concentration of all interests. The regulation of charges would seem as justifiable here as in the grain elevator cases.15

Some illustrations of these same principles are cited from England by Mr. Freund, as follows:

An instance of regulation of prices in case of a monopoly is found in Dasent, Acts of the Privy Council, 1545, p. 192; on complaint made by the whole company of bowyers that one Petersvan Helden, of the Steelyard, having in his hands the whole trade of bringing in of bowstaves into the realm, demanded such excessive prices as they were not able to live up the gain that should rest upon them, giving so excessively for the same, it was ordained that he should not demand above £7 sh. 10 for the band. In the leading English case, Allnut v. Inglis, 12 East, 527, the power to prevent unreasonable charges was based upon the special privileges enjoyed by the dock company.

In the leading case of Munn v. Illinois, 94 U. S., 113, the basic principles were stated justifying the exercise of the police power by the state in the naming of charges for services rendered. These doctrines have been applied consistently in subsequent cases.

In Budd v. New York, 143 U. S. 517, at page 535, the Supreme Court succinctly stated the gist of the doctrine established in Munn v. Illinois, as follows:

It said, that under the powers of government inherent in every sovereignty, "the government regulates the conduct of its citizens one toward another, and the manner in which each shall use his own property, when such regulation becomes necessary for the public good"; and that, "in their exercise it has been customary in England from time immemorial, and in this country from its first colonization, to regulate ferries, common carriers, hackmen, bakers, millers, wharfingers, inn-keepers, etc., and in so doing to fix a maximum of charge to be made for services rendered, accommodations furnished, and articles sold." It was added: "To this date, statutes are to be found in many of the states upon some or all these subjects; and we think it has never yet been successfully contended that such legislation came within any of the constitutional prohibitions against interference with private property."

In a case entitled Cotting v. Kansas City Stock Yards Co., 183 U. S., 79, the writer of the opinion of the court, Mr. Justice Brewer, attempted to make a distinction between the method by which the state should determine the charges levied by a company performing some public service, as distinguished from companies not engaged in such services, and which have devoted their property to a use in which the public has an interest.16 Mr. Justice Brewer cited Munn

15 The Police Power, by Ernst Freund, p. 387.

16 Cotting v. Kansas City Stock Yards Co., 183 U. S., 85.

v. Illinois, and a large number of subsequent decisions based upon that case, making the following comment:

These decisions go beyond but are in line with those in which was recognized the power of the state to regulate charges for services connected with any strictly public employment, as, for instance, in the matter of common carriage, supply of water, gas, etc.17

Mr. Justice Brewer had frequently dissented from the prevailing application of Munn v. Illinois, but in writing the opinion in the Stock Yards Case, he frankly held that the state had the power to make reasonable regulation of the charges for services rendered by the Stock Yards Company.

At great length Mr. Justice Brewer outlined a difference in principle in the determination of what the charges should be for a company performing a public service, and on performing a service in which the public is interested, but not a distinctly public employment. He also discussed a second issue and held that the statute of Kansas was in violation of the Fourteenth Amendment to the Constitution of the United States in that it applied to the Kansas City Stock Yards Company only, and not to other companies engaged in like business in that state.

It was on this second point, and that alone, that a majority of the Supreme Court concurred with Mr. Justice Brewer, who wrote the opinion. Six members of the court declined to concur or to express an opinion on the first question stated. In this decision Mr. Justice Brewer stated:

While not a common carrier, nor engaged in any distinctly public employment, it is doing a work in which the public has an interest, and, therefore, must be considered as subject to government regulation.

In the recent case of German Alliance Insurance Co. v. Kansas, 233 U. S., 389, the issue was whether insurance rates could be regulated by the state under its police power. The opposition claimed:

The basic contention is that the business of insurance is a natural right, receiving no privilege from the state, is voluntarily entered into, cannot be compelled nor can any of its exercises be compelled; that it concerns personal contracts of indemnity against certain contingencies merely. Whether such contracts shall be made at all, it is contended, is a matter of private negotiation and agreement, and necessarily there must be freedom in fixing their terms. And

17 Cotting v. Kansas City Stock Yards Co., 183 U. S., 85. Italics are mine.

"where the right to demand and receive service does not exist in the public, the correlative right of regulation as to rates and charges does not exist." 18

The issue was very clearly stated by the court in the following language:

We may put aside, therefore, all merely adventitious considerations and come to the bare and essential one, whether a contract of fire insurance is private and as such has constitutional immunity from regulation. Or, to state it differently and to express an antithetical proposition, is the business of insurance so far affected with a public interest as to justify legislative regulation of its rates! 19 The discussion by the court of the factors involved is very instructive. Summarizing a review of the cases the court stated:

