AN ACT To provide for a quinquennial census of industry and business and for the collection of current statistics by the Bureau of the Census

Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, That section 17 of the Act to provide for the fifteenth and subsequent decennial censuses and to provide for apportionment of Representatives in Congress, approved June 18, 1929 (46 Stat. 21) is hereby amended to read as follows:

"SEC. 17 (a). That the Director of the Census be, and he is hereby, authorized and directed to collect, compile, collate, and publish, for the year 1943 and every fifth year thereafter, statistics of the manufacturing and mineral industries and of business, commercial, mercantile, service and professional enterprises, and such other industries and enterprises as the Secretary of Commerce may deem it in the public interest to include; which shall be known as a quinquennial census of industry and business.

"(b) That the Director of the Census be authorized, when directed by the Secretary of Commerce, to collect, compile, collate, and publish current or periodic statistical data supplemental to any census or other statistical inquiry authorized by law. The collection of any such current or periodic statistical data shall be undertaken only if the Secretary of Commerce, after due investigation, shall find the inquiry necessary to serve a broad public need.

"(c) That the number, form and subdivision of the inquiries in the schedules used to collect the statistical data authorized by this section, the date or dates to which such data relate, and the areas, including the Territories and insular possessions of the United States, and the classes of industries, enterprises, establishments, and individuals to be covered shall be determined by the Director of the Census, with the approval of the Secretary of Commerce; and the Director of the Census, with the approval of the Secretary of Commerce, shall be authorized to issue such regulations as may be necessary for the collection of such statistics."

SEC. 2. That the provisions for the decennial census inquiries relating to distribution and to mines provided for by sections 1 and 4 of the Act to provide for the fifteenth and subsequent censuses and to provide for apportionment of Representatives in Congress, approved June 18, 1929, are hereby repealed.

SEC. 3. That notwithstanding any other provision of law, any individual census report or any information contained therein may be used in connection with the national-defense program under such rules and regulations as may be prescribed, with the approval of the President, by the Secretary of Commerce. No person shall disclose or make use of any individual census report or any information contained therein contrary to such rules and regulations; and anyone violating this provision shall be guilty of a misdemeanor and upon conviction thereof shall be fined not exceeding $500 or be imprisoned not exceeding six months, or both.

JUSTIFICATION FOR THE ENACTMENT OF LEGISLATION TO PROVIDE FOR A QUINQUENNIAL CENSUS OF INDUSTRY AND BUSINESS AND FOR THE COLLECTION OF CURRENT STATISTICS

INTRODUCTION

This legislation is necessary to provide ample authority for the Bureau of the Census to perform its proper functions in the collection and compilation of statistical data essential to national defense. The Bureau already finds itself embarrassed by inadequate legal authority to meet the requests already received for the collection of data for the Office of Production Management and other defense agencies. While the results of the sixteenth decennial census (1940) have proved of inestimable value as general background data, they cannot be expected to provide a picture of the kaleidoscopic changes which have occurred as a result of the national emergency. Current and periodic inquiries must be made. Such inquiries must be taken with the full authority of law and collected and compiled with the utmost speed. At present the Bureau has a relatively large staff of trained personnel and is well equipped with the latest mechanical devices to implement its part in the defense program but it cannot proceed effectively until legislation such as is here submitted gives adequate authority for this program.

The present authority for work by the Bureau can be classified under four general headings:

1. The organic act of the Bureau of the Census with its supplemental laws and amendments defines in general the interdecennial work of the Bureau.

2. The Decennial Census Act of 1929 provides for the 10-year national inventories of population, unemployment, housing, agriculture, manufactures, business, mines, irrigation, and drainage. It also contains certain general operating legislation applicable to the organic act of the Bureau.

3. Special acts requiring the collection and compilation of statistics for particular subjects, such as cotton, cottonseed oil, and red cedar shingles.

