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UNIVERSITY OF PENNSYLVANIA IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
BY
DAVID SCOTT HANCHETT
PHILADELPHIA
1915
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THE MACHINERY
OF
FEDERAL REGULATION
OF
COMMERCE
H23
THESIS
PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL OF THE
UNIVERSITY OF PENNSYLVANIA IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
BY
DAVID SCOTT HANCHETT
PHILADELPHIA
1915
""
The following pages are reprinted from
Volume II of "The History of the Domestic
and Foreign Commerce of the United States,
published by the Carnegie Institution of
Washington.
velast, Perso. ER.
@13F17 ES...
PART THREE
GOVERNMENT AID AND COM-
MERCIAL POLICY
By D. S. HANCHETT
307129
3
CHAPTER XXXVII.
THE MACHINERY OF FEDERAL REGULATION OF COMMERCE.
Regulation of commerce before 1789, 241. The commerce clause of the Constitu-
tion, 242. Powers of the President regarding commerce, 243. Commercial func-
tions of Department of State, 244. The Department of War, 245. Department
of the Treasury, 246. The customs service, 246. Revenue cutter service, 248.
Life-saving service, 249. Marine Hospital, 249. Bureau of Public Health, 250.
Quarantine service, 250. The Post Office Department, 251. Department of
Justice, 251. Department of the Navy, 252. Hydrographic Office, 252. . Depart-
ment of the Interior, 253. The Department of Agriculture and the Weather
Bureau, 254. Department of Commerce: the lighthouse service, 255; the Bureau
of the Census, 256; the Coast and Geodetic Survey, 257; the Bureau of Foreign and
Domestic Commerce, 258; the Bureau of Standards, 260; Steamboat-Inspection
Service, 261; the Bureau of Navigation, 262; the Bureau of Corporations, 263.
Department of Labor, 263. Independent governmental and international agencies,
264. The judiciary and legislative agencies, 265.
Before the
From the earliest days of its history the United States Government
has been active in the control and regulation of commerce.
outbreak of the Revolutionary War the American colonists were accus-
tomed to the regulation of commercial matters by the British Govern-
ment, and it is not surprising that, when independence was declared, the
Continental Congress should have proceeded to regulate trade matters.
While it possessed no authority to do so, its action was nevertheless
respected by the several States during the revolutionary crisis. As
early as 1775 the Continental Congress opened American ports to the
ships of all countries, prohibited the slave trade, and assumed the
management of the post-office. The first treaty of commerce (with
France) providing for reciprocal trade was negotiated along with the
treaty of alliance in 1778. But these de facto powers did not become
de jure at once. The colonists had not entirely learned the lesson of
cooperation. The Articles of Confederation, adopted by Congress in
1777, and ratified by all of the States by 1781, gave Congress no power
to make commercial regulations.
The various State governments not only placed varying restrictions.
upon foreign trade, but often imposed burdensome duties on interstate
traffic as well, and retaliation-commercial war in fact-was the result.
Effective regulation of trade under the Articles of Confederation was
impossible, and furthermore, individual States obstinately prevented
the adoption of several amendments to the Articles which were then
brought forward with a view to conferring upon Congress a certain
degree of regulative power.
The unfortunate commercial situation was the chief reason for the
change in the form of government effected by the adoption of the
Federal Constitution in 1789. Of the various powers conferred by that
instrument on the Federal authorities none were more important than
5
6
History of Domestic and Foreign Commerce.
those relating to the control of domestic and foreign trade, and to
the various institutions with which the operations of commerce are
closely related. Among all the influences which contributed to the
economic prosperity of the Republic during the early years of its
existence, none was more potent than the system of commercial regu-
lation, the adoption of which was made possible by the Constitution.
•
The commerce clause, Article I, section 8, of the Constitution,
provides that "the Congress shall have Power .. to regulate Com-
merce with foreign Nations, and among the several States and with the
Indian Tribes." Additional clauses of the same article and section
grant to Congress the power "to lay and collect taxes, duties, imposts
and excises, to pay the debts and provide for the common defense and
general welfare of the United States; but all duties, imposts and excises
shall be uniform throughout the United States;" and "to make all laws
which shall be necessary and proper for carrying into execution the
foregoing powers, and all other powers vested by this Constitution in
the Government of the United States, or in any department, or officer
thereof." The power thus conferred has from time to time been
broadly construed by the Supreme Court, and as a consequence the
activities of the Federal Government in the regulation of foreign and
domestic trade have constantly increased.
Commerce has so many phases and touches so many sides of national
life, that it would be impossible to place under a single officer or even
in a single department all the governmental functions relating to it.
Each of the three great branches of the Federal Government, the
executive, the legislative, and the judicial, has a part in the regulation
of trade. The President and the various executive departments imme-
diately under him, the Federal Congress, with its permanent and special
committees, and the Federal courts, from the beginning, had com-
mercial functions to perform, and with the rapid increase in the volume
and complexity of the trade of the nation and with the steady growth
of Federal control, the machinery for the regulation of commerce became
more elaborate and complex. In 1903 it was found advisable by Con-
gress to create a new executive department, the Department of Com-
merce and Labor, under the jurisdiction of which was placed a large
number of bureaus, boards, offices, and services which had formerly
been attached to other executive departments. In 1913 this policy of
segregation of work in department matters relating to commerce was
further carried out by creating a Department of Labor separate from
the Department of Commerce. It must not be supposed, however,
that all of the governmental services which relate to this field have
been placed under the Secretary of Commerce. All of the executive
departments, as well as Congress and certain Federal courts, exercise
commercial functions, and there is a large number of subordinate
bureaus and offices which have a part in the work of aiding and regu-
The Machinery of Federal Regulation of Commerce.
7
lating the interstate and foreign trade of the nation. It is the purpose
of this chapter to give briefly the history of the administrative regula-
tion of commerce by the various divisions of the Federal Governmental
machinery.¹
1
POWERS OF THE PRESIDENT REGARDING COMMERCE.
At the head of the executive branch of the government stands the
President of the United States. His influence upon commerce is
exerted in numerous ways, his appointing power being first in impor-
tance. Upon the character of the men whom he selects for such offices
as Secretary of Commerce or Interstate Commerce Commissioner
depends in large measure the efficiency of governmental control of
commerce. While, indeed, appointments are made "by and with the
advice and consent of the Senate," in practice the President is but little
restricted by the Senate in naming men to fill cabinet positions. Fur-
thermore, by virtue of his power of removal, of the broad powers of
direction which he exercises over the work of the executive depart-
ments, and by means of his ordinance power, the President exerts
great authority over the machinery of regulation. A recent example
of the exercise of the ordinance power will serve to illustrate its impor-
tance. On November 13, 1912, President Taft by proclamation estab-
lished the tolls which are to be levied on ships passing through the
Panama Canal, and on November 21, 1913, President Wilson fixed
the rules for determining the tonnage upon which vessels shall pay the
tolls that are levied, thereby affecting the commerce, not only of the
United States, but of the world, to the extent of determining the
conditions under which the Panama Canal may be used.
Another and very specific way by which the power of the President
is exercised over commerce is through his special authority over foreign
relations. The Secretary of State gives to diplomatic relations his
special attention, but upon the President personally depends in large
measure the success of negotiations with other powers as regards com-
mercial privileges, and the rights of aliens in trade with and in the
United States.2
While the treaty-making power is exercised by the President, by and
with the advice and consent of the Senate, he is obliged to respect the
power of Congress over commerce, and must observe in commercial
treaties the policies established by the laws of Congress. Conflicts
have arisen with respect to the power of the President and Congress
in relation to commercial treaties, but the Supreme Court has declared³
'It will be noticed that much of the language used in this part of this volume is in the present
tense. In giving a history of the agencies of government for the regulation of commerce it seems
advisable, and, indeed, almost necessary, to state what the commercial functions of the several
departments and bureaus now are and to state when and how those powers and duties concerning
commerce were conferred upon the existing agencies of the government. "Present" conditions
are those of 1913.
