322 THE ECONOMIC JOLTRNAL ficiency must be a negative one. The acceptance of this proposi- tion does not by any means carry with it a condemnation of the
policy so described. The value of facilities for commtmication
is so great; their influence on industry and commerce, and thence indirectly on public revenue, is so far-reaching, that a sacrifice of the kind may be capable of full justification on financial, and still more on social grounds, but the fact remains that it is a sacrifice that requires to be vindicated by its results. The post office, as a taxing agency in the sense iust explained, does not yield the large returns that were so noticeable in respect to other monopolies. The table of the receipts, expenditure, and gain or loss of most leading state post offices for a recent year on page 321, and which is taken from W'agner, Fi?a?zwisse?schaft, vol. ii. (2nd ed.), pp. 148--9, does not give very brilliant results. The telegraph system is so closely com?ected with the post office that the extension of state monopoly from the latter to the former has been very general. Most of the postal accotrots iust stated include telegraphs. The United States has not as yet followed the general course; it leaves its telegraphic system to private companies. The question of the best policy in this mat- ter is a difficult one; but for our present pur-l?ose it is enough to note that taxation of telegraphic communication is quite imprac- ticable; the real problem is to secure the payment of expenses by earnings. MtYNICIPAL IND?STRI?.s.--Presenting some points of resem- blance to the postal service is the municipalization of special industries, particularly water and gas supply and tramway service with a monopoly to the public authorities of the town. The agencies in ea. ch case are more cheaply worked by monopoly; in each the serxqce has connection with the governing body which consumes a part of its service or product, and in each the financial ele- ment, though present, is subordinate to other aims. M?micipal industries are in two respects different, for (1) they require a considerable amount of capital expenditure, and (2) they naturally tend to become monopolies. The question then so far as we have to do with it amounts simply to the comparative merits of (a) taxation through monopoly, which is accomplished by the munici- pality taking the industry into its own hands, and so applying its monopoly as to gain extra revenue, and (b) taxation of monopoly, to be effected by subjecting the companies engaged in the busi- nesses to special burdens. The financial elements involved in the decision are the comparative ability of municipal and company management, and the relation that the interest on mm?icipal loans
