except where his physical body is. But it would seem that it is as easy to apply the doctrine of "implied" consent to an individual nonresident, as to a foreign corporation. If the mere fact that a corporation does business in a state constitutes a consent to the conditions which the state may properly and does impose, it is hard to see why the doing of business by an individual is not a consent to the conditions which the state may properly and does impose. The mere fact that the state may not properly impose conditions upon individuals which it may impose upon corporations is immaterial, as long as the conditions it does impose are proper. Furthermore if, according to Judge Hand's theory, a corporation is bound by conditions imposed by the state, not because it has consented to be bound, but because by voluntarily doing business within the state it is just and proper to hold that it is bound by the reasonable regulations of that business by the state, there is no good reason why an individual should not likewise be bound.

There are several grounds, however, on which it may be urged that it is possible to reconcile the decision in Flexner v. Farson with the principles discussed above.

The Kentucky statutes do not make provision for any form of substituted or constructive service upon residents in a proceeding in personam. In Kentucky the only form of service upon residents in such a proceeding is personal service. Does the provision for service upon the agent of a nonresident doing business within the state discriminate against nonresidents in such a way as to violate the constitutional provisions as to privileges and immunities? It would seem not. It is not necessary to put residents and nonresidents on an exact equality. Nonresidents have by virtue of their nonresidence a certain advantage over residents. It is more difficult to find them within the jurisdiction and to effect personal service upon them. Since the discrimination merely removes this advantage, it is not a violation of the constitutional provisions.68 The case of Ballard v. Hunter 69 is instructive on this point. In that case a proceeding in rem was brought in Arkansas for the sale of land in that state for nonpayment of taxes. Service was made

68 Guenther v. American Steel Hoop Co., 116 Ky. 580, 591, 76 S. W. 419 (1903). The opposite view was taken in Moredock v. Kirby, 118 Fed. 180 (C. C., W. D., Ky., 1902), and in Caldwell v. Armour, 1 Pen. (Del.) 545 (1899).

69 204 U. S. 241 (1907).

by publication upon the defendant, a nonresident owner. This service was in accordance with the statutes of Arkansas, which required personal service upon resident owners at least twenty days before the rendition of the decree of sale, but which provided for constructive service by publication of four weeks upon nonresident owners. It was contended that the statute discriminated against nonresident owners, in violation of the provisions of the federal Constitution. As to this Mr. Justice McKenna said: 70 "We have no doubt of the power of the State to so discriminate, nor do we think extended discussion is necessary. Personal service upon non-residents is not always within the State's power. Its process is limited by its boundaries. Constructive service is at times a necessary resource.'

971

Again, the Kentucky statute makes no distinction between causes of action arising within the state and causes of action arising elsewhere. To the extent to which the Kentucky statute attempts to allow an action for a cause of action not arising within the state, by service of process upon an agent, it is undoubtedly unreasonable and unconstitutional. But it would seem that there is no objection to holding that the statute is severable and that it is valid as to causes of action arising within the state, out of the business carried on within the state. The statutes relating to corporations frequently make no distinction between causes of action arising within the state and those arising elsewhere, and although under Old Wayne Life Association v. McDonough and Simon v. Southern Railway, these statutes have been held invalid as to causes of action arising outside the state, they are upheld as to causes of action arising within the state.

70

There is, however, a ground upon which Flexner v. Farson may

204 U. S. 254.

71 See Kane v. New Jersey, stated supra, p. 886.

Similarly it is not uncommon to allow attachment of the property of nonresidents only. This is not an unconstitutional discrimination. Campbell v. Morris, 3 H. & McH. (Md.) 535 (1797). It is not unconstitutional to allow the attachment of property of a nonresident without requiring the plaintiff to give a bond, although such a bond is required in the case of attachment of property of a resident. Central Loan & Trust Co. v. Campbell, 173 U. S. 84, 97 (1899); Marsh v. Steele, 9 Neb. 96 (1879). Compare St. Mary's Petroleum Co. v. West Virginia, 203 U. S. 183 (1906), in which it was held that a provision for service upon the state auditor in actions against nonresident domestic corporations and foreign corporations was not unconstitutional, although there was no similar provision as to domestic corporations.

be supported. The Kentucky statute provided for service upon an agent in charge of the business. The person served in Flexner v. Farson had ceased to be an agent at the time when process was served upon him. Service therefore was not in accordance with the terms of the statute, and hence was insufficient.72 The decision is therefore reconcilable with the principles advocated above; and it is to be hoped that the Supreme Court of the United States will not feel that it is precluded by the decision from holding that a state may validly provide for service of process upon nonresidents doing business within the state, by service upon an agent, in actions arising in the state out of the business carried on within the state.

