LIBRARY OF THE University of California. GIFT OF Received (Uc^jr. , i$9fr. • Accession No. y^Jl) Digitized by the Internet Archive in 2007 with funding from Microsoft Corporation http://www.archive.org/details/feesysteminuniteOOurdarich THE FEE SYSTEM IN THE UNITED STATES. BY THOMAS K. URDAHL, Ph. D. Part I. — Historical Review of Fee Systems. Part II. — The Present Fee System in the United States. Ph.D. thesis, University of Wisconsin, 1897. Compliments of th* Librarian. MADISON, WIS.: DEMOCRAT PRINTING COMPANY, PRINTER, 1898. THE FEE SYSTEM IN THE UNITED STATES. BY THOMAS K. UEDAHL, Ph. D. n Part I. — Historical Review of Fee Systems. Part II. — The Present Fee System in the United States, Reprinted from the Transactions of the Wisconsin Academy of Sciences, Arts, and Letters, Vol. XII. MADISON, WIS.: democrat printing company, printer, 1898. #$ OuX 'ft THE FEE SYSTEM IN THE UNITED STATES. TABLE OP CONTENTS. PART I. HISTORICAL REVIEW. CHAPTER I.— Theory of Fees. page. Definitions and Interpretation by Writers on Finance.— KM shades of opinion; from Bastable who denies the existence of fees as a separate category, to Schaeffle who would in- clude many taxes under this heading.— Points of similarity. 49 A. Benefit, or Service, as a Factor in Public Payments. — Benefit at first the controlling factor in all public charges. — Doctrine of equivalents applied in the United States to but two classes of revenues: 1. Special assessments; 2. Fees.. 54 B. Fees Distinguished from Tor .res. — Relation of fees to the cost of services rendered. — A fee is a counter-payment for a service or privilege. — It becomes a tax when it exceeds the value of the service or benefit conferred 54 C. License Fees. — Nature of license charges. — Incidence of license charges. — High liquor licenses not necessarily taxes. 57 D. License Fees Distinguished from Special Taxes 59 F. Fees Distinguished from Special Assessments. — Simi- larities and Differences. — Professor Neumann's contention regarding fees. — The practical distinction between fees and taxes 60 F. Public Purpose in Fees.— Justification of fees.— Public welfare and the institution which yields the service. — Con- siderations which should govern the imposition of fee-pay- ments. — Tendency of institutions to pass through the fee- collecting stage and become free public agencies 62 O. Method of Collecting Fees. — Directly through public offi- cials. — Indirectly by means of stamps 65 iv Urdahl — The Fee System in the United States. CHAPTER II.— General Survey of the Fee System in An- cient and Mediaeval Europe. page. Importance of European fee systems to a study of the fee system in the United States 67 A. Greece. — Court fees: prytania, epobilia, parastasia, paractabole. — Port and harbor fees. — Warehouse and wharfage fees. — Market fees 67 B. Rome. — Fees developed late. — Causes. — Temple fees and court fees, the earliest. — Sacrementa. — Municipal and ad- ministrative fees. — Fees for market privileges. — Tributes. — License fees. — State postal service 6£ C. Period of Charlemagne. — Development of toll system. — Market fees. — Sehutzgeld. — Fees from Jews. — Court fees. — The Missi, or representatives of Charlemagne, their fees and privileges.— Origin of clerks of court and recorders' fees. — Fees for the use of harbors, dykes, rivers, and roads. 71 D. The Transition from Mediaeval to Modern European Fees. — Result of the disintegration of Charlemagne's em- ■ pire. — Development of the regalia of temporal sovereigns. — Fees from foreigners: for use of scales, for permits, pass- ports, privileges, etc. — Court fees.— Fees collected by medi- aeval guilds. — Significance. — Church fees, their develop- ment. — Fees for burials, masses, baptisms, church rituals etc.— Fees of the Holy See 73 CHAPTER III.— Some Typical English Fees; Their Origin and Development. A. Liquor License Fee. — Ale-houses regulated first.— Fee for registration of license. — Gradual increase in amount. — New methods of gauging the license fees. — Evolution of tavern license fees 77 B. Peddlers'* License Fees. — Same changes as in liquor license fees.— Highest peddler's license charges, imposed by Pitt. . 7& C. Hackney Coach Licenses. — Origin of fee.— Increase in amount.— New standards of measurement 80 D. Other Licenses and Fees.— Dog license, cause of its intro- duction. — Game licenses.— Fees for use of harbors, light- houses, bridges, etc 80 E. English Court, or Administration, Fees. — Fees gauged by the length of the legal instrument. — Fee system ex- tended. — Relation of court fees to administration of justice in England 81 F. Conclusion 82 Table of Contents. y CHAPTER IV.— The French Fee System. Special Significance of the French fee system. page* A. Droits cV Enregistrement. — History of registration fees. — Origin. — Purpose. — Extortions practiced. — Modern fixed and proportional registration fees. — Revenue derived from this source. — Fees for state seal 83 B. French License Fees. — Origin. — Purposes.— Occupations li- censed. — Fee; how gauged 8(> C. Droits de Visite. Drogue et Epice.— Inspection of drug stores and spice shops. — Fees for same. — Legislation in force at present 89 D. Inspection of Mineral Waters 89 E. Verification of Weights and Measures. — Significance. — System of inspection fees 90 F. Droits de Garantie. — Compulsory assay of precious metals. — Fees for same. — How measured 90 G. Postal Fees. — History. — Changes in the tariff of fees. — Re- lation to the amount of revenue obtained. — Post office as an instrument of taxation 90 H. School Fees. — University fees. — Examination fees. — Other fees 92 /. Peages. — History of road and water tolls. — Extortions. — Abolition.— Modern equivalents 92 J. Patent Fees. — Origin. — Development. — Justification.— Re- ceipts 93 K. Droits de Voirie.— Importance of fees for permits to erect structures in highways, water courses, etc 94 L. Permis de Chasse. — Administrative machinery' of the state and revenue from fees 94 CHAPTER V. — Fees in the American Colonies. Colonial Fees at first the same as those in England. — Con- sequences. — Fees and perquisities of governors. — The amounts collected for land patents.— Illegal fees collec- ted. — Laws against the same. — Fee-collecting offices farmed out. — Results 96 A. Survival of the Idea of Regalia, or Royal Preroga- tives.— Distinction between colonial and later marriage li- 99 Other License Fees in the nature of Regalia vi Urdahl — The Fee System in the United States. CHAPTER V.— continued. page. B. Colonial License Fees. — Evolution of license legislation.— Indian traders, tanners, peddlers, etc.— Evolution of liquor license fee in Massachusetts. — Methods of gauging the fee. — Licenses in other colonies 101 C. Colonial Regulation of Fees.— Regulation of ferries, toll- bridges, toll-roads. — One great reform: Compulsory publi- cation of fee bill. — Surveyors' fees very important. — Their regulation by law.— Attorneys' fees subject to legislative enactment 108 D. Church and School Fees in the Colonies. — Church and state not completely separated.— Church fees for political as well as ecclesiastical duties. — Colonial schools supported in the same way. — Fees and higher educational institutions. 110 E. Colonial Inspection Fees. — Causes, origin, and development of inspection legislation. — Purpose of the inspection. — To- bacco in the South.— Beef and pork in New York. — Pot and pearl-ashes in all the colonies, etc. — Significance of the fees. 113 F. Miscellaneous Fees. — Pilot fees.— Harbor fees. —Assessors. — Tax collectors 116 G. Colonial Fees and Political Liberty. — English stamp taxes, levied under the guise of fees. — Struggles with colo- nial governors over fees of office. — Significance 118 H, General Characteristics of the Fee System in the Colo- nies 121 CHAPTER VI.— Fees in the Early Commonwealths (1787 to 1830). A. General Tendencies. — State intervention and regulation by means of special laws. — No uniformity in the system of the several states or of the Federal government 122 B. Some New License Fees. — Lotteries, peddlers, billiard tables, theaters, and others 123 C. Differentiation in Administrative Machinery. — Its influ- ence on the fee system. — Division of labor in public offices. 124 D. Relative Importance of Some of the Early Fees.— Fence viewers' fees, poundage fees, etc 126 E. Inspection Fees. — Inspection of exports: provisions, grain, lumber, bark, pitch, turpentine, lumber, spirits, etc.— In- spection of weights and measures. — General purpose of in- spection laws 126 Table of Contents. vii CHAPTER VI— continued. page. F. Regulation by Means of Licenses.— Attorneys' fees on ad- mission to the bar. — Physicians' licenses. — Licenses to auc- tioneers, pawnbrokers, retailers, victuallers, innkeepers, etc. — Amounts collected.— American liquor licenses, an American development 128- O. Road Tolls, etc.— Era of road, bridge, and canal building. — Regulation of tolls.— Result.— Ferry, bridge, and road licenses or franchises for which fees are charged 130 H. Tonnage Duties in the Nature of Fees 132 CHAPTER VII — The Middle Period (1830 to 1865). A. General Considerations. — Industrial revolution in the New World. — Result. — Growth of towns in size and importance. 13& B. License Regulations and Fees. — Increase in amount and number. — New standards of measurement: amount of stock, population of municipality, etc. — New pursuits requiring regulation and payment of license fee.— Variations in differ- ent states 133 C. Development in Inspection Fees. — A more elaborate sys- tem. — More complex schedules of fees. — State export in- spection more important than ever. — Sealers of weights and measures 135 D. New Inspection Fees. — Inspection of engines, steamboats, etc. — Causes 136 •E. Later Fees as Compared with Earlier Fee Schedules. — Apparent increase in size of fees. — Explanation. — Later fees in round numbers. — Causes 137 F. New Standards of Measurement. — "Folio" as defined by different legislatures. — Variation in different states. — Ped- dlers' license fees.— Liquor and billiard table licenses 138- O. Incorporation Fees. — A survival of the ancient regalia. — Blackstone's conception of the word franchise as compared with the modern significance. — Incorporation privileges and charters.— Increase in amount of fees charged for this priv- ilege. — Development of general incorporation laws. — Sig- nificance 138 CHAPTER VIII.— The Federal Fee System. A. Patent and Copyright Fees. — Development and changes in patent office fees. — Increase in the amount of the old and new fees introduced. — Copyright fees. — Changes 141 viii Urdahl — The Fee System in the United States. €HAPTER VHI-continued. page. B. Custom House Fees.— All custom house officers paid by means of fees at first. — Tonnage duties. — Standards of measure- ment. — Changes in same. — Attempts to change from fees to salaries.— Changes made by the McKinley bill 142 C. Licenses to Vessels. — Changes in amounts collected and standards of measurement.— System becomes more elabor- ate. — Inspectors, etc., paid salaries 144 D. Miscellaneous Maritime Fees. — Wreckers' and pilot license fees. — Shipping commissioners' fees 145 F. United States Court Fees. — Fees allowed deputy mar- shals. — Salaries reduced in 1853. — Maximum salaries fixed in 1878. — Recent changes. — All fees to be accounted for. . . 145 F. Land Office Fees. — Change from fee to salary system first applied here. — Maximum limit fixed by law. — History of changes in the fees. — Relation of land office fees to cost of land 146 O. Other Miscellaneous Fees of the Federal Government. — Consular fees. — Postmasters' fees. — Fees in District of Columbia, their development. — Excise license charges, not fees 147 CHAPTER IX. — The Evolution of the Fee System as Shown by the State and Federal Statutes. Tendency to Change from Fee System to Salary System. — Impossibility of adjusting any fee system to changing eco- nomic conditions. — Political and economic forces arrayed against change. — Line of least resistance. — Forces at work everywhere which will result in bringing all officers to accept salaries in lieu of fees. — Another line of investi- gation showing the same conclusion 118 CHAPTER X. —The Evolution of the Fee System as Reflected by the American Constitution. Constitutions as Indices of Public Opinion. — Constitutional provisions concerning illegal fees. — Chancellors and judges forbidden to receive fees. — Other courts under same inhi- bition. — Governors. — State officers. — County officers re- quired to account for fees of office. — Other provisions 150 Table of Contents. ix PART II.— THE FEE SYSTEM AS IT EXISTS AT PRESENT IN THE UNITED STATES. The two most important forces influencing the fee system. — page. 1. The modern industrial development. 2. Expansion of population and resulting expansion of markets 154 •CHAPTER I. — Modern Inspection Fees. A. Inspection for Protection of Consumer. — 1. Oil inspec- tion. — Variation in schedules of fees, — Standards. — Causes. 2. Commercial fertilizers. 3. Lime, gas meters, baking powder, etc 155 B. Inspection for Benefit of the Producer. — A modern devel- opment. — Grain inspection. — Oleomargarine, etc. — Due to expansion of population into the West 158 C. Inspection for Police Regulation. — New purpose in the inspection of hides. — Inspection of steamboats, vessels, mines, and buildings. — Inspection of cattle brought into a state, etc 158 D. Inspection of Weights and Measures.— Of decreasing im- portance. — Exceptions 160 E. Miscellaneous.— Produce inspection in Ohio. — Salmon in- spection in Oregon. — Milk inspection.— Tobacco inspection. — Municipal inspection regulations 160 'CHAPTER II.— License Regulations and Fees. A. Marriage Licenses. — Importance. — Nature of regulations in the different states. — By whom carried out. — Amount of fees. — Variations. — Success or failure of restrictions 161 B. Liquor Licenses. — Experiments in license legislation. — Li- cense-granting authorities: state, county, town, city. — Dual system. — General features. — Standards of measurement: According to (1) population; (2) total annual sales; (3) kind of liquor; (4) amount sold at the time, etc. — Variations of each in different states. — Druggists' liquor licenses. — Gro- cers' liquor licenses. — Drift of liquor-license legislation 163 C. Peddlers' Licenses. — Dual system.— Fee charged by both state and local authorities. — Other systems. — Fees vary: according to (1) amount of goods carried; (2) number of ani- mals used; (3) kind of vehicle; (4) character of territory; (5) nature of goods sold. — General characteristics 166 x Urdahl — The Fee System in the United States. CHAPTER II, Part II— continued. page. D. Licenses for Shows, Theatres, etc. — By what authority- granted; state; local. — Variations. — Destination of fees col- lected: State or local treasuries. — Standards of measure- ment: According to fl) population; (2) duration of license. — Variations in amounts charged in different states 168 E. Ferries. — Transfer of power to grant ferry licenses from state to local authorities. — Limits to amount of fees which may charged. — Nature of the licenses 170 F. Auctioneers'' Licenses. — By whom issued. — Variations in amount of fees. — Standards of measurement 170 O. Miscellaneous License Regulations. — For exporting oys- ters.— Oyster boat licenses. — Fishing licenses.— Water craft used in trade. — For selling fertilizers. — Detectives' li- censes. — Grazing licenses. — Local licenses. — Brokers, wharfingers, hacks, etc 171 CHAPTER III.— Incorporation Fees. Preliminary requirements. — Significance. — General characteris- tics of incorporation legislation. — Results 173 A. Charges for Incorporation Privileges. — Variations in amount. — Fee proportioned to amount of stock. — Length of charter, etc 174 B. Banking Privileges. — Bank examiners' fee. — Building and loan associations. — Charitable and educational associations 176 C. Insurance Companies. — Importance of regulation. — Amount of fees. — Examination fees. — Retaliatory charges. — Fees paid by foreign insurance companies 177 D. Annual Fees. — Anew development. — Significance. — Varia- tion in amount of annual fee 178 E. Abuses connected with Insurance Fees 180 CHAPTER IV.— Examination Fees. General drift of legislation. — Causes. — Certificates.— Occupations and pursuits for which required. — Fees for examinations. — To whom paid. — For what purpose, — Variations 181 Table of Contents. xi CHAPTER V. Court Fees. page. System antiquated 184. A. Registration Fees. — Forces tending to prevent changes. — New registration fees 185 B. State and County Court Fees. — Consequences of using fee system in lower courts. — Courts not self -supporting. — Re- form. — Colorado plan; Idaho plan; California plan; other schemes. — Results 186 C. Federal Court Fees. — Accounts kept of fees collected. — Amount of increase. — New act of May 28, 1896: Provisions; result 189 CHAPTER VI.— Revenue from Fees. A. Federal Government. — Per cent, of total receipts. — Signifi- cance. — Variations from year to year 191 B. Revenue from Fees in the States. — Variations in totals. — In sources. — Percentage of total revenues 192 C. Municipal Revenue from Fees. — Sources. — Significance in different cities.— Variations in amounts. — Percentage of total municipal receipts 196 D. General Trend. — Prospects of fee legislation. — One category of fees tends to diminish and ultimately disappear. — An- other tends to increase, becoming taxes. — Scope of the fee system extending 199 CHAPTER VII.— Legal Aspect of Fees. A. Evolution of Fees as Interpreted by the Courts.— Law dic- tionaries' interpretation. — Early decisions. — Text-book writers' views. — Relation of fees to taxes. — Fees and police power. — Recognition of the idea of special benefit. — Gaug- ing of fees. — Intent of law-making bodies and fees 200 B. Fees in Their Relation to Inter-state Commerce. — Theo- retical relation. — Earlier decisions. — Changed attitude in later decisions. — Indirect consequences of fee-legislation. — Attitude of courts at present 207 xii Urdahl — The Fee System in the United States. CHAPTER VIII.— The Pee System as a Social Force. page. A. The Fee- System and the Tramp Question 211 B. Fees in Police Courts, and Crime 214 C. Fees and Justices of the Peace 216 D. Fees of District Attorneys and the Administration of Justice 218 E. The Relation of Fees to the Divorce Problem 222 F. The Fee System and Political Corruption , 224 APPENDIX. Table I. — Showing License, Examination, and Inspection Fees in the United States 231 Table II. — Showing Incorporation Fees: — Banks, Insur- ance, Railroad, Telegraph, etc 235 BIBLIOGRAPHY 238 UNIVERSITY THE FEE-SYSTEM IN THE UNITED STATES. THOMAS K. URDAHL. CHAPTER I. THEORY OF FEES. Adam Smith, in a chapter entitled " The Revenue of the Sov- ereign or Commonwealth", 2 takes up in order the various insti- tutions on which the state revenue should be expended, and ex- plains how some of them can be made partially or wholly self- supporting. "As an example," he says, "highways, bridges, and canals can be kept in repair by tolls paid by the users. Courts of justice and institutions of learning can defray at least part of their expenses by fees." In his conclusion he says: " The expense of defending society, and supporting the dignity of the chief magistrate, are both laid out for the general benefit of the whole society. It is reasonable, therefore, that they should be defrayed by the general contribution of the whole so- ciety, all the different members contributing, as nearly as possible, in proportion to their respective abilities. The administration of justice may no doubt be considered as laid out for the benefit of the whole society. The persons, however, who give occasion to this expense and who are immediately benefited by this expense" may properly be called upon to defray it by particular contribution, that is, fees of court. Again, the expense of maintaining good roads "is most im- mediately and directly beneficial to those who travel or carry 1 A thesis submitted for the degree of Doctor of Philosophy, University of Wisconsin, 1897. 2 Wealth of Nations, Book V, Chap. I, Part 4. 4 50 Urdahl — Historical Survey of Fee Systems. goods. " The expense of these, as well as that of " institutions for education and religious instruction, may without injustice and with some advantage be defrayed by such particular members of society as are most benefited by them. " It is, therefore, clear that Adam Smith saw at the very out- set a plain distinction between taxes in the narrower sense, and payments such as fees, tolls, court costs, and charges, which may be called by the general term "fees." But this distinction between taxes and fees recognized by Adam Smith, was entirely unnoticed by Ricardo, Mill, and the other English economists succeeding him. Not until the doctrine of Smith had reached the Continent and been elaborated by the great German representative of his views, do we find the slight- est trace of the difference which he himself but faintly outlined. A German writer, Rau, 1 is the first to really put fees into a category distinct from taxes. The cameralist Justi, * who wrote at about the same time as Adam Smith, classified public revenues into (1) Domain, (2) Regalia, (3) Taxes, (4) Casual rev- enues. The latter included prices and payments for special privileges. Rau also divided the public revenues into four classes; domains, regalia, taxes, and fees: and defines fees (Ge- biihreri) in such a way, as to include many of the payments classed by Justi in the fourth category. Since the time of these authors no two economists have suc- ceeded in agreeing as to definition or content of this subject. The existence of such a category seems with one or two excep- tions to be generally accepted by economic authorities. The earlier writers generally treated fees partly as miscellaneous or casual revenues and partly, also, as direct taxes. Although Rau does not have the honor of being the first to recognize the separate category, as has been asserted by some writers, he was the first to apply the name Gebuhren to this category. He defined Gebuhren, that is, "fees," as "payments made on occasions when the individual citizen comes in a special manner into contact with a state institution or state court." 3 Stein, in 1 Allgemeine Steuerlehre, I, §§ 86, 227. 2 Finanzwiesenschaft. 3 Rau, Finanzwiesensehaft, I, 312. Theory of Fees. 51 his first edition, defines fees as "receipts of the state for ac- tivity in the special interest of individuals. " Both Rau and Stein, as is evident from their definitions, did not consider re- galia, (payments for lucrative prerogatives), as fees, but placed them in a distinct category. Stein, however, in his last edi- tion concedes that the regalia are a part of the fee system, but holds that they form a class of fees by themselves, entirely distinct. 1 Roscher 4 defines fees as "payments for individual govern- mental acts by the individuals who were indirectly the cause of the act. " And he limits this definition by holding that only such acts are governmental as are done for essential state pur- poses, that is, in the interest of law and sovereignty; and, fur- thermore, only such payments are fees as do not exceed, at least not greatly, the cost to the government of the services rendered. Schall 3 asserts that the distinguishing feature of fees is that they are connected only with those official acts which are per- formed for the realization of the essential state purposes, and that the payments by the fee-payers must be gauged by the value of the services of the public courts or officials. There is thus a new element introduced, that of making the size of the fee proportional to the service rendered by the government. Stein, Rau, and Roscher- asserted that the fees should be meas- ured by the cost, or expense, which the official act, in the inter- est of the individual, caused the government; and that the payment became a tax in so far as it exceeded this cost. Another element in Schall 's conception is that the quality of the official act determines whether the payment is a fee or not. Wagner 4 says a fee is a "charge arbitrarily fixed in amount 1 Pfeiffer, I, 295, Staatseinnahmen, says that "fees are collected from individuals for special benefits from those state institutions which the state would be obliged to maintain even if no revenue were derived from them, thus excluding all industries managed or established by the government for the sake of industrial profit." 2 Roscher, Finanzwissenschaft. Third ed., 98. 3 Schonberg, Handbuch, III, 105. * Finanzwissenschaft, II, 35. 52 Urdahl — Historical Survey of Fee Systems. and method of payment by the state, and collected from indi- viduals or groups of individuals for a special service rendered them by a public body, designed to cover the outlay of the government in the exercise of its functions in the public inter- est. " He draws a sharp line between fees and taxes, holding that every payment which exceeds the cost of the service to the state, is in so far a tax. But he says, the idea of service to the individual must also be taken into consideration, although he does not explain just what bearing it has on the question. 1 Max von Heckel 2 defines fees as "payments collected as a spe- cial remuneration for the official activity of public institutions, which are carried on or performed at the request of individuals, and limited by the state in degree and extent in accordance with the service granted. " And he explains that fees may be fixed by two standards: first, the payment of the cost which the services cause the government, and second, the worth or value of the service to the individual. He even goes so far as to hold that payments do not necessarily lose the character of fees by exceeding the value of the service conferred. Neumann 3 takes a still broader view of the subject and holds that "fees are payments which the state sovereignty exacts from individuals for services rendered in their interest.": and explains that they not only may exceed the value of the service to the individual but in fact should often do so ; that the ability of the fee-payer and other considerations should be the controll- ing factor in levying them. Schaffle 4 recognizes a general category which he calls tax- fees. These may be collected by the state from individuals on occasions when they make use of governmental agencies or insti- 1 Finanzwissenschaft, II, 40-41. Von Mayer defines fees as special duties to be paid on occasions when public organs or institutions are specially called upon or made use of. He agrees with Wagner in the main, and holds that the fee should as a rule be fixed a little less than the average cost of the service and should only partially cover the expense. — Worterbueh des deutsches Verwalt- ungsrechts, I, 462, 466. 2 Handworterbuch der Staatswissenschaften, V, 703. 3 Jahrbucher fur National Oekonomie, 36, 494. 4 Grundsatze der Steuer-politik, pp. 51, 454. Theory of Fees. 53 tutions which are of service to them. As a sub-class 1 under the fees he recognizes what he calls " fees in a more limited sense, " which he characterizes as compensation for the expense of ad- ministration. (Verwaltungs-kosten-vergutungen.) None of the French writers seem to have recognized fees as any distinct category. Not even Beaulieu 2 in his Science de Finance considers them as a separate class, but treats of these charges under other headings. 3 The Italian economist Cossa* gives some attention to them and defines fees, costs, and charges, as " the remuneration for special public services which are rendered to the private indi- viduals at their request. " We thus have all shades of opinion, from Professor Bastable, who denies the existence of fees as a separate category, to Schaefiie, who would include all the taxes on contracts and trans- fers, inheritance taxes, and so forth, under that heading. We have assertions that fees should be levied according to the ser- \ vice rendered, or according to the expense to the government, or according to the pecuniary ability of the fee-payers, or ac- cording to the principle of highest monopoly profit. All prominent writers on finance seem to recognize, first, the fact that the official activity may often further special individ- ual interests. But the concensus of opinion seems to be that public activity should not be carried on purely for the sake of such individual interests. All recognize further, that some payment should be made to the state when it incidentally con- fers special benefits upon certain individuals. How such pay- ments shall be determined, how their amount shall be gauged, and under what category in a classification of state revenues such payments shall be placed, are questions which are still open. ilbid., p. 496. 2 LeRoy Beaulieu. The early writer Parieu, III, 165, puts fees among in- direct taxes . 3 M. Besobrasof , in two articles entitled fitudes sur les Revenus publics, seems to recognize the essential difference between fees and taxes. See page 44 of article published in 1866: Impe>iale Acad£mie de Sciences, St. Petersbourg. 4 Taxation: its Methods and Principles, p. 36. 54 TJrdahl — Historical Survey of Fee Systems. A. BENEFIT, OR SERVICE, AS A FACTOR IN PUBLIC PAYMENTS. " In the first stages of development of the state," says Vocke, 1 M the possessors of power and the people stood opposed to each other, but were still held together by certain common interests. Agreements had therefore to be made from time to time, and whatever lay beyond the lines of common interest, had to be secured by certain counter-services." Thus benefit came to be the controlling factor in the imposition of all charges. The state idea appears for the first time in the organized constitu- tional state. This recognized that the state does not exist for its own sake, but for that of the governed, and hence that all state services could not and should not be paid for by special contributions. This paved the way for general taxes. But long after the system of levying taxes according to benefits received " had been abandoned in practice, it was still clung to as a theory. And even to-day people can be found who assert that taxes are or should be levied according to the doctrine of equivalents. But theory has now progressed so far that it is really in advance of practice. 3 The old idea of service and counter-service has been replaced by the modern theory of " equality of sacrifice " and " taxation according to ability to pay. " Benefit, however, is still an important factor in a large number of charges known by various names in dif- ferent countries. In the United States this element enters into two distinct classes of revenues, designated by the headings, special assessments and fees. In order to ascertain the scope and characteristics of these categories, we must compare them with other classes of reve- nue which they resemble, and with each other. B. FEES DISTINGUISHED FROM TAXES. Fees and taxes are alike in that they are both compulsory payments made to the state in order to enable it to carry on its functions. They are furthermore alike in that the amount of each is fixed by state authority. Both may be manifestations 1 Die Abgaben, Auflagen, unddie Steuer, p. 365. 2 Rosewater, Monograph on Special Assessments, Columbia College Studies, II, No. 3. Theory of Fees. 55 of the taxing power, because they are compulsory contributions arbitrarily levied by the sovereign. But a tax is a "one-sided transfer of goods or services"; 1 a fee is not. The latter is in the nature of an exchange or sale, in that there is special bene- fit to the individual, for which the fee is paid. The idea of benefit is of course present in a tax, but it is al- most wholly public benefit. The benefit to the individual may be great or small without changing the amount of the tax which , he pays. In other words, the benefit accruing to the individual - from a tax cannot be measured, and if it could, no system of taxation could be based upon it. Taxes are based on the indi- vidual ability of the tax-payer. It is no objection to a tax, ^ that the payer receives no benefit from the burden, nor does it change the nature of the payment if such is the case. While a payment ceases to be a fee the moment the special services cease. Particular advantage to an individual may exist in a tax, but that does not increase or diminish the share of the tax-payer; while, in the case of a fee, the particular advantage is the very reason and justification of the payment. Many writers lay em- phasis on the fact that the fee should not exceed the cost to the government of the particular services rendered to the individ- ual. Wagner and others maintain with very plausible argu- ments, that, as soon as a payment exceeds the cost of the serv- ice, just so soon does it cease to be a fee and becomes a tax. In some cases this is true; but cost is not always the stan- dard according to which fees may be gauged. It is applicable only where the government exhibits some positive activity for which the payment is made. In other words, it can be applied in those cases only where the value of the services resolves itself into, or is measured by, its cost. Value, as we know, is fixed by marginal utility. The utility of a commodity to an individual is measured by its uses, that is, by the amount of benefit which he thinks he is about to ob- tain from it. In all competitive enterprises in which the com- modity is reproducible at will, it is generally agreed that the 1 Ely , Taxation in American States and Cities, p. 6. 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 Theory of Fees. 57 that the service should be furnished for exactly what it costs, that is, that each individual pay for the special benefit he re- ceives, and no more, as in the case of our Post Office. The pay- ment then is a fee. The same public welfare may demand that the government derive as much revenue from an enterprise as possible. As an example may be mentioned the tobacco monop- oly in France, where the special tax is as easily justified as the sale of two cent postage stamps by our own government. We can therefore find all kinds of charges; from the pure taxes of monopoly, to the free goods furnished to the individual at state expense. C. LTCENSE FEES. Fees are not only paid for benefit actually received, but are often paid in anticipation of a benefit which is expected in the future. The latter is generally in the nature of a privilege. ^ As Professor Seligman puts it: 1 "The particular thing done by the government in return for a fee may be either the dis- play of some positive energy, as in furnishing a water-supply, or it may be simply permission to do some thing. The govern- ment may create direct utilities, or it may permit the individ- ual to create utilities; but in each case it demands a return for the privilege. " Fees are therefore not limited to charges which are fixed by the government according to the cost or expense involved, but they include a number of payments in which the cost is of minor or no importance. Such charges are popularly known as licen- ses, or license-fees. It is obvious that these cannot be measured by the cost to the state, because the privileges, immunities, or exemptions granted, cost, as a rule, almost nothing. The rea- jla^J son why cost cannot be made a standard of measurement in ' these cases, is because cost here does not correspond to the special benefit to the individual. The costs often amount only to the expense of making out the written instrument and con- veying the license; and this fact is often recognized by charging an extra fee for it and another fee for the license proper. In 1 Essays in Taxation, p. 278. 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 ■ 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. Theory of Fees. 59 increased business; because the customers of all those who were compelled to close their doors, will virtually be transferred by the high license to the surviving retailers. Under this assumption, it may thus happen that many of the high liquor licenses are not taxes at all, but fees; because they are payments for what may be termed partial monopoly privileges. This conclusion is amply illustrated by the fact that many of the owners of the large saloons in some of the great cities openly favor high li- censes in preference to low charges. This conclusion cannot be carried too far, however; other elements must be taken into consideration. If the charge is made high enough, it is very likely to result in an increased price and, in that way, to be shifted to the consumer. It then has all the characteristics of an indirect tax. But this throws no light on the question as to whether the charge is a fee or a tax. It may be a tax on the dealer, even if the consumer goes free. If the charge is in- creased indefinitely, it will ultimately become a tax either on the one or the other. When, then, the increase in the amount of the charge fails to drive any dealers out of the business; in other words, when it ceases to turn over to those paying the charge enough customers to counter-balance the payment, then the point is reached where the payment ceases to be a fee. The transition, therefore, of fees into taxes is brought about by the loss of the idea of service, or by the charge being made so great as to exceed the benefit conferred. D. LICENSE FEES DISTINGUISHED FROM SPECIAL TAXES. In special taxes the government attempts to do some special thing for the community, but the individual bearing the tax is not necessarily guaranteed a share in it. A property owner pays a special school tax, whether he makes use of the schools or not. Although there is some benefit derived from the special tax, provided he makes use of the schools, still that is not the reason or justification for its collection; while in license fees there is always a special benefit, the value of which the fee does not exceed. If the charge is greater than the benefit, then it becomes to that extent a license tax. When a charge is im- 60 TJrdahl — Historical Survey of Fee Systems. posed to carry on a business which before was open to anyone with- out a license, and it is not imposed to cover cost of regulation or other governmental expenses which are of real benefit to the licensee, then the charge is a license tax; and not a fee in the true sense of the word. E. FEES DISTINGUISHED FROM SPECIAL ASSESSMENTS. Fees and special assessments have so many points of similar- ity that most of the German writers have made assessments a. subclass under fees. Only one German writer 1 has placed them in any distinct category. Both fees and special assessments are based on the doctrine of special benefits. In both cases the payer receives an equivalent for his payment. Furthermore,, both are payments which in no way displace taxes or exempt from taxation. The direct tax will be exactly the same, whether an individual pays a heavy special assessment or num- erous and large fees during the year. Neither fees nor assess- ments are levied according to the ability of the payers. The objective features of the service rather than the subjective ability of the payer, must be taken into consideration. Due attention must, no doubt, be given in all fee and special assessment legislation to the considerations emphasized by Neu- mann 2 in his article entitled "Taxation according to ability to pay," namely, the effect of a high or low fee on the demand for the service; the relation of demand for the service to the supply of the same ; the relation of increased demand for a serv- ice to public health or general welfare; the relation of cost of a service to an increasing demand and so on. But none of these can be taken as a general guide, by which to regulate the amount which should be charged for a public service. None of them can hold the same place in fee-legislation that " ability to pay " does in tax-legislation ; nor can any characteristic or con- dition of the payer be made the criterion by which the size of fees in general can be fixed. 1 Neumann; Die Steuer und das offentliehe Interesse, pp. 327, 334. 2 Die Steuer nach der Steuerfahigkeit. (Jahrbiicher fur national- Oekonomie, 36, p. 499 . i XJNiVBRSITT 1 Theory of Fees. 61 la both fees and assessments the element of public purpose may be present in the consideration rendered as an equivalent. Neither is collected primarily to procure revenue to defray ex- pense of government, but both are levied normally to pay for the cost of services or improvements given by the government. But the differences are just as striking. Special assessments are levied on the owners of property in fixed local territorial districts for benefits accruing to the property as a result of pub- lic improvements; while fees are levied on no class in particu- lar, but on individuals, and are returns for any public benefits or services to the individual, whether it affect his personal prop- , erty, real estate, or anything esteemed of value. In special as- sessments the total sum to be collected is absolutely fixed and determined upon beforehand; while the revenue from fees de- pends on various circumstances, such as general prosperity, condition of markets, and so on. We have thus briefly summarized the distinctions between fees, taxes, and special assessments. It must be remembered, however, that in a large number of fees there is no practical method of measuring accurately the special benefit; hence the government is forced to fix the fees arbitrarily. The practical distinction will therefore be the intention or the motive of th e gov-/ ernment. 1 If it levies merely a counter payment for its estimate of the roughly measurable special benefit, then the payment is a fee; while, in case of a tax, it arbitrarily decides to use the opportunity of exacting some revenue without reference to the special benefit to the tax- paying individual. In drawing the line of demarcation between fees and taxes, it is not said that the charges should never be so high as to be- oome a tax. In fact it is sometimes desirable and proper that such taxes should be levied. Take a high liquor license as an example. There is no doubt that, if it be made high enough, it become a special tax; but it may be the very best kind of a tax, in that it is easily collected and discourages the consumption of spirituous beverages. Still, the distinction between fees and 1 So held in the case of Harmon v. City of Chicago (Sup. Court Rep., XIII, p. 306). 62 TJrdahl — Historical Survey of Fee Systems. taxes is of vital importance, inasmuch as each must be levied according to an entirely distinct set of economic and financial principles. A fee should be judged distinctly as a fee; a tax should be levied according to the principles of taxation. 1 P. PUBLIC PURPOSE IN FEES. Professor Patten 2 says : " The test of a good tax is that it creates more wealth than it destroys. If the courts, post office, parks, gas and waterworks, street, river and harbor improve- ments and the public works do not increase the prosperity of society, they should not be conducted by the state. " So the es- sential justification of fees must be found in the existence of many public activities and their effect upon individuals. The tendency of public activity in modern times is in two di- rections: (1), limitation; (2), extension. It is toward limita- tion in that all those public activities which are not actuated by the motive of public purpose, are gradually abandoned to private initiative; for example, the manufacture of gunpowder. The tendency is toward extension in that activities and institu- tions which at first were left entirely to private enterprise, are changed into public institutions or industries. The reason for the change is that the public has gradually acquired a greater interest in the institution, until finally it is deemed advisable 1 These distinctions between fees, special assessments, and taxes are essentially the same as those outlined by Professor Seligman in his Essay on the Classification of Public Revenues. But the general application of the theory of special benefit, especially in its relation to li- cense fees, is radically different from the view taken by Professor Selig- man; because he seems to forget that cost here cannot represent the meas- ure of the special benefit to the licensee. (Ibid., p. 281.) In the same way his contention, so frequently emphasized, that special benefit to the indi- vidual tends to disappear wherever the payment made therefor exceeds or falls short of the cost of the service, is, when analysed, simply a return to the old theory that costs determine the existence and size of fees. By re- fusing to recognize the existence of a special benefit where the charge does not equal the cost, Professor Seligman really makes cost the criterion; though he claims throughout that special benefit is the controlling consid- eration . 2 Dynamic Economics, p. 104. 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. 64 Urdahl — Historical Survey of Fee Systems. the entire city when the public welfare is considered; since rents are reduced, better sanitary conditions are obtained by the opening of suburbs, and so on. Finally, perhaps the most im- portant of all, the public schools are of value, not only to the pupils who gain instruction, but the welfare of the whole nation depends upon their activity. It is therefore justifiable to charge no fee for their use. In the same way the low postal charge on printed matter may perhaps be justified in the interest of edu- cation. The tendency in modern times is to increase the importance of public purpose and therefore to decrease the fees; in many cases to such an extent that charges entirely disappear. The sphere of public goods, or free goods, as they have been termed, is gradually widening. Free public schools, free public libra- ries, public parks, free concerts are, all of them, public institu- tions which but a short time ago were not free, but were gov- erned on the principle of service and counter-service; in other words, were fee-collecting institutions. Many others are chang- ing in the same direction. Already, strong pleas have been made for free public water-works, and lower fees in the admin- istration of justice, and even for free transportation. It is therefore plain that the principles and rules which must govern a system of fees are not absolute, but may and must change from time to time or place to place. In other words, they are historically relative to circumstances. They must be modified in each country so as to keep pace and be in harmony with the general development, with the legal and economic progress of the nation. A system of fees applicable to one nation may not be so to another. The foregoing throws some light on one phase of the theory of fees on which great emphasis has been laid by many of the German economists, namely : that the term " fees " should be restricted to such payments as are made for the services of in- stitutions which are absolutely necessary to the realization of essential state purposes. It is contended that only those insti- tutions are essential which tend to preserve or further the ex- istence of purely state functions. In this way payments made for such services as are furnished by the Post Office, the gov- Theory of Fees. 65 eminent telegraph, or railroads are supposed to be excluded from the category called fees. From what has already been said, it is perfectly evident that no hard and fast line can be drawn between essential state institutions and others. The in- stitutions which may be regarded as absolutely essential at one time, may not be so regarded at another; because the public in- terest or public purpose in the institution may be strong at one time and then gradually disappear. Thus Wagner has formulated his theory in such a way as to include under this heading, not only payments for services of institutions which are maintained for the realization of essen- tial state purposes, but also of institutions for the promotion of civilization and general public welfare. He sees fit, however, to exclude state railroads and other similar activities from this class; and designates the government receipts from these sources as income from industrial pursuits. 1 He thus tries to find a line of cleavage between public business and industrial undertakings, a line which it is impossible to draw; because the relation of the state to the various institutions is constantly changing. " The real consideration in the classification of public revenues, is not so much conditions affecting the action of the government or the kinds of business conducted by the government, as the economic relations existing between the individual and the gov- ernment. " 2 It is the relation of the special benefit which the public service yields, to the price paid for such benefit, which determines whether the amount paid is a fee, a price, or a tax. G. METHOD OF COLLECTING FEES. Fees may be collected either directly or indirectly. They are collected directly by officials appointed for the purpose. Very often the officials receive the fees as salary or remuneration of office, after the manner of most of the court fees in the United States. On other occasions they are collected directly by offi- cials and turned into the treasury from which again they draw a fixed salary. In some European countries the official is al- 1 Finanzwissenschaft, II, 41. 2 Seligman, Essays in Taxation, p. 293. 66 Urdahl — Historical Survey of Fee Systems. lowed to retain a certain per centum of all fees collected by him, so as to insure the rigid enforcement of the law. 1 There are a large number of services which are of so heterogeneous a char- acter that it is impossible to classify them definitely. In such cases direct collection is absolutely necessary. The indirect method of collection has become extremely im- portant in most civilized countries of to-day. This is by means of stamps. It must be evident at the very outset that all stamps are not fees. The very term " stamp-tax, " with which we are familiar, indicates that something more than fees has often been collected. The collection of taxes and fees by means of stamps is said to have originated in Holland, when that country was in the midst of its war with Spain; 2 and it was soon introduced into nearly every country in Europe. At present nearly every civi- lized country obtains considerable revenue in this way. These receipts include both fees and taxes which have the common property, that they can be conveniently collected by means of stamps. The advantages are, that elaborate computation by the officials is done away with; and the complicated system of book-keeping which this necessitated, is avoided. They are economical both to the government and the public. To the lat- ter, they save all the trouble and the time which a visit to a public official would involve. The computation and payment of stamps must be done by the public, and is therefore, as Roscher says, " a kind of self-government " ; but it is also accompanied by the disadvantages of self-government, in that it requires an 1 The political corruption which this method of collecting fees has re- sulted in, will be treated of subsequently. 2 In 1624 the authorities of Holland offered a prize of a certain sum of money to anyone who should provide a scheme for a new system of taxa- tion. The prize was awarded to the originator of stamps. Fouquet, dur- ing the Fronde troubles in 1651, introduced stamp- taxes in France, and the system was still further extended by Colbert in 1693. Denmark levied a stamp-tax in Schleswig-Holstein in 1657 and introduced it in the home country in 1660. Prussia learned to make use of the new tax in 1686, and England followed in 1694, with a general stamp act which took the place of the law imposing court fees. Russia, in 1699, was the last to adopt it. Roscher, System der JFinanzwissemchaft, p. 110; Stengel, W&rter- bitch der deutschen Verwaltungslehre, II, 544. Ancient and Mediaeval Europe. 