2Fairlie, The National Administration of the U. S., of America, 29.
³United States vs. Lee Yen Tai, 185 U. S. 213.
8
History of Domestic and Foreign Commerce.
that "as Congress may by statute abrogate, so far at least as this
country is concerned, a treaty previously made by the United States
with another nation, so the United States may by treaty supersede a
prior act of Congress on the same subject." The act or treaty which
bears the most recent date is controlling, and the President may there-
fore, in effect, if he can secure the consent of the Senate, supersede
Congressional action by the negotiation of commercial (or other)
treaties.
The President, acting through the State Department, prepares the
formal draft of a treaty and then seeks the "advice and consent,
that is the ratification, of the Senate. The difficulty of securing the
approval of two-thirds of the Senators present has sometimes required
the negotiation of a new treaty or the acceptance by the countries
parties to the treaty of amendments proposed by the Senate as condi-
tions precedent to favorable action. The Senate's rejection of, or
failure to accept, a treaty has given rise to some of the "executive
agreements" which the President has made with foreign countries.
President Roosevelt's agreement with Santo Domingo in 1905, whereby
the supervision of Dominican finances was undertaken by American
citizens, arrangements were made for paying the foreign debt, and
American battleships were sent to the island, followed the refusal by
the Senate to ratify a treaty the chief terms of which were those
embodied in the executive agreement.
The use by the President of his military powers to keep open
the
channels of interstate commerce during strikes and riots makes him the
ultimate authority to whom appeal must be made in times of crisis to
keep the machinery of commerce going. The President is, in fact, the
supreme director, while the ten great administrative departments, at
the head of each of which is a Cabinet officer of his selection, comprise
in large part the mechanism through which he acts.
COMMERCIAL FUNTIONS OF THE DEPARTMENT OF STATE.
Logically, it might seem better to consider the commercial functions
of the ten departments by beginning with the Department of Com-
merce, to which is now intrusted the fulfillment of most of the functions
under consideration. In order, however, to show more effectively
the historical growth of the administrative bodies dealing with com-
merce, the departments will be considered chronologically.¹
The Department of Foreign Affairs was created by Congress July
27, 1789, and on September 15 following the present title was adopted.
The department was the successor of the Department of Foreign
Affairs, created in 1781 to handle matters which had, since 1775, been
delegated to committees of Congress.2 The early functions of the
¹History of the Department of State of the United States, 1901, 14.
2Checklist of United States Public Documents, 1789–1909, p. 891.
The Machinery of Federal Regulation of Commerce.
9
State Department were more comprehensive than they are now. The
Secretary of State was originally at the head of the Patent Office, and
his department had control of the census, and although both of these
offices, which bear important relations to commerce, have been trans-
ferred to other departments, the State Department still exercises com-
mercial functions of great importance. Foreign relations, the super-
vision of which was the primary purpose for which this oldest one of the
executive departments was organized, have always been handled by it
through the diplomatic serivce, which, in 1913, included 157 officers
who represented the United States in 48 countries. The Secretary of
State and the diplomatic representatives abroad have large commercial
responsibilities, for it is through them that commercial treaties are
negotiated and the rights existing by virtue of those treaties are en-
forced. The general functions of the service were stated as follows
by Frederick T. Frelinghuysen, Secretary of State under President
Arthur:
"The diplomatic officer does for the nation what the consular officer does
for the citizen. Speaking generally, the consul aids the individual and pro-
tects separate interests, while the minister acts for the nation and guards its
general political and commercial welfare.”
tures.
With the details of commercial affairs the diplomat is not usually
concerned, but one of his chief duties is to cooperate with consular
officers in promoting American commerce, agriculture, and manufac-
The consular service is fully considered in the following chapter.
The Bureau of Citizenship supplements the work of the foreign service
by issuing passports, examining certificates of the registration of
American citizens in consulates, authenticating documents for use
abroad, and furnishing to citizens letters of introduction to members of
the foreign service. Lists of American diplomatic and consular officers
are furnished to interested parties by the Bureau of Appointments.²
THE DEPARTMENT OF WAR.
The second of the executive departments was established August
7, 1789, eleven days after the creation of the Department of Foreign
Affairs. Its chief commercial function is the improvement of rivers
and harbors, and the magnitude of its operations in this work will
appear in the consideration of that subject in Chapter XL.
The War Department and the Secretary of War, acting through the
Bureau of Insular Affairs and the Corps of Engineers, have important
duties in the outlying territories of the United States. The Canal
Zone in Panama was administered by the Secretary of War, through
the Isthmian Canal Commission, from 1904 to 1914, when it was placed
¹Exec. Doc. No. 146, 48 Cong., 1 sess., p. 1.
'Congressional Directory, 63 Cong., 3 sess., 292.
10
History of Domestic and Foreign Commerce.
under the governor of the Panama Canal, who is subordinate to the
Secretary of War. To the Bureau of Insular Affairs, established in
1898 as a "division" and made a bureau in 1902, under the immediate
control of the Secretary, is assigned all matters pertaining to insular
civil government. Among the commercial functions of the bureau
is the gathering and publication quarterly of statistics of insular exports
and imports, shipping, and immigration. Porto Rico was granted civil
government by the act of April 12, 1900, and until June 30, 1908, its
governor, who is appointed by the President of the United States,
was required to report to the State Department. Thereafter juris-
diction was vested in the War Department. Various measures of
commercial assistance, including the improvement of San Juan harbor,
have been prosecuted by the United States. Civil government was
established in the Philippines by the act of July 1, 1902, and the islands
are governed by a commission which was organized in 1904 and is
subject to the Secretary of War.
THE DEPARTMENT OF THE TREASURY.
The Treasury Department is vitally concerned with commerce, which
it aids and regulates through five different agencies-the Customs
Service, the Revenue Cutter Service, the Commissioner of Internal
Revenue, the Life-Saving Service, and the Bureau of Public Health.
In the constitutional convention, upon the initiative of Gouverneur
Morris, an effort was made to designate the chief officer of the depart-
ment as the "Secretary of Commerce and Finance." Although this
was not the title adopted, the Treasury Department nevertheless had,
from the beginning, a very considerable supervision over commerce, and
before the establishment of the Department of Commerce and Labor,
in 1903, it was the most intimately concerned with commerce of all of
the executive departments. Its former primacy in this respect is
apparent when it is remembered that, in addition to the services which
it still performs, the department in 1903 also included the Lighthouse
Board, the Coast and Geodetic Survey, the Steamboat-Inspection
Service, the Bureau of Navigation, the Bureau of Immigration, the
Bureau of Statistics, and the Bureau of Standards. All of these
bureaus and services were then transferred to the new Department of
Commerce and Labor, but the Treasury Department nevertheless
retained many important duties respecting the regulation of commerce.
Important commercial functions are exercised by the Customs
Service, which, as one of the first necessities of government, was estab-
lished by the act of September 2, 1789, in the Treasury Department,
where it has remained. From 1849 to 1894 there was a Commissioner
of Customs, whose functions were rather those of an auditor than of
an administrative officer, and whose office was discontinued when
¹Organization and Law of the Department of Commerce and Labor, 8.
The Machinery of Federal Regulation of Commerce.
I I
the auditing service was reorganized. The general supervision of
the service and of the Division of Customs, which was organized about
1870 to attend to administrative duties, is vested in the Assistant
Secretary of the Treasury in charge of customs. An organization grew
up which, in course of time, embraced a superabundance of offices and
officers whose salaries were not adjusted to the demands made upon
them. Finally, pursuant to the act of August 24, 1912, a reorganiza-
tion was effected, designed to accommodate the machinery of collection
to altered trade conditions. The 126 collection districts previously
in existence were reduced in number to 49, and the designations “sub-
port of entry" and "port of delivery" were abolished, "port of entry"
being the only classification retained. A collector of customs has
general supervision of each district, and a collector of the port has
charge of each port.
