panies in a particular activity regardless of whether or not their books of record directly yield the requested information. For this and other reasons estimates and approximations are necessarily acceptable in statistical reporting to an extent that would not be acceptable for financial or certain other purposes. Furthermore, it is essential to the economical and speedy consummation of statistical programs that the rules governing reporting permit the companies to authorize subordinate officials to furnish information directly before formal clearance with comptrollers, auditors or company counsel, and that this information frequently be furnished before final figures have been developed in the company record system. In brief, the confidential relationship which is present in Census reporting is vital to its effectiveness." 2 The Confidentiality of Census Reports-some background (a) Reports furnished to the Census Bureau. Under U.S.C. title 13, section 9, the confidential treatment of census information, reports, and other data furnished to the Bureau of the Census is clearly set forth: "TITLE 13, UNITED STATES CODE-CENSUS "S 9. Information as confidential; exception "(a) Neither the Secretary, nor any other officer or employee of the Department of Commerce or bureau or agency thereof, may, except as provided in section 8 of this title **" For our purposes here, however, it might be helpful to review briefly the historical development of the census laws which gave protection to reports submitted to the census by individuals and business concerns. Before 1880, the decennial census was taken by the U.S. Marshals who, as Federal officers, were expected to protect the information which was collected although there was no specific provision of law requiring that this information be kept confidential. The following prose from the Census of 1840 instructions to Marshals illustrates this point: "Objections, it, has been suggested, may possibly arise on the part of some persons to give the statistical information required by the act, upon the ground of disinclination to expose their private affairs. Such, however, is not the intent, nor can be the effect, of answering ingenuously the interrogatories. On the statistical tables no name is inserted-the figures stand opposite no man's name; and therefore the objection can not apply. It is, moreover, inculcated upon the assistant that he consider all communications made to him in the performance of this duty, relative to the business of the people, as strictly confidential." (Page 145, History and Growth of the United States Census) The Act to provide for the 10th and subsequent censuses (20 Stat. 473), approved March 3, 1879, initiated the present system of supervisors and enumerators to replace the U.S. Marshals in the decennial census. This Act required a special census oath which included the phrase: "(I) will not disclose any information contained in the schedules, lists, or statements obtained by me to any person or persons, except to my superior officers." Essentially, this same oath has been required of all census field employees since 1880. The 1880 oath was enforced by a provision of the law which made it a misdemeanor for a supervisor or an enumerator to communicate to any person not authorized to receive the same statistics on property or business unless authorized to do so by the Superintendent of the Census. The Census Acts for the 11th (1890) and 12th (1900) censuses broadened the scope of the 1880 enforcement provision. The 12th Census Act, approved March 3, 1899, made the enforcement provision applicable to all Census employees: any supervisor, supervisor's clerk, enumerator, interpreter, special agent, or other employee who-shall, without authority of the Director of the Census, 66 2 From page 9 of reprint of Decision of U.S. Court of Appeals in FTC v. Dilger. citation, see note 4 below. For **The exceptions provided in section 8 for release of Census reports for genealogical and other purposes are not pertinent to the discussion here: (1) use the information furnished under the provisions of this title for any purpose other than the statistical purposes for which it is supplied; or (2) make any publication whereby the data furnished by any particular establishment or individual under this title can be identified; or (3) permit anyone other than the sworn officers and employees of the Department or bureau or agency thereof to examine the individual reports. communicate to any person not authorized to receive the same information gained by him in the performance of his duties, shall be deemed guilty of a misdemeanor-." The above provision, binding employees to secrecy regarding the content of census schedules, remains in effect today. It will be noted from the above that the earlier census laws which were principally concerned with disclosures to individuals or business competitors did not prohibit the Director of the Census from disclosing data relating to individuals or establishments either by releasing individual reports or by listings or other tabulations. The 13th Census Act (36 Stat. 1), approved July 2, 1909, however, for the first time, restrained the Director from permitting anyone other than sworn census employees from examining the returns and the language which now appears in Chapter I, section 9 a (1) of the title 13, concerning the use of census data for "statistical purposes only" first appeared in this census law: "That the