56 Urdahl—Historical Survey of Fee Systems. 
marginal utility is fixed ultimately by the cost of production. 
But we have seen that the utility of an article is equal to the 
benefit which the individual obtains from the commodity. If 
this is so, then benefits to the individual and cost are identical. 
This must be equally true of service, whether the government or 
private individuals be the producers. But it may be held, that 
when the government produces a commodity or performs a serv¬ 
ice, it must necessarily be in the nature of a monopoly, unless 
the competition is free. To be sure, this is in some cases true; 
but the government does not necessarily charge a monopoly 
price for its services, and in so far as it does, to that extent is 
the individual paying a special tax instead of a fee. It is not 
said, therefore, that the charge is illegitimate or unjust simply 
because it has lost the character of a fee. Suffice it here to say 
that, in all cases where the government furnishes a service or 
commodity which it can reproduce indefinitely, the payment 
loses its character as a fee and cannot be justified as such the 
moment it exceeds the cost to the government. An illustration 
will explain this more fully: — 
It is not necessarily warmer in a room because the mercury 
rises in the thermometer, yet we regulate the furnace according 
to the height of the column. In the same way, the charge does 
not become a tax because it exceeds the cost of the service, but 
because the cost, like the thermometer, is an index of the amount 
of benefit or value which the public service yields to the indi¬ 
vidual. 
Experience has shown that there is a large number of enter¬ 
prises which may be termed natural or economic monopolies. 
In these the public has usually a deep interest, from the fact 
that the commodities or services supplied by them are, as a rule, 
public necessities. Public policy or public interest therefore 
requires that the enterprises be regulated by the government, 
or taken entirely out of private hands and managed as public 
concerns under government ownership. If this is the case, it 
is understood that the principal reason for undertaking the en¬ 
terprise is the general public policy or public welfare. 
But the individual citizen has an individual, private interest 
which is either promoted or not. Public welfare may demand 
