New State Ice Co. v. Liebmann
New State Ice Co. v. Liebmann
Opinion of the Court
delivered the opinion of the Court.
The.New State Ice Company, engaged in the business of manufacturing, selling and distributing ice under a license or permit duly issued by the Corporation Commission of Oklahoma, brought this suit against Liebmann in the federal district court for the western district of Oklahoma to enjoin him from manufacturing, selling and distributing ice within Oklahoma City without first having obtained a like license or permit from the commission. The license or permit is required by an act of the Oklahoma legislature, c. 147, Session Laws, 1925. That act declares that the manufacture, sale and distribution of ice is a public business; that no one shall be permitted to manufacture, sell or distribute ice within the state without -first having secured a license for that purpose from the commission; that whoever shall engage in such business without obtaining the license shall be guilty of a misdemeanor, punishable by fine not to exceed $25, each day’s violation constituting a separate offense, and that by general order of the, commission, a fine not to exceed $500 may be imposed for each violation.
Section 3 of the act provides:
“ That the Corporation Commission shall not issue license to any person, firm or corporation for the manufacture, sale and distribution of ice, or either of them, within this State, except upon a hearing had by said Commission at which said hearing, competent testimony and proof shall be presented showing the necessity for the manufacture, sale or distribution of ice, or either of them,*272 at the point, community or place desired. If the facts proved at said hearing disclose that the facilities for the manufacture, sale and distribution of ice by some person, firm or corporation already licensed by said commission at said point, community or place, are sufficient to meet the public needs therein, the said Corporation Commission may refuse and deny the applicant [application] for said license. In addition to said authority, the said Commission shall have the right to take into consideration the responsibility, reliability, qualifications and capacity of the person, firm or corporation applying for said-license and of the person, firm or corporation already licensed in said place or community, as to afford all reasonable facilities, conveniences and services to the public and shall have the power and authority to require such facilities and services to be afforded the public; provided, that nothing herein shall operate to prevent the licensing of any person, firm or corporation now engaged in the manufacture, sale and distribution of ice, or either of them, in any town, city or community of -this State, whose license shall be granted and issued by said Commission upon application of such person, firm or corporation and payment of license fee.”
The portion of the section immediately in question here is .that which forbids the commission to issue a license to any applicant except upon proof of the necessity for a supply of ice at the place where it is sought to establish the business, and which authorizes a denial' of the application where the existing licensed facilities “ are sufficient to meet the public needs therein.” The district court dismissed the bill of complaint for want of equity, on the ground that the manufacture and sale of ice is a private business which may not be subjected to the foregoing regulation. 42 F. (2d) 913. The court of appeals affirmed. 52 F. (2d) 349.
The Frost case is relied on here. That case dealt' with the business of operating a cotton gin. It was conceded that this was ,a business clothed with a public interest, and that the statute requiring a showing of public necessity as a condition precedent to the issue of a permit was valid. But the conditions which warranted the concession there are wholly wanting here. It long has been recognized that mills for the grinding of grain or performing similar services for all comers ,are devoted to a public use and subject to public control, whether they be operated by direct authority of the state or entirely upon individual initiative. At a very early period a majority of the states had adopted general acts authorizing the taking and flowage, in invitum, of lands for their erection and maintenance. In passing these acts, the attention of'the legislatures no
In Chickasha Cotton Oil Co. v. Cotton County Gin Co., 40 F. (2d) 846, three circuit judges passed upon the constitutionality of the Oklahoma cotton ginning act. Opinions were delivered seriatim, all to the effect, but for varying reasons, that the business of operating cotton gins in Oklahoma was clothed with a public interest. One of the judges thought that the rule in respect of grist mills should apply by analogy, on the ground of the similarity of service. The rule that mills whose services are open to all comers are clothed with a public interest was formulated in the light, and upon the basis, of historical usage, which had survived the limitations that otherwise might be imposed by the due process clause of the Fourteenth Amendment. While the cotton gin has no such background of ancient usage, and, as the opinion by Judge Phillips points out, there is always danger of our being led afield by relying over-much upon analogies, the analogy here is not without helpful significance.
“ The cultivation and irrigation of the soil, the production and reduction of ores, are of vital necessity to the people of the State of Utah; are pursuits in which all are interested and from which all derive a benefit; and the use and application of the unappropriated waters of the natural streams and water courses of the State to the generation of electrical force or energy to be employed in industrial pursuits are of great public benefit and utility. So irrigation of land, the mining, milling, smelting or other reduction of ores, and such use and application of such waters for the generation of electrical power to be employed as aforesaid are hereby declared to be for the public use, and the right of eminent domain may be exercised in behalf thereof.” c. 95, §. 1, Laws of Utah, 1896.
In the Nash case, this court, applying that statute, sustained the condemnation of a right of way across the lands of one private owner for a ditch to convey water for the purpose of irrigating the lands of another private owner. The decision was rested explicitly upon the existence of conditions peculiar to the state. These conditions are epitomized in the legislative declaration above quoted. The court said (pp. 369-370) that its decision was not to be understood as approving the broad proposition that private property might be taken in all cases where the taking might promote the public interest and tend to develop the natural resources of the state, but, having reference to the conditions there appearing, “ that the use is a public one, although the taking of' the right of way is for the purpose simply of thereby obtaining the water for an individual, where it is absolutely necessary to
This was followed in the Strickley case, where, mining being one of the chief industries of the state and its development peculiarly important for the public welfare, the condemnation of a right of way for an aerial bucket line across private lands, for the purpose of transporting ores from a- mine in private ownership, was upheld under the same statute.
