Bureau of Corporations
Bureau established in 1903 to determine whether U.S. companies were acting in the public interest.
Congress established the Bureau of Corporations as a division of the Department of Commerce and Labor on
February 14, 1903. The bureau was assigned to gather information about companies and to determine whether they
were acting in the public interest.
As a repository of industry data, the Bureau of
Corporations deterred illicit business activities by sharing
corporate information. It was empowered to inspect and
publish reports about the operation of interstate corporations (except common carriers of people or property), predating the Federal Trade Commission (FTC). When the
Department of Commerce and Labor was divided into two
departments in 1913, the Bureau of Corporations was
assigned to the Department of Commerce.
The bureau’s inspection power provided evidence for
antitrust lawsuits. Following the passage of the Sherman
Anti-Trust Act in 1890, courts were tolerant of vertical integration. However, in 1906 bureau officials conducted an indepth investigation of Standard Oil Company of New Jersey
that resulted in the company facing charges of monopolization in United States Circuit Court. In May 1911, the court
ruled that Standard Oil was guilty of gaining through its
stocks as a result of its monopoly, a violation of the Sherman
Act. The decision forced Standard Oil to release the stocks of
36 independent companies and ended its domination.
In 1909, Bureau of Corporations officials concluded that
the American Tobacco Company (ATC) prevailed against
competitors because of astounding financial resources as
opposed to superior organization or technology. The
Supreme Court agreed in 1911, finding that the ATC had
unfairly used vertical integration (a business structure in
which a company owns its suppliers and buyers) to facilitate
the creation of a monopoly by “foreclosing” competitors
from sources for materials or outlets.
Detractors criticized the bureau for providing “sunshine”
regulation, a system in which the regulator disingenuously
cleansed corporate practices through the medium of public
scrutiny while simultaneously educating the business community about efficient methods of competition. In 1914, the
bureau was abolished and superseded by the FTC.