67 elaborate system of laws fixing penalties for a violation of stamp acts, and providing nullifying acts in case documents are un- stamped. When individuality in public acts begins, and classes which may be represented by typical acts or measurements disappear, then the stamp must give way to direct collection. Von Heckel ■ says : " As a system of fees developes and differentiates, the fees on documents, as such, will gradually change to fees on official acts ; general fees will become special fees and the collection of fees by stamps will tend to disappear or be displaced by lump- payments. " As an example may be mentioned the Bank of Eng- land, which pays £60,000 a year in lieu of fees. CHAPTER II. GENERAL SURVEY OP THE PEE SYSTEM IN EUROPE. Attention has been called by various writers to the fact, that taxation in the modern sense of the word, is almost entirely a product or development of the last few centuries. Not so with the fee system. Payments which resemble and possess the na- ture of fees, may be found in almost every government of which we have any knowledge. Although, perhaps, no definite relation can be traced between our fees of to-day and those of Greece and Rome, still the close connection between our civilization and the institutions of the past, makes it imperative, that some attention be given to the history of the fee system in Europe. GREECE. Greece is clearly the first and foremost of the nations of anti- quity, not only in civilization but, in a certain sense, also in political capacitj T . Her institutions and laws were studied and utilized by the Romans and have even been imitated down to 1 Handworterbuch der Staatswissenschaften, V, 708. 68 Urdahl — Historical Survey of Fee Systems. the present. Her system of courts and their administration was at one time as efficient and elaborate as many in existence to-day. When the Athenian citizen brought his suit in a Greek court of justice, he was first required to deposit the pryta?iia, a sum of money corresponding to our docket fee, intended to cover the cost of the trial. In amount they were roughly graduated ac- cording to the size of the sum at stake. These prytania were •originally intended as the compensation of the judges, but were subsequently paid to the state, which in turn remunerated the judges with salaries. 1 If either party wished to appeal the suit to a higher court, it was required to deposit the paracatabole, a fee similar to the prytania. Costs, parastasia, were charged to the losing party, at the conclusion of a trial, and paid over to the winner. Besides this there were the epobelia, the nature of which is little known. During the Athenian supremacy court fees are reported to have been an important source of revenue, because all the allies had to take their suits to Athens for trial. Harbor fees were no less developed than the Greek court fees. As soon as a vessel entered one of the far famed harbors, on which the Greeks had expended so much care and money, it was met by the harbor master and required to pay its harbor fee. If it happened to be a merchant vessel, it was required to pay another fee for permission to unload at the public wharves and a ware-house fee for depositing goods in ware-houses. 2 . Furthermore, we find a developed system of market fees charged in Athens for permission to enter the public market, for permit to occupy a stall, and for permits to foreigners to sell. Here also were charged license fees for permits to quack doctors, jugglers, performers of various kinds, and prostitutes. The protection of the merchant-men of Greece required a large fleet of warships, which were supported by Athens. For the protection thus afforded, the allies were expected to pay an- nually a fixed tribute into the Athenian treasury. The Athenian tributes had therefore, to some extent at least, 1 Meier SchOnmann, Der Attische Process, II, 948. 2 Boekh, Saatshaushalt der Athener. Ancient and Mediaeval Europe. 69 the nature of fees granted for services. Taken as a whole, the Greek fee system was, like Greek civilization, far in advance of any other produced by the nations of antiquity, and may even be compared with those of the nineteenth century. ROME. The financial problem which confronted Rome and her people, after she had become mistress of the Mediterranean, was far different from that which the Greeks had met and partially solved. The coffers of Rome were filled to overflowing with the tributes and plunder of conquered nations. She was not there- fore compelled to devise schemes for making her offices self- supporting. Thousands of captives were each year brought home to be used by the state as slaves, many of them as clerks, recorders, and copyists in the public offices. 1 The state was thus enabled to furnish its services to its citizens for nothing, and as a result the fee system was comparatively unknown un- til long after Rome had reached its zenith. 2 A noteworthy ex- ception is in the Roman temples. 3 Many of these required the attendance of numerous priests and vestal virgins. The volun- tary contributions which were at first made by worshippers, becoming gradually compulsory and fixed by custom, were at last collected in the form of admission fees from all who wished to enter. For permission to approach the altar, a special fee was charged; and a permit to sacrifice required a third pay- ment into the temple-chest, or treasury. At the time of the great festivals and religious ceremonies many of the temples obtained large revenues from these sources. In civil cases* a fee corresponding to the Greek prytania originated very early in the history of Rome, and was called sac- ramentum 5 but later it was regularly known under its Greek desig- nation. The etymology of the word, sacramentum, shows that it was originally a pledge presented to the temple or, at least, en- 1 Mommsen, Romisches Staatsrecht, I, 239. 2 Seyffert, Diet. Class. Ant., p. 55. 8 Mommsen, II, 62-65. * Wagner, Finanzivissenschaft. II, 52. 'Mommsen, II, 65. 70 Urdahl— Historical Survey of Fee Systems. trusted to it for safe-keeping. At first it consisted in five sheep or five oxen according to the value of the object in dispute. These were commuted later on into money payments. If the sum in litigation was less than 1,000 drachmae, about $300, the fee was thirty drachmae, or I9. 1 When the enormous revenues from conquered empires began to flow into Rome, pressure was at once exerted to secure free serv- ices of various kinds. As a result, we see the citizens of Rome furnished with almost every kind of public services at the ex- pense of the imperial treasury. Increasing density of popula- tion necessitated the employment of more public officers, some of whom were paid out of the public purse, while others held honorary offices, with public slaves to do the work. The public Tabularius, corresponding to our Register of Deeds, or Recorder, employed a whole army of clerks, excerptores, who were either slaves or freedmen. 2 Still the custom of paying sacramenta had become so firmly fixed that it was continued even during the period of Rome's greatest prosperity. No other judicial fees appear to have existed for any period of time. Any citizen might prosecute a criminal trial at the expense of the state; but in case he did not succeed in getting the verdict of at least one-third of the judges, he was obliged to pay a fee in the na- ture of a fine. As soon as the streams of tribute ceased to flow into the imperial city, financial troubles began. Attempts were made to raise money in various ways. Vectigalia, 3 or taxes, and tolls of various kinds were levied. Fees were charged for the use of water- works, 4 when utilized for private purposes; although the public fountains in the streets were free. Permits to use sew- ers were paid for. Various administrative fees developed, in the form of charges for numerous services, real or imaginary, which were performed by the government. Probate fees, which at first were moderate, were exploited more and more, until it was at last declared that no will could be legal and be executed in 1 Seyffert, Diet. Class. A nt. p. 551. 2 Mommsen, I, 251-259. Humbert, I, 230. 3 Humbert, Essai, I, 407. 'Mommsen, I, 416-478; II, 1006. Ancient and Mediaeval Europe. 71 Roman courts which did not bequeath a legacy or percentage to the emperor. The magnificent Roman highways, although built at public expense, were to be repaired by the municipali- ties. To meet these expenses they levied road-tolls for their use. During the decline all fees were used as instruments of extor- tion and oppression. Accounts were rendered to the senate, but these were such merely inform. 1 Defalcations became uni- versal owing to the lack of administrative control; and, as one writer puts it, " Rome perished by reason of her finances. " 2 About the time of Trajan markets increased in importance from a fiscal point of view. Fees were charged for admission, for per- mits to occupy stalls, and other market privileges. At the time of Constantine we find fees paid for license to carry on certain occupations. This system once established was extended until, at last, fees were charged for the privilege of carrying on almost every known art and trade. C. PERIOD OF CHARLEMAGNE. The tax system of the Romans tended to disappear among the Franks, and was gradually replaced by the toll-system, which is said to have existed in Gaul at the time of the conquest. A manuscript of the year 681 names, among others, the following tolls: 3 pulveraticus, or road-toll; rotaticus, wheel-toll; ripiti- cus, river- toll; saumaticus, toll for pack animals; and so on.* The markets of the period, which were held at the great relig- ious or church gatherings under the supervision of the bishops, 5 and at the royal courts, were regulated by the king, who col- lected market fees for various market privileges. 6 The right to coin money was early made the occasion for the exaction of seign- iorage. This was often collected by and for the benefit of indi- viduals to whom the king granted the privilege. 7 The right to ^aboulaye, Essai sar les Finances des Itomains, p. 62. 2 G. Humbert, Essai sur les Finances des Bomains, I, pp. 166-167. 3 Waitz, IV, 46. 4 Brunner, Deutsche Bechtsgeschichte, II, 239. " Waitz, IV, 46, 92. • Waitz, II, 47-58. 7 Waitz, IV, 80-82. 72 Urdahl — Historical Survey of Fee Systems. fish and hunt were at first privileges attached to the ownership or possession of the soil; still the king had often these rights reserved to himself, and instances are not wanting where he granted these rights away in certain localities for fixed pay- ments. 1 When Charlemagne had consolidated his immense empire, he turned his attention to internal improvements. Bridges were built, roads laid out and improved, lighthouses established on the Gallic coast, harbors and dikes were made and repaired, and even a canal was planned and begun, from the Rhone to the Danube. With his efficient centralization of political power, he was able to levy and collect fees for the use of these improve- ments. 2 In time the repairs were required to be made by the localities while the fees still continued to be collected for the king. Pirates were brought into subjection and protection offered to merchants. For this they were required to pay fees roughly proportioned to their profits. Jews were also granted privileges and protection by a sort of license, Schutzbrief, for which they were charged payments in the nature of fees. 3 The well-known Wehrgeld of the middle ages was also of this charac- ter.* Fees for protection and privileges were also paid by mon- asteries and individuals, for whom the king appointed one of his lieutenants to act as protector. In earlier times there were even two protectors appointed, one against the Goths and the other against the Romans. Each was supposed to be recom- pensed for their services by their proteges.* In Charlemagne's courts of justice, presided over by his missi, or local counts, the presence of a recording scribe or clerk was required by law. He was appointed by the missi, and the court fees collected by him were divided between the judge, the notary, and the sheriff. In amount these fees varied according to local conditions. The fine prescribed by the capitularies was divided 1 Waitz, IV, 115. a Waitz, IV, 26. 3 Waitz, IV, 200-201; II, 55, 3-4. Payments culled Friedensgeld, partly in the nature of fees and partly in the nature of fines, were also collected. Ibid., II, 535. 4 Waitz, IV, 275, 295. ' Brunner, Deutsche Bechtsgeschichte, II, 51. Waitz, VI, 450-3. Ancient and Mediaeval Europe. 73 when collected between the state, the missi, and the complain- ing witness. 1 The early law of the Franks required no official recorder. His functions were performed by the servant or clerk of the judge, and any one who was able to write might serve in that capacity. As a result, there were no distinctively public documents, as distinguished from'private; and no fee or action of a recorder could make a private doeument public. 2 In Italy, however, the clerk or recorder became early a part of the court, and was just as necessary to its existence as the judge himself. The signature of the clerk gave a legal sanction to every document. D. THE TRANSITION FROM MEDIAEVAL TO MODERN EUROPEAN FEES. After Charlemagne's empire went to pieces, disintegration set in and the royal prerogatives and other vestiges of central- ized power were swept away. When Europe emerged out of the Dark Ages, entirely new conditions and customs had been formed and crystallized, and scarcely any relics of the past could be distinguished. The Feudal Lord who had absorbed many of the powers of the earlier emperors collected all he could get for the protection he afforded his dependents. The King, or sov- ereign, who was beginning to be recognized as the head of the state, became entitled to certain lucurative prerogatives which were in the nature of payments for diverse privileges. The treasures of the earth were his, and he might therefore charge a sum or a fee for the privilege of mining. The game in the forest and the fish in the sea were his property. Privileges to hunt and fish were thus lucrative prerogatives. Similar pay- ments were made for using public harbors, for rights to trade,, and numerous other privileges which belonged to the regalia of the king. Fees were paid for a large number of permits, for pass-ports, 8 for permission to foreigners to work at trades, to use the courts, and so on. 1 Altdeutsche Beichs und Gerichtsverfassung, 1, 170. Waitz, IV, 144- 2 Ibid, p. 527. 3 The modern passport fee was originally a payment for a personal .escort furnished by the lord, or the king, to merchants or travelers through a country which was supposed to be unsafe . At first right to furnish such 74 Urdahl — Historical Survey of Fee Systems. The state prescribed what weights and measures should be used, and possessed the standard by which all others must be gauged. 1 Thus we find " tronage " collected in England at a very early date from all foreigners who made use of the "Tron, " or great King's beam. 2 In the medieval law courts many fees and charges were collected which have either disappeared alto- gether, or else been transformed into their modern equivalents. An example of this is the fee long known as " epices " 3 which originated in a voluntary contribution, made by the winning party in a trial, to the judges. In course of time they became so customary that the judges regularly demanded and collected their epices before they would hear any case. Innumerable other fees, or rather taxes, of this kind were everywhere collected un- der various pretences. There is, however, one class of fees, the influence of which dur- ing the middle ages was so important that it requires special mention. This class includes all the charges made by the var- ious trades and commercial guilds for privileges and preferments. It was largely by means of these heavy fees and charges that the great mediaeval corporatioas were able to maintain them- selves, and prevent the number of master workmen from becom- ing too large. Most of the workmen were kept as apprentices in a subjection little better than slavery, because they were un- able to raise the money exacted by the guilds for promotion. The expenses of passing from apprenticeship to comradeship, and from comradeship to mastership, were enormous, especially if the money value of commodities and labor is taken into con- sideration. The following are some of the fees collected on such occasions:* a royal fee, fee for registration, reception fee, escorts belonged to the lord, as a territorial privilege belonging to the soil. When the times became more peaceful, the written passport took the place of the personal escort, and the gradually increasing power of the king led to the transfer of this power to him. Handworterbuch der Staatswis- senscahften, Supplement, 1897. 1 Waitz. IV, pp. 63-35. 2 Ashley, Eg. Hist. Eng., I, 21. 3 Cheruel, Dictionnaire de V Institution, p. 359. 4 Bianqui, Hist. Pol. Econ., p. 186. Ancient and Mediaeval Europe. 75 police fee, fee for opening shops, honorary fees to the dean and wardens, payment of the ushers and clerk of the corporation, gratuities to the masters who were called to the ceremony, often also fees in the nature of bribes to the judges. These guilds, however, were not allowed to exercise this power for nothing, but were often compelled to pay huge sums to the King for their privileges. In the same way the great colonial and commercial corporations of a later period paid large amounts to the King for the privilege of governing and often- times plundering the colonies. 1 The records of colonial misgov- ^rnment show that these opportunities were not neglected. The charges which indirectly proved perhaps the most burden- some of all, were the license fees which were paid for exclusive rights of various kinds, usually monopolies. The sovereign, always in need of money, would grant for a fixed sum the ex- clusive privilege to sell or manufacture, or trade in various articles. Sometimes these privileges were granted to court favorites, who farmed them out to others; and the latter then extorted as much as possible from the people for their own bene- fit. Many of these licenses became of immense importance and value. It is reported of Louis XIV that he granted a privil- ege of this kind to a courtier, supposing that it would amount to a few thousand francs at most; which, when investigated, was found to yield several hundred thousand francs. Numerous mediaeval monopolies were a direct result of the road, bridge, and river tolls levied on all goods transported from one locality to another. These tolls were often so numerous and large as to be prohibitory, and consequently an exemption from their pay- ment granted by the sovereign would lead to the establishment of a burdensome monopoly. 2 : The " joyeux avenement " collected at the coronation of each king of France were regarded as payments for the continuance of the rights and privileges held by the people under the former king. These charges origi- nated in the presents which in earlier times were given at the coronation ceremonies. 2 The number of toll places on the Rhine increased from nineteen, at the end of the 12th century, to sixty-four at the end of the fourteenth; on the Elbe there were thirty -five and on the Danube, in Austria, there were 76 Urdahl — Historical Survey of Fee Systems. Not only was a charge made for every service or activity of the state or its servants on account of or in the interest of any individual, but even the church had gradually come around to the doctrine of equivalents; or, in other words, "No service without a counter-service. M1 This condition, however, was not attained at a single bound. Gradually the church had changed from the primitive simplicity when it refused to accept any lands or other valuables, except money, until the time when it would accept anything of value,, from the last farthing of the starving beggar to the wealth and lands of a dying king. Very little stress was laid at first upon the doctrine of equivalents, but soon penances or pilgrimages came to be prescribed for the atonement of sin. Little by little these began to be commuted for money payments, from which it is only a step to the absolute power of the church to absolve from sin and its consequences. The sale of indulgences is nothing but a payment in the nature of a fee for a privilege or service. The old idea of voluntary contributions was almost entirely dis- placed by these counter-payments and taxes. 2 The enormous revenues of the Holy See were largely pay- ments of this kind for real or imaginary privileges, exemptions, and dispensations. State and church offices were secured only through payment of huge sums of money, which were simply fees collected for the privileges and honors conferred. Although there was no fixed tariff of these charges in Germany during the reign of Henry V still no political or ecclesiastical office was granted without obtaining at least a gift from the individ- ual so honored. 3 Although the local churches or their repre- sentatives were largely supported by tithes and revenue from seventy-seven toll places. In the middle of the 14th century the tolls collected from Bingen to Coblenz amounted to 67 per cent, of the value of the commodity transported. Handworterbuch der Staatswissenschaf- ten, Supplement, 1897, p. 943. 1 For a short account of church revenues see Handworterbuch der Staatswissenschaften, IV, 677. (Article by Edgar Loening.) 2 The hearth tax in England and the "Denarius St. Petri" in Scandina- via were originally in the nature of fees, but became burdensome taxes. 8 Waitz, VIII, p.409. Fees in England. 77 domains, fees or charges of this character still were not neg- lected. Charges graded sometimes according to the rank and j ability of the payer, sometimes fixed for each locality, were / paid for baptisms, marriages, burials, masses, and other church rituals and ceremonies. The last category of fees was retained even after the Refor- mation, and exists in most civilized countries at the present time. 1 As the division between the church and state becomes more marked, the tendency has been for the latter to take over a great part of these administrative functions, and collect the fees for the same. This change is still going on, and though gradual can be observed even now in most civilized counties. CHAPTER III. SOME TYPICAL ENGLISH FEES; THEIR ORIGIN AND DE- VELOPMENT. A. LIQUOR LICENSE FEES. At common law, permission to sell liquor was not a privi- lege, but a right which could be exercised by anyone, without state interference; nor was drunkenness a punishable offense until the time of James I. During the early reign of the Tudors, there was a steady increase of tippling, accompanied by abuses and disorders, due to the fact that the hostelries and ale- house were places of resort for playing dice, quoits, and other forbidden games. 2 The number of vagrants and idlers had in- creased enormously, owing to the disbanding of the army of Henry VII, and the breaking up of monastic establishments. It was found necessary to exercise some sort of control over ale-houses; so in 1503 we find power given to two magis- 1 Handworterbuch der Staatswissensohaften, IV, 674. 2 Dowell, History of Taxation in England, IV, 90. 78 Urdahl— Historical Survey of Fee Systems. trates in each parish to suppress them or to grant licenses, on receiving bond from the keeper for the maintenance of good order. Stringent laws against tippling were also enacted. But drunkenness continued to increase. So in 1710 a so-called stamp duty of Is was imposed on each victualler's license. Gradually the license fee was increased, until in 1815 in amounted to 4£ 4s. But it was found that this charge bore too heavily on the lower class of houses; therefore a change was made which grad- uated the license according to the rating or assessed valuation of the house in which the liquor was sold. The charge ranged from 2£ 2s for a house rated at less than 15£, to 4£ 4s for one rated over 20£. None of these licenses permitted the sale of wine, which in the sixteenth century was confined entirely to the taverns as distinguished from the ale-houses. The regula- tion of these did not begin till 1553, when it was found neces- sary to demand a magisterial license, because of the increased consumption of wine and " the great numbers of taverns set up in back lanes, corners, and suspicious places. " The power to license was given to local authorities, but the number of licenses which might be issued in each town was limited by law. The crown, however, continued to hold and exercise its prerogative of licensing taverns, until after the restoration ; and, further- more, the two Universities and one or two corporate towns possessed the right as one of their ancient privileges, the rev- enue from which went to the support of the schools. In 1710 a fee was levied in the form of a stamp, costing 4s, which was required to be affixed to all licenses, no matter by whom granted. The charges or fees for licenses were increased from time to time up to 1757, when the retail license was fixed at 5£. From this time on, all liquor licenses became more and more interrelated. The various kinds became differentiated, and distinct, and the amounts paid are increased, so that in 1825 a dealer's license would cost 10£, and a victualler's 4£ 4s. Uniformity was also attained between England, Ireland, and Scotland. Regulation was no longer the only consideration. Revenue, foreign policy, and commercial relations all influenced the amount and character of the charges. In 1840 the license charges were classified according to the Fees in England. 79 size of the town, or population of the county; while in 1870 the amount varied : first, according to the annual value of the house ; second, according to the kind of liquor sold; third, according to the quantity sold at the time; and fourth, according to the place, whether a theater, steamboat, railroad, and so on. Thi& process went on until, in 1888, there were no less than twenty - four distinct kinds of liquor licenses, many of them varying ac- cording to the rental value of the premises. 1 The change in the period for which licenses were granted is just as marked. At first it was indeterminate, subject only to the revocation by the licensing authority. Then they were granted for not more than twenty-one years, and finally, in 1757, were made annual. The qualification and requirements of the licenses tended to become more and more stringent up to 1830, when it was provided that no beer license should be granted ex- cept on certificate of good character, signed by six taxpayers of the parish and certified by the overseer. B. PEDDLERS. Shortly after it had been found necessary to regulate the sale of liquor by means of licenses, the same restrictions were ap- plied to peddlers. The same process of evolution took place in the latter as in the former case. The first licenses were granted free of charge, and needed only the signature of two justices of the peace to make them valid. Soon, however, a fee was col- lected for the privilege by the state, which was increased until in 1697 it amounted to 4£ for each peddler and 4£ extra for a beast of burden. These charges with slight modifications con- tinued in force for nearly a century. When Pitt imposed his shop tax in 1785, he also doubled the license charge for peddling. This charge was so high as to materially reduce the number of licenses; hence in 1789 the fee was lowered to the former amount. At this time the hawkers seem to have acquired a bad reputation for selling contraband goods and smuggling. Incon- sequence an act was passed which required from every applicant for license a certificate of character, signed by the clergyman of 1 Dowell, II, 205. 80 Urdahl — Historical Survey of Fee Systems. his home parish and two reputable residents. As the peddler became of less and less importance, the charge was reduced to 2£ for license to peddle on foot, and 4£ to peddle with a beast of burden. C. HACKNEY-COACHES. Another occupation which early came under the direct legis- lative control of parliament, was that of running hackney- coaches. After the custom of standing them for hire had be- come firmly established, these vehicles became so numerous as to seriously endanger the passenger and impede the cart-traffic in the narrow streets of London. 1 To remedy this an order was issued by the council limiting the number which might be al- lowed, and in 1637 a license was required to be obtained from the king's master-of-horse. No toll was required until the act of 1694 was passed, regulating the fees which might be collected, and requiring the owner of each hackney-coach to pay 50£ for a license for twenty-one years. The total number was limited to seven hundred, which practically created a monopoly of the business. Subsequently annual rentals were imposed and the number increased until there were one thousand licenses in force in 1777. This continued up to 1831, when free-trade in hack- ney-coaches was introduced. High licenses were however soon re-introduced and remained in force until the act of 1869 was passed, which charged 2£ 2s for four wheeled and 15s for two- weeeled vehicles. 2 D. OTHER LICENSES. Most of the other English license charges are comparatively modern, 3 having been introduced either by Pitt or his success- ors. Many of them were imposed for the purpose of obtaining revenue rather than for regulation. Of the latter may be men- tioned the dog-license, as distinguished from early dog-taxes. This regulation was the result of the hydrophobia panic in Lon- 1 Dowell, III, 42. 2 Dowell, III, 45. 3 Some early licenses were granted by the crown, and fees collected there- for. Hall, History of Customs Revenue in England, pp. 25 and 26. Fees in England. 81 don in the hot summers of 1864 and 1865. 1 At that time Lon- don was literally overrun with dogs, many of them ownerless, running at large in the streets and public parks. People were in mortal terror of being bitten, and feared to allow their chil- dren to go outside of the home inclosure. To give the police power to kill these wild dogs and make the owners responsible for the rest, a license fee of 5s was required to be paid by the owner for each dog. When once introduced it continued in force with slight changes down to the present time. The game license, in the modern sense of the term, is another of Pitt's regulative measures. Although there had been game laws as early as 1389, the object of which was " to prevent arti- ficers, laborers, servants, and grooms " from going hunting while " good Christian people were at church, " these early acts simply required property qualifications for obtaining a game li- cense; while Pitt's act of 1784 imposed a fee of £2 2s for each annual license issued. This was primarily intended to affect only " gentlemen;" 2 but these were able to evade it, making good use, however, of the penalties imposed to punish poachers. Licenses were also required of bankers, doctors, barristers, con- veyancers, proctors, auctioneers, pawnbrokers, jewellers, and others. These were very largely, although not exclusively, im- posed for revenue. 3 At present the most important sources of fees in England, from a fiscal standpoint, are the following: harbors, light-houses, bridges and ferries, turnpikes, trusts, markets and fairs, and the Bank of England. 4 E. ENGLISH COURT, OR ADMINISTRATION, PEES. The most significant part of the English fee-system to the student of American institutions, whether viewed from the his- torical, economic, or political point of view, is perhaps the court, or more broadly speaking, the administrative fees. The origin of these is doubtless identical with the origin of the English ju- dicial system. In the latter half of the seventeenth century 1 Buxton, II, 84. 2 Ibid., 1,284. * Statistical Abstract of United Kingdom, 1893. 4 Buxton, II, 205. 6 82 Urdahl — Historical Survey of Fee Systems. the direct collection of court fees was displaced by the use of stamps. At first they were confined to only a few instruments, their cost depending upon the length of the document, as meas- ured by the number of skins required. In order to protect the revenue, however, the number of words to the skin was limited by law, and the prolix legal verbiage was not allowed to be cur- tailed. One of the consequences of this was the abominable style of all early legal documents, and its effects may doubtless be seen in the legal phraseology of to-day. During the next one hundred years the stamp-fee system was extended, not only to all official or judicial documents, but also to many semi-official in- struments, such as bills of exchange, promissory notes, leases, mortgages, transfers, and so on. The judicial fees made it in the interest of magistrates and attorneys to delay and appeal and continue all cases as long as possible; and it was thus largely through their influence, that the law courts of England became a mere mockery of justice, and remained such for centuries. It was on account of the Eng- lish legal fee-system, perverted by the courts into a system of oppression, that Bentham directed his protest against law taxes. It was against the iniquities and abuses of this system, that Dickens wrote his Bleak House, which opened the eyes of the public to the actual condition of the administration of justice. F. CONCLUSION. Taken as a whole, the evolution of the English license fee- system may be said to be as follows : — At first regulation was undertaken by the state without any charge. Then a system of licenses was required, and a small fee was charged for the clerical work of making them out and recording. Gradually this fee was increased, sometimes to cor- respond to the value of the services granted; sometimes it be- came a tax levied purely for revenue, and, in the end, it frequently became so high as to be evaded or even openly op- posed by the people. The fee was then reduced, either on ac- count of its unpopularity, or because the point of diminishing returns had been reached. Either extreme usually leads to a reduction in the size of the fees, and this usually fixes the The French Fee System. 83 amount as it exists in the English legislation at present. Changes are of course in progress even now, but they are so slow as to be scarcely noticeable. CHAPTER IV. THE FRENCH FEE SYSTEM. The origin and development of the fee system of France re- quires special attention and study. In no other place has this source of public income been so much exploited and utilized as here. In no other state does it play so important a role in the system of finance, and in no other country has the " art of taxa- tion, " by means of numerous and heavy charges, originally in the nature of fees, been so well developed. A. DROITS D'ENRSGISTREMENT. The charges comprehended under the term registration fees, are undoubtedly the most numerous and important category in the French fee-system. In fact they may in a certain sense be looked upon as a distinctive product of the French civilization. Historically these charges are said to date back to the Greeks and Romans, who required certain documents, official acts, and the like to be filed with, or preserved by, some public officer. 1 The book or place where these records were kept was called in Latin " Regesta, " from which we have the word register. At first these registration charges represented simply the expense of maintaining the comptroller, or official, whose duty it was to ascertain the date and nature of the document presented for registration. The necessity for such control in France grew out of the frequent deceptions and frauds which were practiced, es- pecially by means of ante-dating or otherwise changing the dates of documents. It was therefore originally undertaken in the interest of individuals or families, to secure the priority of J Parieu traces them back to the tenth century. — III, 105. 84 Urdahl — Historical Survey of Fee Systems. mortgages' and authenticity to these and other documents, espec- ially to their dates. Registration did not, however, become a state institution until 1539, 1 when Francis I required all sales and transfers of real estate to be reported to an official, who was empowered to collect and fix charges or fees for this service. 2 But the original purpose of the charge was soon lost sight of, and it became simply a means of deception, or subterfuge, for the collection of heavy fc and oftentimes, progressive taxes. 3 Other charges, which apparently were of the same nature, were collected under various names. Among others may be mentioned the "Droits d'Ensaisinement", "Droits de Reserve", "Droits de Nouvel Acquit", "Droit d'Insinuation, " all of which were charged for the same ostensible purpose, and yielded con- siderable revenue, both to the royal exchequer and to the collec- tors. An act of 1722 fixed a new tariff of charges for these services, which tariff remained in force down to the Revolu- tion. This law distinguished between fixed and proportionate fees. The fixed charges varied in amount according to the rank of the parties concerned, as in marriage contracts; often also according to the nature and size of the document. Much injust- ice resulted from the fact that most of these fees were collected under obscure, incomplete, and in many cases, arbitrary laws and rules, which were interpreted by the collectors to suit their own interests. The worst abuse, however, may perhaps be ascribed to the vicious system of farming the offices out to subordinates for fixed sums. But, aside from the illegal ex- tortions which this resulted in, the legitimate and regular working of the law was such, that the fees — more especially the proportionate fees — bore more heavily upon the poorer classes than upon the nobles and the clergy.* The modern French legislation on the subject of registration may be said to date back to 1790, when all these heterogeneous elements were united into one great category called "Enregist- rement. " The same edict extended the scope of the subject, in 1 Clamageran, Histoire de VImpdts, III, R. 2 Cheruel, Dictionnaire, I, 353, 506. 3 Parieu, II, 105-106; Vuitry, I, 462. 4 Parieu, III, 108. The French Fee System. 85 that it required all acts of notaries and other court officials to be registered, and fees to be paid for the same. Furthermore, the whole general subject was divided into three great classes. The first class was made to include all acts or documents which concerned or dealt with known values, and the fee for registra- tion was made proportional to the value. The second contained all acts concerning objects or matters having no definitely- ascertained value, such as marriage contracts, wills, and the like. The charge on these was graded in amount, according to the income of the contacting parties, which in turn was esti- mated according to the value of their place of habitation. The last class included all merely formal acts, on which fixed charges were levied. This classification has remained essentially the same down to the present day, 1 but the administrative ma- chinery has been improved, especially during the revolutionary period. A Director General was then for the first time placed in charge of all verifiers, receivers, inspectors, directors, and other officials scattered over the various localities. 2 This centralized control and direct responsibility of subordinates to superiors has resulted in the efficient and economical adminis- tration of the entire system. The edict of 1789 created greater regularity and uniformity among the different charges than had ever existed before, but was soon followed by a whole series of changes, among the most important of which is the abolition of the antiquated and use- less feudal dues. The registration fees have been gradually in- creased, with the avowed purpose of increasing the receipts, un- til the enregistrement has become recognized in France as one of the most important sources of revenue. The system has been extended, until it includes almost every legal and extra-legal document and contract. In fact every document is supposed to be registered, unless it is expressly declared exempt in the law. New objects of registration have gradually been added to the list and new methods of measuring charges have been adopted. As an example may be cited the fees for registration of articles 1 Block, Dictionnaire, p. 1013. 2 Parieu, III, 110-134. 86 Urdahl — Historical Survey of Fee Systems. of incorporation, which, at first the same for all, were by the act of 1872 made proportional to the amount of capital stock. At the present time the fixed fees vary from one-half to one hundred francs, according to the nature and importance of a document. In this category may be mentioned powers of attor- ney, receipts, protests, marriage contracts, transfers of prop- erty, and so on. Preportional fees are usually based upon the face value of the document, and vary from one-tenth of one per cent, to ten and one half per cent. Among other fees classed with the enregistrement are the charges made for grants of nobility, naturalization decrees, per- mits to foreigners, for impressions of the state seal, and the like. These " Droits de Sceau, " as they are called, have been in use from very early times; and are based on the principle, that acts emanating from a judicial authority should be provided with the seal of that authority before they are executed. The following acts, among others, require the state seal to make them valid: letters of transmission or confirmation of title, certificates of majority, acts concerning changes of name, naturalization, ad- mission to domicile, marriage dispensations, and the like. The income to the state from registration charges has in- creased with marvelous rapidity. The total annual receipts be- fore the Revolution have been estimated at twenty million francs, and the cost of collection averaged about thirteen per cent, j 1 while in 1891 the revenue from this source reached the enor- mous sum of five hundred and forty-four million francs. The significance of these figures lies mainly in the fact that almost all of these charges originated as fees, but have gradually been increased until many of them are pure taxes. B. FRENCH LICENSE FEES. Although some of the so-called registration fees are in reality license fees, still there is another distinct class of charges which may properly be placed in this category. The edict of 1577 2 is the first law which required wholesale and retail dealers in in- 1 Handworterbuch, der Staattswissenschaften, V, 378. 2 Parieu, II, 273-274. Block, Dictionnaire de V Administration, p. 1412. The French Fee System. 87 toxicating liquors to obtain a license before they could carry on their traffic. According to this law the fee or license charge was paid once for all; and was not collected periodically, as is usually the case at present. The transition to the system of annual licenses, based upon the annual payment of the license fee, took place about 1630 ;* when a law was passed which re- quired all brewers and dealers in wine, cider, perry, and other drinks to pay a fee annually and obtain a license. Before 1789 the fee collected from saloons and similar resorts was very small, its principal object being to determine the ex- istence and location of the places which especially required po- lice supervision and surveillance. Many of the charges were levied by local authorities and were therefore widely different, being continually subject to change. But there were a great many extra fees which had to be paid before the privilege sought for could be obtained; among others may be mentioned the gaugers' fees, liquor inspection fees, and others of the same nature. The revenues from these were generally farmed out, and, as a result, these extras often amounted to more than the license fee proper. 3 All these charges were abolished during the Revolution, but re-appeared soon after under their modern appellation, " Droits de license, • which were at first required only of distillers. The law of 1814 placed brewers under the same requirement, and in the following year saloon keepers 3 were also required to pay an annual license fee for the privilege of selling liquors. The license however soon lost the character of permission or authorization which had at first been attributed to it. A law passed in 1851 made the grant of the license depend upon the assent of the pre- fect; but this provision was repealed in 1880. At present the most important condition to be fulfilled is the payment of the fee, which varies in amount according to the kind of business. The brewer's license fee depends upon the department in which it is located, and runs from sixty to one hundred francs; while the fee for liquor sellers' licenses is graduated according to the 1 Say, Dictionnaire de Finances, II, 468. 2 Clamageran, Histoiri de VImpdt en France, III, 75. 3 Ibid., I, 417. 88 Urdahl — Historical Survey of Fee Systems. population of the commune in which the business is to be con- ducted. The minimum fee of twelve francs is charged in com- munes having a population of four thousand or less; and in com- munes whose population is less than six thousand, the fee is sixteen francs. The fee gradually increases with the population up to forty francs, which is charged in all places having a popu- lation of over fifty thousand. Wholesale liquor dealers pay a fee of one hundred francs; and distillers' license fees vary from twenty to one hundred francs, according to the population of the communes. The total receipts from all brewers' and dealers' licenses amounted in 1889 to 9,514,482 francs. One of the peculiarities of the French liquor license legislation is that the fee is charged for all restaurants, hotels, etc., whether intoxi- cating liquors are sold or not, hence is not confined to the liquor traffic. A law dated April 28, 1816, required all manufacturers of playing cards to obtain a license and pay a fee, and three years later an act was passed which granted the right to manufacture sulphur on payment of a fee of twenty-five francs. Before that time the state had a monopoly of the business of manufacturing gunpowder. In 1837 another act was passed, which compelled each refiner and manufacturer of sugar to obtain a license at a cost of one hundred and twenty-five francs, and in 1873 the same provision was extended to manufacturers of vinegar and acetic acid, with the exception that the license fee was only twelve and one half francs. Another business which has long been subject to license regu- lations is the carrying trade, whether on the public highways or on private railroads. The first act dates back to 1817, and con- tinued in force down to 1873; when an amendment was passed which gauged the fee according to the number and kind of vehi- cles employed. Railroads were required to pay 6.25 francs per car, as were other four-wheeled vehicles, while two-wheeled carts pay only 2.25 francs each. These charges are very much lower than those collected under the old law. Dray and freight wagons are also required to obtain a license and pay two francs each year for a plate, which must be nailed on a conspicuous place on the wagon. The French Fee System. 89 C. DROITS DE VISITE (DROGUE ET tfPICE). These fees are collected to cover the expenses of the annual inspection of drug and spice stores, in order to test the quality of goods offered for sale. This inspection has been required from a very early period. A decree dated August, 1536, placed this duty upon the doctors of the faculty of medicine in the University of Paris, but no record can be found of any fees col- lected for this service. During the Revolution another act was passed, which required all pharmacists and druggists to submit to aperiodic inspection; and subsequent consular decree compelled the payment of a fee for each visit of the inspector. The receipts from this source went to the support of the inspectors in each de- partment. The result was, that the receipts exceeded the ex- penditures or cost of the service in some places, while in others there were large deficits, which the consul general refused to make up. It naturally followed that the law was badly executed in many places. To remedy this state of affairs a new law was enacted in 1866, which requires all the fees to be paid into the state treasury, out of which all the expenditures under this head for the entire country were taken. At present each pharmacy is required to pay six francs per visit and each druggist or dealer in spices pays four francs. The inspection is undertaken in the interest of public health, and is, therefore, in essence a sanitary measure. D. DROITS DE INSPECTION DE FABRIQUES ET DEPOTS D'EAUX MINER- ALES. The inspection of mineral waters is another sanitary measure which dates back to the old regime in France. In 1823 an ordi- nance was passed to the effect that ail manufacturies and reposi- tories of mineral waters must be inspected at least once a year. The fees collected for this were likewise a part of the revenues of the departments at first, but were afterwards transferred to the state treasury. After numerous laws and decrees regard- ing the amount which might be collected, the fees were finally abolished and the office made unsalaried; as it was understood that the reputation which appointment to this position con- ferred on a physician, was sufficient reward. 90 Urdahl — Historical Survey of Fee Systems. E. VERIFICATION OF WEIGHTS AND MEASURES. This service was of very great importance during the intro- duction of the metric system after the Revolution. In amount the fees vary from five centimes to five francs, according to the size or quality of the scale or measure to be inspected. The system is centralized and uniform for the entire country. The inspectors are paid salaries and the fees are turned over into the treasury. The scales and measures are required to be inspected each year, every commune or department having one or more regular inspectors to perform this service. F. DROITS DE GAR ANTIE. " These are assayers' fees, or charges made for ascertaining the amount and quality of metal contained in objects made of gold or silver. The first edict, dated 1579, provided for this service and established the fees, which were at that time termed "de remede. " The revenue from this source was farmed out, which made the charges very obnoxious to the people, more especially because the assayers had the right to enter and examine the houses and factories of merchants and jewellers. In 1791 the whole system was abolished and freedom of trade established in gold and silver wares. But the numerous abuses which this resulted in, and the important source of revenue which the state found itself deprived of, soon led to the reintroduction of the old system with its compulsion. The act of 1873 is the basis of the present legislation on the subject. The fees vary ac- cording to the amount, quality, and kind of metal contained in the object inspected, namely 37.50 francs per hectogramme of gold and two francs per hectogramme of silver. The total revenue derived from these fees in 1888 amounted to 4,611,531 francs. G. FRENCH POSTAL FEES. 2 It has been asserted that the French postal system took its origin from the system of messengers which the University of 1 Parieu, III, 423. Say, Dictionnaire des Finances, p. 306. 2 Parieu, 111,281. The French Fee System. 91 Paris established in the thirteenth century. These messengers were primarily for the purpose of carrying the letters and merchandise of the professors and the students at the Univer- sity of Paris. These messengers, however, soon carried mail for others also, and, protected by royal favor, the system grew into a great monopoly, from which the University derived con- siderable revenue. In 1546 Louis XI issued an edict, estab- lishing regular postal stations, with relays for messengers, thus creating a state postal system, which competed to a certain ex- tent with the University messengers. This continued up to 1673, when the University was given an annual indemnity in lieu of the revenues from this source. From this time on, the state had a monopoly of the business, which was farmed out to different parties up to 1791. The postal fees collected before the Revolution were very complicated; because an attempt was made to vary the charges not only according to the distance, but also according to the weight and the number of sheets con- tained in the letter. A letter sent from Paris to Marseilles cost at one time as much as two francs and two centimes in postage. The last postal tariff which was made proportional to distance was that of 1827, according to which France was divided into nine zones and postal rates fixed for each zone. This system remained in force up to 1848, when the National Assembly adopted the uniform rate of twenty centimes for all letters weighing seven and one-half grammes or less. Under this system the amount of mail matter carried, increased enor- mously, but the immediate effect of the law was to decrease the amount of revenue derived from the post office. After the Franco-German war, France found it necessary to utilize the post office as a means of raising revenue; and, to do this, the postage on letters weighing ten grammes or less was increased, by the law of August 24, 1871, from twenty centimes to twenty- five. This tariff remained in force down to 1878, when a law was passed reducing the charge to fifteen centimes for letters weighing fifteen grammes. 