These cases, though not strictly analogous, furnish persuasive ground for upholding the declaration of the Oklahoma legislature in respect of the public nature of cotton gins in that state. The production of cotton is the chief industry of the State of Oklahoma, and is of such paramount importance as to justify the assertion that the general welfare and prosperity of the state in a very large and real sense depend upon its maintenance. Cotton ginning is a process which must take place before the cotton is in a condition for the market. The cotton gin bears the same relation to the cotton grower that the old grist mill did to the grower of wheat. The individual grower of the raw product is generally financially unable to set up a plant for himself; but the service is a necessary one with which, ordinarily, he cannot afford to dispense. He is compelled, therefore, to resort for- such service to the establishment which operates in his locality. So dependent, generally, is he upon the neighborhood cotton gin that he faces the practical danger of being placed at the mercy of the operator in respect of exorbitant charges and arbitrary control. The relation between the growers of cotton, who constitute a very large proportion of the population, and those engaged in furnishing the service, is thus seen to be a peculiarly close one in respect of an industry of vital concern to the general public. These considerations render it not unreasonable
We have thus, with some particularity, discussed the circumstances which, so far as the State of Oklahoma is concerned, afford ground for sustaining the legislative pronouncement that the business of operating cotton gins is charged with a public use, in order to put them in contrast with the completely unlike circumstances which attend the business of manufacturing, selling and dis-. tributing ice. Here we áre dealing with an ordinary business, not with a paramount industry upon which the prosperity of the entire state in large measure depends. It is a business as essentially private in its nature as the business of the grocer, the dairyman, the butcher, the baker, the shoemaker, or the tailor, each of whom performs a service which, to a greater or less extent, the community is dependent upon and is interested in having maintained; but which bears no such relation to the public as to warrant its inclusion.in the category of businesses charged with a public use. It may be quite true that in Oklahoma ice is not only an article of prime necessity, but indispensable; but certainly not more so than food or clothing or the shelter of a home. And this court has definitely said that the production or sale of food or clothing cannot be subjected to legislative regulation on the basis of a public use; and that the same is true in respect of the business of renting houses and apartments, except as to temporary measures to tide over grave emergencies. See Tyson & Bro. v. Banton, supra, pp. 437-438, and cases cited.
It has been said that the manufacture of ice requires an expensive plant beyond the means of the average citizen, and thát since the use of ice is indispensable, patronage
Plainly, a regulation which has the effect of denying or unreasonably curtailing the common right- to engage in a lawful private business, such as that under review, cannot be upheld consistently with the Fourteenth Amendment. Under that amendment, nothing is more clearly settled than that it is beyond the power of a state, “ under the guise of protecting the public, arbitrarily [to] interfere with private business or. prohibit lawful occupations or impose unreasonable and unnecessary restrictions upon them.” Burns Baking Co. v. Bryan, 264 U. S. 504, 513, and authorities cited; Liggett Co. v. Baldridge, 278 U. S. 105, 113.
Stated succinctly, a private corporation here seeks to prevent a competitor from entering the business of making and selling ice. It claims to be endowed with state authority to achieve this exclusion. There is no' question
And it is plain that unreasonable or arbitrary interference or restrictions cannot be saved from the condemnation of that Amendment merely by calling them experimental. It is not necessary to challenge the authority of the states to indulge in experimental legislation; but
Decree affirmed.
Dissenting Opinion
dissenting.
Chapter 147 of the Session Laws of Oklahoma, 1925, declares that the manufacture of ice for sale and distribution is “ a public business ”; confers upon the Corporation Commission in respect to it the powers of regulation customarily exercised over public utilities; ,and -provides specifically for securing adequate service. The statute makes it a misdemeanor to engage in the business without a license from the Commission; directs that the license shall not issue except pursuant to a prescribed written application, after a formal hearing upon adequate notice
Under a license, so granted, the New State Ice Company is, and for some years has been, engaged in the manufacture, sale and distribution of ice at Oklahoma City, and has invested in that business 1500,000. While it was so engaged, Liebmann, without having obtained or applied for a license, purchased a parcel of land in that city and commenced the construction thereon of an ice plant for the purpose of entering the business in competition with the plaintiff. To enjoin him from doing so this suit was brought by the Ice Company. Compare Frost v. Corporation Commission, 278 U. S. 515. Liebmann contends that the manufacture of ice for sale and distribution is not a public business; that it is a private business and, indeed, a common calling; that the right to engage in a common calling is one of the fundamental liberties guaranteed by the due process clause; and that to make his right to engage in that calling dependent upon a finding of public necessity deprives him of liberty and property in violation of the Fourteenth Amendment. Upon full hearing the District Court sustained that contention and dismissed the bill. 42 F. (2d) 913. Its decree was affirmed by the Circuit Court of Appeals. 52 F. (2d) 349. The case is here on appeal. In my opinion, the judgment should be reversed.
First. The Oklahoma statute makes entry into the business of manufacturing ice for sale and distribution dependent, in effect, upon a certificate of public convenience
Long before the enactment of the Oklahoma statute here challenged a like requirement had become common in the United States in some lines of business. The certificate -was required first for railroads; then for street railways; then for other public utilities whose operation is dependent upon the grant of some special privilege.
Second. Oklahoma declared the business of manufacturing ice for sale and distribution a “ public business; ” that is, a public utility. So far as appears, it was the first State to do so.
Whether the local conditions are such as to justify converting a private business into a public one is a matter primarily for the determination of the state, legislature. Its determination is subject to judicial review; but the usual presumption of validity attends the enactment.
Third. Liebmann challenges the statute — not an order of the Corporation Commission. If he had applied for a license and been denied one, we should have been obliged to enquire whether the evidence introduced before
The function of the Court is primarily to determine whether the conditions in Oklahoma are such that the legislature could not reasonably conclude (1) that the public welfare required. treating the manufacture of ice for sale and distribution as a “public business”; and (2) that in order to ensure to the inhabitants of some communities an adequate supply of ice at reasonable rates it was necessary to give the Commission power to exclude the establishment of an additional ice plant in places where the community was already well served. Unless the Coürt can say that the Federal Constitution confers an absolute right to engage anywhere in the business of manufacturing ice for sale, it cannot properly decide that the legislators acted unreasonably without first ascertaining what was the experience of Oklahoma in respect to the ice business. The relevant facts appear, in part, of record. Others are matters of common knowledge to those familiar with the ice business. Compare Muller v. Oregon, 208 U. S. 412, 419, 420. They show the. actual conditions, or the beliefs, on which the legislators acted. In considering these matters we do not, in a strict senseitake judicial notice of them as embodying statements of' uncontrovertible facts. Our function is only to determine the reasonableness of the legislature’s belief in the existence" of evils and in the effectiveness of the remedy
(A) In Oklahoma a regular supply of ice may reasonably be considered a necessary of life, comparable to that of water, gas and electricity. The climate, which heightens the need of ice for comfortable and wholesome living, precludes resort to the natural product.