The functions of the service pertain to the entry of ships from
foreign ports, the levying of customs duties following an appraisal of
imported goods, the hearing of appeals respecting appraisals, the
departure of ships from port, and the enforcement of various navigation
laws. Permission to discharge cargo is given to the master only after
a sworn copy of the ship's manifest has been filed with the port col-
lector, together with the clearance papers and register or a consul's
receipt therefor. The tonnage tax, levied on all ships arriving from
foreign ports, is then collected. A customs officer supervises the
process of unloading. Consignees enter goods at the custom-house
by presenting sworn invoices from the consignor or owner, and the
goods are, moreover, appraised by examiners, appraisers, and assistant
appraisers, and at the smaller ports by collectors themselves. In
practice most of the work is done by individual examiners, upon whose
knowledge and judgment depends the accuracy of the appraisal, inas-
much as the appraisers themselves are unable, at the more important
ports, to review effectively the work of their subordinates.
Although admittedly inadequate, this appraisal assists in the detec-
tion of frauds. Appeal from it lies to the Board of General Appraisers,
appointed by the President, which was a branch of the Treasury
Department until 1909, since when it has been quasi-independent.
The headquarters of the board are in New York, where two-thirds of the
work is done. It serves as a reviewing board, with some functions
analogous to those of a court. Appeal from its decisions lies to the
United States Court of Customs Appeals.
When the appraisal has been completed, the customs duties are
levied. Since the institution in 1846 of bonded warehouses, it has no
longer been necessary to collect duties or to insure their collection before
goods are landed, but the importer may, if he chooses, store the goods
in a Government warehouse or in a private warehouse supervised by
customs officers. After the outgoing cargo has been loaded and the
12
History of Domestic and Foreign Commerce.
ship is ready to depart, its register is obtained, and a bill of health,
certifying to the health conditions of the port, together with clearance
papers, are secured from the collector. A ship from abroad is thus kept
under the supervision of the customs service during the entire length of
its stay in port. From the records of arrivals and clearances, and from
the copies of ships' manifests filed with him, the collector compiles
foreign trade and tonnage statistics which are published by a bureau
in the Department of Commerce.
Customs officers also document ships flying the American flag;
keep records of crew lists of departing ships; receive passenger lists
of arriving ships; record bills of sale and mortgages of vessels; enforce
the steamboat-inspection laws; and, where there is no shipping com-
missioner, carry out his duties with respect to the shipping of seamen.
In the collection of import duties the Customs Service is assisted by
the Secret Service and the Revenue Cutter Service, which are likewise
organized under the Treasury Department. The Secret Service,
which was established in 1861, in the State Department, was trans-
ferred in 1865 to the Treasury Department, of which it has since been
a division. Its work was formerly confined chiefly to the prevention
of counterfeiting, but in 1911-12 its duties were increased, and it now
cooperates with the Division of Special Agents maintained by the
Treasury Department for the purpose of detecting customs frauds.
The Revenue Cutter Service, established in 1790, was known as the
Revenue Marine Service until 1894. It is organized as a division in
the Treasury Department, and does for the Customs Service on the sea
what the Secret Service does for it on land. The officers of its revenue-
cutters board inbound vessels from foreign ports, examine their papers,
and indorse the manifests covering their cargoes. Besides aiding gener-
ally in the enforcement of the revenue laws, the service exercises many
other functions. It cooperates with the Department of Commerce in
enforcing the navigation and motor-boat laws, requires strict obser-
vance of the laws governing the anchorage and movement of vessels in
port, enforces the quarantine and immigration laws, and suppresses
mutiny aboard merchant vessels. The major part of the actual work
of the service is of an emergency nature. It is called upon to assist
vessels in distress, to remove derelicts from the ocean, and to save lives
Its officers aid the life-saving corps by instructing, drilling,
and inspecting crews and constructing stations. The wireless equip-
ment of the revenue-cutters enables them to assist in the protection of
life and property at sea.
at sea.
Existing arrangements for the collection of internal revenue date
from 1862, when the Civil War necessitated the reestablishment of
taxes of this nature, which had not been collected at all since 1848.
The Commissioner of Internal Revenue, who is at the head of the
bureau of the same designation, superintends the enforcement of the
The Machinery of Federal Regulation of Commerce.
13
internal-revenue laws and the collection of the taxes. Inasmuch as the
collection of these taxes ordinarily requires very little work, the chief
duties of the internal-revenue forces are those of inspection. Until
1909 the activities of the bureau were confined to taxes levied on certain
specified documents and articles of commerce. The special excise tax
on corporations, authorized by Congress in that year, extended the
field of operations materially, and the duties of the bureau were further
increased and its collections vastly augmented in 1913, when the collec-
tion of the income tax, authorized by amendment of the Constitution,
was made a duty of the bureau.
Life-saving stations were first established by the Federal Government
in 1874, under the direction of the Revenue Marine Service, which had,
however, previously been carrying on for a long time the work of life-
saving at sea. In 1878, the Life-Saving Service was separately
organized as a division in the Treasury Department, where it still
remains, under the supervision of a general superintendent. The
keepers and surfmen at the 284 stations maintained by the service keep
a strict watch, patrol the coasts at night, warn ships of impending
danger, rescue lives, and save property threatened with loss at sea.
Valuable statistical reports are compiled showing marine casualties,
not only within the field of operations of the service, but throughout
the entire world. Miscellaneous minor services, such as the recovery
of missing buoys and the relighting of extinguished beacons, are
rendered.
Great modifications in the equipment of the service have made its
work more effective. In 1912 there were in use 109 power life-boats
and surf-boats, which not only increased the efficiency but extended the
scope of the service. More disasters were brought within reach and
many more rescues were reported than in the years prior to 1908, when
power-boats were little used. The service operates nearly 1,500 miles
of telephone lines, connecting with public telephones and wireless
stations, so that it keeps in close touch with the Weather Bureau and
with commercial centers. Facilities are thus provided for displaying
promptly storm-warning signals and for furnishing to ship-owners and
others information concerning vessels endangered by storms along the
coast. In the 1,730 disasters reported to have occurred within the
limits of operations in 1912, only 59 vessels were lost. The property
saved, including vessels and cargoes, was valued at $11,155,170.
National supervision of health matters is exercised through the
Treasury Department, under the control of which the Marine Hospital
of the United States was established in 1798. The purpose then
aimed to be subserved was merely the provision of medical attention
for sick and disabled seamen in the merchant marine. However, con-
siderations of expediency caused a constantly growing emphasis to be
placed on matters relating to the public health, and many new functions
14
History of Domestic and Foreign Commerce.
were from time to time intrusted to the service. In 1902 the designa-
tion "Public Health and Marine Hospital Service" was adopted, and
finally, in 1912, the designation "Bureau of Public Health" was applied
and an organization effected designed to deal with the health of the
nation in its broadest sense. The past and present services rendered by
this branch of the department are best treated by a consideration of
the work of its various divisions.
The Division of Marine Hospitals and Relief maintains 146 establish-
ments, where medical care is given to the officers and crews of American
vessels, as well as to government employes in various marine services,
and conducts examinations for the detection of color-blindness in ship's
officers. The work of this division embodies the earliest functions of
the service.
Through the Division of Foreign and Insular Quarantine and Immi-
gration, a service of ever-increasing importance is rendered. Although
quarantine matters were originally left to the States, as early as 1796
and 1799 Federal legislation directed certain officials, such as port
collectors and revenue-cutter officers, to assist in the execution of State
legislation. The cooperation of the consular service was secured at an
early date through reports on the existence of disease abroad and on
the sailing of vessels bound from infected ports to the United States.
