Creation of the U.S. Department of Commerce and Labor Summary

  • Last updated on November 10, 2022

With the establishment of the Department of Commerce and Labor in 1903, the U.S. government became actively involved in matters of business, labor, and the national economy.

Summary of Event

The Department of Commerce and Labor Act of 1903 created the U.S. Department of Commerce and Labor, a cabinet department within the executive branch of the federal government. The department included the Bureau of Corporations and the Bureau of Labor. The staffs of these bureaus were to investigate and provide information on corporations, industrial working conditions, and labor-management disputes. The creation of this department and its attendant federal agencies presaged an increasingly activist federal government in the twentieth century, one that would investigate, publicize, and intervene in the dealings of industry, labor-management disputes, and other matters deemed to be of importance to the national economy. Department of Commerce and Labor Act (1903) Bureau of Corporations, U.S. Bureau of Labor, U.S. Department of Commerce and Labor, U.S. [kw]Creation of the U.S. Department of Commerce and Labor (Feb. 14, 1903) [kw]U.S. Department of Commerce and Labor, Creation of the (Feb. 14, 1903) [kw]Department of Commerce and Labor, Creation of the U.S. (Feb. 14, 1903) [kw]Commerce and Labor, Creation of the U.S. Department of (Feb. 14, 1903) [kw]Labor, Creation of the U.S. Department of Commerce and (Feb. 14, 1903) Department of Commerce and Labor Act (1903) Bureau of Corporations, U.S. Bureau of Labor, U.S. Department of Commerce and Labor, U.S. [g]United States;Feb. 14, 1903: Creation of the U.S. Department of Commerce and Labor[00680] [c]Trade and commerce;Feb. 14, 1903: Creation of the U.S. Department of Commerce and Labor[00680] [c]Government and politics;Feb. 14, 1903: Creation of the U.S. Department of Commerce and Labor[00680] [c]Organizations and institutions;Feb. 14, 1903: Creation of the U.S. Department of Commerce and Labor[00680] Roosevelt, Theodore Wright, Carroll D. Cortelyou, George B. Garfield, James Rudolph

In June, 1884, Congress established a labor bureau as part of the Department of the Interior. In 1888, Congress gave that bureau independent status as the Department of Labor, but its commissioner did not have a position in the president’s cabinet. The commissioner reported directly to the president.

When Theodore Roosevelt became president in 1901, public opinion was increasingly concerned with the growing power that large corporations, monopolies, and trusts had in American economic, social, and political life. The Anthracite Coal Strike Anthracite Coal Strike (1902) of 1902 (in Pennsylvania, Illinois, and Ohio), which lasted six months and threatened the nation’s coal supply, exacerbated public and political concern over industrial labor-management relations and was itself a major spur to the creation of the Department of Commerce and Labor.

Political pressure from the public as well as from elected officials encouraged Roosevelt to try to arbitrate the coal miners’ dispute by inviting representatives from labor and management to the White House. Although the meeting did not resolve the crisis—the owners refused to accede to the union’s demands—it was significant in that the president had brought labor representatives to the negotiating table. Previous presidents had tended to take the side of business in labor-management disputes. Representatives from the railroads that owned the coal mines attended the meeting, as did Roosevelt’s commissioner of labor, Carroll D. Wright, and John Mitchell, president of the United Mine Workers United Mine Workers (UMW).

The crisis still unresolved, Roosevelt created an arbitration commission to investigate the strike. Although no official representatives of the UMW were part of this arbitration commission, as the operators refused such recognition, Wright as well as other unofficial labor representatives were part of the commission. With winter closing in, making coal supplies an increasing concern, pressure from public opinion, influential business leaders, and elected officials encouraged the strikers to go back to work on October 23, 1902, while the commission arbitrated the dispute. The commission finally forced a resolution on March 22, 1903, giving the coal miners wage increases but no official recognition of their union from the operators. The incident convinced Roosevelt of the need for a permanent federal agency to prevent or help resolve, through arbitration, any such future national economic crises. He also was convinced of the need for an increased federal role in the economy.

