58 
Urdahl—Historical Survey of Fee Systems. 
all such cases the fee cannot exceed the value of the privilege 
or exemption granted by the public body. The payment, there¬ 
fore, is based on the theory of equivalents. 
But what is the equivalent which the liquor-dealer gets in 
return for the $200 or $500 license fee which he pays? Judge 
Cooley 1 and others say it is the expense which the state must 
undergo in order to regulate his business, and to estimate this 
expense “ it is reasonable to take into account all the incidental 
consequences that may be likely to subject the public to cost ” 
(such as prevention of resulting crime and disorder). Professor 
Seligman 2 does not go so far; but thinks that high liquor li¬ 
censes undoubtedly must be considered as taxes, because there 
is no way of finding out how much pauperism and crime is due 
to the liquor traffic, and how much to other things. With 
slight modifications this view has apparently been accepted by 
many of the modern writers on Finance. 
But is this view correct, if we accept presence or absence of 
benefit as the feature which distinguishes fees from taxes? 
Does the licensee get more benefit from the fact that the govern¬ 
ment spends more money to regulate his trade? It seems per¬ 
fectly evident that such is not the case. But the real benefit 
which a licensee gets from a license, may be ascertained in an¬ 
other way. 
Suppose a license charge is so small that it does not drive 
any competitors out of the business, and, on the other hand, does 
not result in an increase in the retail price of the commodity 
sold. It is then perfectly clear that the burden of the charge 
must fall on those engaged in the business. But suppose that 
the charge is so high that one half of those engaged in the busi¬ 
ness are compelled to abandon it. Assuming that the retail 
price remains unchanged, the first thought would be that those 
paying the license charge would still be the bearers of the bur¬ 
den. But a more careful consideration will show that such is 
not the case. On the contrary, it may often happen that those 
paying the license charge gain more than the amount paid, in 
1 Taxation, p. 598. 
2 Essays in Taxation , p. 281. 
