Postal Subsidies Reduced Under Holt

“[Postmaster] Brown’s successor—the former commissioner of patents, Judge Joseph Holt of Kentucky—was a southerner like Brown but Brown’s antithesis in terms of policy: Holt believed the Post Office should support itself like any private business. Upon taking office Holt reviewed the department’s mail contracts and was flabbergasted by his findings. The Post Office, he discovered, supported six mail lines to the Pacific, none of which brought in even a small fraction of its cost . . .

To some extent these dismaying figures reflected the large quantity of newspapers and government documents that mail contractors were required to carry free of charge. But Holt saw only the bottom line: All told, the six routes were costing the government nearly $2.2 million but bringing in less than $340,000, a net loss to the department of more than$1.8 million a year.

Armed with these figures, Holt moved swiftly to correct the abuses he perceived. He shut down two lines altogether, negotiated a new steamship service less than half the previous cost and reduced services and fees on two other lines . . . Only the southern service was left untouched, because Butterfield’s ironclad contract there permitted no adjustments.”