in 1974, six new jersey kids earned a few bucks delivering holiday cards at five cents each, half the rate of the united states postal service. they were breaking the law.”
In 1971, a private corporation, America’s Independent Postal System, offered to deliver Christmas cards for five cents each, three cents less than the U.S.P.S. speed. they were detained by court order.2
in 1966, the cf&i steel corporation, frustrated with the quality of postal service between its headquarters in denver and its plant in town, hired an armored car service to deliver the mail. after five months of operation, the denver post office stopped service and “at the post office’s suggestion” cf&i paid $2,000 for back postage.³
These are examples of a monopoly in action. With a few minor exceptions, the United States Postal Service enjoys a legal monopoly on letter delivery. Under private courier statutes, private carriers are subject to fines and/or imprisonment.
why does the u.s.p.s. have a legal monopoly? And more specifically, why should the government carry mail?
Let’s examine some of the arguments put forward by proponents of monopoly. One argument is that the U.S.P.S. constitutes a “natural” monopoly. that is, it is stated, it would be impossible for competing private companies to provide an efficient service. therefore, it is argued, we need a government-run monopoly.
This argument does not hold up in light of history. Over the last three hundred years, thousands of private carriers have provided an efficient postal service in England and America.
Three of these private carriers stand out in British history: William Dockwra, Charles Povey and Peter Williamson.4 Each of these men was so efficient in providing postal service that the British General Post Office, after closing them , adopted many of his methods.
william dockwra established his london penny post in april 1680. within a few months he had four hundred post offices and was making ten daily deliveries and four to twelve daily collections. thus, it was possible to send a letter and receive a response on the same day. the 1946 edition of the British encyclopaedia reports:
staff employed in london by dockwra considerably outnumbered those employed by the post office throughout the kingdom. This truly remarkable company gave London a postal service that in some respects has never been equaled before or since.
for some time, dockwra struggled with serious financial difficulties; But as soon as the penny mail began to show a profit, the Duke of York, upon whom the revenue of the post office was settled, asserted a monopoly on it. Dockwra was ordered to pay damages and his company was incorporated into the General Post Office; But the London Penny Post long outlived its creator, lasting until 1801.
charles povey founded his halfpenny carriage in october 1709, serving parts of london, westminster and the borough of southwark. his rates were lower than those of the general post office. after seven months of operation, he was fined and closed.
Peter Williamson established his penny stand in Edinburgh in 1776. It was so successful that his wife and father-in-law soon created a competing penny stand. After seventeen years, the General Post Office took over the business from him.
Following the example of these three men, private penny publications sprang up throughout the British Isles. according to one source, in 1800 there were more than two thousand.5 today, due to the vigorous enforcement of the British postal monopoly, there are none.
American history is much the same. In the 19th century, hundreds of private carriers successfully competed with the Post Office Department. due to the application of the express private statutes, none have survived.
One of the first of these postal services was started in 1835 by William F. boston harden. His success fostered competition, and by 1843 Boston alone had at least twenty private postal operators, including Alvin Adams, father of the Adams Express Company.
Soon, private post offices dotted the land. There was Hussey’s Post and Boyd’s City Express in New York City; the letter from pomeroy express in eastern new york state; the letter express company in western new york state, chicago and detroit; hale and company in new york, new england, philadelphia and baltimore; american letter mail company by lysander spooner; blood’s new york express (four deliveries and five daily pickups); wells and company (later to become wells-fargo); yankee jim’s loon creek express; Randall and Jones Canyon City Express: A Stamp Catalog lists one hundred and fifty private carriers. in 1845, private carriers transported about a third of the nation’s letters.”
