always a justification. This, then, appears as the apology for this policy a theory that a free competition is for the best interest of society. The law does its best when it gives to every man an equal chance. An economic theory, one sees, not a legal theory. The state permits the struggle of competition for its own ends.

There is an exception - franchise. The extent to which franchises shall be granted depends upon the fiat of the state. In a society founded upon competition, the state will be found to leave all but the whole field to competition; yet there is a place for franchise. The state grants franchises for the ferry and the bridge, for the turnpike and the canal, for the railroad and the tram, for light and water, and for like businesses. And such franchises may be defended,1 since in such public utilities it seems that competition does not work for the best interests of the public. The state may do well to withdraw such public services from the field of competition; for it is no inconsistency not to apply a general principle in a situation where it is inapplicable. And experience has shown that when the field is left open to competition in these public services, there is an inevitable result in the end it will be found that there is no competition; and that the community must pay for the experiment. Moreover, the law puts upon these public callings which have more or less of monopoly most strict obligations. In a public calling all who apply must be served and served at reasonable rate; 2 whilst in the private callings one may sell to whom one pleases at any price one pleases. That is a proper distinction that the law makes between a non-competitive business and a competitive business. Note that in the public callings

1 FRANCHISE. Binghamton Bridge, 3 Wall. 75; Gas Co. v. Light Co., 115 U. S. 650; Sands v. River Improvement, 123 U. S. 288; Coe v. R. R., 127 U. S. 40; Bartholomew v. Austin, 85 Fed. 359; Railway v. Railway, 2 Gray 1; Street Railway v. Street Railway, 69 Mo. 65; Donnelly v. Vandenberg, 3 Johns. 27; Patterson v. Wollman, 5 No. Dak. 608.

2 REGULATION OF NON-COMPETITIVE CALLINGS. Jackson v. Rogers, 2 Show. 327; Alnut v. Inglis, 12 East 527; Denton v. G. N. R. R., 5 E. & B. 860; Munn v. Ill., 94 U. S. 113; Railroad Commission Cases, 116 U. S. 307; Smythe v. Ames, 169 U. S. 466; Price v. Irrigating Co., 56 Cal. 431; State v. Portland Co., 153 Ind. 483; Publishing Co. v. Associated Press, 184 Ill. 438; Telephone Co. v. Telegraph Co., 66 Md. 399; Laurence v. Pullman Co., 144 Mass. I; Messenger v. Pa. R. R., 8 Vroom 531; C. & M. R. R. v. B. & M. R. R., 67 N. H. 464; State v. C. N. O. & T. R. R., 47 Oh. St. 130; State v. Steele, 106 N. C. 766.

3 REGULATION OF COMPETITIVE CALLINGS. Brass v. Stoeser, 153 U. S. 391; Holden v. Hardy, 169 U. S. 360; Braceville Co. v. P., 147 Ill. 66; Brewster v. Miller, 101 Ky. 368; Singer v. Md., 72 Md. 464; Com. v. Perry, 155 Mass. 117; State v. Loomis, 115 Mo. 307; Matter of Jacobs, 98 N. Y. 98; State v. Dalton, 22 R. I. 77; Ladd v. Press, 53 Tex. 172.

there is not the regulation by competition; while in the private callings there is always the regulation of competition. Hence, we see that the most rigid restrictions are placed by our laws upon the conduct of public callings, while a broad freedom to trade as one will is given by our laws to those in private callings. And, what is to the point here, it is because a public calling is so subject to public regulation, that there is no danger in the withdrawal of the regulation of competition.

