People Use Government to Stay Connected: The Post Office

by Scott Klinger, 7/28/2014

A year before the Declaration of Independence was signed; the Continental Congress passed a bill establishing the national post office. Ever since, the post office has played a vital role in facilitating the flow of ideas and goods across our far-flung land. In its quest for ever quicker and more efficient deliveries, the post office has been an early supporter of every new transportation innovation in our country’s history.

Mail Moves Slowly in the Colonies

From the earliest days of the American colonies, people needed to communicate with each other over large expanses of thinly populated land. Informal systems of sending letters with traders, travelers, or Native Americans developed, but these networks were precarious and it took a long time for mail to arrive, if it arrived at all.

Some of the most important communications were between colonists and their business partners, family, and friends back in England. To serve the flow of communications from the motherland to the colonies, the first post office was established in Boston in 1633, and officials began building a domestic mail network. Other colonies also began establishing their own postal networks. In 1673, the Boston Post Road was built between Boston and New York. . By 1691, the British government sought to bring greater cohesion and efficiency to this patchwork quilt of colonial postal services by establishing a Royal Post service to serve its colonial subjects. The British expanded the network of post offices throughout the colonies, appointing a postmaster general to oversee each one.

In 1837, a little-known Philadelphia printer named Benjamin Franklin was appointed postmaster general of Philadelphia, America’s most important city at the time. Franklin implemented many important changes, including establishing fixed postage rates depending on the weight and distance traveled. Franklin also sought to improve the roads used to deliver the mail, hiring surveyors to plot new routes and construction crews to straighten established pathways. By the time Franklin left office, post roads extended from Maine to Florida and from New York City to Canada. Today, the old Boston Post Road (known as U.S. Route 1) extends from Florida to Maine, and was largely built by the post office to move the nation's mail.

The Post Office Assists the American Revolution

As political unrest began to build through the mid-18th century, it was through the mail that the most important political ideas were exchanged. Newspapers carrying a wide array of grievances and ideas were delivered to distant subscribers through the post.

As political protests expanded, the Royal Post became less reliable as a means of distributing the mail. Frustrated that his government at the time – the British Crown – was delaying mail containing articles critical of the King, Pennsylvania Chronicle publisher William Goddard presented a plan for a Constitutional Post to the Continental Congress in 1774. The following year, the Continental Congress adopted Goddard’s plan, which served as the basis for the formation of the first post office department. Within a year, the Constitutional Post had 30 post offices between Portsmouth, New Hampshire and Williamsburg, Virginia, and the Royal Post went out of business in America.

On July 26, 1775, the Continental Congress voted to appoint Benjamin Franklin as the nation’s first postmaster general and to pay him $1,000 per year, plus $340 for a secretary and comptroller. The post office was second only to the Continental Army, the predecessor of today’s Department of Defense. In fact, the responsibility of the federal government to “establish Post Offices and post Roads” was enumerated in the Constitution.

By the time the Constitution was ratified in 1789, the national postal network had grown to 75 post offices and 2,000 miles of post roads. But the post office was still of modest size. When the federal government moved from Philadelphia to Washington D.C. in 1800, all of the post office’s records, furniture and supplies were packed into two horse-drawn wagons for the trip south.

The Nation Expands Westward…and Communication Challenges Grow

The next significant challenge faced by the post office was western expansion into “the frontier.” During the 1830s and 1840s, letters travelled west by the same means they had in the earliest days of the colonies two centuries before: in the hands of traders and trappers, government agents, and soldiers.

The post office’s investment in better roads led to new advances in transportation, including the stagecoach. Postal mail contracts made stagecoach travel more affordable to the general public, so mail delivery enhanced the mobility of working people generally. By 1836, mail was moving by rail and once again, the subsidies provided by mail contracts, allowed rail networks to expand more quickly.

With the discovery of gold in California in 1848, new mail delivery routes had to be developed to serve the miners and pioneers in the California territory. The first routes were by sea. Mail would leave the East Coast in ships bound for Panama. Once there, it would be transported overland and loaded onto another ship bound for California. If all went perfectly, the mail could be delivered in a month, but it most often took far longer to arrive. Overland deliveries to the West were poorly organized, resulting in mail being handed from one wagon train company to the next. The process was inefficient and slow.

Complaints about slow mail delivery were a festering political problem in the United States during this time. It took more than six weeks for news to reach Los Angeles that Congress had approved granted California statehood in 1850.

By 1858, John Butterfield’s Overland Mail Company established a southern, 2,800 mile overland stagecoach route from Tipton, Missouri to San Francisco. It offered twice-a-week stagecoach service and promoted mail delivery in 24 days.

