The United States Postal Service (USPS) has a long history of technological innovation. It is, and has been, central to the project of democracy in the US, enabling the growth and free exchange of newspapers and information and connecting citizens to each other across the nation’s expanse. In this episode of Policy Outsider, guest David Hochfelder, associate professor at the University Albany, explains the Postal Service’s mandate to provide “universal service,” explores the Postal Service’s history of innovation, and offers potential new uses for the USPS infrastructure that would satisfy its mandate.
Guest:
David Hochfelder, Associate Professor of History, University at Albany
Transcript was generated using AI software and may contain errors.
Alexander Morse 0:04
The United States Postal Service has been in the news lately because of its upcoming role in the 2020 election, with an anticipated increase of mail-in ballots due to the COVID-19 pandemic. And while the Postal Service has become a target for political debate, we here at the Rockefeller Institute are curious about its role as an American institution. When was the Postal Service founded? And what was its intended purpose? How has the Postal Service adapted throughout its history? And what technological innovations has it provided to Americans? This is Policy Outsider. I’m your host, Alex Morse. We invited David Hochfelder, associate professor of history at the University of Albany in New York, to help answer some of these questions and discuss how integral the Postal Service was to disseminating vital information across the United States. And since its 2020, we conducted this call over Zoom, a teleconference video software. Please bear with us with any sound quality issues that don’t distract from a great conversation. Coming up next.
Thanks for tuning in to today’s episode. I’m with David Hochfelder, associate professor of history at the University at Albany in New York. And we’re here today to talk about the Postal Service. David, thanks for joining us.
David Hochfelder 1:45
It’s great to be here. Thanks for having me.
Alexander Morse 1:47
As I mentioned at the top, we’re going to discuss the history and purpose of the Postal Service. So let’s begin with when the Postal Service was first established.
David Hochfelder 1:56
It was first established in the Constitution. It’s one of the federal departments that is listed specifically in the Constitution. And that provision of the Constitution grants Congress the power to declare post roads instead of post offices. Now, obviously, this has a history that goes back before the Constitution and goes back to the American Revolution, when patriot organizations set up committees of correspondence. Benjamin Franklin was also a postmaster general. So there’s a history that predates the Constitution. But for our purposes today, I think it’s trying to get a postal system in the Constitution is a very important political act. The Post Office Act of 1792, a few years after the Constitution was ratified, set up mechanisms for expanding the postal system as the country grew, and basically set the model that went for a good 200 years, 180 years at least. This would set the model that is the postal system as essentially a public utility, a public good, as a medium that was necessary for creating an informed citizenry, which the founding generation regarded as essential to a well-functioning democracy.
Alexander Morse 3:11
So why is that the case? Why did the founding generation believe that this public good was essential to a well-functioning democracy?
David Hochfelder 3:18
A lot of this has to go back to the political history of the revolution and the post-revolutionary era leading up to the Constitution, a lot of major issues were debated in the pages of the country’s newspapers and pamphlets. And those circulated hand-to-hand in many cases, but also through postal networks, both before and after the establishment of the Post Office Department. So newspapers and other political information circulated widely through the mail. And because of that the postal system seemed to be the natural medium for the conveyance of political information and news.
Alexander Morse 3:53
That’s interesting. I didn’t know that the Postal Service had its roots in the American Revolution. Following up on this idea of a public good and universal service, what are some of the other public benefits offered by the Postal Service?
David Hochfelder 4:07
From its founding or more recently?
Alexander Morse 4:10
I guess it from its founding.
David Hochfelder 4:12
The first and foremost goal of the Post Office Department when it was set up circa 1790, both in the Constitution and the Post Office Act in 1792, again, was to facilitate the circulation of political information and news as essential to a well-functioning democracy. The postal system also cross-subsidized. So in other words, if you’re a newspaper subscriber and you’re living in the countryside let’s say in the 19th century, you were a subscriber to the Albany Evening Journal or the Albany Argus, you could get that paper delivered to your doorstep at a very low rate. Newspapers can also exchange free copies with any other newspaper in the country. So as a historian, sometimes when I’m researching a particular topic, you can see especially before the telegraph in the 1840s, say you’re looking at a news story from the 1830s, you can see how it starts out in Washington DC or New York City, and then just travels almost day by day. This is the origin of the term cutting and pasting, in fact, editors would get newspapers from New York or Washington or Albany, and clip out some interesting stories, then basically typeset those stories verbatim into their own newspapers. Sometimes they would credit the New York Herald or whatever newspaper they were getting the story from. Other times, they would just simply run the story. So it’s interesting, you can see how the news travelled physically. So universal service is another fundamental concept here. The Post Office Department, as it was called in the 19th century and now the Postal Service, is one of the only institutions of national scope that is mandated by law to treat everyone equally. So you can send a letter for 55 cents, I think that’s the prevailing postage, from a Acadia, Maine, to Nome, Alaska, for 55 cents. Same process if I sent a letter from Albany to Detroit. So that’s a pretty powerful statement about the public good and universal service.