4. Orders of the Secretary of Commerce under authority of section 8 of the organic act of the Department of Commerce which provides that the Secretary of Commerce "shall also from time to time make such special investigations and reports as he may be required to do by the President or by either house of Congress, or which he himself may deem necessary and urgent."

Existing census laws leave much to be desired. It is possible, for example, to collect and publish monthly statistics on red cedar shingles with compulsory reporting enforced by statutory penalties, yet it is not possible to collect commodity data for national defense covering many types of manufactured products both for military and civilian use except on a voluntary basis. The Bureau of the Census has a work schedule very much like that of 100 years ago. Important national censuses of business and industry, such as the census of manufactures, the census of mines, and the census of business are required to be enumerated, compiled, and published within the same period of time as the immense national censuses of population, housing, and agriculture. This makes the Bureau of the Census essentially an intermittent organization in its statistical services to the public and produces extremely wasteful and violent flucuations in the size of the Census staff, the use of equipment, space, etc.

OBJECTIVES OF THIS LEGISLATION

The objectives of the legislation here proposed may be summarized briefly as follows:

1. It provides the necessary authority for the assumption by the Bureau of the Census of its proper functions in the collection and compilation of statistics for defense agencies and the public.

2. By eliminating the 1941 census of manufactures and substituting therefor the collection of current or periodic data in the fields of manufacturing, mining, and business, it will be possible to secure much needed data this summer instead of a year hence. Furthermore, the funds released by eliminating the 1941 census of manufactures can be made immediately available for this current statistical program.

3. Savings of Federal expenditures and greatly improved administrative procedures as well as better statistical data will result from the proposed quinquennial census of industry and business and the elimination of the biennial census of manufactures, the decennial census of mines, and the decennial census of distribution which are now taken at the same time as the census of population.

4. A permanent basis for the improvement of periodic statistical data is provided by this legislation in that it makes possible the application of scientifically proved sampling techniques by the Bureau to many phases of its work.

Section 1 of the proposed legislation replaces section 17 of the Fifteenth Decennial Census Act, approved June 18, 1929. It is possible to fit the quinquennial census of industry and business and the current statistical data into the basic census law provided by the Decennial Census Act and to make applicable to the proposed inquiries several of the desirable provisions of the Fifteenth Census Act without unnecessary duplication of the provisions of census law. For example, the Fifteenth Census Act contains all of the necessary provisions for the employment of field employees together with specifications of their duties, and penalties for certain illegal acts by them. It also contains the standard provisions for the compulsory reporting of census information as well as essential operating provisions.

The need for legislation rescheduling the national censuses of the United States to avoid periods of abnormally high work loads interspersed with periods of little

activity by the Bureau, and the need to provide adequate legislative authority for the collection of current and periodic statistical data has long been recognized by many agencies of the Federal Government. The attached legislation is a necessary first step in the revision of the census program. This legislation would also authorize the Secretary of Commerce with the approval of the President to modify the present inflexible rules governing the confidential nature of individual reports to the Bureau and make such reports available for use in connection with the defense program.

ANALYSIS OF THIS LEGISLATION BY SECTIONS

Section 1: This section substitutes for the biennial census of manufactures provided by section 17 of the Fifteenth Decennial Census Act, approved June 18, 1929 (46 Stat. 21) authority for a quinquennial census of industry and business and the authority for the collection of current or periodic statistical data supplemental to any census or other statistical inquiry authorized by law. A detailed analysis of each of the subsections is as follows:

Subsection (a): A quinquennial census of industry and business, and the authority for intervening inquiries relating to the subjects of the said census, when directed by the Secretary of Commerce, is provided in place of (1) the present biennial census of manufactures, (2) the decennial census of distribution, and (3) the decennial census of mines now required by the Fifteenth Census Act.

A census of manufactures was taken in connection with each decennial census of population from 1830 to 1900. Beginning with 1904 this census was made a quinquennial inquiry, and since 1921 it has been taken every 2 years. During the past decade it has become increasingly evident that a complete coverage of all manufacturing establishments in the United States was not necessary biennially and that, on the other hand, data on certain aspects of some manufacturing industries are desirable and necessary annually, quarterly and monthly. The recent development of more refined statistical techniques using scientific sampling methods has opened the way for material savings in the collection of statistical data in this as well as other fields.

