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1. Last year-1949-how much money did this person earn working as an employee for wages or salary?

2. Last year, how much money did this person earn working in his own business, professional practice, or farm?

3. Last year, how much money did this person receive from interest, dividends, veterans' allowances, pensions, rents, or other income, aside from earnings?

If a person is a family head, three similar entries are to be made covering the income of the members of his family.

These questions are to be asked of every fifth person whose name falls on stipulated lines on the census schedule in a manner so determined that the selection of the person is entirely a matter of chance. An upper limit is fixed for the reporting of each of the above-mentioned three sources of income, namely $10,000. Below this amount the actual figure is requested, above this amount "over $10,000" is an adequate response for each source of income.

Both the limitation to one person in five and the ceiling of $10,000 represent the strong desire of the Bureau to hold to a minimum consistent with the needs for adequate data the cost of the census and the canvassing of the public.

Inquiry authorized by law: The Solicitor of the Department of Commerce as far back as March 2, 1940, ruled that the Fifteenth Decennial Census Act signed by President Hoover on June 18, 1929, contains in section 4 (13 U. S. C., section 204) adequate legal authority for the income inquiry.

Moreover, as was made clear by the Solicitor, the procedures followed in selecting the income questions are in conformance with the intent of Congress as outlined in the House report on the bill (Rept. No. 1476, 70th Cong.). Furthermore, there is ample precedent in previous census legislation enacted by the Congress in which specific inquiries were set forth to indicate the economic questions of this character are inquiries related to population and unemployment as specified in the law.

Finally, it should be observed that the list of questions to be used in the 1950 census of population was submitted to the subcommittee of the Committee on Appropriations of the House of Representatives on February 28, 1949, and is printed in the hearings on the Department of Commerce appropriation bill for 1950 on page 149 and following. Following the hearings, the Congress appropriated the necessary funds for the conduct of the population and other censuses for fiscal year 1950.

Ex-President Herbert Hoover has been quoted as saying that he does not believe that the act which he signed in 1929 authorizes the income questions. I should like to point out that the 1930 census conducted during President Hoover's administration, for the first time, included a question on the value of home owned or owner-occupied units and the monthly rental paid for tenantoccupied units.

The answers to these inquiries were collected under the same 1929 Census Act carrying the same penalty provisions covering the 1950 census. The legality of these questions was not challenged nor were they presumably contrary to the intent of the law as interpreted by the then Director of the Census and then Secretary of Commerce under President Hoover.

Their legal justification was the same as is the legal justification for the 1950 income questions, namely, that they are "inquiries relating to population, to agriculture, to irrigation, to drainage, to distribution, to unemployment, and to mines." It is also of some interest that in a report to the Congress of the Commission on Organization of the Executive Branch of Government signed by President Hoover in February 1949 there appears the following statement: "Government policy depends upon much detailed knowledge about the Nation's employment, production, and purchasing power." Income is certainly an important measurement of purchasing power.

Upper limit for inquiry: A $10,000 upper limit has been fixed for responses to each of the 3 sources of income. There are 3 basic technical reasons why amounts of income in excess of $10,000 from any one of the 3 sources of income inquired into are not specifically requested.

First. One of the major objectives of the income questions is to measure the effect of unemployment, whether for a few days, weeks, or months, on annual income flow. The most important economic and social aspect of unemployment is certainly the loss of income suffered thereby, and it is in the lower-income brackets that this occurs.

Second. Another major objective of the income questions, one in which business is particularly interested, is the measurement of potential markets and

mass purchasing power. It is well known that the mass market is restricted to persons with incomes of less than $10,000.

Third. The number of persons in the United States with incomes in excess of $10,000 for each source of income requested is so small that returns for all such persons would necessarily have to be consolidated into a single-income class in the published reports. It would seem utterly useless to request specific reports for persons with relatively large income merely for the purpose of consolidating them into a single category for statistical purposes.

Census reports confidential: The Census Bureau is prohibited by law from revealing information about any individual. Section 11 of the 1929 Census Act cited above reads as follows:

"Matter identifying individual reports not to be published: That the information furnished under the provisions of this Act shall be used only for the statistical purposes for which it is supplied. No publication shall be made by the Census Office whereby the data furnished by any particular establishment or individual can be identified, nor shall the Director of the Census permit anyone other than sworn employees of the Census Office to examine the individual reports."

Moreover, Census Bureau employees are under law (section 8 of the above act) prohibited from disclosing any information which they collect in the course of their duties and if they should do so are guilty of a felony and upon conviction thereof shall be fined not to exceed $1,000 or be imprisoned not to exceed 2 years, or both so fined and imprisoned in the discretion of the court.