Federal interest in quarantine matters was, however, slight until in the
late seventies, when a serious yellow-fever epidemic in the South led
to an agitation for a national quarantine system. In 1878 the Secre-
tary of the Treasury was authorized to establish a quarantine at ports
where no State or municipal establishments existed. The following
year a National Board of Health was established with authority to
promulgate national quarantine regulations, which, if State authorities
were unwilling to enforce, were to be carried out by Federal officers
specially designated for the purpose. Another crisis came in 1893,
when an epidemic of Asiatic cholera in European ports, whence emi-
grants sailed to the United States, led to the establishment of a more
effective supervision. The National Board of Health was abolished,
and control over quarantine vested in the Marine Hospital Service, and
the strict supervision of the surgeon-general has since brought about
the conformity of the State regulations with Federal regulations.
Annual conferences of State and National health officials assist in
securing uniformity of administration. In 1879 the National Board of
Health was authorized to build temporary quarantine stations, which
were made permanent in 1888. New stations have been authorized
from time to time, until the service now maintains a total of 47 in the
continental United States and 24 in outlying possessions.
Medical officers are stationed at fourteen American consulates to
prevent the introduction into the United States of epidemic diseases.
The Division of Foreign and Insular Quarantine and Immigration has
The Machinery of Federal Regulation of Commerce.
15
charge of the examination of arriving aliens, and, at the request of the
Department of Labor, which supervises immigration, may require.
quarantine officers stationed at Italian consulates to inspect emigrants
departing for the United States. Large immigrant hospitals are main-
tained at New York and San Francisco.
Interstate commerce is subject to the rules of the Division of Domes-
tic (interstate) Quarantine, which is charged with preventing the spread
of contagious or infectious diseases from one State or Territory into
another.
THE POST-OFFICE DEPARTMENT.
When temporarily established in 1789, the post-office was considered
a part of the Treasury Department, but in 1792 it was permanently
established as the General Post Office. Although in 1829 the Post-
master-General was admitted to the Cabinet, it was not until 1872 that
the post-office was recognized by Congress as an executive department.
Aside from its indispensable function of supplying a prompt and safe
mail service, it has secured for commerce greater security with respect
to means of transporation than would otherwise have been enjoyed,
through the insistence on the prompt movement of trains following the
designation by Congress, in 1838, of every railroad in the United States
as a post-route. Through the establishment of mail subsidies, which
are discussed in Chapter XXXIX, improvements in ocean transporta-
tion services have been effected. Moreover, by itself becoming a
carrier of parcels, first in 1890 through the international, and, in 1913,
through the domestic parcel post, the Post Office Department has
facilitated the movement of commerce. Experiments in rural free
delivery, begun under the law of 1890, resulted in a rapid extension of
this service after 1897. The postal savings system, established in
1911, had, within one and a half years, deposits amounting approxi-
mately to $28,000,000, which, in the opinion of the Postmaster General,
represented "hoarded money that is restored to the channels of trade."
Post-office money-orders and the registered-mail service are both great
commercial conveniences.
THE DEPARTMENT OF JUSTICE.
Although the Attorney General's office was established September
24, 1789, and the Attorney General was from the outset admitted to the
Cabinet, the Department of Justice was not recognized as an executive
department until 1870. Engaged, as the department is, in aiding the
executive and judicial departments of the Federal Government in the
enforcement of law, its duties have always extended to all the concerns
of national life. Certain of the Department officers are specifically
concerned with commercial matters. The solicitor for the Department
of Commerce, for instance, acts as legal adviser to the Secretary of
16
History of Domestic and Foreign Commerce.
Commerce and the bureau chiefs; the Assistant Attorney General,
Customs Division, represents the Government in all cases involving
reappraisement and classification of imported goods; the Solicitor
of Internal Revenue is the legal adviser of the Commissioner of Internal
Revenue, and an Assistant to the Attorney General has special charge
of all questions arising under the anti-trust and interstate-commerce
laws.
THE DEPARTMENT OF THE NAVY.
Naval affairs were first administered under the jurisdiction of the
War Department, but on April 30, 1798, a separate department was
created. A brief account of the growth of the Navy is given in
Chapter XXXIX. Both in time of war and of peace the Navy and
the Marine Corps are constantly called upon to protect American
interests in one part of the world or another. The account of the
movements of individual warships, contained in the Secretary's annual
reports, indicates the wide scope and great utility of this service.¹
Moreover, by placing with American ship-builders orders for war
vessels, the department requires the installation of improved equipment
at the shipyards and facilitates the development of skilled workmen,
whereby American establishments are placed more nearly upon a com-
petitive basis in the construction of ships of all kinds.
The Bureau of Navigation of the Navy Department has charge of the
naval wireless equipment, which in 1912 included 41 shore and 6 light-
vessel stations. Several naval and military stations were in that year
opened for the transmission and receipt of commercial radiograms, and
others were made available in the case of a lack of private facilities.
The Hydrographic Office, which was originally established in 1842
as an independent bureau in conjunction with the United States Naval
Observatory, has been a part of the Bureau of Navigation since 1866.
It is charged with improving the means of safe navigation, both for
vessels of the Navy and of the merchant marine, by providing accurate
nautical charts, sailing directions, and manuals of instruction. Much
of the information contained in its periodical publications is of such
importance to mariners that it is "sent broadcast by radio," so that all
vessels within reach may get it at once. Monthly charts and weekly
bulletins covering the North Atlantic, monthly charts of the North
Pacific, and less frequent charts of other oceans are published. These
charts locate both fixed and temporary dangers to navigation, indicate
the usual paths followed by storms at particular periods, the relative
amounts of fog which may be met, the direction and force of prevailing
winds, the direction of ocean currents, the variation of the magnetic
needle, and the courses to be followed in crossing the ocean. These
"steamship lanes" were originally suggested by Lieutenant M. F.
Annual Report Navy Department, 1910, pp. 57-118.
The Machinery of Federal Regulation of Commerce.
17
Maury, of the United States Navy, for routes between northern Europe
and the United States, but until 1891 there was no agreement to follow
them. In that year five companies, and in 1898 all companies, con-
cerned in trans-Atlantic service agreed to do so. The office has also
played an important part in inducing the steamship lines to change their
courses during ice seasons in order to avoid danger. Ice reports are
sent out over the ocean by wireless, and in 1912, following the Titanic
diaster, a cruiser was detailed for ice-patrol duty in the North Atlantic.
The Secretary of the Navy found it impracticable to detail a vessel for
this work in 1913, but the Secretary of the Treasury placed two
revenue cutters in this service.
The Naval Observatory, which grew out of the Department of Charts
and Instruments, established in 1830, is separately organized, although
its connection with the Hydrographic Office is so close that their
consolidation has been urged. The Observatory publishes the Ameri-
can Ephemeris and Nautical Almanac, containing astronomical informa-
tion for the guidance of vessels; determines the relative merits of navi-
gation instruments, and establishes standard time and differences of
longitude.
THE DEPARTMENT OF THE INTERIOR.
The Department of the Interior, which was created in 1849 to relieve
other executive branches of the administration of burdensome affairs
not closely related to their normal functions, and to provide means for
the exercise of those neglected functions which relate more particularly
to the arts of peace, has little direct connection with commerce. The
inconsequential commerce with the Indians, which under the Constitu-
tion is to be regulated by the Federal Government, is supervised by the
Indian Service. With the development of the railway service the
department has been concerned, through the Commissioner of the
General Land Office, who determines whether railroads have complied
with the requirements of Congressional grants. From 1878 to 1904,
an officer, first known as Auditor of Railroad Accounts, and later as
Commissioner of Railroads, reported on the physical and financial
conditions of companies receiving Government aid in lands or bonds,
enforced the laws relating to such companies, examined their books,
aided the Government directors appointed to their boards, and fur-
nished information concerning their tariffs and accounts. His duties
were transferred, in 1904, to the Lands and Railroads Division, and in
1907 to the General Land Office. The Interstate Commerce Commis-
sion was, for two years following its creation in 1887, required to sub-
mit an annual report to the Secretary of the Interior, who provided
quarters for it, and passed upon its accounts and the appointment of
its employes. At his own request the Secretary was relieved of these
supervisory powers.