Nor can the Court properly take judicial notice that, in Oklahoma, the means of manufacturing ice,for private use are within the reach of all persons who are dependent upon it. Certainly it has not been so. In 1925 domestic mechanical refrigeration had scarcely emerged from the experimental stage.
The business of supplying ice is not only a necessity, like that of supplying food or clothing or shelter, but the legislature could also consider that it is one which lends itself peculiarly to monopoly.
That these forces were operative in Oklahoma prior to the passage of the Act under review, is apparent from the record. Thus, it was testified that in only six or seven localities in the State containing, in the aggregate, not more than 235,000 of the total population of approximately 2,000,000, was there “ a semblance of competition ”;
(B) The statute under review rests not only upon the facts just detailed but upon a long period of experience in more limited regulation dating back to the first year of Oklahoma’s statehood. For 17 years prior to the passage of the Act of 1925, the Corporation Commission under § 13 of the Act of. June 10, 1908, had exercised jurisdiction oyer the rates, practices and service of ice plants, its action in each case, however, being predicated upon a finding that the company complained of enjoyed a “virtual monopoly” of the ice business in the community which it served.
“ The manufacture, sale, and distribution of ice in many respects closely resemble the sale and'distribution of gas as fuel, or electric current, and in many communities the same company that manufactures, sells, and distributes electric current is the only concern that manufactures,. sells,.and distributes ice, and by reason of the nature and extent of the ice business it is impracticable in that community to interest any other concern in such business. In this situation, the distributor of such a necessity as ice should not be permitted by reason of the impracticability of any one else engaging in the business to charge unreasonable prices, and if such an abuse is persisted in, the'regulatory power of the State should be invoked to protect the public.” See also Consumers Light & Power Co. v. Phipps, 120 Okla. 223; 251 Pac. 63.
By formal orders, the Commission repeatedly fixed or approved prices to be charged in particular communities;
As early as 1911, the Commission in its annual report to the Governor, had recommended legislation more clearly delineating its powers in this field:
“ There should be a law passed putting the regulation of ice plants under the jurisdiction of the Commission. The Commission is now assuming this jurisdiction under an Act passed by the Legislature known as the anti-trust law. A specific law upon this subject would obviate any question of jurisdiction.”35
This recommendation was several times repeated, in terms revealing the extent and character of public complaint against the practices of ice companies.
“ This would prevent ruinous competition resulting in the driving out of business of small though' competent public service utilities by more powerful corporations, and often consequent demoralization of service, or the requiring of the public to patronize two utilities in a community where one would be adequate.”
Up to that time a certificate of public convenience and necessity to engage in the business had been applied only to cotton gins. Okla. Sess. Laws, 1915, c. 176, § 3: In 1917 a certificate from the Commission was declared prerequisite to the construction of new telephone or telegraph lines.
Fourth. Can it be said in the light of these facts that it was not an appropriate exercise of legislative discretion to authorize the Commission to deny a license to enter the business in localities where necessity for another plant did not exist? The need of some remedy for the evil of destructive competition, where competition existed, had been and was widely felt. Where competition did not exist, the propriety of public regulation had been proven. Many communities were not supplied with ice at all. The particular remedy adopted was not enacted hastily. The statute was based upon a long-established state policy recognizing the public importance of the ice business, and upon 17 years’ legislative and administrative experience in the regulation of it. The advisability of treating the ice business as a public utility and of applying to it the certificate of convenience and necessity had been under consideration for many years. Similar legislation had been enacted in Oklahoma under similar circumstances with respect to other public services. The measure bore a substantial relation to the evils found to exist. Under these circumstances, to hold the Act void as being unreasonable, would, in my opinion involve the exercise not of the function of judicial review, but the function of a super-legislature. If the Act is to be stricken down, it must be on the ground that the Federal Constitution guarantees to the individual the absolute right to enter the ice business, however detrimental the exercise o(f that right may be to the public welfare. Such,' indeed, appears to be the contention made.
A regulation valid for one kind of business may, of course, be invalid for another; since the reasonableness'
Sixth. It is urged specifically that manufacturing ice for sale and- distribution is a common calling; and that the right to engage in a common calling is one of the fundamental liberties guaranteed by the due process clause. To think of the ice-manufacturing business as a common calling is difficult; so recent is it in origin and so peculiar in character. Moreover, the Constitution does not require that every calling which has been common shall ever remain so. The liberty to engage in a common calling, like other liberties, may be limited in the exercise of the police power. The slaughtering of cattle had been a common calling in New Orleans before the monopoly sustained in Slaughter-House Cases, 16 Wall. 36, was created by the legislature. Prior to the Eighteenth Amendment selling liquor was a common calling, but this Court held it to be consistent with the due process clause for a State to abolish the calling, Bartemeyer v. Iowa, 18 Wall. 129; Mugler v. Kansas, 123 U. S. 623, or to establish a system limiting the number of licenses, Crowley v. Christensen, 137 U. S. 86. Every citizen has the right to navigate a river or lake, and may even carry others thereon for hire. But the ferry privilege may be made exclusive in order that the patronage may be sufficient to justify maintaining the ferry service, Conway v. Taylor’s Executor, 1 Black 603, 633, 634.
