Page:The Economic Journal Volume 1.djvu/342

 320 TH ECONOMIC JOURN,r, the kindred functions that the post office may legitimately add to its primary one. It may however be objected that post office revenue is not in reality taxation, and therefore lies outside the scope of our present inquiry. The post office it may be said is an industry, and its gains are industrial gains. If the state were to purchase the English railways it would surely be erroneous to include receipts from that new source under the head of taxation; besides, the post office receipts are always described as 'non- tax revenue.' This difficulty is only an apparent one, and can be easily cleared up by considering the real nature of the institution. It is plainly a public agency, and as such may, like any other state agency, stand in one of three positions as to its amount of receipts: .. (1) Expenditure may exceed income; as is invariably the case with regard to the military and naval services, but even with them there are small receipts to be taken into account. Some post offices are in the same position as e.g. that of British India, and so in several years is the United States post. Postal systems that do not meet their expenses may be best regarded as administrative departments carrying out a public function. (2) Income may just meet expendi- ture (including profit on capital invested). It is then an industrial agency, and so continues as long as it receives merely normal profit, or allows free competition on the part of private ' under- takers.' (3) By aid of its special privileges it may obtain an extra return beyond what would be gained under open competition, and in all cases this additional gain is undoubtedly the result of taxation. A simple test will suffice to show that such is the true view. Suppose the privilege withdrawn, would not the extra advantage be either shared among the competing producers or be given in lower charges to the consumers ? Aga!n, to change the supposition, if a charge equivalent to the gain through legal monopoly were imposed on the occupation, would it not be i name as well as in reality a tax ? Or finally, if the business, with the legal privilege annexed, were handed over to a single company and its extra gains appropriated by the state, would not that also be a tax ? The monopolising restriction is one form of the tax which remains in force through all the different assumed cases. The importance of clearly drawing this distinction arises Industrial account have. with the distribution of receipts by the state in that question; taxes A good deal of the net from its connection taxation. taken into monopoly the burden of have not to be raised through income of the English Post Office would come under the head of taxes on communications with quite as much justice as the railway