At all events, the courts have no choice but to recognize the right created by such a grant of a franchise. Upon one ground alone the courts can dispute the grant: the lack of capacity in the grantor. In Street Railway v. Street Railway,1 a municipality was held to have no power to grant an exclusive right to one street railway although the charter gave the municipality full power of regulation. Only when they must will the courts recognize such grants. But next in interpretation of the extent of the grant the courts have a policy. It is at that stage we find a stern rule — the rule of Charles River Bridge v. Warren Bridge.2 In that par ticular case it was held that the authorization of a toll bridge did not prevent the authorization of a free bridge sixteen rods away. Since then it has been recognized that competition is never to be excluded unless there is express stipulation against it. The prin ciple has had a further extension. In Illinois Canal v. Chicago Railroad, the express franchise of a canal company was held not invaded by the construction of a parallel railway. Thus only that sort of competition which is by precise provision enjoined will be excluded. A modern instance is Railway Company v. Telegraph Association. There a telephone company with a franchise was held to have no action against an electric traction company for disturbance of the established ground circuit of the telephone by the introduction of the ground circuit of the single trolley system of the railway. Apparently an express franchise does not avail against the conflict of new conditions. Such strict rules of construction as these could not be unless there were a certain cast in the minds of the courts the large policy that competition shall be free cuts the grant down as much as interpretation may.5 Of 448 Oh. St. 390.

2 II Pet. 420.

3 14

Ill. 314.

1 79 Ala. 470. 6 EXTENT OF FRANCHISE. - Charles River Bridge v. Warren Bridge, supra; Horse Railway v. Cable Road, 30 Fed. 388; Gas Co. v. Saginaw, 28 Fed. 529; Street Railway v. Street Railway, supra; Gas Co. v. Gas Co., 25 Conn. 19; Canal v. Railroad, supra; Water Co. v. Syracuse, 116 N. Y. 178; Railway Co. v. Telegraph Assn., supra; Parkhurst v. R. R., 23 Ore. 474: Brenham v. Brenham Water Co., 67 Tex. 567; Turnpike Co. v. R. R., 21 Vt. 895; Canal v. R. R., 11 Leigh 73.

course if there be an express franchise and if there be a clear invasion, the courts must declare that competition a tort.

A second principal division of the subject is concerned with the methods by which competition is allowed. May competition be carried on by every method? - this is the issue here. Common knowledge of business transactions shows many limitations. Certain methods of getting trade are held permissible; certain other methods of getting trade are held not permissible. The law must leave the widest scope possible to methods in trade; and yet there are certain rights here that must be protected from violation. The law draws lines here. Suppose in one case a customer is taken from a rival by mere persuasion, obviously the rival has no suit. But suppose a customer is taken from a rival by open violence, obviously then the rival has a suit. In the first case the method of competition is held to be fair; in the second case the method of competition is held to be unfair.

What competition, then, is held fair? Perhaps as good a case as any to show what is permitted is Ayer v. Rushton.1 The defendant in that case put a sign in front of his store: Depot of the Cherry Pectoral Company. The defendant also instructed his clerks to say: Rushton's Pectoral was much better than Ayer's Pectoral. The defendant also posted a placard: Ayer's Pectoral, one dollar; Rushton's Pectoral, 50 cents—which will you have? Of course it was held that all this was no more than fair competition. For is it not fair to sell goods under their proper names, even if thereby advantage is taken to some extent of the trade established by a rival? Parsons v. Gillespie 2 is a principal case upon that point. The plaintiff was first in the field with flaked oatmeal; but that it was held did not exclude a rival from producing by the same process and offering for sale under the same name the same product. If that were not so there would be an end to competition. And is it not fair to open another shop even if some trade is diverted? In Choynski v. Cohen,3 the plaintiff first opened an "Antiquarian Book Store," then the defendant opened an "Antiquarian Book Store." The court said: The defendant had only described his store; any one might open a ladies' shoe store; it was no different here. And is it not fair to claim the same advantages for your wares as for wares of a rival? In Tallerman v. Dowsing Heat Company, the proprietor of one heat treatment was first to operThe system got some commendation from the medical peri

17 Daly 9.

2 [1898] A. C. 239.

