§ 14. The era of canal construction.

In England the canal period was of considerable duration. Construction was begun soon after the middle of the eighteenth century and did not noticeably cease until about the middle of the nineteenth century. From the first the canals carried a very large traffic upon which they imposed regular tolls upon a classified basis. In the United States also many canals were constructed, largely aided by the State governments. At one time it seemed to the most enthusiastic believers in the canal system that it was the ultimate solution of the transportation problem. It was recognized in all cases that all boatmen had the right to pass through these canals upon paying to their proprietors the established tolls. Much public service law dates from this time. The cases upon the proper priorities to be observed in the management of a public business are particularly interesting.

§ 15. The coming of the railways.

It is a matter of history that where the first railways were laid down at the beginning of the nineteenth century the theory upon which they were constructed was that they would be public highways, for the use of which those that drove their vehicles over them should pay toll as for the use of a turnpike or a canal. The introduction of the steam locomotive brought about the end of that theory almost before it was put into practice. A train drawn by a locomotive was too expensive, the operation was too costly, and its management too intricate for any shipper, or even for any private carrier. Almost from the outset, therefore, the railway company provided and operated the engines and cars themselves, and accepted for transportation such goods as were offered. When the right of eminent domain was first given to the early railroads its constitutionality was doubted, as the railroads had now become carriers. All such doubts were set at rest by the masterly opinion of Chief Justice Ruffin in Raleigh &

Gaston Railroad v. Davis, in the course of which he showed his appreciation of the benefits accruing from the undertaking of public services by private concerns.

§ 16. Transportation facilities as a class.

In the first part of the nineteenth century, therefore, the generalization was being made (and not without a certain justification from the facts) that all of the public employments were connected in one way or another with transportation. Indeed, this generalization became so accepted that when later in the century new conditions pressed for further application of the law requiring the service to the public, the attempt was made in the first common-law decisions dealing with these businesses to include other services quite different in character within this generalization. Thus telegraph companies and even telephone companies were said to be common carriers, and sleeping cars and steamboats were by some thought to be inns. But those judges who looked at these new callings in this light saw through a glass darkly. It was given to others to see the vision of a great class of public callings of which those connected with transportation constituted but one branch, although the principal one.

§ 17. Alteration in economic conditions.

In the early part of the nineteenth century a combination of economic factors brought about in the business world as near an approach to a condition of freedom in competition as can ever happen in a world limited by time and space. Naturally enough with such individual freedom of action laissez faire became the accepted policy for dealing with the business world as the occasions for the application of the principles of law regulating public callings become fewer. This condition of affairs prevailed to a remarkable extent in the United States during the first half of the nineteenth century. The English

2 Dev. & Bat. 451.

system of excessive legislative regulation by Parliament having become distasteful, the constitutions of the original States and of the United States carefully limited the power of legislatures to interfere with the ordinary affairs of business. Regulation of private affairs by the law may be said to have been at a minimum in the first half of the nineteenth century. And in this time of small enterprises it was safe to leave the individual proprietor free to deal with his customers as he pleased.

§ 18. Development in the common law.

It is almost a truism that the spirit of the age molds its law. Those who frame the laws are members of the community and share its spirit. The age's ideal of right is their ideal, the method of thought about justice which is prevalent at the time is their method of thought, too; and it therefore follows that in working out legal problems, both bench and bar work along the lines prescribed by the spirit of the age in which they live. Nowhere is the influence of the spirit of the time on the common law more evident and more potent than in this question of the regulation of common callings. Following the change in economic thought which has been described, the judges of the last century began to say as to his business activities that it lay with the tradesman to conduct his business as he pleased, at his own prices. This was a period when all men were much attracted by the theory of laissez faire that the most desirable thing was the least possible interference with business relations by the State. That the coercive law of public calling survived this period is proof positive of its absolute necessity to a greater or lesser extent in every society.

§ 19. Special restrictions in early charters.

One method of regulation of enterprises public in character during this period has not been mentioned as yet. These were great undertakings which were projected

bridges and turnpikes, canals and railways. To carry them out required aggregated capital; to maintain them required permanent organization. There was a form of organization as yet confined to purposes in some degree governmental, which was best designed to bring together the necessary capital and give the necessary permanencethe corporation. And although it was not as yet considered proper to give this franchise of being a corporation to men engaged in purely private business, it was thought most appropriate for the State to create a corporation for such purposes. Moreover in granting the franchises the State could impose upon the grantee such terms as it might think necessary for the protection of the public in its dealings with the corporation. And so the charters of this period are often elaborate in their provisions, imposing upon the corporation the duty to serve all that apply properly and without exceeding a certain fixed profit. Thus the beginning of statutory regulation of the American railways is coeval with the railways themselves. The first railway charters contained regulations as to the doing of the business, which have been of considerable importance in the history of statutory regulation. One of the earliest such charters was that of the Baltimore & Ohio Railway in 1827. This charter, among other provisions, limited the amount of tolls to be charged for freight and also expressly reserved to any future company the right to connect with the road. The charter of the Worcester Railroad in 1829 limited the toll to six cents a ton per mile. Other charters limited the earnings of the railroad to a certain percentage each year to amounts varying from ten to twenty-five per cent per annum.

§ 20. The struggle against encroaching monopoly.

As the prevalence of competitive conditions in business limits the application of the principles of public service law, so the prevalence of monopolistic conditions extends their application. Such a change came about in

the latter part of the nineteenth century. About a generation ago a change in commercial practice showed with remarkable distinctness the advantage of combination. Great enterprises took the place of small ones, and great enterprises required co-operation and combination. As the people became accustomed to look upon combination as the price of success, they came more and more to regard it as a blessing rather than an evil; and public opinion has gradually turned away from the individualistic ideal until to-day it has been fairly discarded by the current philosophy. With the principle of combination as the spring of action has come a corresponding need of controlling the action of such combinations for the good of the whole public. As the rights of the individual trader yield to the rights of the great corporation, so in the view of the man of the present day, the rights of the corporation, should in their turn yield to the rights of the whole people. The same spirit which fosters combination, fosters also control of the combination for the public benefit. The spirit of the present age, therefore, has come to be a spirit which demands that great business enterprises should be conducted in accordance with the requirements of society. 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.

§ 21. Conservative and radical views of regulation.

While it is generally agreed that a change has come over the spirit of our time, that State regulation is the prevail