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STATEMENT OF WAYNE CHATFIELD TAYLOR, UNDER SECRETARY,

DEPARTMENT OF COMMERCE

The CHAIRMAN. Mr. Taylor, you are Under Secretary of Commerce? Mr. TAYLOR. Yes, sir.

The CHAIRMAN. And in connection with the bill now in hearing, S. 1627, and H. R. 5232, you have visited my office, and we had a discussion on the subject of the bill?

Mr. TAYLOR. Yes, sir.

The CHAIRMAN. I wish you would tell the committee, as near as you can recall, the statement that you made to me in support of this bill when you called on me.

Mr. TAYLOR. Well, I think the best way I can do that, Mr. Chairman, is to give the committee a little of the history of the bill, and why we worked out with O. P. M. and the Bureau of the Budget these proposals.

This goes back to, I believe it was, November or December, 1940, when it was quite apparent that in order to get the full, I might say, utilization of the industrial plant of this country, that we had to have information which was not in existence. I believe Mr. May was the first person in 0. P. M. that we discussed the question with. Our feeling was that first we ought to have the information, second, we ought to avoid a duplication in every way possible. In other words, if there was one agency of the Government which had the equipment and the personnel to get this information, we should use that organization rather than attempting to create a new organization in one of the new agencies.

That idea was thoroughly explored with 0. P. M., also with O. P. A. C. S., which was at that time in existence, and with the Bureau of the Budget, the idea being that if we had existing machinery and existing personnel we would do a quicker job for the Government if we utilized that, and the question of the transferring of funds and one thing and another with which you are familiar would be avoided.

We discussed the matter thoroughly with Mr. May, Mr. O'Brien, Mr. Knudsen, Mr. Stettinius, and the people over in the Budget, and came to the conclusion this was the best way of handling it, because as you know, there is a provision in the law that information that is given to the Census, particularly regarding the name of any particular company, is to be held confidential. Even we in the Department of Commerce cannot go to the Census and get the name of any particular corporation. Of course, when you are planning this kind of national effort you want to utilize your plants and know where the inventories are and so on, and you have to have the names. Therefore this particular section of the bill is really the most important one.

Mr. ALLEN. Which section is that?
Mr. TAYLOR. Well, I believe it is section 3.
The CHAIRMAN. Yes; that is covered in section 3, Mr. Taylor.

Mr. TAYLOR. Yes; and another thing that became also apparent was that if you utilize the funds which had already been appropriated for this biennial census, you would not only combine giving the necessary information to the country, but to the defense agencies but you would save the taxpayer money by pushing off the 5-year census until 1943. There are various other details of the conversation and our general approach to it, but that gives you a general background.

Mr. ALLEN. That section 3, then is the essential difference between the present law and what you want?

Mr. TAYLOR. That is right.
Mr. ALLEN. Coupled with going from 2 years to 5 years.

Mr. TAYLOR. That is right, and in going from 2 years to 5 years, and building up, let us say, the current information, most of which will be spot checks, we think we will give the businessman, as well as other governmental officials, a better complete picture of the situation than you will under the present system. We also think it will save the taxpayer considerable money to stagger it over that period, because in the past we have built up an organization, and as soon as we trained it, we disbanded most of it. Another thing that has not particularly to do with this bill, but it is a question of administration; we have made all our field offices Department of Commerce offices rather than Bureau of Foreign and Domestic Commerce offices, so that we have our census people out in our regional offices, permanent regional offices. They can make spot checks, using the Bureau of Foreign and Domestic Commerce personnel out there. We have had several very encouraging results from that. There was one particularly, where we were checking the existing warehouse space by utilizing the field offices, and using the telephone, by which we were able to get much quicker results as to what the existing warehouse situation was, but also we were able to do it infinitely cheaper than we have ever been able to do it before. Mr. Capt and Dr. McClure can give you the details as to how much under the estimate it was.

But it is that type of thing that we think is not only going to serve the business community better but also serve the Government better.

Mr. KRAMER. May I ask a question?
The CHAIRMAN. Yes.

Mr. KRAMER. I see there is quite a difference in section 3, in the penalty. Do you favor the misdemeanor or the felony?

Mr. TAYLOR. I haven't any very strong convictions about that. As a matter of fact, my personal feeling is that any information you give to a national-defense agency, which would be included in information that we would get through the census, would be so unimportant-I mean so far as the life of that particular business is concerned—that I think I favor a moderate penalty.