information furnished under the provision of the next preceding section [that is, information relating to 'any manufacturing establishment, mine, quarry, or other establishment of productive industry', not including agricul ture] 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 can be identified, nor shall the Director of the Census permit anyone other than the sworn employees of the Census Office to examine the individual reports." Thus, the legislative history of census confidentiality (as cited briefly above) reveals the increasing concern of Congress over the past 80 years that the confidentiality of census reports be safeguarded against disclosure and that the information be used "for statistical purposes" and not made available to other agencies of Government for purposes of taxation, investigation, or regulation. Moreover, Presidential proclamations made in connection with the decennial censuses have given added weight to the protection accorded to census information and have included repeated assurances that no person should be harmed because of furnishing census information. Of these, President Hoover's proclamation for the 15th Census, made on November 22, 1929, may be cited: "The sole purpose of the Census is to secure general statistical information regarding the population and resources of the country. . . . No person can be harmed in any way by furnishing the information required. The Census has nothing to do with taxation, with military or jury service, with the compulsion of school attendance, with the regulation of immigration or with the enforcement of any national, state or local law or ordinance. There need be no fear that any disclosure will be made regarding any individual person or his affairs. . . .' (b) Copies of census reports. It is only since the 1937 Census of Manufactures that copies of census reports have entered into the collection mechanism employed by the Census Bureau. As indicated above, the widespread use of copies was a development related to the use of the mails in collecting business and industrial census data instead of visits to plant or store by enumerators. It is understandable, therefore, that earlier census legislation omitted any mention of copies of census reports and when the census laws were codified in U.S.C. title 13 in August 1954, there was no specific reference to company-retained copies of census reports, as the recent Supreme Court decision pointed out. Even today, as stated earlier, copies to be retained in company files are not employed in all surveys and there is no legal requirement that such copies be retained in any case. Prior to the decision in December 1961, there was a general belief in the business community, and among Federal agencies, principally the Bureau of the Budget and the Census Bureau, that the confidentiality of census reports applied equally to company-retained file copies of those reports. There were two lower court rulings to substantiate this belief, as follows: Bethlehem Steel Corporation 3 In the case of United States v. Bethlehem Steel Corporation, which involved a Government agency request for copies of census reports, the companies (Bethlehem and Youngstown Steel) asked the Census Bureau to supply them with copies of similar reports filed by other major steel producers. The Census Bureau refused to make these copies available. The United States District Court (Southern District, New York) held that the Government could not be required to supply 3 U.S. v. Bethlehem Steel Corp., D.C., N.Y., 1958, 21 F.R.D. 568. the defendant companies with copies of the reports of other steel producers "since such reports were confidential under the statute." The Court went on to say: "Congress created a privileged status as to the information furnished to the Census Bureau and directed its confidential treatment so as to prevent misuse." In this case, the Court's interpretation that the "information" furnished to the Census Bureau enjoyed a "privilege status" led many to believe that companyretained copies (with identical information) also were confidential. Beatrice Foods Company* In this case, also known as the "Dilger Case," the status of copies of census reports was more clearly defined. The Court of Appeals (7th Circuit) ruled that Beatrice Foods Company did not have to comply with a Federal Trade Commission subpoena demanding company-retained file copies of census reports. The appellate could heid that since the Federal Trade Commission could not obtain the original report from the Census Bureau, it should not be permitted "to do indirectly that which it cannot do directly." In support of its opinion, the Court cited a 1930 Attorney General's opinion that the Census Bureau "should decline to furnish certain requested census information to the Women's Bureau of the Department of Labor." In this case, the Federal Trade Commission, acting under section 6 of the FTC Act, ordered the company to submit certain records, including file copies of census reports. The company failed to furnish all of the data requested and was subsequently ordered by a Federal district court to furnish the data, including company-retained file copies of census reports. The case was appealed and the Second Circuit Court of Appeals ruled that the company had to submit its file copies of census reports to the Federal Trade Commission. This ruling in the Second Circuit Court being contrary to the ruling of the Seventh Circuit Court in the Beatrice Food