18
History of Domestic and Foreign Commerce.
The rather nominal authority which the Secretary of the Interior
possesses over the Territories, Alaska and Hawaii, affords him an
opportunity to exercise an influence over their commerce. His author-
ity consists largely in the receipt of reports from the governors and in
the making of recommendations for legislation.
THE DEPARTMENT OF AGRICULTURE.
The Department of Agriculture was established in 1889 as the natural
outgrowth of the agricultural activities of the Government, which
began in 1836 with the distribution of seeds and plants by the Com-
missioner of Patents, and, in 1862, developed into a so-called "Depart-
ment of Agriculture," which was in reality a detached bureau with a
commissioner in charge.
Important commercial functions are exercised by one of its subdivi-
sions, the Weather Bureau, which was established in 1890. Before
that year, however, a part of the work now done by this bureau was
accomplished by other agencies. As early as 1863 the Department of
Agriculture published meteorological data compiled by the Smith-
sonian Institution, and upon the recommendation of the department's
commissioner regular weather reports were inaugurated in 1870, when
the Chief Signal Officer of the Army was authorized to give storm-
warnings and to take meteorological observations. Since the organi-
zation of the Weather Bureau its duties have increased until they have
attained a surprising variety, and its operations have extended into all
parts of the world. Concisely stated, the activities of the Weather
Bureau are these: It forecasts the weather; issues and displays its
forecasts, together with storm, cold-wave, frost, and flood warnings;
gages and reports the height of water in rivers; transmits marine intel-
ligence over its telephone and telegraph lines and otherwise; reports
actual temperature and rainfall conditions; conducts investigations in
climatology and evaporation and makes and distributes meteorological
observations. The weekly forecasts issued at Washington for the
weather for a week in advance are prepared on the basis of regular
cable and wireless reports from all over the northern hemisphere.
Warnings of approaching storms were, in 1912, received from vessels
sailing along the various coasts, and from eight special observing sta-
tions maintained in the West Indies during the hurricane season. The
bureau has arranged with the various wireless services for disseminating
broadcast over the oceans and the Gulf both forecast messages and
storm-warnings. Through its display stations, the bureau reaches
every port and harbor of any considerable importance on the Great
Lakes and the seacoasts. The regular stations at eight strategic points
maintain a vessel-reporting service, whereby information regarding
passing vessels, wrecks, and marine disasters is promptly communicated
to interested parties. The weather observers at all marine stations
The Machinery of Federal Regulation of Commerce.
19
report vessels in distress and send out calls for help which bring assist-
ance. The Bureau publishes frequent meteorological charts of the
oceans and Great Lakes.¹
THE DEPARTMENT OF COMMERCE.
After a statement has been made of the commercial activities of the
eight departments of the Federal Government first established, the
question might be asked, what important functions remain to be sub-
served by a Department of Commerce? Congressman Mann, of
Illinois, speaking for the House Committee on Interstate and Foreign
Commerce, answered the question in the course of the debate preceding
the establishment, in 1903, of the Department of Commerce and Labor.
He pointed out that, following the creation of the necessary administra-
tive departments in the early period of United States history, Congress
was conservative about establishing new departments, whose heads
would be entitled to seats in the President's Cabinet, the efficiency
of which would be destroyed if its size were unduly increased.
Mann said:2
Mr.
"It is evident that not more than one new Department of the Government
is likely to be created at this time in view of our past policy, but it has seemed
to your committee that the enormous interests in our country not engaged in
agriculture but now engaged in trade and transportation, in manufacturing
and mechanical pursuits, might well have gathered together into one new
executive department of the Government those branches of the public service
clearly related to their interests, and which could easily be detached from the
Departments in which they now are."
Some of the Departments in existence prior to February 14, 1903,
when considerations such as those stated above resulted in the passage
of the act establishing the Department of Commerce and Labor, were
then much more concerned with the development and regulation of
commerce than they now are. Most of the bureaus and services now
comprised within the Department of Commerce were originally estab-
lished as branches of the older Departments, particularly the Treasury
Department, from which were transferred, in 1903, the Bureaus of
Navigation, Statistics, Standards, and Immigration, the Lighthouse
¹Other bureaus which are indirectly concerned with commercial regulation are the Bureau of
Animal Industry, which supervises the movement of animals, meats and meat food products in
interstate and foreign commerce, exercises important quarantine functions, and seeks to controi
and eradicate diseases of animals, particularly in times of epidemic; the Bureau of Plant Industry,
which has on occasions made investigations into the best methods of marketing, transporting, and
storing fruits; the Federal Horticultural Board, which administers the Federal plant quarantine
act of 1912, having to do with the entry of foreign nursery stock and other plants and plant
products, and the establishment and maintenance of a foreign and domestic quarantine on account
of plant diseases and insect pests; the Office of Markets, which investigates and reports on the
marketing and distribution of farm products; the Bureau of Chemistry, which inspects the con-
ditions of manufacture, transportation, and sale of food and drug products, and makes investiga-
tions looking to improved methods of transporting food products; the Bureau of Statistics, which
issues crop reports which are of great value to business men in prognosticating conditions; and
the Office of Public Roads, which is energetically furthering the "good-roads movement."
Cong. Record, XXXVI, 1903, p. 1036.
20
History of Domestic and Foreign Commerce.
Board, the Lighthouse Establishment, the Steamboat-Inspection
Service, the United States Shipping Commissioners, and the Coast and
Geodetic Survey. From the Department of State came the Bureau of
Foreign Commerce, and from the Department of the Interior, the
Census Bureau. The U. S. Fish Commission and the so-called Depart-
ment of Labor, then unattached to any of the eight executive depart-
ments, were annexed, and two new bureaus created, those of manu-
factures and of corporations. As its title and make-up indicate, the
departmental functions were not confined to commerce, but included
labor as well, but ten years later a separate Department of Labor was
established.
The oldest of the institutions over which the Department of Com-
merce has supervision is the Lighthouse Service.¹ Although continuously
in the Treasury Department until 1903, this service has many times
been reorganized and placed under the supervision of various officers.
By the act of August 7, 1789, Congress accepted the cession of the eight
lighthouses then maintained by the States, and undertook to manage
them through the Secretary of the Treasury. His functions were
assumed by the newly created Commissioner of Revenue from 1792
until 1802, when the office was abolished. The secretary resumed
control until 1813, when the commissioner's office was reestablished,
and lighthouses were again placed within his jurisdiction. When for
a second time his office was discontinued, in 1820, the management of
the service was delegated to the Fifth Auditor of the Treasury, who
remained in control, and was known as the General Superintendent of
Lights, until 1852, when a more enduring organization was effected.
The Lighthouse Board, then created, consisted of the Secretary of the
Treasury, three naval officers, three engineer officers of the Army, and
two civilians, eminent in science. In 1903 the Secretary of Commerce
and Labor assumed the functions exercised before by the Secretary of
the Treasury. The final act of reorganization was that of June 17,
1910, which abolished the Lighthouse Board and created in the Depart-
ment of Commerce and Labor a Bureau of Lighthouses, with a Com-
missioner of Lighthouses in charge. The duties which devolve upon
the service include the marking and lighting of the channels of harbors
and navigable rivers; the installation and maintenance of aids to naviga-
tion; the testing of apparatus with a view to introducing improvements;
and the publication of information concerning aids to navigation in the
Weekly Notices to Mariners, which show the changes in lights, buoys,
etc., and contain current information necessary for safe navigation.