Mr. KRAMER. How long do you think it will be after the act is passed before you will get under way with this work?

Mr. TAYLOR. As a matter of fact, we are doing some of it now. We are not able to give them the individual names, but we are doing work for all the defense agencies, using the census mechanism.

Mr. KRAMER. Are you taking an inventory now of merchandise on hand?

Mr. TAYLOR. We are in the position that we have to go to 0. P. M., or they have to come to us, and if they have a special job which they wish done, we have to make an estimate of the cost. Then they will have to reimburse us for the cost, by going through the Budget and so on.

It is a rather cumbersome method. Mr. KRAMER. I say, are you making an inventory now of whether a certain concern has a thousand kegs of nails, or whether they have one?

Mr. TAYLOR. I can't give you a detailed answer to that. making certain spot inventory checks, particularly having to do with

We are

scarce materials, scarce metals. I don't think it goes into finished products, but Dr. McClure can answer that question.

Mr. KINZER. Mr. Taylor, you now have your manufacturers' census every 2 years?

Mr. TAYLOR. Yes, sir.

Mr. KINZER. Is it felt that under this bill that is too frequent, that 5 years will be sufficient to meet the needs?

Mr. Taylor. Yes; we think 5 years will be sufficient, particularly if we supplement it with more complete information. Actually, as you all know, your census is the equivalent of an annual audit, I mean, as compared to business practice, whereas this current information is the quarterly earnings statement, for example, or your monthly earnings statement. My own feeling is that business relies much more on the earnings statement than it does on the annual balance sheet.

Mr. KINZER. This bill provides here that upon your request the Bureau of the Census shall undertake new fields, and furnish you with any information relative to questions that may confront them. How general would that be, in your judgment, or just what would that cover?

Mr. Taylor. I think it would cover the type of question that Mr. Ford raised some time ago. If you were sure that a situation existed which your spot checks had demonstrated, then you would feel you would want to have a more complete census of it.

Mr. KINZER. To repeat what you said a bit ago, suppose you were hunting nails, and found where they were in your census investigation. Suppose that question came up a month later. Will you do it over again?

Mr. TAYLOR. No; I don't think there would be any necessity for doing it over again, because if that information were important to the national defense and the utilization of those materials, the nationaldefense people would take whatever action was necessary. There is no point in doing it over again for that type of thing. There are certain other things where you want a moving inventory, say, but that wouldn't go down to kegs of nails.

Mr. KRAMER. May I interrupt you there? Mr. KINZER. Surely. Mr. KRAMER. Would you also inquire as to the prices they were selling materials at at different places in the competitive field, as to whether or not one man was getting considerably more for his materials?

Mr. TAYLOR. Normally, we wouldn't do that.

Mr. KRAMER. Don't you think it would be wise to do that? I find in some instances one man may want 38 cents a pound for nails, where another is willing to sell them for 7 cents.

Mr. KINZER. The price in my judgment is not as important as where they can be purchased.

Mr. KRAMER. It may have some bearing on why a man would have to pay an exorbitant price in one area and perhaps less in another.

Mr. KINZER. Will you please tell us, Mr. Taylor, what has been your experience in the matter of withholding information. The penal provision in these measures raises the question. Have you had any difficulty in securing information, have there been violations in the law in connection with it so that it was necessary to put in the penalty? Do you know of any instances where you found it necessary to institute criminal proceedings?

Mr. TAYLOR. My understanding is that the record has been unusually good on that point.

Mr. KINZER. I understand no prosecution has ever been brought, it has not been necessary.

Mr. TAYLOR. I say, so far as I know, there have been only one or two cases over a long period of years where the question has even been raised. Dr. Reed, or Mr. Capt, could give you the actual history on that. Of course, that has been within the census itself. As I described to you, even we in the Department of Commerce cannot go to the Census and say, "Give me so and so's name.

Mr. LELAND FORD. Does the bill here, which was passed, H. R. 213, give you the necessary authority and provide for a report upon metals? Is that right, Mr. Moser?

The CHAIRMAN. Any statistics from the Census Bureau can be released to the O. P. M.

Mr. LELAND FORD. Providing for any information?

The CHAIRMAN. It doesn't make any difference whether it is metals or materials or anything else.

Mr. LELAND FORD. That seems to be repeated in this bill. I was wondering if you think it necessary to incorporate it here?

