In 1948, Frank Chodorov pointed out a devastating fact in regard to the United States Post Office Department (which was a precursor to the USPS): “Notwithstanding the savings effected by such accountancy, the Department has managed to show a deficit in all but eight of the past one hundred and twenty years.”[1] Yet even today, many fear that the United States Postal Service will soon become privatized, or even worse, that it will wither away entirely while leaving us at the mercy of private firms. These sentiments, unsurprisingly, have been perpetuated by the media in a hysterical fashion, especially now that election season coupled with the growing concern over mail-in ballots is dawning on us.
It was a small miracle that I managed to stumble across a paper from October 2008 titled “Universal Service and the Postal Monopoly: A Brief History” in none other than the “about” section of USPS.com. I’ll preface by saying that the primary argument used is that if the U.S. Post Office didn’t have a monopoly, then the vast increase in the amount of newspapers delivered—which led to a massive boom in literacy rates in the 19th century—wouldn’t have been possible.[2] In this 20-page paper, hilarity began to ensue within a few paragraphs:
To enable the Post Office Department to serve all Americans, no matter how remote, yet still finance its operations largely from its revenue, Congress gave the department a monopoly over the carriage of letter-mail by a group of federal laws known as the Private Express Statutes. Without Such protection, Congress reckoned that private companies would siphon off high-profit delivery routes, leaving only money-losing routes to the Department, which then would be forced to rely on tax-payers to continue operations. In the past two centuries, Congress has held to this belief.[3]
In other words, they wouldn’t stand a chance if they were in competition with other private postal firms. Even beyond that, they admit that maintaining their revenue stream is of greater importance than keeping costs low for consumers. What else could it possibly mean to “siphon off high-profit delivery routes” aside from attracting customers with faster, cheaper, and a more reliable service? Clearly, from their point of view, they were entitled to have control over these routes as a matter of fact.
The first Private Express Statutes were originally passed in 1792, yet Section 1696, which was later passed in the 20th century, is cited by the USPS paper:
Whoever established any private express for the conveyance of letters or packets, or in any manner causes or provides for the conveyance of the same by regular trips or at stated periods over any post route which is or may be established by law . . .shall be fined . . . or imprisoned . . . or both.[4]
Private Express Statutes are inextricably linked to the monopoly status that USPS enjoys to this day. For example, the USPS paper states that the number of circulated newspapers per capita increased from “3.8 in 1810” to “21.8 in 1850,” which on its own seems to give credence to their assertion that it resulted in a highly literate society, yet it by no means explains what it then goes on to say:
But until 1845, high rates of letter postage discouraged casual correspondence. While newspaper postage cost less than 2 cents, letter postage ranged from 6 to 25 cents, depending on distance traveled. In 1840, for example, sending a letter from Baltimore to New York City cost 18.75 cents, representing more than a quarter of a laborer’s daily wage of 72 cents . . . in 1845, the cost of sending a letter from Baltimore to New York City was lowered to 5 cents, from 18.75 cents.[5]
Notice the peculiar dates being used here: “1840,” “until 1845,” and “in 1845.” They make it appear as if in 1840, sending letters was just too expensive, for whatever reason, yet in 1845, the government was kind of enough to reduce the postage rates. In this complete lack of historicity, they conveniently forgot to mention that it was only a year earlier when Lysander Spooner embarked on what proved to be a very real and immediate threat to the U.S. Post Office: The American Letter Mail Company. Founded in January 1844, Spooner’s private mail carrying company, which had established post offices in New York City, Baltimore, Philadelphia and Boston, sought to lower these overpriced rates by offering faster shipping and lower rates.[6]
Not only did the American Letter Mail Company instantly begin to flourish, both in terms of its popularity and the pressure it had put on the government, but twice a day mail was being delivered between New York City and Philadelphia at a fraction of the cost: 6 ¼ cents per half-ounce letter (or the customer could get a bargain deal of twenty stamps for a dollar). In some cases, free local delivery was offered to further undercut the USPO. Congress soon began to warn railroad operators that they were forbidden from allowing non-USPO mail to be transported one their trains, while the Postmaster General (along with his government lackeys) was having none of this. Spooner had to be stopped before it was too late.
By March 1844, after only two months in operation, Spooner and his employees began to feel the wrath of the bureaucrats and special interest groups they were outcompeting. In one instance, Hugo McElderry, who was a director of a Railroad Company, accosted one of Spooner’s agents and proceeded to eject him from the car, while in another instance U.S. Marshals raided their Philadelphia office and arrested Calvin Case, who was the office manager at the time. On March 30th, Spooner himself was arrested along with other agents while traveling through Maryland, yet the Massachusetts District Court declared in April that these transportation companies were not liable for passengers who secretly used their services to deliver mail. In reality, this was (or should have been) a small victory for Spooner that was counteracted by the fact that he remained in jail until he was released on bail in June. Private Express Statutes, as mentioned earlier, had nearly ruined him financially as well as legally, which was all part of the government’s plan.