The cases need no explanatory or fortifying comment. They demonstrate that a business, by circumstances and its nature, may rise from private to be of public concern and be subject, in consequence, to governmental regulation. And they demonstrate, to apply the language of Judge Andrews in People v. Budd, 117 N. Y., 1, 27, that the attempts made to place the right of public regulation in the cases in which it has been exerted, and of which we have given examples, upon the ground of special privilege conferred by the public on those affected cannot be supported. "The underlying principle is that business of certain kinds holds such a peculiar relation to the public interests that there is superinduced upon it the right of public regulation." Is the business of insurance within the principle? It would be a bold thing to say the principle is fixed, inelastic, in the precedents of the past and cannot be applied though modern economic conditions may make necessary or beneficial its application. In other words, to say that government possessed at one time a greater power to recognize the public interest in a business and its regulation to promote the general welfare than government possesses today. We proceed then to consider whether the business of insurance is within the principle.20

The court holds the insurance business to be of such a character as to justify public regulation. The existence of a monopoly as a justification for regulation is well established and generally recognized. Mr. Wyman in his work on Public Service Corporations, written while a member of the law faculty of Harvard, stated the accepted doctrine in the following language:21

It will have been noticed, therefore, that the principle of law which permits the regulation of these callings has never been abandoned, though the conditions calling for its application at various times have greatly changed. Whenever the

18 German Alliance Insurance Co. v. Kansas, 233 U. S., 405.

19 Ibid., 406.

20 Ibid., 411.

21 Sec. 29, 33.

public is subjected to a monopoly the power of oppression, inherent in a monopoly, is restricted by law. Whenever, on the other hand, competition becomes free, both in law and in fact, the need of governmental regulation ceases; public opinion ceases to demand such regulation, and the law withdraws it.

The programme of organized society is practically to see to it that those who have gained a substantial control of their market shall not be left free to exploit those who look to them to supply their needs. Men now see clearly that freedom of action in the industrial world may work injuriously for the public, and it must then be restrained in the public interest. Having seen the results of unrestrained power we no longer wish those who have control of our destinies to be left free to do with us as they please. Such liberty for them would mean enslavement for us.

The broad police power of the government in regard to matters over which it has control has been constantly stated and restated in the decisions. The following is typical:

Regulations respecting the pursuit of a lawful trade or business are of very frequent occurrence in the various cities of the country, and what such regulations shall be and to what particular trade, business or occupation they shall apply, are questions for the state to determine, and their determination comes within the proper exercise of the police power by the state, and unless the regulations are so utterly unreasonable and extravagant in their nature and purpose that the property and personal rights of the citizen are unnecessarily, and in a manner wholly arbitrary, interfered with or destroyed without due process of law, they do not extend beyond the power of the state to pass, and they form no subject for federal interference."

CONCLUSION

Public necessity-the general welfare-is the test as to the extent of the police power of a government. What shall be regulated is a legislative question, and the courts will not interfere with the action of the Congress or state legislature over matters under their control, providing there is not a clear abuse of legislative discretion, an arbitrary action without reason or justification.

The regulation of prices on food and fuels during the war is justified for the reason that the general welfare of the people demands this action: (1) because the purchase and sale of these commodities in different parts of the country have been dominated by powerful combinations of moneyed interests which are exacting excessive charges for that which they have to sell; and (2) as a matter of common defense in a war where other governments have resorted to the same and even more drastic measures.

It would be a strange and most unfortunate situation, while 22 Gundling v. Chicago, 177 U. S., 183.

other governments are protecting their people from exorbitant charges at this crucial period in world history, if our government should be helpless to do so; or possessing that power, it should fail to perform a similar service for the American people.

Without attempting to discuss the various provisions of the measures which have passed Congress, if the basic principle upon which these laws are framed should be tested, the decisions of the courts of last resort clearly indicate that the acts in question would be sustained and be within the legislative discretion of Congress.

WHAT COOPERATION CAN DO AND IS DOING IN LOWERING FOOD COSTS

BY PETER HAMILTON,

New York City.

Legislation and proclamations, intended to restrain the disposition toward exorbitant prices, can have but a temporary and imperfect result because they do not touch, or they touch very superficially, the fundamental cause of extortion. They are like the remedies of the old-fashioned medical practitioner of a generation ago, who treated symptoms with strong drugs instead of seeking to remove the cause of disease. Frequently the drug effects complicated the symptoms, so that the patient was in worse straits than before. Modern medicine has learned that until the cause has been removed it is futile to merely treat symptoms.

Scarcity of supply, greatly increased demand, one or both, are the legitimate immediate causes of high prices. Monopoly, artificial scarcity induced by withholding supplies from an eager market, cupidity, employing one pretext or another, are the immediate causes of extortion. But back of monopoly, back of cupidity and chicanery is the selfish motive of private profit. It is for this that men cheat each other and descend to all the unfair practices which have puzzled legislators and reformers. This is the fundamental cause of extortion and sharp practice between men and between nations. Indeed, if complete analysis be made, it is the cause of war itself. Our legislators and reformers are like the oldfashioned practitioner, frantically treating symptoms with strong