Alexander Morse 6:20
Now is this idea of a universal service in terms of the Post Office unique to America?
David Hochfelder 6:26
No, Great Britain was one of the innovators in regards to that. So early on in European countries, including Great Britain, the postal system was an arm of the government. It was to set up initially several hundred years ago in every country to facilitate the transmission of government news and directives and orders and things like that. It was mainly for the government to operate. Then, as a byproduct, postal systems in Europe allowed private customers to use the postal system at very high postages. The 1830s and 1840s, reformers in Great Britain decided to transform that system into a public utility basically. Reformers in Great Britain pioneered the cheap postage movement, the postage stamp, which is part of the cheap postage movement, and this notion of universal service and facilitating the transmission of newspapers. American reformers looked across the ocean and decided this is a really good idea. So there’s a similar cheap postage and universal service movement that arises in the 1840s. By 1851, the US Post Office Department has prepaid stamps, three cent stamps, and you can mail a letter anywhere within the continental United States for three cents. This is a far cry from 25 cents per page that had been the rate of postage over 500 miles before the cheap postage movement. The other interesting thing about the Postal Service before 1851 is that the recipient had to pay the postage, so the sender could not prepay the postage, or if you did, you got to go to the post office and do it through some sort of process. You couldn’t simply fix a stamp to an envelope. Henry David Thoreau famously remarked in Walden, that he received very few pieces of mail that he thought was worth the cost of paying for it. So one of the reasons for the benefits of the cheap postage movement was to turn the postal system into a social medium, as well as a business and political news medium, so that people could stay in touch over long distances for the price of three cent postage. So it kept family ties and friendship ties together in an era when Americans were migrating in unprecedented numbers.
Alexander Morse 8:47
How did the Postal Service grow out of the 1850s?
David Hochfelder 8:50
As far as the economics of information transmission, you talk about network effects and so forth, maybe there are two things, network effects and the marginal cost of delivering a piece of information. I believe it’s Metcalfe’s law, one of the pioneers of the internet, who basically said that the utility of a communications network grows at a certain mathematical rate based on the number of people who are in that network when we see these network effects in social media today. So think of the postal system as kind of a social media. The more people who are writing letters to each other or sending information through the mail, the greater the utility of the postal system to all of its users. So that’s the network effect, positive externality. The second thing is the marginal cost of transmitting information. What reformers argued in the 1840s and 1850s, in both the UK and the US, it didn’t cost that much more to carry another letter, carry another piece of mail. Therefore, once your fixed costs are already sort of accounted for, the stagecoach or the railway carriage or what have you, this little piece of mail doesn’t cost that much more to transport. So why not lower the cost of transporting that letter to the point where maybe it doesn’t even breakeven, but it’s not going to cost you much more, if anything, to stick another letter in a mail bag. So this notion that information can be transmitted at very, very low costs, which we enjoy today with the internet and social media, that notion really arises with the cheap postage in the mid-19th century.
Alexander Morse 10:25
So that’s interesting that the reforms can make postage cheaper and mail service more accessible actually lead to wider use and growth of the postal system. What else did the Post Office pioneer? Or rather, how else did the Postal Service continue to grow?
David Hochfelder 10:42
Postmasters general in the United States took their public service obligations very seriously. And in the 19th and early-20th centuries, there were several innovations. We tend to think today of the federal government as not been terribly innovative. In fact, I would strongly push back on that in all sorts of other ways besides the postal system. But let’s just stick with the postal system, since that’s our topic. The postal system drove innovation in several different ways. As an aside, sometimes the innovation was technological, that is in fostering technological innovations. Sometimes innovation was administrative and organizational. So you can have innovations that don’t require new devices, new machines, and you can innovate by creating more streamlined organizations and administrative procedures. So the postal system innovated in both ways. After cheap postage in the 1860s and 1870s, the Post Office Department pioneered what was called fast railway mail service that is hiring a fast locomotive with some rail cars to transmit one of the major routes, for example, was between New York City and Chicago, the mail at much higher speeds than ordinarily could be done if you just stuck mail on a passenger rail train. And the gravestone of the founder of the fast railway mail service is buried in Rose Hill Cemetery in Chicago. His headstone is actually a fast railway mail car. He was very proud of this, it was the crowning achievement of his life. So that’s one innovation. Another is rural free delivery in the 1890s. Basically, farmers were agitating for postal routes to deliver the mail directly to their doors. Before that time, if you lived in a rural area, you had to go to the post office to collect your mail. So the Post Office Department did that, first with horses and wagons, and then the Post Office Department became one of the earliest and best customers of the infant automobile industry in the 1900s. So you had another way that the post office drove innovation, at least as a customer. Then in the 1910s, similar to the process with parcel post, your private express companies going back to the 19th century, who handled packages, delivered packages. This was very expensive and mainly used by banks and other major businesses. So the Post Office Department wanted to open this up to just ordinary Americans and offered parcel post at very low rates. This facilitated, for example, the Sears Roebuck’s catalog, which was a big source of consumption in the early- and mid-19th centuries. Sears Roebuck’s business model would not have been possible without the parcel post. You could order anything from the Sears catalog and have it delivered through