Case, the Supreme Court agreed to take up the St. Regis Case in its October term, 1961, and, as described above, decided in favor of the Federal Trade Commission. Congressional action Shortly after the second session of the 87th Congress convened in January, 1962, a number of bills proposing to protect the confidentiality of copies of census reports by amending the Census Act were introduced in the House of Representatives. From the following list of bills and their sponsors, it will be apparent that the St. Regis decision was of both national and bipartisan concern to Members of Congress: H.R. 10205-Rep. Ford (R., Mich.). H.R. 10344-Rep. Lesinski (D., Mich.). H.R. 12746-Rep. Derwinski (R., Ill.). The first 4 of these bills failed to include language permitting the voluntary use of copies of census reports in legal proceedings. The Henderson bill (H.R. 10569), which appears below, and identical bills introduced later by Representatives Glenn (H.R. 12323) and Derwinski (H.R. 12746), contained language allowing for the voluntary cooperation of business firms with the Federal Trade Commission in its investigations of possible violations under section 7 of the Clayton Act: "[H.R. 10569, 87th Cong., 2d sess.] "A Bill To amend title 13, United States Code, to preserve the confidential nature of copies of information filed with the Bureau of the Census on a confidential basis "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 9(a) of title 13, United States Code, is amended by adding at the end thereof the following: 'No department, bureau, agency, officer, or employee of the Government except the Secretary 4 FTC v. Dilger, C. A. Ill. 1960, 276 F 2d, 739; Certiorari denied 364, U.S. 882. 5 U.S. v. St. Regis Paper Co., C.A., N.Y., 1960, 285 F 2d 607; Certiorari granted, 365 U.S. 857. of Commerce, shall require, for any reason, copies of any such information, reports, and other data which have been retained by any such establishment or individual. Copies of any such information, reports, and other data which have been so retained shall be immune from legal process, and shall not, without the consent of the individual or establishment concerned, be admitted as evidence or used for any purpose in any action, suit, or other judicial or administrative proceeding.' The fact that the large majority of firms cooperate willingly with the Federal Trade Commission in its investigations is confirmed by the following statement of Chairman Dixon of the Federal Trade Commission: "It is highly significant, we believe, that of the substantial number of such requests that have been sent out, certainly well in excess of 100, so far as a quick check reveals, not a single company has objected to furnishing copies of their retained census reports and in several instances where they did not retain copies, have obtained the material from the Census Bureau in order to furnish it to the Commission." The voluntary cooperation of the business community with the Federal Trade Commission in antitrust investigations is commendable, but, as the hearings of the legislative subcommittee brought out clearly, the compulsory requirement that copies of census reports be made available to the regulatory agencies would have two deleterious effects: (1) Federal census and statistical programs (especially voluntary surveys) and their public and private users would suffer, as explained in the previous paragraphs; and (2) the regulatory agencies themselves would obtain less information than in the past since they would not be able to obtain copies of census reports, if firms were to destroy their copies or fail to report to census in voluntary surveys. The valuable census compilations relating to industrial and business concentration, by product and geographic division, widely used now by the regulatory agencies for benchmark data would be less meaningful if estimates voluntary supplied by reporting firms were not available. Thus, everybody stood to lose as a result of the St. Regis decision as stated in the following exchange between Congressman Johansen, of the legislative subcommittee, and Mr. Walter Ryan, of the Budget Bureau: "Mr. JOHANSEN. Isn't it true therefore that all users of this information will potentially be the losers? Those in Government who use the statistics, those in private business who use the statistics? We can all suffer from the impairment of the data. “Mr. RYAN. I believe that is certainly true, Congressman Johansen. In par ticular if business respondents elect to escape from this problem by not keeping, for example, file copies, then no one gains. Certainly the statistical agencies lose. Every other agency that would like to have access to the type of information loses."" In view of the widespread agreement among informed persons that the St. Regis decision had dealt a damaging blow to census statistics as we now know them and the fact that the enforcing agencies themselves would be among the principal losers if certain census data were no longer compiled, it was difficult for some to understand the Federal Trade Commission's opposition to H.R. 10569 and the related bills. Apparently the Federal Trade Commission's opposition was based principally on the matter of convenience as stated below by the Federal Trade Commission Chairman: "Most companies have their census reports a convenient way to provide the Commission with information and preventing the use of these reports in Commission proceedings would compel both these companies and the Commission to go to the trouble and expense of compiling basic industry information in other forms. This provision of these bills would benefit therefore only the very small minority of companies who prefer to compile production and similar information separately for the Commission rather than give it to the Commission in the form of retained copies of census reports." The Subcommittee concurred with the Budget Bureau that the general public interest in reliable census statistics outweighs any special interest or convenience See Hearings before the Committee on Post Office and Civil Service, House of Representatives, Confidentiality of Census Reports, 1962, p. 7. 