It is settled by unanimous decisions of this Court, that the due process clause does not prevent a State or city from engaging in the business of supplying its inhabitants with articles in general use, when it is believed that they
Seventh. The economic emergencies of the past were incidents of scarcity. In those days it was preeminently the common callings that were the subjects of regulation. The danger then threatening was excessive prices. To prevent what was deemed extortion, the English Parliament fixed the prices of commodities and of services from time to time during the four centuries preceding the Declaration of Independence.
Eighth. The people of the United States are now confronted with an emergency more serious 'than war. Misc.y is wide-spread, in a time, not of scarcity, but of over-abundance. The long-continued depression has brought unprecedented unemployment, a catastrophic fall in commodity prices and a volume of economic losses which threatens our financial institutions.
Whether that view is sound nobody knows. The objections to the proposal are obvious and grave. The remedy might bring evils worse than the present disease.. The
Yet the advances in the exact sciences and the achievements in invention remind us that the seemingly impossible sometimes happens. There are many men now living who were in the habit of using the age-old expression: “It-is as impossible as flying.” The discoveries in physical science, the triumphs in invention, attest the value of the process of trial and error. In large measure, these advances have been due.to. experimentation. In those fields experimentation has, for two centuries, been not only free but encouraged. Some people assert that our present plight is due, in part, to the limitations set
To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation. • It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country; This Court has the power to prevent ah experiment.
Compare Sumner H. Sliebter, “ Modem Economic Society,” p. 56, 326-328; Eliot Jones and T. C. Bigham, “ Principles of Public Utilities,” p. 70; Eliot Jones, “Is Competition in Industry Ruinous,” 34 Quarterly Journal of Economics, 473, 488.
See Ford P. Hall, “ Certificates of Convenience and Necessity,” 28 Mich. L. Rev. 107, 276; Waldo O. Wihhoft, “ Certificates of Con-' verbenee and Necessity in Michigan,” 10 Mich. State Bar Journal 257; Charles S. Hyneman, “Public Encouragement of Monopoly in the Utility Industries,” Annals of American Academy of Pobtical and Social Science, January, 1930, p. 160; 24 Col. L. Rev. 528. Professor Hall lists statutes of forty-three states, most of them
See D. E. Lilienthal and I. S. Rosenbaum, “ Motor Carrier Regulation by Certificates of Necessity and Convenience,” 36 Yale L. J. 163, “Motor Carrier"Regulation: Federal, State, and Municipal,” 26 Col. L. Rev. 954'. Compare LaRue Brown and S. N. Scott, “ Regulation of the Contract Motor Carrier Under the Constitution,” 44 Harv. L. Rev. 530.
Such a law has since been passed in Arkansas. Ark. Acts, 1929, No. 55. The .State court held that the measure violated the State constitution insofar as it sanctioned denial of the right to engage in the ice business. Cap. F. Bourland Ice Co. v. Franklin Utilities Co., 180 Ark. 770; 22 S. W. (2d) 993. The provisions for the regulation of rates, attacked under the Fourteenth Amendment, were sustained.
“ Neither is it a matter of any moment that no precedent can be found for'a statute precisely like this. It is conceded that the business is one of recent origin, that its growth has been rapid,, and that it is already of great importance. ... It presents, therefore, a case for the application of a'long-known and well-established principle in social science, and this statute simply extends the law so as to meet this new developmént of commercial progress.” Munn v. Illinois, 94 U. S. 113, 133. See Thomas P. Hardman, “Public Utilities,” 37 W. Va. L. Q. 250.
O’Gorman & Young, Inc. v. Hartford Fire Ins. Co., 282 U. S. 251. “ Every possible presumption is in favor of the validity of a statute, and' this continues until the contrary is shown beyond a rational doubt. One branch of the government can not encroach upon the domain of another without danger. The safety of our institutions depends, in no small degree on a strict observance of this salutary rule.” Sinking-Fund Cases, 99 U. S. 700, 718. See also Legal Tender Cases, 12 Wall. 457, 531; Trade-Mark Cases, 100 U. S. 82, 96. See James B. Thayer, “ The Origin and Scope of the American Doctrine of Constitutional Law,” 7 Harv. L. Rev. 129, 142,
" Whether the enactment is wise or unwise, whether it is based on sound economic theory, whether it is the best means to achieve the desired result, whether, in short, the legislative discretion within its prescribed limits should be exercised in .a particular manner, are matters for the judgment of the legislature, and the earnest conflict of serious opinion does not suffice to bring them within the range of judicial cognizance.” Chicago, B. & Q. R. Co. v. McGuire, 219 U. S. 549, 569.
“Questions of policy áre not submitted to judicial determination, and the courts have no general authority of supervision over the exercise of discretion which under our system is reposed in the people or other departments of government.” Green v. Frazier, 253 U. S. 233, 240. See also Price v. Illinois, 238 U. S. 446, 451, 452; Rast v. Van Deman & Lewis Co., 240 U. S. 342, 357; Merrick v. N. W. Halsey & Co., 242 U. S. 568, 586, 587.
The mean normal temperature in the State from May to September is 76.4 degrees. Climatological Data, United States Weathef Bureau, vol. xxxix, Í93, No. 13, p. 53. The mean normal temperature in January, the coldest month, is 38.3 degrees; in December,' 39.2 degrees. Ibid. . So far as appears, no natural ice is harvested in the State for commercial purposes. See Guy L.-Andrews, “State Regulation of Ice Industry in Oklahoma/’ Refrigerating World, Sept-1928, p. 32.