92 Urdahl — Historical Survey of Fee Systems. H. SCHOOL FEES. The University of Paris derived for a time considerable rev- enue from the postal system operated by it; still its income was never so large, but that it was found necessary to collect numerous fees of many kinds from its students. In the first place, there is a quarterly matriculation fee of thirty francs collected from students in all departments. Other fees vary according to the nature of the studies pursued, or degree for which the student is working. Furthermore, there are numerous examina- tion fees, varying in amount, besides heavy fees for certificates of aptitudes. For the degree of LL. D., these fees aggregate thirteen hundred francs. According to the law of 1844 the fees for this degree were fixed at sixteen hundred and sixty francs; while the fees required for obtaining a simple license, amounted to eleven hundred francs. "With this schedule of charges the University obtained two hundred and sixty thousand francs in 1862. There are many other examination and school fees levied throughout France. As an example may be mentioned the fee for a teacher's examination, which is ten francs for a lower grade, and twenty francs for a higher. 1 I. PEAGES. These are pecuniary charges collected for the use of the means of transportation and locomotion, such as canals, roads, rivers, and bridges. They are said to date back to Charlemagne, who attempted to prevent the imposition of new peages. They mul- tiplied very fast under feudalism, and soon lost their early characteristic of being payments designed to cover the expense of repair and maintenance of the roads and water courses. The lords who collected these tolls were for a time supposed to be personally responsible for the safety and condition of the high- ways. 2 The nobles and clergy were exempt from paying these fees, and, as early as 1353, the same exemption was extended to ^arieu, III, 415-417. Say, Dietionnaire, p. 222; and History of French Universities. 2 An ordinance of 1561 imposed upon the collector the obligation of keep- ing his road in repair. Cheruel, II, 962. The French Fee System. 93 members of Parliament. 1 Complaints were repeatedly made against the numerous exactions practiced as peages. As an ex- ample it is reported that thirty such tolls were collected on thirty- six leagues of road outside of Paris. 2 The peages were abolished by a law of March 15, 1790, but were shortly afterward re-established under the name of "Oc- troi de Navigation. " These, like their predecessors, were al- most all taxes, their original purpose having been entirely lost sight of. The old idea still exists in the bridge and ferry tolls which are collected throughout France. Bridges, ferries, and similar means of transportation over navigable waters, were con- fiscated by the law of November 26, 1798; and fees were, for a time, collected for the use of the state. 3 Afterward it was de- cided to grant ferry privileges for limited terms of years to the highest bidder, the fees or tolls having previously been fixed by law. The grant was usually made for three, six, or nine years. J. PATENT FEES. The fees connected with the French Patent Office, are per- haps as modern as any in the French system. These origi- nated in a law passed by the National Assembly on January 7, 1791. The patent rights which have been granted by the last kings under the old regime were in the nature of special mo- nopoly grants, rather than patent rights in the modern sense of the word. The law of 1791 fixed the patent fees at 360 lrancs for five years, 862 francs for ten years and 1,562 francs for fifteen years. An act of 1844 changed the charges to 500 francs for five years, 1,000 francs for ten years, and 1,500 francs for fifteen years. The number of patents issued has been growing, resulting in a correspond- ing increase in the amount collected as fees. In 1885 the re- ceipts from this source were no less than 2,045,000 francs. The comparatively high patent fees of France are justified by French 1 Vuitry, I, 120. 2 Chamageran, Histoire de Vimpot en France. 3 Hock, Finanzverwaltung Frankreichs, pp. 428-432; Say, Die- tionnaire de Finance, p. 466; Block, Dictionnaire; Pariu, III, 400. 94 Urdahl — Historical Survey of Fee Systems. writers, for two reasons: first, in order to raise funds to de- fray the expense of maintaining the patent office; and, secondly, to serve as a check against numerous and indiscriminate ap- plications for patent. K. DROITS DE VOIRIE. l These are charges for permits to erect signs on public high- ways or streets, also for the privilege of erecting porticos, bal- conies, verandas, and similar structures on the streets. Charges for permits to erect bath houses in rivers, for permits to have news stands on streets, wharves, and other places, and many other similar privileges belong to that class. Before the Rev- olution these fees formed part of the seigniorial dues, and were often farmed out by the lord or the king. At present they are of increasing importance, especially in the cities, as they can be allowed or discontinued at any time, if the public welfare seems to demand it. L. PERM1S DE CHASSE. 2 These are fees for license to hunt and to carry hunting arms, and are of considerable importance. At one time they yielded nearly two million francs of revenue into the treasury. Numer- ous laws have been enacted regulating this privilege, and for a time, after the Revolution, the right to hunt was free to all ; this caused such destruction of game that the old regulations were enacted. In 1871, the fee was fixed at thirty francs to the state and ten francs to the commune; which was found to be so high as to cause a diminution in the receipts, and, in 1875, the charge was reduced to eighteen francs for the state and ten for the commune. The above-mentioned fees are simply a few of the most im- portant classes in the French fee system. There are of course many others, of which no mention has been made ; some of them, like the court fees, of very great significance. Many others are 1 Say, Dietionnaire, p. 1532; Hock, p. 425. 3 Parieu, III, 408. The French Fee System. 95 levied and collected by the municipalities or other public bodies, while still others are semi-private in their character. Enough evidence has been given on each of the classes out- lined, to show how the charges that originated as pure fees, were invariably increased, especially under the old regime, until they became extortionate taxes. The French Revolution, as has been demonstrated, brought about the complete abolition of the charges which had become so obnoxious. But later many of the charges were re-enacted, and gradually increased. The only difference between the earlier and later laws, so far as the fees are concerned, is that the latter charges are designed to produce the highest monopoly returns. As soon as the fees are made so high as to result in a diminution of the revenues, there follows very frequently a reduction. Tn other words, the prin- ciple of highest monopoly charges is better understood and ap- plied at present than was formerly the case. In a few instances the charges have been reduced to less than the cost of the serv- ices to the government; but, in the majority of cases, the French government obtains more or less revenue from fees. One of the most important reasons for the success of the gov- ernment in extracting revenue from its fee system, is the excel- lent administrative machinery by which its fee-collecting offi- cials are governed. The accounts to be rendered are elaborate in the extreme, and the personal responsibility of officials is vigorously enforced; and the result is, that the frauds so often exposed by investigating committees in America, are almost unknown. 96 Urdahl — Historical Survey of Fee Systems. CHAPTER V. FEES IN THE COLONIES. A study of the fee-system of the colonies, as contrasted with the English fees of the same period, reveals in a very striking way the influence which economic conditions and environment have upon the institutions, habits, and ideals of men. It is com- monly understood that the early American colonists carried with them their English laws, church, and institutions; and that they were in all respects Englishmen who had merely changed their abode. From one point of view this is not true. Th e mo ment the first colonists set foot on the American soil with the inten- tion of permanent residence, at that very moment they became Americans; in that the forces which have formed the American institutions began to influence them. They did not carry with them and apply to American conditions the whole English law in its English form, as one might expect. Even the church and social relations were profoundly modified in the process of transplanting from English to American soil. It was the spirit of the laws, and the ideas and ideals of the church which be- came the basis of the American structure. Some parts of the I law were, it is true, taken literally and enforced as American I law. But a greater portion of the English jurisprudence was found inapplicable to the new conditions and rejected. The English courts and judicial machinery were, however, extensively | used in all colonies in a somewhat simplified form. 1 This accounts for the fact that the charges made for the services of the courts of justice, represent almost the only system of fees for which we are indebted to England. To this fact may also be at- tributed the large number of apparently useles and superfluous fees, which have to be paid to officers connected with the courts in most 1 See Duke of York's Laws of Pennsylvania, pp. 147-151, for a well de- veloped system of court fees charged in 1682. Fees in the American Colonies. 97 of the Eastern states. Much of this machinery of the courts was at first imposed upon the colonists by the governors, who had charge of the admistration of justice, and oftentimes even acted as judges. 1 But so little use did the colonists make of the courts, except to enforce criminal law, that no objection was raised against the fees collected by the various court officials, or at least inserted in the laws. Another form of charges, which were collected from the very beginning, were the perquisites and other fees which constitu- ted the compensation of the governors and inferior officers of the colonies. 2 The most important source of these fees were the land patents and land grants. Payments were also made for a variety of services performed by the governor, although do law fixing their amounts can be found. These charges were re- peatedly made pretexts for numerous extortions of various kinds, but there is ample evidence to show that they were not paid without protests. Indeed, so far were these objections carried, as to re- suit in an open revolt against the New York governor by Ver- mont. 3 The main objection they had to him was, that he charged 1 Gov. Hunter's commission in New York in 1703 gave him power to ap- point judges, commissioners of oyer and terminer, justices of the peace, and other officials. Civil List of New York, p. 163. The governors of New York were chief justices or appointed deputies to serve in that capac- ity. The governor of South Carolina was given the following fees (Stat- utes, 1865, II, 3): Signing vessel dispatch, 5s; signing license to sell wine, 5£; signing license to sell punch, 3£; signing letter testimonial, 10s; signing writ in admiralty court, 1£; signing marriage license, 10s; signing warrant of contempt in admiralty, 1£; signing warrant of appraisement, 5s; signing letter of administration, 5s; signing probate of will, 5s. In 1686 the following fees were added: For grant of 500 acres of land, 1£; injunc- tion in chancery, 10s; decree in chancery, 10s; ticket to leave, 2s 6d; grant of less than 500 acres of land, 10s; prohibition in admiralty, 10s; warrant for land, 2s 6d. 2 The attorney general of the colony of New York was charged with the preparation of letters patent for corporations, grants of land, and so on; the fees from which were highly lucrative. Civil List of New York, 1887, p. 176. 3 The fees of the governor of New York for granting a township of land in Vermont were from $2,000 to $2,600, while the governor of New Hamp- shire charged only $100. Rowland E. Robinson, History of Vermont, p. 62. 7 98 Urdahl — Historical Survey of Fee Systems. higher land patent fees than Governor Wentworth of New Hamp- shire, from whom they had received their lands before the trans- fer of jurisdiction. Some of the early governors succeeded in collecting goodly salaries from their perquisites. 1 The grants to the governor of New York yielded over $65,000, besides liberal fees to the secretary of the province, clerks of council, receiver general, attorney general, and surveyor general. 2 The colonial governors were not all models of puritan simplicity and honesty. 3 Many of them did not scruple to avail themselves of their office to exact various illegal fees, at times almost exorbitant in amount. * These colonial governors, especially those of New York, were many of them worthy examples of the notorious ring-leaders of later generations. The crown itself was constantly defrauded of numerous fees and perquisites, which they collected in its name, but failed to turn over or account for in any way. Considered from our point of view, it seems rather strange that the colonists would pay these charges, when they must have known that there was no law sanctioning them. But it Governor Clarke is said to have amassed a fortune of $100,000 in seven years; and Gov. Clinton obtained $80,000 in a short time (mainly from fees, as salaries were less than 2,000£ per annum). Roberts, History of New York,'?. 296. 2 During the thirteen months interregnum in New York in 1731 , the lieutenant governor collected over 6,407£ in fees and other perquisites of office. Ibid., p. 261. 8 Among the other glaring abuses charged against Governor Crosby of New York was the extortion of 150£ for one trip to Albany, 750£ for serv- ices in London, etc., in the probate court. (Ibid., pp. 265-267.) See also F. A. Wood's History of Taxation in Vermont, Columbia College Studies, IV, 322. 4 " For the sake of acquiring fees as governor or proprietor he (Gov. Sothel of North Carolina) disputed the best of titles, and vexed the fairest traders." History of North Carolina. Hugh Williamson, II, p. 140.) The Ninth assembly of New York in 1703 adopted an address to the gover- nor concerning the exorbitant charges, fees, and other exactions, re- questing, among other things, the appointment of a treasurer who shall be a resident and inhabitant of the colony. {Civil List of New York, 1887, p. 73.) See also W. S. Ripley, Financial History of Virginia, Columbia College Studies, Vol. IV. Fees in the American Colonies. 99 must not be forgotten that laws were not so explicit in the early days as at present. General powers were given to gov- ernors in such a way as to leave details to the discretion of each official. A page of colonial or provincial law would give all the rules which would have required twenty pages of modern statutes. The worst abuses which this state of affairs made possible were more directly caused by the fact, that the governors looked upon their positions as sources of revenue, and did not hesitate to exploit the offices to which they had the appointing power. Thus we find one of the grievances of the Massachusetts colonists under Governor Andros's administration 1 to be, the extortionate fees collected by the deputy to whom Secretary Randolph had farmed the post of secretary. This practice was not confined to Massachusetts alone, but was resorted to in several other col- onies both by the governor and by subordinate officials. A. SURVIVAL OF THE IDEA OF REGALIA, OR ROYAL PREROGATIVES, IN THE COLONIES. In the earliest colonial period there were very few taxes levied, for but little revenue was needed. All the officers were supported more or less by the fees which they collected. No expensive public works were undertaken by public authority; 2 hence but little money was needed in the treasury. As a re- sult, the idea of paying money or fees into the public treasury never seems to have occurred to the early colonists. In old England they had paid everything into the King's Exchequer for the use of the King and the State. What could be more natural than that similar payments should, in the New World, be made to the highest representative of the sovereign power — the governor! At any rate, such was the case. He granted the marriage license and collected his perquisites 3 for the grant, 1 Doyle, English Colonies in America, IV, 247. See also Colonial Laws of Massachusetts, p. 242, for similar methods authorized by the Massachusetts General Court. 2 The meeting houses and town halls were built by co-operation rather than by means of taxes; no record of laws passed for this purpose, is found. 3 Maryland marriage license fee, 30s. Colonial laws, 1777, Ch. 12. The governor of New York had power to grant marriage licenses and 100 Urdahl — Historical Survey of Fee Systems. while the clerk wrote the bond which was required, the secre- tary recorded it, and the minister performed the ceremony, each of whom must be given fees for their services. But the colonial marriage license was, in its essence, radi- cally different from the modern marriage license. The license which the governors granted, was at first regarded as a special dispensation. Everybody was not required to obtain this license; and the more usual way in many colonies, was to be married in the churches, after the banns had been proclaimed, and the other formalities complied with. The special dispensa- tion conferred by the marriage license from the governor, was the privilege of being married at home, without going through all the prescribed formalities. The new method obviated all the publicity which the old customs required, and soon became popular in many colonies. The governors were, as a rule, very willing to grant these licenses, because of the fees which they thereby obtained. The governor of Pennsylvania is reported to have obtained considerable revenue from this source. 1 But the governor's prerogative extended to many other mat- ters with which our governors of the day have nothing to do. [ In Massachusetts they granted licenses to Frenchmen to open 'shop, or carry on trade in the province. 2 A fee had to be paid to obtain the governor's signature to validate a deed from Indians. 3 Licenses to trade with the Indians were obtained in the same way. 4 A fee for each ordinary license was also a part of the governor's perquisite in many places, 5 as were peddlers' issue probates of wills, to license schoolmasters and printers, to erect forts, and establish fairs and markets. Civil List of New York, 1887, p. 163. Governor Andros, appointed Governor General in 1686, charged 60s for the probate of each will, besides expenses of journey to Boston; and for confirming patents of lands granted under the old charter, he charged 50£. Columbia College Studies, I, 300. 1 Mem. Pa. Hist. Soc, XI, 357. 2 Laws of Massachusetts, 1693, p. 90. * Ibid., HOI, I, 471. * Ibid., 1113, p. 725. 5 The Duke of York's laws, 1676, provided that licenses to sell liquor be issued by the Governor to those recommended, "in order thereto by two justices in open court." f OF TBB (university Fees in the American Colonies. ^s^JUKEIfok*^^ licenses 1 in some colonies. Fees for letters patent, for natur- alization privileges, for certificates of ability to contract debt, and for many other real or imaginary privileges, were received by many colonial governors. Most of these fees may, in one sense, be considered as relics of the old system of royal prerog- atives, which survived for shorter or longer periods of time under American conditions. Very often the fees of the gover- nor continued to be collected, long after the special dispensation had ceased to exist. Many of these fees, especially for licenses, did not remain very long a perquisite of the governor's office. Their abolition or gradual transference into the public treas- ury, is marked by frequent clashes between the representatives of the people and the governors, the latter backed by the crown. The licensing power was usually taken away from the governor first, and transferred to some licensing body or to the legislature afterwards; and the fee was either abolished altogether, 2 or else commuted for a fixed annual appropriation. 3 B. COLONIAL LICENSE FEES. It is not possible at present to state the exact cause of the different kinds of license legislation which we find on the colonial statute books; nor can we place our finger upon the original acts, which may be called the prototypes of all the subsequent laws on this subject. But sufficient data may be found in the colonial records and laws of any colony, to establish, beyond all reasonable doubt, the origin and development of the fees which were and are at present paid for the licenses granted by public authority. Many of these charges must, no doubt, as has al- ready been pointed out, be considered as survivals of the Eng- lish, or European, systems of government. But a very large majority of our license regulations and license fees, have been introduced and developed on American soil. To obtain a proper 1 Henning's Statutes, III, 377-378. 2 Fees of the Governor of Massachusetts for ordinary and marriage licenses were abolished in 1776. Laws, 1776, VIII, 225. 3 A law of South Carolina in 1711 provided that the license money be paid into the treasury and that the Governor be granted 120£ per annum in lieu of all license money formerly collected by him. Statutes, p. 363. 102 Urdahl — Historical Survey of Fee Systems. conception of this development, it is necessary to constantly bear in mind the economic and political condition of the people and governments of the colonies. The English, Dutch, and the Swedes, who became the founders of the American colonies, came directly from old countries, in which everything had so long been firmly established by law and custom that the citizens had not become conscious of their rights to make or chancre their own laws at will. j It is conceivable that these borrowed institutions and laws which the governors attempted to apply to the colonies, worked very well at first. But a short period of time sufficed to prove to these early pioneers, that the English law was not suitable to all conditions. Thejproblems which the English law attempted to solve, were not the problems which confronted the colonist. They did, no doubt, at the very outset, attempt to regulate the marriage relation in the same way that they had been accus- tomed to in their home countries. They, or at least the gover- nors, did think it necessary to regulate the titles and rights to land. But the lack of any provision regulating the Indian trade, \ was not felt, until this trade with its abuses had assumed such J proportions as to threaten the safety of the colony. Here they I had no English precedent to fall back upon, and were therefore forced to devise some new means of dealing with the subject as it presented itself. The people who carried on the Indian trade were, as a class, .disreputable and not to be trusted. 1 The most natural solution Iwas, to allow only responsible and trustworthy people to engage jin this traffic, and, to secure this end, it was enacted that no [ one should engage in the Indian trade without a license therefor from the colonial governor. This is the first stage of the evo- lution of a license fee; regulation by the state without any charge for the privilege, except perhaps a very small recorder's fee for the clerk. An examination of the laws of the various colonies will reveal a large array of subjects which, to the mind of the colonial legislator, seemed equally liable to abuse. As examples the following might be cited : the occupations of tan- Dinwiddie, Virginia Historical papers, II, 340. Fees in the American Colonies. 103 ners, 1 printers, 2 lawyers, 3 physicians, 4 Indian traders, 5 peddlers,* tavern keepers, 7 pilots, 8 and many others. No one at that time could foresee that the liquor regulation, which then seemed even less necessary than some of the other license regulations, should one day become so important as it has grown to be. The regula- tion of any one of the above mentioned subjects, might have de- veloped in the same way that the liquor licenses have, provided the conditions had been suitable. All of them attained the first stage of development, but many reached no farther. As exam- ples may be cited the printers' and tanners' licenses. Many others have tended to disappear, or have been made conditional upon certain qualifications, educational and otherwise, the fee being often changed from a license fee to an examination fee. On the other hand, many occupations which are now subject to stringent license regulations, were forbidden in the colonial pe- riod. As examples may be mentioned peddlers in Connecticut, Massachusetts, 9 and New York, 10 and theatres in Massachusetts 11 and Rhode Island. 12 The second stage in the development of license regulations is reached when a fee is collected for the privilege conferred by the license. This stage was very often hastened by the fact, that the colonial governors were eager for any opportunity or excuse 1 Two early laws of Massachusetts and Connecticut, which read almost like the ancient Guild regulations, provided that no one should engage in the business of tanner until he had shown his ability and knowledge of the mystery of tanning to the county court, and had paid a license fee. (In force down to 1796.) 2 History of New York (Commonwealth series), I, 255. 3 Laivs, S. C, 1789, IV, 669. *Laius, N. H., 1789, p. 302. 5 Statutes, S. C, 1711, II, 359. •Peddling was forbidden in New York (Laws, Ninth Session, p. 204). 'Laws, S. C, 1741; Rev. Stat., 1801, V, 400. 8 Colonial Laws, S. C, 1690, pp. 51, 93. * Laws 119$, 1,243. 10 New York Statutes, Ninth session, Ch. XI, 204; Twenty-fourth ses- sion., p. 45. 11 Up to 1806. First playhouse in Boston, 1794. Weeden, History of New England, II, 863. 12 Statutes 1823, p. 152, § 1. 104 Urdahl — Historical Survey of Fee Systems. for exacting money from the people. A small charge once begun was easily made a precedent or pretext for a higher exaction. But even where the license fees were taken away from the gov- ernors, their tendency to increase in amount was manifest. As an example may be cited the fees for Indian traders' licenses in South Carolina. At first there was no charge for the privilege; then a small, almost nominal fee was charged, which was soon increased to £3; in 1709 it became £5; and in 1711 it was in- creased to £8, then to £20; and finally in 1734, £50 were charged for each license. This was the high water mark, which was held for only a short time, after which the charge was decreased again. 1 In 1719 a commission was appointed to manage the Indian trade for the benefit of the colony. This commission was empowered to license traders, provided they gave bond for £500 and paid ten per cent, of the proceeds into the colonial treasury. 2 The same is true of peddlers' licenses in South Carolina. The fee was gradually increased, until in 1738 we find £100 charged for a license to peddle by water, and £50 by land when carried on with a horse. 3 , The evolution of the license fee as we know it to-day, can be most easily traced through its early stages in the colonial liquor regulation. The experience of Massachusetts may be considered as typical ; for every other colony has, with more or less varia- tions, passed through the same process.* The preamble of a Massachusetts license law dated 1645, 5 reads as follows: " For- asmuch as there is a necessary use of houses of common en- tertainment in every commonwealth, and of such as retail wine, beer, and victuals, yet, because there are so many abuses by persons entertaining and by person entertained," it is or- dered that, " no person . . . shall be a keeper of a cook- 1 Johns Hopkins University Studies, 13, 104; Financial History of South Carolina, C. L. Whitley; also Laws, S. C. "Laws, S. C., 1719, p. 93. 3 Laws, 1838, III, 487. 4 F. A.Wood, History oj Taxation in Vermont; Columbia College Studies, IV, 391. The earlier liquor licenses in Vermont were imposed for regulation, not revenue. The fee charged was about equal to one dollar. 6 Colonial Laws, Mass., p; 43, (1645-51, 1653, 1657-58); 1645, p. 164. Fees in the American Colonies. 105 shop or house of common entertainment, tavern or a public seller of wine, ale, beer, or strong waters by retail, without the approbation of the selected townsmen, and a license by the county court, upon pain of forfeiture of £5 for every offence. " This did not apply to wholesalers selling wine in quantities of not less than three gallons or strong waters less than a quart. A little later another act was passed which read in part as fol- lows -} " And because it is difficult to keep order, and keep the public houses of public entertainment in conformity to the wholesome laws established, as is necessary for preventing drunkenness, excessive drinking, vaine expenses of money, time, and the abuse of the good creatures of God, it is ordered" that the license shall be valid for only one year, but may be renewed annually on application to the county court; for each renewal the licensee was required to pay two shillings six pence to the clerk of court. In 1661 it was deemed necessary to require distillers and wholesale dealers to obtain a license, for the rea- sons set forth in the preamble, as follows : " Upon complaint of the great abuses that are daily committed by retailers of strong waters, rhum, . . . both by distillers thereof and by such as have it from forraigne ports, 2 it is ordered" that etc. . . . Laws of this kind, designed to prevent drunkenness by re- stricting the sale of liquor to persons of good character who could secure the approval of the selectmen of the town, and by providing penalties against tippling and drunkenness, were re- peatedly passed by the colonial legislatures. As a sample of the latter may be mentioned a provision in a law of 1787: 3 " Nor shall any person licensed to sell strong waters, or any house- keeper permit any person or persons to sit drinking or tippling strong waters or wine or strong beer in their houses. " An act of the same purport was passed in 1798 in Massachusetts Bay Colony,* which provided in addi- tion that no more houses of common entertainment should be licensed than was necessary for the accommodation of the pub- 1 Ibid., p. 166. 2 Ibid., p. 84. 3 Ibid., p. 15. A Acts and Resolves and Charters of Massachusetts Bay Colony^ III. 106 Urdahl — Historical Survey of Fee Systems. lie, and furthermore that all licensed houses shall be " on or near the high roads, streets, and places of great resort. " As early as 1712 we find a statute which attempted to accomplish the same thing, by giving the licensing authorities power to suppress unlicensed establishments and to decrease the number of licensed ones. It was further provided in 1787 that all persons apply- ing for a license outside of the regular time, shall pay six shil- lings to the county, besides the usual fees; and the old pro- vision was continued in force, to the effect that all licensed houses must keep on hand provisions for entertaining men and beasts. One of the most significant characteristics ol all the liquor li- cense legislation of the colonial period, is the fact, that it con- cerned taverns and ordinaries only. The taverns and inns were very important factors in colonial life. Every crossroad had its tavern or inn for accommodation of travelers and car- riers, which was an absolutely necessary part df the transporta- tion facilities of the time. The licenses were aimed, not so much at the regulation of the liquor traffic, as at the regulation of the taverns, so as to make them furnish suitable accommoda- tions at reasonable rates. In fact it was not unusual to rescu- late the rates, prescribe what provisions must be kept on hand, fix a minimum standard of quality of beer, and regulate the maximum price per pint. 1 The modern saloon or grog-shop did not exist and was not recognized by law until 1816, when the first act was passed authorizing the grant of licenses to persons who did not maintain taverns. Two years later we find the li- cense fee raised from one to four dollars per annum, 2 besides the usual fees for registration and other services. From this time on the liquor license fee has gradually increased until it became what we have it today. 1 In Virginia the licensee bound himself to sell his liquor at the price set by the commissioners. Applicants for innholders' licenses were required to take an oath not to violate the law against monopolies, nor to sell liquor at higher prices than was prescribed by law. Acts and Resolves of Province of Massachu- setts, V, 647. 2 Colonial Laws, Mass., from Boston Courier, p. 19. Fees in the American Colonies. 107 It has seemed necessary to give this somewhat lengthy ac- count of the Massachusetts license legislation, because it ap- pears to show more accurately than that of any other colony, the evolution of our liquor license fees under normal conditions. It shows quite clearly the actual steps in the process by which the modern fee has emerged out of a simple regulation. It shows, furthermore, that modern liquor license is entirely different from a colonial liquor license, the latter being in its essence a tavern or hotel license, which was intended to regu- late, not only the sale of liquor, but the entire tavern business. The transition from tavern to saloon licenses took place as soon as the tavern ceased to be an economic problem, in other words, when the canal, the steamboat, and the railroad began to dis- place the public highways in the business of transportation. Most of the country taverns disappeared of themselves, while others were changed into or displaced by the saloon and corner j grocery. Many other expedients were resorted to at various times in the other colonies. The size of the license charge, for example, was graduated according to the place where the tavern was situated, varying from l£ 10s to 10£ in the colony of Plymouth in 1669 ; l while in Maryland the number of ordinaries was lim- ited by law, and the amount of the license charge varied ac- cording to the proximity of the tavern to large towns. 2 In Con- necticut taverns were limited in number to two in each town, 3 and a similar provision was required in South Carolina. It is of interest to note that, as a rule, high license charges I were imposed much earlier in the south than in New England. Thus Virginia at one time charged as much as 40£ for ordi- j naries' licenses, 4 and South Carolina 5 collected 6£ for each li- cense in 1701. Maryland also obtained considerable revenue 1 Laws of Colony of Plymouth, p. 155. 2 2,000 lbs. of tobacco were charged for an ordinary license within two miles of St. Mary's and 1,2C0 lbs. for the same privilege within any county. Johns Hopkins Univ. Studies, Vol. 10, p. 313. 3 Laws, 1797. Approval of selectmen required. 4 Statutes, Henning, I, 189. 6 Statutes, II, 363. 108 Urdahl — Historical Survey of Fee Systems. from her license money. The high peddlers' and Indian trad- ers' license fees have already been mentioned. Billiard table li- censes in connection with ordinaries were also introduced very early in the South. 1 Ferries were licensed everywhere, but fees were at first rarely charged for the privilege. 2 Many other li- cense fees were imposed at different times, but none of them seem of sufficient importance to deserve special consideration here. C. COLONIAL REGULATION OF FEES. As the interior of the colonies developed, it is but natural that means of transportation should become of increasing im- portance. The attention of the colonial legislative bodies came to be directed more and more to ferries, toll-bridges, toll-roads, and other transportation facilities. 3 At first the permission to build them and levy toll for their use, was granted by special acts.* In some colonies, however, these rights were granted by the governors. The regulation of the amount of fees to be charged was, as a rule, left to the legislative council, which ex- ercised this right very frequently. But in spite of the best regulation, and in spite of the heavy penalties imposed for vio- lations, unjust and discriminating tolls continued to be col- lected by the various ferry-men and toll-gatherers. Complaints were also made that the judges, sheriffs, clerks, and other fee collecting officers, connected with the courts, charged illegal and extortionate amounts for their services. The legislative bodies made numerous attempts to prevent these abuses. But with each new regulation which checked some existing abuse of the fee-system, some other subterfuge 5 or way of evading the law, so as to collect heavy fees, was often in- 1 South Carolina in 1741 charged 40s for billiard table licenses. 2 In Massachusetts in 1781 the clerk making out the ferry license was allowed to charge 5s therefor. Laws, Dorsey, I, 176. 3 Ferry tolls regulated, Colonial Laws of Mass. (reprint), p. 151. 4 Mass. Law, Feb. 14, 1797; 1694; 1726, 1760, etc. 6 Separate fees were charged in Virginia for each of several small parcels of land, when one fee would suffice. Bacon's laws attempt to remedy this. Statutes at Jjarge, Henning, II, 355. Fees in the American Colonies, 109 vented by the slippery collectors. 1 In course of time the legis- lation seems to have accomplished at least one great reform in most of the colonies. This reform consisted in securing pub- licity, as to the amount of fees which each public official could legally charge for his services, by making provision to the effect, that the fee bill should be posted up in a conspicuous place in the office of each fee-taker. 2 Colonial legislation consists largely of a series of special laws. General laws came later on, after the efficiency of each special law had been demonstrated. The above mentioned reform was thus applied gradually. 3 The offices in which the abuses seemed most aggravating, were first brought under this provision. In time others followed, until a complete reform was accomplished, the importance of which can scarcely be grasped by the student, who examines the subject from the modern legal point of view. The colonial legislative bodies were not the legal sovereigns which our legislatures are to-day. They might make their regulations for the public official ; but so long as the people did not know what these enactments were, the offi- cials might charge almost what they pleased, under cover of law. The reform, therefore, which, though begun in the colon- ial period, has not been completely carried out in some of the states even to this day, really took from the official the arbitrary power which he often exercised, and made him directly amen- able to the will of the people, that is, to the law. One of the most important colonial offices, outside of the courts, was that of provincial surveyor, or surveyor-general, as he was usually termed. Knowing, as we do, that the land grants and land patents formed the chief source of the emoluments 1 Another way of evading the law was to require every fee payer to pay heavy extras for copies of documents which he did not want or need. Ibid., Ill, 162. v 2 A Virginia law of 1736 provided that a table of fees of each clerk and \ secretary be set up in his office. Ibid., IV, 505; III, 164; IV, 59, 350, 490; V, 341; VI, 98, etc. 3 In Penn's charter, made in England, 1683, it was provided that all fees \ be moderate and fixed by the provincial council and general assembly; a table of fees to be hung up in each respective court. Colonial Charters and Constitutions, by B. P. Poore. 110 TJrdahl — Historical Survey of Fee Systems. of the governors and other officers, it is perfectly natural that the official who fixed the legal metes and bounds of their respective lands, should increase in importance many fold. In that primi- tive state, his services became a necessity to everybody; as everyone owned, or wished to own, land. In some colonies this officer charged monopoly prices for his services. This led to numerous acts regulating the fees which he might legally charge. 1 Still, the remuneration was usually sufficient to con- stitute a handsome salary. 1 This is further evidenced by the fact that enterprising young men, like Washington and Jeffer- son, made surveying their profession. The quasi-public charges of attorneys at law caused so much dissatisfaction, that in the end laws were enacted providing maximum charges, 2 and forbidding any attorney to refuse to plead a case without just grounds. The large number of un- scrupulous and incompetent lawyers was perhaps responsible for enactments, providing that attorneys should pass satisfactory examinations before admission to the bar. 3 The fees of numer- ous other public or quasi-public officials were from time to time regulated or fixed in many of the colonies. D. CHURCH AND SCHOOL FEES IN THE COLONIES. It is perhaps well understood, that the colonial church and state were not separate in the modern sense of the term. The church still exercised many political or state functions, and was supported, indirectly at least, by the state.* It is true that at 1 The law of New York even went so far as to pay the surveyor a fixed salary, and provided that all fees be paid into the treasury. Laws 1785, XXXII. Surveyors' fees fixed at 100 lbs. of tobacco for making a survey of of 100 acres of land, in 1661. Statutes of Virginia, II, 99; III, 330. 2 Attorneys on admission to the bar were required to take oath that they would not charge unreasonable fees. (1732.) Statutes at Large, Hen- ning, IV, 360. Attorneys fees regulated in Virginia. Laws, III, 162; II, 479. 3 South Carolina license to practice law; fees 1£ 10s. Laws, 1791, V, 156; 1785, IV, 699, fees 1£ 10s; 1736, fee 4£. 4 There was no distinction in Connecticut between the town, the church and the school, as far as taxes were concerned. Every inhabitant was compelled to help maintain each. History of Taxation in Connecticut. Johns Hopkins University Studies, Vol. 14, No. 8, 62. Fees in the American Colonies. Ill first the idea, that the minister should be supported by volun- tary contributions, was tried. But the force of custom was not strong enough to make everyone pay these voluntary contri- butions, so legal compulsion was resorted to. In the South, however, this method was not even tried. The laws 1 here pro- vided, that the ministers should receive a twentieth of all the pro- duce, a charge corresponding to the old church tithes in England, and the "centiemes" in France. These laws were, however, soon repealed. In almost all of the colonies, the ministers of the Gospel ob- tained a large portion of their remuneration from fees, collec- ted for both ecclesiastical and political services. They acted as registers of births, 2 marriages and deaths, and were given fees for each registry; and, in so far as they acted in this capacity, they were public officers. In some provinces they had power to issue marriage licenses, 3 and everywhere they were entitled to the fees, fixed by law, for performing the marriage cere- mony* and other purely ecclesiastical functions. One law even went so far as to provide a fine, in case a larger fee was charged than the law allowed. The colonial schools, which existed only in the North, were also largely supported by fees, 5 paid by the pupils. It was at times found necessary to appropriate money to make up the 1 "The minister shall have the twentieth calf, pigge, and kidd," etc. Statutes at Large, Virginia 1632, I. 2 Statutes at Large, Virginia, II, 54. Laws, New Hampshire, 1791, p. 297. Johns Hopkins University Studies, Vol. I, Parish Institutions in Maryland. In Massachusetts the clerk of court received 3 d. for each birth, death, or marriage which he recorded. Colonial Laws, 1639, p. 188. 3 In North Carolina a fine of 5£ was imposed on any layman who per- formed the marriage ceremony in a parish where there was a clergyman, one-half of which fine went to the clergy. Francis L. Hawks, History of North Carolina, II, 170. 4 Fees fixed for performing a marriage ceremony, preaching a funeral sermon, etc. Henning's Statutes at Large, II, 55. * History of Taxation in Connecticut, Vol. 14, p. 06. Boone's Edu- cation in the United States, p. 19. "They, (the schools) were not free, tuition was paid for all." Wickhershain's History of Education in Pennsylvania, p. 182. 112 Urdahl — Historical Survey of Fee Systems. deficiency for those pupils whose parents were too poor to pay. This led to regular appropriations. As the schoolmaster did not receive enough fees for his pedagogic services to support himself and family, he was compelled to supplement his income from this source by serving in other capacities. In fact it was quite customary to have him serve in an ecclesiastical, educa- tional, and public capacity 1 at one and the same time, and for each of these services he received fees. In this way, that is, by holding several offices, the schoolmaster was able to obtain a livelihood out of the few meager fees, which each position yielded. The relation of the fee system in colonial days to higher edu- cation, is an important subject which can only be touched upon. Many license fees were early turned over to support colleges and schools. 2 In Virginia the charter of William and Mary College provided that it should receive the fees and profits of the sur- veyor-general's office, which at that time were not inconsider- able in amount. 3 In the same spirit is an early law of Maryland which provided that all sums received for marriage, ordinary, hawkers' and retailers' licenses on the Eastern shore be applied to the use of Washington College, 4 and that all those collected on the Western shore be applied to St. John's College. 5 Boone's Education in the United States, p. 12, foot-note. The duties of a New England schoolmaster were: (1) to act as a court messenger, (2) to serve summons, (3) to conduct certain ceremonial services of church, (4) to lead Sunday choir, (5) to ring bell for public worship, (6) to dig graves, (7) to take charge of school, (8) to perform other occasional duties. 2 Ferry between Boston and Charlestown licensed 1659. Revenues granted to Harvard College. Colonial Laws, Mass., p. 139. 3 Virginia law of 1752 granted the receipts of peddlers' licenses, at the rate of 20£ for each license, to William and Mary College. Statutes, Hen- ning, VI, 245. Another law of 1.759 reduced these fees to 3£ for each license. Ibid., VII, 285. 'Laws, Md., 1784, Ch. 7, §§ 3, 5, 6, 8, 15. 6 Ibid., Ch. 37, §§22, 23, 32. Fees in the American Colonies. 113 E. COLONIAL INSPECTION FEES. Aside from ferry, bridge, and road-tolls, the inspection fees \ were the ones which most directly touched the every-day life of \ the colonist; even though they were by no means so numerous l or important as they became after the revolution. In the South I tobacco had already become the great staple, and it was early found necessary to require all tobacco offered for sale to be in- spected. The first statute on this subject was passed in the colony of Virginia in 1629. This provided that all tobacco ten- dered in payment of debts ] should first be viewed and stamped by a tobacco viewer or inspector. In other words, this law de-* cided what kind of tobacco should be legal tender in payment^ of debts. But there were other causes which led up to this leg- * islation. Among these may be mentioned the fact that the price of Virginia tobacco had been steadily declining in Eng- i land, because of its inferiority to the Spanish tobacco. 2 Fre- quent complaints were made by the merchants, who supposed that this inferiority was largely due to the carelessness of the planters, and as a result an attempt at tobacco inspection was made as early as 1619. 3 Another law was passed in 1630,* the ostensible purpose of which was to prevent the exportation of bad tobacco. This was further amended in 1632, " in order to raise the price of exported tobacco, by improving its quality." 5 The same purpose is stated in the preamble of a provincial in- spection law of Massachusetts Bay Colony, in the following words: " to encourage the exportation and manufacture of the best pot- and pearl-ashes, to secure credit abroad to our produce, and thus displace those hitherto imported from Russia and other foreign countries. " 6 Provision is here made for the appoint- 1 Statutes, Henning, I, 152. Ibid., VIII, pp. 95, 223. 2 Virginia was forced to inspect tobacco because the price was continu- ally forced down by the poor quality. Dinwiddie, Papers, Va. Hist. Colls., I, 38. 3 Statutes, Henning, I, 205. 4 All tobacco intended for export in Pennsylvania to be inspected (1656).- Hazard, Annals of Pa., p. 225. 6 Statutes, Henning, I, 190. • Provincial Laws of Mass. Bay, III, 804-806. Similar provisions en- acted in New York. Laws, 1784, 1, 100. 8 114 Urdahl — Historical Survey of Fee Systems. ment of assayers of ashes, whose duty it should be to test the quality of all ashes intended for export. Another law passed by the same body in 1698, providing for the appointment of searchers and sealers of leather was enacted, " for the better pre- venting of deceits and abuses by tanners, curriers and dressers, or workers-up, of leather." 1 A somewhat similar enactment was enforced very early in the colony of New Plymouth. 2 These laws regarding the inspection of leathers were naturally made necessary by the fact, that a large number of inexperienced tanners attempted to work hides into leather, and thus flooded the market with a worthless product. The object of this inspec- tion legislation was, therefore, to protect the consumers at home against the frauds or inefficiency of the producers in this indus- try. 8 The causes of later laws of the same character may be gathered from the following pr eambl e of a statute, passed by the General Court of Massachusetts on June 21, 1710:* "Whereas boards, plank, and timber are usually sold by the measure set upon them at the mills where they are sawn, and bundles of shingles are marked for a greater number than what they con- tain, wherein great fraud and deceit is too often practiced by illminded persons, for prevention whereof . . . " — meas- urers of boards and the like were to be annually elected in maritime towns, who were required to view all lumber intended for sale. Many of these early inspection laws may be said to have orig- inated, indirectly at least, in the necessity of having official gaugers of casks and other packages, in order to secure uni- formity and avoid fraud in the measurement of quantities bought or sold. Thus we find an attempt on the part of Massachusetts, to require the gaugers of casks and measures, not only to verify the size of the cask or barrel of pork or beef, but also to inspect 1 Ibid., 313-314. An earlier statute dated 1641. Colonial Laws, Mass., p. 170. 2 Charter and Laws of New Plymouth, p. 189. Similar provision in Mass. in 1641. Col. Laws, p. 170. 3 Complaints were common about poorly tanned leather and shoes made therefrom. Bruce, History of Virginia, II, 477, 481. 4 Provincial Laws, Mass., I, 656. Fees in the American Colonies. 