458
(2)
A deduction of a percentage on profits also seems to be open to no grave objection, provided that such part of the profit is exempted as may be devoted to necessary improvements in the service.
On the other hand the levying of the contribution upon the gross revenue derived from the Post Office appears to be equivalent to the exaction from a merchant of 17 per cent, of his capital and income, and I venture to submit that the revenue derived from the Post Office (or at least that part of it which is required for expenditure on the Postal Service) should be regarded as the capital of the Post-using portion of the community held in trust for it and administered on its behalf by the Government. I consider that the Government should be in a position to provide a Postal Service for the letter-writing public on as cheap terins (inasmuch as it is not its object to make a large profit) as could be offered by private firms, but at the same time without expense to the non-letter-writing portion of the community. The impost of 17 per cent. on gross receipts renders this position quite impossible. In cases where the General Post Office competes to some extent with private firms (e.g., in the carrying of parcels) the latter must enjoy an immense advantage at any rate if the parcels post is to be conducted on strict business principles, without assistance from general revenue. Again in cases where the General Post Office exercises a monopoly, owing to this impost of 171⁄2 per cent. there will be unnecessary hardship either to the general public or to the Post-using section of it, and the hardship will increase as the business of the Post Office is extended. I venture to hope that in view of these considerations it may be decided to exempt from the deduction for the Military Contribution that portion of the revenue which is devoted to the necessary expenses of the Postal Service, I should add that if the contention of the memorialists is upheld, the amount to be deducted in respect of 1895 on account of transit charges and expenses of the Postal Con- vention would be $145,711.00. The total revenue of the Post Office in 1895 was $244,449.71 while the expenditure was $194,240.27, leaving a balance of $50,209.44. For the reasons I have stated, I consider this to be the largest sum on which the impost of 17 per cent. should be charged.
4. The contention in paragraph 3 is obviously sound, as the water accounts with departments are simply a matter of book-keeping; the amounts are merely book entries: no money actually passes and if it did it would simply be transfer- ring money from one account to another.
5. I agree with the memorialists also that the items classed last year as appro- priations in aid should fairly be exempted. For example, the Government might hand over Queen's College or the Government Civil Hospital to a Public Body, paying to such Body the difference between the cost of upkeep and the amount of the fees collected. The revenue would be thereby diminished by the amount of the fees, while it would scarcely be contended that Government should not entrust the management of such institutions to a public body simply because to do so would decrease the amount of the Military Contribution. Items of this nature are practically Refunds of Expenditure. A list of the amounts of the appropriations in aid for 1895 is enclosed.
6. The item referred to in paragraph 5 of the memorial should also, I think, be exempted. The sum mentioned, viz., $15,000, has been provided in the Estimates to meet the expenditure on account of refunds of revenue.
7. As regards paragraph 6, I have nothing to add to the remarks contained in paragraph 5 of my despatch No. 267 of 28th August, 1895, except that the memo- rialists are in error in supposing that the revenue derived from Water Rates and the Central Market will, in course of time, cease and determine, although they might be decreased.
8. I shall be glad to be favoured with an early decision on the several points raised by the memorialists.
Enclosure 2.