U.S. Department of Commerce

Economics and Statistics Administration

BUREAU OF THE CENSUS

he

conomic

Two Moments of Truth: 1954 an

ensu

EC97X-TMT
This publication was written by Mark E. Walla

Chief, Economic Planning Staff; Kathy V. Fried

Economic Planning Staff; and Robert A. Mar

Economic Planning Staff, all of the Economic

Planning and Coordination Division of the U.S

Census Bureau.

Authority to proceed with the project came fro

John P. Govoni, Chief, Economic Planning a

Coordination Division and Thomas L. Mesenb

Assistant Director for Economic Programs.

Helpful suggestions were provided by Dr. Fred

T. Knickerbocker, Associate Director for Econ

Programs and Paul T. Zeisset, Economic Pla

Staff.

Graphic design and editing were provided,

respectively, by Meshel L. Butler and

Barbara M. Abbott, both of Administrative

and Customer Services Division.
Shirley Kallek came to the Census Bureau 

1955, just after the 1954 reinstatement of t

Economic Census. In her oral history—wh

was conducted in April 1983—she express

great concern that the findings of the Watk

Commission Report, and the circumstance

that gave rise to it, would be forgotten.

Knowing she was among the last of the Cens

Bureau staff that carried the "institutiona

memory" of those events, she was empha

about the importance of capturing the

event in historical accounts: "At [the] time

everybody in the Bureau knew about the

Watkins Committee Report . . . It is just a

important for us to remember it today as 

was in that time." From An Oral History—

Shirley Kallek, U.S. Census Bureau,

April 27, 1983.

The Economic Census—Two Moments

of Truth: 1954 and 1997 is a publication

which we hope fulfills this wish.

This brochure is dedicated to

Shirley Kallek

Census Bureau Associate Director 

Economic Fields (1974-83)
We are in the midst of great

technological revolution

which is accelerating

change, hastening

obsolescence, creating

new industries and

transforming old ones,

remaking the industrial map of the

country, and bringing

within the range of

the feasible great

heights of production, productivity, and

well-being...The need

for the benchmark

statistics provided by

the Bureau of the

Census is greater today

than ever before, and

promises to grow in

intensity.

—Watkins Commission

Report, 1953

Econ

Censu

indispens

understa

America's 

my. It assur

accuracy o

statistics we 

for sound eco

policy and for su

ful business pla

—Alan Gre

Chairman, 

Governors of the 

Reserve Syste
This question came up almost 45 years

ago. The Eisenhower Administration had

failed to provide funding for the 1953

Economic Census.

The Secretary of Commerce wanted

to know if the Economic Census was

indeed necessary. To answer his

question, in October 1953, he

appointed Dr. Ralph J. Watkins, then

Director of Research for Dun and

Bradstreet, Inc., to form an Intensive

Review Committee to study the

issue. The Committee made its

report, "Appraisal of Census Programs," in February 1954.

Thereafter known as the "Watkins

Commission Report," its series of

unreserved testimonials—from the

business, financial, professional, and

governmental groups represented on

the Committee—led to the recommendation to reinstate the Economic

Census for 1954.

The 1954 Economic Census was the

first to fully integrate the earlier economic

censuses (for manufactures, mining,

commerce, and the like), and to provide

comparable census data across

economic sectors. This census used

consistent time periods, concepts,

definitions, classifications, and

reporting units.

The 1997 Economic Census

standardized the economic data

product line to more closely

achieve sector by sector

uniformity in the presentation of

results, including consistent

units of measure, geographic

and industry displays,

4 

comple

begun i

The 1997 

be the first 

American 

fication Sys

new, integra

concepts, d

industry cla

collect, tabula

economic data

The 1954 cens

presented fo

sectors. In a 

1997 census w

parability of t

and its use o

U.S. econom

able to thos

Mexico from 

As a com

the 1954 

first econ

be taken 

turn, the 

Economi

first that 

dissemin

Wide W

These are 

in an era 

economy is:

• Bigger than 

• More intri

• More tightly 

economy than ev

• A larger factor i

American than eve
2 

as the Watkins Commission observed in

1953, the Census must meet this

challenge: it must accurately capture

data resulting from "the creating of new

industries and the transforming of old

ones." To accomplish this, the new

North American Industry Classification

System (NAICS) has been adopted

to measure our dynamic economy:

• In 1953, the U.S. economy was

driven by manufacturing industries.

• In 1997, the American economy

is increasingly dominated by the

service sector, and in particularly,

by information industries.

The new NAICS structure

captures these vital changes in

economic activity by making it

possible to collect first-time

benchmark statistics for hundreds

of new or transformed industries.