115 the contents. This new duty, placed upon the old gaugers of casks, was not looked upon as anything new or novel, but was designed to better carry out the purpose of the old statutes. \ In fact it was not even called inspection, in the earliest Mas- sachusetts laws, but seems to have been considered as a part of the duties of sealers of weights and measures, and gaugers of casks. But the element of inspection for some definite purpose, soon becomes so prominent as to overshadow, to a certain ex- tent, the object of the old laws, resulting finally in special in- spection laws, entirely distinct from the enactments regulating the sealers and gaugers of casks. As an example may be men- tioned the Massachusetts act of 1641, entitled "an act for the preventing deceit of any person in the packing of fish, beef, or pork to be put on sale in this or other jurisdictions." 2 Numerous instances may be found in the colonial laws of any one of the colonies, where attempts are made to insure integrity both as to quantity and quality of goods put upon the market. Some laws, however, are much more far-reaching, in that they were intended to regulate the price as well. The economic condition which must be regarded as the ulti- mate cause of much of this legislation, is the lack of a currency or suitable medium of exchange. Most of the exchanges of this period were barter, and were based on commodities rather than money values. Tobacco especially was used as money, and was recognized as such by law in Virginia, Maryland, and South Carolina. Fines and penalties in many colonies were paid in shingles, or other products; and taxes and fees were almost everywhere levied and collected in kind. The need therefore was soon felt, of having some public official to test and appraise this heterogeneous currency. The attempts to regulate the prices of certain commodities can be explained in the same way. This was not sumptuary legislation, in the same sense that the laws and regulations of the early Kings of France were. The liberty-loving spirit of the colonists would tolerate no such restraints. These laws, providing for measures of wood 3 and 1 Provincial Laws, Mass. Bay Colony, I, 50; II, 129-131. 2 Col. Laws, Mass., p. 130. 3 Provincial Laws, Mass., V, 1119. 116 Urdahl — Historical Survey of Fee Systems. grain, gaugers of casks, inspectors of provisions of various kinds, were intended to facilitate exchanges rather than to check them, to stimulate and increase public and private credit, by furnishing greater stability to their standard of deferred pay- ments, and, finally, to insure certainty regarding quantity and quality of the income of the public treasury. It may perhaps not be evident at first sight, that there is a vital relation between this inspection legislation and the fee system. It was the fee system which made all this legislation possible. These inspectors were invariable paid by means of fees. According to some statutes half was collected from the buyer, and half from the seller, while in other colonies the seller was forced to bear the whole expense. This office became in some places quite lucrative, especially in rapidly growing cen- ters of population. The number of commodities requiring inspec- tion were also multiplied, resulting very often in a proportional increase in the number of inspectors, until at last we find every town supplied with one or more officials of this kind. 1 These inspectors, as has already been intimated, were very often paid by a certain allowance of the commodity inspected, and even when the fee was reckoned in money, it was often commuted or paid in produce. At first, therefore, it was quite customary for the inspectors to carry on a trade in the product inspected. This naturally opened the door for unscrupulous officials to en- rich themselves, by means of all sorts of frauds and deceptions, both in inspecting the commodities of others and in marking their own produce. To prevent these evils laws soon appeared forbidding, under heavy penalties, any inspector to trade in the commodity which he inspected. Many other regulations were also enacted to put an end to this prevalent malfeasance of office. F. MISCELLANEOUS FEES. Pilots were found to be necessary long before the colonies had developed any commerce of their own; in fact, they were all the more necessary in the early period, before the bays and channels had been thoroughly sounded and the navigable waters explored. 1 Colonial Laws, Mass., p. 170. Fees in the American Colonies. 117 The fees which they might be allowed to collect were therefore early prescribed by law. But in this case the fees were regu- lated and fixed, not so much to prevent overcharges for pilotage, as to provide sufficient remuneration in this occupation in or- der to enable trustworthy and efficient men to make it their pro- fession. The fees were therefore purposely made high, so as to make them an incentive for efficient and reliable men to devote themselves to this duty, in preference to the many other prom- ising fields of employment then open to them. Furthermore, the fees had to be comparatively high, if the pilot should ob- tain a livelihood, because there were so few vessels to make use of his service. But the growth of commerce resulted in an enormous increase in the income of pilots. The old fees soon began to appear burdensome, and finally resulted in an agita- tion for their reduction by law. Numerous laws followed which attempted to establish the fees of pilots, and in various ways to regulate the profession. South Carolina even went so far as to pay her pilots salaries, and collect all pilot fees at the cus- tom house for the use of the state. 1 Harbor fees 2 of various kinds were also charged at the most important ports. At first, however, they were not collected with any regularity. In the north these duties were usually collected for some definite purpose, as the maintenance of fortifications or the improvement of harbors, 3 and consisted in a pound of powder or more, according to the size of the vessel.* In Mary- land the port duty was fixed at a pound and a half of powder and three pounds of shot for each ton of burden. This was af- terwards commuted into a money charge of 14d. per ton. In Connecticut 5 they were collected during King George's War for 'Ibid., 1778, IV, 432, 184, IV, 598. 2 Statutes, S. C, 1690, pp. 51, 93; 1700, p. 173; 1702, p. 193. 3 Laws, S. C, 1785, IV, 656. Laws, Va., 1656, I, 176. Tonnage fees levied in powder and shot according to the size of vessel. 4 Harbor fees for the maintenance of fortifications at Charlestown and Boston were collected at the rate of 6d. per ton from all other than Eng- lish and Colonial vessels. The latter were required to pay only lOd. per vessel. Col. Laws, Mass., 1645, pp. 159-160. 6 Taxation in Connecticut, Johns Hopkins University Studies, XIV, No. 8, p. 59. 118 Urdahl — Historical Survey of Fee Systems. the protection of New London, and again during the French and Indian War for the maintenance of a war ship. These port duties were also collected for the maintenance of lighthouses, and other maritime improvements or equipments. The positions of searchers, surveyors, collectors, and the like, in the more important harbors, were early known to be very lucrative. Under the government of the province of New Neth- erlands and the colony of New York, the collectors of the port of New York received a salary of 55£, surveyors and searchers 60£, comptrollers 55£, land waiters 50£, tide waiters, 30£; in addition to which each received a large amount of fees. 1 In many harbors wharfage fees were also collected. In Massachu- setts these were graded in amount according to the nature of the commodity placed upon the wharf. 2 In 1752 Virginia col- lected lighthouse fees at the rate of 2d. per ton from all vessels entering the Chesapeake, for the maintainance of her light- houses. 3 Many other kinds of fees were .from time to time collected, but their importance lies mainly in the fact, that they are in many instances the forerunners of later charges. As an ex- ample, may be mentioned the fees for assessing and collecting taxes, which in the early period formed part of the perquisites of the sheriff or other judicial officer. 4 Q. COLONIAL PEES AND POLITICAL LIBERTY. The inhabitants of the English Colonies of America did not suddenly become conscious of their political rights in 1766. The doctrine that " taxation without representation is tyranny" had in its essence been discussed and asserted for nearly a cen- tury. The stand which was taken in 1765 was the result of nu- 1 Civil List, N. Y., 1887, p. 179. In 1679, Miller, the collector of customs of North Carolina, is said to have collected $5,000 in cash and thirty-three hogsheads of tobacco in six months. J. W. Moore, History of North Carolina, p. 23. 2 Colonial Laws, Mass., 1647, p. 147. 3 Statutes, Henning, VI, 228. 4 The Attorney General of the province of New Netherlands acted in the double capacity of attorney general and sheriff. Civil List, N. Y., 1887, p. 176. Fees in the American Colonies. 119 merous contentions with the various governors over the fees of office which these could legally collect. The conclusion of each of these disputes left the people more conscious of their politi- cal rights, and led to stronger demands for their recognition. No one of the colonies has been entirely free from struggles of this kind. Under proprietary governments the governor was continually tormented by the proprietor to find lucrative places for the latter's friends and connections. The fees and perqui- sites which these favorites collected in North Carolina, became in time so unbearable as to result in an open quarrel between the two houses of the legislature. The lower house representing the people finally won the day, and passed an act in 1762 regu- lating the fees of office which might be collected by the ap- pointees of the Governor. A similar struggle took place in Maryland, over an act passed by the legislature providing that the port duty, which up to that time had been collected by the Governor, nominally for the support of the forts and fortifica- tions, should be granted him by law, but should not be levied as his prerogative. The preamble of this act stated " that it was not their intention to deprive the governor of an honorable sup- port, but only to assert and maintain for themselves, their con- stituents and posterity, that principle and most essential branch of liberty to which they conceive themselves entitled as subjects of Great Britain, of not being liable to the payment of money, tax, impost or duty, except such as shall be war- ranted, raised, and assessed by the laws of the province." 1 A similar dispute arose in 1754 regarding the so-called duty on ordinary licenses which the lower house claimed as public revenue. 2 The history of every other colony presents numerous instances of this kind. The citizens of Massachusetts were re- peatedly opposed to their governors on the question of fees of office or other prerogatives, while New York, after a long ser- ies of contests on just such questions, finally succeeded in mak- ing the governor amenable to the legislature, both in his ap- pointments and in the collection of fees of office. Liberty-loving 1 MacMahon, History of Maryland, p. 179-180. 2 Ibid., p. 298. 120 Urdahl — Historical Survey of Fee Systems. Vermont rose in open revolt against the right claimed by her governor to collect extortionate land patent fees. 1 These objections were not made all at once, but were raised against certain specific fees, which had become especially bur- densome. Being thus led, unconsciously almost, to discuss and formulate their privileges as opposed to the prerogatives of the crown and the governor, the colonists gradually evolved the principles which were afterwards laid down in the Declaration of Independence. Furthermore, these disputes tended to keep alive the spirit of liberty, and kept the colonists alert to pre- vent infringement upon their rights, causing them at times even to seize upon and overthrow old established prerogatives and perquisites. It is for this reason that we see the colonial gov- ernors, in spite of their aggressiveness, constantly losing ground to these persevering frontiersmen. The final struggle, which resulted in the achievement of Ameri- can independence, was but a repetition of the protests which had been made again and again, against the imposition of ex- tortionate and unauthorized taxes under the guise of fees. It came about in this way: No direct taxes had been imposed on the colonies by Great Britain up to 1765. Plantation dues and duties had been levied, but these were merely for regula- tion of trade. Having learned from past experience that Eng- lishmen were likely to object to new direct taxes, the ministry determined to use a method of obtaining revenue that had been successfully employed in the home country, namely, by levying the taxes under the guise of fees. They pretended that the new stamp charges were of the same nature as the payments for postal stamps. 2 These stamp taxes were, as a matter of fact, not very heavy; indeed, they were much less burdensome than 1 For an account of the struggle over the " pistole " fee for land patents in Virginia, see Dinwiddie's Papers, I, pp. 44-47, 363. 2 Dowell, Taxation in England, II, 147. " Is not the Post Office, which they have received, a tax as well as a regulation? " was asked of Benjamin Franklin. He replied: "No, the money paid for the postage of a letter, is not in the nature of a tax. It is merely a quantum meruit for a serv- ice done. No person is obliged to pay money if he does not choose to re- ceive the service. He may employ a special messenger if he likes. . . ." Fees in the American Colonies. 121 many of the so-called fees, which had repeatedly been submitted to in England. But the colonists refused to concede that the stamp charges were payments for regulation. The result of this was the American Revolution, which terminated, as every one knows, in American Independence. H. GENERAL CHARACTERISTICS OP THE FEE SYSTEM IN THE COLONIES. The most striking features of the colonial financial system is that the greatest part more or less of the revenue was derived from fees, inasmuch as all offices were self-supporting. There was scarcely an official who did not charge and collect for his own use fees of one kind or another. The " social contract " theory of the state, which was commonly accepted for a time, really had some foundation in the actual colonial conditions. Service and counter-service was the theory on which the entire method of remunerating public officials was based. It worked very well for a time, that is, during the primitive period; but as soon as the population became dense, and the amount of business to be performed by public officials increased, opportunities for fraud set in, which lead to the substitution of the salary for the fee system. Another characteristic of the colonial period, which belongs to all truck economies, is the fact that fees were paid in kind, that is, in cattle, tobacco,' corn, powder, shot, and so on. Furthermore, the undifferentiated state of the public serv- ice made it possible for one person to hold several offices at the same time, and, by means of fees from each, to eke out enough to make a fair compensation. The early colonial fee-system contains the germ from which the modern fee-system developed. Conditions were such that but few license and inspection fees were necessary, and harbor 2 and pilot fees were in their infancy; while court fees were well 1 A law was passed in Virginia to allow those who did not raise tobacco to pay their fees in money. 2 Fees of shipping officers in Mass. ports in 1663: For taking bond, 5s.; receiving and entering certificate, 2s. 6d.; for giving and recording certifi- cate, 2s. 6d. Colonial Laws, p. 223. 122 Urdahl — Historical Survey of Fee Systems. developed, owing to the fact that they were taken directly from the English system of jurisprudence. Finally a ferment, in the form of dissatisfaction, was present which was destined to lead to the gradual abolition of the fee system, as a means of direct remuneration of public officials. CHAPTER VI. FEES IN THE EARLY COMMONWEALTHS (1787-1830.) A. GENERAL TENDENCIES. The revolution does not represent any definite break or divid- ing line in the development of the fee system. The increased industrial and political activity of the decades following the war, forced to the front the necessity of state regulation of vari- ous matters, which necessity had not been felt during the colo- nial days. The political self-consciousness of the individual commonwealths, which was particularly strong during this youthful period, manifested itself in more direct state interfer- ence with the affairs of individuals than in any succeeding epoch. In general the individual state (commonwealth) was the important political unit, to which all eyes were turned. This often exercised its authority directly, without the use of the in- termediate political units, in the form of the city, county, and township organizations, so often employed at the present day. The individual citizen was then likely to meet or violate a state law or state regulation at every turn ; while now it is the mu- nicipal ordinances with which men come in most direct contact. Local and special laws therefore were the order of the day in every legislature. State regulation and state activity in one locality required one schedule of fees to pay all expenses, and in another locality a different rate. The Early Period in the United States. 123 There is perhaps no body of legislation which so regularly affects the economic conditions of the time and locality as the early laws prescribing regulations involving fee payments. Uni- formity in legislation was not aimed at in that day. The per- iod may most appropriately be called the "Era of special legis- lation. " Each individual ferry and toll bridge had a separate and distinct tariff of fees prescribed by the legislature. The pilots in one port or river were granted one scale of fees, while those in a different harbor were given another schedule. The in- spection fees were at times made high or low according to the character and location of the inspection office. General laws, es- tablishing fees or charges of various kinds, came later. Even the court fees were at times made higher in one district than in an- other. The fee-regulations of the Federal Government had the same characteristics. One schedule was applied to one port, and a different one to another. The marshals of some localities were allowed to make certain charges, while in others different rates were fixed, because of the differences in population and econo- mic conditions. B. SOME NEW LICENSE FEES. One state after another resorted to the licensing of lotteries and sometimes even to state management of them. 1 Fees were also charged for permission to sell lottery tickets. In the same way we find the New York legislature in 1802 making a pro- vision 1;or licensing the occupation of peddlers, 2 which up to that time had been a forbidden pursuit; while the southern states had, from the earliest colonial period, not only licensed and regulated hawkers and peddlers, but even derived consid- erable revenue from this source.* Also the licenses to maintain billiard tables were required very early in the South, while in several New England states that privilege was not granted till the beginning of this century. In all the states, however, such licenses were granted directly by some commonwealth official, and the fee paid therefor was for the use of the state, and not 1 McMaster, History of the Ameriean People, I, 583. 2 Same provision in Mass. Laws, 1799, 1, 243. 124 Urdahl — Historical Survey of Fee Systems. to the municipalities, as is customary at present. In 1806 l the Massachusetts Court of General Sessions passed an act giving power to certain state officials to grant theater licenses, which had been forbidden up to that date. 2 The voice of the munici- pality was moreover beginning to be recognized; as is seen in the fact that the license should only be granted on the recom- mendation of the selectmen of the town. The key to the whole situation lies in the fact, that the ob- ject of all legislation in this period was to make the fee-collect- ing offices self-supporting, and still not allow the officials to re- ceive more than a fair compensation for their services. This almost impossible task necessitated frequent changes to corres- pond to the growth in population and industry in each locality. In general it may be said, that the only common characteristic of the fee legislation of the different states during this period, is the tendency of the states to perform services directly in the interest of the public, which are indirectly a benefit to individ- uals, and to collect fees for such services. This extension of state activity manifests itself in one direction in one state, and in a different one in another. No general category of the fee-system can be said to have originated in the period, although every state introduced new regulations and collected fees which were new, as far as the individual commonwealth was concerned. C. DIFFERENTIATION IN ADMINISTRATIVE MACHINERY. Prior to the Revolution many of the states had no adminis- trative machinery for assessing and collecting taxes, or for per- forming many other public functions necessary to the existence of the modern commonwealth. Some of them attempted to uti- lize the judicial machinery which they had, to carry on the new adminstrative functions. The sheriff is thus the tax collector in a few Eastern States even to this day. But as taxation became more and more important, it was found necessary to make the tax collector a distinct public official. In the same way the as- 1 Laws, Mass., II, 150. 2 Statutes, S. C, 1817, par. 9. p. 384. Charleston may charge not less than $500 for theater licenses. The Early Period in the United States. 125 lessor often became an indispensable official in the apportion- ment and collection of local taxes. These, as well as the town and county treasurers, became, as a rule, fee-paid officials. Most of the new states in the West have made them part of their political machinery from the very beginning, and have con- tinued to remunerate them by means of fees down to the present. The only difference is, that the rates have been lowered as the amounts to be collected have increased. 1 A comparison of the fee-system of this period with that of a later epoch, demonstrates very clearly, how "division of labor" in public affairs has almost kept pace with that of industrial undertakings; and, furthermore, brings to light the regular differentiation which has been going on in all public offices. The attorneys' fees allowed by law in 1788 in New York, in- cluded many semi-official charges which now are paid to recorders, clerks, sheriffs, newspapers, and the like. This shows that the attorney at that time performed many of the functions of these officials; in other words, the duties of the attorney have been gradually more and more narrowed and limited in various ways. As an example of this may be mentioned the fact that the public official known as the " Schout Fiscal " was entrusted with almost every conceivable duty except judicial decision in the early colonial courts of New York. He combined in himself the power of public prosecutor and the executive duties of sheriff. 2 The same will hold of almost every official of that day when compared with his modern successors. 3 1 An example: South Carolina paid her tax collectors 7^ per cent, of the amount collected in 1803, while in 1813 the rate was reduced to 3^ per cent. Laws, 1813, VI., 712. 2 History of the Court of Common Pleas in New York, J. W Brooks. New York, 1896, p. 10. 3 The secretary of state of N. Y. was at first also commissioner of the land office, of the canal board, clerk of the council by appointment, clerk of the board of regents of the state university, etc. The speaker of the House of Burgesses also held the position of treasurer of the colony. Dinwiddie Papers, Va. Hist. Col., I, 73. 126 Urdahl — Historical Survey of Fee Systems. D. RELATIVE IMPORTANCE OP SOME OP THE EARLY PEES. The conditions existing in the earlier settlements made some legislative enactments have greater significance than they have at present. The modern method of building durable fences so rapidly and cheaply, for example, had not been invented. Large commons, where cattle were turned out to pasture, exist- ed in all the original states. The owners of cultivated fields were therefore in some localities compelled by law to fence them. This often meant an enormous amount of work, and even after the fields had been fenced, cattle would at times break through the inclosures; in such cases the question of damages resolved itself into whether the fence was legal or not. Fence-viewers were therefore appointed in almost every county to inspect and pronounce upon the various fences in dispute. These officers were usually paid by fees which were of no minor importance in the estimation of the colonists. An examination of any of the early statutes will show a large percentage of acts which relate to the subject of preventing swine from running at large. Now one township, now another is brought under this interdiction. After such an act had been passed, all swine found at large were liable to be impounded and held by the pound master until his fees were paid. Poundage fees were thus no insignificant item to the early farmers, for the same reason that at present they are of considerable importance in the more newly settled agricultural districts of the West. E. INSPECTION FEES. The legislation which most distinctly manifests the tendency toward state intervention on the part of the early common- wealths, is the inspection laws of this period. 1 These, many of them, had their origin in the economic needs or necessities of the colonial period. The people were living in a truck economy. The scarcity of money made it necessary to pay debts in com- modities. Under such circumstances it was just as much to the 1 Maryland required the inspection of hides, leather, lime, lumber, shingles, plaster of Paris, flour, salted fish, coal, etc. Laws, 1813-1832. The Early Period in the United States. 127 advantage of the buyer as the seller to have the commodities in- spected. Tobacco 1 was therefore subject to the most rigorous inspection law, and one state even attempted to regulate the amount which should be grown in order to prevent fluctuations in price. Without such inspection, a debtor might pay his debt with a very inferior grade of tobacco, while on the other hand the creditor might refuse to accept the best brand of to- bacco for any assignable reason. The same is true in regard to the other commodities. 2 Debts were paid in any one of the many staples. The inspection of these may be compared to the government assaying of the precious metals in the older coun- tries. The inspection of other articles originated in the exten- sive export trade of each state; especially in the north, where the articles which came under the inspection laws were largely those which constituted the exports. Thus we find pot and pearl ashes 3 subject to rigid inspection in many states; salted fish, beef, pork, flour, and many other commodities were very early made subject to compulsory inspection. The fact that peo- ple were accustomed to the inspection of some articles made it easy to extend the system of compulsory inspection to other commodities. Lumber, hoops, shingles, grain, bark, leather, hides, and many others, were added to the list which required the mark or brand of the public inspector before they could be sold. In the south the inspection laws affected pitch, tar, tur- pentine, tobacco, flour, lumber, spirits; in short, all the chief staples. Not only the inspection but the gauging and measuring of commodities was required to be done by a public official, who received fees for his services. This brings up another subject which was of fundamental importance to the early common- wealths, that is, the regulation of weights and measures. The Federal Constitution* provides that Congress shall have power 1 Account of tobacco inspection. Bruce, Econ. Hist. Va., I, 304. 2 Shingles were used to pay fines . Ibid., II, 158. 3 Ashes was the most important form in which the American forests were utilized for export. Laws, Mass., 1807, II, 901-928. Laws, New Jersey, 1821, R. S., p. 1043. Laws, N. H., 1785, p. 389. 4 Federal Constitution, Art. I, Sec. 7. 128 Urdahl — Historical Survey of Fee Systems. to fix the standards of weights and measures ; but Congress has never done so. The individual states therefore adopted and en- forced their own standards. Some of them made the sealer of weights and measures a state officer, while others attached the duties and emoluments of the office to some other state office. Besides the state sealer, there were subordinate county sealers, all of them paid by fees collected from those who had their scales and measures tested. To provide further against the use of fraudulent scales, it was enacted that dealers should have their instruments of measurement sealed at stated intervals; which resulted in considerable pecuniary gain to this office. It is noticeable that a large number of these and similar fees were paid for services performed by the government to protect the public, and more especially the consumers, against fraud on the part of the seller. These regulations, which to us seem al- most superfluous, were at that time very necessary, because of the imperfection of competition. The buyer was as a rule al- most helpless against the frauds of the seller. No way was open to him to detect or avoid imperfection in the scales or measures, unless the government gave him the means. Adultera- tions and goods of inferior grades might be imposed upon him with impunity, unless there was an inspection law to which he might appeal. Oppression, fraud, discrimination against the weak, were the evils which were feared, and which many of these laws attempted to guard against. The fees were payments for real services to the seller as well as the buyer. The seal of a public inspector added pecuniary value to the goods, while to the buyer it was a valuable safe-guard against fraud and adul- terations. T. REGULATION BY MEANS OF LICENSES. Some states found it necessary to regulate the legal profes- sion, and at a very early date prescribed examinations and the payment of license fees before admission to the bar was granted. 1 Laws against over-charges by attorneys were not uncommon, 1 Laws Mass., 1803, II, 735. Admission to court of Common Pleas, $20; admission to practice in Supreme Court, $30; degree of Barrister at Law, $40. The Early Period in the United States. 129 while one state required every attorney to pledge himself before the license could be issued, not to charge illegal or extortionate fees. Physicians 1 became amenable to law, in that some states required license fees, and prescribed examinations for all who desired to practice medicine. In short, license fees and regulation by means of license, be- came extremely common in the early part of the century. 2 Auctioneers, 3 pawnbrokers, retailers of various kinds,* victual- lers, innkeepers, and others were placed under supervision, but perhaps most important of all were the liquor licenses. 5 These were employed in all the states to regulate the establishments in which liquor was sold. The charges vary from a merely nominal fee to a considerable sum. Some commonwealths even had a classified system of licenses; among others may be men- tioned the beer license, wholesale liquor dealers' license, retail liquor license, for each of which a distinct fee was charged. In the earlj T history of the country it was customary for the country grocer to sell liquor as well as provisions, which led to the establishment of the license regulations for groceries in general. It should be borne in mind that liquor legislation and the license system is a distinctively American development; al- though England has had almost the same experience, which has resulted in similar regulations, still our system is not taken 1 In New Jersey, physicians for vaccination hospitals were required to furnish bond for 1,000£ before they could obtain license. Act, 1789, Feb. 3, p. 302. The Massachusetts Medical Society was given power to exam- ine and license candidates, and to fix fees therefor. Laws, 1796, par. 6, 42. 2 Broker's license fee of $5, originated by an early Governor of Maryland. Laivs, 1818, Ch. 10, §1. Ibid. , Lottery ticket broker's fee, $500. Hawkers' and peddlers' license fee, $40. 1819, Ch. 184, §6. 3 South Carolina license fee, from $25 to $175. Statutes, XV, 797. 4 Pennsylvania venders of domestic merchandise, $20. Laws, Penn., 1830, p. 387. 6 In Baltimore, liquor in quantities of 10 gal., fee $12; retailing generally, fee $16. Laws, Md., 1827, Ch. 117, par. 2. New Hampshire beer-bottler's license, for first class fee, $75; second, $50. Laws, N. H., 1814, par. 148. 130 Urdahl — Historical Survey of Fee Systems. from England. Each of the original states, almost without exception, passed through all the stages in the evolution, which as has already been shown, may be roughly outlined as follows : The bad effects of the unrestrained sale of liquor soon became manifest; to remedy this, power was given to some public officials to restrict the number of places where liquor might be sold. From this it is but a step to a written license. Soon a small fee is charged for the use of the licensing body. Little by litle this fee is increased until it becomes the license charge as we know it today. Before 1830 the liquor licenses were all of them moderate, rarely exceeding $50 ia amount, and usually much less. G. ROAD TOLLS, ETC. After the colonies had recovered from the immediate effects of the revolutionary war, a period of intense industrial activity and prosperity set in, as is manifested by the enormous increase in the number of internal improvements and other improve- ments and other enterprises. Pennsylvania was the leader in road and bridge building. In this state 168 turnpike companies and 61 bridge companies were incorporated 1 between 1792 and 1828. The other states were progressing along the same lines. Almost every legislature passed some special act incorporating bridge and road companies, or granting ferry privileges. Many of these undertakings were so large, that state aid was neces- sary if they should be successfully completed. Pennsylvania alone subscribed over two million dollars to turnpike, bridge, and canal companies in less than twenty years. 2 Most of these improvements were not built by local political bodies, for the free use of the people, but were speculative in- vestments for profit. The investors expected, in almost every case, to recompense themselves, not only for the interest on the invest- ment, but also for the capital itself, out of the tolls to be col- lected for the use of the improvement. Some of the charters 3 1 Worthington, Finances of Pennsylvania, Amer. Econ. Assn. Publ., p. 20. 2 Ibid., 21. 3 1797, 20th session, p. 454. License granted to Anthony Dobbins to run a stage from Goshen to New York. The Early Period in the United States. 131 fixed a scale of maximum fees or tolls x which might be collected, and in a few cases provided for a revision and reduction of the same, after a certain number of years had elapsed. But the law fixing the fees for each ferry, bridge, or toll-road, was not lived up to in all cases, or was easily evaded, on account of the loose wording of the special acts. The result was the continuation of petty discriminations and annoyances of various kinds, due to favoritism or antagonism of the toll collecting body to different individuals. It was but natural that protests against these over- charges and frauds should begin to pour in upon the various state legislatures ; for protests of this kind were not uncommon, even in the colonial period. In consequence, the legislatures usu- ally attempted to regulate the ferry and bridge companies, by fix- ing more detailed and elaborate schedules of rates and prescribing penalties for their violation. 2 But apparently the abuses con- tinued; for the laws of the period after the revolution fairly bristle with special enactments regulating this, that, or the other toll collecting company. The problem which those early legislatures had to solve, was exactly the same as the railroad problem of today, only on a smaller scale. The abuses of that day, as shown by the com- plaints, were in miniature the very same as the complaints against the railway companies at present. If history repeats itself, the final solution of this early problem may point to a similar treatment of the problem of today. As has been stated, the early commonwealths tried regula- tion of various kinds. 3 At first the right to establish ferry or post roads was, as a rule, granted by the legislature for nothing; soon, however, this power of issuing ferry licenses began to be transferred to local authorities, the legislatures prescribing the method and manner in which the grant should be made. Us- ually a bond for a certain amount was required for the enforce- 1 Act, Mass., passed in 1817, Rev. Stat, 1836, p. 338. 2 These tolls collected by private companies were not fees. Their signifi- cance lies in the fact that they became fees when the state or municipality took the roads out of private hands. Sometimes, also, they became license fees, because the abuses practiced by the toll collecting companies led up to regulative legislation of this kind. 3 Laws of New Hampshire, 1791. 132 Urdahl — Historical Survey of Fee Systems. ment of the law regulating ferries. Thus we find in New York laws, passed at the eighth session, a regulation to the effect that " each ferry license should be granted for an annual rental, " which was in its essence a license fee. The law prescribed what tolls should be collected besides numerous police regula- tions. Soon the power to make all these regulations was trans- ferred to the local authorities. Then comes the inauguration of the great movement which has resulted in public ownership of highways and bridges, but which is not yet completed as regards ferries. The change from private ferries to free public bridges has however been carried out wherever the cost has not been too great. H. TONNAGE DUTIES IN THE NATURE OF FEES. It is the state tonnage duties of this period J that reveal most clearly the dependence of the early commonwealth on colonial institutions. These were duties, levied with the consent of Congress, on vessels entering certain harbors or water-courses, and were, originally at least, intended as payments for the use of improvements made or to be made in such rivers or harbors. They were, perhaps, only partially in the nature of fees, because they were at times levied to pay for improvements which were about to be made. The service would only be actual, in case the vessel returned to the harbor, and in that way received benefit from the improvements. The significance of these duties lies in the fact that they illustrate how the states had been ac- customed, while they were colonies, to pay for their harbor im- provements in this way. So very naturally they resorted to the same methods after the Union had been formed, although the federal constitution expressly prohibited it. 2 These charges all disappeared, as soon as the federal customs and tonnage duties became firmly established. J R. I., 1790, to deepen channel at Providence; Mass., 1798, to improve the Kennebeck River; Pa., 1805, to improve the Delaware River; Va., 1804, 1826, to improve the James River; N. C, 1824, to improve Appatomax River; Ga., 1787, to improve Savannah River; Md., 1783, to improve Balti- more Harbor; Md., 1793, to improve harbor and pay health officer of har- bor. 2 The constitutionality of these duties was not questioned because the consent of congress was obtained in each case. The Middle Period in the United States. 133 CHAPTER VII. THE MIDDLE PERIOD. 1830 TO 1865. A. GENERAL CONSIDERATIONS Beginning with the administration of President Jackson the United States entered upon a period in many respects the most remarkable in the history of the country. In a certain sense it may be called the beginning of the industrial development, or the industrial revolution, of the New World. Mighty strides were made in all branches of learning and especially in the in- dustrial arts. The most wonderful inventions l were applied, and machine production on a large scale began. Towns in- creased enormously in size 2 and importance so that city ques- tions were forced to the front. Gradually one power after an- other was turned over to municipalities, until they held in many respects almost the same position as fee-collecting institutions, that the states held in the earlier epoch. The legislature, to be sure, fixed the maximum and minimum amount which might be charged ; but the towns had the power to fix the charge, within those limits, and to grant licenses or to refuse them. These municipal privileges were granted much earlier in a few isolated instances, 3 but the movement did not become general. B. LICENSE REGULATIONS AND FEES. As a result of the rapid growth of the cities the liquor ques- tion came into prominence, and high licenses were introduced 1 Telegraph, 1837; cheap postage proposed by Hill; steam propulsion, etc., etc. 2 The percentage of total population living in cities increased from 6.7 per cent, in 1830 to 20.9 per cent in 1870. U S. Census. 3 Mayor and Aldermen of Hudson granted power to license taverns. Fee not to exceed 16s per year. Statutes, N. Y., 13th sess., p. 195-196. Annapo- lis, Md., given power to regulate ordinaries and retailers of liquor. Laws, 1784, Ch. 49. City of Washington given the same power, also the power to license and regulate wharfs. Laws, Md., 1784, Ch. 45, § 12. Georgetown granted similar powers. Ibid., 1799, Ch. 85, § 2. 134 Urdahl — Historical Survey of Fee Systems. not only to regulate the sale of liquor, 1 but also for permission to carry on various other occupations. Maryland required licenses to be taken by keepers of cook-shops or taverns, peddlers, and others. The fees were collected partly for regulation but largely for revenue. An attempt to vary the size of the fee ac- cording to the amount of stock ■ was inaugurated as early as 1828. This same idea was applied roughly to the charges for peddlers' licenses in New Jersey, in that a peddler on foot was required to pay only eight dollars, while one with a horse was charged fifteen dollars. 3 Pennsylvania was almost the first to extend her license system so as to include a very large number of industries. Brokers of all kinds, venders of foreign and do- mestic merchandise, sample agents, and many others were brought under its requirements.* Pursuits in which fraud was most likely to be practiced, were charged a higher license fee than others. But there is no uniformity in the different states in this respect. Each law was passed usually under pressure of circumstances. 5 The conditions of one state brought the abuses of one pursuit to light, while another at the same time felt the need of regulating a different occupation. Shows, theaters, and circuses had become of far greater im- portance than at any previous period. This is manifested by the number of acts which regulate and license these amuse- ments, 6 also by the fact that the license fee is slowly increasing 1 Liquor license in Maryland from twelve to fifty dollars. Laws, 1832, Ch. 26. 2 Laws, Ind., 1828, Ch. 85. 3 Statutes, N. J., 1846. 4 Law, Venn., 1830, p. 387. Much of this later license legislation was unquestionably directed toward raising revenue, and was in essence taxa- tion; but its importance in this connection lies in the fact that it originated as pure license fees. During the period under consideration, many of the license charges possessed all the characteristics of pure fees. The license and business taxes which became very common in the South, were radi- cally different, although they too originated, indirectly at least, in license fees. 6 In some states clock-peddlers were charged no license fee, while in Penn- sylvania thirty dollars was charged for each. Ibid., p. 39. 6 Statutes, N. H., 1850, Ch. 971; Md., 1841, Ch. 194; Penn., 1850, p. 147. The Middle Period in the United States. 135 in amount. 1 The importance of the large cities is here again recognized by the fact, that a higher fee was collected for these licenses in the great towns than in small ones. C. THE DEVELOPMENT IN INSPECTION FEES. The system of inspection continued to be elaborated and en- larged in such a way that new articles were continually added to the list coming under this requirement. Furthermore, new and more complex schedules were made of the old inspection fees. Many of these early laws were designed to protect the consumer, and forbade the sale of uninspected articles. This provision was soon found to be too onerous to some producers, and as a result inspection laws were made applicable largely only to articles intended for export. 2 Sometimes, however, a few products, which were deemed especially liable to adultera- tion or deception as to quality, were in some states kept under compulsory inspection; as, for example, in Pennsylvania, flour intended for sale, 3 in South Carolina, turpentine. To understand fully the significance of these state export in- spection laws, it is necessary to bear in mind that the export trade had not become centralized in a few great ports as it was later on. Cheap transportation other than by water was not even dreamed of. Every state which had any seaboard at all, carried on its own export trade, instead of sending its products to New York or other great ports, as is customary at present. Each little harbor drained, as it were, the products of the ter- ritory surrounding it. It was not American pork and Ameri- can wheat that was quoted in European markets, but it was New York flour, Virginia tobacco, Carolina pitch, and so on; each state became in a sense responsible for the quality of its own goods. It is then not difficult to understand why each state laid so much stress on the inspection of its own products 1 Laws, Penn., 1845, p. 532. 2 Compulsory inspection, except of exports, was abolished in New York in 1845. Laws, Ch. 202, Par. 1. In North Carolina provisions, cotton, turpentine, tobacco, lumber, and the like, were required to be inspected before exportation. Laws, 3856, Ch. 27. 8 All timber sold must be inspected. Laws, S. C, 1856, XII, 580. 136 Urdahl — Historical Survey of Fee Systems. intended for export. The exporter was not only required to pay a fixed fee for each quantity of goods inspected, but in some cases was compelled to buy a certificate stating that the entire cargo had been inspected, before the vessel could obtain its clearance papers. 1 Facilities for ascertaining the weight and measure of articles bought or sold, were not as yet in the possession of the masses. The increasing amount of buying and selling which was done by means of comparatively few scales and instruments of meas- urement, presented a fine opportunity for large profits by means of fraudulent instruments. A sealer of weights and measures to test regularly the accuracy of all scales, was therefore an eco- nomic necessity. The services of this official were directly in the interest of the owner of the scales, because his instrument re- ceived the official sanction and approval. It was therefore not unjust to require him to pay the inspection fee. With the growth in population the number of scales multiplied very rap- idly. As a result the number of sealers required was very much greater, and the amount of fees paid to these became of more importance. D. NEW INSPECTION FEES. The industrial progress of the community shows itself most directly in the canal and railroad building, and the employment of steam in navigation. As a result of the imperfections of the earlier built engines, their use was not so safe as it ha3 since become. Railway, steamboat, and other accidents were very nu- merous, due to boiler explosions or fires caused by the applica- tion of steam as a means of propulsion. Lives were lost in large numbers; steamboats went down with all on board; rail- road holocausts were frequent; all of which resulted in pressure for legislation to protect the lives of the public against the sup- posed carelessness and greed of transportation companies. The states 2 therefore stepped in and passed acts making railroads responsible for injuries received in railroad accidents. 1 Laws of New Hampshire, New York, and of other states. 2 Massachusetts took the lead, followed by the other NewEngland states and by New York and Pennsylvania before 1850; while the North The Middle Period in the United States. 137 But the states could not regulate steamboats engaged in inter- state or foreign commerce, because this power was given to Congress by the Constitution. A bill was therefore introduced in this body, and passed in 1850, providing for United States steamboat inspectors, whose duties should be to test all boilers, inspect the boats, and see that the required number of life-boats, life-preservers, and the like were carried. As a compensation they were allowed to collect fees from the boat owners for each inspection. E. LATER FEES AS COMPARED WITH EARLIER FEE SCHEDULES. A comparison of the tables of fees of the middle period with those in force in the colonies, shows not so much a reduction in the size of the various fees as an attempt to put all charges in round numbers, in other words, to charge such amounts as would seem most convenient and customary for the public to pay. A comparative study of the early schedules of fees seems to show that there was an attempt to compute accurately, in dollars and cents, the cost of the various services performed by public officials; while the later fee-bills appear to be attempts to approximate roughly the cost of the service, rather than to really measure it. If we glance at the numbers in an early fee- law, they run as follows: 1 5, 17, 25, 34, 13, 19, 42, 67, 50, 85, etc., while a later statute of the same kind would show the following figures: 40, 25, 50 cents, $1, .50, .20, etc. This would seem to indicate a regular increase in the amount of the fees, but a general statement that such is the case can- not be made. There may be a very decided increase in one state or in one part of a state, while in another there may be a decided decrease. A further explanation of some of the odd numbers in the earlier schedules is the fact, that the colonial fees were expressed in pounds and pence and, in the earlier laws, these were simply translated into their American money equivalents. western states all passed similar laws between 1850 and 1860. Rhodes, History of the United States, II, 18. 1 Statutes, Conn., 1796. 138 Urdahl — Historical Survey of Fee Systems. F. NEW STANDARDS OF MEASUREMENT. In course of time new standards of measurement are intro- duced. Recorders' fees were, as a rule, so much per folio. "Folio," however, is an ambiguous term, of which the recorders were not slow to avail themselves; and, as a result the states one by one passed acts defining its meaning. 1 Peddlers' license fees soon become graded according to the amount of goods which were carried, and also according to the nature of the goods sold. 2 Liquor licenses are made to vary in some states accord- ing to the number of kinds of liquor sold on the premises; in others according to the quantity sold at the time; and in still others according to the value of the stock, 3 or the rental value of the premises, and so on. In billiard table licenses there is usually a smaller charge for the second table on the same prem- ises than for the first. In a few states the charge for inspec- tion is slightly lower if there is a large quantity of goods in- spected at one time, than for small quantities. G. INCORPORATION FEES. Another set of fees, which may be said to be a direct result of economic conditions of the middle period, are the payments which have been designated by the general term, " incorpora- tion fees. " These are, in a certain sense, one of the few sur- vivals of the ancient Regalia, or lucrative prerogatives, which belonged to the sovereign. The right of incorporation was at first simply one of a large number of franchises 4 granted by the King. In common law the words "franchise" and "liberty" are synonymous. Blackstone defines a franchise as a "royal privilege, or branch of the king's privilege, subsisting in the hands of a subject. " 5 It may be "vested" he says "in natural 1 Some states fix 100 words to the folio; others 80, and so on. 2 First there is one charge for all peddlers' licenses; then there is a higher charge for a license to peddle with a horse; then the charge is further increased for license to peddle with two horses, and so on. 3 Pennsylvania adopted the system as early as 1840. 