It was in this context that in early January, 1903, Roosevelt called for the creation of a Department of Commerce and Labor, to include a Bureau of Labor and a Bureau of Corporations. The functions of those agencies would be to investigate the operations and conduct of corporations and to provide the federal government with information about business structure, operations, and working conditions. The bill creating the department also provided for six other bureaus within the department to deal with matters of immigration, the census, navigation, fisheries, standards, and business statistics.

Roosevelt adroitly used the opposition of business leaders to enlist the support of the public and Congress for the bill. He publicized a letter from an attorney representing John D. Rockefeller’s Standard Oil, Standard Oil written to Matthew Quay, a senator from Pennsylvania, protesting against such governmental interference. Roosevelt portrayed the opponents of the bill as those very forces of economic and industrial injustice that were increasingly worrisome to the public. By winning public support to his side, Roosevelt obtained overwhelming congressional backing. The bill to create the new department was passed on February 14, 1903.

Roosevelt named George B. Cortelyou, his private secretary, as the first secretary of the Department of Commerce and Labor. Roosevelt and Cortelyou did not view the new department as an agency the federal government could use to attack business but as an empowerment of government to expand services to businesses, particularly in providing market information. Cortelyou advised the president on labor disputes as well as on antitrust prosecution. He also advised Roosevelt on the issue of the union shop in the Government Printing Office.

As the first commissioner of the Bureau of Corporations, James Rudolph Garfield used the agency to investigate many corporations. He shared Roosevelt’s view that federal government should regulate businesses, not randomly break them up. Garfield received some outside criticism that the bureau was too lenient in dealing with the “trusts,” particularly regarding an investigation of the United States Steel Corporation, United States Steel Corporation which he and the president thought was a “good” trust. He initiated stringent investigations of the beef and oil industries. The investigation of Standard Oil led to an antitrust suit, and ultimately the Supreme Court ordered the dissolution of Standard Oil in 1911.

Significance

The creation of the U.S. Department of Commerce and Labor set an important precedent for the growing role of the federal government in the national economy. It was a significant departure from the policies of the legislative and executive branches in the late nineteenth century, which said that public agencies should not intervene in the private business sphere. The increased federal role in the economy was at times antagonistic to corporations. Investigations by the Bureau of Corporations led to antitrust litigation and dissolution of the American Tobacco Company and Standard Oil.

For the most part, however, the Department of Commerce (which split from the Department of Labor in 1913) has by design functioned to help business and commerce in the United States. By distributing commercial and business statistics as well as agricultural and population censuses, the Department of Commerce makes available information that can help people involved in various industries or businesses learn about relevant markets in particular regions or across the nation. This type of comprehensive information, which would be prohibitively expensive for most businesses to collect privately, can be very important, particularly to individuals starting businesses.

The department’s national standards for weights and measures facilitate interstate commerce by standardizing the basis for trade and ensuring honesty. The department also helps industry by protecting assets through patent and trademark registration. The Department of Commerce also provides information useful to the maritime and aviation industries by publishing nautical and aeronautical charts. Through its National Oceanic and Atmospheric Administration (NOAA), the department sponsors the collection and dissemination of weather data, including severe storm warnings, and conducts research relative to coastal and marine resources and the environment. It also organizes emergency responses to oil spills and other environmental disasters. The department is also engaged in foreign commercial expansion, in the promotion of international free trade agreements, and in international emergency relief responses. All these actions represent a desire by both politicians and businesspeople to stabilize industry while promoting economic growth.

In 1913, President Woodrow Wilson signed a bill that created the Department of Labor, Department of Labor, U.S. separating it from the Department of Commerce. The presidential campaign of 1912 had reflected growing public concern with industrial-labor relations and the rights and powers of labor unions. Presidential candidates Roosevelt and Wilson had differences on the issues of labor and corporation regulation, but both advocated continuing government activism on these issues.