Here is where the value of NAICS as an

Economic Census measurement tool is

paramount.

NAICS identifies and defines 361

industries not previously recognized

separately.

It also revises the scope of 333

existing industries, while leaving

480 industries substantially

unchanged. It increases the

classification of U.S. industries

from 1,004 to 1,174. In so

doing, NAICS replaces

the Standard Industrial

Classification System (SIC),

activi

collecte

system, 

its last r

However, 

quality of 

obscured by 

as a classifi

a fast-breakin

driven, servi

increasingly 

economy.

In systematica

dynamic indu

in unifying the 

economic act

America, NA

Economic C

expand the 

the pivotal E

of 1954:

• Bench

indispens

• Only 

Census c

In makin

gather s

greater p

becomes 

of the Ec
• Semiconductor machinery 

manufacturing

• Fiber optic cable manufacturing

• Reproduction of computer 

software

• Manufacture of compact discs

except software

• Convenience stores

• Gas stations with convenience 

food

• Warehouse clubs

• Food/health supplement stores

• Pet supply stores

• Pet care stores

• Cable networks

• Satellite communications

• Paging

• Cellular and other wireless 

communications

• Telecommunic

• Credit card iss

• Temporary he

• Telemarketing 

• Hazardous wa

• HMO medical 

• Continuing ca

communities

• Casino hotels

• Casinos

• Other gamblin

• Bed and brea

• Limited servic

• Automotive oi

lubrication s

• Diet and weig

centers
By providing invaluable statistical

benchmarks, the Economic Census has

gained increasing—not decreasing—

importance over the years.

Statistical benchmarks are firm

and reliable reference points

from which an economy can

measure both the volume and

direction of its change over

time.

Statistics collected in an Economic

Census form the cornerstone for the

collection and interpretation of

statistics gathered between the

censuses.

The 1953 Watkins Commission Report

shows an understanding of the

importance of benchmarks. Moreover,

the Commission observed the inextricable relationship between benchmark

statistics and the highly visible economic

indicators that are issued on a more

frequent basis between censuses.

Direct quotes from the report are in

blue italics throughout this work.

The fact-gathering program of the

Bureau is not one of assembling statistics for statistics' sake. Rather, it is a

purposive program authorized by the

Congress for the periodic

measurement of the condition

of the country. These measures

serve in themselves as a basis

for innumerable decisions

and actions, throughout

our national life.

4 

indicat

Federal

governm

and by n

institutions 

business 

organization

indicators i

indispensable 

by all agencie

and by the m

separate unit

society, and n

million busin

Without these 

it would not 

construct or 

tem of econ

Business ex

labor leade

men, scho

governme

administra

of our soc

on censu

economic 

on cens

[The] c

system o

cators. . .b

low-cost 

and repres

. . .rests in o

on the ben

provided by 

Census.
Review Panel

Recommendations

The Watkins Commission

had established separate

review panels to assess various

census programs.

Following are excerpted findings

of the panels on manufactures,

business (wholesale, retail, and

services), governments, mineral

industries, housing and construction, and foreign trade.

These excerpts—timeless in

their insights—are reinforced by

data from economic censuses,

surveys, and related programs

of the 1990s.

. . .the foundation of the 

program. . . An exam

census data as a be

use of census of man

determine what ind

included in current in

of production, and 

values should be 

several industry ind

them in a ge

production.

The single mos

indicator is the 

making up the 

Product. . . 

representing o

advances in the h

measurement an

never have been c

the benchmark figu

census enumeratio

Manufacturing Jobs per 1,000 Pop

by County: 1992

U.S. Department of Commerce Economics and Statistics Administration BUREAU OF THE CEN

Prepared by the Geography Division

4 
6 

ecooc oecastg, saes dee

opment, and market identification,

as well as the more basic

applications determining

industry and company

importance in the economy.

The censuses of manufactures

and business probably have

equally intensive use in

industry, as the starting point

for analytical studies, to

establish sales yard-sticks,

relative size of regional

markets, and measurement of

growth trends. . . Members of

NAM utilize, in varying degree,

all the census data.

— Fred C. Foy, Chairman

 NAM Distribution Committee, 1953

manag

affairs. 

essentia

marketing

execution 

In almost 

basic data 

Bureau of the 

as a starting 

business orga

at the answ

questions. . 

components o

to better perfo

within the tota

basic knowled

to them.

