A Brief History of the United States Department of Commerce

by JRO on October 15, 2013

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The U.S. Department of Commerce is a cabinet-level department of the United States Government. The mission of the Commerce Department is to promote and encourage business development through growth, entrepreneurship, and partnerships with business and higher education. The department manages an annual budget of $7.5 billion and employs approximately 47,000 individuals around the world.

The Commerce Department is led by Secretary Penny Pritzker, who was appointed the 38th secretary to head the department in 2013 by President Barack Obama. The main offices for the Commerce Department are located near the National Mall at 1401 Constitution Avenue NW in Washington, D.C. (the Herbert C. Hoover Building). Two of the more notable agencies in the Commerce Department are the National Oceanic and Atmospheric Administration (NOAA), located in Silver Spring, Maryland, the United States Patent and Trademark Office (USPTO), located in Alexandria, Virginia, and the Bureau of the Census in Washington, D.C.

The Creation of the Department of Commerce

The department was created February 14, 1903, under an act of Congress as the Department of Commerce and Labor (32 Stat. 825). A subsequent act on March 4, 1913, split Commerce and Labor into separate cabinet-level departments (37 Stat. 736). It was President Theodore Roosevelt who led the effort for the creation of the department and his successor, President William Howard Taft, who signed the legislation that separated Commerce and Labor. It would fall on President Woodrow Wilson to appoint the first Commerce Secretary, William C. Redfield. Herbert Hoover, before becoming elected President in 1928, served as Commerce Secretary under Presidents Warren Harding and Calvin Coolidge.

Most of the Commerce Department’s spending goes to private contractors. Of that spending, 92 percent usually goes to four departments: NOAA, USPTO, the Census Bureau, and the National Institute of Standards and Technology. Defense contractors and large technology firms received 23 percent of the monies spent by the Commerce Department, including Lockheed Martin, Northrup Grumman, IBM, and Raytheon. The Commerce Department funded the effort in 2007 to help individuals convert old-style analog televisions to digital through a $120 million contract given to IBM.

Controversy Over the Existence of the Department of Commerce

The Department of Commerce has undergone many changes throughout its 110-year history to reflect the nature of commerce in the United States over the period. These changes include the merger of the Bureau of Corporations into the Federal Trade Commission in 1915; the transfer of the Bureau of Mines from the Interior Department in 1925; and the establishment of the Office of Minority Business Enterprise, the Office of Telecommunications, and NOAA in 1969 and 1970.

The Commerce Department has been the subject of government downsizing efforts, most notably a mention during a debate between Republican presidential candidates in Rochester, Minnesota, in November 2011. In that debate, Governor Rick Perry of Texas proposed the elimination of three cabinet departments, Commerce, Education, and Energy, as a way to streamline government and do away with duplicative federal-state levels. President Obama also proposed the merger of Commerce as a way to make efficient the delivery of services to businesses.

Regardless of what may happen to the Department of Commerce in the future, there is no doubt that it has played a vital role in contributing to the development of business enterprises in the United States.

Kyle Simpson focuses on Employment Law, Business Law, Commercial Litigation, Securities Litigation, Banking Law, Financial Regulation, Commercial Paper, Torts and other associated areas.

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