CHAPTER I. HISTORICAL INTRODUCTION. § 1. Public callings and private callings. TOPIC A. -MEDIAEVAL CONDITIONS. § 2. The distinction between public employment and private business an old one. 3. Conditions of business in the Middle Ages. 4. Parliamentary regulation of rates. 5. Examination of early public employments. 6. The common surgeon as an illustration. 7. The tailor as an illustration. 8. The smith as an illustration. 9. The innkeeper as an illustration. 10. The carrier as an illustration. TOPIC B. PERSISTENCE OF STATE REGULATION. § 11. Partial continuance of regulation to modern times. 12. Persistence of principle accompanying change of conditions. 13. Applications of the principle to commodities in new countries. 14. Monopolies established by patents from the crown. 15. Grant of franchises in modern times. 16. Persistence of the class of public callings. 17. Introduction of improved highways by private enterprise. 18. Toll-bridges and turnpikes as illustrations. 19. Canals and waterways as illustrations. TOPIC C.-THEORY OF LAISSEZ FAIRE. § 20. Freedom of individual effort limiting the application of the prin ciple. 21. Early decisions as to gas supply an illustration. 22. Early decisions as to waterworks an illustration. 23. Cotton press as a modern illustration. 24. Stockyards as a modern illustration. 25. Conservative and radical views concerning the public services. TOPIC D.--GROWTH OF THE PUBLIC EMPLOYMENTS. § 26. Extension of the application of the principle in recent times. 27. Growth of the public service companies in late years. 28. Grain elevators as an illustration. 29. Warehouses as an illustration. 30. Associated Press as an illustration. 31. Ticker service as an illustration. 32. The public services as virtual monopolies. 33. Overshadowing importance of the problem of rate regulation. 34. Rate regulation at the present time. § 1. Public callings and private callings. The distinction between the private callings-the rule—and the public callings-the exception-is a division in the law governing our business relations which has and will have most important consequences. The causes of the division are economic rather than strictly legal. Free competition, the very basis of the modern social organization, superseded almost completely medieval restrictions, but it has just come to be recog nized that the process of free competition fails in some cases to secure the public good, and it has been reluctantly admitted that some control is necessary over such lines of industry as are affected with a public interest. At this point the problem of public callings becomes a legal one. In private businesses, one may sell or not, as one pleases, manufacture what qualities one chooses, demand any price that can be got, and give any rebates that are advantageous. But in public businesses one must serve all that apply without exclusive conditions, provide adequate facilities to meet all the demands of the consumer, exact only reasonable charges for the services that are rendered, and between customers under similar circumstances make no discriminations. The significance of this distinction between the public calling and the private calling may be appreciated from an examination of the general course of events leading up to the present industrial situation. For this distinction between the public callings and the private callings has been taken in our law from the earliest times to the present day. TOPIC A.-MEDIAEVAL CONDITIONS. § 2. The distinction between public employment and private business an old one. From early times there has been a peculiar law governing certain callings which were regarded as public in character. These callings have always been regulated by the State to a greater extent than ordinary employments; indeed the difference between them and ordinary businesses has been so great as to constitute a difference in kind rather than in degree; and the regulation of the public callings has always been therefore a distinct topic of the law. The law has always imposed an affirmative duty of action upon those who professed a public employment. This distinction of the public callings from the private callings was often of the utmost importance in our early common law. Indeed, whether the defendant was in a common employment or not made more difference in the success of the plaintiff's action or its failure than it does to-day. And although many of the decisions which make the distinction are long since obsolete in one way or another, the subsequent developments in the law in no manner affect the force of these cases in establishing the difference between the obligations of those in public employment and those in private business as a fundamental fact in the legal system. 3. Conditions of business in the middle ages. In the middle ages, and long thereafter, the necessity of furthering the well-being of the people and protecting them from oppression was enough to justify State interference. In the England which we see through the medium of our earliest law reports, the medieval system was at its highest point of development, hardly affected as yet by the modern ways of ar ranging things which were just in their beginnings. The older policy had been one of almost universal regulation. Most of the trades in the towns were restricted by the gild system. Under this system the services to be rendered to the public in the trades were governed by certain codes of by-laws; but these by-laws were continually declared void by the local courts if they were oppressive. In the country at the same time there were to be met certain privileges in carrying on business in connection with the manorial system. Some businesses required the investment of more or less capital in constructing a plant, as the bake-house and the mill. It had been necessary at the outset that these should be provided by the lord of the manor and the seignorial ban covered these, the lord granting franchises to certain persons. 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 any one in the country than in the towns, with their craft gilds and merchant gilds. The fundamental principles in the medieval order, taken as a whole, were, therefore, the establishment of special privileges and the consequent system of State regulation, both in respect to service and in respect to price; and it is clear upon all the evidence that these principles of State regulation were put into practice by the special tribunals and the regular courts in a thorough and intimate manner. For these reasons the mediæval system may well be described as a consumer's policy. Under the medieval system industrial activity was limited by various restrictions. The ideal held was a society in which all things were ordered. The conception was that every man had a right to a place in this established order according to his rank, a state of affairs by most men desired. Each person was held bound to perform his own part; no person, therefore, should be allowed to interfere with the employment of another. Of course, the modern theory is altogether different. A state of free competition is considered to be for the best interests of society; and, therefore, in our time almost every business is open to almost every man. And yet at all times in economic history both restriction and freedom are to be found in the law. The proportion, however, changes greatly. In one epoch there is much legal limitation, with little freedom left; in another age there is almost universal competition, with some little franchise to be found. And the rule will generally hold true that the more the natural laws of competition regulate service and price, the less the State need interfere in these respects; but conversely when competition ceases to act efficiently State control becomes necessary. 4. Parliamentary regulation of rates. Not only did the law regulate business indirectly, through the courts, parliament itself frequently regulated prices of necessaries of life by direct legislation. The great staples, like wool and food, were habitually regulated in this way, and the employment and the price of labor was a subject of statutory provision. Thus, in 1266, Henry III., after reciting former statutes to the same effect, regulated the price of bread and ale according to the price of wheat and barley, and forbade forestalling; that is, cornering the market. In 1344 the ordinances fixing the export prices of wool were repealed after some years of trial. In 1349 all laborers were obliged to serve for the customary wages, and "butchers, fishmongers, regrators, hostelors (i. e., innkeepers), brewers, bakers, poulterers, and all other sellers of all manner of victuals," were bound to sell for a reasonable price. These statutes continued in force throughout the middle ages, and until after the settlement of America. 151 Hen. 3, Stat. 1. 218 Ed. 3, cap. 3. 323 Ed. 3, cap. 1. |