Under usual census procedure, any person who prefers not to answer questions to his local enumerator has the privilege of communicating his responses directly to the local census supervisor or his representative in the local census office.

In 1940, in addition to the standard procedure, the Bureau of the Census printed special forms which, at the option of the respondent, could be used to report his income directly to this Census Bureau in Washington in lieu of making his return to either the local enumerator or the local supervisor.

As in 1940, I have ordered the use of special forms permitting any person the option of mailing his return directly to the Census Bureau in Washington.

Every American may be assured that, under the protection of the law and of the special procedures devised, the income information together with all of the information reported to the Bureau of the Census will, as usual, receive completely confidential treatment. Census returns cannot be used for purposes of taxation, regulation, or investigation, and cannot be made available to any other agency of the Government.

The Bureau of the Census has throughout its history enjoyed the full cooperation of the American people and has commanded their respect primarily because of its known zealousness in guarding the confidential nature of the replies of any individual person or establishment. The Bureau is quite prepared to stand on its record in this respect. I can speak with some first-hand knowledge of this matter because I have been connected with the Bureau for most of the period since 1930 when I served as a census enumerator.

In closing I should like to summarize the experience that the Bureau of the Census has had with the 1940 census income questions and with the income questions asked in various surveys and census pretests during the last 9 years.

Public acceptance of income questions: Charges were made 10 years ago that the American people would refuse to answer the income questions, but experience belied the charges. Of the 35,000,000 families of whom wage or salary income information was requested in 1940, in only 1.9 percent of the cases was the information not collected either because it was unknown or only partly reported or refused.

Of the 40,000,000 earners from whom income returns were received, less than one-half of 1 percent elected to choose the special form on which their income could be entered and mailed directly to Washington in lieu of reporting it to the local census enumerator.

Income inquiries have been made of hundreds of thousands of people by this Bureau since the 1940 census, including a total of 477,000 persons included in tests of the 1950 population schedule. In these surveys, for which there was no provision for mandatory response, less than 1 percent of the persons canvassed refused to answer the income questions. It was largely on the strength of this experience that the inclusion of such questions in the 1950 census in response to widespread demand was deemed feasible and practical.

We will leave the census now and get on to the main statement. Mr. RICH. Let us get bread and butter for these poor low-income families.

Senator SPARKMAN. Senator Flanders, do you have any questions? Senator FLANDERS. I was interested in the emphasis you place on general business conditions as a factor in raising the level of income of the lower-income groups. Somewhere in your summary you made a reference to the improvement in living standards made by improved methods of manufacturing, by new and cheaper and satisfactory products, and the whole range of investment and research.

One of the things that I would be interested in knowing is whether you can get from your information in the Department any clue as to whether the present rate of investment in improved facilities is on a par with or below or above the rate which has been in effect during the period when we made our greatest advance in the scale of living of the people of the country.

Can you give any estimate as to how that is running at the present time? It would be necessary, it would seem, in some way, for segregating mere expansion of industry which is related to the increase in population, from the improvement in industry which affects the standard of living.

Mr. BLAISDELL. I think your distinction is very pertinent, Senator. The improvements in industry which are being made at the present time I feel are developing at as great a rate as they ever had.

Certainly from the standpoint of statistical measurement of investment in new undertakings, while there might be some question on some of the data, I think that the evidence is outstanding that, as far as new processes and new developments are concerned, we are moving ahead today as fast as we ever did, and that the funds going into these new things are as great as they have ever been.

My own opinion and I would have to check this with data—is that it is probably one of the highest rates of development.

Senator FLANDERS. I am glad to hear that in general terms. My only experience relates to the business in which I was engaged for 50 years until I came here, and that is machine tools, in which there is at the present moment a very poor market for improved machinery as compared with previous times.

It has been noticeable, it appears to be breaking, for instance, in the automobile industry and household-equipment industry, that the market has been so good that they have not been bothered about cutting the costs at all.

I am interested in whether that is a general condition or specifically for the industry with which I am best acquainted.

Mr. BLAISDELL. I think the general condition-and I think we could substantiate this without great difficulty-is that the rate of development of new things is very, very great today.

Senator SPARKMAN. Mr. Rich?

Mr. RICH. Mr. Blaisdell, I was very much interested in this statement you made, and I am going to read it:

An increase in social-security benefits and coverage would aid low-income groups, notably the unemployed and the aged. Health programs would improve medical and dental care of those who cannot afford it. Low-cost housing would not only raise living standards but in the long run improve health and productivity.

