ing philosophy of the people at the beginning of the twentieth century; it must be borne in mind that this has been the result of a gradual progress of thought, and that this progress has not affected all men or all lawyers equally. Now, as at all times, there are conservative lawyers and radical lawyers, the former as far behind the prevailing spirit of the time as the latter go beyond it. In every change of popular thought there have been laggards, and in every such change there have been those who are unable justly to estimate the true meaning of the change, and work beyond it into eccentricities in which the people will never follow them. We have, therefore, three general types of thought at every time: the conservatives, the moderates and the radicals. And this is as true of legal as of economic thought. Many lawyers still hold conservative views as to the application of the law of public callings to modern conditions. They believe that the conductors of every business, however necessary to public welfare, should do whatever seems good in their own eyes. And some economists still tell us that the only way to get efficient service for the public is to allow the public service companies the right of exacting such rewards as they are able to get. But in spite of these now obsolescent views there can be no question that the tendency to-day is to restrain in the interests of society all business which has obtained undue power. Individual freedom is limited by the modern notion of social justice.

Topic C. State Control of Public Utilities

§ 22. The public services of the present day.

Whatever way we turn to-day we depend upon a service that is public in character. Not only in long travels but in short journeys we employ common carriers-railroads and steamships, coaches and cabs, street cars and omnibuses, the subway car and the elevated train. If we ship goods there are various transportation services at our disposal-railroads and ships, express companies and dis

patch lines, refrigerator lines and tank cars. If we are journeying we eat at hotel restaurants, and put up at public inns, or travel in palace cars and lodge ourselves in sleeping cars. Our freight in its transit has its needs attended to: for our goods, warehouses, for our grain, elevators, for our cattle, stockyards, and for our exports, docks. In almost every community, even relatively small, we have for our household needs gas, electricity, water supply and sewerage service provided for us, usually, except the last two, by private companies in public service, and always to the law governing public service, even when provided by the municipality itself. For speedy communication in our business and pleasure, we have the telephone and telegraph in common use, and ticker service and messenger call for special needs. One may judge by this incomplete list how common to every part of our modern life are the various public services, and how necessary it is that they should be required by law to serve us all with adequate facilities for reasonable compensation and without discrimination.

§ 23. The effect of natural monopoly.

The case for public service is plainest in those few utilities where there are natural limitations upon the sources of supply which are essential to the business. This situation in itself gives some degree of monopoly to those who control the sources of supply most accessible to their market, in preventing effective competition with the local service already established. Thus those who control the most advantageous watershed have a natural monopoly of the supply of water in a given district; and so by established law the waterworks established to distribute water to a community must supply all that apply to the extent of their undertaking. So too an irrigation system by which a stream is impounded and its water is distributed over lands within its flow has a public character. Sites where water power may be developed to greatest advan

tage are necessarily limited; and, if the enterprize contemplates the sale of water power at the canal to various users, it would seem that there should be no discrimination therein. For like reasons those who have pre-empted the natural gas fields must deal without discrimination with the public which they have assumed to serve therefrom. All members of the public within the range of the operations of these systems may demand that the law put them upon an equality with their neighbors in obtaining these services so necessary to their welfare. For were not the law ready to act in their behalf there would be the gravest danger of intolerable injustice.

§ 24. Difficulty of distribution as a factor.

Another natural limitation upon competition results from the character of the product. If the physical characteristics of the product are such that it can only have a local distribution the barrier against outside competition may fairly be said to be natural. What after all is that element in the situation which makes the sale of gas a public employment, while the vending of candles is a private business? Is it not that the box of candles may be sent from any factory to compete in any market, while a thousand cubic feet of gas can only be got in any particular community from the pipes of the local company? Much the same argument could be made in differentiating the supply of electricity from the sale of energy in the shape of coal; and indeed electric lighting was held to be a public service from the moment of its first installation upon a public basis. Electricity must be distributed over a wiring system as it is made; it cannot be transported independently and stored indefinitely. The purpose for which the supply is used would seem to be immaterial so long as thereby a public need is satisfied. Nevertheless there have been some doubts raised about the public status of an electric company supplying power exclusively. To give a modern example of a public employment made

such by the special character of the product supplied and the peculiar necessities of the local public, one might instance the ice-plants in the cities. It may be predicted with confidence that the ice-plants will henceforth be found upon the list of those businesses so important to the public that they can no longer be left to the private hands without public control.

§ 25. Scarcity of advantageous sites.

The sites upon which certain services can be conducted to best advantage are few in number. In Munn v. Illinois (perhaps the leading case upon public employment) the Supreme Court spoke of the grain elevators as taking toll at the gateways of commerce. Likewise the owners of the established docks obviously command the situation; and this is the explanation of the fact that wharfingers are held to serve the public. The necessity of these locations to proper conduct of the business may be so great that those who are possessed of these sites may well be said to enjoy a natural monopoly; since if others venture to establish themselves at all at such disadvantage, their competition will be comparatively ineffectual. At all events, those in the favorable locations could exact higher prices than would be fair, were it not for the fact that the law intervened. Terminal facilities, such as union stations furnish the most striking examples of this importance of particular sites; and there are cases compelling them to take in all railroads desiring entrance. To a lesser extent this is true of those services which although not dependent upon an exact location are operated with peculiar advantage in particular areas, such as stockyards, which by recent decisions have been held subject to public control of their business conduct.

§ 26. Limitation of available time.

Another obvious restriction upon effective competition results from limitation of time. When the need of the ap

plicant is immediate, the person from whom he asks service has an unfair advantage. It is this instant need which gives to those agencies established for the rapid transmission of intelligence that virtual monopoly which the earlier telegraph and the later telephone have always had. The very nature of their business is such that one must deal with the established plant upon whatever terms its owners are allowed to make. This is equally true of news-gathering agencies such as the press bureau, and the stock tickers. There are those who must have this service in their business or they cannot get on at all in competition with their rivals. Thus the law must step in and see to it that only reasonable rates are imposed. In these businesses public regulation of the service furnished is peculiarly necessary, or else public needs will not be met. There are other ways of sending communications by mail or by messenger, but since time is of the essence here they are not effective substitutes. It is not accidental that the telephone cases and the associated press cases furnish the best discussion of the fundamental basis of the special law of public employment. Obviously this coercive law is imperatively required to meet the monopolistic conditions surrounding these peculiar services.

§ 27. The public services a necessity.

The test here suggested is that whether a business is public or not depends upon the situation of the public with respect to it. Wherever there is in private hands substantial control of a public necessity, it may well be said that the public has now an interest in the conduct of these businesses by their owners. Since these agencies are carried on in a manner to make them of public consequence, they have become affected with a public interest. Therefore, as the old books say, having devoted their property to a use in which the public has an interest, they in effect have granted to the public an interest in that use, and must submit to be controlled by the public