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Wilson came into the presidency in 1913 with a series of progressive commitments, chief among them an added focus on the rights of labor. He worked with Congress to establish a separate Department of Labor, creating a new cabinet position for the secretary of labor. President Wilson’s choice for this position, William B. Wilson, president of the UMW, reflected his concern about the rights of labor organizations. William Wilson was the first labor union representative to be named to the cabinet. President Wilson wanted a representative from the ranks of labor to have the authority of a cabinet-level position in representing executive branch efforts to arbitrate labor-management disputes. Secretary of Labor Wilson strengthened the Labor Department’s Division of Mediation and Conciliation and played a significant role in President Wilson’s efforts to arbitrate the Ludlow, Colorado, coal mine strike of 1914. President Wilson also pushed through Congress the Keating-Owen Act, which barred from interstate commerce goods produced with child labor; the Adamson Act, which gave railroad workers an eight-hour workday; and the Workmen’s Compensation Act, which provided workplace insurance to federal employees. The enforcement of these new laws became the responsibility of the Department of Labor.

The functions of the Department of Labor grew dramatically through the twentieth century. In the interests of workers, the department became responsible for enforcing laws regarding labor-management relations, child labor, equal pay, minimum wages, overtime, public contracts, workers’ compensation, health and safety in the workplace, and industrial accidents. The department also aided businesses by gathering and disseminating market information, analyzing costs and standards of living, and analyzing trends in prices, employment, and productivity. In addition, it created a number of agencies designed to relieve unemployment, such as the Neighborhood Youth Corps, the Job Corps, and the Bureau of Apprenticeship and Training.

In 1914, President Wilson and Congress created the Federal Trade Commission Federal Trade Commission to replace the Bureau of Corporations as the federal government’s primary antitrust and corporate investigatory agency. The Federal Trade Commission was the agency established to enforce the Clayton Antitrust Act of 1914. Clayton Antitrust Act (1914) That act also represented continuing and growing concerns over competition, economic opportunity, and antitrust that grew from the precedent of the creation of the Department of Commerce and Labor in 1903. Department of Commerce and Labor Act (1903) Bureau of Corporations, U.S. Bureau of Labor, U.S. Department of Commerce and Labor, U.S.

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Babson, Steve. The Unfinished Struggle: Turning Points in American Labor, 1877-Present. Lanham, Md.: Rowman & Littlefield, 1999. A concise and comprehensive history of the American labor movement. Includes notes and index.
  • citation-type="booksimple"

    xlink:type="simple">Blum, John Morton. “Theodore Roosevelt and the Definition of Office.” In The Progressive Presidents: Theodore Roosevelt, Woodrow Wilson, Franklin D. Roosevelt, Lyndon B. Johnson. New York: W. W. Norton, 1980. A good introduction to the Progressive politics and policies of Theodore Roosevelt and Woodrow Wilson. Concise, yet detailed in its analysis.
  • citation-type="booksimple"

    xlink:type="simple">Brands, H. W. T. R.: The Last Romantic. New York: Basic Books, 1997. Iconoclastic biography of Theodore Roosevelt.
  • citation-type="booksimple"

    xlink:type="simple">Gould, Lewis L. “Immediate and Vigorous Executive Action.” In The Presidency of Theodore Roosevelt. Lawrence: University Press of Kansas, 1991. Excellent history of the foreign and domestic policies of both of Roosevelt’s administrations. Useful for students beginning study of the Progressive Era.
  • citation-type="booksimple"

    xlink:type="simple">Kolko, Gabriel. The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916. New York: Free Press of Glencoe, 1963. Excellent for those seeking an in-depth and challenging analysis of business-government relationships in the Progressive Era. Kolko contends that new regulations were not a victory for the “people” over the “interests.” Leaders of industry desired regulation that they could help to formulate and influence to avoid competition and stabilize their industries.
  • citation-type="booksimple"

    xlink:type="simple">Miller, Nathan. Theodore Roosevelt: A Life. New York: William Morrow, 1992. This book’s treatment of the Northern Securities case is particularly concise and well done, characteristics that hold for the book as a whole. Good for those with some familiarity with Roosevelt and the Progressive Era.

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