Conversely, in the case of a Nation or Municipality taking over a monopoly, it is the duty of the Government Department or Town Council to so carry on the business as to render the most efficient service, at the lowest cost consistent with efficiency, with paying for the cost of acquisition and with paying the working expenses. Advocates of nationalisation urge that profits should be applied in reduction of taxation, and suggest that this is in itself one of the benefits to be derived therefrom. Opponents always assume that national and municipal trading must be carried on with a view to profit, and some even ridicule the idea that any trading concern can be successfully carried on unless with this view and with a resulting profit. Acrimonious discussions have taken place as to whether profits which have been claimed by advocates of municipal trading to have been made by tramways, gas, water and electricity works, are only paper profits as alleged by the opponents. In Lord Avebury’s book already referred to,[8] one whole chapter, headed “Loss and Profit,” treats of the question whether municipal enterprises have been profitable or not, and he adduces many examples to prove that in most cases the alleged profits are imaginary. It has, in fact, been the practice universally to apply profits made out of municipal trading in this Country in reduction of rates, and in foreign Countries, where railways are owned by the State, their revenues are made use of either as general revenue or, as in Prussia, for social or educational purposes, which would otherwise be provided for by direct taxation. The only instance of national trading in this Country is the General Post Office, and I think it is correct to say that the original intention when Penny Post was established was to so carry it on that working expenses only should be covered by the revenue. In practice, the gross revenue is entered with other items of revenue in the National Accounts, and the gross expenditure with other items of general and non-productive expenditure, with the result that the net profits of the Post Office, in effect, become a source of general revenue, and are therefore applied in reduction of general taxation. Until recent years this net profit has not been considerable, but last year it was as much as £5,000,000. Having regard to the continual and progressive increase in postal business, and the acquisition of the whole telephone system, there is every prospect of still further increase in net profits. What will be the result of a continuance of this practice of applying net profits of Municipal and National trading towards reduction of rates and taxes? It has not, so far, had any very serious result, simply on account of the fact that such net profits have not yet been of a very startling amount. But if these profits should increase, will not the result be the very evils which are the natural consequence of a private monopoly?