The position with regard to Municipalities which borrow money from investors to establish municipal gas, water, electricity, etc., undertakings or build houses, is the same in effect. Thus the London County Council has numerous loans outstanding which are dealt with on the Stock Exchange and carry interest at varying amounts ranging from 2½ per cent to 5 per cent. These interest payments total several million pounds a year.

Undertakings, such as the Post Office, that are acquired outright by the State may present a more obscure picture, but they are not essentially different from the other forms. The main difference is that the interest payments to investors are not associated directly with the Post Office but are merged in the National Debt as a whole. Thus, when the Telegraphs were purchased, the Government borrowed money in the form of consols, and used the money to buy out the companies. Including interest on further money borrowed for the development of the service up to 1877 “the annual charge for interest, at the rate of 2½ per cent in perpetuity, on the outstanding amount of Consols is £271,691.” (Post Office Commercial Accounts, 1939. H.M. Stationery Office, p. 36.)

On the Post Office as a whole, including telegraphs, telephones, etc, capital for development is provided by loans authorised periodically by Acts of Parliament and by advances from the treasury, the money actually being borrowed from the National Debt Commissioners. Each year before the war the Post Office published what are called “Post Office Commercial Accounts”, which show the financial results of the Post Office on an ordinary commercial basis. These accounts show the surplus made by the Post Office on the year’s working “after charging interest on capital”. In 1939-40, for example, the interest charge was £7,223,297 and the surplus after charging interest was £7,246,841. In most recent years the surplus was in the region of £11,000,000 or £12,000,000, and since 1939-40 it has presumably been much larger as a result of the raising of the letter postage rate to 2½d.

The purpose of the above examples is to show that nationalised industries are not essentially different from private ones – both kinds are a means by which the capitalist obtains his property income, out of the surplus value produced by the working class.

Major Attlee, leader of the Labour Party and former Postmaster-General, in an article in the New Statesman (7 November, 1931), actually described the Post Office as “the outstanding example of collective capitalism.”

It may be useful here to draw attention to the much more fully developed forms of State capitalism in Russia at the present time. In that country industries and services are to a large extent financed through loans raised by the Government. At 1 January, 1933, the total amount of the loans outstanding was over 10,000 million roubles, and it is increasing yearly (Statesman’s year Book, 1940, p. 1266). Some of the loans are lottery loans on which the investor, in addition to the repayment of his capital, has the chance of winning a large sum of money in the lottery ; other loans carry interest at 4 per cent. (Statesman’s Year Book, 1940, p. 1266).

With the growth of inequality of incomes in Russia in recent years, due to unequal wage rates for different grades of workers ; to the large sums of money given as prizes for work the State wishes to honour, such as the 100,000 roubles given to Ilya Ehrenburg, a journalist, for his book The Fall of France (Evening Standard, 19 May, 1942) ; and to the rise of rouble-millionaires among the collective farmers (see Soviet Millionaires, Russia To-day Pamphlet, 1944, 2d), the minority of wealthy investors is obviously playing a larger part in Russian industrial life. Already cases have been reported in Soviet War News, 6 January, 1943, of individuals able to give or invest sums ranging up to 300,000 roubles (at 25 roubles to the £ this is equivalent to £12,000).

In Russia, as in other countries where investment in State loans exists, the property income so derived is based on the exploitation of the working class, and is of course quite incompatible with Socialism.

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