STATISTICAL AND GRAPHICAL STATEMENTS 1. Purpose and scope of business statistics.—The reader has already been familiarized with the value of statistical statements as supplements to financial statements. By business statistics we mean the rec ords that grow up out of the operations of industrial and mercantile establishments. As a rule, these sta tistics are as varied in their contents as the different lines of business from which they are taken. Thus, the records of public service corporations will differ widely from those of manufacturing or mercantile es tablishments.
When the prevailing type of business was the gen eral country store, statistical records of operations were impracticable. As business became more and more specialized, accurate cost and sales records be came possible. As industry became concentrated in its ownership, comparisons of the operations of dif ferent plants under the same control was an inevi table consequence. Thus was formed a body of rec ords sufficiently extensive to merit the name of busi ness statistics.
The demand of the business man for information concerning every detail of his business has resulted in the invention of a large number of mechanical devices that permit the gathering of an increasing amount of statistical information. A large part of this material is furnished by modern accounting methods. The old-fashioned bookkeeping was confined in a large measure to recording receipts and disbursements. Modern accounting analyzes the transactions which give rise to these effects. It groups them in classes ; it measures service as well as financial results and brings the two into proper relations, one with the other.
2. Official and business statis tics, as distinguished from government statistics, are the practical result of the tendencies in modern busi ness toward specialization and toward an increased size in individual enterprises. Some modern business concerns have become so extensive that their adminis tration, as pointed out in the Texts on factory and office management, is in many respects comparable to that of cities and states, and branches of national governments. Indeed, it would seem that at times the problems of business concerns are infinitely more complex and difficult than those of government.
As business approaches in its administrative prob lems more and more closely the operations of public authorities, it is not surprising that it should avail it self to a greater extent of methods which have long been established in government practice. From this adoption of government methods comes a growing use of statistical statements in business management, and the increasing frequency of definitely organized sta tistical departments in business concerns.
People sometimes think of government statistics as being gathered to meet some fancied need or to satisfy an idle curiosity. It must not be overlooked that these statistics have their root in some real need of government, or the necessary basis for transacting its business.
In other words, it is not mere habit or routine which leads the governments of the world to publish each year a vast quantity of books crammed with official statistics. On the contrary, it is done for definite, practical purposes. The larger part of these sta tistics is designed as a basis for action.
Thus the census of the United States Government, which involves the employment of many thousands of persons and the expenditure of many millions of dol lars, had its origin in the necessity of determining the basis of representation in Congress.
Similar illustrations are found in the statistical rec ords pertaining to revenues, expenditures and public debt.
3. The contents of business each line of business has its own peculiar operations to record, it would be ridiculous to attempt, in this growing field, to classify the various kinds of statistics which might arise. VVhat is needed in any particular business can best be judged by those who are engaged in it. Ex perience shows that when thought is given to this mat ter the volume of records often becomes very consid erable. It is quite as possible to overdo the gather ing of such records as to neglect them. The informa tion which can be presented in statistical form, should be carefully weighed, and its value estimated be fore elaborate preparations for securing such data are provided.