The industry first assumed commercial importance in the United States about 1880. See Ice and Refrigeration Blue Book (10th, ed.), pp. 12-18. Reports of the Bureau of the Census indicate that .in 1869 there were only four establishments producing artificial ice; in 1879, 35;' in. 1889, 222; in 1899, 775. See Willard L. Thorp, “The Integration of Industrial Operation/’--United .States Census Monographs, III, 1924, pp. 49, 50.- In 1929, the Census of Manufactures shows 4,110 establishments making ice as their product of chief value. The Ice and Refrigeration Blue Book for 1927, p. 30,-lists 7,338 plants actually producing ice for. sale. It estimates the', total production for that year at 52,202,160 tons, as against 4,294,439 tons, reported by the Bureau of the Census for 1899. ~7
See Report of Conjmittee on Fundamentar Equipment submitted to the President’s Conference on Home Building and Home Owner
See Walter R. Sanders, “ Industrial Application of Refrigeration in the United States,” Proceedings of the Fourth International Congress of Refrigeration, London, 1924, p. 967. It was testified that in' Oklahoma City in April, 1930, 46.4 per cent, of the sales of ice were to the retail trade, 37.12 per cent, to the commercial trade, 13.81 per-cent, to the wholesale trade, 2.92 per cent, for car icing, and the remainder for carload shipments out of the city. In 1922 there were loaded in Oklahoma' 1676 cars of food products under refrigeration; in 1925, 2940 cars; and in 1929, 3347. The Ice and Refrigeration Blue Book (10th ed.), pp. 22, 23, lists 198 industries using refrigeration. In a great number of these it is impracticable to install a private ice plant.
Were it not. for refrigeration, the market for perishable foodstuffs, in warm seasons, would be limited in area to a few miles and in time to a few days, or even hours. A considerable part of this refrigeration is supplied by concerns manufacturing ice for sale. Such concerns commonly supply ice "used in car-icing. Mechanical refrigeration is beyond the means of many small retail dealers. Moreover, since decay in food, once begun, cannot be arrested by subsequent refrigeration, ice, or a substitute, is often essential on the farm. See M. E. Pennington and A. D.-Greenlee, “The Refrigeration of Dressed Poultry in Transit,” Bulletin No. 17, U. S. Department of Agriculture, p. 31.
More than 80 per cent, of the milk and cream sold from farms in the United States is produced in sections where natural ice can be harvested. See U. S. Department of Agriculture, " Cooling Milk and Cream on the Farm,” Farmers' Bulletin No.' 976, p. 1. The dairy industry in Oklahoma, however, is wholly dependent upon artificial ice, or its substitutes. Refrigeration on the farm is indispensable to the safe marketing of dairy products, at any season when thetemperature exceeds 50 degrees. See John T. Bowen, “ The Application, of Refrigeration to the Handling of Milk," Bulletin No. 98, U. S. Department of Agriculture, pp. 2, 65 et seq.
The power of the Commission to compel this service, of course, depends upon the status of the ice business as a public utility. The evidence shows that the distribution of ice in rural communities not themselves possessing ice plants has developed almost wholly since the passage of the Act of 1925. There was testimony that such, distribution would be impracticable without the protection afforded by the Act.
The total number of household refrigerators in the entire country manufactured and sold before 1920 was approximately 10,000. In 1924, the annual production reached 30,000; in 1925, 75,000. Electrical Refrigerating News, February 17, 1932,
The Secretary of the National Association of Ice Industries testified that the. ice business for the last eleven years had increased upon an average of 5.35 per cent, each year; that in 1919 the per capita consumption of ice was 712 pounds; in 1929, 1157 pounds. A great deal of the increase in consumption of ice in Oklahoma, another witness testified, was in rural communities and among urban dwellers of the poorer classes.
The number of domestic electric meters installed in Oklahoma as of August 31, 1930, was only 222,237, according to a tabulation of the Bureau of Foreign and Domestic Commerce. The population of the State in 1930 was 2,396,000. Fifteenth Census, vol. I, p. 18. It is estimated that 965,000 household refrigerators were sold in 1931, of which only 10,146 were sold in Oklahoma. Electrical Refrigerating News, February 24, 1932. Approximately 3,578,000 such refrigerators are now in use throughout the country. Id., February 10, 1932. From these figures it may be calculated that the number of refrigerators in use in Oklahoma is between 35,000 and 40,000. The average •cost of a household electric refrigerator in 1925 was $425; in 1931, $245. Electrical Refrigerating News, February 17, 1932. The price of ice for domestic use in Oklahoma’ varies from 40 to 70 cents the hundredweight. New families use as much as three or four tons of ice in a year.. In view of these facts, this Court can scarcely have judicial knowledge that in Oklahoma all families or businesses which are able to purchase ice are able to purchase a mechanical refrigerator. See Report of Committee on Fundamental Equipment, submitted to the President’s Conference on Home Building and Home Ownership, pp. Ill, 128-129. This Committee found it impossible to recommend even an ordinary refrigerator, using ice, for families of low income, and-suggested the design and marketing of a specially constructed ice-chest.
It is noteworthy that the ice industry has the characteristic of uniformity of product or service common to most public utilities, and distinguishing it from other businesses in which differences in quality or style make difficult effective regulation. See S. Howard Patterson and Karl W. H. Scholz, “ Economic Problems of Modem Life,” (2d ed. 1931), p. 426.
The tendency of the industry to be conducted as a public utility is reflected in the widespread entry into it in recent years of electrical, gas, and water utilities, and the like. Such companies in Oklahoma operate more than one-third of the ice plants. See Ice and Refrigeration Blue Book (10th ed.), pp. 1268-88. Compare Oklahoma Light & Power Co. v. Corporation Commission, 96 Okla. 19, 24; 220 Pac. 54.
Municipalities have engaged extensively in the business of manufacturing and selling ice in foreign countries, and to a lesser extent in the United States. On several occasions, departments of the Federal Government, unable to secure ice at what were regarded as reasonable prices, have installed their own ice plants. Both in the Philippine Islands and in Panama plants have been operated which sell ice to government employees. See Carl D. Thompson, “Public Ownership,” pp. 301-305; Jeanie Wells Wentworth, “A Report on Municipal and Government Ice Plants,” submitted to the Borough President of Manhattan, December 15, 1913.
