an act of its Legislature; or through commissioners, county or municipal authorities, or other officers or agents acting under the provisions of a State constitution or statute.2

However exercised, it is always a legislative, and not a judicial function; and, if delegated by a State constitution or Legislature to State officers, the latter, whether designated a "board," "commission," "council," or even "court," are still agents of the State, exercising functions which are in their nature legislative, administrative, or political, and never judicial. The suggestion by Chief Justice Waite in the earlier cases that the duties of such a tribunal are judicial in their nature has been superseded by the doctrine just stated. In Janvrin, Petitioner, however, the Supreme Judicial Court of Massachusetts, in a majority opinion and with some hesitation, sustained a statute giving to actual water-takers within a certain district, part of which was supplied by the respondent water company, the right to apply to that court, or two or more justices thereof, when aggrieved by a rate charged or about to be charged, to determine the reasonableness of the rate. The

1 The Granger cases, 94 U. S. 113 et seq.; Ruggles v. Illinois, 108 U. S. 526; Dow v. Beidelman, 125 U. S. 680; Chicago & G. T. R. R. v. Wellman, 143 U. S. 339; Budd v. New York, 143 U. S. 517; Brass v. Stoeser, 153 U. S. 391; St. Louis & S. F. R. R. v. Gill, 156 U. S. 649; Covington Co. v. Sanford, 164 U. S. 578; Smyth v. Ames, 169 U. S. 466; 171 U. S. 361; Fitz v. McGhee, 172 U. S. 516; Lake Shore & M. S. R. R. v. Smith, 173 U. S. 684; Cotting v. Kansas City Stock Yards, 79 Fed. Rep. 679.

2 Spring Valley Water Works v. Schottler, 110 U. S. 347; Chicago, M. & St. P. R. R. v. Minnesota, 134 U. S. 418; Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362; San Diego Land Co. v. National City, 174 U. S. 739; Chicago, M. & St. P. R. R. v. Tomkins, 176 U. S. 167; Freeport Water Co. v. Freeport, 180 U. S. 587; Tilley v. Savannah R. R., 5 Fed. Rep. 641; Chicago & N. W. R. R. v. Dey, 35 Fed. Rep. 866; Chicago, St. P., M. & O. R. R. v. Becker, 35 Fed. Rep. 883; Cleveland Gas Co. v. Cleveland, 71 Fed. Rep. 610; Capital City Gas Co. v. Des Moines, 72 Fed. Rep. 818 and 829; Milwaukee Ry. Co. v. Milwaukee, 87 Fed. Rep. 577; San Diego Land Co. v. Jasper, 89 Fed. Rep. 274; San Joaquin Irrig. Co. v. Stanislaus County, 90 Fed. Rep. 516; Wilmington & W. R. Co. v. Commissioners, 90 Fed. Rep. 33; Northern Pac. R. R. v. Keyes, 91 Fed. Rep. 47; Cleveland City Ry. Co. v. Cleveland, 94 Fed. Rep. 385; Western Union Tel. Co. v. Myatt, 98 Fed. Rep. 335; Kimball v. Cedar Rapids, 99 Fed. Rep. 130; Louisville & N. R. R. v. M'Chord, 103 Fed. Rep. 216; Pike's Peak Power Co. v. Colorado Springs, 105 Fed. Rep. 1; Haverhill Gaslight Co. v. Barker, 109 Fed. Rep. 694.

3 Chicago & G. T. R. R. v. Wellman, 143 U. S. 339, 344; Reagan v. Farmers' L. & T. Co., 154 U. S. 362, 394, 397; Interstate Com. Com. v. Ry. Co., 167 U. S. 479, 499; Interstate Com. Com. v. Brimson, 154 U. S. 447, 474, 489; St. Louis & S. F. Ry. Co. v. Gill, 156 U. S. 649, 663; Western Union Tel. Co. v. Myatt, 98 Fed. Rep. 335; State v. Johnson, 61 Kan. 803; Nebraska Tel. Co. v. State, 55 Neb. 627; Norwalk St. Ry. Co.'s Appeal, 69 Conn. 576.

