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comes a virtual monopoly. It is unquestionable that the State can, and indeed it is its duty to, subject to police control a monopoly, created by law; but in this case it is laid down for the first time that where the circumstances, surrounding a particular business, or its character, make it a “virtual monopoly,” the State can regulate the conduct

' of the business, so that all having concern in it, will be treated impartially and fairly. I say this rule has been laid down for the first time, although the chief justice refers to it as a long established rule, and refers to Lord Hale as bis authority. A careful study of Hale's writings will disclose the fact that to no case does he refer in which the business does not under the law constitute a privilege, more or less of a legal monopoly. There is nothing in his writings to justify the application of his rule or his reason

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1 “In this connection it must also be borne in mind that, although in 1874, there were in Chicago fourteen warehouses adapted to this particular business, and owned by about thirty persons, nine business firms controlled them, and that the prices charged and received for storage were such as have been from year to year agreed upon and established by the different elevators or warehouses in the city of Chicago, and which rates have been annually published in one or more newspapers printed in said city, in the month of January in each year, as the established rates for the year then next ensuing such publication. Thus it is apparent that all the elevating facilities through which these vast productions of seven or eight great States of the West must pass on the way to four or five of the States on the seashore may be a virtual' monopoly.

“ Under such circumstances it is difficult to see why, if the common carrier, or the miller, or the ferryman, or the innkeeper, or the wharfman, or the baker, or the cartman or the hackney coachman, pursues a public employment and exercises 'a sort of public office,' these plaintiffs in error do not. They stand, to use again the language of their counsel, in the very .gateway of commerce,' and take toll from all who pass. Their business most certainly 'tends to a common charge, and is become a thing of public interest and use.'

Certainly, if any business can be clothed with a public interest, and cease to be juris privati only,' this has been.” Opinion of Waite, Ch. J., supra. See post, $ 93, for extracts from the dissenting opinion of Justice Field.



ing to a business, which is a virtual monopoly, but is not made so by law.

But even this is not a satisfactory reason for compelling all innkeepers to receive all guests applying to them at the present day. Perhaps at an early day, when the number of travelers was limited, and was not large enough to support more than one inn in most places, innkeeping may have been a virtual monopoly. But that town is very small, in this country, which cannot boast of at least two inns, and the actual rivalry and competition to secure guests will dispel all notions of a virtual monopoly. No reason but public convenience can be suggested for the existence of this law in respect to innkeepers, and it is by no means a satisfactory one. The public convenience can never justify the interference of the State with one's private business.

Of late a disposition to bring within this category the theaters and other places of public amusements has been displayed by legislatures, both State and national, in order to prevent discrimination by the managers and proprietors of such places against the negro, “ on account of his race, color, or previous condition of servitude.” The United States statute, which has lately been declared to be unconstitutional, because the law encroaches upon the domain of the State legislatures, and which corresponds in all essential particulars to the State statutes on the same subject, provided " that all persons within the jurisdiction of the United States shall be entitled to the full and equal enjoyment of the accommodations, advantages, facilities and privileges of inns, public conveyances on land and water, theaters and other places of public amusement, subject only to the conditions and limitations established by law, and applicable alike to citizens of every race and color, regardless of any previous condition of servitude.” So far as these statutes refer to the enjoyment of the privileges of inns and public conveyances, they merely affirm the common law, and grant no new right. But in respect to theaters and other places of public amusement, the regulation is certainly novel. The only legal reason for the regulation is public convenience, unless the circumstances are such that the business becomes a virtual monopoly. And to justify the regulation on these grounds is, certainly, going very far toward removing all limitation upon the power of the State to regulate the private business of an individual. In the Supreme Court case,' in which Chief Justice Waite justifies the police control of “a virtual monopoly," on the ground that the use of the elevator is a public necessity to all merchants, who are engaged in the shipment of grain through Chicago to all points of the country. So, also, may the entertainment at an inn be considered a public necessity to all travelers. But attendance upon theatrical and other public amusements can in no sense be considered a necessity, nor is the business a franchise or legal monopoly. Such legislation should, therefore, be condemned as unconstitutional. But it has been sustained in Mississippi against all objections,' and Judge Cooley justifies it in the following language : “ Theaters and other places of public amusement exist wholly under the authority and protection of State laws; their managers are commonly licensed by the State, and in conferring the license it is no doubt competent for the State to impose the condition that the proprietors shall admit and accommodate all persons impartially. Therefore, State regulations corresponding to those established by Congress must be clearly within the competency of the legislature, and might be established as suitable regulations of police." 3