4 Blackstone mentions as franchises the right to have a manor, to hold court-leet, to have lordship, to hold estrays, to use royal fish, and so on. 5 Blackstone, II, 37. The Middle Period in the United States. 139 persons or bodies politic." The most common of all franchises came to be the grant of corporate existence, with which were coupled other rights, such as the right to take tolls on high- ways, and similar privileges. In the United States most of the other franchises dropped out of sight, and to the popular mind the word usually means a privilege to use highways, or streets for some purpose or other. It is thus clear, that it is a last remnant of a large number of grants which were formerly made by sovereignty. The first American franchises were granted to turnpike, bridge, and ferry companies, usually by special charters. No charges or fees were collected for the earlier ones, and even after the applications for charters became numerous, charges or payments of any kind were rare. But with the increasing value and earning capacity of these corporations, whose activities the charters made possible, the tendency becomes general to impose charges, which are virtually payments for the right to exercise those privileges. A careful study of conditions will show that the special benefit conferred on individuals through these various charters, were at first so small that the grant might well be made for nothing; 1 especially since the public was oftentimes largely benefited by the enter- prises which were thus put into operation. Later on, however, the special benefits conferred by the charters were very valua- ble, and a moderate payment was simply a slight remuneration for the privilege given. There are a few general causes which may be said to have led up to, and brought about the general incorporation laws of this period as contrasted with the early special laws. In the first place, the grant of charters and other corporation privi- leges degenerated into acts and laws which were passed by means of political c hica nery and in trig ues. Indeed, to such an extent was this carried that politicians made it a business to obtain charters of such a general character, that they could be 1 The early charters for water companies in the state of Connecticut, known as acqueduct companies, were in reality for co-operative corpora- tions of farmers secured for the purpose of supplying themselves with water. No fees were paid for these charters. These are in one sense the precursors of the modern water-supply companies. 140 Urdahl— Historical Survey of Fee Systems. used equally well for any kind of a corporation. 1 When ob- tained, these franchises would be sold to anyone wishing to buy. In this way a bill might be passed without debate or delibera- tion which would be instrumental in creating corporations with powers and privileges dangerous to the general public. In the second place, it was a period of intense industrial activity. Corporations were needed everywhere to carry on the railroad and canal-building, shipping and other industrial en terprises. Finally, the decision of the Supreme Court in the Dartmouth College case, holding that the privileges granted away by means of these special charters could not be altered or resumed by subsequent legislation, led up to constitutional amendments reserving power to the state to alter and amend all charters. All these things may be said to have been the causes that brought about general incorporation laws prescrib- ing the method of procedure which a body of persons must follow in order to become incorporated. Comparatively few states, however, had reached this stage before the war. 2 The significant part of most of these general incorporation laws is the fact, that a regular incorporation fee is charged, small in amount at first, but gradually increasing until it be- comes the fee which is at present known as franchise taxes, charter fees, incorporation charges, and by many other desig- nations. A little thought will convince anyone that the char- ters were not obtained for nothing, even when they were granted by special acts. Very often more than the amount at present paid as fees, had to be expended in one way or another to secure the passage of the special act. In one sense it may therefore be said that the general law took the fees out of the politician's pocket, and turned them into those of some public officer and sometimes into the public treasury. 1 The notorious Credit Mobilier owed its existence to a charter obtained in this way. 2 Connecticut passed a general incorporation law in 1845. A New Jersey incorporation law dates back to 1811. The Federal System. 141 CHAPTER VIII. THE FEDERAL FEE-SYSTEM. A. PATENT AND COPYRIGHT FEES. To the public generally the best known system of fees col- lected under the federal laws, is undoubtedly that connected with the National Patent Office. This office is one of the insti- tutions which were conceived and established by Jefferson in 1790. Before that date some of the states had by legislative acts granted patents and copyrights for short periods of years, but none of them had any complete system. 1 True to the ideas then current, that fees should pay salaries directly, and should only be sufficient to make the public institutions self-support- ing, Jefferson made the patent office fees very low, and al- lowed all of them to be collected as salaries by the patent office officials. 2 But the receipts were found to be inadequate to pay expenses ; so in 1793 a law was passed which increased the fees to six times the former amount. This continued in force up to 1836, when a new act was passed which provided that patent officials should be paid salaries, and that all the fees collected should be paid into the treasury. The Patent Office fees re- mained about the same for United States citizens, but foreign applicants were compelled to pay much larger sums for patent rights. 3 Provision was also made for the right to extend the the life of a patent, and a fee of forty dollars was to be col- 1 Statutes, N. Y., p. 274; Copyright act, 1777. Massachusetts patents, 1639; Colonial Laws, p. 182. Governor and council have power to encourage inventions in Pennsyl- vania. Laws, Duke of York, p. 251; charter of Province of Philadelphia. 2 Jefferson's schedule was as follows: Filing petition, 50 cents; filing specification, 50 cents; making out patent, $2; affixing seal, $1; endorsing and delivering, 50 cents. 3 Statutes at Large, U. S., V, 513. Citizens of Great Britain, applica- tion fee, $500; any other country, $300; citizen U. S., $30; caveat, $20; ex- tension of patent, $40; appeal from examiner's decision, $25. 142 Urdahl — Historical Survey of Fee Systems. lected for each extension. This schedule remained in force up to 1861. Congress then passed an act which reduced most of the old fees by one-half, but enlarged the fee bill so as to require payments for official acts which up to that time had been free. 1 The discriminations against foreigners were also repealed. With slight changes this schedule has remained in force up to the present. New duties are gradually taken over by the patent office, because the sphere of invention becomes broader with every new discovery in science, and the technicalities of patents and patent rights become more complicated. New fees are therefore constantly being introduced to pay for the more elaborate and thorough examination which must be taken in the interests of the patentees. ■She copyright law has been subject to less change than the patent law, and the fees have remained uniform almost from the beginning. The first act, passed in 1790, fixed the copyright fee at fifty cents, and provided for a re-issue on payment of an- other fee of the same amount. These charges continued un- changed in all the subsequent acts, except that a recent law has taken all the fees out of the Librarian's salary 2 and required their payment into the treasury. 3 B. CUSTOM HOUSE AND OTHER IMPORT PEES. The very first law levying import and tonnage duties made provision for the payment of all officers connected with the cus- tom house by means of fees. Surveyors, weighers, gaugers, in- spectors, and collectors, each had their own fees defined by this early act of 1787. Clearance and entrance fees for ships were 1 Ibid., XII, 246, each caveat, $10; each original application, $15; issuing each original patent, $20; each application for reissue, $30; each ap- plication for extension, $50; recording assignments, etc., extra. 2 Revised Statutes, U. S., 1891, p. 951. 3 The applicant for a copyright is required to deposit two copies of his book with the librarian, the cost of which may in one sense be reckoned as a part of the copyright fee. There are, however, other fees collected by the librarian, which are not absolutely necessary to the validity of the copyright. As such may be mentioned a fee of fifty cents for each copy of the certificate; and one of a dollar for recording the assignment of a copy- right. The Federal System. 143 varied according to the tonnage. For ships of less than one hundred tons, the fee was one dollar and a half, while all ships of over one hundred tons were required to pay two dollars. Payments were also made for permits to land goods l and for each bond procured. In 1789 the coasting and fishing trades were put under special regulation ' l by means of licenses, for each of which a fee of fifty cents was collected; and in addition a fee of ten dollars was charged for each certificate of enroll- ment. Foreign vessels were placed under similar restrictions and compelled to pay for any privileges granted them. This schedule of fees continued in force for two decades, 3 when it was decided to vary the amount according to the importance of the port of entry, and a salary was added to the fees of office in some of the Northern and Northwestern ports. A decade later, in 1831, an act was passed which required all the fees collected in the Northern custom-houses to be paid into the treasury, and placed the customs officials of that section on a salary. Up to 1864 most custom house officials of the Atlantic sea-board received as compensation all the fees collected at their respective offices. The enormous sums which some of these positions yielded finally became known, and as a result Congress passed an act* making $9,500 the maximum amount which any collec- tor should be allowed to retain, and providing that any excess above this amount should be paid into the treasury. These pro- visions, however, did not prove satisfactory. So in 1879 a new law was enacted which provided a schedule of fees to be exacted from all who had dealings with the customs service. These multitudes of fees, consisting usually in small vexatious exac- tions, were in many cases inadequate to compensate the officers concerned, except in the busy ports where they aggregated enormous sums. One of the sections 5 of the last named act pro- vided fixed salaries for naval officers, collectors, and surveyors of the chief ports. There was no reason why this provision 1 In 1887 the fee for each permit was twenty cents. 1 Revised Statutes, U. S., I, 704. 3 Ibid., Ch. 107, par. 7, 1822. 4 Ibid., XIII, 134. 6 Section 23. 144 Urdahl — Historical Survey of Fee Systems. should not have been extended to all the other officers con- nected with the customs service, specially since action to this effect had been repeatedly recommended by the secretaries of the treasury. J The tariff law of 1890, known as the McKinley bill, 2 abolished ail fees exacted for oaths except so far as provided in the act itself. It also placed all officers on salaries equal to the amount of fees which each would have been entitled to receive for his services during the year. This was a step in the right direc- tion, but only a very small one, as the salaries were left just as indeterminate and unclassified as ever. C. LICENSES TO VESSELS. In 1864 a new standard was adopted for estimating the fee or charge for each permit or license to vessels, in that the fee was was made to vary from twenty-five cents to one dollar, accord- ing to the tonnage of the vessel. Fees for permits to vessels belonging to foreigners were fixed higher than those of citizens of the United States. Then came an act in 1871 fixing the li- cense fee at twenty-five dollars for a vessel of one hundred tons burden, and charging five cents extra for each ton over that limit. The same change is noticeable in the fees which were allowed for measuring vessels. 3 Similar standards are applied to boat inspection fees. The first law* on this subject was en- acted in 1838, and fixed a fee of five dollars for the inspection of any vessel, and the same for each boiler inspection. In 1852 vessels were divided according to tonnage into four classes 5 ranging from one thousand tons to less than one hundred and twenty-five, the fees varying from thirty-five to twenty dollars. This schedule remained in force up to 1884, when inspectors were paid salaries ; and the fees, which were fixed at ten dollars for a vessel of less than one hundred tons and fifteen cents extra for each additional ton, were collected for the treasury. 1 Report on Collection of Duties, Secretary Manning, 1895. 2 Statutes, U. S., 131, sec. 22. z Acts, 1790, Ch. 34, sec. 44; and 1864, Ch. 83, sec. 45. 4 Statutes at Large, 1838, V, 304. 6 Statutes, U. S., 1852, V, 73. The Federal System. 145 D. MISCELLANEOUS MARITIME FEES. Numerous other fees were from time to time collected for li- censes to carry on maritime and other pursuits. Wreckers and pilots were compelled to obtain licenses at a cost of five dollars besides a fee of one dollar for each annual renewal of the same. 1 In 1864 this charge was increased to ten dollars for each license. 2 A few years later the captains, mates, and engineers were placed under the same requirements. 3 From 1872 shipping commis- sioners * were allowed a fee of two dollars for each man engaged by them for a crew and fifty cents for each certified discharge. This law was modified in 1884 in such a way that all the fees of the shipping commissioners were required to be paid into the treasury. 5 E. COURT FEES. Most of the inferior officers of the Federal courts were, until quite recently, allowed to retain some or all of the fees con- nected with their respective offices; nor had any serious attempt been made to reduce the income derived from fees to any fixed amount, until the act of 1853, by which the allowance of deputy marshals was limited to seventy-five per cent, of the fees earned by them. 6 This was followed by an act requiring marshals to give an account of all fees collected, which finally resulted in the act of 1878 fixing the maximum compensation of United States marshals at $6,000, to be paid out of the fees earned after the office expenses had been deducted. The clerks of the United States Courts have continued to receive fees as salary down to the present; and only slight changes have been made in the original bill regulating their fees, for the most part in increasing the number of acts for which fees might be collected. United States district attorneys 7 have also received the fees col- 1 Revised Statutes, U. S., 1853, 73. 2 Statutes, U. S., 120. 3 16 Revised Statutes, U. S., 473. ♦17 Ibid., 278. '22 Ibid., 8. 23 Ibid., 59. 6 Ibid., 1853, X, 161. 1 1bid., 1789 and 1791; district attorney paid salary and fees. 10 146 Urdahl — Historical Survey of Fee Systems. lected for their services almost up to the present. It is only with- in the last year these positions have become salaried. The ter- ritorial court officials still receive many fees for numerous serv- ices which are usually performed by other officers in the states. 1 For example, fees for marriage licenses, recorders' fees, and the like are still received by them. F. LAND OFFICE FEES. It is in the Land Office that we first see the government change from a fee-system of compensation to a salary system. The prospects of gradually increasing government land sales made it evident, that the fees in many offices would greatly exceed the legitimate compensation for the work performed; and it was equally evident that no adjustment of the schedules could bring an equilibrium between work and pay about. So, as early as 1818, we find an act which gave the land office regis- ters and receivers an annual salary of $1,500, besides one per cent, of the money collected by their respective offices; pro- vided, however, that no salary should exceed $3,000 per annum. But even this provision made a position in the land office of a rapidly growing state exceedingly desirable. Hence in 1859 another act 2 was passed which limited the salary of registers and receivers to $2,500 in Western, and $3,000 in the Pacific states. The land office fees constituted a very large part of the original price of the land. 3 In the Pacific states the fees were thirteen per cent, of the total price, in some of the others they constituted eleven per cent., and in many cases even more. When the surveyors' fees are added to these, one can realize what an important item in the cost of the public land these fees were. It must be borne in mind also that the fees had to be paid, even though the land was obtained by pre-emption, by tree claim, or in any other manner. The land office fees have at times been used by unscrupulous officials as instruments for 1 Ibid., p. 96. 2 Statutes at Large, XI, 378. 3 Schedule in 1869: 160 acres of land at $1.25 per acre, commission $18; 80 acres at $1.25, commission $9; 40 acres at $1.25, commission $7; 80 acres at $2.50, commission $18. The Federal System. 147 carrying on some of the most notorious and fraudulent land swindles, to the injury of actual settlers. G. MISCELLANEOUS PEES. The consular and diplomatic offices collect each year certain fees for passports, consular papers, and other services. Orig- inally these formed part of the salary 1 of the consul or minister, as did the fees collected in the consular courts; but in 1860 these officials were required to account 2 for all fees received in any way in the exercise of their judicial authority. 3 Many of the fees were diminished in amount and some of them entirely abolished by the act of 1891. Postmasters were also paid orig- inally by means of fees ; and a remnant of the old system exists even today, in the fact that the salary of postmasters in the small towns depends upon the average receipts of their respec- tive offices for the four years preceding. As far back as 1845 an attempt was made to limit the compensation of these officials by an act which provided that none of them should retain more than $5,000 per year including his salary. Any excess should be accounted for and paid into the treasury. This act was soon superseded by the present law. Other fees regulated from time to time by Congress are the municipal fees of all kinds in the District of Columbia. Fees for liquor licenses and for licenses to innkeepers, peddlers, and many other occupations have been fixed and changed again and again by Congress. One act which very well illustrates the tendency of changing from fees to reg- ular salaries, is that of 1842, which expressly prohibits any police official in the District of Columbia from receiving any gift, fee, or emolument other than his regular salary. The spirituous liquor, or excise licenses, as they are called, and the industrial licenses of the war-period were not fees, but taxes pure and simple. They were levied mainly for revenue, and were essentially the same as the other indirect taxes of this period, because no real privileges or services of any kind were granted in return for their payment. 1 Revised Statutes, I, 255. 2 12 Statutes at Large, p. 75. 3 Revised Statutes, U. S., XIV, 226. 148 Urdahl — Historical Survey of Fee Systems. CHAPTER IX. THE EVOLUTION OF THE FEE SYSTEM AS SHOWN BY THE STATE AND FEDERAL STATUTES. The foregoing treatment of the changes in the Federal fee system, illustrates incidentally a tendency which manifests it- self in the development of almost every state or municipality in the United States. This tendency is to pass from a primitive fee-system to a salary system. The forces which make this change necessary and desirable, lie in the economic conditions of a rapidly growing and progressive community. In a static society, a society in which neither wealth nor population are in- creasing, the fee-system of remunerating public servants may, with effectual supervision and wise administration, continue for any period of time without resulting in either needless expense or fraud of any kind. But in a progressive community, like any one of our large cities or even states, it has been impossi- ble so far to frame any system or schedule of fees which will be economical and still not be unjust to the fee-paid officer. A purely clerical office in a city may, with a certain schedule of fees, yield $5,000 this year; and next year, on account of the rapid growth of the city or a revival in business, it may yield five times that amount, or because of business stagnation, pro- duce only a small fraction of it. If any schedule should be made absolutely just, it would require that the fees be adjusted to eco- nomic conditions each year by men who could forecast accurately the future and take into consideration all possible changes and chances. Such conditions are Utopian. No legislature or county board can foresee how much business a district court is going to have in a certain year. Fees, especially those of local officers, when once fixed are not likely to be changed very soon. The inertia of such legislation is very great; all the political forces are against it. The growth of population may cause a certain position to yield fabulous sums within a very few years. This continues until some scandal reveals the true condition of af - Evolution of Fee Systems in the United States. 149 fairs to the public, and arouses it so that it overcomes the in- ertia and obtains a revision of the law. But it is almost im- possible to invent a fee bill for an office which has been yield- ing $50,000 a year^so as to make it yield only $5,000. The easiest way for legislation to accomplish its pur- pose is to place the office on a salary and require the old fees of the office to be turned into the treasury. At any rate, such has been the trend of fee-legislation. The Federal legisla- tion reflects the movement more decidedly than that of the states; still a careful investigation of the laws of any state will show the same tendency. The legislation of one state for a short number of years may not reveal such a change; but taken all together the laws of any state show a more decided tendency away from the fee system of compensating officials than would seem possible to a superficial observer. There is no regularity in the movement among the different states. One legislature passes an act requiring the fees of one office to be turned into the treasury, and another legislature makes the same law applicable to a different office. At long intervals we find acts which are almost revolutionary in character, in that they are made applicable to a large number of officials. 1 The individual laws are not the result of a general theory or force of any kind, but are as a rule passed under pressure of actual local or special conditions. In some cases aggravating frauds and over-charges, in others considerations of public economy constitute the motive power; but, whatever be the immediate causes, the results show by the very fact of their generality, that the indirect cause lies in the fee system itself. There is, however, another method by which this tendency and its consequences may be easily brought to light. This is by a comparison of the number of salaried officers or the common- wealth's pay-roll, as it may be called, with the unsalaried or fee-paid officials at different times. A comparative study of this kind shows very clearly how one by one the fee-paid offi- cials are transferred to the salary list. Allowance must, how- ever, be made for those cases in which the office fees are abolished entirely instead of being turned into the public 1 Statutes, N. Y., 1839, Ch. 338, sec. 3. 150 Urdahl — Historical Survey of Fee Systems. treasury. On the other hand, this comparison will not repre- sent adequately the change; because the number of fee-collecting offices has increased, owing to the differentiation in public functions which has already been explained. Furthermore, the transference of political functions and con- sequently of fees, from state to municipal bodies, has been very general in all parts of the country. But even after all due allowances are made, the evidence is everywhere very strong to show that the salary system is gradually gaining ground, and that in time, if the movement continues, it will displace the fee-system. This does not mean that the fee-system is likely to disappear entirely. It simply means that more and more fees are required to be turned into the treasury instead of being absorbed by the officers collecting them. It is a movement toward economy in the management of public affairs which is in line with all the ideas of the age. CHAPTER X. THE EVOLUTION OF THE FEE-SYSTEM AS REFLECTED BY THE AMERICAN CONSTITUTIONS. No series of public documents can be found which can serve as a better index of the sober, conservative public sentiment of the United States taken as a community, than the national and state constitutions. A study of the provisions which may be found in the state charters and constitutions, and which relate directly or indirectly to the fee-system, from the first settle- ment down to the present day, better than anything else shows the questions which were most important in the minds of the framers of the constitution. Besides, each state constitution would naturally reflect that part of the fee-system which in that par- ticular locality demanded regulation. Evolution of Fee Systems in the United States. 151 Taking up the constitutions and charters in this way, we find u in the early charters no reference to the fee-system whatever, with the exception of provisions to the effect, that judges and chancellors shall receive and collect no fees oth^r than those fixed by law. Such a provision was contained by six of the char- ters and constitutions of the last century, and by seven of the constitutions framed after 1800. « This shows that the early colonists attempted to guard against the extortions which they had experienced in England, and that they feared the power of unscrupulous judges. This provision was especially significant in the Charters, because the judges were appointed by the Crown. Other provisions in these early charters were to the effect, that the fee-bill of judges should be posted in conspicuous places ; 2 that the Justices of the Peace should charge no fees ex- cept those allowed by law; 3 and that no clerks of court should be allowed to colleet any fees except those fixed by law. 4 As soon as the colonies had achieved their independence, new questions began to show themselves in the constitutional pro- visions concerning fees. The people had come to the conclu- sion that the judges would perform their functions better, if they were in no way interested financially in the cases to be ad- judicated; and so by special act the legislatures had already in many cases placed the higher judges on salaries instead of fees. To prevent any return to the old system, a provision was inserted in most of the constitutions 5 adopted after the Revolu- 1 Va., 1776; Vt., 1777, Sec. 23; S. C, 1776, Art. 24; Penn, 1683, Art. 9, and 1776, Art. 2, Sec. 30; Md., 1776, Art. 52; Ohio, 1851, Art. 4, Sec. 14; N. C, 1828, Art. 3, Sec. 15; Neb., 1866, Art. 4, Sec. 6; La., 1845, Art. 71; Ark., 1836, Art. 6, Sec. 8; 1864, Art. 6, and 1865, Art. 7, Sec. 19. 2 Constitution, Pa., 1683, IX. 3 Pennsylvania, 1776, Art. II, Sec. 30. 4 Arkansas, 1836, Art VI, Sec. 8. 6 The following is the order in which this provision appears in the con- stitutions of the several states: Pa., 1776, Art. 2, Sec. 23; Tenn., 1796, 5, 3; Del., 1792, (J, 3; Ohio, 1802, 4, 14; Ala., 1819, 5, 11; Me., 1820, 5, 2; Mich., 1835, 6, 2; Fla., 1836, 5, 5; N. Y., 1846, 6, 21; 111., 1848, 6, 16; Cal., 1848, 6, 11; Wis., 1848, 4, 10; Va., 1850, 6, 14; Kans., 1859, 3, 15; Ore., 1857, 13, 1; Nev.. 1864, 6, 10; La., 1846, 78; Ga., 1865, 4, 3; Md., 1862, 4, 37; S. C, 1868, 4, 9; Neb., 1866, 4, 7; Tenn., 1870, 6, 7; Ark., 1874, 6, 8; Col., 1876, 6, 18; Mont., 1889, 8, 30; Id., 1889, 5, 15; S. D., 1891, 5, 30. 152 Urdahl — Historical Survey of Fee Systems. tion to the effectjthat the judges of the Supreme and Superior courts should not be allowed any fees or perquisites of any kind/\ As time went on, judges of other, and lower, courts were placed on salaries and forbidden by statute to collect fees ; and the con- stitution makers enacted this provision into permanent law. One state adds the judges of probate court to the list of salaried magistrates, and another state some other class of judges, until the transfer is complete. The later constitutions have a provi- sion to the effect that all judges shall pay into the treasury the fees collected and receive salary as compensation. 1 This movement which is almost completed as regards judges, is only at its beginning with the court officers such as court clerks, constables, and the like. But some constitutional con- ventions have already taken the bold step of providing that no public court officer, with the exception of justices of the peace, J shall receive for his own use any fees or perquisites whatever, but shall be paid a salary fixed within certain limits by the leg- islature. Other states will follow this example, and it is but a matter of time until this reform is completed. Other provisions in the state constitutions show another movement, which is quite as striking as that just mentioned. This is the movement which has resulted in placing most of the state officers on salaries instead of fees. It originated in some of the colonies, by requiring the governor to turn the license fees into the treasury, and little by little the^other fees and per- quisites were taken away from him. This change, however, came about a half a century later than that concerning the judges. One or two constitutions provide that the governor shall receive no fees for his own use, 2 but they say nothing about the other state officers. Georgia by a constitutional provision / placed her attorney-general on a salary in 1782, and in 1798 added her state-treasurer and surveyor-general to the list. No other constitutions had any provisions concerning this subject until that of California in 1848, which placed the governor, lieutenant-governor, secretary of state, comptroller, attorney- 1 Kas., 1859, Art. 8, Sec. 15; Md., 1867, 4, 37; Pa., 1873, 5, 13; Col., 1879, 4, 19; Ala., 1875, 6, 10. 2 Md., 1867, Art. 2, Sec. 21; Me., 1863, Art. 5, Sec. 6. Evolution of Fee Systems in the United States. 15$ general, treasurer, and surveyor-general on salaries and forbade them to receive fees. 1 After 1863 a provision to the effect that state officers shall turn the fees of office into the treasury becomes quite general, especially in the West. 2 A few other provisions of diverse tendencies are to be found; but they are as a rule isolated instances, and do not illustrate any general movement. A few Western constitutions are of special significance, because they have attempted to regulate the fees of all county officials. 3 1 A few constitutions take the fees away from only a few state officers, viz.: La., 1879, Sec. 77; auditor, secretary, and treasurer. Ala., 1875, Art. 5, Sec. 25, ditto. 2 Constitution, Ore., Art. 13, Sec. 1; S. D., 1891, 21, 2; N. D., 1891, 3, 84; Nev., 1864, 17, 14; Neb., 1875, 5, 24; Mont., 1889, 7, 4; Md., 1874, 5, 24; Mich., 1850, 9, 1; La., 1879, Sec. 77; 111., 1870, 5, 23; Id., 1889, 4, 19; Fla., 1885, 4, 21; Col., 1876, 4, 19; Cal., 1879, 4, 19; Ark., 1874, 19, 11. 3 See pp. 186-189, seq. 154 Urdahl — The Present Fee System in the United States. PART II. THE FEE SYSTEM AS IT EXISTS AT PRESENT. To obtain an adequate conception of the present character of the fee-system in the United States, it is necessary to keep con- stantly in mind the economic background, or setting, as it were, of the legislation concerning those public functions and activi- ties which invoke fee-payments. Laws and regulations by them- selves mean almost nothing, unless they are supplemented by a knowledge of the conditions under which they exist. The ab- sence of slavery is by no means the most important character- istic of the epoch which begins at the close of the war. The great industrial forces, although many of them were in opera- tion before the war, had Dot become so powerful that their in- fluence could be felt and observed as easily as it could be after- wards. Production on a large scale did exist to- some extent during the "Fifties;" but concentration of production as we know it to-day, was impossible until the modern transportation facilities had been developed. The great trans-continental and other railroad systems were all of them built immediately be- fore or after the war; and were, in one sense, the direct causes of the expansion of markets from purely local to national limits. This market expansion made the development of enormous in- dustrial centers possible. These two factors, namely, the ex- pansion of markets, and the growth of cities, form the key, or rather the cause, of much of the fee legislation enacted dur- ing the last forty years. Another great factor to which may be traced, either directly or indirectly, most of the remaining fee-legislation, is the wonderful expansion and development of the West. 1 This expansion brings to the front new issues and new subjects requiring regulation, many of which involve the payment of fees of one kind or another. 1 The indirect causes and other elements of this expansion are of little or no significance to the subject in hand. Inspection Fees. 155 CHAPTER I. MODERN INSPECTION FEES. A. INSPECTION FOR PROTECTION TO THE CONSUMER. It is, perhaps, obvious that under the designation "Modern Inspection Fees " are meant only those fees which are collected in accordance with inspection laws passed in modern times. An examination of the laws of any state, will reveal the exist- ence on the statute books of a large number of laws which were enacted comparatively early in the history of the country. It is also self-evident that these do not as a rule represent the tendencies of the present ; on the contrary, they are often " dead letters," which have not been repealed because no laws have been needed to displace them. Taken as a whole, the post bellum inspection legislation may, with a few exceptions, be said to represent an entirely new movement, or tendency. The articles which the earlier laws required to be inspected, were largely agricultural products in a more or less crude state; while the articles for which the modern laws provide inspection, are generally manufactured products. Of these, however, only those which are most easily adulterated, and whose adultera- tions are most likely to result in injury to public health or safety, are placed under any restriction whatever. 1. Oil Inspection: First and foremost in importance is the inspection of oil or petroleum, if we may judge by the number of states which have deemed it necessary to enact compulsory oil-inspection laws. The oil-inspection legislation probably or- iginated in the frequent explosions and consequent fires due to the inferior quality of the oil at first put upon the market. The modern oil-inspection laws may roughly be said to begin about 1880. A few instances 1 may be found earlier, but the subject did not become of much importance until the great 1 Inspection law, Ind., 1863, 3 Stat. 370, p. 27. Rev. Stat., Mo., 1879, par. 5848. 156 Urdahl — The Present Fee System in the United States. American oil fields had been discovered and exploited. Indeed, it is the aggressiveness and power of the Standard Oil and other companies, in keeping up the price and lowering the quality of the oil, which may largely be considered the cause of the later legislation on this subject. The consumption of oil increased enormously, until it became a necessity to. everybody; and as the quality gradually deteriorated, popular discontent made itself felt in the form of legislation prohibiting the sale of any oil below a certain quality. Public oil-inspect- ors were provided, usually by appointment, whose compensa- tion consisted in fees fixed in amount by law. In general these were determined by the quantity offered for inspection at the time, usually a certain number of cents per barrel. Many states make the fees regressive in amount, in that the charge per barrel decreases as the number of barrels inspected at the time increases, from forty cents for a single barrel to ten or fifteen cents if over ten barrels are inspected at one time; 1 while one state provides that the inspector shall be paid by the hour. 2 The other state laws on the subject fix the fee per barrel, rang- ing in amount all the way from ten to twenty-five cents, with no reduction for large quantities. 3 Nebraska pays its oil in- spectors fixed salaries. Minnesota requires all oil-inspection fees to be paid into the treasury, and other states limit the amount which an inspector can receive as his official income to a certain maximum. 2. Commercial Fertilizers : Another instance of compulsory in- spection for the protection of buyers or consumers is that of commercial fertilizers. The importance of these to agriculture and the opportunity for fraud, by means of adulterations and imitations, which their manufacture offers, has led many states l Laws, Kan., 1882, Ch. 180, par. 5; Minn., 1889, Ch. 246, Sec. 2; Ohio 66, Vol. 117, par. 4; N. D., 1890, 107, par. 4; N. M., 1893, p. 118; Md. 1881, p. 571; Fla., 1893, p. 88, one cent per gallon for less than five gallons, one-fourth of a cent for more than 5,000 gallons. 2 R. I., 1896, p. 449. 3 la., 1896, Ch. 195, par. 4, 10 cts. per bbl.; Mich. 1881, p. 43, 16cts. per bbl.; Ark., 1883, Sec. 6-10, 25 cts. per bbl.; Wis., 1883, Ch. 156, 10 cts. per cask; N. D. 1890, p. 219, 10 cts. per bbl.; Ga., 1880, p. 153; S. D., 1890, p. 219, 10 cts. per bbl. Inspection Fees. 157 to require official inspection or analysis before they can be sold. 1 This is another case where an attempt is made to protect the pub- lic, not against adulterations of farm products, but against adulteration of manufactured articles. One state requires the manufacturer to buy a certificate of analysis from the state chemist, at a cost of fifteen dollars, and to purchase official labels stating the results of the analysis, to be attached to each package sold. 3. Lime, Baking Powder, Gas Meters, and other articles: Almost in line with the foregoing, may be mentioned the state inspection of lime, which is at present compulsory in a few commonwealths. 2 The same purpose is manifest in the inspec- tion of gas-meters, which is made compulsory in some states, 3 while many cities also have the power to require, and provide for, the inspection of this article. Inspection of saleratus and baking powder is of the same character, and is already made compulsory in several states. All of the fees mentioned in the preceding, and many others, demonstrate the fact that it is manufactured products, as a rule, which are deemed most liable to adulterations and other frauds. It is the products of urban or collective labor that most require the intervention of the state for the protection of the consumer. In earlier years it was flour, beef, pork, and the like about which the legislator was most concerned. It is true that a few inspection laws have been passed since 1865 which affect provisions in general; but, with one exception/ they can be found only in the older states, which have simply revised and elaborated their old laws. The Western states included in the Mississippi valley, which represent the tendencies of pro- gressive America more accurately, perhaps, than any other sec- 1 Laws, Me., 1895, Ch. 94, fee $20; Mass., $15 per ingredient; Ga., p. 6, 23 to 50 cents per ton; Tenn., 1889, Ch. 226, par. 3, 50 cents per ton; Pla., 1889, Ch. 858, 25 cents per ton. 2 Me., 1875; R. I., 1869, p. 443; Del., 1861, 30 cts. per carload. 3 Cal., 1885, par. 582, fee $2.50 for each meter; Conn., 1886, Ch. 169, $1; Ohio, do.; Nev., 1877, par. 202, $2.50, to be paid by the user. 4 Ohio has quite an elaborate inspection law, passed in 1876. See code of 1887, p. 470. 158 Urdahl — The Present Fee System in the United States. tion, have none of them, so far as can be discovered, passed any general inspection law affecting provisions, cr agricultural products in general. B. INSPECTION FOR THE BENEFIT OF THE PRODUCER. Such a statement as the above may seem erroneous to one who knows that many Western states have compulsory grain- inspection and similar laws; but the grain-inspection laws of the West have an entirely different purpose from the old in- spection laws. Their purpose is to protect the seller and not the buyer. They are aimed at frauds and discrimination prac- ticed by the great elevator companies against the producers or farmers. These companies in purchasing would very often represent first-class grain to be of the second or third class, and pay only third-class prices. The farmers generally would have no means of protecting their interest, because no other buyers were within reach. Much of the ware-house legislation which attempted to fix the ware-house fees, had the same purpose, namely, to protect the interest of the farmer or seller against the buyer, who was usually the ware-house man. The oleomargarine legislation is very similar in its aims and ob- ject. It is enacted not so much to protect the consumer as to protect the dairymen against a certain kind of competition. Most of the regulations mentioned originated in the West, and are a result of the opening up of its great resources and the expansion of its population, both of which were made pos- sible by the improved transportation facilities. The old prob- lem, which consisted in preventing the sale of inferior or un- marketable goods, has almost disappeared, primarily because competition has become so much more perfect. The question of determining quality or value is no longer important, as buyers and sellers are in general more nearly on an equality than was the case earlier. C. INSPECTION FOR POLICE REGULATION. The character of frontier life, or rather the form of industry which is best suited to some of the Western states, is responsi- ble for the change in the significance of another class of inspec- Inspection Fees. 159 tion fees. In the early states hides were very often inspected to ascertain whether they were marketable or not. Some of the Southern and Western states have adopted laws almost exactly similar to the early enactments. They provided for regular inspectors, whose duty it was to inspect all hides before they were sold or exported, and who were allowed to collect fees for such inspection. 1 Stringent provisions were made to prevent ranch owners or other individuals from shipping any raw hides before they had been inspected. But though the early and later laws are much alike, still their purposes are widely different. The inspections under the later laws are not so much to ex- amine and pronounce upon the quality of the hides, as to ascer- tain the brand or mark. In other words, they are police regu- lations to prevent concealment of the theft of cattle in shipping the hides of slaughtered animals. But there are a large number of other inspection fees which are paid for purely police regulations. Of this character may be mentioned those due for the inspection of steamboats 2 and boilers; 3 of vessels by health officers;* of mines; 5 of build- ings; of halls used for public purposes; 6 of sheep and cattle 7 brought into a state, and examined with the view to prevent the introduction of contagious disease; and many other regulations of this nature. It is worthy of notice that this kind of regula- tion is on the increase; but, as a rule, the public welfare is so deeply involved, that it is often deemed advisable to pay the inspector out of the public treasury. 8 1 Nev., 1871, par. 118; Tex., 1876, 301, par. 25; Fla., 1889, Ch. 389, par. 1; Col., etc. 2 Cal., 1885, I, Sec. 582; Me., 1876, Ch. 148, par. 4; and others. 3 Conn. 1886, Ch. 129, fee $5. 4 Louisiana, fee for vessel of 7,000 tons, $30; for less tonnage, $20; for brig, $15. 6 Mont., 1895, par. 56, fee $10; Id., 1895, fee $5; la., 111., etc. 6 Connecticut, Maine, and others. 7 Arizona, 1885, p. 50, fee ten cts. per head. 8 As examples may be cited the inspection of bee-hives, for the preven- tion of diseases among bees, and of fruit trees brought into a state. 160 Urdahl—The Present Fee System in the United States. D. INSPECTION OF WEIGHTS AND MEASURES. The sealers of weights and measures as state and local officials, have tended to disappear. The reason, which has been elabor- ated in preceding chapters, is the gradual cheapening and con- sequent diffusion of instruments of measurement among the people, so that nearly every one possesses the means of testing the accuracy of his dealer's measurements. As a matter of fact, town-weighers are still, as a rule, subject to some regula- tions. Some cities still have public measurers of wood, and weighers of hay and grain; 1 and others provide for a compul- sory weighing and measuring of coal 2 and other articles. But, in general, the accuracy of weights and measures can be left to the self-interest of buyers and sellers to secure. There are two exceptions, however: first, in the case of imports and the pay- ment of customs duties; and second, in the gauging and measur- ing of liquors for the collection of the excise tax. In both cases Congress has enacted stringent regulations, but in only the first instance is a fee paid for the services performed. The nationalizing tendencies which the railways exerted on exports, led to the abolition of state export inspection laws; but inter- national commercial relations have necessitated federal export regulations, 3 which are in many respects similar to the old state inspections, except that no fees are collected from the exporter for the services of the inspector. E. MISCELLANEOUS. There are, furthermore, a large number of local or semi-local regulations involving fee payments, which are not enacted for protection either to consumer or producer; nor for police regu- lation. Some of them may be said to resemble the early ex- port inspections, in that they tend to preserve and protect some special local industry. Examples of this kind may be mentioned: the produce inspection law in Ohio; the law of Ore- 1 Minneapolis, Minn. 2 Philadelphia, Pa. 8 The refusal of foreign countries to take our uninspected pork and meat has forced Congress to require its inspection. License Fees. 161 gon, requiring salmon to be inspected ; x the inspection of lumber; 2 and that of tobacco, in the tobacco growing states; 3 and so on. Usually such inspections are confined to the important staple of some locality, which it is imagined requires state intervention or regulation. A great many cities and municipalities have power to pass ordinances for inspecting various articles; but, as a rule, these are purely for police regulations, and fees are rarely collected for the service of the official performing the inspection. The most common example is the inspection of milk, which is re- quired in many of the most progressive municipalities. An- other example is the inspection of steamboats and steam boilers, * which has become largely a municipal regulation. The larger the city, the more numerous do these activities become, and the more marked is the tendency for municipalities to take over gradually many of the old state functions. CHAPTER II. LICENSE REGULATIONS AND FEES. A. MARRIAGE LICENSES. The oldest and most common form of license regulations which has existed, and which exists to-day in some form or other in every state or territory in the Union, is that of the marriage license. This is one of the first, and perhaps the most impor- tant, of the regulations affecting that fundamental institution of human society — the family; and upon the character of this reg- ulation, depends the success or failure of the only direct interfer- 1 Regulation prescribed by the county boards. 2 Oregon, 1880, p. 17, par. 6. 3 Missouri, 1879, Rev. Stat., par. 5868; Maryland, 1872, Ch. 36, Sec. 21. 4 Philadelphia, Statutes, Pa., 1864, Sec. 880, p. 8. 11 162 Urdahl — The Present Fee System in the United States. ence which the state exercises over the marriage relation. It is an important function, which most states have neglected to exer- cise in the interest of society. Only twenty-one states require any returns of marriages to be made to any state officer, and but few commonwealths have compulsory registration of mar- riages. It would take too long to give even an outline of the public services performed for which the license fee is charged, much less to trace the causes which brought about the legisla- tion. Suffice it to say, that the number and nature of the re- quirements as outlined in the statutes of the different states, varies very decidedly. One state requires a statement of the age of the parties and proof of their competency to contract marriage, before the license shall issue ; another prescribes that bonds be given as a guarantee that the parties are entitled to marry; 1 another simply prescribes that the license, or the appli- cation for a license, be recorded in some office. Louisiana gives the probate judge power to suspend marriage, if any objections are raised, until a hearing has been had. Maine requires a notice of intention to marry to be recorded with the town clerk five days before the license is granted. Maryland requires an examination of the applicant for license, under oath, to ascer- tain whether any legal impediment to his or her marriage ex- ists. Massachusetts requires notice of intent to marry. 2 Penn- sylvania requires parental consent in certain cases. These and many other requirements are deemed important enough to be enacted into law, and for the exactiou of fees for the services performed by the officials in carrying them out. The enforce- ment of these laws, in thirty-five states, is left to a mere cleri- cal official, — the county clerk, county recorder, or some other registering official. In the other states the licenses are dis- pensed by the county or probate judge. The fees for these serv- ices of the officials, and for the license proper, vary, as can be seen from the table in the appendix, from fifty cents to three dollars. 3 Several states require the fee for the license proper 1 Kentucky, 1895, Ch. 7, p. 652. 3 New Hampshire requires certificates of intention; fee one dollar. Statutes, 1884, 1518, par. 2. 3 One state has charged as much as four dollars. Laws, Md., 1853, Ch. 86. License Fees. 163 to be paid into the state treasury, and give the officials power to collect extra fees for their services. 1 Most states, however, give the fees as perquisities of office to one or more of the offi- cials concerned. 