Free competition a good

That if the judge says "That is a reasonable price then he means it is right to charge it; but if he says it is unreasonable then he believes it is wrong to charge it. But, says Blackstone," the common man may not be capable of reasoning out what the natural law is, and here we see the divine goodness; let him seek his own true happiness and this will be a simpler way to find out what is right.”

Besides this religious view there was also the thought that free competition would certainly be a good thing for buyers. It was contrasted with monopolies. If one man or one company has a monopoly, then a higher price may be charged. There will be a limit, because it is almost always true that if a price is charged which seems outrageous people will go without or will find some substitute for the article. In the eastern part of the United States people think of coal as a necessity. Nevertheless when the price was doubled during the strike among the anthracite miners, many found that they could use soft coal, or coke, and some even began to think of peat. And a monopoly may find it pays better to sell more at a lower price than to sell fewer goods at a higher price. It may be more profitable for a railroad to carry a thousand persons at a dollar each than four hundred persons at two dollars. Fixing the rate at a price that will bring the largest return is called "charging what the traffic will bear." It is evident, however, that to charge what the traffic will bear may in many cases yield great profits. Some other person might be glad to do the work or sell the article for a smaller profit. If there is free competition there will be an automatic check upon too great profits. The buyer will share in the advantage of new ways of making and transporting

goods. And besides it is likely to stimulate makers and sellers to find out better ways of making and selling if they know that others are selling at lower prices than they.

All these reasons-natural love of liberty, distaste for any government interference, trust in the providential harmony between each and all, and belief in the value of competition-made the system of Let-alone, Laissez-faire, very strong. It is still maintained in

much of our law, for it is embodied in many of the state constitutions. It must be remembered, however, that it was worked out just before the Industrial Revolution. It had in mind chiefly the conditions when there were no large factories, no railroads, few cities,` almost no corporations, and no labor unions. It is because the revolution has made such sweeping changes that in certain respects we have broken altogether with the view that liberty and competition are all that we need in order to secure justice and public welfare. In other points there are still two opinions, some holding that the government should aim only to keep the field of competition open, others holding that it is better to permit combination, and regulate it.

The third stage of opinion is that upon which we (3) The have recently entered. It is now held that the new policy of conditions require a change in public policy. This regulation stage of opinion is illustrated by three types of regulation.

Railroads represent such enormous power of capital and affect the business and life of every one of us that they have naturally received the greatest consideration. Farmers believed that the railroads were charging too high prices and in 1873-74 began what has

been called " granger legislation" to control and regulate freight rates. The railroads naturally resisted this effort, but the courts held that the railroads were property "affected with a public interest." In other words, they were not doing business as purely private corporations but were also bound to consider the public welfare and therefore might be compelled to submit to regulation in the interest of the public. But the business of a railroad is so complicated that it is evidently difficult if not impossible for any legislature or court to say offhand what prices it should charge. It was seen that some scientific and impartial body was needed to investigate conditions and find out what ought to be charged. Such a body was organized in 1887 as the Interstate Commerce Commission, which has come to take a larger and larger part in regulating the transportation of the country.

Regulation of other kinds of business and private property has followed. The use of powerful and dangerous machinery, the dust and the poisonous chemicals used in many industries have made many trades extraordinarily dangerous to life and health. The government has more and more compelled factory owners or railway managers to safeguard the life and health of its workmen. This follows under what is called the police power of the government, which will be explained in the chapter on Public Welfare and Private Property. Another type of regulation under the police power is the regulation of housing which has been made necessary by the growth of cities and is therefore in one sense a part of the regulation of business by the public.

The third great field in which this new policy of the government has shown itself has been in the regu

lation of business with the special purpose of preventing monopoly and unfair competition. The Sherman Act passed in 1890 was the leading statute in this field. The details of this regulation are explained in Chapters XXVII and XXVIII on Competition.

Theories

of right

of property

(1) Occu

pation or possession

CHAPTER XXIV

PUBLIC WELFARE AND PRIVATE PROPERTY

W

HY do I have a right to say that something is "mine"? Or, in other words, what is the basis of the right of property? If I own a piece of land or a house or railway can I do with it just as I please, or are there limits to the right of property? These are very important questions which men have thought over a great deal. Many answers have been given to the first question, but it will be sufficient to notice four.

(1) Robinson Crusoe called his island" my island." What made it his island? When white men came to America they found the Indians living here. The white men usually "took possession" of the country in the name of the king of England or of France, and later on proceeded to divide up these regions and portion them out to colonies. The actual colonists usually made some kind of bargain with the Indians. They bought the land from them. What right had the Indians to the land and what right had the king of England or of France to "take possession"? Suppose you pay your fare on a street car or a railway train and take some vacant seat. If some one else comes along and asks you to move you might say, "This is my seat." What gives you a right to this seat rather than to any other? And why have you a