds to the acre ?
Mr. OLMSTED. I think somewhere about that, sir; but-
Mr. OLMSTED. The man who makes the report, the Texas farmer, has a figure in his mind as to what a full crop is for the section that he reports for.
The CHAIRMAN. Of course the ultimate accuracy of your result depends upon whether or not that individual, who has in his own mind an arbitrary standard
Mr. OLMSTED. Whether he reports honestly or not.
The CHAIRMAN. So that, in the last analysis, the whole thing depends upon the correct judgment of the individual who starts out to make the estimate?
Mr. OLMSTED. Exactly so; and I want to say right there
The CHAIRMAN. And of course you can not know what that is that is, you do not know, under your system?
Mr. OLMSTED. That is true.
The CHAIRMAN. Yes. When you ask Mr. Jones for information along that line, you assume that Mr. Jones assumes the correct arbitrary sum as his normal basis?
Mr. OLMSTED. Yes; and I want to say right there that "the proof of the pudding is in the eating.” By taking these condition reports from year to year and comparing them with the average condition for the same month for a series of years, say for ten years, we find that by applying a very simple formula we can work out what the whole crop will be. We have done it time and again, and it always works out right; so it shows that these condition figures are approximately correct from month to month. That whole thing was thrashed out before the Agricultural Committee.
The CHAIRMAN. That is, your idea is that they can take the figures collected by this Bureau together, year after year---
Mr. OLMSTED. Taking one year with another. The CHAIRMAN (continuing). And work out the result on the basis of these percentages?
Mr. OĽMSTED. For ten years.
The CHAIRMAX. For ten years. So that you get back to the original arbitrary basis upon which these men have made their estimates ?
Mr. OLMSTED. Yes. And we can work out from that a forecast of the crop that proves to be almost exactly accurate for every crop.
The CHAIRMAN. And its result is so approximately correct that it satisfies you that the original arbitrary normal standard assumed by these men has been substantially accurate?
Mr. OLMSTED. Yes, sir.