See Willard L. Thorp, “ The Integration of Industrial Operation,” United States Census Monographs, III, 1924, pp. 49, 50. Neither consolidation of ownership nor increase in production has had the
Several reasons were given in the testimony for this localization óf the ice business. Freight rates on ice are high in proportion to value. Handling charges are doubled if the icé is put in cold storage at the point of consignment; and, if kept in the car, the ice loses in weight and deteriorates in quality during the period of a week or more before a carload will be exhausted in a small community. Shrinkage of course varies with the weather, but is at all times considerable.
Oklahoma is predominantly a state of rural population. Only 34.3% of its inhabitants live in towns or cities of more than 2,500. Fifteenth Census of the United States, vol. I, p. 15. It has only four cities over 25,000; 12 cities from 10,000 to 25,000; and 52 cities from 2,500 to 10,000. There are 444 incorporated places of less than 2,500. Ibid., pp. 895-98.
See Editorials, Refrigerating World, May, 1928, p. 5, June 1, 1928, p. 6; J. H. Reed, “Consolidate Ice Delivery in ."Atlanta,” id., May, 1928, p. 15.
See e. g., John Nickerson, “ Consolidations in the Ice Industry,” 73 Ice & Refrigeration 333, 334; 69 id. 223 ; 70 id. 357; 72 id. 39; ibid. 282; Halbert P. Hill, “ The Effect of Recent Mergers on the Ice Industry,” Refrigerating World, February, 1926, pp. 15, 42; W. F. Stevens, “ What the Future Holds for the Ice Manufacturer,” 76 Ice & Refrigeration 81, 82; W. L. Foushee, “ The Ice Business as a Public Utility,” ibid. 302. See Tipton v. Ada Ice & Fuel Co., 2d & 3d Ann. Rep. Okla. Corp. Comm. p. 358.
The Ice and Refrigeration Blue Book for 1927 shows that of 142 communities containing ice plants manufacturing ice'for sale, at least 112 were served either by a single plant or by several plants of common ownership. See pp. 1268-1288, 1645 et seq. There is evidence in the record that it was common practice for manufacturing establishments of different ownership, to make use of a jointly-owned delivery company. Out -of 217 plants listed as -engaged in manufacturing ice for sale, 101 were owned by corporations owning or controlling other plants within or without the State. Ibid.
For accounts of the situation in Oklahoma before the- passage of the bill, see Guy L. Andrews, “ Regulation of the Ice Business in Oklahoma,” 75 Ice & Refrigeration 171, “ State Regulation of the lee Industry,” ibid.,.437. In the year 1924, 375 formal complaints against ice companies are said to have been filed with the Commission.
Okla. Sess. Laws, 1907-1908, c. 83: “Section 13. Whenever any business, by reason of its nature, extent or the existence of a virtual monopoly therein, is such that the public must use the same, or its services, or the consideration by it given or taken- or offered, or the commodities bought or sold therein are offered or taken by purchase or sale in such a manner as to make it of public consequence, or to affect the community at large as to supply, demand or price or rate thereof, or said business is conducted in violation of the first section of this.Aot, said business is a public business, and subject to be controlled by the State, by the Corporation Commission or by an action in any district court of the State, as to all of its practices, prices, rates and charges. And it is hereby declared to be the duty of any person, firm or corporation engaged in any public business to render its
Powers v. Mangum Ice & Cold Storage Co., 2d & 3d Ann. Rep. Okla. Corp. Comm., p. 354; Tipton v. Ada Ice & Fuel Co., ibid., p. 358; Scanlon v. Sass, ibid., p. 361; Worley v. Hill, ibid., p. 390; Gillian v. Tishomingo Electric Light & Power Co., 4th Ann. Rep., p. 103; Wadlington v. Southern Ice & Utilities Co., 13th Ann. Rep., p. 235; In re General Investigation of Prices, Practices, Rates and Charges of the New State Ice Co., 15th Ann. Rép., p. 176; In re General Investigation of Prices, Practices, Rates and Charges of the Steffens-Bretch Ice & Ice Cream Co., ibid., p. 177; McCartney v. Kingfisher Ice Co., ibid., p. 210; In the Matter of the investigation of prices charged for ice at Guthrie, Oklahoma, by the Rummeli-Braun Co., ibid., p. 212.
Brenan v. Tishomingo Ice & Cold Storage Co., 2d & 3d Ann. Rep. Okla. Corp. Comm., p. 353; Tipton v. Ada Ice & Fuel Co.,
In most instances of complaint of insufficient ice the Commission undertook to secure only the equitable distribution of the available supply; and the terms of- the statute gave it no greater authority. See, e. g., Powers v. Mangum Ice & Cold Storage Co., 2d & 3d Ann. Rep. Okla. Corp. Comm., p. 354; Gardiner v. Geary Light & Ice Co., ibid., p. 403. But compare Ratner v. Imperial Ice Co., 11th Ann. Rep., p. 205; Ada v. Tipton Ice & Fuel Co., 2d & 3d Ann. Rep., p. 358. On no occasion, before 1925, did the Commission undertake to extend ice service to communities not theretofore supplied.
Brenan v. Tishomingo Ice & Cold Storage Co., 2d & 3d Arm. Rep. Okla. Corp. Comm., p. 353; Powers v. Mangum Ice & Cold Storage Co., ibid., p. 354; Tipton v. Ada Ice & Fuel Co., ibid., p. 358; Scanlon v. Sass, ibid., p. 361; Worley v. Hull, ibid., p. 390; Ralston v. Hobart Ice & Bottling Co., 4th Ann. Rep., p. 110; In the Matter of Proposed Order No. 94, 6th Ann. Rep., p. 219, 7th id., p. 266; Langan v. McCoy Bros., 8th & 9th Ann. Rep., p. 226; Ratner v. Imperial Ice Co., 11th Ann. Rep., p. 205; Norton v. Chandler Ice Co., 12th Ann. Rep., p. 227; Vance v. Tahlequah Light & Power Co., 13th Ann. Rep., p. 194.