7 See Hearings before the Committee on Post Office and Civil Service, House of Representatives, Confidentiality of Census Report, 1962. p. 25. 8 See Hearings before the Committee on Post Office and Civil Service, House of Representatives, 1962, Confidentiality of Census Reports, p. 9. of the Federal Trade Commission, as brought out in the following exchange between Chairman Henderson and the Budget Bureau spokesman: "Mr. HENDERSON. Mr. Ryan, I assume that you have had and seen copies of the letters sent to the Committee by the Chairman of the Federal Trade Commission. You will recall in one leter Mr. Dixon stated it was very convenient for the Federal Trade Commission to use Census reports in their proceedings. "Would you agree that we should not jeopardize the entire Census statistical system simply because the Federal Trade Commission determines it is convenient to use the copies of the Census report rather than conducting its own studies and surveys and investigations? "Mr. RYAN. In this operation of balancing opposing interest, Mr. Chairman, we are of the opinion that the interests of the statistical system which we have attempted to describe here outweigh the interest of the Federal Trade Commission in particular or any other regulatory agency that needs access to an individual record. We feel there should be no impediment to the asking of questions by these agencies but at the same time there should be no force which would require the respondent to give to such agencies the information that he has prepared for statistical purposes. "Mr. HENDERSON. This is a problem facing the Committee, we do not want to keep the regulatory agencies from conducting their investigations and getting all of the information that exists but . . . just being able to go down to Census . . . for a matter of convenience, you feel that is the overriding problem we run into here with the loss of confidentiality in reporting? Mr. RYAN. This is certainly true, Mr. Chairman. I should point out, however, that the proposals that the Administration makes in the form of modification of the bills that are before you and particularly the bill introduced by yourself reflect the concern of the Federal Trade Commission on these two points. As you have said, no one wants to unduly impede the Federal Trade Commission or other agencies in obtaining information they feel they need from respondents. Hence we support the position that the Federal Trade Commission should have every right to ask questions of respondents. We feel respondents should not be forced in reply to that request to give information that has been prepared for a statistical agency on a confidential basis." " It is clear, both in H.R. 10569 itself and in the statements of Members of the Subcommittee, as shown in the hearings, that there was no intent to make the basic production data or other records of a company inaccessible to the Federal investigative or regulatory agencies. If such were the intent, it would be necessary to amend section 132 of title 13, which states ". . . . but nothing in this title shall be deemed to revoke or impair the authority of any other Federal agency with respect to the collection or release of information." In the absence of any amendment, section 132 would necessarily be controlling in respect to all information other than the copies referred to in the proposed amendment to section 9(a). Amending H.R. 10569 During the Subcommittee's hearings on the bills, considerable discussion took place concerning the exact form the remedial legislation should take. The United States Chamber of Commerce spokesman stated that confidentiality should apply not only to company-retained copies of census reports, but also to companyretained work-sheets, tabulations, letters, etc. "As the committee considers what form the legislation should take, we hope you will agree that confidentiality should apply to: the company-retained copy of the Census report, and other data that are solely and exclusively supplemental to the Census Report. Specifically: worksheets, tabulations, breakdowns, etc., that are compiled by the company solely as aids to the preparation of the report-and copies of letters between census and the company which deal with the company's report. "In connection with the latter, many companies find it necessary, in preparing their census report, to assemble special data that would not otherwise be available in the company. Like the report, these data are useful in subsequent clarifying communications between the Census Bureau and business-and in assuring continuity of data from one report to the next. Therefore, it is extremely im See Hearings before the Committee on Post Office and Civil Service, House of Representatives, 1962, Confidentiality of Census Reports, p. 25. |