2 In many of these cases the marriage license fee loses its most important function, namely, that of regula- tion. It was originally intended to be a payment for a privilege granted only in cases where it appeared advisable. Under this system, the pecuniary interest of the official is in many cases diametrically opposed to his plain duty under the law. As a mat- ter of fact, it is notorious that marriage licenses are rarely re- fused in any state. It is largely to this system that we owe the large number of wild and runaway marriages, oftentimes contracted by mere children. B. LIQUOR LICENSES. To the great majority of the people, the word " license " will call to mind, or will mean, simply the permit to sell liquor, which is obtained in most states on payment of a certain sum of money. The license legislation on this subject alone, when taken together, shows a greater diversity in the different states than would at first thought seem possible. In most of the orig- inal states the license charges as they exist to-day, are the re- sult of a gradual increase of the amount charged at the begin- ning of the century. For example, the license fee in Rhode Island 8 has increased from $4 in 1822 to $400 in 1896. Many of the new Western states have of course adopted laws which are taken directly from the statute books of Eastern states, and some of them have attempted new experiments in license legis- lation. Scarcely two states have exactly the same system. One state grants all the licenses directly through a state official, and receives all the fees into the state treasury: another state leaves both the power to grant the license and the revenue therefrom to the local political units. One commonwealth 4 has a license 1 Delaware requires two dollars. 2 California gives half to the recorder and have to county clerk. Statutes, 1870, p. U8. 1 Laws, 1822, pp. 295, 349. 4 New York, "Raines law." 164 Urdahl — TJie Present Fee System in the United States. or excise commission, which grants all licenses and turns half the proceeds into the state treasury and grants the other half to the counties and municipalities. In some states the counties 1 are the most important political units, and the county commis- sioners or county boards are given power to grant all licenses. In others the cities, 2 villages, and towns are given this power, and are allowed to use some or all the revenue derived from this source. 3 But as a rule the state legislature gives the counties, cities, or towns power to grant the license only under the con- ditions it prescribes. In some states these are allowed a great deal of latitude in imposing restrictions on their grants, and oftentimes, too, in prescribing the amount of the fee. In a few states the localities are given "local option," as it is called, or, in other words, power to allow or entirely prohibit the sale of liquor within their boundaries. Pennsylvania* charges from $300 to $1,000 according as the yearly sales vary from $500 to $10,000. California 5 graduates the charge from $60 to $480 per annum according as the amount of sales varies, from less than $5,000 to $120,000 per annum. Arizona 6 varies the wholesale license fee from $120 to $500, in the same way, and charges $200 for each saloon license. But this system has not given entire satisfaction, as it is almost im- possible to obtain reliable returns of the amount of sales. 7 Still another system is that in use in the state of Washing- ton, 8 which prescribes a minimum and maximum license fee for counties and cities. Some commonwealths prescribe a certain license fee to be collected for the state, and allow the counties to charge a county license for their own use up to a certain 1 North Carolina, 1896, p. 123; Oregon, 1885; Texas allows counties one- half again as much as the state fee, for their own treasuries. 3 Nebraska, 1889, Ch. 33; Ohio, 1883, Ch. 132. 3 Washington requires ten per cent, of all license money to be paid into the state treasury. 1882, par. 2. 4 Laws, 1891, 248, par. 1. 6 California Code, of 1885, 3376, 3378. 6 Arizona, 1887, 2233-2243. 7 The fee is usually estimated on the basis of the sales of the year pre- ceding. 8 Washington, 1882, par. 2; Connecticut, 1883, Ch. 137, par. 5. n Y "V TJNIVERSITY License Fees. amount. 1 There are a great variety of standards by which the amounts of the fees are fixed. Perhaps the most important and widely accepted method, is to gauge the fees according to the population of the city or other political unit. More than half a dozen states have adopted this system entire, or some modifica- tion of it. Montana 2 divides her towns into five classes, with population ranging from 300 up to 10,000, and charges license fees varying from $100 for the lowest class to $600 for those having over 10,000 inhabitants. Minnesota 3 charges $1,000 in cities of over 10,000 and $500 in all others. Rhode Island 4 var- ies the retail license fee from $200 to $400 according to popula- tion. Alabama, New Jersey, 5 and Texas employ the same system with slight modifications. ; Three states have made the amount of yearly sales a basis for the amount of fees which shall be paid. Other individual states have systems which vary in some particulars from all others. In almost all states a different charge is made for a wholesale dealer's license than for a retailer's. 6 A few states have what is called beer or malt-liquor license, which is cheaper than a regu- lar liquor license; 7 while Kentucky has extended this method still further, by granting a malt-liquor license for $50, spiritous- liquor license for $100, and a license to sell both for $150. 8 Further- more, some states grant what is known as "quart licenses." 9 Besides these liquor licenses there are in many commonwealths licenses to distilleries and breweries, with fees graduated accord- ing to the output in barrels 10 or according to the annual sales. 11 1 Missouri, 1887, R. 178; Arkansas and Texas have similar regulations. 2 Montana, 1895, 4063. 3 Minnesota, 1893, Ch. 189, par 1. Nebraska, 1889, Ch. 33. 4 Rhode Island, 1896, p. 349. 6 New Jersey, 1895, p. 1810. • Arkansas charges $150 for a wholesale dealer's and $800 for a retail dealer's license. 1 Michigan, 1881, p. 148. Illinois collects $300 for a dramshop license and $150 for a malt liquor license. 8 Ky., Laws, 1890. 9 Ga., 1835, p. 185; N. J., 1888, p. 1810. 10 Mich., 1881, p. 148. 11 Ariz., 1887, Sec. 2232; Mont., 1894, Sec. 4063. BJ^ 166 Urdahl — The Present Fee System in the United States. Other licenses which are by no means rare, are druggists' permits to sell liquor; likewise licenses to merchants engaged in mercan- tile business, licenses to grocers and others. Some states pre- scribe special licenses for taverns, for club houses, and many- other places where liquor is sold. The tendency of the license legislation since the war, has been to gradually increase the fees. There is scarcely a state which has remained unaffected by this movement, although changes in legislation of this character are slow. The reform movement has taken many directions in the different states, the most striking of which may be mentioned: the constitutional provision of North Dakota, prohibiting the passage of any license law; the South Carolina dispensary act which attempts to change from state regulation to state management; the Maine and Iowa prohibition laws; and others. In most states a small fee, ranging in amount from fifty cents to several dollars, is charged by the official granting the license, for the clerical work of issuing or recording. 1 c. peddlers' licenses. Most of the new states which have been formed since the war, have found it necessary at the very first session of their law making bodies, to pass some sort of regulations for peddlers; and the old states have either continued the old laws or elabor- ated them further. The diversity of laws on this subject is almost as great as that of liquor regulations. But few states consider it sufficient regulation, to require simply a state li- cense 2 with a small fee for the use of the state, as was the nature of the earlier legislation. On the other hand,, some require no state license at all, but have turned the whole regu- lation over to the cities and counties, 3 in some cases prescrib- ing only the minimum and maximum fees which may be charged. In a large number of other instances the legislature prescribes in detail how the license shall be granted and exactly what fees shall be charged, but allows the counties to grant the license and to put the money into their own treasuries. Others adopt 1 Arkansas clerk's fee, two dollars. 2 Revised Statutes, Neb., 1895, p. 919, Sec. 251. Rhode Island. 3 Or., 1864, par. 14; Wy., 1864, Sec. 14; 111.; etc. License Fees. 167 a middle policy, by compelling the peddler to take out a state license first and pay a sum into the state treasury for it, and allowing each county to grant a second license for a fixed sum, which license is good only within county limits. Some states even allow townships to grant or refuse licenses. 1 The most common method of fixing the amount of the fees, is a result of an early attempt to make it conform roughly to the amount of goods carried by the peddler. In the earlier days the best customers of the peddler were the people who lived away from the main roads of travel and distant from any trading center. On account of the lack of good wagon roads, it was customary for the peddler either to carry a pack him- self, or to have one or more pack animals for the purpose. The number of horses, therefore, came to be a pretty good method of estimating the amount of goods which he carried. This fact was seized upon by the law makers as a standard for measuring license charges. 2 This system has been introduced in many states and continued in use in its primitive form, even after wagon roads became common everywhere so that vehicles could take the place of pack animals. One or two states have, how- ever, recognized this, and put peddlers with one horse and vehicle in a class by themselves. California has simplified it still more by having only two classes, namely, peddler on foot, and peddler with a wagon. Rhode Island 3 has made the amount of the fee depend upon the size and character of the territory within which it is valid, and charges $60 for a license for the entire state, $30 for the county of Providence, and $10 for any other county. Some states have peddlers' licenses for river traders, the cost of which is gauged by the tonnage of the water-craft which they use. 4 A new departure, Which is espe- 1 N. D., 1890, Ch. 142, par. 4; Me., 1895, Rev. Stat, p. 296; Wis., 1870, Ch. 72, par. 3, and 1895, Ch. 81. 8 The old form of the law recognized three classes, as follows: (1) peddler on foot, (2) peddler with one horse, (3) peddler with two horses. The later laws often run as follows: (1) peddler on foot, (2) peddler with one horse and vehicle, (3) peddler with two horses and vehicle. 3 Also New Hampshire, 1878, 27, 3; Ohio, 1882, 79, 80. 4 Florida: boats of 20 tons, $30; of less tonnage, $10. Arkansas, 1873, par. 20. 168 Urdahl — The Present Fee System in the United States. cially marked during the years since the war, is to vary the license charge according to the character of the goods sold. Thus we find a large number of states in which lightning-rod agents are supposed to require special regulation 1 and are charged heavy licenses. Other states find it necessary to dis- courage the peddling of watches and jewelry. 2 Another class which is charged heavy fees, includes venders of patent med- icines. One state charges a certain sum per month, another so much per day. 3 Sewing-machine and insurance agents are sometimes recognized in the same way. 4 In short, the attempt seems to be quite general to collect heavier fees for licenses to peddle those goods which are most likely to be employed for frauds by swindlers or sharpers. D. SHOWS. License regulations for traveling circuses have increased greatly in importance, and although prescribed and executed at present by a great many states directly, still in many others the whole matter has been transferred either to the counties or to the municipalities. 5 In some states the movement has just be- gun, in that the state still receives a state fee for its license to a company to exhibit within the state, and the municipalities are given power to collect another fixed fee for each perform- ance within their respective limits. 6 Another system gives the circus managers the option of ob- taining a license from the state authorities for the whole state, or a license for only one county or city; in other words, grading the licenses according to the population of each portion of 1 Statutes, Ky., 1894, c.6. Patent agents and lightning-rod peddlers charged twice the regular license fee . 2 Vermont, 1886, Be v. Stat., par. 955. Delaware charges peddlers of clocks $50 in addition to regular license charge. Iowa, 24 Gen. Stat., 83, par. 3. 3 Wisconsin, 1883, p. 165, $100 per month. 4 Florida, $200 per annum. 5 Shows to be licensed by two judges of the court of common pleas. Fee from $10 to $200 per day. Public Laws, N. J., 1895, p. 37. •Vermont, 1867, 56, par. 1; state license $1,000; each town license, $100 for each day. Wisconsin, 1890, Ch. 52, par. 5. License Fees. 169 territory, 1 and receiving all the license money into the state treasury for the use of the state. The other extreme is to give the county board, or city council, power to determine the amount and collect it for local purposes, sometimes however within some maximum limit. 2 The same idea is carried out where the legislature fixes the size of the fee, but allows it to be paid into the county treasury. 3 It is but natural that the license fee should vary greatly in amount on account of the differences in the character of the various states themselves; 4 for example, a single license in New York or Philadelphia would be much more valuable than a state license for Delaware or for some of our Western states. The state license charges are very often pure taxes, and not pay- ments for any actual privileges. Of the same nature as a circus license is a theater license. The fees for these are still fixed for many municipalities by the legislatures. Alabama varies them according to the population, from $50 to $100. California gauges them according to the seating capacity of the houses, from $400 to $600. Other states attempt to vary them slightly according to the length of time or the number of performances, while still others charge a certain annual sum for the building, and collect nothing from the theatrical companies. The regula- tion of these has already in very many states passed into munic- ipal control ; and indeed it is but natural that they should, as all the extra police protection and all the services of other mu- nicipal activities required by theaters, are rendered directly by the municipality and not by the state. 1 Pennsylvania charges $1,000 for the whole state, $500 for Philadelphia, $200 for Alleghany county, and $50 for other counties. 2 Iowa: county board may determine the amount, not exceeding $1,000. 16 Gen. Laws, Ch. 131, par. 1. 3 South Carolina, 1875, XV, 845, par 1. 4 Kentucky (1890, par. 1049), has a peculiar method of gauging circus licenses. The law provides a charge of $1 for each 100 voters in the county, the total not to exceed $50. For theaters the same plan is used, but $20 is the maximum total. Incorporated cities have exclusive right to license shows, etc. 170 Urdahl — The Present Fee System in the United States. E. FERRIES. Another early state function which has gradually been trans- ferred to the municipalities, is that of licensing and regulating ferries. The old custom of granting ferry licenses by special acts of the legislatures, has gradually given way to the modern system of general laws. These, as a rule, provide that the license shall be granted by county boards or commissioners, and that the fees shall be paid into the county treasury. The most common practice is to provide some maximum and mini- mum limit to the fees which may be collected by these author- ities. The most usual provision in this matter is, that the- charge shall be not more than $100 and not less than $l. r Indiana 2 puts the limits at $3 and $50, while Illinois 3 charges not less than five $5 nor more than $300. Another system consists in gauging the license fee according to the carrying capacity of the boats.* Bond is quite often re- quired of the licensee, as a guaranty of the safety and efficiency of the service, and the faithful performance of the business for which the license is granted. F. AUCTIONEERS. The modern system of regulating auctioneers, is simply a continuation of the method in vogue before the war. Some legislatures still fix the fees which shall be collected, but the standard of measurement has been changed somewhat in many commonwealths. Idaho gauges the fee from $120 to $400 per quarter according to the gross amount of business, and allows the fee to go into the county treasury. Other states employ the same system. 5 Missouri, on the other hand, makes the fee vary according to the length of time for which the license is 1 Ark., Wash., Wy., Kan., — the same limits; Neb., — limits, $2 and $500. Rev. Stat, 1895, p. 593. 2 Revised Statutes, 1876, par. 52, p. 356. 3 Statutes, 1845, p. 252, par. 2. 4 Idaho provides that the license fee shall not exceed ten per cent, of the tolls collected. 6 Md., 1886, Ch. 507, Sec. 503. Mont., 1895, Sec. 4060. License Fees. 171 issued — $50 for three months, and $75 for six months, 1 and so on; while Vermont and other states simply prescribe the maxi- mum and minimum fees, and allow the local political bodies to determine the amount within these limits. In the great ma- jority of cases, this regulation is left entirely to the cities and other municipal bodies. G. MISCELLANEOUS LICENSE REGULATIONS. Many license fees are paid for special regulations which have become necessary only on account of the special economic and social conditions of particular localities. Most noteworthy of these may be mentioned the following: Delaware collects a fee of $30 for each permit to open oysters for export; Maryland 2 charges a fee of from $2 to $5 for each oyster boat, varying the amount according to the length of the boat; Mississippi 3 allows the counties to charge a fee of $1 per ton for a license to each oyster boat; and Delaware likewise varies the charge according- to the tonnage of the boat. Maryland * requires annual licenses for permits to catch fish with a seine or gill-net, and gauges the fee according to the size of the seine or net, at the rate of three cents per square fathom. Kentucky licenses all her water craft on the Ohio, Mississippi, and Kentucky rivers. South Carolina 5 and several other states find it necessary to regulate by means of licenses ail boarding houses for seamen. New Hampshire and other states require all who sell commercial fer- tilizers to take out a license and pay a fee therefor. 6 Vermont collects state dog license fees, 7 and New Hampshire 8 has state steamboat licenses. A few states have recently pre- scribed license charges for permits to sell cigarettes. Colorado 1 Revised Statutes, 1879, Sec. 4168. 2 Md., 1886, Ch. 296, Sec. 18. 3 Statutes, Miss., 1892, ac. 3089. 4 Statutes, Ind., 1870, Ch. 204. 6 Statutes, 1866, XIII, Sec. 8, p. 472. 6 Vermont charges a fee of $100 for each. — 1888; No. 109, Sec. 3. New Hampshire charges $50. — Statutes, 1891, p. 351. 7 Statutes, 1894, No. 119, Sec. 1. 8 Sec. 1, p. 100,1881. 172 Urdalil — The Present Fee System in the United States. collects $100 for each detective's license, and charges $500 for a permit to sell oleomargarine. Nevada requires grazing li- censes, varying the fee according to the number of sheep. 1 Numerous other occupations are here and there required to be licensed, before they can be carried on. The license taxes of the Southern states, whose object is solely to raise revenue, can not be counted as license charges, but may usually be classed as occupation taxes. The development of local self-government has brought about the transfer of many of these powers from the states to the local political units. As a result, there is already a large class of regulations which are everywhere placed under municipal pow- ers. One legislature grants more power and another grants less to the local bodies; but every where some license powers are turned over to the latter. The fees for these are thus quite regularly collected by municipal authorities for the use of the -city treasuries. Licenses to brokers, wharfingers, local auc- tioneers, commercial travelers, hucksters, pawnbrokers, places of amusement, hotels, taverns, junk dealers, boarding houses, boarding stables, billiard tables, hacks, slaughter-houses, wash- houses, bill-posters, dance-houses, scavengers, intelligence of- fices, dealers in explosives, bowling-alleys, shooting-galleries, dogs, steamboats, «and many others, have in some states become municipal regulations. The number is gradually increasing; in fact, some cities exercise more power in this way than many a state did a few years ago. The rapidity of growth of urban population and its great con- centration is one of the causes for the rapid increase in the number of matters which require license regulation. Building permits and sewer and water permits are of this character. Furthermore, the peculiar conditions of each city present new subjects which must be taken under police supervision and ulti- mately become subject to license regulations. Milk sellers are in some localities required to be licensed, coal dealers in others. The rapid growth of one section may require special sanitary regulations; one quarter of a city may be of such a character 1 For 5, 000 sheep, $250; for 3, 000 sheep, $200; for 1, 500 sheep $75. — 1895, Ch. 36, p. 53. Incorporation Fees. 173 that a license for excavation must be obtained before a cellar can be dug. A city like New York may become so overrun with petty peddlers that a city license regulating them is an absolute necessity. Local meat-sellers become more and more of a nui- sance as population becomes dense, and concentration of the business in one locality becomes a necessity. Market privileges are then paid for by fees collected for the use of the city treas- ury. The establishment of an oil refinery may be so dangerous to the safety of a city that its regulation by means of license becomes necessary. These are but a few examples of the thou- sand and one cases where public welfare requires that a city shall have and exercise licensing power. CHAPTER III. INCORPORATION FEES. 1 PRELIMINARY REQUIREMENTS. The part of the fee-system which can be called, with most ac- curacy, a product of the last three decades, includes that class of charges which is directly or indirectly connected with corpora- tions of various kinds. The present is truly an age of corpora- tions. The gigantic enterprises with which we are familiar,, have been made possible only through the combination of capi- tal and ability which these corporations represent. It is per- haps not an exaggeration to say that four-fifths of the aggre- gate business of the nation is directly or indirectly carried on by means of those artificial persons. The whole framework of our national existence is so closely interwoven with these insti- tutions, that it is almost impossible even to imagine American 1 Strictly speaking, many of the corporation fees might be considered as a separate class of license fees; but their significance in the United States is so great that, aside from other important reasons, they deserve a place in a class by themselves. 174 Urdahl — The Present Fee System in the United States. industry without them; and yet, they are all of them only the creatures of the legislative will of the people. Their early char- acteristics — that they were at first only special privileges granted for special public purposes and that they were only granted by special acts — have all been gradually lost sight of, more especially after the privileges of corporate existence began to be granted according to general laws. When such a law had been in force for some time, and it was found that everybody could obtain corporation privileges by conforming to certain requirements, it soon came to be looked upon as a right which was almost as inalienable in its nature as any belonging to citi- zenship. When, therefore, some states began to charge fixed sums for this grant, it was immediately designated by the peo- ple in general, and even by economists, as a tax on corpora- tions, or taxes on corporate charters. The forces which led up to general corporation regulations, have already been treated in a different connection. To put it briefly, the result has been, that in most states laws have been passed, requiring those applying for corporate privileges to conform to certain rules, the most common being that the char- ter, or articles of incorporation, stating the object, purpose, and so on, shall be filed with the secretary of state or some other state officer. Sometimes the official approval of the char- ter and a certificate of incorporation, or certificate of authority to do business, must be obtained. In some states they are also required to file a statement preliminary to the grant of cor- porate privileges. A. CHARGES FOR INCORPORATION PRIVILEGES. An incorporation fee is in most cases collected for filing the charter of articles of incorporation. A glance at the table in the appendix will show that six states charge only five dollars and two charge less than this amount, while all the rest charge amounts varying from five to one hundred dollars for this serv- ice. It should be borne in mind, however, that the incorpora- tion fees include all the charges made by the state under various heads, and that the total amount, instead of the individual fees, is the important consideration. The most common and the Incorporation Fees. 175 fairest method of gauging the incorporation fee, is to make it proportional to the amount of capital stock. 1 Five states have adopted this method in full, and charge from ten cents to one dollar per thousand dollars of authorized capital stock. Six other states have a slight modification of this system, in that they charge a certain minimum fee for any amount of capital stock up to a certain limit, and then collect from fifty cents to a dollar per thousand of capital stock over this amount. A very large corporation would, under this latter system, yield some revenue into the state treasury. These fees were originally designed only to cover the expenses incurred by the state in granting incorporation rights and regulating them when granted. The dangers which may come to the public from corporations which at times may be organized for purposes that are not the very best, has become quite apparent during recent years. The harm which may be done by private individuals is great, but that is insignificant when compared with the injuries which may accrue to the public from incorporated companies. In the latter the responsibility is divided, because one of the first privileges which a corporation has, as against the individual, is limited liability for debt. It was need of concentration of capital which first gave rise to this provision in the incorpo- ration laws, and the enormous industrial enterprises which have been made possible by it, have simply demonstrated its wisdom. Limited liability for debt is, however, not the only privilege which is granted by the state through its incorpora- tion laws. There are a great many other privileges obtained now by one company, now by another, which are of just as much, and oftentimes more, value than the above-mentioned. The public purpose and interest in all these enactments has hitherto been so great, that no state has attempted to charge fees which are at all equivalent to the value conferred. 1 Illinois charges $30 for the first $2,500 of capital stock, $50 for $5,000, and $1 per $1,000 for amounts over $5,000. — P. L., 1395, p. 132. North Dakota charges $50 for the first $50, 000 of capital stock and $5 for each additional $10,000. — Laws, 1891, Ch. 105, Sec. 1. 176 Urdahl — The Present Fee System in the United States. B. BANKING PRIVILEGES. It required but a few years of actual experience to demon- strate the fact, that all kinds of corporations could not be regu- lated by the same kind of restrictions, nor could all be allowed the same privileges. It was early discovered that a banking corporation could not be given as much latitude as a manufac- turing concern. Re-acting against the abuse of the banking privileges which were granted just before the war, many of the "Western states inserted a provision in their constitutions forbidding the organization and incorporation of banks within state limits. 1 This prohibition was soon repealed, however, because the need of banking institutions made itself felt too strongly to be resisted. The new bank act did not, however, provide sufficient safe-guards against frauds upon depositors and investors by means of bank failures. As a result, many states determined not only to regulate the incorporation 2 of banks, but to keep them under constant supervision by means of state bank examiners, who were given power to wind up the affairs of any bank which seemed unsound. In some states these examiners are paid salaries out of the treasury, while in others they are allowed to collect fees from each bank examined. 3 A new departure in banking, in the form of building and loan associations, trust companies, 4 and the like, has grown up, and is flourishing in many parts of the country. These associations were supposed to be safer, in many ways better suited to the needs of the laboring classes, than ordinary banks. Their spe- cial character has been recognized in state laws, by special regu- lations and special incorporation fees, usually lower in amount than those collected from banks. Most commonwealths also recognize the nature of charitable, educational, and religious 1 Constitution, la., 1846; First draft of the Constitution, Wis., 1848. 2 North Carolina charges one half mill on each dollar of capita) stock of banks, 1895, p. 122. Montana has divided banks into six classes, ac- cording as the aggregate business ranges from $5,000 to $250,000, with fees for each ranging from $40 to $400 per annum. 3 The salary of Inspector of Finance in Vermont is apportioned among the institutions examined in proportion to their taxes. 'Laws, Ala., 1892, p. 665; annual fee, $200. Incorporation Fees. 177 corporations, by making the incorporation fee very small, often merely nominal in amount. 1 C. INSURANCE COMPANIES. In course of time, incorporation laws have gradually been adjusted to new and ever changing conditions. A comparison of the laws of the present with those of the "Sixties," shows that the latter have tended to differentiate. New classes of corporations have sprung up which alone receive more legisla- tive attention at present, than the whole subject did a few years ago. One of the most striking examples of this is the insurance legislation which has been enacted during the last thirty years. All who have been at all connected with insurance companies for any length of time, will remember the lack of special regu- tion and the enormous opportunities for fraud, which the early insurance laws offered. That these opportunities were not neg- lected, is abundantly exemplified by the large number of insur- ance companies which obtained charters, solicited insurance as _ong as possible, and then, after having pocketed the premiums, became insolvent. Many of these were notorious as the most gigantic swindles of the age. After a few experiences of this sort, public opinion became aroused, and schemes were devised to prevent their recurrence. Thus special insurance legislation began, in which the legislators had few if any precedents to go by. We therefore see the beginning of the tentative period in insurance regulations, out of which but few states have as yet emerged. One of the first attempts to accomplish this purpose was by changing the method of formation or incorporation of insurance companies. Special qualifications were required, apart from the usual requirements of the general incorporation laws, and a distinct category of fees was established for insur- ance corporations. 2 For filing the charter or articles of incorporation, the fees range from $6 to $50. Eight states charge $25 for this service; 1 North Carolina charges only one-fifth of one mill per dollar of stock of loan associations, while banks have to pay one-half mill. Illinois charges $30 for original application for charter for loan associations. 2 See table of incorporation fees in the appendix. 12 178 Urdahl — The Present Fee System in the United States. two, $50 ; one, $55 ; two, $30 ; and the others, sums varying between these mentioned. Very often the official granting the charter, is required to examine into the solvency of the company, and to ascertain whether it has sufficient assets to secure the policy- holders. Special fees are collected for such examinations, and are usually given to the examining official as part of his salary. Sometimes the law fixes a maximum fee 1 which may be collected, but provides that the examiner or commissioner shall be paid according to the amount of labor involved. Other laws provide for the payment of the actual expenses of the examiner during the time spent in making each examination. 2 D. ANNUAL FEES FROM INSURANCE COMPANIES. But an insurance company is radically different from other corporations. It may be perfectly solvent this year and have ample securities to meet all liabilities, while in less than a year it may be on the verge of bankruptcy. To guard against the possibility of an insolvent company continuing to sell policies, most of the states have made provisions for an annual examina- tion of all companies doing business within a state, to facilitate which each company is required to make an annual statement of assets, liabilities, amounts of policies, and so on. As remun- eration for the expenses of this examination, an annual fee is required, which ranges in different states from two to fifty dol- lars. This system is in its essence an annual grant of license. Another peculiarity of insurance companies is the extent of territory over which they can operate. But few of them are limited to any one state. A company organized under the laws of one state, must therefore obtain special permit to carry on its business in another. There is thus a large number of regulations which are only applicable to foreign insurance corporations, that is, companies organized in another commonwealth. In gen- eral it may be said that the fees exacted from these, are higher than those collected from domestic corporations. Some states even make the fees so high that they are almost prohibi- 1 Laws, Texas, 1876, p. 223, Sec. 2: Fee not to exceed $250. 2 Minn., 1878, Ch. 34, par. 282; la., 12, Gen. Stat., Ch. 138, par. 24; Wash., 1890, par. 15, — charge $5 per day. Incorporation Fees. 179 tory. x These high charges have led a few states to paass retali- tory legislation, 2 providing that foreign insurance companies shall pay the same fees which their own state demands of com- panies from other states. For the security of policy holders in foreign companies, these are required to deposit with some state official securities sufficient to cover all risks. To ascertain the amount required for this purpose, the policies must be assessed by some competent state official, to pay for whose services fees are usually collected 3 from the companies concerned. In order to carry out the laws regulating foreign companies, it has been found necessary to require all insurance agents to obtain a license or certificate of authority to do business, for which an- other and small fee is often collected. The most common charge is two dollars, but some states charge less, while others collect as much as ten dollars for these licenses. 4 Some attempts have been made in a few states to have insurance legislation keep pace with the specialization in the business itself. The fees there- fore vary according to the kind of insurance, whether fire, life, accident, tornado, boiler, live stock, and many others. As a rule, the fees are fixed so as to discriminate in favor of mutual and benevolent associations. In consequence of this we find large organizations, fraternal in name, which are in reality nothing but life and accident insurance companies. The ten- dency of the later legislation affecting insurance companies, has been to increase the number of regulations, and at the same time to increase both the number and the size of the fees which are charged. 5 1 Washington charges two per cent, of the total premiums collected within the state. Connecticut charges three per cent. 2 New Jersey, 1872, p. 25. Ohio and Nebraska have similar laws. 3 Ohio charges one cent per one thousand for such valuation, Texas col- lects ten dollars per million assessed. 4 Ohio allows any company to pay a lump sum per year for permission to have as many agents as it pleases, without further license charge. 6 The companies themselves have made frequent and decided objections to the collection of these fees, especially when their amount was more than enough to cover the expenses of the insurance commissioner's office. It has been argued by some of their representatives that a higher fee than would be sufficient to cover actual cost, would simply be a tax on those who made use of the insurance companies, because these would necessa- 180 Urdahl — The Present Fee System in the United States. E. ABUSES CONNECTED WITH INSURANCE FEES. The vicious practice of allowing insurance commissioners or some other official to retain some or all of the insurance fees, is still continued in some states. 1 Another custom, in favor of which no good reasons can be given, is the practice of allowing the examining official to receive directly from the company for his own use, the fees which are supposed to cover his actual expenses 2 during the time consumed in the examination. Very often these are defined by law to be mileage, at ten cents per mile, and a certain amount per day for the time spent in mak- ing the investigation. In the first place, this method may yield a salary out of all proportion to the salaries of other state officials. 3 Then the examiner may grant or refuse a permit to transact business. If he is at all corrupt, he may use this power to extort huge bribes from those companies which are doing business on an unsound basis. Furthermore, the fee which he is allowed to receive directly from the company, may easily be increased by the company into a direct bribe to cor- rupt and destroy the efficiency of a corruptible official. This temptation might be partially removed, by requiring all fees to be paid directly into the state treasury and by forbidding any official to receive any gift or fee, under any pretense whatever, from an insurance company. rily have to increase their premiums to cover the extra outlay. This would be true if a fee of several thousand dollars were collected annually from each company, but none of the fees are actually so high as to produce any change in the price of policies. 1 Indiana allows the state auditor to retain twenty-five per cent, of the fees collected, besides his office expenses. 2 Delaware, New York, Minnesota, and many other states have such pro- visions. 3 Suppose the examiner in one of the North Western states receives an application for examination from a half dozen companies in New England, and from several on the Pacific coast. As soon as it is convenient for him he travels to Boston, and leisurely examines all the companies who apply from that section of the country. The actual expenses which he collects from each company will them include mileage, which alone may amount in this way to several thousand dollars in the course of a year; while the real expenses of the examiner will be but a small fraction of the amount collected. Examination Fees. 181 CHAPTER IV. EXAMINATION FEES. It has already been pointed out incidentally that some of the commonwealths very early required those desiring to enter a particular profession to have certain qualifications. One or two states created medical boards, in the beginning of this century, to examine all candidates and grant certificates; but the ex- tension of the state examination system to other professions is a very late development. Many of the so-called license fees are often partly in the nature of examination fees, and vice versa. The early pilot licenses were of this nature. The applicant had to furnish evidence that he had served the required number of years as apprentice on a regular pilot boat, and was often also required to pay a fee for a certificate. Experience brought to light the dangers due to incompetent pilots much earlier than those due to incompetency in other pursuits. The candidate was often required to prove his ability to manage vessels of dif- ferent tonnage in the presence of the licensing body. As the vessels have increased in size and carrying capacity, the diffi- culty of piloting them has increased proportionately, and the risk which would be run by entrusting them to incompetent men has increased to such an extent that state examination of pilots has become almost a necessity. It would be difficult to name the order in which the different professions came under state supervision in this way. Some of the colonies required lawyers to pass a sort of examination be- fore their admission to the bar. It has been customary in most of the new states to allow anyone to practice law who could satisfy very slight educational qualifications. The growth of the country has been so rapid, and the spread of population so sudden, that legal and medical services by properly educated and qualified lawyers and physicians were, in many localities, out of the question. The pioneers, therefore, had to take what 182 Urdahl — The Present Fee System in the United States. they could get. Furthermore, the Western spirit, which looked with favor on the "self-made man" attempting to work up in any profession, was opposed to stringent examinations as tend- ing to shut out all except those with means enough to attend schools. The result is, that, even in the present age of pro- gress, the great majority of our states allow individuals to practice law and medicine who have scarcely any qualifications whatever. Another cause of this state of affairs is the fact, that many states have turned over to medical and legal schools and to colleges the power to grant degrees which have the force of state examinations in giving license to practice. In many of the commonwealths where state examinations are given, they are usually made easy, with the express purpose of allowing those who can study these branches privately to obtain license or certificate. The examination fees in the states having this system range from five to twenty-five dollars. Much more general is the requirement that pharmacists shall pass a satisfactory examination before they obtain a certificate. Many commonwealths provide for examinations of assistant phar- macists, and have laws forbidding the sale of any drugs except by a licensed pharmacist or assistant. 1 But it is in the com- paratively modern profession of dentistry that the most strin- gent regulations are made, if one may judge by the number and amount of the examination fees. A glance at the table will show that that the fees range all the way from one to thirty dollars, the most common charge being ten or fifteen dollars. In all of the above-mentioned cases the examining board has the power to designate the institutions whose diplomas shall ex- empt the candidate from state examination. It is, therefore, quite customary to require the applicant to obtain a certificate from the state board at a small cost, usually from one to two dollars, even if he has an accredited diploma or has passed an examination. In some states this certificate is required to be recorded with a state or county official, which necessitates the payment of another fee. For the better regulation of some of these professions, espe- 1 Wisconsin and Minnesota have such laws. Examination Fees. 183 cially that of pharmacist, annual licenses or certificates are re- quired to be obtained, or annual registrations to be made, at a a cost of one or two dollars. 1 Other pursuits for which some states prescribe state examinations are: veterinary surgeons, engineers, 2 plumbers, and teachers. 3 The lack of teachers in many parts of the country, which is felt even at present, has made any charges for teachers' examinations inadvisable. There is, however, a tendency in a few states to charge special fees for life certificates; and, in some instances, an examination fee of one or two dollars is charged by the county examiner for an- nual certificates. The examinations in all these cases are usually conducted by an examining board, and the fees are as a rule required to be turned into a fund to be used for the maintenance of this board and other purposes. In cases where the examination is con- ducted by a salaried officer, as, for example, the county school superintendent, the fees are often used for a library, or institute fund, or some other similar educational purpose. The general drift of legislation seems to be to increase the number of pursuits for which examinations are required and to raise the standard of requirements. The civil service examina- tions bring up an entirely distinct category. No fees have as yet, so far as can be ascertained, been charged for the privilege of taking these examinations; but the probability is, that if they go on increasing in importance, a small fee will ultimately be collected from each candidate, as is the case in many Euro- pean countries at present. 1 Col., 1893, p. 368; Conn., 1893, Ch. 298; 111., Minn., Neb., etc. 2 Ala., Id., Mich., Mont., etc. 3 Colorado even requires an examination of horseshoers. Many cities have ordinances prescribing similar tests of different pro- fessions and pursuits. 184 Urdahl — The Present Fee System in the United States. CHAPTER V. COURT PEES.* Very little that is important can be said of this large cate gory of fees as it exists today. It has undergone less change than any other part of the fee system; hence is everywhere more or less antiquated. The forces which have tended to pre- vent change will be discussed in another chapter. No compar- ative study of this subject can be undertaken, because the serv- ices furnished for each fee-payment rarely mean the same in any two states; and the functions of the various judicial officers are widely different in the several states. * The classification given is neither strictly scientific nor absolutely com- plete. Some of the categories overlap; and the last class, especially, in- cludes a large numbers of distinct sub-classes, whose only common charac- teristic is, that they are collected by courts or semi-judicial officials. The justification for the adoption of this classification lies in the fact, that the statistical and other materials at hand lend themselves naturally to this grouping. The more elaborate, and, in one sense, more scientific classifi- cations of Wagner, Schall, and other German writers, are very well adapted to a purely theoretic study and discussion; but they were found, after re- peated trials, to be absolutely worthless when applied to actual conditions such as exist in the United States. Authentication fees, for example, are a very clear and easily defined group of fees, in theory; while, in practice, it is impossible to distinguish between authentication and registration fees, nor can a comparative study of such a class be successfully undertaken . It has therefore seemed best to adopt a classification which appeared most suited to an exposition of the conditions and relations of the fees in the various states to each other. In order to make this classification complete, it would be necessary to add two more classes, on which sufficient material was not available for a more elaborate treatment. These two classes may be designated as Educational Fees and Industrial Fees. Under the first would be included all charges made by public educational institutions for tuition and other general expenses. In the free public school systems these are rarely collected, except from non-residents, while in the higher institutions of learning they are quite general. The second class includes Court Fees. 185 A. REGISTRATION FEES. Not even the registration fees have enough elements in com mon in a sufficient number of states to make any comparison give significant results. 1 Many attempts have been made to change the system of registration of land titles ; 2 but the interests of lawyers, and many other forces have, as a rule, been arrayed against such reforms, and as a result they have been introduced in but few localities. The Australian, or Torrens system, was adopted in the city of Chicago a short time ago, but it was soon carried into the courts and declared unconstitutional. It is needless to state that enormous sums are each year paid out in fees for registration, a great part of which, with a more modern system, might be saved to the public. Too much empha- sis cannot be laid upon the necessity of adopting more simple and modern methods of registering land titles. Most of the Western and Middle states could as yet put into operation, with- out much difficulty, systems of registration which would be the means of saving millions of dollars to future generations. In the more densely populated Eastern states the necessity of a new system is beginning to be felt; but the change can be ac- complished only with the greatest difficulty, because of the in- numerable vested interests based on the old systems of regis- tration. The older and more populous a country grows, the more intricate and costly does the tracing of land-titles become, and the more powerful are the forces arrayed against such reforms. In New York the average cost of obtaining an abstract of title of real estate is from seventy-five to one hundred dollars; while all feesvcollected by public bodies for the services of institutions which are industrial in their character. The post office, government telegraph, tele- phone, municipal waterworks, gas works, as well as toll roads and toll bridges are institutions of this kind. 1 The registration fee in one state is part of a license fee or of some other fee, while in a different state it is distinct. 2 The original fee for registration is often the smallest part of the fees paid in securing title. There is, as a rule, an abstract-office fee, attorney's fee for examining title, a fee for certificate from register of deeds, and often many others. There are thus many people whose livelihood depends on the continuance of the old fee system. 186 Urdahl — The Present Fee System in the United States. in the West the abstract costs comparatively little. These fees may in the end become so burdensome as to be a serious impedi- ment to the purchase of land by the humbler classes of a com- munity. Although the system of registration is slowly expanding, comparatively few new classes of objects have been found, which have been brought under this provision. In the ranching dis- tricts the recording of cattle-brands is of great importance, while in a logging district the recording of log-marks seems the most important from the recorder's standpoint. The county recorders and registers of deeds are at present paid by means of fees in most of the states. B. STATE AND COUNTY COURT FEES. Sheriffs, constables, clerks of court, and other court officers are, as a rule, remunerated in the same way. In the older states scarcely any changes in this part of the fee-system have been accomplished. The result is, that many^of the court officials are receiving fees which were designed for conditions existing from fifty to one hundred years ago. Not only are the fees entirely unsuited in amount to the modern conditions, but many of the primitive forms and formulas are clung to with great tenacity. The following example will illustrate this: in the early courts the sheriff was usually the jailor, court messenger, and consta- ble; this custom, once established, has been continued in most of the older states, and as a result the sheriffs pocket enormous amounts of fees for services which they are supposed to perform in these three distinct capacities. In spite of the numerous and heavy fees the courts tare no where self-supporting. Not even those courts which deal ex- clusively with civil cases and have all their docket- fees and other fees, are able to maintain themselves without heavy drafts upon the state or local treasuries. Reforms to remedy this have been proposed, now in one state, now in another, but the legis- latures of the older states have not been able to rectify even the most glaring inconsistencies. The only states that have at- tempted any reform or solution of these problems, are a few Western commonwealths, which are less hampered, and freer Court Fees. 187 from the influence of old customs, traditions, and institutions. These have succeeded apparently in taking some decided steps in advance of any Eastern state. Colorado, by an act passed in 1891, 1 divided the counties of the state according to population into six classes, the first class containing all counties having a population of over 50,000, and the sixth class all those of less than 3,000. The fees of all county or court officers were graded according to the class in which the county happened to be. It was further provided that all county officers should be paid salaries fixed by law, and that all fees or emoluments of office of every kind should be accounted for and paid into the treasury. Idaho passed an act in 1887 based on a somewhat similar scheme. Here the counties were divided into five classes according to the assessed valuation of property in each, the lowest being $500,000, and the highest $3, 250, 000. 