This section of the book is from the "Introduction To Public Finance" book, by Carl Copping Plehn.
The post was included above among those functions for which fees were charged. Whether that be quite correct or not depends upon the way in which the postal system is run. If it is run so as to yield the largest possible revenue over and above expenses, it is of exactly the same character as any other industrial enterprise upon which the State enters. The State sells postal services for the highest price it can get, or rather, for the largest net return. Its profits, the post office being a monopoly, are regulated by the principle of charging what the traffic will bear. But no post office is run on this principle. The importance of the public service rendered has led to the recognition of a large element of common benefit. This recognition has not resulted in the entire abandonment of charges for the service except in a few instances ; for example, the free carriage of newspapers in the county in which they are published. But it has led to the attempt to run the service in such a way that expenses shall be met, and only a small surplus, if any, shall accrue to the benefit of the treasury. Whenever the surplus tends to grow, the rates are lowered or the service improved. Of all the powers, Great Britain is the sole exception to this rule, about one-third of her postal receipts being profits. (1895, receipts £10,760,000, expenses £6,869,000. But the allied telegraph service ran behind ; receipts £2,580,000, expenses £2,674,000.) The postal rates in Great Britain are as low as in other countries, but the surplus is accounted for by the extremely small size of the territory covered by the land service, the concentration of population, and the cheapness of water transportation, all of which makes it particularly easy to do a large and profitable business at low rates.
There are some writers who regard any surplus acquired in this way as practically the result of taxation, and class any charge for the public service, above the cost thereof, as a special tax. This classification presupposes that the service is, by nature, of a public character, an assumption contrary to the fact, for no function except that of governing itself, in the narrowest possible sense, is by nature of a public character, nor, on the other hand, by nature of a private character. On this consideration, therefore, it is better to class these gains, not as taxes, but as the earnings of a public industry.