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COMMISSIONER OF CORPORATIONS.
DEPARTMENT OF COMMERCE AND LABOR,
BUREAU OF CORPORATIONS,
SIR: I have the honor to submit the first general report of the Commissioner of Corporations, covering the period from the organization of the Bureau to June 30, 1904.
The law under which the Bureau of Corporations was created is section 6 of the act of Congress establishing the Department of Commerce and Labor, approved February 14, 1903, reading as follows:
SEC. 6. That there shall be in the Department of Commerce and Labor a bureau to be called the Bureau of Corporations, and a Commissioner of Corporations who shall be the head of said bureau, to be appointed by the President, who shall receive a salary of five thousand dollars per annum. There shall also be in said bureau a deputy commissioner who shall receive a salary of three thousand five hundred dollars per annum, and who shall in the absence of the Commissioner act as, and perform the duties of, the Commissioner of Corporations, and who shall also perform such other duties as may be assigned to him by the Secretary of Commerce and Labor or by the said Commissioner. There shall also be in the said bureau a chief clerk and such special agents, clerks, and other employees as may be authorized by law.
The said Commissioner shall have power and authority to make, under the direction and control of the Secretary of Commerce and Labor, diligent investigation into the organization, conduct, and management of the business of any corporation, joint stock company or corporate combination engaged in commerce among the several States and with foreign nations excepting common carriers subject to "An Act to regulate commerce," approved February fourth, eighteen hundred and eighty-seven, and to gather such information and data as will enable the President of the United States to make recommendations to Congress for legislation for the regulation of such commerce, and to report such data to the President from time to time as he shall require; and the information so obtained or as much thereof as the President may direct shall be made public.
In order to accomplish the purposes declared in the foregoing part of this section, the said Commissioner shall have and exercise the same power and authority in respect to corporations, joint stock companies and combinations subject to the provisions hereof, as is conferred on the Interstate Commerce Commission in said "Act to regulate commerce" and the amendments thereto in respect to common carriers so far as the same may be applicable, including the right to subpoena and compel the attendance and testimony of witnesses and the production of documentary evidence and to administer oaths. All the requirements, obligations, liabilities, and immunities imposed or conferred by said "Act to regulate commerce" and by "An Act in relation to testimony before the Interstate Commerce Commission," and so forth, approved February eleventh, eighteen hundred and ninety-three, supplemental to said "Act to regulate commerce," shall also apply to all persons who may be subpoenaed to testify as witnesses or to produce documentary evidence in pursuance of the authority conferred by this
It shall also be the province and duty of said Bureau, under the direction of the Secretary of Commerce and Labor, to gather, compile, publish, and supply useful information concerning corporations doing business within the limits of the United States as shall engage in interstate commerce or in commerce between the United States and any foreign country, including corporations engaged in insurance, and to attend to such other duties as may be hereafter provided by law.
The Commissioner was nominated by the President on February 17, confirmed by the Senate on February 21, and took the oath of office on February 25, 1903, and the organization of the Bureau proceeded as rapidly as was consistent with the proper development of work in an entirely new field.
The growth of the Bureau is shown by the following statement, which gives the number of persons actually employed in its service and the total expenditures on account of the salaries, per diem, and traveling expenses of the employees from month to month from the beginning of the Bureau's history. This includes the salary of employees detailed from other bureaus or offices, and excludes salary of employees carried on the Bureau of Corporations roll but detailed for duty in other bureaus or offices, and hence represents the actual cost of all service rendered directly to the Bureau of Corporations.
NUMBER OF EMPLOYEES AND TOTAL SALARY AND EXPENSES, BUREAU OF CORPORATIONS, FROM THE ESTABLISHMENT OF THE BUREAU, FEBRUARY, 1903, TO JUNE 30, 1904,
From the establishment of the Bureau to June 30, 1904, other expenses were as follows:
Furniture (as per inventory June 30, 1904).
Books on hand (as per inventory June 30, 1904).
Supplies (in part estimated).
Printing (in part estimated)
$5, 472.72 775.80 3,512. 48 823.40
10, 584. 40
In order to show in full the actual cost of the operation of the Bureau, the items of rent, janitor and watchman service, telephone service, light and heat, should be added. As these expenses are borne by the Department out of general appropriations for that purpose, and no distribution thereof is made among the several bureaus and offices, these items can only be estimated, and for the purpose of this statement they are estimated at $5,000.
