price for which men can safely sell goods, with the hope of remaining solvent, is the price fixed by the correct guess at what they can continually replace them, plus two additional sums. First, when goods are high, the amount below the normal, to which they are bound to fall; and, second, the amount that will carry them over the depressed period that is sure to follow all periods of inflation. What always happens when scarcity appears is that "the trade," indeed the whole world, insists upon the duty of increased production. As a result, wages and everything necessary in production advance. Costs sink to a second place. People having been frightened inevitably hoard, and finally when the joint effort of the world oversteps the market, there come the collapses called "panics," and thousands of business men are swept to ruin. Thus scarcity is the true mother of panic. It has always been the inherent nature of such transactions. It may be called "overproduction," or "inflation," or by any other name, but there must be insurance against it, or widespread disaster will follow. Most commonly the estimate of such insurance tends to be fixed too low in the fierce conflicts of free competition, not too high, and the estimated price is in reality a large part insurance against that which is inevitable and uncertain only as to time of its actual occurrence.
On the other hand, in the properly so-called public utility cases, where competition is eliminated, where the chief element is plant, and commodities but enter to a limited extent, and, where, as Mr. Justice Peckham points out,[1] "risk is reduced, almost reduced to a minimum," public regulation, however unsatisfactory, is at least possible. This is true even though commod-
- ↑ Wilcox vs. Consolidated Gas Co., 212 U. S. 19 (see page 49). 1909.
