[749] "On the purely financial side the gain from the service must generally be a small one; the return for capital employed is little, and the only remaining element would be the economy that results from the application of monopoly, and the consequent unity of the service. Any further charge is really a form of taxation."—C. F. Bastable, Public Finance, London, 1903, p. 209.
"When we come to look more closely into the essential character of this 'public utility' in respect of its economic and financial value, it will appear that in this case an important administrative function has attached to it, as it were involuntarily, an effective contrivance for the levying of a tax, such as to require that the Post Office be taken up in connection with the theory of taxation."—G. Cohn, Science of Finance, translated by T. B. Veblen, Chicago, 1895, p. 126.
[750] The rates for postcards, printed matter, and samples roughly correspond with the cost of service and are perhaps to some extent prices.
[751] The suggested classification, if satisfactory from the speculative point of view, does, however, give rise to practical difficulties. In public financial statements it is, of course, impossible to show the actual nature of the revenue on such a basis. The only practicable course is to classify as a whole the gross revenue and the net revenue for the entire service. There is difference of opinion even as to this apparently simple problem. The common-sense solution would seem to be that recommended by Sir Edward Hamilton, viz. to reckon the net revenue as a tax and the balance of gross revenue as payment for services rendered; although in view of the complications resulting from the existence of unremunerative services, and the failure to make proper allowance in respect of the capital employed in the service, such a course is unscientific and misleading.
"The whole of the receipts from the various sources administered by the Post Office has always been treated in our Public Accounts as 'Non-Tax Revenue.' It is all carried to the Exchequer; and the whole cost is annually provided by Parliament. Therefore, to omit altogether this public receipt from a classification of taxes would seem to be the natural course to take. But the charge which is made for the carriage of letters, telegrams, and parcels, so far as the Post Office services are a State monopoly, is unquestionably 'an obligatory contribution by persons in respect of or incidental to something which they do.' Accordingly, to take no account of this charge, which nobody can avoid, would be to omit something which falls within our definition of a tax. At the same time it is obvious that to treat the whole of the Post Office revenue as a tax would for present purposes be misleading, inasmuch as the amount actually expended by the State represents direct and immediate service rendered to those who write letters or send telegrams. Regard being had to these considerations, when balanced one with another, it appears to me that the least incorrect course to adopt is to treat as a tax the amount by which the revenue derived from Post Office services exceeds the cost of administering those services."—Sir E. W. Hamilton, K.C.B. (Memoranda on Classification and Incidence, p. 36).
See also p. [361], n. 2, supra.
[752] "There cannot be devised a more eligible method than this of raising money upon the subject; for therein both the Government and the people find a mutual benefit. The Government acquires a large revenue, and the people do their business with greater ease, expedition, and cheapness than they would be able to do if no such tax (and of course no such office) existed."—Sir William Blackstone, Commentaries on the Laws of England, London, 1783, vol. i. p. 324.
"Nor, while the rates of postage are confined within due limits, or not carried so high as to form any serious obstacle to correspondence, is there, perhaps, a more unobjectionable tax."—J. R. McCulloch, Taxation and Funding, p. 320.
[753] "The Post Office in reality is neither a commercial nor a philanthropic establishment, but simply one of the revenue departments of the Government. It very rightly insists that no country post office shall be established unless the correspondence passing through it shall warrant the increased expense, and it maintains a tariff which has no accordance whatever with the cost of conveyance. Books, newspapers, and even unsealed manuscripts, can be sent up to the weight of 4 ounces for a penny; whereas if a sealed letter in the least exceeds ½ ounce it is charged 2d. It is obvious that the charges of the Post Office are for the most part a purely arbitrary system of taxes, designed to maintain the large net revenue of the Post Office, now (1867) amounting to a million and a half sterling.
"It will thus be apparent that Sir Rowland Hill's scheme of postal tariff consisted in substituting one arbitrary system of charges for a system more arbitrary and onerous."—W. S. Jevons, Methods of Social Reform, London, 1883, p. 280.