Another institution, almost as old as the Government, by which
commerce is facilitated and benefited, is the Census. The first census
was taken in 1790, when the returns were made to the President.
Beginning with 1800, the Secretary of State was given general supervi-
¹Organization and Law of the Department of Commerce and Labor, 65–66.
The Machinery of Federal Regulation of Commerce.
21
sion, which he retained until the establishment, in 1849, of the Depart-
ment of the Interior, after which the head of that Department exercised
supervisory functions until in 1903, when the work was transferred to
the new Department of Commerce and Labor. Previous to 1902 the
Census Office was discontinued at the expiration of the work of taking
each decennial census and then reorganized for the succeeding census,
but in that year it was transformed into a permanent and continuous
institution. When it was transferred to the Department of Commerce
and Labor in 1903, the designation was changed to "Bureau of the
Census." Until 1880 United States marshals were required to take
the census, but thereafter special supervisors and enumerators were
employed.
The Census Bureau is now no longer maintained merely for the
decennial enumeration of the population, but is charged with the com-
pilation of special statistical reports on a variety of subjects. A census
of manufactures is taken every five years, and the act providing for
the census of 1910 required a similar census of agriculture. Under
the act of 1902, moreover, the decennial collection of statistics is
required in connection with transportation by water, express business,
banking and loan institutions, the fishing industry, and in other fields.
Quinquennially the bureau compiles statistics relating to street railways,
telegraph and telephone lines, and electric light and power stations, and
annually, on the production and distribution of cotton and forest
products. These statistical reports are included in monographs afford-
ing valuable economic and historical information.
The Coast and Geodetic Survey was the first technical bureau estab-
lished by the Government. In 1807 the President was "authorized
to cause a survey of the coast of the United States to be made." The
organization of the work was delayed by the war of 1812, and operations
did not begin until 1816. The early work was done under the super-
vision of the Treasury Department, where the Survey remained until
1903, with the exception of two short periods, both before 1836, when
it was temporarily supervised by the Secretary of the Navy. The con-
nection with the Navy Department, nevertheless, was, until the Spanish-
American war, a close one. For fifty years, previous to 1898, nearly
one-half of the Survey vessels were both manned and officered by the
Navy, but these duties have, since that time, been performed exclusively
by civilians. The present organization dates from 1843, and the name
"Coast and Geodetic Survey" from 1878. Previous to the latter year
the appellation "Coast Survey" was used. The Survey is charged with
the survey of the coasts of the United States and of coasts subject
to its jurisdiction, and with the publication of charts covering these
surveys. Its activities are not, however, confined strictly to the
coasts. Rivers are surveyed to the head of tidewater or ship naviga-
tion; deep-sea soundings, and temperature and current observations
22
History of Domestic and Foreign Commerce.
are taken in the Gulf Stream and Japan Current, as well as along the
coasts; magnetic researches and observations are made on land and
sea; heights and geographic positions are ascertained; and latitude and
longitude are determined and triangulation work done in the United
States. Publicity is given to the results of these observations through
a variety of media, including some of especial benefit to mariners, such
as sailing and harbor charts, general charts of the coast, Tide Tables,
and Coast Pilots containing sailing directions. The Bureau is, with the
Bureau of Lighthouses, a joint publisher of the weekly Notices to
Mariners.
The Bureau of Foreign and Domestic Commerce is a consolidation
of three bureaus, Statistics, Foreign Commerce, and Manufactures.
Preceding the organization in the Treasury Department of the Bureau
of Statistics (by the act of July 28, 1866), the Department had been
systematically collecting statistics for nearly fifty years, under the
authorization of the act of February 10, 1820. Even before that time
the Secretary of the Treasury had been called upon by Congress for
statistical reports concerning commerce. The information was secured
by the collectors of customs, and compiled and published, after 1820,
by a Division of Commerce and Navigation, which was consolidated
with the Bureau established in 1866. The Bureau of Statistics orig-
inally published data relating to foreign trade alone; but, beginning
in 1875, it was required to publish statistics of internal commerce,
other than by railroad, as well. Since 1892 it has been required to
publish statistics of imports and exports moving by rail as well as by
water. A Statistical Office, established in the State Department in
1842, was organized in 1874 as the Bureau of Statistics. In 1897 its
name was changed to Bureau of Foreign Commerce, to avoid confusion
with other governmental statistical bureaus. Finally, in 1903, it was
merged into the Bureau of Statistics above referred to. Its principal
duty was the publication of consular reports. The final consolidation
occurred in 1912, when with the Bureau of Statistics was combined the
Bureau of Manufactures, to form the Bureau of Foreign and Domestic
Commerce. The Bureau of Manufactures was one of the two new
bureaus established in 1903. It was designed "to foster, promote and
develop the various manufacturing industries of the United States, and
markets for the same at home and abroad, by gathering, com-
piling, publishing, and supplying all available and useful information con-
cerning such industries and such markets, and by such other methods
and means as may be prescribed by the Secretary or provided by law."
•
The Bureau of Foreign and Domestic Commerce is closely related
to the promotion of commerce. To that end it issues publications
containing a large amount of useful information. Daily Consular and
Trade Reports, together with the reports of the commercial agents of
the Department, contain up-to-date information regarding trade
The Machinery of Federal Regulation of Commerce.
23
conditions in foreign countries, opportunities for the expansion of both
foreign and domestic trade, and information as to the service rendered
by the Government for the promotion of commerce. Special bulletins
relate to subjects of current. commercial significance; a World Trade
Directory shows the names of possible foreign buyers of American prod-
ucts; confidential circulars indicate current projects, involving pur-
chases, which are of interest to American business men; the "Tariff
Series" includes bulletins on such subjects as "Consular Regulations
of Foreign Countries," and "Foreign Tariff Notes;" and a monthly
sailing-dates bulletin shows the sailings from the principal ports of the
United States to the principal ports of the rest of the world.
The publications mentioned are those which are not specifically
related to the statistical functions of the bureau. The statistical pub-
lications are necessarily voluminous. The statistics of foreign com-
merce embrace tables showing imports and exports by articles, coun-
tries, and customs districts; the transit trade; the warehousing of
imported goods; imports entered for consumption; ocean freight rates;
and the movement of American and foreign vessels in the foreign
trade. These statistics are collected in a large volume published annu-
ally. The Statistical Abstract of Foreign Countries, an annual publica-
tion, shows, in terms of American currency, weights, and measures, the
imports into and exports from each country of the world. The Foreign
Commerce of the United States, a monthly statement of the "total values
of imports and exports," is also published. This publication, formerly
entitled Monthly Summary of Commerce and Finance, has in the past
contained monographs upon commercial and industrial subjects, and,
until 1913, it presented figures concerning internal commerce, i. e., the
quantities of certain staple commodities, e. g., live-stock, grain, produce,
provisions, merchandise, lumber, fruits, coke, coal, and petroleum,
handled at various principal markets. The Bureau also publishes The
Statistical Abstract of the United States, a condensation of miscellaneous
statistical information collected by the various branches of the Govern-
ment.
The reason for the publication of so great a variety of statistics was
stated by Secretary Nagle, in his annual report for 1911 (p. 78), as follows:
"Changes in the character of the imports and exports have materially
affected trade currents, the share of our exports which is sent to Europe having
fallen from approximately 80 per cent a quarter of a century ago to less than
64 per cent in 1911, and that to other parts of the world proportionately
increased. These changes in the character of the commerce and its move-
ments, as well as the increase in the volume of both imports and exports, have
stimulated the desire on the part of the public for commercial information in
much greater detail and to be presented with much greater promptness.
""
In 1905 four commercial agents were added to the staff of the
Bureau of Manufactures and sent abroad with the object of promoting
the foreign commerce of the United States. Manufacturers and
24
History of Domestic and Foreign Commerce.