Gardiner v. Geary Light & Ice Co., 2d & 3d Ann. Rep. Okla. Corp. Comm., p. 403.
Worley v. Hull, 2d & 3d Ann. Rep. Okla. Corp. Comm., p. 390.
Order No. 1906, 15th Ann. Rep. Okla. Corp. Comm., p. 178.
See 8th & 9th Ann. Rep. Okla. Corp. Comm., p. 1.
2d & 3d Ann. Rep. Oída. Corp. Comm., p. 8.
In its Eighth and Ninth Annual Report, dated November 20, 1916, p. 5, the Commission said: “The scope of legislation pertaining to those utilities which serve the public generally should be broadened. Two conspicuous examples are ice plants and cotton compresses. Chapter 93, Session Laws, 1915, extends the jurisdiction of the Corporation Commission over water, heat, light, and power .companies, but does not include ice plants. Numerous complaints are received by the Commission each year as to extortionate practices of ice companies and exorbitant prices charged. The same jurisdiction should be given the Corporation Commission over ice plants as it exercises over gas, electric and water companies.”
In its Eleventh Annual Report, October 3, 1918, p. xxii, it was said: “The business of manufacturing and distributing ice is as much a matter of public concern as is the business of rendering water, electric or gas service and should be subject to the same regulation. Complaints are continuously being made to the Commission in reference to prices of ice, practices of ice companies, or service rendered by such companies, and the Commission lias frequently been called upon to exercise jurisdiction under the so-called Anti-Trust Laws. Specific legislation should be enacted in reference to these
Again, in the Twelfth Annual Report, November 18, 1919, p. 1: “ During the past summer season numerous complaints against practices and rates of ice utilities have arisen from at least a hundred towns and cities throughout the State. The same jurisdiction should be given the Corporation Commission over ice plants as it exercises over gas, electric, and water companies.”
Besides continuing in effect Order No'. 1906, supra note 33, the Commission has issued further general orders pertaining particularly to accounting practices. Order No. 3843, 20th Ann. Rep. Okla. Corp. Comm., p. 562. Ip the following cases it has prescribed rates: In re Application of Marietta Ice & Water Co., 22d Ann. Rep., p. 601; In re Application for Reduction in Ice Rates Charged by the Sallisaw Ice Co., ibid., p. 816; In re Reduction of Rates Charged by the Consumers Ice Co., ibid., p. 859; In re Application of Southwestern Light & Power Co., 23d Ann. Rep. p. 755; In re Application of the Ward Ice Industries for Reduction in Ice Rates, ibid., p. 757. In In re Application of the Shawnee Ice Co. for increase of capacity in its plant, 22d Ann. Rep., p. 834, the applicant was allowed to withdraw its application, and the intervening application of E. A. Liebemann to erect a.new plant was denied. In Burbank Ice Co. Kaw City Ice & Power Co., 23d Ann. Rep., p, 558, the defendant's permit to
8th & 9th Ann. Rep. Okla. Corp. Comm., pp. 5, 6.
Okla. Sess. Laws, 1917, c. 270.
Okla. Sess. Laws, 1923, c. 113, § 4. This statute was held valid against objections under both the Federal and State Constitutions in Ex parte Tindall, 102 Okla. 192; 229 Pac. 125, and Barbour v. Walker, 126 Okla. 227, 229; 259 Pac. 552. See also Chicago, R. I. & P. Ry. Co. v. State, 123 Okla. 190; 252 Pac. 849; Chicago, R. I. & P. Ry. Co. v. State, 126 Okla. 48; 258 Pac. 874. As to certificates of public convenience and necessity for the operation of a cotton gin, see Hohman v. State, 122 Okla. 45; 250 Pac. 514.
Okla. Sess. Laws, 1925, c. 102, §§ 5, 6. Control over entry into these businesses, power and water plants, and the like, had theretofore been exercised by the requirement • of a franchise from the municipality to be served. See Pawhuska v. Pawhuska Oil & Gas Co., 28 Okla. 563, 568; 115 Pac. 353; Huffaker v. Fairfax, 115 Okla. 73; 242 Pac. 254. Cf. Okla. Const., art. IX, § 2, art. XVIII, § 5.
“ Plainly circumstances may so change in time or so differ in space as to clothe with such an [public] interest what at other times or in other places would be a matter of purely, private concern.” Block v. Hirsh, 256 U. S. 135, 155.
In Lord Hale’s “ Treatise on the Ports of the Sea,” Hargrave, “ Law Tracts,” pp. 77-78. Lord Hale was speaking of the particulars, •wharves and cranes in ports; and did not purport to generalize the obligation to serve all persons at reasonable rates in other circumstances. See Breck P. McAllister, “ Lord Hale and Business Affected With a Public Interest,” 43 Harv. L. Rev. 759. He was speaking of duties arising at common law, and not of limitations upon the legislative power of Parliament. See J. A. McClain, Jr., “The Cqnvenience of the Public Interest Concept,” 15 Minn. L. Rev. 546. He could not have been speaking of such limitations, for in England they did not exist; and Parliament was accustomed to regulate prices of commodities of all kinds. See note 46, injra.
Chief Justice Waite, who wrote the opinion, said generally, p. 126, “ Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the
Lake Shore & M. S. Ry. Co. v. Ohio, 173 U. S. 285, 292; Chicago & Alton R. Co. v. Tranbarger, 238 U. S. 67, 77; Chicago, B. & Q. R. Co. v. Drainage Commissioners, 200 U. S. 561, 592; Bacon v. Walker, 204 U. S. 311, 317. “But it was recognized in the cases cited, as in many others, that freedom of contract is a qualified and not an absolute right. There is no absolute freedom to do as one wills or to contract as one chooses.” Chicago, B. & Q. R. Co. v. McGuire, 219 U. S. 549, 567. Compare Walls v. Midland Carbon Co. 254 U. S. 300.
