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various transportation services at our disposalrailroads and ships, express companies and dispatch lines, refrigerator lines and tank cars. If we are journeying we eat at hotel restaurants, and put up at public inns, or travel in palace cars and lodge ourselves in sleeping cars. Our freight in its transit has its needs attended to—for our goods, warehouses, for our grain, elevators, for our cattle, stockyards, and for our exports, docks. In almost every community, even relatively small, we have for our household needs gas, electricity, water supply and sewerage service provided for us, usually (except the last two) by private companies in public service, and subject to the law governing public service, even when provided by the municipality itself. For speedy communication in our business and pleasure, we have the telephone and telegraph in common use, and ticker service and messenger call for special needs. One may judge by this incomplete list how common to every part of our modern life are the various public services, and how necessary it is that they should be required by law to serve us all with adequate facilities for reasonable compensation and without discrimination.
4. Control of the public services necessary.The test here suggested is this: whether a business is public or not depends upon the situation of the public with respect to it. Wherever there is in private hands substantial control of public necessities it may well be said that the public has now an interest in the conduct of these businesses by their owners. Since these agencies are carried on in a manner to make them of public consequence, they have become affected with a public interest. Therefore, as the old books say, having devoted their property to a use in which the public has an interest, the owners in effect have granted to the public an interest in that use, and must submit to be controlled by the public for the common good to the extent of the interest they have created. Only a generation ago the general feeling as to every sort of industrial relation was that it was better to leave people to work out their own industrial salvation. But of late years we have been calling upon the state to save us from the abuse of monopoly in all its forms, and we are impatient if the state delays. It is only a few years since that we have had any detailed law for the regulation of public services. If they did not refuse to render their usual service, and did not charge extortionate prices, little fault was ever found with them in the last generation. Now we are demanding of them the utmost service which they are capable of rendering, upon the terms of full equality for the whole public. If they do not increase their facilities to meet the needs of their growing business, and if they give one customer in any way the least advantage over another, we sternly call their owners to account.
5. The effect of natural monopoly.—The case for public service is plainest in those few utilities where there are natural limitations upon the sources of supply which are essential to the busi
This situation in itself gives some degree of monopoly to those who control the sources of supply most accessible to their market, in preventing effective competition with the local service already established. Thus those who control the most advantageous watershed have a natural monopoly of the supply of water in a given district; and so by established. law the waterworks organized to distribute water to a community must supply all that apply to the extent of their undertaking. So too an irrigation system by which a stream is impounded and its water is distributed over lands within its flow has a public character.2 Sites where waterpower may be developed to greatest advantage are necessarily limited; and, if the enterprise contemplates the sale of waterpower at a certain canal to various users, it would seem that there should be no discrimination therein. For like reasons those who have preempted the natural gas fields must deal without discrimination with the public which they have assumed to serve therefrom.4 All members of the public within the range of the operations of these systems may demand that the law put them upon an equality with their neighbors in obtaining these services so necessary to their welfare. For were not the law ready to act in their behalf there would be the gravest danger of intolerable injustice.
6. Difficulty of distribution as a factor.-Another natural limitation upon competition results from the character of the product. If the physical characteristics of the product are such that it can only have a local distribution the barrier against outside competition may fairly be said to be natural. What after all is that element in the situation which makes the selling of gas a public employment, while the vending of candles is a private business? Is it not that the box of candles may be sent from any factory to compete in any market, while a thousand cubic feet of gas can only be obtained in any particular community from the pipes of the local company. Much the same argument could be made in differentiating the supplying of electricity from the sale of energy in the shape of coal; and indeed electric lighting was held to be a public service from the first moment of its installation upon a public basis. Electricity must be distributed over a wiring system as it is made; it cannot be transported independently and stored indefinitely. The purpose for which the supply is used would seem to be immaterial so long as a public need is satisfied. Nevertheless, there have been some doubts raised about the public status of an electric company supplying power exclusively.? To give a modern example of a public employment made such by the special character of the product supplied and the peculiar necessities of the local public, one might instance the ice-plants in the southern cities. It is predicted with confidence that ice-plants will henceforth be found upon the list of those businesses so important to the public that they can no longer be left to private hands without public control.
1 Haugen v. Albina Light & Water Co., 21 Ore. 411, 28 Pac. 244, LEADING ILLUSTRATIVE CASES.
2 Wheeler v. No. Colo. Irr. Co., 10 Colo. 582, 17 Pac. 487. 3 Sammons v. Kearney Power & Irr. Co., 77 Neh. 580, 110 N. W. 308. 4 State ex rel. Wood v. Consumers Gas Trust Co., 157 Ind. 345, 61 N. E. 674. 5 Shepard v. Milwaukee Gas Light Co., 6 Wis. 539. 6 Cincinnati, etc., R. R. Co. v. Bowling Green, 57 Ohio St. 336, 49 N. E. 121, LEADING ILLUSTRATIVE CASES.
7 Jones v. North Georgia Electric Co., 125 Ga. 618, 54 S. E. 85, holding such service public as the majority of courts do; but see Brown v. Gerald, 100 Me. 351, 61 Atl. 785, holding to the contrary. 8 Rhinehart v. Redfield, 93 N. Y. App. Div. 410, 87 N. Y. Supp. 789.
7. Scarcity of advantageous sites.The sites upon which certain services can be conducted to best advantage are few in number. In Munn. v. Illinois' (perhaps the leading case upon public employment) the Supreme Court spoke of the grain elevators as taking. toll at the gateways of commerce. Likewise the owners of the established docks10 obviously command the situation; and this is the explanation of the fact that wharfingers are held to serve the public. The necessity of these locations to proper conduct of the business may be so great that those who are possessed of these sites may well be said to enjoy a natural monopoly; since if others venture to establish themselves at all at such disadvantage, their competition will be comparatively ineffectual. At all events, those in the favorable locations could exact higher prices than would be fair, were it not for the fact that the law intervenes. Terminal facilities, such as union stations, 11 furnish the most striking examples of this importance of particular sites; and there are cases compelling them to take in all railroads desiring entrance. To a lesser extent this is true of those services, which although not dependent upon an
9 94 U. S. 113, LEADING ILLUSTRATIVE CASES. 10 Macon D. & S. R. R. Co. v Graham & Ward, 117 Ga. 555, 43 S. E. 1000. 11 State ex rel. v. Jacksonville Terminal Co., 41 Fla. 363, 27 So. 221.