(Witness: Olmsted.) The CHAIRMAN. Let me ask you this question right there, so that you can explain it as you go on-because I want you to explain it fully: Is not that really the factor that renders the whole equation unstable and uncertain? Mr. OLMSTED. No, sir; that is what renders it certain. The CHAIRMAN. Go on and explain it then. Mr. OLMSTED. If we adopted a fixed figure with reference to that normal, it would not be certain at all, because that fixed figure would not apply to every locality. Every locality has a different measure of a full crop. In Ohio, for instance, we might say that the normal crop would be 40 bushels per acre. In South Carolina it would be 10 bushels per acre. Those farmers know what a full crop is in their country. The CHAIRMAN. Do they, within your knowledge, take, say 40 bushels per acre as the normal, 100 per cent? Mr. OLMSTED. If that is the full crop in the locality of the man who makes the report as to that. We can not fix it. The CHAIRMAN. Does that vary in every locality? For instance, does one farmer say to himself Mr. OLMSTED. No; not every locality. It varies in every considerable section, of course, but not in every little locality. One part of a State will make 40 bushels per acre, normally, if a full crop be made; while in another section of the same State the farmers may make 35 bushels per acre as the normal. The land is not quite so good. The CHAIRMAN. Are you in the possession of information so that you know what the exact normal figure is? Mr. OLMSTED. No; but these correspondents are. They live there. They are on the ground, and they know for their own locality what the normal crop is there. They are asked to report on that basis, and they do report on that basis, and have done so for the last forty years. The CHAIRMAN. And whatever standard, in their judgment, is the normal standard is the basis of your information? Mr. OLMSTED. That we adopt; yes, sir; and we do not pretend that it is anything else but a comparison with the normal condition. The whole commercial world, in the case of cotton, for instance, when we say that the condition of the cotton crop is 75 (if that should be the figure) would know that the indications at that time were, according to the opinions of the people who made the reports, that three-quarters of a normal crop would be made. Those figures are valuable particularly as they are used in comparison with preceding years. You see, we have a ten-year basis, which we keep up all the time. We give an average for ten years, and we show the preceding year in comparison with the average years for the same month, and that results in a formula which enables us to work out, by means of these condition figures, very closely what the crop may be. It works out nearly exactly all the time; and if my predecessors had confined themselves to that formula they would have been much closer in their estimates for many crops than they have been. The CHAIRMAN. What have been the results heretofore in connection with this Bureau as to the cotton crop? What I want to know is, how have the actual results of the crop compared with the forecasts and estimates made by the Department? (Witness: Olmsted.) Mr. OLMSTED. They have resulted, when reduced to a common basis, in marvelous accuracy-something almost unbelievable. Mr. Hyde, my predecessor, had a way of estimating the crop in bales of an indefinite weight. He did not state the weight of the bales, and no one knew what those bales weighed. He would not say. He would say so many bales." But by going back into his figures, and digging into them, I have found the number of pounds that he used in arriving at his bales. 66 The CHAIRMAN. He did not give the public that information? Mr. OLMSTED. No; he would say "so many bales," without saying how much the bales weighed. The CHAIRMAN. What is that sort of an estimate worth? Mr. OLMSTED. I did not regard it as valuable at all, myself; and I changed the whole thing when I took charge of it, as soon as I could. The CHAIRMAN. How long had this Department been running this thing on the basis of bales, without letting anybody know what the bales were? Mr. OLMSTED. I do not know how long; but I know that the bales he estimated did not compare at all with the bales as finally determined, because they were bales of a different kind. The Census Office bales have been 500-pound bales, gross weight, since 1899. His bales were bales of an indefinite weight. The CHAIRMAN. They might just as well have been in pounds, or better; might they not? Mr. OLMSTED. Well, I do not think it was a proper way to do the work; but that is the way he made his estimates. It would have been just as easy to make them in bales of a definite weight, which I have done since Mr. Hays was in charge of the Bureau, last year, and I have continued it since I have been in charge; and I intend to do it. I believe you asked how close the estimates have been? The CHAIRMAN. Yes. Mr. OLMSTED. I took the Census Office bales from 1899 up to last year and reduced them to pounds. Then I took the estin ate of the Bureau in bales and went back to the original figures and found how many pounds there were in the bales; and I found that there was a marvelous closeness. The widest divergence that I found was 4.4 per cent, and it ran down in some years to a fraction of 1 per cent; but the average divergence for a period of seven years was only seven-tenths of 1 per cent, taking the pound basis, by