The race for speedy delivery was on. Two years later, William Russell came up the idea of a Pony Express. He placed newspaper ads announcing: “Wanted: Young skinny wiry fellows not over 18. Must be expert riders willing to risk death daily. Orphans preferred.” Pony Express riders covered 75 to 100 miles a day, changing horses every 10 to 15 miles. The Pony Express increased reliability and cut the travel time for a piece of mail from St. Joseph, Missouri to Sacramento, California to just 10 days, with some trips reportedly taking only a week. The Pony Express was an important, but short-lived innovation. It suspended service just 17 months after it began, shutting down in October, 1861, two days after the new transcontinental telegraph cuts the time to transmit a message across the frontier from days to minutes.

The Mailbox and Home Delivery

During the postal service's first 90 years, people had to drop off and pick up their mail at post offices. In some major cities, recipients could pay an extra penny or two to have their mail dropped at their homes. When mailing letters, customers had the option of pre-paying the postage or sending the letters COD – collect on delivery. When recipients refused delivery – as they increasingly did – the post office's labor and transportation costs went unpaid. With losses mounting, by 1855, the post office required all customers to pre-pay for postage. Three years later, the agency made it easier to mail letters by adding collection boxes in major cities. By 1863, the post office instituted free city delivery in 49 of the largest cities, but residents of rural America still had to travel – often at great lengths – to drop off and collect their mail. For many, a trip to the post office was a weekly or even monthly chore. Experiments with rural free delivery (RFD) were conducted in 1896 in West Virginia, bringing scheduled mail delivery directly to the farms and homes of rural Americans. This service was expanded nationally in the early days of the 20th century. The modern mail system as we know it was in place.

Mail Takes to the Rails, Roads, and Air

While mail travelled by train as early as the 1830s, rails became the primary mode for shipping inter-city mail during the Civil War. In 1864, the first railroad post office was established when a special mail car was attached to trains running between Chicago and Clinton, Iowa. Postal employees sorted mail onboard the trains, picking up and dropping off sacks of mail at each station along the way. By 1930, the peak of mail was moving over the rails, and more than 10,000 trains had mail cars attached.

The addition of cars and trucks to the mail delivery fleet began in the early days of the 20th century, and the use of airplanes started in 1926.  Both led to the gradual decline of mail delivery by rail. By 1971, most mail trains had been taken out of service; the last train moving mail between New York and Washington, DC ended trips in 1977.

The end of the Second World War marked another transition for the post office. The volume of business mail surpassed personal mail for the first time, and new technologies allowed for further efficiency in mail processing. Zone Improvement Plan Codes (or ZIP Codes) were established in 1963, assigning each post office in the United States a unique five-number code that simplified sorting and delivery.

The United States Postal Service – an Independent Agency

Despite these advances, the 1960s marked a time of growing problems within the postal system. The agency did not make new investments in technology, and service grew less reliable. In some extreme cases, mail delivery stopped entirely. Postal workers became unhappy with their wages and demanded better pay and working conditions. To address these concerns, Congress passed the Postal Reorganization Act of 1971, moving it out of the Executive branch of government and establishing the United States Postal Service (USPS) as an independent agency of the federal government. Since that time, the USPS has been directed by a Board of Governors. As part of the reorganization act, postal workers were given higher pay.

The USPS was also given the authority to issue bonds to fund necessary investments in new technologies and new processing plants. Advancement in sorting technology followed. In 1983, two decades after ZIP Codes were introduced, the USPS rolled out ZIP+4, a nine-digit code that allowed automated sorting down to the carrier level. And the pervasive bar coding of today’s mail features an embedded 11-digit code that allows machines to sort mail according to each carrier's route.

The Looming Threat of Privatization and Other Challenges

With the dawn of e-mail and the precipitous decline in personal letter writing, the modern post office faces new challenges. The rise of private sector competitors like UPS and FedEx have drawn away profitable express mail and parcel post business. Because these services can choose which places to service, they can cut their expenses by simply not offering delivery to remote areas.  The USPS does not have that option:  its mission is to keep all the American people connected, not just those in cities or along heavily travelled routes.

Some politicians and administrations have argued that the postal service should be privatized, that UPS and FedEx can take over its mission – despite the fact that its establishment was enshrined in the Constitution. In 2003, Congress placed a heavy burden on the USPS by requiring it to pre-fund its employees' future health care costs. This requirement is the principle reason for the large losses reported by the postal service. If such an accounting standard were imposed on corporate America, most large companies would also be reporting heavy losses instead of current profits, and some would be facing bankruptcy.

Privatization proponents are also seeking to replace the jobs of well-paid postal service employees with non-union (and so lower paid) workers at retailers such as Staples. (Staples is now offering promotional discounts to U.S. Postal Service rates in order to draw business away from local post offices.) Such action would reduce the number of good, middle-class jobs and could lead to a reduction in mail service to places without certain commercial facilities.