If business h

from which 

research an

quence effe

efficiencie

lower pric

then the p

to know th

would e

interest 

pressure 

census re

All good 

dependent 

on accura

relevant infor

. . .are. . . go

on markets se

markets from w

materials, equip

capital . . .
0

20

40

60

80

59 63 67 72 77 82 87 92 9

Retail Sales per Capita, by County

U.S. Department of Commerce Economics and Statistics Administration BUREAU OF THE CEN

Prepared by the Geography Division

6 
State and Local Government Taxe

Percentage of Personal Income, b

Fiscal Year 1992

U.S. Department of Commerce Economics and Statistics Administration BUREAU OF THE CEN

Prepared by the Geography Division

8 

employment, and to provide a basis for

allocating funds among the states and

within the states to subordinate units.

The Bureau of the Census is the

primary source for figures on

governments in the United States,

through a program that has been

carried on since 1850. The program

merges together statistics

concerning the Federal Government,

the 48 State governments, and

approximately 115,000 local

governmental units to provide

information on taxation and other

governmental revenues,

governmental costs, debt,

employment, and other subjects.

these f

in eval

standin

governme

abreast of 

state and l

other financ

Wide use also 

data in educa

. . . For all prac

analysis of 

operational sta

local governm

parative bas

primarily on 

Census figur

point.
Mining Establishments per 100,00

Population, by County: 1992

U.S. Department of Commerce Economics and Statistics Administration BUREAU OF THE CEN

Prepared by the Geography Division

one of the most us

of our analytica

collapse.

— Island Creek Coa

(Hunti

Census statistics p

data in mining. . 

Bureau of Labor 

Security Board, 

Board, U.S. Tar

Department of Co

income figures), a

Internal Reven

provides a un

industries and by 

available from in

reports by gover

Mineral Industries is

an invaluable tool. . .

it provides a basis for

comparison from which

our industry can be

appraised in relation to

the Mineral Industry as a

whole. . .When integrated

with the fuel consumption

data in the Census of Manufactures, it is probably the

only complete analysis we

can make of our participation in the industrial and

4 
data were used extensively by the Federal

Housing Administration and other

agencies of the Federal government

concerned with housing and home

financing; by local housing agencies,

both government and private; and by

many private organizations, such as

insurance companies engaged in

mortgage financing. They were also

used by manufacturers and distributors of building materials and by

labor unions.

Censu

field o

statistics 

importanc

collection a

these data, 

Commerce 

service. . . 

accuracy of th

much of the 

America's trad

10 

Construction Spending on Educa

Facilities per Capita, by State: 199

U.S. Department of Commerce Economics and Statistics Administration BUREAU OF THE CEN

Prepared by the Geography Division
State Top export (1996)

Value

1996

($mil)

Alaska

Alabama

Arkansas

Arizona

California

Colorado

Connecticut

District of Columbia

Delaware

Florida

Georgia

Hawaii

Iowa

Idaho

Illinois

Indiana

Kansas

Kentucky

Louisiana

Massachusetts

Maryland

Maine

Michigan

Minnesota

Missouri

Mississippi

Montana

North Carolina

North Dakota

Nebraska

New Hampshire

New Jersey

New Mexico

Nevada

New York

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Virginia

Vermont

Washington

Wisconsin

West Virginia

Wyoming

Metallic Ores and Concentrates

Electrical/Electronic Mach, Eq

Food and Kindred Products

Electrical/Electronic Mach, Eq

Electrical/Electronic Mach, Eq

Machinery, Except Electrical

Chemicals and Allied Products

Transportation Equipment

Chemicals and Allied Products

Machinery, Except Electrical

Machinery, Except Electrical

Petroleum Refining and Related

Machinery, Except Electrical

Machinery, Except Electrical

Machinery, Except Electrical

Electrical/Electronic Mach, Eq

Agricultural Products

Transportation Equipment

Agricultural Products

Machinery, Except Electrical

Machinery, Except Electrical

Electrical/Electronic Mach, Eq

Transportation Equipment

Agricultural Products

Chemicals and Allied Products

Electrical/Electronic Mach, Eq

Primary Metal Products

Machinery, Except Electrical

Machinery, Except Electrical

Food and Kindred Products

Machinery, Except Electrical

Chemicals and Allied Products

Electrical/Electronic Mach, Eq

Miscellaneous Manufactured Com

Primary Metal Products

Transportation Equipment

Machinery, Except Electrical

Agricultural Products

Chemicals and Allied Products

Machinery, Except Electrical

Electrical/Electronic Mach, Eq

Machinery, Except Electrical

Agricultural Products

Electrical/Electronic Mach, Eq

Machinery, Except Electrical

Tobacco Manufactures

Electrical/Electronic Mach, Eq

Transportation Equipment

Machinery, Except Electrical

Bituminous Coal and Lignite

Chemicals and Allied Products

216

820

812

5429

27199

5574

2934

3284

3252

4744

1271

71

746

626

8153

2582

1637

1134

1993

4599

618

260

23689

4943

1594

163

97

2016

259

1427

550

4859

686

158

6014

5090

821

3307

3336

169

904

145

1850

10661

448

3647

2056

13403

3167

367

25

12 

U.S. Department of Commerce Economics and Statistics Administration BUREAU OF THE CENS
in the reinstatement of the Economic

Census for 1954 was no less evident in

1997. Despite program cuts elsewhere—

and initial talk of curtailing Economic

Census funding—Congress gave the

1997 Economic Census its unequivocal budget support. The FY 1998

appropriation bills fully fund the

Economic Census.