We may, therefore, summarize as follows:
Salaries, traveling expenses, and per diem
Furniture, books, miscellaneous supplies, and printing.
Total expense of operation of Bureau of Corporations from Feb-
$66, 119. 05 10, 584. 40 5,000.00
81, 703. 45
This statement of the cost of the Bureau has been made without regard to the appropriation drawn upon. Certain employees of other bureaus and of the Secretary's office have been detailed to this Bureau; the expenses of such details have been included in the above,
although not paid from appropriations specifically made for this Bureau. On the other hand, certain employees of this Bureau have been detailed to the Secretary's office and to other bureaus of the Department; and the expenses of such, although paid from appropriations for this Bureau, have not been included in the above. The object is to show the actual cost to the Government of the operation of the Bureau of Corporations. Under normal conditions after the exigencies incident to the organization of the new Department have ceased-there will be no need for the exchange or use of details.
LIBRARY OF THE BUREAU.
The Bureau's library consists of the following books:
Law: Text-books, reports, and digests
State codes and sessions laws (including 132 pamphlet constitutions and laws).
Insurance publications, State laws, and reports (including 118 pamphlets).
Cases: Printed pleadings, etc. (pamphlets).
Only such books as may be termed "tools of trade" have been purchased. The Congressional Library is used for all books of casual reference or needed for special investigation.
THE PERSONNEL OF THE BUREAU.
Special care has been exercised in the selection of the employees of the Bureau, in order to obtain specially qualified and technically trained men. They have been chosen from the certifications of the United States Civil Service Commission, or by the approval of the Commission, or by transfer from other bureaus and Departments of the Government. The satisfactory results obtained prove the efficiency of the present administration of the civil-service act.
The routine administrative work of the Bureau has been organized in accordance with the most improved business methods, the purpose being to obtain the highest degree of efficiency, accuracy, and promptness in daily work, and at the same time to exercise strict business economy. Not only have the expenditures been within the appropriations, but the work is worth what it cost.
During the period of the organization of the Department of Commerce and Labor the Secretary was obliged to detail the Commissioner, the Deputy Commissioner, and various employees of the Bureau of Corporations upon purely departmental work. This necessity arose from the fact that the first appropriations were insufficient to meet the absolute needs of the Department.
The appropriations for the year ending June 30, 1905, are $156,220. The estimate for the year ending June 30, 1906, are $236,420, being an increase of $80,200, or about 51 per cent.
The request is made that the wording of the appropriation be changed so that there will be no statutory division of the sum appropriated among special agents, special attorneys, and special examiners. The need of this change cannot be too strongly urged. The work of the Bureau can not be conducted along fixed lines of employment for the reason that in one investigation legal work will predominate, and in another, financial or economic, and hence the specific character of employment should be left to the discretion of the Secretary and the Commissioner. As shown by experience, much work in a special investigation is temporary, the character of which can not be foreseen. A great advantage in the use of the appropriation as requested in the estimates is that field and office men can readily be exchanged in accordance with the needs of special investigations. It has been found that better results and greater economy are possible by requiring field officers to work up in the office the reports of their own investigations and examinations.
PURPOSE AND SCOPE OF ORGANIC LAW.
The first work of the Bureau was a thorough study of the purposes and scope of its organic law, the jurisdiction and powers of the Commissioner, and methods of procedure. Such study of necessity covered a wide range of legal research, including both Federal and State legislation and judicial decision.
The Bureau is in a measure an arm of the legislative branch of government, charged with the duty of obtaining information to which Congress is entitled on the subject of interstate and foreign commerce. It is placed under the executive branch of the government for the purpose of administration and continuity of action.
Congress, having the constitutional authority to legislate in regard to interstate and foreign commerce, has the power to obtain all information necessary to make such legislation adequate and appropriate. Congress has in this case created the Bureau of Corporations as a specific means of carrying out the purpose desired, prescribing the method of investigation by the Bureau and of transmission of the information obtained to Congress through the Executive.
A system of reports made through the President is obviously appropriate because of the necessity of voluminous and extensive investigations involving the private affairs of citizens. Such reports must needs be passed through some sifting process and presented to Congress in such form as to afford a basis for legislation, and with as great a degree of publicity of detail as may be consistent with the proper protection