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Why We Must Rescue the U.S. Postal Service From the Brink of Death

The post office can still be saved, but its grave has been dug.

“When the post office is closed, the flag comes down. When the human side of government closes its doors, we’re all in trouble” -- Jennings Randolph, senator from West Virginia 1958-'85

For the post office the end game is on. This year, the U.S. Postal Service will close half its processing centers. By late spring a first-class letter will take one to three days longer to arrive at its destination. By the end of this summer, Saturday delivery is scheduled to end. Over the next year the post office plans to close over 3,000 local post offices while slashing some 220,000 of its 650,000 employees.

Looking back, it is easy to distinguish three discrete stages in the 221-year life of the Postal Service. 

Stage 1: Post Office Has a Broad Public Mandate

The first stage began in 1792 when President George Washington signed legislation making the United States Post Office a cabinet-level department. It was a public institution with a clear mandate: to enable universal low-cost access to information. In its early years this led it to initiate free and low-cost delivery of newspapers, and eventually, to offer a special rate for periodicals and books.

The post office helped tie the country together physically as well as intellectually. Post roads were essential to the early development of the country. Rural free delivery established in the late 19th century, spurred improvements in roads and bridges since the post office would not offer service where roads were bad. In the 20th century, mail contracts underwrote the embryonic aviation industry.

In the 1820s, when private companies began charging a handsome fee to deliver information faster, enabling cotton speculators to make a killing on the difference in prices at the docks of New York and the plantations of Alabama, the post office responded by establishing its own express mail service. The private sector complained. A congressional investigation concluded “(T)he Government should not hesitate to adopt means…to place the community generally in possession of the same intelligence at as early a period as practicable.”

In the 1840s, when the private sector began siphoning off the most profitable mail routes, leaving to the post office only money-losing routes, Congress gave the post office a monopoly, enabling it to dramatically reduce the price of postage and initiate free door-to-door delivery in cities. In 1858, the first mailboxes appeared on street corners.

At the end of the 19th century, when private parcel companies began treating their customers badly, the post office introduced parcel post. The competition resulted in reduced prices and improved customer service.

In the 1890s and early 1900s, financial panics and the closures of hundreds of banks led the post office to introduce postal savings banks. At its peak after World War II postal banks had over 4 million accounts and deposits exceeding $3.3 billion. 

Stage 2: Post Office Becomes a Public-Private Institution

But after World War II, the post office’s inability to borrow money and invest long-term coupled with the dramatic increase in the volume of mail put an increasing strain on its system. In 1966 the mail system in Chicago literally collapsed under an avalanche of mail, leading LBJ to appoint a commission to study the future of the post office. The commission’s chairman, retired CEO Frederick R. Kappel, envisioned a more corporatized post office. Indeed, in testimony before Congress Kappel revealed his ultimate goal: “If I could, I’d make (the post office) a private enterprise…and the country would be better off financially. But I can’t get from here to there.”

In the l950s, low-paid postal workers often moonlighted to make ends meet. It took 21 years for an entry-level worker to reach the maximum wage level. Strikes were illegal. Workers demonstrated, lobbied and even held prayer services to publicize their plight.

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