which is why the Library of congress exists to begin with//
Interesting, I was not aware of this. Can you cite evidence?

Surely. I'll put Google books links in the same order as the legal citations.

Beginning with the copyright act of 1790, 1 Stat 124, those seeking copyright protection were required to deposit a copy of the work in question with the office of the secretary of State. http://books.google.com/books?id=u90WAAAAIAAJ&dq=%22unit...

At this time, the Library of congress didn't even exist; it was established in 1800 when the US moved the government to it's current location in DC. The post of Librarian was made a paid position in 1802, and in 1815 the purchase of Thomas Jefferson's (much larger) personal library for ~$25,000 was authorized following a fire which destroyed the most of the books in the Congressional library. At this time it was not a public library, but only for use of members of the government - first Congress, then the executive, and later members of the judiciary. Although it kept expanding, it was basically a private reference library.

By 1844 many thought the US should have a national library of some sort - something Jefferson himself had urged, arguing that there was no subject on which congress might not at some point wish to research as part of its lawmaking activity. The generous bequest of James Smithson led congress to pass on 8/10/1846 an act to establish the "Smithsonian Institution, for the Increase and Diffusion of Knowledge among Men." Article 10 of this amended the Copyright act of 1831, directing that copies of all copyrighted works should henceforth be deposited with both the Smithsonian and the LoC, 9 Stat 106. http://books.google.com/books?id=TGcZAAAAYAAJ&dq=%22unit...

By 1859 neither the Smithsonian nor the LoC had established themselves as clear 'national' libraries, with varying complaints about the completeness of their collections, accuracy of the catalogs and so on. Development of LoC had been set back several years by another fire in 1852, as well as the need to service new, smaller, libraries for the sole use of the House and Senate. The situation had become confusing, so in the meantime Congress passed "An act for keeping and distributing all public documents," 11 Stat 138, which directed that copyright and patent materials still held by the Secretary of State be transferred to the Department of the Interior, apparently on the theory that the DoI was best placed to service requests for copies and catalogs from libraries in the individual states. http://books.google.com/books?id=vio3AAAAIAAJ&dq=1859%20...

The Civil war interrupted matters, and Lincoln's first appointee as Librarian spent most of the war out in the field After it had ended, a new librarian took over named Ainsworth Spofford, who was dedicated to the original idea of a national library. His efforts led to the passage of legislation bringing copyright deposits back to the LoC (13 Stat 540 (1865)); the Smithsonian deposit, which moved the whole Smithsonian collection into the LoC and for the first time provided in law that it should be fully accessible to the public except for one month a year during recess, to make repairs (14 Stat 13 (1867)), and amendment to the Copyright making registration with the LoC mandatory on pain of a fine (14 Stat 395 (1867)); and the Copyright Act of 1870, which left the Department of the Interior in sole charge of patents and trademarks, and made the LoC the sole organ for registration and (mandatory) deposit of copyrighted works (16 Stat 198, pp212-216).
http://books.google.com/books?id=u90WAAAAIAAJ&dq=%22unit...

The International Copyright Law of 1891 set up reciprocal recognition of other countries' copyrights, conditional upon deposit of those works in the LoC. All this collecting swelled the volume of works in the library to something approaching half a million, which eventually provided the justification for the purchase of land for and construction of the building which houses the LoC today (after a couple of expensive false starts) in 1896, and in 1897 Congress decided to grant authority to make "rules and regulations for the government of the Library", including administration of copyrights, to the Librarian. http://books.google.com/books?id=uwguAAAAIAAJ&dq=act%20o...

there's general information (beyond the scope of your question) about the development of the library at http://www.loc.gov/loc/legacy/loc.html. You might be surprised to know that the LoC also has (IMHO) the most comprehensive collection of media filespecs, at http://www.digitalpreservation.gov/formats/ which is very useful if you're asked to provide a codec for some obscure file format.