It wasn’t long though before a stark irony began to rain down on these same government agitators when it was realized that the citizens had become accustomed to these new low prices. In March 1845, at the request of the Postmaster General, Congress forced through a bill that fixed the postage rate at 5 cents per half-ounce within a 500-mile radius and 10 cents per half-ounce over 500 miles.[7] Again, while trying to maintain the notion that they did this out of the kindness of their hearts (and not because 5 cents would obviously undercut 6 1/4 cents), the USPS paper went on to proclaim this on page four:
In 1845 the utility of the mail system to the general public was greatly increased by an act of Congress that simplified and slashed postage rates for letters, reducing the five distance-based categories down to two, and the cost of sending a letter, in some cases, by more than two-thirds. . . For example, in 1845, the cost of sending a letter from Baltimore to New York City was lowered to 5 cents, from 18.75 cents. In 1851 rates were dropped even lower for some letters.
Go figure! Nowhere in the paper (which to its credit does contain 84 footnotes) is Lysander Spooner mentioned. It does concede, however, that in the 1840s, “postal revenues were crippled by the operation of numerous private express companies in large eastern cities as well as by the carriage of letters by railway passengers.”[8] Again, go figure! How could this be? Better yet, it goes on to cite Postmaster General Wickliffe who stated in 1843 that “The General Government should either protect the department against the inroads of private posts, or provide the ways and means to meet the necessary expenses of the service.”[9] But that was just it: government couldn’t meet the demands of the public, and couldn’t earn enough revenue, which is why they had to pass laws in order to harass and arrest those in violation, and they even went as far as to jail the mailers—not the companies who delivered the mail, but the private citizens who used these private postal services. In fact, it says it right in the USPS paper!: “For the first time, mailers who sent letters by private express companies or other means were also liable for prosecution.”[10]
It simply cannot be overlooked that this is how the government and everyone in its ambit operates, which is through a distorted lens of reality that serves to justify their actions as well as the existence of monopolistic entities in general. But what was the truth of the matter? Spooner, in a final act of defiance and fortitude, published Who Caused the Reduction of Postage? Ought He to be Paid? in 1850 in which he relentlessly mocked his adversaries with facts and statistics related to what private competition—not a government monopoly—ultimately brought about. Spooner’s American Letter Mail Company continued to give politicians headaches by lowering rates until he was finally forced to cease operations in 1851. Nevertheless, he had rightfully earned the moniker “Father of the 3-cent stamp” when Congress was again forced to lower postage rates uniformly in 1851, this time to 3 cents. As you can see, the USPS takes credit for this as if lowering rates was their idea (similar to claims made today that the USPS maintains low prices because of its monopoly status). The USPS paper ends with a statement from Postmaster General John E. Potter in 2007 who “remained optimistic about the future of the Postal Service and reaffirmed his commitment to its historic mission.” Potter opined:
We are seizing this historic opportunity to build a bold vision of a profitable United States Postal Service that delivers for future generations.
We will be competitive. We will respond effectively to market and operational conditions and the needs of customers. . . .
As we enter this new chapter in our history, our mission remains the same – providing trusted, affordable, universal service. That promise will guide everything we do as we make our bold vision a new reality.[11]
What a shame then that the U.S. Government Accountability Office reported losses of “$69 billion over the past 11 fiscal years—including $3.9 billion in fiscal year 2018.”[12] In fiscal year 2019, they endured a whopping loss of $8.8 billion which was “the largest on record” and which “marks the 13th consecutive year the USPS has finished in the red.”[13] So much for their “bold” vision of becoming profitable and competitive.
SOURCES:
[1] Frank Chodorov, The Myth of the Post Office (Illinois, Henry Regnery Company, 1948), 3.
[2] United States Postal Service, “Universal Service and the Postal Monopoly: A Brief History,” October 2008. https://about.usps.com/universal-postal-service/universal-service-and-postal-monopoly-history.pdf.; On page 4, they pointed out somewhat ironically that in 1840, the literacy rate was 91 percent of white adults.
[3] Ibid., 2.; Keep in mind that in 2019, the USPS had a net loss of $8.8 billion.
[4] Ibid., 3.
[5] Ibid., 4.
[6] To understand the arguments that Spooner put forth against the government’s postal monopoly, see Lysander Spooner, The Unconstitutionality of the Laws of Congress, prohibiting Private Mails New York: Tribune Printing Establishment, 1844).; One of Spooner main arguments was that Article 1 Section 8 Clause 7 of the Constitution permits Congress to “establish Post Offices and post Roads,” but what it doesn’t say is that only Congress is permitted to operate Post Offices.
[7] Kelly B. Olds, “The Challenge to the U.S. Postal Monopoly, 1839-1851,” Cato Journal 15, No. 1 (Spring/Summer 1995), 15.; Old’s’s paper details many fascinating examples of attempts to compete with the government’s postal monopoly which began as early as 1839 with William F Harnden’s route between New York and Boston, while James W. Hale, according to Olds, had the “most successful private mail company.”
[8] United States Postal Service, “Universal Service and the Postal Monopoly: A Brief History,” 13.
[9] Ibid., 13; They cite Wickliffe’s statement from Annual Report of the Postmaster General, 1843, 6.
[10] Ibid., 13.
[11] Ibid., 20.; They quote the source from United States Postal Service Annual Report, 2007, 2.
[12] United States Government Accountability Office, High-Risk Series: Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas, March 2019, 99.
[13] Thomas Aiello, “Another Year, Another Loss for the US Postal Service,” National Taxpayers Union, November 15, 2019.