which cotton is bought and sold. It is not bought and sold by the bale; it is bought and sold by the pound, and the pound is the true measure of any crop of cotton— the true measure of the quantity of cotton produced. The CHAIRMAN. And your statement now is based upon information on file in the Department? Mr. OLMSTED. Yes, sir; but not published. The CHAIRMAN. What we would like to know is how nearly the actual results have tallied with the estimates of the Department, published and given to the public. The information on file in the Department, that does not go to the public, is not of very great value to the public. Mr. OLMSTED. You are right about that, certainly. Comparing the number of bales estimated by Mr. Hyde with the number of some other kind of bales, nobody knows what kind, as afterwards deter (Witness: Olmsted.) mined, there was considerable divergence. There was a divergence as high as 10 per cent some years, or perhaps higher. The CHAIRMAN. I do not see, then, from your explanation, that his estimates were worth anything. Mr. OLMSTED. I do not think they were very valuable, sir. Mr. OLMSTED. I do not think so. But, Mr. Littlefield, I want to say this to you: That in every other subject he dealt with except cotton he dealt in a definite unit. Cotton is only one thing that the Bureau deals with, you know; and the amount of money that is devoted to cotton out of our total appropriation does not amount to $25,000 a year, because we have all these other crops. Now, I will say, in justification of the former statistician, that with every other crop he did deal in definite units. For instance, he estimated the number of bushels of wheat, and the number of bushels of rye, and the number of bushels of corn, and the number of pounds of flax seed, and the number of tons of hay. In everything else, in every other estimate except cotton, he did deal in a definite unit. But in cotton, for some reason, the unit of his estimate or the basis of his estimate was indefinite. The CHAIRMAN. He seems to have differentiated between that and the other crops. Mr. OLMSTED. But I have made it definite, and I propose, as long as I am there, to keep it so, in spite of the protests of people who would like to have my estimate in an indefinite form that anybody could twist to mean what they pleased. The CHAIRMAN. That simply keeps the market in an uncertain condition all the time? Mr. OLMSTED. Why, certainly. In the case of my estimate, I think anybody of ordinary intelligence knows what I mean. Whether I am right or wrong, they know what I mean, at any rate. The CHAIRMAN. I received a letter last March which I will now read, so that you can explain in relation thereto. I imagine that what you have already stated perhaps furnishes the explanation, but at any rate I want you to explain it in your own way. Mr. OLMSTED. Yes, sir. The CHAIRMAN (reading): Hon. CHAS. E. Littlefield, House of Representatives, Washington, D. C. NEW YORK, March 31, 1906. DEAR SIR: I notice by the newspapers that an investigation is being conducted by the Committee on Expenditures of the Department of Agriculture with the view of reducing unnecessary expenditures of public money. I have for thirty years been a compiler and publisher of statistics in reference to cotton, and I doubt very much if anyone outside of the Department of Agriculture itself has paid more attention to the reports of the Department in respect to cotton than I have. The estimates of the Department of Agriculture in respect to acreage and yield and the condition of cotton have for a number of years been exceedingly inaccurate. The object of the reports issued by the Department of Agriculture in respect to cotton and in respect to other agricultural products is to give those interested in these matters reliable information respecting them. Many of the reports issued by the Department of Agriculture, if published without the Government stamp upon them, would not have the slightest credit with intelligent men in the cotton trade anywhere, because they are frequently on their face so grossly and absolutely inaccurate. Incorrect statements issued by the Government in regard to anything are not only of no benefit to the public, but are absolutely harmful to all legitimate interests, because they mislead people. (Witnesses: Olmsted, Lovering.) Some of the reports which are issued by the Department of Agriculture are duplicated by the Census Office; and surely it would be a matter of sound economy to prevent the duplication of what is supposed to be practically the same information. În view of the absolute unreliability of the estimates of the Department of Agriculture in regard to acreage in cotton, I am sure that the consensus of opinion of cotton manufacturers and cotton merchants would favor the absolute discontinuance of all estimates by the Department of Agriculture in respect to the acreage or the yield of cotton. It seems to me there is no excuse whatever for having the Department of Agriculture continue these estimates in regard to the yield of cotton crops when the Census Office publishes at frequent intervals reports on the cotton which has actually been ginned of each crop. The census figures are facts, while the figures of the Department of Agriculture are nothing but guesses, and frequently very bad ones. In view of the constant misleading errors which have been made by the Department of Agriculture in respect to acreage in cotton, it seems