giving such persons an advantage over every other, and leading to a monopolization in the hands of such persons of all the products as to which the carrier chose to deal. Indeed, the inevitable result of the possession of such a right by a carrier would be to enable it, if it chose to exercise the power, to concentrate in its own hands the products which were held for shipment along its line, and to make it, therefore, the sole purchaser thereof and the sole seller at the place where the products were to be marketed; in other words, to create an absolute monopoly. To illustrate: If a carrier may by becoming a dealer buy property for transportation to a market and eliminate the cost of transportation to such market, a faculty possessed by no other owner of the commodity, it must result that the carrier would be in a position where no other person could ship the commodity on equal terms with the carrier in its capacity of dealer. No other person owning the commodity being thus able to ship on equal terms, it would result that the owners of such commodity would not be able to ship, but would be compelled to sell to the carrier. And as by the departure from the tariff rates the person to whom the carrier might elect to sell would be able to buy at a price less than any other person could sell for, it would follow that such person so selected by the carrier would have a monopoly in the market to which the goods were transported."

It was a fact shown in the record of this case that the Chesapeake and Ohio, as a result of its being a dealer in coal as well as a carrier, had become virtually the sole purchaser and seller of all coal produced along its line of road. As the court points out, the inevitable tendency will be toward such monopoly if the common carrier is permitted both to deal in a commodity and to carry it. The court is content, it seems, to decide no more at present than that the carrier must charge itself in its operations as a dealer with its own schedule rates as carrier; but much of its reasoning, if carried to the logical conclusion, would forbid the railroads to take the inconsistent positions of dealers and carriers.

§ 304. Charging its competitors higher relative rates.

The view expressed in the last opinion that a carrier in engaging in ordinary business must treat itself and its business rivals with equality is a conservative view. It may be that a more radical remedy is demanded to meet the situation, for it is not always safe to leave the matter in this shape. Thus in another case before the commission,-McGrew v. Missouri Pacific Railway3—the defendant railway which owned many coal mines along its route, was shown to charge higher relative rates to its competitors in the coal mining business whose product was of a higher grade.

The commission pointed out that this could not be altogether stopped as the law stood, saying: "It may properly be observed that in a case like that under consideration it is difficult to afford the complainant adequate relief. The defendant railway company owns most of the mines upon its system. It both mines the coal and transports it to market. It is a matter of entire indifference to it whether a profit accrues from the mining or from the transportation. It may so adjust its rates that the mining of its coal will be conducted at a loss, the profit being derived from the carriage, and in such event every coal operator upon its line paying those rates must do business at a loss. The only remedy available in such case to the independent operator is to secure to him a reasonable rate."

It cannot be insisted upon too strongly that the paramount duty of the common carrier is to the public. It must do nothing ́inconsistent with that obligation. To carry its own goods at lower rates than it carries those of the shipping public will enable it to market those goods at lower prices than other shippers can make. And this, it is submitted, is in substance discrimination, or at all events has all the effects of discrimination. Moreover, to a certain extent these evils are practically unavoidable from the nature of the case whenever a common carrier is also a dealer in the commodities it carries.

38 I. C. C. Rep. 630 (1901).

$305. Whether a collateral business is ultra vires.

Because of general policy if for no other reason it should always be held ultra vires for a public-service corporation to engage in any collateral business outside of its direct duties to the public in the same line of service that it is conducting. This was said in an English case at an early date, Attorney-General v. Great Northern Railway. There the question was whether a railroad was engaged beyond its powers in actively buying coal from collieries along its route which it transported to market in competition with other ccal of private shippers.

