Theory of Fees. 
63 
to take it entirely out of private hands. An invention of great 
social importance, a change in the habits and standard of life 
of a class of people, or the rapid growth of a city, are all 
factors which may necessitate the peformance of certain duties 
by the state, in which, but a short time before, the element of 
public purpose was of little importance or almost wholly lack¬ 
ing. 
We may therefore have public institutions with all the vary¬ 
ing degrees of public purpose present, and the charges should 
then be diminished as the latter increases . 1 The greater the 
measurable differential gains to the individual and the more the- 
costs of these activities are increased, the higher ought the 
charge to be. 
On the other hand, the more the object of public interest 2 en¬ 
ters and the more the differential gains to the individual disap¬ 
pear, the lower the fees ought to be. 
In a progressive nation, that is, one whose economy is dy¬ 
namic, the tendency is to extend the fee system so that competi¬ 
tion prices will gradually be displaced by fees. Within the bound¬ 
ary which separates fees from taxes, there is a large field within 
which the size of the individual fees must be fixed. The power 
to do this must be left to the discretion and judgment of the 
legislator and the administrative official. By these the welfare 
and interest of the general public must always be kept in mind. 
Though complete remuneration may be justified as far as the in¬ 
dividual is concerned, yet the public welfare may demand that 
it be less. The Post Office does not exist only for the benefit 
of those who use it. Its influence goes farther. Its greatest 
service is perhaps the commerce it creates, “by bringing differ¬ 
ent sections into closer contact.’’ Street car service is of im¬ 
portance, not only to those who make direct use of it, but to 
1 Seligman, Essays in Taxation , pp. 296-7. 
2 “Public interest,” or “ public purpose,” here means that public wel¬ 
fare demands that the services furnished by the institution in question be 
as generally utilized as possible. In granting the privileges for which 
license fees are paid, the public purpose is therefore less, because the ex¬ 
press purpose of the license charge is usually to restrict the number exer¬ 
cising the privilege. 