How efficient were the private carriers? Hunt’s Business Magazine reported: “Government enterprise is utterly incapable, under its most advantageous impulses, of comparing itself to private enterprise.” Albert D. Richardson wrote that Wells-Fargo’s express operations in the West “illustrate the superiority of private enterprise. Whenever couriers travel in the same steamboat, or in the same rail car, with those of the U.S. Mail united, three-quarters of businessmen trust them with their letters, which are invariably delivered before government mailings….”8
of course, these developments were seen in washington. In 1844 Senator James F. Simmons of Rhode Island stated, “It is notorious for the fact that, . . . on the express routes, twenty letters are sent out of the mail for the one that is mailed.”9 That same year, Congressman John P. Hale of New Hampshire warned: “Deadly trending events for the Post Office Department are in progress; and its decline has begun.” post office.”¹¹
Unable to match the efficiency of private carriers, the Post Office resorted to force. Private express charters were strengthened in 1845. William C. wooldridge reports:
With a realistic appreciation of the underlying difficulties, the senate postal committee introduced a bill that would combine a drastic reduction in postal rates with stricter restrictions on private competition. even then, however, the bill’s sponsor recognized the government’s congenital inability to successfully compete with private expresses; he begged his colleagues “to take into account what he had repeatedly urged, that it was not by competition but by penal sanction” that private stalls should be destroyed.¹²
Those private carriers who weren’t scared off the market were put out of business by criminal prosecution. the government postal monopoly was preserved, not by providing better service than private carriers, but by threatening them with arrest.
There is nothing “natural” about the postal monopoly. if the monopoly were “natural”, the government would not have to crush the competition with threats and criminal charges.
A second argument used by monopolists is that private carriers would not charge uniform rates. they would charge less for low-cost routes (such as across town) than for high-cost routes (such as across the continent).
seems like a pretty fair system. people would pay for what they have. what we have now is the looting of mail from across town to subsidize mail from across the continent. what’s noble about that?
And we must remember the words of Hunt’s Business Magazine: “Government enterprise is utterly incapable, under its most advantageous impulses, of comparing itself to private enterprise.” given a few years of free enterprise, all postal rates would likely be lower than they are now, including those now subsidized by taxpayers. Of course, we’ll never know as long as the U.S.P.S. has a monopoly.
A third argument used by monopolists is that private letters would not be safe in the hands of private carriers. private carriers can open the mail and read it.
This is precisely what the postal monopoly has been doing for years:
for 20 years, the cia routinely opened more than 13,000 letters a year going to and from the ussr, later expanding this operation to include mail from north vietnam, cuba, and other (non-communist) latin american countries . chief postal inspector william cotter consistently lied about the existence of this operation until this year.
Military counterintelligence groups routinely opened military mail, both within the us and in the US. uu. and on bases abroad. Operation “flap and seal” was justified on the grounds of spotting spies, but according to columnist Jack Anderson, it was primarily used to spy on military personnel who had complained about the Vietnam War.
In the last two years alone, Inspector Cotter admits there have been court orders to open first-class mail and nearly 8,600 approved mail covers [the recording of all return addresses on someone’s incoming mail]. The latter have been at the behest of 41 federal agencies, including the IRS, the Drug Enforcement Agency, the Interstate Commerce Commission, and the Departments of Agriculture and Interior, as well as state and local police and prosecutors.¹3
on july 13, 1855 the publisher of alta california, enraged by the prosecution of private carriers, declared: “the present system of mails is the most outrageous tyranny ever imposed on a free people. it forbids us to send letters by such means of transport that we prefer, without paying an odious and onerous tax to the government…,,¹4
strong words. and it’s still true.
1 new york times, December 20, 1974 (new jersey edition).
2 John Haldi, Postal Monopoly (American Business Institute, Washington, D.C., 1974) pp. 16-17.
³wall street journal, June 5, 1967.
4 rockford fresnel, “mail carriers against the state”, groundbreaking, June 1966.
5 fresnel, ibid.
6 william c. Wooldridge, Uncle Sam, The Monopoly Man (Arlington House, New Rochelle, N.Y. 1970) pp. 11-31.
7 frank chodorov, the myth of the post office (regnery, hinsdale, ill., 1948) p. 14.
8 wooldridge, p. 21.
9 george l. Priest, “The History of the Postal Monopoly in the United States”, Law & economics, April 1975, p. 59.
10 priest, p. 61.
11 wooldridge, p. 22.
12 wooldridge, p. 23.
13 Robert Poole, Jr., “Getting Big Brother Out of the Mailbox,” Reason, Nov. 1975, p. 54.
¹4 wooldridge, p. 31.