Post Office Monopoly

The post had either broken even or generated small surpluses until its expansion in the 1820s, when it generally began to report progressively greater losses. By 1844, the department was losing so much business to competitors that a reluctant Congress, fearing the political consequences of either cutting mail service or paying to support it, was forced to act, despite southern politicians’ suspicion of costly federal schemes that called for tax increases and strengthened Washington’s hand. As it is wont to do in such situations, Congress created a special commission to assess the crisis and make recommendations for fixing it. This group of experts took the high road, concluding that the post had not been created to generate revenue but for “elevating our people in the scale of civilization and bringing them together in patriotic affection,” as well as to “render the citizen worthy, by proper knowledge and enlightenment, of his important privileges as a sovereign constituent of his government.” Accordingly, starting with the Post Office Act of 1845 and continuing through 1851, Congress passed a series of reforms that would stimulate the full flowering of what the historian Wayne Fuller called “the people’s post office.”

The government finally abandoned the hoary principle that the post must support itself, even as it was extending all the way to the Pacific. The institution was explicitly defined as a public service that, like the military, deserved financial support, and after the Post Office Act of 1851 deficits would be accepted as a matter of course. Congress shored up the post’s finances in other important ways, especially by passing legislation that reinforced its poorly defended monopoly. Known as the Private Express Statutes, these laws made it a crime for other carriers to transport mail in places served by the post, which soon put the independent competitors out of business.