1 See post, $ 93, for lengthy quotations from Lord Hale. 2 See Civil Rights Cases, 109 U. S. 3.


1 Munn o. Illinois, supra.
: Donnell o. State, 48 Miss. 661.

3 Cooley on Torts, p. 285. See post, $ 101, concerning licenses as police regulations.

§ 93. Regulation of Prices and charges. - A most interesting question, somewhat like, and resting upon the same grounds as the one discussed in the preceding section, is the right of the governinent to regulate prices and charges for things and services. The exercise of this power was quite common in past ages; and there appeared to be no well defined limitations upon the power, if any at all were recognized. But under a constitutional and popular government, there must necessarily be some limitation. It is a part of the natural and civil liberty to form business relations, free from the dictation of the State, that a like freedom should be secured and enjoyed in determining the conditions and terms of the contract which constitutes the basis of the business relation or transaction. It is, therefore, the general rule, that a man is free to ask for his wares or his services whatever price he is able to get and others are willing to pay; and no one can compel him to take less, although the price may be so exorbitant as to become extortionate. No one has a natural right to the enjoyment of another's property or services upon the payment of a reasonable compensation ; for we have already recognized the right of one man to refuse to have dealings with another on any terms, whatever may be the motive for his refusal. But there are exceptions to the rule which can be justified on constitutional grounds. This general freedom from the State regulation of prices and charges can only be claimed as a natural right so far as the business is itself of a private character, and is not connected with, or rendered more valuable by, the enjoyment of some special privilege or franchise. Whenever the business is itself a privilege or franchise, not enjoyed by all alike, or the business is materially benefited by the gift by the State of some special privileges to be enjoyed in connection with it, the business ceases to be strictly private, and becomes a quasi public business, and to that extent may be subjected to police regulation. A special privilege or franchise is



granted to individuals because of some supposed benefit to the public, and in order that the benefit may be assured to the public, the State may justly institute regulations to that end. The regulation of prices in such cases, will therefore, be legitimate and constitutional.

But the regulation of prices will not be justified in any case where the law merely declares the prosecution of the business to be a privilege or franchise. If it be without legislation a natural right, no law can make it a privilege by requiring a license. The deprivation of the natural right to carry on the business must be justifiable by some public reason or necessity. Otherwise the general or partial prohibition is unconstitutional, aud furnishes no justification for the regulation of prices and charges, incident to the business.?

But some of the courts are inclined to extend the exercise of this power of control to other cases, which do not come within the classes mentioned, viz.: those in which no special privilege or franchise is enjoyed, and in which there is no legal monopoly, but in which the circumstances conspire to create in favor of a few persons a virtual monopoly out of


i Chicago, etc., R. R. Co. v. Iowa, 94 U. S. 155; Peik v. Chicago, etc., R. R. Co., 94 U. S. 164; Slaughterhouse Cases, 16 Wall. 36; Waterworks v. Schotler, 110 U. S. 347. Judge Cooley classifies the cases as follows:

“1. Where the business is one, the following of which is not a matter of right, but is permitted by the State as a matter of privilege or franchise. Under this head may be classed the business of setting up lotteries, of giving shows, and of keeping billiard-tables for hire; of selling intoxicating drinks, and of keeping a ferry or toll bridge.

2. When the State on public grounds renders to the business special assistance by taxation, or under the eminent domain, as is done in the case of railroads.

“3. When, for the accommodation of the business special privileges are given in the public streets, or exceptional use allowed of public property or public easements, as in the case of hackmen, draymen, etc. Commonwealth v. Gage, 114 Mass. 328.

“4. When exclusive privileges are granted in consideration of some special return to the public and in order to secure some hing to the public not otherwise attainable.” Cooley's Principles - Constitution, p. 234.

? See post, § 102.

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