In holding that it was Vice Chancellor Kinderley said, adverting to the policy of the matter: "There is no reason, as the affidavits show, why they should not-there is great danger that they may get into their hands the entire business in the coal of all that district of the country. If they can do that in regard to coal, what is to prevent their doing it with every species of agricultural produce all along their line? Why should they not become purchasers of corn, of all kinds of beasts and sheep, and every species of agricultural produce and become great dealers in the supply of edibles to the markets of London; and why not every other species of commodity that is produced in every part of the country from which or to which their railway runs? I do not know where it is to stop, if the argument on the part of the company is to prevail. There is, therefore, great detriment to the interests of the public, for this reason, taking merely the article of coal."

But even granting that the public service company has some permissive clauses in its charter which might include the power to engage in some independent business, the problem is not to be dismissed. Natural persons engaging in a public employment have apparent power to engage in any collateral businesses that they please, and yet the law governing the conduct of a public business has certainly developed so far that they cannot

4 29 L. J. Ch. 794 (1859).

discriminate in their own favor, and as will be seen in the next section the law may have gone so far as to forbid them from engaging in a collateral business in competition with the people they are serving. It is submitted that a corporation, whatever its prima facie powers, ought not to stand in any different position before the law from a natural person.5

§ 306. Whether collateral businesses should be permitted. Some courts seem disposed to go one step further yet and to say that it may be inconsistent with public service for the public servant to engage at all in the ouside business and to make use of his own facilities in conducting it. A square decision in point is Central Elevator Co. et al. v. People."

The informations made the same general allegations in each case,--that defendants had stored grain owned by themselves in the particular warehouse of which they were proprietors; that not less than three-fourths of all the grain received in the public warehouses in Chicago was owned by the warehousemen; that the grades for inspection of grain were such that the grain of each grade was not of the same quality, but that separate carloads of different quality and value were graded in the same grade; that by reason of advantages of the defendants, as owners of warehouses, in mixing and manipulating grain, and rebating storage charges, and otherwise, they had been enabled to drive out competition, and to hold and enjoy the privilege of buying grain free from competition; and that such storing of grain was unlawful and injurious to the public. All the informations prayed for the same relief, a perpetual injunction. to restrain defendants, as warehousemen, from storing grain in their own warehouses.

The court granted the application. Cartwright, the justice who wrote the opinion, said in part: "The public warehouses established under the law are public agencies, and the defend

5 As the matters discussed in this section are questions of general corporation law, it is not thought necessary to subjoin any citations.

6174 Ill. 203, 51 N. E. 254 (1898).

ants, as licensees, pursue a public employment. They are clothed with a duty towards the public. The evidence shows that defendants, as public warehousemen storing grain in their own warehouses, are enabled to, and do, overbid legitimate grain dealers, by exacting from them the established rate for storage, while they give up a part of the storage charges when they buy or sell for themselves. By this practice of buying and selling through their own elevators the position of equality between them and the public whom they are bound to serve is destroyed, and by the advantage of their position they are enabled to crush out, and have nearly crushed out, competition in the largest grain market of the world. The result is that the warehousemen own three-fourths of all the grain stored in the public warehouses of Chicago, and upon some of the railroads the only buyers of grain are the warehousemen on that line. Where the warehouseman is a buyer, the manipulation of the grain may result in personal advantage to him. Not only is this so, but the warehouse proprietors often overbid other dealers as much as a quarter of a cent a bushel, and immediately resell the same to a private buyer at a quarter of a cent less than they paid, exacting storage, which more than balances their loss. In this way they use their business as warehousemen to drive out competition with them as buyers. It would be idle to expect a warehouseman to perform his duty to the public as an impartial holder of the grain of the different proprietors, if he is permitted to occupy a position where his self-interest is at variance with his duty. In exercising the public employment for which he is licensed, he cannot be permitted to use the advantage of his position to crush out competition and to combine in establishing a monopoly, by which a great accumulation of grain is, in the hands of the warehousemen, liable to be suddenly thrown upon the market whenever they, as speculators, see profit in such course." 997

7 Accord, Hannah v. People, 198 III. 77, 64 N. E. 776 (1902), a more extreme case, holding an act passed to enable the warehousemen to do what