Agricultural aids have markedly improved the lot of many rural workers. The raising of the national minimum wage will aid many low-income workers directly. Extension of educational opportunities to low-income groups would be a fundamental step in the long-run program of improving their status. All of these programs which I have enumerated now constitute, to a greater or lesser extent, our national policy.

That sounds to me pretty much like the same program that they are putting on in Great Britain. Do you approve of the program that they are putting on over there?

Mr. BLAISDELL. Mr. Congressman, I thought I was describing what we have been doing here. I was not talking here about governmental programs; I was talking about the national program of this country where every one of these things has been done, and in which

Mr. RICH. You mean they have started. How far do you think we ought to go in this policy that you have outlined here in socializing America?

Mr. BLAISDELL. I have not described the process of socializing America. What I have been talking about are things which we have been doing here and that have been accepted by the American people. We have done some of them by private undertakings; we have done some of them governmentally. Take our pension program here that I mentioned, the old-age pension program. This is a program which has been carried on by private industry just as it has been carried on by the Government.

Various corporations have become convinced of the necessity for a program of pensions as has any other part of the community.

Mr. RICH. I agree with you as to the business, but I am wondering as to how far you are figuring on going now as a national policy.

Mr. BLAISDELL. I am not advocating a national policy. I was describing what we have done. I simply stated that as a national program this is what we are doing.

Mr. RICH. But you say that by increasing these various functions that you have already mentioned "is our national policy." I am just wondering how far you expect to go, how far do you expect to go in the socialized medicine, in dental care, and things of that kind.

I agree that a lot of low-income people we should look after, but I wonder how far this Federal Government is going to that end. Can you, as one of the heads of the Department of Commerce, in your field, give us any information on that?

Mr. BLAISDELL. These programs are not part of our activities in the Department of Commerce. You mentioned the problem of medical care. I am no expert in the problem of medical care, but I am well acquainted with the fact that there are literally millions of people today in the United States who have already banded themselves together in their insurance associations to pay for medical care.

Mr. RICH. That is right in those associations and I agree we ought to help them.

Mr. BLAISDELL. This is our national program. I have not said a thing about a national program in terms of governmental program of medical care. I would much prefer to let the people who are experts in that field talk about it.

I have been trying to limit myself to some of the things that I know a little bit about, which has been the character and the influence of our business activity on this group of people.

I mentioned these programs because I feel they are an inherent part of the social life of the United States. The people are asking for some of them through increased Government activity; they are asking for some of them through their direct cooperative activities, through their associations, through their private business, through all of these things, but that is the program.

Mr. RICH. Is the Department of Commerce fostering or recommending or trying to influence legislation to the extent that we might do all the things that you mentioned here in this discourse of yours this morning?

Mr. BLAISDELL. Those are not the tasks of the Department of Commerce, I am sure you recognize. So that as I say, I would much prefer not to give my personal views on this particular matter, but rather to limit myself to those things, and I am giving you simply statements of facts.

Mr. RICH. You are here as a representative. Your personal views are going to have a great influence with the Department of Commerce. I would like to know what they are. I would like to know if the Department of Commerce and the people associated with it are interested in going to the extent of socializing this country, because I am opposed to it in every way I can possibly be, and I do not want to fool anybody on it, and I do not want anybody to fool me. That is the reason I am asking you what your ideas are.

Mr. BLAISDELL. As far as these programs which I have indicated are concerned, the people who have decided the policies of this country, in the Congress, have said that we go in a certain direction. I personally think we have gone very wisely. I think some of them we will probably go further with. I think some of them we will probably go back on.

Mr. RICH. Can you state those that you will go further on and those that you will go back on?

Mr. BLAISDELL. We have adjusted these programs as the times change. In the unemployment-insurance program of the country we have adjudged it to the needs of the industry and the needs of the people so that the two things work together.

People in the social security agencies have dealt with these things in the down-to-earth fashion. The indications are, if I read the signs right, that there is at present demand that these social insurance programs should be improved.

Mr. RICH. By the Federal Government?

Mr. BLAISDELL. By the Federal Government.

Mr. RICH. And you expect the Federal Government to go on in, then, and do the things that ought to be done by the people themselves, or the States, and the local governments?

Mr. BLAISDELL. No. I would expect the Federal and local governments and the State governments would do a great deal of cooperating on these programs as they have in the past.

Mr. RICH. Why do you not do the cooperating with the State and local governments and let them handle it

Mr. BLAISDELL. We do.

Mr. RICH. Instead of you trying to do it here?

Mr. BLAISDELL. I am sure you are acquainted with the unemployment compensation system which is a thoroughly integrated system

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