Reporting of Industrial Statistics.Review by: S. M. DuBrulJournal of the American Statistical Association, Vol. 30, No. 192 (Dec., 1935), pp. 775-776Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2277751 .

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REVIEWS 775

Reporting of Industrial Statistics-Report of the Committee on Statistical Reporting and Uniform Accounting for Industry to the Business Advisory and Planning Council for the Department of Commerce. Business Ad- visory Council, Department of Commerce, Washington, D. C. Free.

This report was prepared by a Committee consisting of Walter S. Gifford, Chairman, Pierre S. du Pont, and W. A. Harriman, with Donald R. Belcher as Executive Secretary. The report has been confined strictly to the limita- tions imposed by its title and thus does not deal with the question of the uses to be made of the data after they are collected and published. Further- more, the report, rather than making a presentation of a broad program of governmental statistical activity, is concerned almost entirely with the activi- ties of the Department of Commerce in the field of industrial statistics.

The Committee offers a strong endorsement of the general census studies of industrial activity on an annual or biennial basis and recommends that these be broadened as much as possible. Beyond that, however, its main recommendation is that the Department of Commerce encourage the gather- ing and tabulation of current data by the trade associations in their respec- tive fields, confining itself to the publication of only such totals and averages of these facts as may be of broad public interest.

There can be no argument on the soundness of the Committee's appraisal of the place of the trade association in any comprehensive program of in- dustrial statistics. The trade association is composed of, and supported by, the members of the industry and will have far less difficulty in obtaining comprehensive data voluntarily than will any Government agency. Further- more, every industry interested in a statistical program at all will want much more detailed figures than would be advisable for a Government agency to collect as a regular activity. Even though the Government agency were to collect the data in the detail desired by the industries, the burden of such an undertaking on a centralized basis is impossible to conceive, if the reports are to be promptly summarized and distributed.

There is violent opposition in some quarters to this plan, on the grounds that associations are poor custodians of confidential data; that they seldom appreciate the need of having trained statisticians; that their tenure is often highly uncertain; and there are numerous other objections. But in any industry in which the members are not sufficiently alive to their own needs for a good statistical program, the substitution of a Government agency, although it may produce more and better data, will not compel their use in better management of the industry, and thus the data will only be of his- toric interest to a few students. On the other hand, many associations have long since proved the merit of industry statistical programs, for example, the machine tool, rubber, automobile, and paper industries, to mention only a few noteworthy instances. No Government agency could begin to perform the statistical services which the associations in these industries are now fulfilling.

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776 AMERICAN STATISTICAL ASSOCIATION

It is unfortunate that the committee which prepared this report failed to explore this issue exhaustively. Possibly the answer is to have certain compulsory reporting to the Government, but to underwrite this function to the associations which can satisfy the Census Bureau and the Central Statis- tical Board that they are adequately equipped to perform it. In this way both the industry statistics movement and a sounder, less ballyhoo-type of trade association program would be accelerated, and at the same time the work would be decentralized and conducted by those directly in touch with their own peculiar problems.

There is one astonishing comment by the Committee which cannot go un- challenged. The Committee does not recommend obtaining data on orders, stating that "orders, new and unfilled, have not been included for the reason that their usefulness to others than members of the particular industry would appear to be generally slight and their forecasting property of doubt- ful significance"! That statement, in a system in which the immediate cause of current fluctuations in the level of business activity is a change in the rate of business buying, is astonishing. The explanation may lie in the dominating public utility background of the members of the Committee. All industrial statisticians and managers who have been interested in this problem will unanimously agree that the compilation of data on production, stocks, and shipments only is of small value in comparison with these series accompanied by data on new and unfilled orders. Without all five of these series, the problem of rational industrial control is infinitely more complex and unsatisfactory. With all these series available, this reviewer can speak from personal experience on their value in forecasting both price and pro- duction in at least two industries, namely, merchant pig iron and fire-clay brick. The automobile industry's whole technique of production control is based on the esfimated rate of retail buying corrected as the actual sales are reported at least every ten days. Only when orders and shipments are synonymous, as in retailing, is the position of the Committee tenable that only data on production, shipments, and stocks are necessary.

The Committee should be given a great deal of credit for the manner in which it has compiled a catalogue of the desirable series to be obtained, with notations concerning those already available and the sources from which they are obtained. This compilation should be of tremendous value to all students of current industrial statistics and will serve as a ready reference for source material in this developing field.

The report as a whole is worth reading by all technicians interested in this field, if only to be acquainted with another of the reports conscientiously prepared by business men who took seriously their job of trying to help the New Deal develop practical programs, only to learn at a later time that those who could do something about their recommendations were too busy even to read or understand them.

S. M. DuBRUL General Motors Corporation

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