8

39 Cal. 501.

4 [1900] I Ch. I.

odicals. So, when the defendant entered the field, he instanced these testimonials as commendation of the heat treatment in general. The court refused to interfere. And is it not fair to compare goods of the seller with the goods of a rival? White v. Mellin1 is the leading case as to that. The proprietor of one food advertised: Dr. Vance's food is far more nutritious and healthful than any other preparation. The proprietors of Mellen's food sued for the disparagement. It was held: Advertisements of this sort appear fair enough; every extravagant praise may be used by a tradesman in commendation of his own goods; it may attract trade to him and diminish the business of others; but of such disparagement by comparison the law takes no cognizance. And is it not fair for one tradesman to undersell another? Ajello v. Worsley 2 decides that. Ajello was a maker of pianos, and Worsley was the proprietor of a furniture emporium. Worsley testified that his business policy was to select a certain line of goods to sell below cost; thereby he would get customers into his establishment to buy other goods priced to yield a good profit. In this particular case he marked down a piano of the Ajello make; and the result was that no other retailer could afford to sell the Ajello piano. Now Ajello sues Worsley for the damage to his trade. The court holds: There is no cause of action; the owner of property may dispose of it for such price as he sees fit; a trader is entitled to carry on his business in any lawful way, whether it causes loss to others in the trade or not. And may a trader say it is not fair if a rival has made an arrangement which is to his prejudice? In Walsh v. Dwight it appears that contracts were entered into by the manufacturers of Cow Brand Saleratus with the jobbers of the commodity, by which the jobbers agreed not to sell any other brand of saleratus below the price of the Cow Brand. The Cow Brand was widely advertised; hence the other brands could not be sold at the same price; thus the scheme damaged the manufacturers of the other brands; but they recovered nothing at law. It is clear that in the last analysis there is nothing done in all these cases that is not usual in competition; nor is anything done that is not proper in competition ; for indeed these methods are the

1 [1895] A. C. 154.

2

[1898] I Ch. 274.

8

40 N. Y. App. D. 513. 4 COMPETITION FAIR. - Evans v. Harlow, 5 Q. B. 624; Younge v. McCrae, 3 B. & S. 634; Jenner v. Abeckett, L. R. 7 Q. B. D. 11; White v. Mellen, supra; Parson v. Gillespie, supra; Ajello v. Worsley, supra; Tallerman v. Dowsing Co., supra; Print Works v. Dry Goods Co., 105 Fed. 163; Choynski v. Cohen, supra; Cohn v. Lahn, 26 Alb. L. J. 342; Johnson v. Hitchcock, 15 Johns. 185; Tobias v. Harland, 4 Wend. 537; Lovell Co. v. Houghton, 54 N. Y. Supr. Ct. 60; Ayer v. Rushton, supra ; Walsh v. Dwight, supra. And compare lists following.

very processes of competition; and if these methods were not allowed in competition that whole benefit from competition for which society stipulates would cease.

What competition, then, is held unfair? Certain methods in competition it has been seen are fair; while certain other methods it will be seen are unfair. All depends upon the method practised in the particular case. Suppose competition be defined in

the abstract case as the diversion of a customer from one competitor to another. Then it occurs to inquire as to the position of the customer. Put this case: The customer is under a contract to deal with the first merchant. Then put this case: the customer is dealing with the first merchant, but there is no contract. There is a distinction here. In the one case a second merchant must, to succeed in competition, induce the customer to break his contract with the first merchant; it seems that there may be found an element of wrong in such competition. In the other case there is, as has been seen, no tort in the mere competition; what must be attacked is the means employed to divert the customer.

Of that first situation the leading case, as is well known, is Lumley v. Gye. There it will be remembered a Miss Wagner was under contract to sing for the first manager; the second manager induced Miss Wagner to break her contract and perform for him; and the court held this a tort. The decision is grounded upon the ancient action for enticement of a servant; but certain of the judges indicated a wider ground. One says: Suppose a trader with intent to ruin a rival trader goes to a banker who owes money to his rival and begs him not to pay the money which he owes him, and by that means ruins his rival, it seems that an action could be maintained. Exchange Telegraph Company v. Gregory 2 raises the same issue. Plaintiff furnished the official news service from the London Stock Exchange. The brokers, the customers, were obliged to contract not to furnish the tape news to non-subscribers. One customer furnished the quotations to the defendant, an outside broker, who published them. Here it is seen the competition was carried on by inducing customers to break their contracts. The court in granting the plaintiff an injunction said: This is a mean and contemptible act; this is an illegal and unjusti fiable act; this is an invasion of a right. In Heaton Button Company v. Dick,3 the business necessity of such a result also appears.

1 2 E. & B. 216.

2 [1896] 1 Q. B. 147.

8 55 Fed. 23.