[754] "Will it pay?
"I will here lay down what may seem to financiers in this House a somewhat startling position. I hold that the State has no right to make a profit out of the Post Office. (Cheers.) ... Probably half the letters sent are business letters; and another very large share is sent by persons of small means who have many stern inducements to take care of their pence. In other words, one half of your postal revenue is derived from a tax on the machinery of trade, and another large share from the poorest class of citizens.
"This is practically a tax on commerce."—Sir J. Henniker Heaton, Parl. Debates (Commons), 30th March 1886.
[755] "Regarded as a tax diffused over the whole community, it is on the whole defensible, though the tendency to insist that the postal profits shall be devoted to improving the service is already becoming more pronounced."—C. F. Bastable, op. cit., p. 575.
"The Post Office, therefore, is at present one of the best sources from which this country derives its revenue. But a postage much exceeding what would be paid for the same service in a system of freedom is not a desirable tax. Its chief weight falls on letters of business, and increases the expense of mercantile relations between distant places. It is like an attempt to raise a large revenue by heavy tolls: it obstructs all operations by which goods are conveyed from place to place, and discourages the production of commodities in one place for consumption in another; which is not only in itself one of the greatest sources of economy of labour, but is a necessary condition of almost all improvements in production and one of the strongest stimulants to industry and promoters of civilization."—J. S. Mill, Principles of Political Economy, London, 1871, vol. ii. p. 462.
"It may happen (quite acceptably) that a surplus comes in from an undertaking which is primarily carried on for administrative purposes alone. A striking instance of this is afforded by the letter post. If the administrative purpose in question admitted of no aim beyond the covering of its own expenses, such a surplus would have no meaning, or at any rate no other meaning than that of a surplus in the hands of a consumers' club, which is returned to the members, on the closing of the accounts for the year, in the proportion in which they have contributed to it. The fact that the postal service not only retains any such surplus but even (with due regard to its primarily administrative function) consciously seeks it, is to be explained on the ground that, without hindrance to the administrative function, the different abilities of the citizens to contribute to public purposes may be drawn on by this means, with desirable results which are not attainable in any other way."—G. Cohn, op. cit., p. 94. Cf. The Development of the Post Office, Fabian Research Department, London, 1916, pp. 43-7.
[756] The extent to which any such disadvantage may be experienced is, of course, largely minimized by the existence of a low rate containing no element of tax, (see supra Chapter IV) for most of the formal documents of commerce.
[757] "It is wholly misleading to point to the fact that the business of the Post Office now yields a very considerable profit, and to suggest that increased remuneration can easily be provided from that source. That profit is not in a bag to be drawn upon at will. It goes into the National Exchequer, and forms part of the revenue of the country, and if two or three millions is taken from it, the deficit in the Exchequer must be made good in other ways. And it has never been admitted, nor can it now be admitted, that the profits of the Post Office belong in equity to the staff rather than to the taxpayer. The Post Office is not like a private business. Parliament has established a monopoly, and has fixed certain rates of postage. If Parliament chose to relax that monopoly, or to reduce those rates of postage, the profit would straightway disappear. It does not do so, because it desires to retain for the Exchequer the sums so brought.
"Parliament has also established the sixpenny telegram, extended the telegraph service into remote rural districts, and has given very cheap rates to the Press. This has resulted in the telegraphs being worked at a loss of over a million a year. No one would suggest that it would be just, because of this loss, to reduce the wages of the men and women employed in the telegraph service, and it is equally beside the mark to quote the profits on the postal side as though the pay of the staff should be determined by their amount."—The Right Hon. Herbert Samuel, British Postmaster General, to a deputation from the staff, 19th November 1913.
[758] Pekin.