4 174 Mass. 514, 517.

statute was attacked on the ground that it was an attempt to impose legislative functions upon the judiciary. It was sustained on the ground stated by Mr. Chief Justice Holmes that "it does not undertake merely to make of the Court a commission to determine what rule shall govern people who are not yet in relation to each other, and who may elect to enter or not to enter into relations as they may or may not like the rule which we lay down; it calls on us to fix the extent of actually existing rights. With regard to such rights judicial determinations are not confined to the past. If it legitimately might be left to this Court to decide whether a bill for water furnished was reasonable, and, if not, to cut it down to a reasonable sum, it equally may be left to the Court to enjoin a company from charging more than a reasonable sum in the immediate future." It may safely be said of the statute under consideration in that case that it went to the extreme permissible limit in extending the functions of the judiciary.1

A Kansas statute creating a "Court of Visitation" with power both to fix rates and to pass judicially and finally upon them was held unconstitutional by the State court as violating the provision of the State constitution for the separation of the legislative and judicial branches of the State government.2

The fixing of rates, being, like any other exercise of the police power, a legislative function, whether done by the people in a State constitution, by their representatives in a State legislature, or by their agents upon subordinate boards, councils, or commissions, is always regarded as the act of the State itself. A rate commis sion, says Mr. Justice Brewer, in Reagan v. Farmers' Loan & Trust Co., is "merely an administrative board created by the State for carrying into effect the will of the State as expressed by the Legislature."

"The prohibitions of the Fourteenth Amendment," says Mr. Justice Harlan, in Ex Parte Virginia, "have reference to actions of the political body denominated a State, by whatever instruments or in whatever modes that action may be taken. A State acts by its Legislature, its executive, or its judicial authorities. It can act in no other way. The constitutional provision, therefore, must mean that no agency of the State or of the officers or agents by

1 See also Brymer v. Butler Water Co., 179 Pa. 231.

2 State v. Johnson, 61 Kans. 803.

whom its powers are exerted shall deny to any person within its jurisdiction the equal protection of the laws. Whoever, by virtue of public position under a State government, deprives another of property, life, or liberty, without due process of law, or denies, or takes away the equal protection of the laws, violates the constitutional inhibition; and, as he acts in the name and for the State, and is clothed with the State's power, his act is that of the State. This must be so, or the constitutional prohibition has no meaning." The following are the only kinds of property or business that have been actually held by the United States Supreme Court to be so affected with a public interest as to be subject to the State regulation of rates: namely, railroads, water supply, toll bridges, turnpikes, and grain elevators; but it has also been held in the Circuit Courts that the business of gas, electric light, telegraph, stockyard and street railway companies is affected with a public interest within the rule under consideration, and that the prices charged are, therefore, subject to statutory regulation. In the State Courts ferries, grist mills and telephone companies have also been held to be subject to this power of the legislature.2

It would seem as unprofitable to attempt any general definition of what constitutes that "public interest" or "public use" which renders the business and property to which it attaches subject to state regulation of rates and prices as it is to attempt a definition of the "police power" itself. Attempts of the latter kind have been discouraged by the Supreme Court of the United States in several well known passages in its opinions. Certain broad elements of similarity in the subject-matter of the adjudicated cases, suggested by the expression "public service companies" now coming into common use, will in some cases serve as a sufficient criterion.

So far as the actual decisions go the right of regulation of rates has not been carried beyond two classes of cases. In the cases of the first class the right is sustained partly because the business is one of a class that has for a long time been subjected to such regulations and partly because it serves the public necessities or in a high degree the public convenience, and the opportunity to pursue it naturally and generally involves some features of a monopoly. Such are the grain elevator, stockyard, and grist mill cases. In the other class of cases the right of regulation may depend on the

1 71 Fed. Rep. 610; 72 ib. 818, 829, 952; 82 ib. 245; 109 ib. 694, and cases supra. As to wharfage, see 121 U. S. 444.

2 109 Mass. 506; 55 Neb. 627; 86 Me. 102.

8 16 Wall. 36, 62; 101 U. S. 814, 818; 115 U. S. 650.

possession by the person or corporation interested of special franchises, such as the power of eminent domain or rights in the public streets; at least this would seem to be a sufficient foundation for legislative regulation of the rates charged by water, gas, electric light, telephone, telegraph, street railway, bridge, turnpike and railroad companies.