2 A maximum and minimum salary for the several county officers of each class was fixed by law; and provision was made that the fees collected by each, with the exception of those of justices of the peace, should be accounted for and paid into the county treasury. Montana has divided the counties into eight classes, and adopted provisions similar to those al- ready mentioned. Nevada in 1885 fixed by law the salaries of some of the county officers and provided that all fees should be paid into the county treasury. Arizona 3 has still another sys- tem. Here the counties are classified according to the number of registered voters in each. Officers in those counties having less than seven hundred and fifty voters, receive fees and salary which together shall not amount to more than six hundred dollars. Counties having less than fifteen hundred voters may remunerate their officers by means of fees and salaries; while officers of counties having more than fifteen hundred voters are, within certain maximum limits, to be allowed the fees of office only. California has a much more elaborate system. An act passed in 1891 divided the counties of the state into fifty-three classes based on population. In the first class were all counties 1 Laws, 1891, p. 3U, par. 22. 2 Feb. 7, 1896, Utah provided a similar system. 3 1893, p. 142. 183 Urdahl — Tlie Present Fee System in the United States. of over four hundred thousand inhabitants, while the fifty-third class contained all having less than two thousand. The salaries for the county clerks, sheriffs, auditors, recorders, treasurers, tax-collectors, assessors, and district attorneys were fixed for each class, and provision made that the fees collected should be paid into the county treasuries. The other officers, — coroners, justices of the peace, constables, and so on, are allowed to re- ceive fees ; but it is required that an account be kept, and any excess over the maximum allowed must be paid into the county treasury. 1 The only one of the older states 2 which has as yet attempted to deal with this question in this way is Kentucky. 3 A law, passed in 1895, fixed certain maximum amounts which might be retained as salaries by the county officers; and pro- vided that all sums received above such amounts should be paid into the treasuries, and heavy penalties were prescribed for false reports by any official. An attempt was made a year earlier to limit the amount which might be retained by city officials out of the fees received. 4 It would appear as though some one of the above schemes, if thoroughly carried out, would furnish an adequate solution of this grave problem. One thing, however, seems certain; and that is, that the experiments which these Western states are carrying on, will be of interest and value to every state in the Union, whatever their result may be. The problem is one which -confronts almost every locality, although the abuses are more manifest in some states than in others. Thoughtful men and wise legislators are beginning to take more and more interest 1 Supplement to the Code of 1893, p. 375, 806. 2 Pennyslvania made an attempt in 1810 to limit the amount which might be retained as salaries by registers of wills, recorders of deeds, pro- thonotaries of courts of oyer and terminer, courts of quartersessions, and orphans' courts, by providing that an account of all fees collected by each officer should be given to the Auditor General; and that fifty per cent, of all fees collected in excess over $15,000 should be paid into the state treas- ury. The attempt was a failure because of the inefficiency of the admin- istrative machinery. — Laws, 1810, §1. 3 1895, Ch. 47, par. 1776. 4 1895, p. 1046, par. 3065. Court Fees. 189 in the legislative reforms which are attempted, not only within the Union, but also in other countries. If the reforms outlined above should at all meet the expectation of the reformers, it. will only be a question of time until the movement will spread over the entire West and even overcome the inertia and conser- vatism of many Eastern commonwealths. 1 But the reform is bound to come in course of time, even if it is not accomplished by such legislation at a single stroke. It requires no great power of observation to see that a change is gradually going on in everyone of the states in the Northwest. One official after another is transferred from the fee to the salaried list. Scarcely a session of a legislature closes without having accomplished one or more changes in this respect. C. FEDERAL COURT PEES. Scarcely any of the states employing the fee system have as yet required the officers to give any strict account of the total amounts received as fees. Even if the new system is introduced,, it becomes next to impossible to obtain any figures which will show in dollars and cents the total gain or loss due to the one system or the other. It is quite different with the Federal officials, and more especialy those connected with the Federal courts. These were required comparatively early to give a complete account of every fee received. We have thus full and reliable statistics of the amounts collected as fees in the various courts for a long series of years. These figures show that the cost of maintaining the United States courts has for a number of years been increasing at the rate of over a million dollars a year. On May 28, 1896, Congress passed an act which changed most of the officials connected with the Federal courts from the fee to the salary system of compensation. The result is, that the total expenses under the new system for the current year 1897, according to the estimates made by the Attorney General, 1 It may be of interest to note that the original drafts of two of these laws were not made in the West by any " sage bush " legislators, but are the product of the best legal talent of the East. The statute of one state is taken from a revised code which was laid before the New York legisla- ture; and after being rejected by that body, it was taken up and passed in the West. 190 Urdahl — The Present Fee System in the United States. based on the returns for the first six months, will be $4,861,465, as compared with $6,675,239 for 1896, which was the cost un- der the fee-system. This shows a total saving of $1,813,774 in spite of the fact that the volume of business is on the increase. The specific items in which this reduction is made as given in the report of the attorney general are as follows: Salaries and expenses of marshals $2, 995, 541 50 Expenses for bailiffs 94, 920 40 Expenses for jurors . 215, 306 09 Expenses for district attorneys 192, 042 81 In miscellaneous expenses there is an increase of $2,646 over the preceding year. One item which most forcibly illustrates the extravagance of the fee system, is the mileage of United States attorneys and their assistants, which amounted to $93,908 for the fiscal year 1896, while according to the estimates the maximum expense under the new system will not exceed $6,000. These figures illustrate, better than volumes of discussion, the economic advantages of the new system, and the wastefulness of the old method of remuneration. But the diminution of the sums paid to public officials as sal- aries and for other purposes, represents by no means all the gain which accrues to the public from this change. The attorney general puts this very admirably when he says: — In districts where the " abuses of the fee system have flour- ished without interruption for a generation, fewer persons are called from their daily pursuits; private business suffers less interruption; is less frequently disturbed by groundless prose- cutions and dread of them; the number of persons who as in- formers, professional witnesses, and the like, seek to gain a livelihood by methods which often cause, and always threaten, the prostitution of judicial proceedings, is largely diminished and the general morale has been raised. There is every reason to believe that there has been and will be no failure to promptly and effectively enforce the laws. " The salary system is not as yet extended to deputy field mar- shals, as their services are only required intermittently; nor are the clerks of court brought under this requirement, but it is probable that they will be in the near future. This result of the application of the new system to the Fed- Revenue from Fees. 191 eral courts, gives a suggestion of what might be accomplished in the state and local courts, especially if it is borne in mind that the business of the Federal courts is insignificant, when compared with the aggregate business of all other courts. CHAPTER VI. REVENUE FROM FEES. 1 A. FEDERAL GOVERNMENT. Federal fees are the only ones of which anything like com- plete accounts are kept, and even here the reports are not de- tailed enough to make an exhaustive treatment possible. A special report made by the secretary of the treasury to Con- gress, stating the receipts and expenditures of the Federal gov- ernment for the year 1882, is the basis of the following table, which contains the aggregate of all the fees, excluding postal fees, collected by Federal officials for that year: Consular fees $613, 422 22 Steamboat fees 279,889 36 Registers' and receivers' fees 1, 107, 671 61 Marine hospitals 406, 103 59 Weighing fee3 48,638 17 Customs officers 480, 728 69 Emoluments (customs) 368, 822 74 Emoluments (judiciary) 25, 315 39 Patent office fees 917,897 14 Passports 20, 115 00 Copying (general land office) 8, 247 90 Copyright fees 15, 753 04 National health laws 1,647 68 Total 2 $4, 564, 390 85 1 The statistics on which this chapter is based cannot be considered ab - solutely accurate; but they are accurate enough to show the general results indicated. Many of the receipts classed in some tables as fees should, no doubt, were all the particulars known, be classed as taxes; while others at present considered taxes, should have been included in the fee tables. 2 [The sum of the amounts given is $4,294,252.53.— Editor.] 192 Urdahl — The Present Fee System in the United States. The total is important in that it shows the significance of the subject of the fee-system as a source of revenue. Without the fee-system this sum would have to be raised by taxation or in some other way. This four and a half million dollars repre- sents the amount which is annually collected for the numerous little services performed by Federal officials throughout the land. The true significance of the Federal fee-system will be more adequately represented, when the receipts of the Post Office, which in essence are pure fees, are added to the above miscellaneous fees, making a total of nearly eighty millions a year; while the revenues of the United States from all sources was $372, 802, 498. 29. J The revenues from fees vary with the general prosperity of the country. There may be, and usually is, a gradual increase in the total from year to year, although there is at times a diminution of several thousand dollars from some particular source. In 1891 the consular fees had increased to $782,619, while the registers' and receivers' fees had decreased $931,907. The consular fees in 1895 amounted to $938, 765, 2 an increase of over $150,000 in five years. The Patent Office fees vary quite extensively, owing to differences in industrial and inventive ac- tivity of the community. B. REVENUES FROM FEES IN THE STATES. In most of the states the amounts which are accounted for as fees, are surprisingly small. There are, in the first place, a large number of states whose receipts from fees include only the ordinary office receipts of their state officers, the total amount of which constitutes but a very small per cent, of the total state revenues. Among the members of this class may be men- tioned the following: North Carolina received $13,715 in fees from all sources, and of this amount $13,192 were the receipts of the secretary of state's office. Arkansas collected $26,466 from all sources, of which over $18,000 was from the secretary of 1 Report Sec. of Treas., 1895, p. 15. For the fiscal year 1896 the total fees amounted to over $86,000,000, while the total revenue from all sources was $409, 000, 000. 3 Report of Sec. of Treas., 1895, p. 701. Revenue from Fees. 193 state's office, and over $8,000 from the insurance commissioner's oftice. 1 Kansas credits $13,646 to fees, of which the bank com- missioner collects $6,458, the oil inspector $4,500, and the sec- retary of state $1,676. 2 Alabama receives $29,003 from her fee system; but of this amount $22,602 is obtained from solicitor's fees, and $861 from oyster licenses; the remainder is collected by the state officers. 3 But there are a few states that receive considerable revenue from the fees which are accounted for by the state officers. Among these may be mentioned Illinois, where $525,872 was last year credited to fees, of which $195,135 came from the sec- retary of state's office and $328,475 were collected by the super- intendent of insurance. 4 Missouri also received the not incon- siderable sum of $192,485 from fees; $109,294 of this was col- lected from foreign insurance companies, and $76,510 by incor- poration fees. 5 Wyoming, whose total state revenue only equals $410, 990, receives $8, 1 00 from fees of state officers. Of this amount $4,400 is from foreign insurance fees, and $1,000 from the fees of the secretary of state. Colorado obtains $150,000 from her insurance department, and $40,000 from the secretary of state's office. 6 The little state of New Jersey receives nearly $83,000 from incorporation fees. 7 This large sum is explained by the fact that incorporation is here made easy; and com- panies from all parts of the Union come here to obtain their charters, for exactly the same reason that the number of divorce cases in South Dakota has been out of all proportion to the population of that state. There are several states whose revenues include fees derived from various other sources besides those mentioned, the most general of which are the receipts from state supreme and inferior courts. New Jersey receives $22,815 from the clerks in chan- 1 Report of Auditor, Ark., 1896, p. 22. 2 Report of Treasurer, 1896, p. 8. 3 Report of Auditor, 1896, p. 59. Building and Loan Associations, $3,800; Secretary of State, fees, $915; Attorney General, $73; State Auditor, $751. 4 Report of Treasurer, 1896, p. 7. ' Report of Auditor, 1896, p. 5. • Report of Auditor, 1896, p. 14. 7 Report of Comptroller, 1896, p. 17. 13 194 Urdahl — Tlie Present Fee System in the United States. eery ; l Nevada obtains over $1,000 from her supreme court fees; 2 Utah collects over $10,000 from the fees of her clerks of court; 3 and a few other states show small sums derived from this source. Among other miscellaneous sources of state fees, it may be worthy of notice that Connecticut obtains $10,000 from her shell fisheries. 4 Minnesota obtains $135,000 from grain in- spection fees ; 5 and many other states obtain revenues from other sources, the amounts of which are too small to be of any ac- count. The states, however, that show the largest receipts from fees, are invariably the ones that have the most elaborate system of licenses. Maine 6 receives $83,084 from fees of all kinds, while her total state revenues amount to $1,576,382. North Dakota 1 Beport of Comptroller, 1896, p. 17. 2 Report of Comptroller, 1896, p. 16. 3 Report of Auditor, 1896, p. 22. 4 Report of Comptroller, Conn., 1896, p. 77. Com'r of pharmacy $1, 973 25 Com'r of shell fisheries 10, 136 25 Executive sec 535 50 Insurance com'r , 68, 334 79 Secof state 2,147 35 Incorporations 1,500 00 Total recepts $84,627 14 » Report of Auditor, 1896, p. 66. Insurance fees $16,462 00 Secof state 1,543 85 Dairy com'r 1,500 00 Public examiners 500 00 Game and fish com'r 1,639 30 State bank fees 2,265 00 Warehouse 110 00 Grain inspection 135, 700 00 Candidates for state offices 1,650 00 Total. $161,370 15 • Report of Treasurer, 1896, pp. 10 and 11. Private detectives' fees $150 00 Hawkers and peddlers 4,300 00 Itinerant vendors 100 00 Dog licenses 29, 494 85 Incorporations 642 00 Increase of capital stock 23,595 00 Railroad com'r 9, 880 09 Sec. of state, fees 2,260 84 Insurance com'r 11,143 00 Medical board, registration 1,518 00 Total $83,083 78 Revenue from Fees. 195 obtains over $15,000 from elevator licenses. 1 Leaving out of consideration the Southern states, whose licenses are, partially at least, in the nature of business taxes, we find a number of commonwealths which seem to employ licenses partly as regu- lative measures and partly for revenue, and thus obtain a very large percentage of their revenues from this source. Mary- land 2 received $1,118,972 from license charges and other fees, as compared with her total revenue of $3,156,876. Pennsyl- vania nominally receives all her state revenue from these sources, but in reality many of the so-called licenses are taxes levied under the form of license charges. The same may be said of the railroad licenses in Wisconsin and other states. The amount 1 Report of Auditor, N. D., 1896, p. 3. Com'r of ins $33,683 40 Sec. of state 5,682 46 Incorporations 2,930 00 Com'r of agr 3 20 State examiner 2, 450 00 Clerk of supreme court 1, 388 25 Vet. examining board 475 00 Dist. veterinarian 125 25 Elevator licenses 1, 535 00 New land contracts 65 00 Total. $27,779 56 [The sum of the amounts given is $48,337.56. — Editor.] ^Report of Comp. of Treas., 1896, p. 2. Bonus on corporations $6,439 80 Excess of fees of office ; . ■ 50,01190 Franchise tax !. 29,53658 Auctioneers 3,887 75 Billiard tables 10,375 98 Brokers 12,312 53 Cigarettes 12,780 37 Exhibitions 2,482 76 Fishery 12215 Hawkers and peddlers 4,333 29 Ins. companies 130,865 11 Ordinary 11,52639 Oyster house 31,56112 Oyster measures 1, 227 60 Oyster canners and packers 5, 649 86 Traders 194,60442 Traders in liquor 9,093 62 Dredges for oysters 25,284 33 To sell commercial fertilizers 18,295 00 Tongs and scrapers 13, 510 00 Highliquor licenses (Bait.) 530,57539 State hay scales 756 23 State tobacco inspection 8,685 27 State warehouses 5,179 43 Total $1,118,927 40 196 Urdahl — The Present Fee System in the United States. accounted for as peddlers' license fees, is surprisingly small; but it may be explained by the fact that the laws are evaded, and that the state authorities, as a rule, are unable to enforce them. In general it may be said that the state income from fees is, as a rule, but a very small part of the total state revenue; although a few states, like Pennsylvania and Maryland, succeed in getting a large percentage of their income from them. C. MUNICIPAL RECEIPTS FROM FEES. The increasing importance of the fee-system from a revenue standpoint, is best illustrated by a study of the officers' reports of the various cities of the country. The reports for 1896, from cities with a population of over 75,000, show a great variety in total receipts from fees, and more especially in the particular sources from which the fees are derived. Savannah, Ga., obtained $83,273 from municipal fees and licenses, $51,000 of which was liquor license charges, and $15,904 were payments for market privileges. 1 Salt Lake City, Utah, credits $116,419 to license fees, most of which is paid for liquor licenses. 2 Duluth. Minn., derives $130,373 from fee payments, of which $16,000 are municipal court fees and $113,834 from licenses, largely to sell liquor. 3 Paterson, N. J., receives $154,308 from fees, while the total municipal revenues from all sources are $3,245,475. The main sources of fees are liquor licenses, which yield $138,655; other licenses $5,795; registry of dogs, $5,162; court-recorder's fees, $3,036; and miscellaneous fees. 4 St. Paul, Minn., derives $309,000 from liquor licenses, $7,050 from theater licenses, and less amounts from hack and cab drivers, peddlers, express companies, build- ing inspection, markets, pawnbrokers, city railroads, and so on, making a total of $338, 347. 5 Minneapolis obtains $289,000> 1 Municipal Report, 1896, p. 57. 2 Report, 1895, p. 42. 8 Report of Compt., Duluth, 1896, p. 27. 4 Annual Report, 1896, p. 12. 6 City Report, St. Paul, 1895, p. 32. Eevenue from Fees. 197 from her liquor licenses, $48,646 from fees and fines, which together with fees from miscellaneous sources make a total of $353,874, as compared with the total municipal receipts from all sources of $1,029, 525. « The larger the city and the denser the population, the more important do the sums total derived from fees become, as com- pared with the general receipts. In the great cities the revenue from fees constitute about ten per cent, of the total income from all sources. In St. Louis 2 the fees amounted to $2,168,365, while the general receipts were $12,041,402. The fee payments of all kinds in the city of Philadelphia 3 for the year 1896 amounted to almost four million dollars, while the total munic- ipal receipts were about thirty-one and one-half million dollars. 1 Annual Reports, Minneapolis, 1896, p. 34. 2 Fees accounted for in the Comptroller's Report of St. Louis for 1896, p. 5. Wharfage $65,283 53 Boiler and elevator inspection 13, 953 00 Building permits 9,862 00 Street railroad franchises 74,152 15 Commissioner's fees 157, 169 15 Recorder of deeds 54,06110 Scales 10,656 35 Licenses 1,367,755 53 Inspector of fertilizers 17, 699 92 Fees of office 3,613 55 Fees for oil inspection 14, 525 51 Insurance foes 536 80 Total (not including occupation taxes on licenses) $2, 168, 365 06 [The total sum of the amounts given is a little over $1,788,000. — Ed.] 3 Philadelphia Compt. Report, 1896, p. 21. Boiler inspection $20, 301 50 Building inspector 36, 235 31 Search fees from tax office 6, 508 60 City solicitors 247,537 22 Port warden 703 00 Prothonotary 54,535 61 Recorders 105,243 25 Register of wills 92,900 10 Sheriffs 65,998 47 Clerk of Quarter Sessions 39,384 11 Bureau of highways 168,510 07 Surveys 181,398 49 Waters 2,835,326 74 Total $3,909,030 08 [The sum of the amounts given is a little over $3,852,000. — Ed.] 198 Urdahl — The Present Fee System in the United States. The ratio is about the same in the other large cities. 1 The relative amounts which are derived from the various sources vary in the different cities according to the climate, location, and other peculiarities of each, also according to the wisdom and foresight exercised by their respective municipal and legislative bodies. St. Louis received in 1896 nearly $75,000 for street railway franchises, while Philadelphia with a much more valua- ble system did not receive a dollar from this source except by way of taxation. Philadelphia, on the other hand, receives large sums each year from the fees collected by prothonotaries and other court officers. Chicago, New York, and other cities derive comparatively little revenue from this source. The ten- dency has been prevalent in some of the corrupt city councils to grant away valuable franchises and other privileges, which other- wise would have yielded annual sums into the treasury. Indeed, many of the legislative bodies in our large cities exercise almost as important and far-reaching powers in this respect as the absolute monarchs of the seventeenth century. History fur- nishes numerous examples of commercial monopolies and other exclusive privileges, granted as trifling tokens of royal favor to some favorite courtier, which when exploited were found to yield fabulous sums. So it is with many municipal bodies. A little, harmless-looking ordinance is introduced involving fees which are apparently insignificant; and a few years later it may be discovered that the fees provided for yield annually a small fortune to some official. 2 1 Fees of the city of Chicago: Amusements $21, 434 10 Dog licenses 84,480 00 Pawnbrokers 18,750 00 Wholesale liquors 28,693 00 Wholesale malt dealers licenses 33, 985 09 Saloons 2,991,965 34 Street car companies 68,841 00 Building permits 43, 902 95 Certificates of inspection 14, 636 00 Insurance 22,767 67 Poundage 1,008 00 Total $3,627,930 47 [The sum of the amounts given is a little over $3,329,000.— Ed.] 2 Chicago Times-Herald, Jan. 27, 1897, p. 1. In the spring of 1896 the city council of Chicago passed an ordinance which required all peddlers to Revenue from Fees 199 The amounts collected as fees in the great cities, seem to be enormous when taken by themselves, but they are by no means as large as they might be under more efficient and economical administration of municipal affairs. The municipal machinery is as yet very crude and undeveloped. As a result the amount of waste is very great. Very many of the small fees which are collected here and there, may be compared to the by-products of a great factory. Utilization of these by-products, and new economies are the things which can increase the output. Just so with our municipal establishments. Taxes are already so high that the income from that source can not be increased very materially with the present system; but the receipts may be augmented quite perceptibly by getting into the treasury all the fees which are collected for every privilege or service what- ever. D. GENERAL TREND OF THE FEE LEGISLATION. The most general and far-reaching tendencies which can be said to exist, are in two directions. There is one class of fees which tend everywhere to disappear, or at least to diminish in size. This class includes all payments for actual services or goods furnished by public authority. Good examples are the following: the Post Office; the public schools; all kinds of cler- ical services; the use of highways, which originally and in a few places even now, are paid for by means of tolls ; water sup- ply in large cities; gas and electricity when furnished by mu- nicipalities. In short, wherever the government attempts to furnish a service which could be furnished by private initiative, the tendency soon becomes manifest to reduce the fee below the cost of the service, often even to such an extent that it becomes a free good. There is, however, another large category of fees which may be said to be on the increase in amount. These include most of the license fees. We have seen in the foregoing how each one has, as a rule, originated in a simple recorder's fee, and grad- buy a tag from the city clerk for fifty cents, which was required to be at- tached to their wagons. The estimated annual profit to the clerk from this source was $8,000. 200 Urdahl — The Present Fee System in the United States. ually increased until some of them became real taxes. The num- erous incorporation fees would belong to this class. A very- little investigation will show that they are on the increase. Here also the numerous inheritance taxes belong;. They cer- tainly originated in probate fees, and may, if moderate in amount, be placed even now in this category. There is, furthermore, a tendency to extend the scope of the fee system. With every extension of the functions of govern- ment new direct services to individuals become possible, and new fees are collected therefor. Each recurring cycle of years sees the development of new fees and the disappearance of the old. CHAPTER VII. LEGAL ASPECT OF FEES. A. EVOLUTION OF FEES AS INTERPRETED BY THE COURTS. The courts have not succeeded in establishing any definite and sharply defined category under the heading of fees as dis- tinguished from other public revenues. This becomes perfectly evident when we turn to the various law dictionaries and ascer- tain that no definition or explanation of the term can be found. Eminent legists and text-book writers, such as Judge Cooley, Mr. Desty, and Mr. Hilliard, seem to ignore entirely the sub- ject as a whole and confine their attention to license and inspec- tion fees, which are but a small part of the subjects included under the more general term. Not even on the subject of license fees have the courts succeeded in evolving any definite body of law. Conflicting decisions can be found in the various state courts, due doubtless to the wide divergence in the constitu- tional limitations of various states and public bodies. On the strength of some of these decisions the American legal writers have formulated definitions and accepted certain princi- Legal Aspect of Fees. 201 pies in regard to licenses and license fees. Judge Cooley de- fines a license as " a privilege granted by the state, usually on payment of a valuable consideration. To constitute a privilege the grant must confer something which, without it, would be illegal. A fee is in the nature of a sale of a benefit, or privi- lege, to a party which would not otherwise be entitled to the same." 1 Mr. Desty says that "a license is not a tax, but a privilege granted to carry on some occupation or exercise some right which could not be legally exercised without the grant of such license. 2 . . . The license fee is not limited to the mere cost of issuance; it may be sufficiently high to produce a fund to enforce regulations adopted to restrain the improper exercise of the pursuit. " Neither of the above mentioned writers lay any stress on the distinction between license fees and license taxes, but regard both as essentially in the nature of a tax. This is shown by Judge Cooley's statement, that license fees may be imposed for four different purposes: (1) for regulation, (2) for revenue, (3) to give monopolies, and (4) for prohibition. But he affirms that the only legitimate purpose for which fees should be levied, are for regulation and revenue. This distinction from a legal point of view, between license fees levied for regulation, and the so-called fees for revenue, was recognized very early in the history of the country. The idea has been further elaborated by many courts that license fees whose purpose was regulation, were levied by the police power, while fees for revenue were im- posed by the taxing power. But the term regulation is a very broad one, and can be made to include almost every exercise of sovereignty; or it may be interpreted so as to embrace only a few subjects, according as the interpreting body takes the lib- eral or conservative standpoint. As a result, we find that the decisions vary and conflict with each other, not only in the courts of different states, but even within the same state in dif- ferent periods of time. Courts are, from the standpoint of history and political science, not only interpreters of constitutions and laws, but of economic 1 Cooley, Law of Taxation, p. 512. 2 Desty, Taxation, pp. 1385 and 1380. 202 Urdahl — The Present Fee System in the United States. conditions. They are influenced by the ideas and ideals of the times, and unconsciously, at times even consciously, adjust and modify constitutions and laws so as to fit the economic condi- tions which present themselves. We thus find a long list of cases where the imposition and collection of license fees, were adjudged to be an exercise of the police power, although it was clearly shown in many of them, that the fee yielded a surplus revenue to the public body. 1 In New York vs. Leonard, 2 the court held that the imposition of a license charge of $50 per car for the privilege of running on the streets of New York, was an annual tax and not a license fee; while the parallel case of Johnson vs. Philadelphia,* was decided contrary to the former decision, the court holding that $50 per year per car was a legiti- mate license charge. The court here stated " that if it be granted that the sum is a reasonable charge as a police regulation, then its incidental operation in augmenting the receipts of the city treasury, cannot invalidate it. " The trend of the earlier de- cisions * seems to be that the distinction between fees and taxes corresponds to the distinction between police powers and taxing powers. The dividing line between these two powers has never been definitely fixed. Even the United States Supreme Court 5 has 1 People vs. Thurber, 13 III., 554; Walker vs. Springfield, 94 111., 364; Burch vs. Savannah, 42 Ga., 596; Durach's Appeal, 52 Pa., 392;. East St. Louis vs. Trustees, 99 111., 583; Rochester vs. Upman, 19 Minn. , 312; State vs. Carridy, 22 Minn., 322; Johnson vs. Phila., 60 Pa., 445; Fire Dept. vs. Helfenstein, 16 Wis., 136; Cine. Gas Co. vs. State, 18 Ohio, 237; Boston vs. Sehaffer, 9 Pick., 415; Welseh vs. Hotchkiss, 3£ Conn., 140. 2 32N. Y., 261. 3 60Penn. Stat, 451. 4 Tenney vs. Lentz, 16 Wis., 566; License Cases, 5 How., 504; Keller vs. State, 11 Ind., 525; Commonwealth vs. Kimball, 24 Pick., 359; Gib- bons vs. Ogden, 9 Wheat., 23; Mar met vs. Ohio, 12 N. E. Rep., 472, etc. 6 New York vs. Milwaukee, 11 Pet., 102. "Every law comes within the police power which concerns the welfare of the whole people of the state or any individual within it, whether it relates to their rights or their duties, whether it relate to them as men or as citizens of a state, whether in their public or private relations, whether it relates to the fight of persons or Legal Aspect of Fees. 203 long defined the police power in such a way as to make it co- extensive with the whole internal government of a state. But later decisions have limited the scope of this power in one direction, and extended it in another. In the case of Barbie vs. Connolly 1 the Supreme Court has so far narrowed the conception as to place the development and administration of common law outside of its realm ; and writers on political science have, in theory at least, gone further and limited the conception still more. Although the general nature of the power has been de- fined, still the outlines are left very vague and undetermined. Even if the early view be accepted, that a license charge which yields revenue is a tax and an exercise of the taxing power, while a charge which will cover only the necessary expenses of issuance, and the additional labor of officers thereby imposed, is an exercise of the police power, still, even this apparently simple and clear distinction would leave a large field within which courts and legislators might exercise their discretion. In Judge Cooley's words 2 : "The courts will not inquire very closely into the expense of a license, with a view to adjudge it a tax, where it does not appear to be unreasonable in amount in view of its purpose as regulation." The various courts are therefore compelled to find other justi- fications for fees than the mere fact that they are levied under the police power. Charges are found which are perfectly legit- imate, but which far exceed the cost of the regulation carried out by the government. The courts have been compelled to admit that a license fee is nob necessarily limited to the cost of regulation, and that it is not necessarily an exercise of the police power. In the leading case of Ash vs. People 3 the court decided that " the exaction is not a tax, it is but a reasonable compensation whick the city demands from those who will not of property, of the whole people of the state or of any individual within it, and whose operation was within the territorial limit of the state and upon the persons and things within its jurisdiction." 1 113 United States, 27. 2 Cooley's Constitutional Limitations, p. 243, 6th ed. 3 11 Mich., 347. The city of Detroit established a city meat market and required persons keeping meat shops outside of this market to pay a license fee of $5 per annum. The ordinance was sustained. 204 Urdahl — The Present Fee System in the United States. sell in the public markets, for the additional labor of officers and expenses thereby imposed. ... If the city may demand enough to pay for making out the license, it is difficult to con- ceive why it may not also demand enough to pay all expenses attending supervision of the trade at the place licensed. " In Chilvers vs. People 1 the court held that a license is not a tax: "It is a price paid for a franchise or public privilege in an in- dividual. " This idea is brought out very clearly in a whole series of cases in which the courts have passed upon the validity of incorpor- ation charges. In Ashley et al. vs. Ryan, the Supreme Court of Ohio held that the sum required by statute for filing articles of incorporation, was not a tax on property. u The filing is simply an authority or license to persons filing the articles to become a corporation, and the sum paid therefor is the con- sideration demanded by the state for this right. The same idea is presented by Justice Field in Insurance Co. vs. New York. 2 " The right or privilege to become a corporation ... is one generally deemed of value to corporations The govern- ment may require that corporations pay a specific sum each year." In Monroe Savings Bank vs. Rochester % the court said: "It must be regarded as sound doctrine that the state may im- pose any conditions it please. . . If the grantees expect the boon, they must bear the burden. " In the case of Pearl vs. Virginia* Justice Field said: " A grant of corporate existence is the grant of a special privilege to incorporators. " In these and other cases 5 of the same kind the courts have apparently grasped the fundamental characteristics of fees; namely, that they are payments for special benefits conferred by the state or other public body upon individuals. But they have not carried it to its logical conclusions by applying it as a cri- terion to all fees. They have not laid down the general law, that fees shall not exceed the value of the special service ren- dered to the individual. This standard of measurement has been applied to only a limited number of fees. 1 11 Mich., 50. 3 37N.Y., 365. 2 134U. S., 599. *8 Wall., 168. 6 Morgan vs. La., 18 U. S., 455; Baker vs. Cincinnati, 11 O., 534; Cincinnati Oas Co. vs. State, 18 O., 237. Legal Aspect of Fees. 205 As for the rest, the courts have held in some cases 1 that charge should be sufficient to cover only a small part of the ex- penses incurred by the state; while in others 2 they have sanctioned fees high enough to cover not only the cost of direct regulation, but enough to produce a fund to protect the com- munity from indirect and probable injurious consequences of the exercise of the privilege. In still other decisions the stand is taken that the fees should be high enough to indemnify the state for the exact cost of furnishing the service to the individ- ual ; but this cost is interpreted to include only the direct con- sequences. « This is the nature of the decisions of the United States Cir- cuit Court for the Western D istrict of Pa. in the case of West- ern Union Telegraph Co. vs. Philadelphia.* The court held that an ordinance of the city of Philadelphia, charging $16,000 for a license to the telegraph company, levied a tax, and not a fee, because it far exceeded the amount expended by the city in pro- tecting persons and property from injury from the poles, wires,, and other property of the telegraph company. Two years later a similar case* came up for adjudication in the courts of Mis- souri, arid was taken to the Umted States Supreme Court. The question at issue was whether the city of St. Louis could charge five dollars per pole for its permission to the Western Union Telegraph Co. to do business in the city. The Supreme Court 1 Trans. Co. vs. Parksburg, 107 U. S., 691; Packet Co. vs. Keokuk, 95 U. S., 80; Packet Co. vs. St. Louis, 100 U. S., 423. 2 Cincinnati vs. Buckingham, 12 Ohio, 257. State vs. Cassidy, 22 Minn., 320. " It, (the state) regards the traffic (in liquor) as tending to produce intemperance, and as likely to entail upon the state the expense and burden of providing for a class of persons ren- dered incapable of self-support. The evil influence and example upon society is necessarily injurious to the public welfare and prosperity, and therefore calls for such legislative action as will operate as a restraint upon the business flowing from its prosecution. To this end a license is re- quired, and the business restricted to such persons as are willing to indemnify the state in part against such probable results. . . . These measures are undoubtedly police measures — it is not at all important whether the license produce revenue to the city or not." 3 107U. S., 365. 4 St. Louis vs. W. U. Tel. Co. 206 Urdahl — The Present Fee System in the United States. decided that the charge was not a tax, but was in the nature of a rental, or essentially a fee. "A municipal corporation has power to impose a reasonable charge upon a company doing inter-state business, as a compensation for the space occupied by its property. " The court makes no statement as to how the size of the fee should be gauged, but it is evident that the element of service or benefit is of more importance in this than in many previous decisions. In some recent decisions there are traces of a decided advance in the legal interpretation of fees. The true criterion, as has been explained before, by which payments can be judged as fees or taxes, must be the presence or absence of a special benefit to the individual equivalent to the charge. The legislative, or law- making, body has ultimately the discretion and the power to de- cide whether a charge shall be imposed or not; and in so doing it also decides whether it is a counter-payment for a service rendered to certain individuals by the state, or whether it is a burden in the form of a tax imposed without reference to ser- vices. The intent of the legislative body becomes, therefore, a guiding principle, which has already received recognition both by state 1 and federal courts. 2 The decision in which this is brought out most clearly is in the case of Harmon vs. Chicago. 4, Here the United States Su- preme Court decided that an ordinance of the city of Chicago was invalid which imposed a license fee upon all tugs plying in the Chicago River, whether licensed by the United States in the coasting trade or not. The charges would have been per- fectly legitimate, so the court intimated, if they had been im- posed as a consideration for improvements made in the channel of the river, which improvements were of use to the tugs. The fact was shown by the attorneys for the defense that such valu- able improvements had actually been made in the Chicago River, but there was nothing in the ordinance to show that the city council intended the license fee as a consideration for the use of these improvements; on the contrary, there was reason to believe that the so-called fees were intended simply as a tax 1 Mitchell vs. Williams, 27 Ind., 62. 3 U7U. S., 410. Legal Aspect of Fees. 207 on the tugs plying in a river which was a part of the navigable waters of the United States. It was therefore held to be an interference with interstate commerce. The court here virtu- ally held that the charge would have been a legitimate license fee, had the council imposed it with that intent; but, as the council had levied it with the understanding that it was a tax, its intent and interpretation must be accepted by the court. Essentially the same principles were laid down in the earlier case of Huse vs. Glover, 1 where the legislature of Illinois, after having expended much money on locks and improvements in the Illinois River, passed a law levying a tonnage toll on vessels passing through these locks. The Supreme Court held that this exaction "was a compensation for the use of artificial facili- ties constructed, and not an impost upon navigation." The tendency therefore seems to be in the right direction, at least in the decisions of some courts. This tendency is to construe as fees all charges which the legislative body intended to con form to the roughly measurable special benefit. B. FEES IN THEIR RELATION TO INTER-STATE COMMERCE. Almost all questions in regard to fees which have come before the Supreme Court of the United States for adjudication, have involved some phase or other of the regulation of interstate and foreign commerce. It would seem, at first blush, as though no fee would be of itself an interference with commerce. If the fee charged is a counter-payment, and does not exceed the value of the equivalent granted or furnished by the state, it becomes difficult to understand how such a charge can interfere with internal commerce. In the earlier decisions this was the view taken by the courts. In Osborne vs. Mobile 2 the Supreme Court passed upon the validity of an ordinance which required an express company doing business beyond the state limits to pay a license fee of $500, and an express company doing business within state limits to pay $100; and charged a license fee of $50 to any »119U. S., 543. 2 16 Wall., 479. 208 Urdahl — The Present Fee System in the United States. local express company whose business confined itself to the city. The validity of this ordinance was sustained on the ground that the fee was a payment for the privilege of doing business in the city. But this decision was reversed fifteen years later by the same court, in the case of Leloup vs. Mobile, l in which the facts were similar to those in the case just mentioned. Here the court held that any tax or charge levied on a company engaged in interstate commerce, was an interference with such commerce and hence unconstitutional. In Guy vs. Baltimore 2 the court decided that an ordinance which levied a higher wharfage fee on vessels laden with products of other states, than on those laden with products of the state of Maryland, was unconstitu- tional. In November, 1896, Judge G-rosscup of the United States Circuit Court in Chicago, held that an ordinance passed by the Chicago council violated the Constitution of the United States in that it interfered with interstate commerce. This ordinance prescribed a license fee of $250 to be paid by anyone who should sell or offer for sale any spirituous or malt liquors in the city of Chicago, and was construed so as to apply to commercial travelers who sold liquors by sample. The United States Supreme Court rendered its decision in the case of Brin- ner vs. Rebman* along almost the same line. Here the state of Virginia had passed a statute prescribing an inspection fee of one cent per pound on all beef transported one hundred miles or more to be sold within the state. The court held that the fee charged was so large as to prohibit practically the importation of beef from without the state. It admitted that a small in- spection fee might be legitimate, but one cent per pound was so large as to interfere seriously with interstate commerce. This is the tenor of the decisions of the court in Walling vs. Michigan 4, and in Railroad Co. vs. Husen.* There are, however, even more extreme cases. The fee itself may be imposed for a legitimate purpose, and may be so low as to 1 127 U. S., 640. 4 116 U. S., 446. 2 100 U. S.,434 . 6 15 U. S., 965. 158 U. S., 78. Legal Aspects of Fees. 209 barely cover the cost of regulation; and yet the incidental or indirect results may be of such a character that it becomes an interference with commerce. The best example of this kind of a fee may be found in the case of Minnesota vs. Barber. 1 The validity of a statute passed by Minnesota in 1889 was here ques- tioned. This law provided for the inspection of all cattle, sheep, or swine designed for slaughter for human food, which inspection was required to be made within twenty-four hours of such slaughter. The inspectors appointed for this purpose, were allowed a small fee for their services. The avowed pur- pose of this law was to prevent the sale of infected and unsound meat, and the regulations imposed were devised to attain this end; nor were the fees charged exorbitant. No distinction was made in the law between residents of Minnesota and those of other states; and yet the act was held by the U. S. Supreme Court to result in a discrimination against citizens of other states, and to interfere with the commerce carried on by them. It became a discrimination because it was more difficult for a resident of Illinois to conform to its provisions than for a resi- dent of Minnesota. The court therefore declared it to be uncon- stitutional, not because the fee itself interfered with commerce, but because the indirect effects were such. It seems, therefore, to be accepted by the courts that any law which requires a party, under any pretext, to take out a license to carry on in- terstate commerce, interferes to that extent with such com- merce, and hence is unconstitutional. 2 In the most recent cases quoted in the preceding, the courts seem to assert that inspection regulations involving fee pay- ments and other requirements of the same nature, come under this inhibition. 1 136 U. S., 313. No beef packer in Illinois could send his cattle to Min- nesota and have them inspected and then ship them back to Illinois for slaughter; and yet this would be the practical effect of the law, if the meat was designed for sale in Minnesota. 2 This has been the interpretation of the Supreme Court in Pickard vs. Pullman /Southern Car Co., 117 U. S., 594; Roffins vs. Shelby City Taxing District, 120 U. S., 489; Stutenbourgh vs. Henrick, 129 U. S., 141; M. C. Call vs. Calif., 136 U. S., 129; Norfolk and Western R. R. Co. vs. Pa., 136 U. S., 114. 14 210 Urdahl — The Present Fee System in the United States. The existence of any regular development, or evolution, in the views of the supreme and other courts, may perhaps be called in question by men -who emphasize the purely legal as- pect of court decisions; but a study of the cases from an his- torical point of view, seems to reveal very clearly the changes which have been outlined. CHAPTER VIII. THE FEE SYSTEM AS A SOCIAL FORCE. The opinion seems to be prevalent that social forces are so very cumbersome and unwieldy that it is well-nigh impossible to influence or effect them. Color is lent to the idea by the enormous amount of social energy which often has to be ex- pended to secure a comparatively insignificant reform. It must be remembered, however, that many of the so-called social re- forms are simply attempts at rolling a stone up hill, with ex- ceedingly crude or unsuitable instruments. Oftentimes, too, the momentum which it has acquired it its downward course must be counteracted. But if taken at the critical point, if the golden opportunity is seized by the legislator, the social reformer, or statesman, the social forces may be guided and are as susceptible of human influence as the most delicate clock- work. Scientific research is gradually bringing to light new methods of guiding and restraining the forces which appear to be working injury to society. But before any attempt is made to regulate or restrain any activity, it is necessary to determine exactly what its bearings are. This is the first question which a social science has to solve. Why is the influence of an insti- tution bad? Is it because the whole institution is of itself vicious, or is it because some safeguard or check has been neg- lected? Studies of this kind often show the vast importance of comparatively insignificant details. A very innocent-looking provision in a law may result in vice, crime, and other disast- rous consequences. A slight change in the conditions affecting The Fee System as a Social Force. 