•
merchants, as well as the press, have expressed their appreciation of the
services rendered by these agents through their reports on conditions
abroad. Beginning with 1912, the commercial agents were also assigned
to work at home, looking to the development of the export trade through
personal contact with the manufacturers and merchants in whose
interest they have carried on their investigations abroad. The num-
ber of men engaged in this work has been increased and the service
extended. In order that this service may supplement rather than
duplicate the work of consular officers, the men employed are chiefly
technical experts, familiar with the conditions existing in particular
branches of trade.
Another new departure in the work of the bureau lies in the coopera-
tion which is now undertaken with representative trade organizations
through conferences with their officers, through the use of their mem-
bership lists for the dissemination of confidential commercial informa-
tion, and through filing with them plans and specifications for work
which their members would be qualified to undertake. The part
played by the Department in the organization of the new Chamber of
Commerce of the United States, established in 1912, was a recognition
of the importance of the trade associations. The Bureau, which for a
year had been collecting information regarding American commercial
associations, sent broadcast to these organizations an invitation to
attend a conference called by the President. Some 700 delegates, rep-
resenting 400 commercial associations located in every part of the
United States, thereupon cooperated to form the new body which is
to coordinate the unrelated efforts of commercial organizations, looking
towards trade promotion.
The lack of as general a utilization of the facilities provided by the
Government for the promotion of commerce as is possible has been
recognized by the department, which, in 1911 and 1912, through the
Bureau of Manufactures and its successor, the Bureau of Foreign and
Domestic Commerce, published pamphlets entitled "Promotion of
Commerce," containing outlines of the services maintained by the
various governmental offices and bureaus. While the data thus pre-
sented were little more than an index to the activities of these agencies,
the pamphlet was designed to be of assistance to manufacturers and
merchants, to whom it was sent with the advice that they secure addi-
tional information from those bureaus and offices engaged in work of
particular interest to them.
The work of the Bureau of Standards was inaugurated in 1830, when
the Secretary of the Treasury was authorized to examine the weights
and measures used in the various custom-houses. In 1836 the Depart-
ment was ordered to furnish the States with copies of the standards
adopted. Until 1901 the Superintendent of the Coast and Geodetic
¹Miscellaneous Series, Nos. 6, 6A, and 6B.
The Machinery of Federal Regulation of Commerce.
25
Survey, then in the Treasury Department, also served as the Superin-
tendent of the Office of Construction of Standard Weights and Meas-
ures, a designation first used in 1882. The functions of the office were
limited. The growing demand for a great variety of standards and for
certification by the Government as to the accurateness of weights and
measures led, in 1901, to the dissociation of the old office from the
Treasury Department and its establishment as the National Bureau of
Standards. The independent existence of the bureau, was, however,
of short duration, for in 1903 it was attached to the Department of
Commerce and Labor and its name changed to "Bureau of Standards.'
The Bureau is the custodian of standard weights and measures which
under the Constitution are fixed by the Federal Government. It
constructs standards, together with their multiples and subdivisions,
and compares the standards used in commerce, manufacturing, engi-
neering, scientific investigations, and educational institutions with
those adopted or recognized by the Government. The uniformity and
precision in weights and measures, which the makers of the Constitu-
tion desired to insure, is secured by furnishing to official sealers, acting
under governmental authority, and to private parties, accurate stan-
dards of length, mass, and capacity.
Congress first provided for a Steamboat Inspection Service by the
act of July 7, 1838, thirty-one years after Robert Fulton, by running
the Clermont from New York to Albany, demonstrated that the use of
steam power in the propelling of ships was practicable. The enactment
of the law was coincident with the initial trip of the Great Western,
the first steamship built for the trans-Atlantic service. Under this
law, Federal district judges appointed inspectors of hulls and boilers
in their respective districts, but the supervision of the service was
vested in the Secretary of the Treasury. The method of appointing
inspectors was changed and added powers were given to the service.
from time to time. In 1852 the President was charged with the duty
of appointing supervising inspectors; in 1871 a Supervising Inspector
General, who is still in charge of the service, was authorized; and finally,
in 1903, the Secretary of Commerce and Labor took the general juris-
diction out of the hands of the Secretary of the Treasury. The service
is charged with the inspection of all vessels engaged as common carriers
in interstate commerce, the licensing of the officers thereof, and the
administration of the laws relating to such vessels and their officers and
crews for the protection of life and property. It formulates such rules
governing the building and operation of ships as public safety requires,
inspects the materials used in steamship boilers, tests the boilers
before they are placed in service, and determines the passenger-carrying
capacity. It examines and licenses masters, chief mates, other mates in
charge of a watch, pilots and engineers of steamships, and masters and
chief mates of sailing-vessels of over 700 tons. These licenses it is
empowered to revoke, in cases of incompetence, misbehavior, or negli-
26
History of Domestic and Foreign Commerce.
gence. An annual inspection is made of the hulls, appliances, boilers,
and machinery of all steam, gas, and motor vessels, to determine their
stability, accommodations, and safety, including the provision of fire
apparatus, life preservers, and life boats. Sailing-vessels over 700
tons and other vessels and barges of over 100 tons are also inspected
annually with reference to the stability of their construction. Neces-
sary repairs may be required to be made.
The regulations which the service makes as to the operation of vessels
upon navigable waters relate to such subjects as the passing of ships,
the transportation of gunpowder, the carriage on non-passenger vessels
of persons not belonging to the crew, and the issuance of special permits
for excursions. The laws for the protection of life and property aboard
vessels, the enforcement of which is committed to the service, are of
varied nature and considerable volume. They relate, among other
things, to non-transportable goods, maltreatment of crews, commission
of crimes aboard ship, and installation of fire-fighting and life-saving
appliances.
The bureau in the Department of Commerce which is perhaps most
vitally concerned with maritime commerce is that of Navigation, which
is entirely distinct from the bureau of the same name in the Navy
Department. Its varied duties were, at the time of its establishment
under the Secretary of the Treasury in 1884, performed by a number of
agencies in his Department and by the circuit courts. Various func-
tions have since been added, and the bureau, which is one of those trans-
ferred to the Department of Commerce and Labor in 1903, is now
charged with the enforcement of the great volume of Federal naviga-
tion laws, covering a wide range of subjects, and with the recommenda-
tion of changes in those laws. The bureau has over the commercial
marine, including the merchant seamen of the United States, a super-
vision which is limited only by the grant of specific authority in certain
respects to other governmental agencies. It "registers" American
vessels engaged in the foreign trade, "enrolls" those engaged in the
inland and coastwise trade, and "licenses" those of the latter which are
of less than 20 tons measurement. It supervises the laws relating to
the admeasurement of vessels, their original letters and official numbers,
publishes annually a list of the vessels of the United States, and collects
statistics of the merchant marine and ship-building industry. The
commissioner examines the accounts of port collectors, surveyors of
customs, and shipping commissioners, with respect to such matters as
fines, penalties, and forfeitures required under the navigation laws,
services to vessels, navigation fees, amounts collected on account of
decease of passengers, tonnage-tax collections, and shipment and
discharge of seamen.
The bureau relies for the fulfillment of its varied functions upon the
cooperation of other agencies. The enforcement of the navigation
laws, for instance, has from the time of its establishment been intrusted
The Machinery of Federal Regulation of Commerce.
27
chiefly to customs officers, who previously had jurisdiction in the
matter. Those functions which relate to the protection of seamen are
administered by shipping commissioners who were first appointed
in 1872, and are stationed at important ports of entry on the seaboard.
At points where there is no shipping commissioner the collector of the
port performs the functions elsewhere assigned to the commissioners,
including the registration of men seeking employment as seamen, the
superintendence of their engagement and discharge, the rendition of
aid to masters in compelling seamen to be aboard ships at the agreed
time, and the facilitation of apprenticeships. The wide scope of the
bureau's operations makes its commissioner an authority on maritime
subjects. His annual reports contain not only valuable statistical
data concerning the American merchant marine, but information in
relation to registry laws, regulation of radiotelegraphy, ship subsidies,
safety of life and property at sea, and other current questions of mari-
time policy.
