§ 28. Economic limitations create public employment. 29. Cost of the plant.

30. Service on a large scale.

31. Legal privileges accompanying public employment.

Tepic D. Modern Regulation of Public Services

§ 32. Necessary regulation of virtual monopoly. 33. Economic conditions at the present time.

34. Control of the public services.

35. Differentiation of the public service law.

36. Unity of the public service law.

37. The modern programme of State control.

38. Overshadowing importance of rate regulation. 39. Present state of the public service law.

40. Ultimate limitations upon public employment. 41. State control not socialism.

§ 1. Public callings and private business.

The difference between public callings and private business is a distinction in the law governing business relations which has always had and will always have most important consequences. Those in a public calling have always been under the extraordinary duty to serve all comers at reasonable rates, while those in a private business may always refuse to act unless they are paid any price they may choose to ask however exorbitant. So great a distinction as this constitutes a difference in kind of legal control rather than merely one of degree. The causes of this division are, of course, rather economic than strictly legal; and the relative importance of these two classes at any given time, therefore, depends ultimately upon the industrial conditions which prevail at that period. Thus in the England which we see through the medium of our earliest law reports, the medieval system of established monopolies called for the legal requirement of indiscriminate service from those engaged in almost all employments. There followed in succeeding centuries an expansion of trade which gradually did away with the necessity for coercive law. Indeed, in the early part of the nineteenth century, free competition became the very basis of the social organization, with the consequence that the

recognition of the public callings as a class almost ceased. It is only in very recent years that it has again come to be recognized that the process of free competition fails in some cases to secure the public good; and it has been reluctantly admitted that State control is again necessary over such lines of industry as are affected with a public interest.

Topic A. The Early Policy of Regulation

§ 2. The mediæval theory of State control.

The medieval system involved almost universal regulation of all the doings of men, and therefore its commercial policy was almost completely restrictive. The ideal held was a society in which all things were ordered, the full conception being that every man had a right to his place in this established order. This state of affairs was by most men greatly desired. Indeed, a regulated monopoly with the corresponding obligation of public service seemed in that age to the great majority of people far better than an unregulated competition without public obligation. It was thought that things were put in a true balance by requiring each person to perform his part and allowing no person to interfere with the employment of another. And all of this control of industrial affairs was felt to be ultimately for the benefit of the whole public who could obtain thereby without favor at reasonable prices proper service in accordance with their requirements. In this industrial regulation it has been well said that the medieval system was a consumer's policy by reason of its limitation of prices, far more than it was a producer's policy by virtue of its monopoly of service.

§ 3. The regulation of business in the middle ages.

In medieval England this thorough system of State control reached a high state of development. Most of the trades in the towns were parceled out to the gilds. Under this system the services to be rendered to the

public in the trades were governed by gild codes. These by-laws were continually declared void by the local courts if they were really inconsistent with public service. In the country at the same time there were to be met similar privileges in carrying on business in connection with the manorial system. Some business required the investment of more or less capital in constructing a plant, as the bakehouse and the mill. It may have been necessary at the outset that these should be provided by the lord of the manor; at all events in later times the seignorial ban covered these, the lord granting franchises to certain persons. Here again those who conducted these businesses were bound to serve all fairly or answer for it to the courts of the manor. But, upon the whole, the ordinary trades and crafts were more freely open to anyone in the country than in the towns with their craft gilds and merchant gilds. This may explain why the cases requiring public service of carriers and inn-keepers, ferrymen and farriers, appear so early in the royal courts; for there were no local courts with clear jurisdiction over the lines of travel across the country.

§ 4. Early differentiation of the public service law.

Thus there is to be found from the earliest times a peculiar law governing the conduct of those engaged in a public employment. The characteristic thing then as now was the legal imposition of an affirmative duty of proper actions upon those who openly professed a public employment, while those who carried on private business were under practically no duties which were not pure negative in character. This general distinction between the legal obligations of those in public calling and in private business was often of the utmost importance in our early common law. Indeed, whether the defendant was in common employment or not, made more difference in the success of a plaintiff's action or its failure than it does to-day. In those days contract law was so undeveloped

that in an ordinary business one could not be held to his bargains, yet at that time in a public calling such as innkeeping one was held to the public undertaking he made to serve all that might apply. So, too, while the law of tort as yet gave no remedy against one for negligent injury to property voluntarily intrusted to him in the course of ordinary business, in a public employment such as that of the blacksmith one was answerable for failing to use proper skill in the calling he had assumed. However obsolete this substantive law may be as to private business, the subsequent developments in the law in no manner affect the force of these decisions in establishing the fundamental difference in legal situation between those engaged in public employment and those in private business. The law which suffices for ordinary businesses has never been enough for the protection of the public in their dealings with these extraordinary services. Special law has always been necessary for the regulation of prices in public employments; and these principles of our common law are for all time.

§ 5. The history of the carrier.

From the earliest times it has been agreed that the common carrier of goods is in a public employment. A statement of the early law is to be found in one of the leading cases on carriers, Jackson v. Rogers.1 "This was an action on the case for that whereas defendant is a common carrier from London to Lymmington et abinde retrorsum, setting forth as the custom of England, that he is bound to carry goods, and that the plaintiff brought him such a pack, he refused to carry them, though offered his hire. And held by Jeffries, C. J., that the action is maintainable, as well as it is against an innkeeper for refusing a guest, or a smith on the road who refuses to shoe my horse, being tendered satisfaction for the same.

12 Show. 327 (1683). The whole report of this case is included in the quotation which follows.

Note, that it was alleged and proved that he had convenience to carry the same; and the plaintiff had a verdict." In Plantagenet England the population lived apart in separate communities. Small attention was paid to the roads connecting them which were no more than trails winding through the wilderness. No cart could pass over them, only pack animals with the goods in their panniers. So many were the bands of outlaws in the greenwood that no man might with safety traverse these paths alone. The transportation of goods was, therefore, given over to the carrier, who traveled oftentimes with trains of pack animals, and a considerable company. Few would pass

over the same roads between the same towns, because the traffic was still comparatively small, as England had as yet but little beyond a local economy where each community was sufficient to itself, into a national economy which involved interchanges of goods between distant markets. The conditions surrounding transportation, therefore, were those of virtual monopoly. The merchant must appeal to the protection of the law, a protection without which he was at the mercy of the carrier with whom circumstances forced him to deal without a chance for choice.

§ 6. The position of the wharfinger.

In a commercial port those who own the convenient sites for wharfage upon deep water possess a peculiar advantage. It was of such wharfinger that Lord Hale in his De Portibus Maris 2 wrote the most famous paragraph in the whole law relating to public service. It is there that he says that whenever the king or a subject have a public wharf to which all persons must come who come to that port to unload their goods-"in that case there cannot be taken arbitrary and excessive duties for cranage, wharfage, etc., but the duties must be reasonable and moderate, for now the wharf and crane and other con

2 Hargrave Law Tracts, 78.