Mr. TAYLOR. I think it is necessary to have such a provision. I think that is the most important part of the bill. There are other aspects which to us are important, but that is one of the aspects of the question which is continually arising. For instance, Mr. Odlum, who is now taking care of the defense contracts, the fact that we cannot give him detailed information about the names of these plants, without violating the letter of the law, is handicapping his work. But there are various other things in the rest of the bill which are also important.

The CHAIRMAN. Mr. Taylor, I did not intend to ask you until later, but I will inject it now, since you are going into that field; by what provision of law are you restrained from giving that information now without special legislation to the Office of Production Management?

Mr. TAYLOR. That is in the basic census law, isn't it?

The CHAIRMAN. I think not. We had that discussion here with Dr. Austin and Dr. Reed, when Mr. Fletcher was chairman of the committee, and Dr. Austin told us it was a regulation. I know of no such law, and I think, if Dr. Austin said so, that it is true. I believe you have the authority to release it.

Mr. TAYLOR. If we have, Mr. Moser-
The CHAIRMAN. I think it is an old regulation,

Mr. TAYLOR. If we have, I am disappointed at my powers of persuasion, because I have been doing everything I know how to convince the people in the Census Bureau that this information should be available to the defense agencies.

The CHAIRMAN. Dr. Austin--and at that time I remember Dr. Reed was present-told this committee, because we raised that issue with him-Congressman Lemke, of North Dakota, was on the committee then, and Congressman Fletcher was the chairman; Congressman Bruce Barton was a member of the committee. That was the discussion which I think Dr. Reed will probably remember, and at that particular time Dr. Austin told us the regulation was older than his connection with the Bureau, and he was rounding out 40 years at the time.

Dr. REED. I don't recall any such conversation. It is held, even within the Department of Commerce, that no such information can be disclosed by our Bureau. If there is any loophole by which it can be done I don't know of it, because we have actually refused to divulge such information in and outside the department, information on individual schedules, even including the name of the concern reporting on the facts.

The CHAIRMAN. I know that to be the fact.

Dr. REED. We refuse to give it to judges, we refuse to give it to the Bureau of Internal Revenue, we refuse to give it to any investigator.

Mr. ALLEN. You refuse to give it to any Members of Congress also. Dr. REED. Absolutely.

The CHAIRMAN. In that connection also, Dr. Reed, you will recall we had a pretty heated discussion up on the third floor when Congressman Fletcher was chairman, and it was determined a subcommittee of this committee would be appointed for the purpose of straightening those matters out. You will recall on that particular occasion Congressmen Bruce Barton and Lemke and myself especially took vigorous exception to the crossing of the path of the Census Bureau by the Central Statistical Board, and if at that moment Dr. Austin did not ask to keep it off the record, it will show in the hearings of that committee, when you and Dr. Austin and others appeared before the committee.

Dr. REED. It may be possible, Mr. Chairman, that that was some special inquiry of the census which was not under the law, because we do have certain ones not under that law. For instance, vital statistics, I believe used to be free from it, but anything covered by the decennial census act is completely inviolate, so far as giving out information on an individual schedule. And as a matter of policy, both departmentally, and from a census standpoint, we have always refused to give information, even from schedules not covered by that law.

The CHAIRMAN. Well, I would be pleased if somebody would show us where it was a matter of legislation, becuase I have never been able to find it.

Are there further questions?
Mr. Curtis. Mr. Taylor, which bill are you favoring?
Mr. TAYLOR. Either S. 1627 or the Rankin bill, which is H. R. 5232.
Mr. CURTIS. Is that identical with S. 1627?

Mr. TAYLOR. I think there are a couple of minor changes. I think the penalty clause is one of the changes.

Mr. Curtis. But S. 1627 has passed the Senate?
Mr. TAYLOR. Yes. We feel that that bill meets all requirements.

Mr. CURTIS. In referring to subsection (a), section 17, at the bottom of page 1, all that does is change that census from 2 years to 5 years?

Mr. TAYLOR. From 2 to 5 years. Then it changes the distribution and manufacturing census from 10 to 5.

Mr. CURTIS. Sections (b), (c), and (d), pages 2 and 3, authorize an additional census to be taken any time, do they not?

Mr. TAYLOR. I don't know whether you would call them technically complete censuses.

Mr. Curtis. Is that new law?
Mr. TAYLOR. Well, that is the implication.

Mr. CURTIS. Now, if section 17 is enacted in its entirety, changing it from 2 to 5 years, and then giving you authority to collect other

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