The Bureau of Corporations was established in 1903, by the act which
created the Department of Commerce and Labor, to perform duties of
an investigative and informational character. Its powers of inquiry
and publicity constituted an important part of the regulative machinery
provided for corporations by the Federal Government. On the basis
of its investigations into the organization, conduct, and management
of joint stock companies and corporate combinations, including those
engaged in interstate and foreign commerce, the President was enabled
to make recommendations to Congress for legislation to regulate
commerce. The Bureau of Corporations, as stated below, was, in
1914, merged into the Federal Trade Commission.
THE DEPARTMENT OF LABOR.
The only bureau of the new Department of Labor, established in
1913, which is closely associated with commercial matters is that
dealing with immigration. In 1891 the office of the Superintendent
of Immigration was established in the Treasury Department, and there-
after the National Government undertook the direct supervision of
immigration matters. These had theretofore been left to State officials,
who, after 1882, acted under the direction of the Secretary of the
Treasury. The Bureau of Immigration, with a commissioner general
in charge, was established in 1895, transferred to the Department of
Commerce and Labor in 1903, and to the Department of Labor in 1913.
From 1907 to 1913 it was known as the Bureau of Immigration and
Naturalization, but two separate bureaus in the Department of Labor
now deal with these questions. The immigration and Chinese exclu-
sion laws are administered by the Bureau of Immigration, which main-
tains a rigid surveillance over all arriving steamships, as well as over
emigrants departing from important European ports, destined to the
United States.
28
History of Domestic and Foreign Commerce.
INDEPENDENT GOVERNMENTAL AND INTERNATIONAL AGENCIES.
Of the agencies of government, unaffiliated with any of the executive
departments, that having the greatest power to regulate commerce is
the Interstate Commerce Commission, a body which, since its estab-
lishment in 1887, has become a powerful regulative agency, exercising
a great influence over interstate transportation. Although designated
as a commerce" commission, its functions relate more specifically to
matters of transportation. By virtue of its control over railroads and
an increasing authority over water carriers, the commission has been
able to regulate rates, eliminate special favors, and establish more con-
venient and safer service, thereby greatly facilitating the development
of commerce.¹
In 1914, Congress created a Federal Trade Commission which took
the place of the Bureau of Corporations. The Federal Trade Com-
mission has much larger powers than the Bureau of Corporations
possessed. It is an investigating and supervisory body created pri-
marily for the purpose of maintaining fair competition among corpora-
tions engaged in interstate trade. Congress gave the Commission,
which is a body of five men, large powers of investigation and minor
powers of regulation. The creation of the Commission was intended
to be a step towards the ultimate goal of Federal regulation of corpora-
tions engaged in interstate commerce.
Aid, regulation, and protection are extended to commerce by the
Federal Government, not only through national agencies, but also
through international bureaus, commissions, and congresses. Of these,
the Pan-American Union has been the most active in fostering com-
merce. In 1881 James G. Blaine, when Secretary of State, suggested
the convocation of a Pan-American conference, which was held in
Washington in 1889-90. This conference established the International
Bureau of American Republics, known since the fourth conference, held
in 1910, as the Pan-American Union. While the union performs many
duties, largely of an informational character, its great aim is to develop
and maintain closer relations of commerce and friendship between the
21 member republics of the western hemisphere. Its publications,
including a monthly magazine, special reports, and hand-books, relate
particularly to commercial questions. An extensive correspondence
looking to the promotion of trade is carried on, not only with the
governments of the member countries, but with manufacturers, mer-
chants, and others.²
'The commission is discussed in vol. I, chap. xvii.
2Other international unions concerned with commerce, of which the United States is a member,
are: The Universal Postal Union, International Radiotelegraphic Union, International Railway
Congress, Permanent International Association of Navigation Congresses, Union for the Protec-
tion of Industrial Property, Metric Union, International Union for the Publication of Customs
Tariffs, and International Office of Public Health. These are discussed in Reinsch, Public Inter-
national Unions, etc.
The Machinery of Federal Regulation of Commerce.
29
•
THE JUDICIARY AND LEGISLATIVE AGENCIES.
The agencies thus far considered in discussing government aid and
regulation of commerce were those within the executive branch of the
Government. A survey of the Federal Judicial system indicates that
there have been two courts established for the handling of commercial
matters the United States Court of Customs Appeals and the United
States Commerce Court, both of recent creation.
The Court of Customs Appeals was created August 5, 1909, to hear
all appeals from the decision of any board of United States General
Appraisers in customs cases, relating to the classification of merchan-
dise, the rate of duty assessed, fees and charges connected therewith,
and any other appealable questions as to the laws and regulations
governing the collection of the customs revenues.
The Commerce Court, in existence from 1910 to 1913, was designed
to effect a speedy, uniform, and systematic enforcement of the inter-
state commerce law. Congress established the court upon the recom-
mendation of President Taft, for the purpose of creating a tribunal
which should eventually be a body of experts qualified to undertake
the consideration of technical questions in a special field. The court,
for reasons stated in Volume I, Chapter XVII, was disestablished after
an existence of only three years.
The consideration of the legislative machinery of the Federal Govern-
ment which deals with commerce has been left until the last, because,
despite its importance, it is a changing mechanism and one which has
little actual contact with commerce. Through its instrumentality
are drafted the laws which are administered by the agencies which
have already been considered. Although the legislative body is the
creative body, and not the one which performs the specific acts of
"aid and regulation" which have been considered in this chapter,
its powers to aid and regulate commerce are none the less important.
· These powers are exercised largely through committees and com-
missions.
When the National Government came into existence, the general
practice was to create select committees to handle subjects as they
arose, and after the completion of the work so delegated, the committees
ceased to exist. Some idea of the difficulties involved in this method
of procedure may be gleaned from the fact that in the Third Congress,
for instance, there were at least 350 select committees. Gradually
the practice grew of creating standing committees, to whom were
referred bills relating to the general subjects, over which they were
given jurisdiction. This process has continued, until there are a large
number of standing and a very few select committees at each session.
The committee chambers are not only the laboratories where the legis-
lative work of Congress is in large measure done; they also furnish the
means whereby public opinion may most effectively be brought to bear
1
30
History of Domestic and Foreign Commerce:
upon proposed measures, and the hearings which the committees hold do
much to inform the public of the issues at stake in important national
affairs upon which legislation is pending. In the period from 1902
to 1909, the House Committee on Interstate and Foreign Commerce
alone issued 89 publications, including reports of public and private
hearings, special investigations, etc., dealing with important commer-
cial questions:
Of the Senate committees, those particularly concerned with com-
merce are the following: Commerce; Expenses in the Department of
Commerce; Foreign Relations; Immigration; Inter-Oceanic Canals;
Interstate Commerce; Public Health and National Quarantine; Rail-
roads; Standards, Weights, and Measures; Transportation Routes to the
Seaboard; Transportation and Sale of Meat Products. House com-
mittees similarly concerned are: Alcoholic Liquor Traffic; Expenditures
in the Department of Commerce; Foreign Affairs; Immigration and
Naturalization; Interstate and Foreign Commerce; Merchant Marine
and Fisheries; Railways and Canals; Rivers and Harbors.
The Government of the United States has gradually built up many
agencies for the regulation of commerce. Each of the three great branches
of the Federal Government, but the executive branch in particular, is
concerned with the regulation of trade. These governmental agencies
have varied activities, many of which are of great importance. The
United States Government, however, is the patron rather than the
autocrat of commerce, its policy being to maintain commercial freedom
by means of such restrictions as are demanded by the public for its
own protection.
APH 1 2 Q1"
UNIVERSITY OF MICHIGAN
3 9015 07463 6526