there is a deficit."--Sir
Robert Giffen, K.C.B. (_Memoranda on Classification and Incidence_, p.
94).

The argument is that in large towns the cost of the service is
infinitesimal, and the charge is therefore tax. Obviously this has no
application to country services.

Plehn does not take this view:--

"_Postal surplus not the result of taxation._"

"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."--C. C.
Plehn, _Introduction to Public Finance_, p. 358.

[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