TRUSTS.
Legal monopolies have generally been granted to private persons for some real or ostensible service to the commonwealth. Sometimes such a grant was made primarily for fiscal purposes. Thus the monopoly of the issue of hank notes in England, granted in the early part of the eighteenth century to the hank of England. was a reward for the considerable services of that corporation to the national exchequer. In early times the exclusive right of sale or production of a commodity was frequently granted to in dividuals in return for a fixed sum paid into the public treasury. The danger. however, of such monopolies lay in the fact that the probable profits were as a rule underestimated through the influence of favoritism, with the result that the sums secured by the treasury were not com mensurate with the vexation to the public. Too frequently these exclusive privileges were granted to Court favorites whose actual services to the commonwealth merited no such reward. Aro nopolies by grant first acquired prominence in the reign of Elizabeth, when her frequent grants of monopolies in articles of common use were regarded as a great abuse and brought forth the protests of Parliament. Such articles as salt, leather, coal. soap, cards, beer, and wine were thus monopolized, and indeed there was hardly any article of common necessity of which the sale was not thus restricted for the benefit of the great. The practice was continued until the statute 21, dallies 1., c. 3, known as the Statute of monopolies, was enacted by Parlia ment in 1623. This statute abolished all exist ing monopolies with certain exceptions, as patents and manufactures of war supplies and materials, and forbade the creation of monop olies, except by grant made by authority of act of Parliament.
Somewhat similar in character were the special prerogatives granted about this time to the East India and other trading companies. The monopoly of trade which was a eharacteristie of these companies was held by many to be a feature essential to their success. It may be remarked that monopoly privileges did not pre vent failure on the part of the ninny companies which from time to time were established by France, though they may have been a valuable adjunct to the more vigorous administration of the English and Dutch companies.
The limited monopoly for a term of years which at the present time is granted to the holders of patents and copyrights is somewhat akin in principle to those just, discussed, but is justified by other considerations of public policy.
It differs from them in that the objects to which such rights pertain are essentially new creations, and the exclusive privileges which they convey act as a stimulus to productions which arc of public benefit. While copyright aims to secure to writers a reward for their labors, there are, in general, few restrictions upon the use of these privileges. On the other hand, the aim of patent legislation is in sonic countries not only to stimulate invention, but to secure the widest utilization of improved processes. The monopoly which the patent right confers cannot he used, therefore, for the ex clusive benefit of its possessor. Persons who fail to provide for the commercial utilization of their patents forfeit their rights. German law, for instance, provides for an annual fee for the issuing of patents which grows larger as time progresses, and under this law ineffective patents or those which are not commercially prof itable lapse and cease to he a bar to further applications of the principle upon which they are based. The power of granting monopolies is subject to restrictions of both the United States and the various State constitutions. The ques tion as to how far a State may grant exclusive privileges to eonduct a business depends pri marily upon the Constitution of the State, and hence is a question of constitutional law outside the scope of this article. The Fourteenth Amend ment of the United Stales Constitution, which provides that "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, nor shall any State deprive any person of life, liberty, or property without due process of law," is a direct limitation upon the powers of a. State to grant monopolies indiscriminately. It does not, however, prevent a State from giving ex clusive privileges to conduct public callings upon the theory that power to regulate and control public callings was an essential right of the State, recognized at common law and not in tended to be destroyed by the Fourteenth Amend ment. Thus the State may grant the exclusive right to operate public ferries, turnpikes, rail road:, grain elevators, etc.