“In Lord Hale’s time ... all activity comprehended under what we .call business, was public, and all of it subject to price control.” Walton H. Hamilton, “Affectation [sic] With a Public Interest,” 39 Yale L. J. 1089, 1094.' For voluminous collections of statutes and materials relating to Parliamentary control of business in England prior to the American Revolution, see the references- in Edward A. Adler, “Business Jurisprudence,” 28 Harv. L. Rev. 135; J. A. McClain, Jr., “ The Convenience of the Public Interest Concept,” 15
Statutes of eight of the thirteen States passed during the Revolution, and fixing the price of almost every commodity in the market, are listedin 33 Harv. L. Rev. 838, 839.
Maryland Laws-of 1789, c. 8, § 2, Herty’s Digest of the Laws of Maryland, 1799, p. 250; 5 Statutes of South Carolina 186, 1 South Carolina Acts of Assembly, 1791-1794, p. 88.
See Hearings before the La Follette subcommittee of the Senate Committee on Manufactures, Seventy-second Congress, First Session,
See Edward S. Corwin, “ Social Planning under the Constitution,” 26 American Political Science Review 1; W. B. Donham, “Business Adrift,” (1931), p. 165; “America Faces the Future,” edited by Charles A. Beard, (1932), pp. 1-10; Paul M. Mazur, “New Roads to Prosperity,” (1931), c. V.
W. B. Donham, “Business Adrift,” pp. 141, 142; “The Swope Plan,” edited by J. George Frederick, (1931), pp. 70, 73, 128; Richard T. Ely, “Hard Times, The Way In and the Way Out,” (1931), pp. 62-64, 135, 137; “The Menace of Overproduction,” edited by Scoville Hamlin, (1930); Dexter M. Keezer and Stacy May, “The Public Control of Business,” (1930), p. 83; Walker D. Hines, “Planning in a Particular Industry,” Bulletin of the Taylor Society, October, 1931; Philip Cabot, “The Vices of Free Competition,” The Yale Review, Autumn, 1931; Julius H. Barnes, “Business Looks at Unemployment,” Atlantic Monthly, August, 1931;' “The Federal AntiTrust Laws: A Symposium,” edited by Milton Handler (December 1931).
The depression which began in 1929 has greatly reduced the. present consumptive capacity; and the loss of export trade, and the arrest in the growth in population (resulting from the lessened birthrate and the practical stoppage of immigration), apparently preclude the rapid increase of consumptive capacity which followed the earlier periods of depression.
See Charles A. Beard, “America Faces the Future,” (1932), pp. 117-140; “The Swope Plan,” edited by J. George Frederick (1931); Report No. 12 of the Committee on Continuity of Business and Employment of the United States Chamber of Commerce,- October 2-3, 1931; Report of the Executive Council, American-Federation of Labor to the 51st Annual Convention, óctober 5, 1931; Stuart Chase, “A Ten Year Plan for America,” Harpers' Magazine, June, 1931; George Soule, “What Planning Might Do,” New Republic, March 11, 1931; “ When We Choose to Plan,” Graphic Survey, March 1, 1932; “ The New Challenge to Scientific Management,” Bulletin of the Taylor Society, April, 1931; Robert J. McFall, “Planning Industry,” id., June, 1931; Horace B. Drury, “ The Hazard of Business,” id., Decern-' ber, 1931; Grover A, Whalen, “National Planning,” id., February,
See Charles R. Stevenson, “The Way Out,” (1932), particularly pp. 27, 31, 33; Philip Cabot, “The Vices of Free Competition,” The Yale Review, Autumn, 1931;'J. A. Hobson, “The State as an Organ of Rationalization,” Political Quarterly, January-March, 1931; and the discussions by Professor Beard and Messrs. Swope, Chase, Soule and Smith, supra, note 53. Concerning the bituminous coal business, see United States Coal Commission, Final Report 1925, Part I, pp. 268, 269; “ Opening New Mines on the Public Domain: A Way of Order for Bituminous Coal,” by Walter H. Hamilton and Helen R. Wright, pp. 35-37; “ The Case of Bituminous Coal,” by Walton H. Hamilton and Helen.R. Wright, pp. 170-173; 263, 264; Willard E. Atkins, et al., “Economic Behavior,” (1931), c. XXII; Senate Bill No. 2935, §§ 2, 8 (72d Congress)', introduced by Senator' Davis, and report of Hearings, U. S. Daily, March 15, 1932, p. 1. ' Concerning petroleum and gas, see Ralph H. Fuchs, “ Legal Technique and National Control of the Petroleum Industry,” 16 St. Louis L. Rev. 389; J. Howard Marshall and Norman L. Meyers, “ Legal Planning of Petroleum Production,” 41 YaleL. J. 33; Samuel H. Slichter, “ Modern Economic Society,” 861,862.
Compare Sumner H. Slichter, “ Modem Economic Society,” (1931), pp. 872-888; Charles Whiting Baker, “Pathways Back to Prosperity,” (1932), pp. 59-61; Samuel Crowther, “A Basis for Stability,” (1932),.pp. 3-17; J. Franklin Ebersole, “National Planning,” Bulletin of the Taylor Society, August, 1931; Virgil Jordan, Some Aspects of National Stabilization,” Mechanical Engineering, January, 1932; “What Price Stability,” The Annalist, October 9, 1931; Warren Bishop, “The Rain of Plans,” The Nation’s Business, October, 1931; Myron W. Watkins, “The Economic Philosophy of Anti-Trust Legislation,” Annals of the- American Academy of Political and Social Science, January, 1930; Albert W. Atwood, “ The Craze for National Planning,” Saturday Evening Post, March 19, 1932.
Compare Charles Warren, “ The New .‘ Liberty ’ under the Fourteenth Amendment,” 39 Harv. L. Rev. 431.
Compare Felix Frankfurter, “ The Public and Its Government,” pp. 49-51.
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