LANGDELL HALL,

CAMBRIDGE, MASS.

Austin W. Scott.

72 See People's Tobacco Co. v. American Tobacco Co., 246 U. S. 79 (1918).

EFFECT OF AN INCREASE IN THE LIVING WAGE BY A COURT OF INDUSTRIAL ARBITRATION UPON VESTED RIGHTS AND DUTIES UNDER PREËXISTING AWARDS

IN

the present article I address myself to a subject which, so far as I am aware, has never yet received a comprehensive consideration by courts of industrial arbitration. The subject, brought into strong relief by recent fluctuations in the cost of living, has not, generally at any rate, been faced by legislatures. Sidetracked by industrial courts, it is yet vital to their efficient functioning. For the purpose of the present article, I may explain that under the legislation of the state of South Australia, the Industrial Court is precluded from awarding less than a living wage, that the lockout and the strike are punishable offenses, and that the court is authorized by statute to vary an existing award.

I will deal first, though briefly, with new cases. When an industrial court has raised the living wage, in the absence of such declaration being challenged (and the challenge being duly supported by evidence or argument), it may be assumed that the court will accept the living wage, and apply it in the new cases which come before it. It is necessary, further, to distinguish between the living wage and the minimum wage for an industry. The minimum wage may be a primary minimum (extending to unskilled laborers in an industry generally), or a secondary minimum (applicable in cases of skill, etc., in various grades of an industry). As regards the primary minimum, it will be apparent that, although the court may be at liberty to declare a wage higher than the living wage, there may be cogent reasons for the exercise of caution where the living wage has recently been raised materially. No argument is necessary to justify a loyal adherence to the living wage as a bed-rock level. It will simplify my later argument if I briefly resume the cogent reasons for maintaining, at any rate in new cases, preëxisting marginal differences between the living wage (or the primary minimum wage, if that be higher than the living wage) and the secondary minimums. The conditions of industrial organization to-day call for an increas

ing degree of skilled work. It is absolutely necessary to the wellbeing of a community that the skilled and competent worker should be encouraged in every way possible. If he is not, a premium is put on apathy, and the community drifts towards that "cult of incompetence" which, according to many distinguished authorities, is one of the regrettable prices paid for democratic institutions. In part, the need for differential rates of wage may be illustrated by the need for maintaining a reasonably high standard of output. The question of output to-day is even more important than the question of nominal wages. Again, while employers should, as far as possible, coöperate in maintaining a high secondary wage, they are subject, in the absence of legal regulation, to the danger that if they are just to the competent and skilled workmen, they may find themselves handicapped by the competition of some other employer who is less scrupulous. It is scarcely possible to exaggerate the importance of this limitation upon any disposition which the employers may have to regard special competence or efficiency by adequate additions to a living or primary minimum wage. In the early days of industrial legislation, and when Wages Boards were first introduced, it was not so much the intention of the legislatures to secure an adequate remuneration for skill, etc., as to preclude sweating. Prevailing opinion assumed that the skilled worker could take of himself. In the course of time, however, it has become increasingly apparent that a system of industrial regulation must pass far beyond the question of the elimination of sweating if national efficiency is to be maintained, or justice to the workers even approximately assured.

I pass from new cases to consider what adjustments, if any, should be made with respect to court awards actually in force at the time when the living wage is increased. Naturally, when the living wage is increased, the employees who are under an obligation still in force will desire that the revised standard should be immediately applied to them as well as in new cases. Briefly, the argument is that what a court awards is not so much a particular sum of money as so much purchasing power. When, through an increase in the cost of living, the living wage is increased, the employees are entitled to argue that the revised standard should be universally and comprehensively adopted if the spirit of preëxisting regulation is to be honored, notwithstanding the fact that the award under which