211 vagrants may increase or decrease the number of tramps by thousands. An almost insignificant pecuniary reward to a judge or constable will double the number of arrests and com- mitments in a single year. Changing the method of remuner- ating the prosecuting attorney may lead to the perversion of the whole system of justice. An unimportant change in a divorce law may cause an enormous increase in the number of divorces. A. THE FEE-SYSTEM AND THE TRAMP QUESTION. Why is the army of vagrants each year becoming greater, is a question which is heard from many sides. One general answer, which seems almost self-evident, is this: Because the life of a vagrant or tramp is more desirable and agreeable, to his mind at least, than is that of a productive worker. If we analyze this still further, we find that such a state of affairs may be brought about by two distinct sets of circumstances. Either the conditions effecting tramp life have become more attractive, or the lot of the worker has become less attractive and desirable. Only the first of these hypotheses comes within the scope of the subject in hand. Tramp life is made possible and even agreeable by private charity and alms, or by state aid and relief. A great deal has been said, and a great stress has been laid, upon the evils of indiscriminate charity and out-door relief; while scarcely a voice is heard against the direct premium placed upon va- grancy, as a result of the use of the fee-system to remunerate certain public officers. The average tramp would be forced either to work or to starvation, if he could find no comfortable or convenient county-jail in which to spend the long, cold winter. Under existing conditions, however, he is often a wel- come visitor at these public lodging houses; for both the jailor and sheriff are financially better off for each extra " knight of the road " whom they can induce to accept their hospitality, because the county pays the bill at so much per head, and the larger the number, the greater the profits for the keeper. 1 What 1 Tramps are often furnished with liquor, tobacco, and newspapers, to induce them to return. 212 Urdahl — The Present Fee System in the United States. wonder that some of our county jails are known far and wide among the vagrant classes for their accommodations! Is it sur- prising that instances repeatedly occur, where a tramp commits some misdemeanor before the very eyes of the sheriff or con- stable, with the express purpose of securing a commitment to jail for a period of time? Counties using this system find the number of tramps increas- ing year after year, in spite of the fact that the jail or prison is crowded the greater part of the time. This has continued, in many cases, until the expense of maintaining tramps has be- come unbearable, and a demand is made for a new system. As a result the jailor and sheriff, or both, are given a fixed allow- ance out of which to support and feed all prisoners, 1 and a cer- tain amount of labor is required of these to relieve the monot- ony. The conditions become changed. The sheriff is no longer interested in having as large a number of tramps as possible within his county. Life within the prison walls is made less attractive; and as a result the stream of vagrants takes another route, through more hospitable districts. A change like the one above described took place in Dane county, "Wisconsin; and in four years the cost of maintaining tramps was reduced from $15,000 to $3,000. 2 This amount represents the taxes annually levied and actually paid by the public in a single county to sup- port the tramp during that seasen of the year in which he can- not depend on private charity. In one sense it may be looked upon as a standing bribe to encourage shil'tlessness, in the same way that the poor laws of the last century put pauperism at a premium in England. 3 The jailor and keeper are not the only public officers who are interested in the existence and presence of the tramps. Where the fee-system is fully applied, we find every judicial officer more or less interested in having as many tramps brought up for trial as possible. It means, as a rule, a fee for the judge, a fee 1 This system is now in force in several counties in Wisconsin. 2 Report of Dane Co. Board of Supervisors. 3 A member of the Wisconsin State Board of Charities estimates that the tramps, through the fee system, cost the state over a quarter of a mil- lion dollars a year. Tfie Fee System as a Social Force. 213 for the sheriff, 1 and a fee for every other officer who takes part in the trial. It is but natural that inducements should be made for the vagrant to return and be re-arrested, 2 to be perhaps again committed to jail for a short time. Indeed, to such an extent have these frauds been carried, that it has been found necessary in some states 3 to pass laws prescribing heavy penal- ties for conspiracy between tramps and judicial officers * to de- fraud the counties. 5 Even if we grant that the increased use of machinery in pro- duction, and the consequent industrial system, is responsible for the idleness of many in our dependent classes, still the ease with which they obtain their food and shelter, is the primary reason why so many become professional tramps instead of returning to productive labor when opportunity is offered. Austria forces tramps to work for a definite period in a work-house or a house of correction. Belgium prescribes a comparatively long time in a compulsory workshop. France fixes imprisonment and hard work for at least three months. Germany has her public tramp- hotels, and strict police supervision, and England her tramp work-houses. 6 All of these countries are attempting to discour- age vagrancy; while in the United States, with a tramp prob- lem more pressing and serious than any which Europe has had to solve, we find many states and counties which indirectly spend huge sums, not to reform the vagrant or to enable him to become a productive worker, but practically to encourage him 1 The fees of the sheriff for each tramp are said to run from four to six dollars, while those of the judge vary from two to three dollars. 2 Tramps are often induced to appear before the justice in the forenoon under one name and in the afternoon under another, so as to earn extra fees for each official. 3 Laws of Wisconsin, 1889. 4 Some cases have been found where the same tramp was serving three different sentences at one time, by being discharged and re-arrested and recommitted to jail, so as to earn fees for the sheriff and magistrate. 8 This state of affairs is not confined to a few states. Inquiries in the different states show that the same frauds have been, or are at present, prevalent in New York, in New England, in the South, in the Middle States, and in the far West. 6 See consular reports. 214 Urdahl — The Present Fee System in the United States. to continue the life which he has begun. Public charity and philanthropy are all well and good, provided they accomplish their purpose, but that does not justify a system which takes thousands out of the public treasury without benefiting a single vagrant. The tramp is simply used as an instrument for tak- ing money in the shape of fees out of the pockets of the public, and putting them into the fee-paid officer's purse. 1 But a very small part is used to feed the tramp, and this small part does him and the community more harm than good. B. FEES IN POLICE COURTS, AND CRIME. Until quite recently both the police force and the municipal courts in most of our large cities were supported more or less by fees and fines, under the mistaken idea that the main func- tion of police officer was to catch criminals, and that the func- tion of courts was to pronounce sentence on them when caught. It was also supposed that these public officials would perform their duties more efficienty if impelled by self-interest. This conclusion seems reasonable enough at first blush, but the trouble is that it is based on absolutely false premises. The great and primary function of a police officer is not the appre- hension of criminals, but the repression of crime. Paying a police office according to the number of arrests made, is about like paying a teacher according to the number of floggings he has inflicted. Not only that, but we have a large body of men whose " bread and butter " depends on having the laws violated, although they are themselves its ministers. The idea never seems to have oc- curred that there was any danger of over-officiousness on the part of any official. The more criminals caught, the better, it is said. True! — but have we any guarantee that the police will catch only actual criminals? What is to prevent him from mak- 1 Prom counties having tramp workshops come reports that they are empty most of the time, because the justices are pecuniarily interested in the vagrant, and thus fail to sentence them to the work-house. Thus the fee-system becomes, indirectly at least, the cause of the failure of this so- lution of the tramp problem. The Fee System as a Social Force. 215 ing arrests on slight suspicions, or for trifling or unwarrant- able reasons? The same self-interest impels him in the latter as in the former case. As a rule, hungry men are not over scrupulous about the means and methods which will secure them bread. There is every reason to believe that they would sacri- fice their most important function, that is, that of repression, to the more profitable employment of making arrests. Indeed, this is amply illustrated by the experience of every city which has changed from fee-paid policemen to salaried officers. An act of the Maryland legislature abolished the fee-system in Bal- timore in 1862, and as a result the number of arrests for minor offences decreased from twelve to seven thousand. The decrease in the number of arrests did not result in more lawlessness or more petty offences, but can be accounted for by the fewer un- called-for and unnecessary arrests. Hundreds and thousands of poor victims are each year dragged to prison, who when brought before a magistrate must be dis- charged for want of evidence. To the world it is immaterial whether a few arrests more or less are made If the arrested individuals are innocent, they will be discharged, it is held, so what difference does it make? But it does make a difference to the unfortunate wretches. Dragged to prison for some trivial, petty offence, 1 they must await trial in the morning, unless they can satisfy the exorbitant demands of the professional bailor. Even if acquitted and discharged in the end, their self- respect is lowered, their feelings toward the public are embit- tered, and a stigma is cast upon them and their family which may lead to their ruin. But that makes no difference to the jailor, the magistrate, the constable, or policeman, who are each of them richer by the amount of their fee on account of this ar- rest. But suppose the man is really guilty, and suppose that he was even caught in the act of committing some misdemeanor; he is sentenced to pay a fine, or, in default, to a term in the county jail or penitentiary; and society is supposed to be that much better off, on account of the zeal of the constable or police officer. Not so, however. The term in the penitentiary is not 1 Altgeld, Inaugural Address, Jan., 1893. 216 Urdahl — The Present Fee System in the United States. going to reform a man sentenced for being drunk. On the con- trary, it is generally admitted that many of our county jails and penitentiaries are training schools of crime; and that the man who was " sent up " for some petty offence often comes back a full-fledged criminal. The more trivial the offence, the more likely is he to react against law and order, and become a real criminal, to prey upon society. Better far that many criminals should go unpunished than that one innocent man should be ex- posed to such humiliating and dangerous environment. About each police court in our great cities there is always hovering a large number of pettifoggers or mediocre lawyers, who are waiting to be appointed to defend any wretch, for the fees that are allowed them. Where they have access to the prisoners before the preliminary hearing, they often succeed in getting every prisoner to plead not guilty and demand trial, no matter how clear a case of guilt it may be. This practice is often encouraged by the custom, still prevalent in many states, of allowing the prisoner to choose the attorney who shall appear in his defense, even where the latter is paid for his services out of the public treasury. There is also another class of men which the fee system attracts to these same courts. These are mainly local "politicians," retired saloon-keepers, and other idlers, who hang around the corridors of every police court, wait- ing for an opportunity to serve as jurors for the sake of the fee. So serious has the evil become, that the abolition of the entire jury system in the police courts has been advocated. C. PEES AND JUSTICES OF THE PEACE. There is perhaps no part of the American judicial system which exists with such uniformity in all states, as the Justice of the Peace. And everywhere, almost without an exception, his remuneration consists in the fees which he collects. This official seems almost indispensable to the local administration of justice, and no state has as yet been able to devise any fair and economical system of compensation other than by fees. The amount of business done by each of these officials varies from time to time and place to place. One justice may have The Fee System as a Social Force. 2Y7 regular daily sessions, while another i3 scarcely ever called upon to act. All cannot be paid salaries, as it would entail enormous expense to the public; and apparently such a system would be unjust to the magistrate who is called upon to act often. To the casual observer it would seem, therefore, as though some well-devised scale of fees would be the only just and fair method of remuneration. But a closer investigation will reveal the fact, that other things must be taken into consideration besides the interests of the justice of the peace, and the economy of public money. There is such a thing as a "penny wise and pound foolish " policy in public, as well as in private economics. Perhaps no single influence has done more injury through the American courts than the fee system in its effects on the Jus- tice of the Peace, The men who occupy this position are not as a rule of such a character that they can stand by and uncon- cernedly see all cases, and in consequence all fees connected with them, go to the rival or neighboring justice. As a rule they are not men of means, and a fee more or less is of great importance. What is the result? The result is that the decis- ion of a justice of the peace is almost certain to be a discrimi- nation in favor of the plaintiff. Why? Because it is the plaint- iff who begins the suit, and he or his lawyer has the option of bringing the case in justice A's or Justice B's or any other court. If he brings it into Justice A's court, it means a cer- tain number of fees for him, and he must therefore show his gratitude by rendering his judgment for the plaintiff. But sup- pose the justice has the moral courage to decide the case on its merits, and that as a result his decision is in favor of the de- fendant. The consequence is that Justice A will receive no more patronage from that lawyer or plaintiff. All the cases, and hence all the fees which he might have had, are therefore transferred to Justice B who is more grateful. These cases are not pure assumptions. They are actual facts which are known and utilized every day by lawyers throughout the land. The many upright and conscientious justices, whose characters are above reproach, are prevented from exerting even the average amount of influence by the vicious system, which from its very nature drives the business into the courts of these 218 Urdahl — The Present Fee System in the United States. disreputable wretches who are willing to barter their judgment for a paltry fee. The system becomes in its essence, in many cases, a legalized method of bribery. The whole administration of justice is perverted in that large class of cases in which the humbler classes of the community are most likely to be affected. Such a system would not be tolerated in the higher courts, while here it is continued year after year without protest, because- the cases affected as a rule are petty and insignificant in regard to the amount involved. In many Eastern cities the mayor and aldermen exercise the function and receive the fees of magistrates. These, as a rule, have been as much influenced by the desire to obtain fees as any other justices; nor has their judicial function tended to take away the stigma usually attached to the very name of Alder- man. One of the methods of reform proposed is to abolish en- tirely the office of justice of the peace and turn over the duties to salaried police courts. 1 D. FEES OF THE DISTRICT ATTORNEY AND THE ADMINISTRATION OF' JUSTICE. One of the relics of barbarism which exists in some states or, perhaps more accurately, one of the barbarous inventions of this nineteenth century, is the system of paying district or state attorney's fees varying in amount according to the number and character of the convictions secured. This method is not based on the experience of any state, but is like so many other un- practical schemes which are adopted and applied in many Western commonwealths. To be sure, there have been laws in some of the original states which are somewhat similar and may be called antecedents of these. But the differences are broad and far-reaching. A Connecticut statute of 1796 2 pro- vided that the state attorney should receive fees roughly pro- portioned to the nature of the trial. 3 For prosecuting a trial* for a capital offence he secured $14, for any other criminal case $9, and for any civil case $3.34. This, however, is widely 1 Altgeld, Lire Questions. 2 Statutes, p. 181. 3 An early law of Delaware gave the attorney general $10 for the prose- cution of a capital offence and $2.40 for drawing an indictment, etc. The Fee System as a Social Force. 219 different from the system now in force in California, 1 which pays the attorney $50 for every conviction he secures for a capital offence, $25 for each conviction of felony, and $15 for misdemeanor; and, with the object apparently of especially punishing gambling, the same premium is placed on conviction under the act prohibiting gaming as for a capital offence. In Arkansas 2 the prosecuting attorney receives $75 for a con- viction of a capital offence, $35 for securing conviction for homicide, $25 for felony, $25 for gambling, and $10 for each misdemeanor. In Tennessee 3 the district attorney receives $50 for each conviction of violation of the anti-trust law; while for obtaining a conviction for murder or wearing "bowie-knife" or violating the law against conspiracies, the fee is $25; for a conviction of perjury $15; felony $10; and misdemeanor $5. In Nevada* the fees are relatively the same but five times as large. In Oregon 5 there is another departure. Here the attor- ney receives certain fixed fees for convictions, and in case the trial results in acquittal he receives only half the amount. 6 There are therefore at least three distinct methods in force. First, the old system of granting the district attorney a fee varying in amount according to the nature of the offense for which prosecution is undertaken. Second, paying the attorney for his services by fees graded according to the enormity of the crime or the desirability of having the offense punished; paying however, not for prosecuting the case, but for securing the conviction. Third, rewarding the attorney with a much larger fee in case he secures conviction than when the trial results in acquittal. 7 1 Deering's Code, IV., Sec. 77, p. 540. 2 Laws, 1894, par. 3304. 3 Laws, 1895, Ch. 4, §5. *Laws, 1861, 173. 6 Laws, 1878, Art. 21, Sec. 2. " Other examples are as follows: In Florida, — for conviction of murder in first degree $30, in second degree $10; any felony $5; carrying concealed weapons $10. Laws, 1885, Ch. 3620, par. 2; 1877, Ch. 3000, Sec. 1. In New Mex., — for conviction of murder in first degree $20; second degree $15; any felony $5. 7 For conviction $25; for acquittal $12.50.— Laws, Wyoming, 1802, p. 314. 220 Urdahl—The Present Fee System in the United States. All of these methods are fundamentally wrong, and based on theory which cannot be supported either by facts or by argu- ments. It is supposed to increase the efficiency of the attorney by offering him a pecuniary inducement to undertake and pros- ecute cases. But is there not every legitimate/incentive to an attorney to do his work well, even when he is paid by salary? His reputation as a lawyer is at stake, the esteem and good will of his constituents impel him to prosecute every legitimate case. His success as a lawyer after his term of office expires, will de- pend largely on the way in which he performs his duties of office. He can gain nothing by letting crime go unpunished, and he has everything to lose. But suppose the man is of such a character that the paltry fee will stimulate him to action. If it is only the money he is after, what is to prevent him from accepting a higher reward from the criminal for not prosecuting than the state offers for conviction? What is to prevent him from "drumming up" business by beginning suits wherever there is the slighest chance of winning. It is held to be economical, because the attorney, it is thought, would not begin cases unless he supposed he could win; and if he is a poor attorney, he would not win his cases, and as a re- sult it would cost the county and state little or nothing. But this economy is apparent, not real. The attorney's fee is by far the smallest item to the state in the cost of the trial; all the other expenses will have to be borne, even if the suit results in acquittal. These other expenses are likely to be increased many fold, because of the fact that the attorney is only striving for conviction. Witnesses and jurymen will be summoned regard- less of cost to the public and regardless of the triviality of the offense. There are few cases so doutful that there is no chance of winning, and to win means subsistence to the attorney. What is to hinder him from beginning proceedings wherever there is a chance to win? What is prevent him from summoning a jury and a crowd of witnesses wherever there is opportunity for liti- gation? He has nothing to lose but his time; the state foots the bill for the rest. There are always plenty of people who will act as complaining witnesses, providing the district attor- The Fee System as a Social Force. 221 ney will prosecute the case at public expense. There will be numerous instances where suits will be instituted simply be- cause of the spite which one neighbor bears another. If the at- torney is paid fees, he will be eager to undertake any and all of these cases which the people offer to furnish evidence for. From the standpoint of public welfare the position of the dis- trict attorney is an exeeedingly important office. Next to that of the judge, it is the most important in our judicial system, and in some cases he even assumes some of the latter's duties. The attorney must, in fact, perform many of the functions of the higher magistrate, especially in weighing evidence, and ex- amining witnesses, to determine whether a process should be begun or not. In order to perform his duties properly, he should approach each case with an unbiased and unprejudiced mind, aiming only to secure the prevalence of justice. But how can a man be unprejudiced before whose face there is always shaken a reward for securing conviction, and a penalty in the form of unremunerated work, in the case of acquittal? We must take men as they are. Lawyers are human just as well as politicians. They cannot help being influenced, to some extent at least, by conditions which affect the well being of themselves and their families. There is many a case in which the district attorney himself is very much in doubt as to whether the accused is inno- cent or guilty. ' If the prisoner is poor and has inexperienced counsel, the chances are that the abler lawyer will get the ver- dict. Such cases are by no means rare, in which the excessive zeal of an attorney for his fee can secure the conviction of one who is innocent. 2 An innocent man may suffer punishment and serve his time in the penitentiary, and the world is no wiser. He, however, becomes a different man. He looks upon the state as his enemy r and is more than likely to become the real criminal he was sus- 1 From testimony of many who are or have been district attorneys. 2 Of early legislation of the same tenor as these laws, may be mentioned the "Fugitive slave law," passed Sept. 12, 1850. — See Congressional Globe. One of the provisions of this act, against which a great outcry was raised in the North, was that marshals or justices securing the con- viction of a negro as a runaway, should receive $10; while if acquittal was the result, the court fee should only be $5. 222 Urdahl — The Present Fee System in the United States. pected of being. It must always be borne in mind that it is usually the poor, the unfortunate, and the less favored mem- bers of society that are likely to be exposed to unjust prosecu- tion. The rich and strong are able to protect themselves, and can usually secure remuneration for their trouble. Nor is this all. The fee-paid district attorney is directly interested in hav- ing no criminal plead guilty without a trial. He will usually see to it that no prisoner pleads guilty at the outset. Thus a great many cases that might be disposed of without trouble or cost, result in expense and needless trials. Taken altogether, it is not too much to say that the whole system is vicious. It is not economical, in fact it is quite the opposite. It is not likely to make the attorney any more effi- cient, except in " drumming up " cases for petty or trivial of- fenses. It will not lead to the punishment of more actual crimi- nals, while it may lead to the unjust punishment of innocent persons against whom some malicious individual bears a grudge. Finally, it tends to degrade one of the most important positions in the American courts into a pettifogger's office, to be run for gain. E. THE RELATION OF THE FEE-SYSTEM TO THE DIVORCE PROBLEM. It might appear to a careless observer that the connection between the fee-system and the number of divorces is very slight. But a careful examination will disclose the fact, that certain allowances in the nature of fees are indirectly responsi- ble for a large proportion of the hasty and uncalled-for divorces granted in many states. Our divorce laws have in most states been framed so as to be favorable to the wife as against the husband. In the eye of the law she is the weaker, and is more likely to require the strong arm of the state to free her from bonds too onerous to be endured. A great many states have therefore provided that she shall be entitled to court money from her husband as soon as she files her application, and usually she is given alimony if the divorce is granted. The purpose of the court money is to enable her to engage an attorney to plead her case, and it is usually paid to the lawyer as his fee. In amount it is just about large enough to make the The Fee System as a Social Force. 223 procuring of divorces a lucrative practice to second-rate attor- neys. What is the result? A large number of lawyers are anxious to prosecute divorces, and stand ready to undertake a prosecution as soon as any woman has told her tale of woe. Divorce agencies are established in large cities which advertise that they can guarantee a divorce in so and so many months. The wife deposits nothing, pays for nothing; they take their pay out of the court money collected from the husband. Is it to be wondered at that the number of divorces increases so very rapidly? As a re- sult of a little family quarrel the wife in a fit of anger resolves that she can not and will not endure it, so she rushes to a law- yer who immediately institutes proceedings; which of itself does not tend to conciliate either party. A divorce results not from any actual cruelty or oppression, but from some little mis- understanding, some little domestic storm which would have blown over but for the existence of the court money to tempt a divorce lawyer. If the attorney would always sacrifice his own gain for the welfare of the parties, and advise them to delay and yield differences, all might be well. But human nature cannot be changed; it must be guided so as to serve for the wel- fare of society instead of against it. Take away, if possible, each incentive which impels people to act contrary to social welfare, and replace it with another which will utilize selfish- ness in the interests of society. There can be no doubt but that the granting of court money and the consequent ease with which divorces can be obtained, is responsible for the breaking up of hundreds of homes which had not outlived their useful- ness, homes which, after the little unpleasantness was forgot- ten, might have been real hearthstones in the true sense of the word. But, it is urged, court money is absolutely essential to secure the proper protection of woman against oppression. If no court money were granted, she would not be able to secure counsel, and would be absolutely at the mercy of her tyrant husband, who is usually pictured as a drunken brute who misuses and abuses his wife in every possible way. This is by no means a typical case. As a rule, it is people in prosperous circum- stances who are applicants for divorce, and the wife would us- 224 Urdahl — The Present Fee System in the United States. ually have little trouble in securing enough money to pay a lawyer's fee. On the other hand, the court money would be no benefit to the really misused wife of a poor drunkard, as the husband would have nothing from which the court could collect the fee. If it is necessary to assist the wife in any particular way, then give her the alimony and not a lawyer's fee, which inures to the benefit of the attorney. If we examine divorce statistics for the last twenty years, we find a very marked increase in the number from year to year, and a very marked increase in the number granted for apparently trivial causes. There must be some reason for this. People are not naturally more quarrel- some and overbearing toward each other now than formerly. It is asserted by those who have studied this question that the number of divorces increases in the proportion that the means of obtaining them are facilitated. If this is true, it must be evident to any observer that, after due weight has been given to other causes, there is at least some relation between the sys- tem of court money and the divorce problem of to-day. F. THE FEE-SYSTEM AND POLITICAL CORRUPTION. Very few people are so ignorant of politics as not to have heard, from rumor at least, of public offices the emoluments of which are so great as to enrich the occupant in a single year. No public office in the gift of the people is of such importance as to yield a regular legal salary of $100,000, even though it required the highest grade of ability which the country can furnish. This amount has been received more than once, how- ever, by officers whose duties and abilities were of a compara- tively low order. The position of sheriff' in a densely populated county, or that of recorder or collector, are offices which do not require a very high grade of attainments ; and yet these purely clerical officers have often been paid a higher salary than the President of the United States. 1 Some of these are reported to J The legislative commission investigating state expenses in Connecticut makes public the statement that for the year ending July 1, 1897, the clerk of the superior court of New Haven county received $9,690 in fees, over all expenses of office including assistant clerks. Senator Converse The Fee System as a Social Force. 225 yield fabulous sums; * yet no actual facts can be ascertained as to the real value of such offices, as they are usually kept a close secret among a favored few of the leading politicians of either party. Very often no account of the receipts of office is re- quired by law; hence none is given. These positions are usually the goal of the ambition of every politician. There is, therefore, the most intense competition, not only within the political parties for obtaining the nomina- tions, but among the people to secure election when once nomi- nated. These lucrative offices furnish the life-blood of the spoils-system and the political machine. The manipulators of the machine, knowing the value of such an office, can levy higher assessments for the corruption fund the greater the amount re- ceived from the office. Especially is this the case where a polit- ical party practically controls the election. It does not require any great power of observation to see that in all local or state elections, the heaviest pressure is, as a rule, brought to bear on those particular offices in which the remuneration is wholly or partly paid in fees or other perquisites. It is the office of county sheriff in most places which is the center of the political whirlpool. In many Eastern cities the office of prothonotary, clerk of court, or recorder is the most powerful incentive to political activity. 2 The political forces which are set in motion to obtain these lucrative positions, are almost incredible in estimates the net annual returns of the office to be $9,800, which is almost double the pay of the chief justice of the state and about two and one-half times the pay of the judge of the court in which the above named clerk belongs.— New York Evening Post, Feb. 15, 1898. 1 The income of the city clerk of Chicago asserted to be $49,000 for two years.— Chicago Times-Herald, Jan. 16, 1896, p. 1. The Chicago re- corder's income was estimated by an investigating committee to have been nearly $9,000 for six months.— Ibid., Dec. 7*, 1896, p. 7. The position of county sheriff in many counties in Wisconsin is said to yield as much as $20,000 a year. Many county clerks earn over $5,000 a year in fees. Newspaper reports are current that the collector of taxes under Governor Warmouth at New Orleans received as fees not less than $100, 000 a year for four years. 2 A prominent New York attorney has furnished the following estimates which are said to be conservative: The position of sheriff of New York •county used to yield $125,000; at present it yields about $25,000. The 15 226 Urdahl—Tke Present Fee System in the United States. power and magnitude. Each candidate has a whole army of henchmen in the field, each of these demanding pay either by some position or by money. How is all this possible? Most of these positions have no great amount of honor connected with them or even of influence, except so far as the subordinate ap- pointments are concerned. The mainspring which furnishes the power for all this political machinery, lies in the amount of salary which the fees yield to the officer. He can afford to spend $50,000 in money and a year or two of his time, to obtain an office that will yield $100,000 a year in revenue. 1 A man can afford to contribute liberally to the party fund who can realize such a sum if his party succeeds. 2 Political office is not the greatest incentive or stimulus which he has. More is at stake. The candidate has usually invested his entire fortune on the issue, often also as much as he can borrow from his friends. 8 Is it any wonder that he strains every nerve to win? Is it sur- prising that no stone is left unturned which will aid his elec- tion? Success means not only a position for a year or two, but it means comparative wealth and prosperity affecting his entire career, and opens the door to future advancement. It is almost in the nature of a wager in which everything is at stake. Un- der such conditions more or less corruption is inevitable; and the worst of it is, that the people themselves pay the fees which constitute the corruption fund. The history of any of our large cities will furnish numerous examples, and there is scarcely a county in the older states in which the same spectacle has not been witnessed over and over again.* position of county clerk in New York city used to yield from §80,000 to $100,000; at present it is considered to be worth $25,000. The office of register of deeds is at present worth about $20,000. 1 Several New York and Philadelphia fee-paid positions were for many years said to yield from $50,000 to $100,000 a year. — Estimates by reliable men. 2 Conservative estimates by citizens of Minneapolis, for several counties in Minnesota, disclose the fact that over one-half of the salary of the sher- iff must be spent to obtain election. 3 Cases are not rare where the candidate mortgages his home and prop- erty to raise campaign funds. 4 In New York and other states where a partial reform of the fee-system The Fee System as a Social Force. 227 That many of these fee-paid offices yield more than legitimate salaries can not be questioned. How much more, no one knows. These high rewards do not, however, attract better and more ef- ficient men. In fact the opposite is very often the case. The man who can obtain such a position must be a politician, the more unscrupulous and skilful the more likely is he to obtain it. None but a politician who has had experience in manipulating the machine and knows how far corruption money will go, would dare to take the enormous chances of losing which are involved; and when he is elected, we do not have an efficient official but a man who is primarily interested in obtaining as much gain as possible out of what he regards as a legitimate enterprise. The high rewards, therefore, instead of drawing men of ability into office, tend rather to repel them, and to attract the most unde- sirable class of office holders, namely, those most skilled in cor- rupting voters; and the enormous fees collected by them must be used, in part at least, as a corruption fund to secure the coveted position. But suppose the money is not used as an act- ual corruption fund, we find another state of affairs which is al- most as bad. The aspirant for the office announces himself a candidate almost a year before the election, sometimes much earlier, and then spends all his time, and often employs his friends also, to secure delegations instructed for him from the various primaries. When at last he succeeds in becoming the nominee of his party, only half the battle is won. He must now spend all the rest of his time in campaigning so as to secure votes enough to elect. There is, therefore, a double opportunity for using corruption methods. An official who has obtained his position by using more or less questionable means, is not going to turn over a new leaf and become a model of honesty as soon as he gets into office. Over- charges, favoritism, and frauds of various kinds, are extremely likely to be the order of the day. 1 Reports of investigation has been introduced, the testimony of men in position to know the facts is, that the campaign expenses and the intensity of the political struggle for office have been reduced by one-half after the new system was put in operation. 1 Reports of the Investigating Committee of the city recorder's office of Chicago.— Chicago Times-Herald, Dec. 23, 1896, p. 1; also other papers. ■ 228 Urdahl — The Present Fee System in the United States. committees in the large towns illustrate this very well, while much of the fraud in the office is so easily and skillfully con- cealed that it is never found out. This is accomplished all the more easily where no account of any kind is required of the fees of office received by an official. But the tendency has been to demand an account from every officer who collects fees, and to fix a maximum limit to the amount which may be kept as salary over and above office ex- penses. This, however, offers a loop-hole for almost as much corruption as the old system. The official appoints his clerks, and, as a rule, is responsible to no one for their number and character. He employs several times the number of clerks actually needed to do the work, some of them holding several positions in as many distinct capacities, in order to draw double or quadruple salary. Sometimes the officer himself holds sev- eral minor positions besides his regular office. In other words, the provision allowing an official to pay his office expenses out of the fees collected, furnishes an opportunity for enormous frauds. The office expenses often more than swallow up all the fees collected. The only remedy is to enforce the most rigid system of ac- countability, so that every fee collected is paid into the treas- ure'. It is bad business management to allow an official to pay and appoint his own clerks. No private enterprise could exist for any length of time which employed such methods. A pri- vate establishment always pays its subordinates from the gen- eral treasury, and keeps a sharp watch over their salaries and efficiency. The same economy must be applied to public affairs if they are to be well administered. All the corruption is not, as a rule, caused by bad legislation; the laws creating the var- ious offices and making provisions for their emoluments, were legitimate and proper at the time when they were enacted. But most of them were enacted very early in the history of the country, and few, if any, radical changes have been made in them. But they have simply outlived their period of useful- ness. Economic conditions have changed, while the laws have not been changed to fit them. The fee-bill which would yield barely enough revenue to support the sheriff of New York in The Fee System as a Social Force. 229 1840, would, if in force in 1890, produce a fortune in a single year. Why ? Simply because the business of the office has in- creased enormously on account of the growth of population. Furthermore, the work can be done at a much lower cost. It is like production on a large scale, in that economies of various kinds can be practiced. The question immediately arises : Why have the legislatures so often failed to adjust law to economic conditions in this par- ticular more than in others? The answer is evident. Which- ever political party happens to be in power is directly inter- ested in having as many lucrative offices to confer as possible. A party is not likely to diminish the emoluments of an office when, by so doing, it diminishes to just that extent the patron- age which it has to confer. Especially is this the case where no pressure in that direction is brought to bear upon the legis- lative body. There is likely to be no pressure of this kind for the diminution of the fees of an office or a change in the system, because no body of individuals, as a class, is likely to be espe- cially affected or feel the burden of the system. The fees are paid intermittently, now by one person and now by another; while the great majority of people rarely have any fees to pay at all. There has thus never arisen any popular demand for the publication of the amount of fees collected or for their reduction. As a result, we find that it is only at this late day that the same requirements are beginning to be made in regard to fees as were introduced in regard to taxes one hundred years ago; namely, that their amount should be made public, and that all fees collected should be accounted for. This lack of knowledge of the number of fees collected has tended still further to dis- courage any agitation for their reduction. But whenever a movement of this kind is started, then all the fee-collecting officers, with all the political influence which they can command, stand ready to work against it. 1 It is not strange, therefore, 1 A bill to abolish some minor sheriffs' fees in the Wisconsin Legislature in 1896 was defeated through the lobbying of the sheriffs and their friends. Numerous similar bills have met the same fate. It is a notorious fact, well known to all who are familiar with New York politics, that the recent 230 Urdahl — The Present Fee System in the United States. when everything is taken into consideration, that primitive laws have so long remained in force, and that they are even now with difficulty being displaced by more modern and suitable enactments. The movement seems to be in progress which ap- pears destined to place every fee-paid public officer on a salary or what is equivalent to the same. This, together with civil service reform, will ultimately remove the greater part of the political corruption connected with purely administrative offices. But from the very nature of American conditions, the movement must be slow and gradual. A sudden change from fees to salaries will not do away with all the corruption at once. When the change is made, the sal- aries are at times likely to be left so high as to become almost as great an incentive to corruption as when the office was paid by fees. 1 Oftentimes, too, some flaw or inaccuracy in a law offers an opportunity for obtaining extras, of which the official is not slow to avail himself. All the reforms of the evils con- nected with the fee-system can be most easily accomplished through legislation. It is the legislator's duty to provide laws which make the environment of the official such that honesty will be the best policy, laws which will take away the incentive to cor- ruption and make it more profitable to do right than to do wrong. Such laws cannot be struck off at any fixed time by the hand and brain of man. A careful study of the conditions and question involved, utilization of the results of legislative experiments in other states, and a gradual improvement of the parts wherein a law is found defective, are the elements required to accomplish such a task. Madison, Wis., July, 1898. amendment to the New York fee code failed to pass because of the opposi- tion of sheriffs and other fee-paid officials, whose salaries would have been affected thereby. 1 Many of the salaries of county officers in Pennsylvania range from $8,000 to $15,000. Statistics. 231 Table I. — License, Examination, and Inspection Fees in the United States. (Compiled from state statutes.) * According to size of the city ; f according to amount of sales ; t according to amount of capital employed; a, each performance; b, per quarter; c, according to seating capacity ; R, regulated by municipalities. License Fees. Mar riage Retail liquor, state. Whole- sale liquor, state . Whole- sale liquor, county Retail liquor, county . Beer. Brew- ers. Dis- tillers'. Ped- dlers on foot. $1 50 2 00 1 25 2 00 1 50 1 00 3 00 2 00 $125-3O0f 200 500 60-480f R $200 120-500f 50 $32-75 $40^166} $200 40-160f $60 $100 60 R 200 250-450 1 to 100R 25 400 25 100—200 500 250-350 50 100 5 25 50 1 00 1 00 2 00 1 00 1 00 1 50 75 1 00 1 00 120 500 150 100 150 R 5—20$ 10 Kentucky 75 50 20 5 50—75 Maryland 18—150 100 Michigan 50 200 a oo 1 00 2 00 1 50 2 00 1 00 300 500—1000* 600—1200* 50—400* 100-500* 500—1000* 500 200 500 15 25—100 Mississippi 500—800 6 90-600f 600 50 30 120-300f 50 New Hampshire New Jersey 100-250 30 50 200 100 20 1 00 75 1 00 1 00 1 00 "i'66 1 00 1 50 15 Ohio R 72 100 10—200 300—1000* 200-400* 75-175* 80 150-200 150-200* 366-1066* 500-1000 50 8 10—200 25 250 200 50 5—150 450 450 Utah 15 2 00 1 00 75 2 00 100-1,000 100-350 200 150 100 100 West Virginia. 150 50 10—50 20 10-100 232 Urdahl — The Present Fee System in the United States. Table I, continued. — License, Examination, and Inspection Fees in the United States. (Compiled from state statutes.) License Fees. Ped- dlers on horse . Ped- dlers with two horses. Pawn- brok- ers. Ferry . Auc- tion- eers. Bil- liard tables. Shows. $50--100* 25b 100 400-600c Circus. $50 120 $25 8 20 $120 $50 $1-100 $20 $100 180 120 R 2R 1-100R 10 R 50 100 50 100 100 50 240 R 5-20 75 100 Florida 15 25 60 10 120 R 5-10a 3a R 5-25 100 200 R 5-300 3—50 R 10-500 10 R 5-20 25 5— 25a R 50 30 10 10 50 2 R 2 40 10 50 30 100 20 175-400C 50 30—500 R 2 150 .200 30 30 2 R 2 R R 40 75 20 80 40 120 '"200 1 "2—566 10-75 5-400f 20 30 75b 250a 400 20 10 75 l-300a 10— 200a 20 37 50-150 R 500 North Carolina 25 20 40 25 Ohio R 2-50 500 10-500 R 50 30-100 R R Pennsylvania 16 25 50—500 500 200 5—75 10-50 5-200 5—280 Texas Utah 30 1-150 300—1000 1-100 25 5 25 75 100 50 30 50 100 1-100 50 10—500 Statistics. 233 Table I, continued. — License, Examination, and Inspection Fees in the United States. (Compiled from state statutes.) Examination Fee. Medi- cine. Phar- macy. Den- tistry. Teach- ers. Engi- neer, first grade. Engi- neer, second grade. Pilots. Attor- neys. $5 $6 25 5 11 10 25 1 $1 $20 $10 $6 6 2 $50 7 5 5 3 15 10 6H 5'" 8 5y 2 $20' 12 10 10 10 15 22 25 12 10 20 10 Florida 1 Georgia 5 R 3 R 3 5H 2 13 5 1 5 3 1 1 5 2 10 10 5 21 5% 2 2 10 11 10 1 20 10 10 5 25 30 5 7 5 4 7" 1 1 15 Minnesota 10 10-25 1 20 5 1 Mississippi 20 Montana 7% 5 25 Nevada 5 New Jersey 26 10 lttpct N ew York 10- North Corolina 10 5 8 3 6 10 10 5 R 5 10 '""d" 25 5 27 15 5"* 5H N orth Dakota , 1 Ohio D 10 15 Oregon 2*4 25 1 p ct Bhode Island South Carolina 10 5 South Dakota 1 Tennessee 11 15 Texas £ Utah 5 5H Virginia Washington West Virginia 10 7 7 2 5 25 1 1 2 Wisconsin Wyoming 2Bi Urdahl — The Present Fee System in the United States. Table I, continued. — License, Examination and Inspection Fees in the United States. (Compiled from state statutes.) Inspection Fees. Oil. Beef and pork. Fish. Land fertilizers. Boilers, steam- boats, etc. lc per gal. 25c per bbl. $15 $10 5 R 20c bbl. 10 30 5 J4 to lc per gal. K to lc per gal. 25 15 25 2 6—10 40c for 3 bbl. 10c per bbl. 35c R 10-40 5-7 20 5 15 15—30 7c 20 5 5 R R R R 16 15-40 3—10 m 12 20 10-40 Ohio .. 15-40 10 10 8 6 $1 per hr. 10 25 50c Utah... 10 Statistics. 235 Table II. — Showing Fees for Corporations, Banks, Insurance Com- panies, etc., in the United States. Filing articles of incor- poration. Filing art'cles of in- corpo- ration, chari- table. Filing articles of incor- poration, foreign. Re- cord- ing charter l Certi- ficates (issue). Increase of stock. 3 De- crease of stock. Certif- icate not to exceed $10,000, $5 25 80 10 100-5,000 30—50 100 50 12 25 25 10 55 30 $2 19 $3 mi WA "'"$2^ $15 10 100-5,000 50 Colorado 1 20c 15c 1-5 per c t 100-5,000 $10 Florida . . Illinois 5tf 5 25 IK 10c 15c i" 1 1 1-10 pr ct 1 55 10 5 Kentucky 30 m 10 30 1-20 pr ct V* per ct 25 5 50 50 5 10 200 10 Y% per ct 20c 25 1-20 pr ct 5 Mississippi 50c 50c 25c 8 8 2 5 15 7* 5 5 20 5 10 39 6 ...... 35 15c 2 2 Ohio 17-52 20c 134 5 5 5 10 Pennsylvania 5 6 10 6 25 25 1 3 10 20c 10 H, per ct 25 Utah . 5 Washington West Virgiana 5 10 10-25 3 15c 5 2 5 20c 25 50 3 i c, cents per folio. 3 Per cent of stock. 236 Urdahl — The Present Fee System in the United States. Table II, continued.— Showing Fees for Corporations, Bank, In- surance Companies, etc., in the United States. Certifi- cate not to exceed $50,000. Certifi- catenot to exceed $100,000. Certifi- cate not to exceed $250,000. Certifi- cate not to exceed $500,000. Certifi- cate not to exceed $1,000,000 Rail- road, i Banking* $25 $50 $75 $100 $200 $50-200 10 17 K 40 riH 152K 100 $50 95 15 145 20 295 35 535 60 1,035 110 Ibid. Ibid. 50 100 300 50 100 150 275 525 50 100 150 275 525 1 pr ct Vi pr ct 1-20 p ct 1-10 p ct 25 50 100 200 25 50 1- 20 p ct North Dakota Ohio 50 50 100 100 150 250 275 500 525 1,000 100 250 500 100 100 100 25 50 100 200 100 Utah 2 pr ct. i Ibid. ; same fee as for other corporations. Statistics. 23; Table II, continued. — Showing Fees for Corporations, Banks, In- surance Companies, etc., in the United States. Tele- graph. E J Build- nrpss i^and press ' 1 loan. Filing articles of incor- poration. —Insur- ance. Fire. Life.i Mu- tual. For- eign. $100 Annual state- ment. 3 Alabama $100 $25 1 pr ct. of prem. R $50-200 15 30 50 10 10 3 pr ct. $20 20 California Colorado $50 50 3 pr ct. 25 10 R 10 Delaware 2 p ct. 5 Georgia 100 $100 m 50 Ibid 12 10 55 30 50 $50 $50 50 50 2* 15 26 .01 p ct. of risk. Ibid. Ibid. Ibid. 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This book is DUE on the last date stamped below. 14 Aug'53-' AUG1 5195310 JEG& 1955 It Art? 1995 m 1 LD 21-100m-7,'52(A2528sl6)476