It must be confessed, however, that this subject is attended with difficulties, many of which may be insoluble by resort to any general principles, but which may be expected to find a gradual solution by the process of "judicial exclusion and inclusion" applied to the facts of particular cases in the light of existing social and economic conditions. Take, for instance, the business of manufacturing gas or electricity and selling it to distributing companies, unaccompanied by any special franchises. Is it permissible for the State in the exercise of the police power or of any other power to fix the maximum price to be charged for gas and electricity manufactured and sold under such conditions? In connection with this and other doubtful cases it must always be remembered that the circumstances and conditions rendering permissible so strong an exercise of the police power as the regulation of rates and prices are not the same as the circumstances and conditions that might justify some other exercise of that power like the regulation of the times, places, or manner in which the business may be carried on.1

II.

THE CONSTITUTIONAL LIMITATION OF THE RIGHT OF THE STATE TO REGULATE RATES.

A. If the rates fixed by a State are unreasonably low, they are obnoxious to the provisions of the Fourteenth Amendment.

Having stated the general rule, it remains to state the equally well-settled qualification or limitation,2 that where a State law or the order of a State commission or other agency fixes rates or prices so low as not to permit the company to earn its operating

1 Lake Shore M. & S. R. R. v. Smith, 173 U. S. 684, 691.

2 Other limitations, namely, that the power of regulating rates cannot be so exercised as to interfere with interstate commerce (see 114 U. S. 196; 116 U. S. 307, 325; 118 U. S. 557; 154 U. S. 206), or in such a manner as to impair vested contract rights (see 94 U. S. 155, 161; 108 U. S. 526, 531, 537; 110 U. S. 347, 353; 116 U. S. 307, 325; 128 U. S. 174, 179; 134 U. S. 418, 454; 156 U. S. 649; 169 U. S. 466, 523; 173 U. S. 684, 687; and Cleveland City Ry. Co. v. Cleveland, 94 Fed. Rep. 385), are outside the scope of this article.

expenses properly estimated and a reasonable profit upon the capital actually invested in its plant, such statute or order is the subject of judicial review, and must be declared void, and its enforcement enjoined, as a violation of those provisions of the Fourteenth Amendment to the United States Constitution forbidding any State to deprive any person of his property without due process of law or to deny to any person within its jurisdiction the equal protection of the laws.

This proposition has for many years been the established law of the United States courts, as will appear from the following review of the cases.

DECISIONS OF THE U. S. SUPREME COURT.

Munn v. Illinois,1 which was the first case in which the State regulation of rates was brought before the United States Supreme Court, contains a dictum by Chief Justice Waite to the effect that the reasonableness of such rates is a matter for the sole determination of the State Legislature, and is not the subject of judicial inquiry or review. It is to be observed, however, that in that case the question was not squarely presented whether the rate fixed by the Legislature was so low as to amount to a deprivation of property within the meaning of the Fourteenth Amendment, because that issue was not raised at the trial,2 and the indictment was not only for charging more than the statutory rate, but also for doing business without procuring the license required by the statute.

In the cases in 94 U. S. 155, 164, 179, 180, 181, the general principles laid down in Munn v. Illinois for the business of grain elevators were applied to the transportation by rail of freight. In those cases, also, it was not alleged that the rates were so low as to amount to a deprivation of property without due process of law; but the Chief Justice took occasion to repeat his dictum in Munn v. Illinois, above referred to.

In Shields v. Ohio, Ruggles v. Illinois, Illinois Central R. R. Co. v. Illinois, the same general principles were applied to the

1 94 U. S. 113.

2 The unreasonableness of the rate must be distinctly raised; in civil cases, including actions for penalties, by the pleadings-Chicago & G. T. Ry. Co. v. Wellman, 143 U. S. 339; St. Louis & S. F. R. R. Co. v. Gill, 156 U. S. 649; Lake Shore & M. S. Ry. Co. v. Smith, 173 U. S. 684; Beardsley v. Erie R. R., 44 N. Y. Supp. 175; and in a criminal case at the trial-Ruggles v. Illinois, 108 U. S. 526; Budd v. New York, 143 U. S. 517.

3 95 U. S. 319.

6 108 U. S. 541.

4 108 U. S. 526.