A census of mines has been taken in connection with the decennial census of the United States since 1840. The productive activity, inventories, and capacity of this industry are so vital for national defense, and for the proper development of national economy in times of peace as well, that a census of the mineral industries should be taken quinquennially instead of decennially. With the assistance of the Work Projects Administration a census of mines was taken for the year 1935. It is proposed that the quinquennial complete canvass of this industry be supplemented by the collection at more frequent intervals of certain of its more basic statistics.

The census of distribution provided for by the Fifteenth Census Act as a decennial inquiry has proved useful far beyond the expectations of those who originally sponsored this inquiry. Twice during the past decade the Bueau of the Census has taken other censuses of distribution: In 1933 as a national Civil Works Administration project and again in 1935 with the assistance of the Work Projects Administration. In recognition of the true nature of the census of distribution, the title of this inquiry has been changed to census of business. Like the census of manufactures and the census of mines it is believed that complete coverage of business establishments is needed only once in every 5 years, but that certain supplemental data of a current nature are needed at more frequent intervals.

The close economic interrelationship between the censuses of manufactures, mines, and business, particularly with regard to the types of establishments to be canvassed, the character of the data to be gathered, and the necessary concurrent interpretation of data from all three fields in securing a true picture of production and distribution makes imperative the collection of these three major censuses at the same time. Present legislation provides that these censuses are collected together only during the decennial census period, at which time the Bureau of the Census is also required to take a census of population, a census of agriculture, a census of housing, and censuses of unemployment, and irrigation and drainage. It is proposed that the quinquennial census of industry and business be taken for the year 1943 and every fifth year thereafter, thus reducing the number of Nation-wide censuses and therefore the size of the field and office staffs, the amount of space and equipment, and other wasteful factors which result from a too heavy peak load during the decennial census period.

Subsection (b): The Director of the Census is authorized by this subsection to collect current or periodic statistical data supplemental to any census or other

statistical inquiry authorized by law when so directed by the Secretary of Commerce and after due investigation by him.

The current statistical work of the Bureau of the Census is now done under two types of authorization: (1) Specific laws, such as the Cottonseed Act of 1916 (39 Stat. 436; U. S. C., title 13, secs. 81 to 84, inclusive); and (2) orders of the Secretary of Commerce under the general authority of section 8 of the Organic Act of the Department of Commerce (32 Stat. 829; U. S. C., title 5, sec. 604). Only when operating under a specific act, such as the Cottonseed Act, does the Director of the Census have the power to compel the submission of current reports by industrial or business establishments. Therefore, when public policy requires a complete and accurate monthly report on a particular industry or commodity it is necessary to submit to Congress a special bill providing for these data. Such special legislation is bothersome to the executive agencies and the Congress.

It is administratively desirable and in the public interest to enact general legislation which will give the authority of law when necessary to requests for current industrial and business reports. In recognition of this, Acting Director Bell of the Bureau of the Budget, in a letter to the Secretary of Commerce, March 13, 1937, said:

"It would seem advisable that Congress enact a provision of law for the imposition of a penalty applying to all investigations conducted under the authority contained in section 8 referred to (32 Stat. 829, U. S. C., title 5, sec. 604). This would make unnecessary the enactment of special legislation, such as is contemplated by S. 1124 (the Red Cedar Shingle Act; 50 Stat. 204), having as its only necessary purpose a penalty provision applicable to the particular work concerned.'

Because of the many varied activities conducted under the general authority contained in section 8 of the organic act of the Department of Commerce, referred to by Mr. Bell, it is deemed advisable to make specific provision for the collection of current statistical data rather than to enact a more general provision covering all work undertaken under this broad departmental authorization.

Section 2: This section eliminates the inquiries relating to distribution and to mines as part of the decennial census of the United States.

