From Bureau to Trade Commission: Agency Reputation in the Statebuilding Enterprise

Abstract

When studying the formation of the Federal Trade Commission (FTC) in 1914, scholars have usually focused on interest groups and electoral politics. This essay, by contrast, suggests that the reputation and network influences of an existing federal agency, the Bureau of Corporations, also shaped the creation of its successor, the FTC. Building on the concept of bureaucratic autonomy, the essay examines the structure of the bureau, its connections, and its preferences. The bureau's leaders favored a clear separation from the Department of Justice and argued for a quasi-judicial process for antitrust, which they felt would be more effective than the courts. They advocated discretion in covering small firms and mandatory annual reports, while seeking to avoid being assigned authority to clear business agreements in advance. Well before the 1914 debates, leaders at the bureau directed substantial funds toward influencing trust legislation. They contacted academics and civic leaders, tracked existing legislative proposals, and analyzed key legal terms. Internal studies examined major questions, such as how to define and regulate unfair trade practices. Bureau officials came to argue Congress could never define these in legislation. Instead a bureaucracy with appropriate authority could adapt definitions of unfair practices to changes in business. When the bureau became the nucleus of the FTC, it received much of the discretionary power it sought.