In an era of tight budgets and

public scrutiny of Congressional decisions, full funding

was the ultimate vote of

confidence in the worth of the

1997 Economic Census and

the data products that would

result from it.

The Census Bureau will not disappoint

these high expectations. It is improving

the Economic Census along two

pioneering pathways:

• Via the introduction of NAICS to the

international statistical community, an

essential step for measuring today's

economy.

• By augmenting its publication program.

The Census Bureau will showcase the

release of data on NAICS industries

in a new report covering all economic

sectors. Within this report, statistics

on all economic sectors are being

issued 2 years earlier than ever

before in the Economic Census

cycle. Also, the Census Bureau

is moving to standardize data

presentation formats across

the 1997 Economic Census

product line.

12 

rather t

of individ

reports.

This sta

across the 

line is critic

today beca

electronic a

enables us

easily mix a

from various 

for consis

presentatio

The resu

Economic 

unsurpas

introduc

ments to 

usefuln

vance 

Census 
as retail sales, housin

goods orders, and b

statistics. The Bureau 

with other Federal effo

Economic Statistics 

FedStats, and Stat-

one-stop shoppi

statistics.

The Bureau's Web site—

www.census.gov—

includes up-to-the minute

access to the latest economic indicator reports. The

latest release is highlighted

on the economic "clock," and

the site provides full tables in

text and spreadsheet formats.

13
1954

Consolidation of the earlier

economic census-taking efforts

(manufacturing, mining, commerce,

etc.) into a unified system providing

comparable data across sectors.

Use of consistent time periods,

concepts, definitions, classifications

and reporting units.

1997

First use of the 

North Americ

Classification Sy

an integrated fra

cepts, definition

classifications—

tabulate data, an

products. More 

coverage of U.S. 

and more comp

with other natio

Canada and Mex

sector standard

presentation form

consistency ac

product line—p

Economic Cens

whole.

1954

First use of mailout/mailback data

collection.

1997

First-time capabi

dissemination o

World Wide Web

1954

Left unfunded in 1953—followed

by reinstatement of the Census of

1954, definitively establishing the

importance of the Economic

Census (i.e., the comprehensive

collection of detailed, benchmark

data).

1997

Talk of curtailing E

funding—followe

of the largest, m

Economic Cens

previous time 

14 

Funding Reaffirms Importance

of the Economic Census

Unification and Standardization

Communications
The Economic Cens

is the Irreducible

Building Block of

Economic Measurem

The farther we get from the

solid bricks and stone

and timber and steel

of comprehensive

census enumerations,

the more fragile and

uncertain our

working materials

become.

—Watkins Commission

Report, 1953

Econo

Census af

every Amer

Businesses 

decisions a

where they lo

and how muc

produce base

what they learn 

Census. The data 

serve as cri

inputs into mon

fiscal and t

policy. In s

statistics from 

Economic Ce

are vital to 

functioning o

market econ

—Maureen 

Past Pres

National Associa

Business Econo
1810—

The First Year

Census of Manufactures

introduced

1954—The Affirming Year

Congress reinstates the Economic

Census—left unfunded in 1953

Various censuses consolidated

into one set

First use of mailout/mailback data

collection

1997—The Reaffirming

Year

Congress fully funds the

Economic Census—despite

budget-balancing discussions to

cut funds

NAICS introduced

Data products standardized

Complete dissemination of results

on the World Wide Web

The key to the successful functioning of any human institution

is good management, whether

that institution is public or

private, international or

national, State or local, a giant

business corporation or a

one-man retail shop, a big

farm. . . an association

. . . or a family.

ensus Al

man

depend

records

internal 

records are 

the evaluatio

and past p

programs and 

future course

. . . good extern

statistics—on 

served and on 

from which a

materials, equip

and capital...[

essential].

Decisions the

innumerable 

day and every 

functionin

economy 

functioning 

sided socie

of these de

be based on 

good or bad

they can be n

the informatio

they are based.

— Watki

Issue