Section 3: The needs of the defense program are of such a character as to require full and direct information about specific individuals and business establishments. It is clearly the intent of Congress and of the administration to implement in every possible way the defense program. An essential part of this implementation must be through the proper use of statistical data to speed production and to provide the detailed knowledge needed for the planning of total defense. To continue to impose the rigid provisions of the present confidential-use law of the Census Bureau on data now in the possession of the Bureau and that to be gathered and used for the national-defense program would defeat the primary objects of the legislation here proposed. As a safeguard against the possible misuse of information submitted in individual census reports, the Secretary of Commerce is given the authority to prescribe with the approval of the President the terms and conditions for use in the defense program only of such information. A penalty is provided for the disclosure of any individual census report or any information contained therein contrary to the terms and conditions prescribed by the Secretary.

Mr. CAPT. Now, Mr. Chairman, I would be glad to answer any questions the committee wishes to ask, and if I cannot answer them I will engage myself to get the replies for you as soon as possible.

The CHAIRMAN. Then, Mr. Capt, I will ask you a few questions to start with. When the letters to which you refer had been submitted by the Secretary of Commerce to the Speaker of the House, you came to my office to see me, and I gave you this article cut from the Evening Star to read, and questioned you on the subject of the special census therein referred to.

That article reads:

WORK PROJECTS ADMINISTRATION WON'T FINANCE SPECIAL CENSUS OF METROPOLITAN DISTRICT OF COLUMBIA

The Work Projects Administration has turned down a request of the Census Bureau for funds to finance a sample census of metropolitan Washington, it was learned today.

To meet the demands of defense and other Government agencies for figures showing the growth of population in the District and in nearby areas since the decennial count of April 1, 1940, the Census Bureau had planned to take a sample census during the week beginning June 23. Since it had no funds for the purpose, the Bureau asked Work Projects Administration to finance the project.

Despite the refusal of Work Projects Administration to finance the project, the Census Bureau said today that it hoped to carry out the project within a month or so with the financial help of defense agencies. Plans for the same census have been completed. In addition to population, it will include housing and employment

I wish you would give the committee the gist of your reaction to that along the line that you discussed with the Chairman of the committee in my office.

Mr. CAPT. This article, which is a news report, refers to a proposed W. P. A. project to take a special census of population and housing in the District of Columbia and environs.

The Defense Authority Housing Coordinator, Mr. Palmer, the Alley Dwelling Authority, the House District Committee and the so-called Toland committee, had several times approached the Bureau of the Census with regard to taking a census of population and housing in the District and environs, because of the tremendous influx of people that had come about as the result of defense activity. We had agreed to take it, provided we could get funds. Bear in mind, gentlemen, we had no purpose in the census except to render service to people who needed it.

We went to W. P. A. and asked if they would put through a project to do this thing, after we had conferred with these other agencies, as they had agreed that would probably be the best way to do it, inasmuch as they could not get funds from their own appropriations. The W. P. A. after considering it, refused to put up the funds for it, and that was the last of it.

The CHAIRMAN. Now, then, Mr. Capt, who in the Tolan committee approached the Bureau of the Census to take such a special census in the District of Columbia?

Mr. CAPT. I think Mr. Tolan himself may have talked to some of our people. I know some of his staff, a Dr. Lamb, one of the staff of that committee, talked to our population people on a number of occasions about it.

The CHAIRMAN. I happen to have a member of the Tolan committee on this committee. He is not here today, but he knew nothing of it. Mr. Tolan denied he knew anything of it. In what way does this Mr. Shira, whom I had you check up, figure in it?

Mr. CAPT. He is working in the Library of Congress.

The CHAIRMAN. I think that is the information you gave me. This fellow Shira has been connected with the Library of Congress and the Carnegie Foundation.

Mr. CAPT. He is not on our pay roll and we don't know anything about him, except he is in the Library of Congress.

The CHAIRMAN. Did he at one time approach you or anyone to your knowledge in the Census Bureau?