to me that it would be wise to have the acreage of cotton ascertained by the Census Office. Prominent gentlemen largely engaged in the cotton trade, as factors who sell cotton for the planters, exporters who buy cotton for export, and cotton buyers who buy cotton for our domestic mills, have written me recently, and the consensus of their opinion is that the reports of the Department of Agriculture in respect to the acreage, the condition, and the yield of cotton should be discontinued, because they tend to greatly disturb legitimate business by causing sudden and great fluctuations in the price of cotton. I beg to inclose copies of some of the letters which I have received, and invite your especial attention to them. They are from gentlemen of high standing, as you may easily ascertain by referring to any volume of Commercial Reports, which I am sure the Washington bank with which you deal would place at your disposal. I invite your especial attention to the letters from John M. Parker, esq., who is one of the most prominent cotton factors and commission merchants in New Orleans, and at the same time a planter himself; and to the letter of Gen. William W. Gordon, of Savannah, who is one of the best-known cotton factors of that city. Should you desire them, I can furnish you with many other letters of the character of the ones which I now send to you, or can send the original letters themselves, if desired. The Hon. Edward D. White of the Supreme Court will tell you in regard to my standing and character. Yours, very truly, ALF. B. SHEPPERSON. Mr. OLMSTED. Yes; I know him. I want to say, in connection with that, that the National Association of Cotton Manufacturers have negatived all that by their action in the last convention. Mr. Lovering, who is the president of the New England Association of Cotton Manufacturers? Mr. LOVERING. Mr. McColl. Mr. OLMSTED. Yes; Mr. McColl. The CHAIRMAN. I will simply say here that I think that letter states the whole situation from his point of view. Mr. OLMSTED. Yes. The CHAIRMAN. And I have some other correspondence, not a great deal; some favoring and some opposing the continuation of the reports. In the first place, I think you had better state, Mr. Olmsted, when you made this change in the method of work of your Department. Mr. OLMSTED. The change in the manner of expressing the estimates in a definite unit? The CHAIRMAN. Yes; in the manner in which you are now putting out your information. Mr. OLMSTED. Yes, sir. As soon as I was placed in a position where I could see the inner workings of the office I discovered what seemed to me to be this wholly inadequate way of expressing the estimate, and when it became time to make the December estimate I had formulated The CHAIRMAN. December of what year? 23848-07-42 (Witnesses: Olmsted, Lovering.) Mr. OLMSTED. December, 1905-I had formulated a plan of expressing it in a definite unit instead of a vague, indefinite unit. I secured, after considerable discussion and persuasion, the consent of my immediate superior, who was favorably inclined to anything that would improve the service, as soon as he saw what I was driving at. After consultation with other gentlemen I secured the adoption of this method, and in the December estimate of 1905 we did express the number of bales that we thought would be produced that year in a definite unit, a bale of 500 pounds gross weight; and I will say that we came within 4.7 per cent of the actual fact, as we found some months later by the Census Bureau report. So that it was pretty close, you see reasonably close. The CHAIRMAN. Since December, 1905, you have given the estimates on that basis? Mr. OLMSTED. No; we did not make any other estimate of that kind until December, 1906. The intervening estimates on our other subjects are not dealt with by the Census Bureau at all. The CHAIRMAN. Then the only estimate you had made prior to the letter written by Mr. Shepperson on March 31, 1906, was the one you made in December, 1905? Mr. OLMSTED. The only quantitative estimate was that of December, 1905; yes, sir. That man knew that when he wrote that letter, and he knew also when he wrote that letter, that we were within about 4 per cent of the actual fact, as actually discovered later. What is the date of that letter, by the way? The CHAIRMAN. March 31, 1906. Mr. OLMSTED. Perhaps he did not know it then, because it had not been developed; the Census Bureau had not made its final report at that time. The CHAIRMAN. What I wanted to get at was whether or not the letter written by Mr. Shepperson was either before or about the time when you had made this change. Mr. OLMSTED. It was after we made the change, because we made the change in December, 1905. The CHAIRMAN. Exactly so. Mr. OLMSTED. And that letter is written in March, 1906; was it not? The CHAIRMAN. Yes. Mr. OLMSTED. It was after we had made the change, and after we had expressed our estimate in a definite unit. The CHAIRMAN. But you had not made any intervening estimates prior to this letter of his? Mr. OLMSTED. No, sir; between our December quantitative estimates and the writing of the letter we had made no estimates at all regarding cotton. Mr. LOVERING. Did you not make an estimate of the condition in August? Mr. OLMSTED. In August? Oh, yes; we made one in August; but you see that is in March. Mr. LOVERING. Did you not make an estimate of the acreage in August? Mr. OLMSTED. No; not in August. We made one in June. |