The postal service is responding to this pressure and to the decline in the volume of “snail mail” by consolidating sorting facilities and looking at innovative ways to leverage its unique set of assets to raise additional revenues. For example, it has been marketing its “last mile delivery network” to private parcel operators. It is also looking at ways to use its fleet of vehicles – still the largest in America – to provide a range of services, from detecting air pollutants and climate change emissions to reporting potholes to municipal public works departments. Postal vehicles can also be used to read utility meters and to check wireless Internet signals as they move throughout American communities.

The post office is also exploring offering basic banking services like check cashing and savings accounts to the 34 million Americans whose communities and neighborhoods have been abandoned by traditional banks. The post office already offers postal money orders, an affordable service for those without access to a checking account, And for more than half a century between 1911 and 1967 the United States Postal Savings System provided savings accounts for more than four million Americans, many of whom were immigrants used to saving money at their post offices in their home countries. Depositors earned 2 percent interest on their savings. At its peak in 1947, the Postal Savings System held $3.4 billion in deposits ($36 billion in 2014 dollars). Shuttering local post offices and shifting services to private retailers would preclude the post office from offering these helpful services to underserved Americans.

Standing at a Crossroads

The post office played a vital role in connecting the American people at the beginning of our nation, so vital that our nation’s founders wrote the establishment of the post office into the Constitution. It continues to play a crucial role today. Last year, the agency's more than 625,000 employees delivered nearly 66 billion pieces of first-class mail, more than 10,000 pieces of mail for each employee, or 210 pieces of mail for every man, woman, and child in the country. USPS customers can mail a first-class letter 4,280 miles from Key West, Florida to Barrow, Alaska for 49 cents. In contrast, a letter mailed in the much smaller United Kingdom costs 62 pence ($1.05 in U.S. currency), and a letter mailed within Canada costs $0.85 ($0.79 in American dollars).

Throughout its long history, the post office has been a model of adapting to both to the changing expectations of the public it serves and to new technologies that emerge. The USPS stands at another crossroads of innovation in its efforts to fulfill its mission of connecting and serving the American people in the years to come.

As a public institution focused on universal service at affordable prices, rather than on profit, the post office been the glue that helped bind the many disparate parts of our country into one nation.  That role continues today.

The postal history in this post is adapted from The United States Postal Service: An American History 1775 – 2006, and from History of the Post Office

back to Blog

A few added bits on financial services in US postal history:

- The Post Office began offering money orders in 1864 as a way for Union soldiers to send pay home to their families without putting cash in the mail. Thus 2014 marks the 150th anniversary of US postal money orders — even today, a huge winner in the marketplace and a profitable service for the USPS.

- At its peak, the Postal Savings System did indeed have about $36 billion in 2014 dollars. But that was when the US population was only about 144 million. If you increase proportionally for population growth, then the equivalent savings deposits today would total nearly $80 billion.

- These savings deposits weren't actually held by the Post Office. The Post Office distributed deposits among community financial institutions — something the USPS could do again with postal savings today. It's one of several ways the Postal Service could bolster local community banks and credit unions, which have been struggling for years.

- A final note: Congress set the Post Office's savings interest rate. Thus the Postal Savings System — which as you note was particularly important to immigrants — didn't dwindle on its own. Congress killed it through inaction, by not increasing the savings interest rate to stay competitive with banks at the time.

Thanks for this great piece on the US Postal Service, and also for your related 2/25/14 piece (linked as "basic banking services" in the article above).

You are right about the compelling benefits of the USPS offering basic financial services to low-income working families, but the benefits go even further. If low-cost USPS alternative services completely replaced payday lenders and other financial predators, it could restore about $1 trillion each decade to the folks who are currently getting ripped off.

Think of it as a trillion-dollar economic stimulus injected straight into mainly low-income neighborhoods across America — with resulting local job growth, higher sales tax revenues for cash-strapped local governments, and reduced demand on tax-supported assistance programs. All without costing taxpayers a dime.

That's exactly how the US Conference of Mayors sees it. In June they adopted resolutions in support of postal banking. (See postalbankingaction.org/resolutions, an initiative of BankACT.org.)

The post office is still a good deal, for the times when you must use the mail. 49 cents for a letter, and their shipping prices are reasonable.

Post new comment

By submitting this form, you accept the Mollom privacy policy.

Comments Policy

The Center for Effective Government requests that all site users maintain a reasonable standard of decorum in their comments. We reserve the right to remove comments that contain threats and excessive profanity. Comments that contain any form of commercial advertising may be edited or marked as spam at our discretion.

Thank you for your assistance in fostering a constructive, respectful dialogue on our site.