the mail, even kits for homes. There’s also an apocryphal story that a mother and father decided to send their young daughter to visit her grandmother, and it was cheaper to send her by parcel post than buying a railway ticket. I don’t know if that story is true, but it’s a nice story. And then also in the 19-teens, after about 50 years of agitation and lobbying, under President William Howard Taft, the postal system set up a network of postal savings banks. I have images of these postal savings bank cards and stamps and so forth. You could go into any post office, obtain a card, stick five cent stamps on it until you got to $1, take that card in and deposit that dollar in your postal savings account. The postal savings system paid lower interest than commercial savings banks, but the real value was that deposits were guaranteed by the full faith and credit of the federal government. Whereas until 1933, with the rise of federal deposit insurance, your listeners may remember the bank runs seen from It’s A Wonderful Life. Runs on banks were common during financial panics. And the value of the postal savings system really came out in the summer of 1932, which saw a wave of bank failures around the country, especially in cities like Chicago. So the postal savings system was a safe place to put your money, as opposed to taking your chances with a commercial bank that could default and depositors might receive 60 cents on the dollar for their deposits. Then, finally, in the 1960s and 1970s, the postal system worked with Western Union to develop a mailgram system, where you could send messages electronically from post office to post office. So this wasn’t door-to-door delivery of telegrams like what Western Union had been doing for all its history, but this was a way to save some time. Instead of 24 hours to get from New York to Chicago, you could send a mailgram that would arrive in half an hour, and then stick that in the mail and have that delivered later in the day.
Alexander Morse 15:43
So communication innovation throughout the decades eventually paved the way for internet communications. Has the advent of the Internet slowed down or stalled innovation from the Postal Service?
David Hochfelder 15:56
The real underlying foundational issue here, in my opinion, is that the country right now lacks a communications and information policy. We’ve had one throughout most of our history. Today, the purposes to which our parents’ generation used the mail or even myself when I was younger, before long distance calls essentially became free and before I had an email account, I used the mail to stay in touch over long distances with friends and family, again, because it’s cheap to do. With the rise of email and basically the disappearance of distance in long distance phone calls, the societal function of the postal system has to change. Policy that specifically addresses whatever needs the postal system could still meet, given its ethos of universal service and being a public good. So most people have email or text capabilities through their phones. Except for birthday or Christmas cards or what have you, we don’t much need the mail anymore for interpersonal social communications. There is a direct marketing function that the mail provides. People still get magazines and so forth through the mail. But there are other ways that the postal system can still live up to its ethos of universal service and being a public good or a public utility.
Alexander Morse 17:20
You mentioned earlier that this stems from a lack of a national communications policy. Can you elaborate on that?
David Hochfelder 17:26
So going back to the Constitution and the Post Office Act of 1792, that communications policy basically said, the Post Office Department will deliver political information and news at subsidized rates, because that’s important to an informed citizenry and the proper functioning of a democracy. After about the 1840s and 1850s, when you have the telegraph as the first electrical communications medium, the postal systems initiative changes. It still provides these services with respect to political news and newspapers, but it becomes a popular medium again for people to stay in touch with each other. And that was, again this notion of universal service, with the rise of the telegraph there became established a boundary between public and private enterprise. When Samuel Morse invented his telegraph in the 1840s, he says this when he shows the device to Congress, this is in the writing in a petition to Congress that the Post Office Department is the natural home for this new communication system, because that’s what the Post Office does. It transmits information, it has a monopoly, in fact, on the transmission of information. However, for variety of reasons, which I won’t belabor you with, the federal government decided not to acquire Morse’s telegraph, even though the first experimental line between Baltimore and Washington was managed by the Post Office Department. So the telegraph goes private around 1845. And that establishes a boundary between public and private enterprise. That remained the divide to this day. During the Progressive Era, around 1910, the next turn in federal communications policy arises when the federal government forces AT&T to divest itself of Western Union that they acquired a few years beforehand. The federal government from an anti-monopoly standpoint, is worried about one company, AT&T, controlling all of the electrical transmission of information, the telegraphs and telephones. So the federal government forced AT&T to disgorge Western Union in exchange for allowing AT&T to become the de facto telephone monopoly and Western Union would become the de facto telegraph monopoly. So it’s a managed monopoly, if you will. And that’s still guaranteed universal service, fare rates for that service, and certain levels of quality with regard to telephone and telegraph traffic. And of course, the postal system still did what it did, transmitted information very cheaply. It was a social medium in the form of letter writing. And then this understanding that AT&T and Western Union would be monopolies, highly regulated monopolies. That was the de facto communications policy of the federal government in the 19-teens through the 1980s. When the federal government breaks up AT&T in the 1980s, effectively what happens is deregulation of the telecommunications industry ends this national information and communications policy, the policy becomes “let the private sector figure it out.” I don’t know what would have happened had the federal government chose differently and regulators would have still kept that regulatory monopolistic regime in place. It could be the technological progress would be stifled, we might all have cell phones, but they might be the size of a brick and only make phone calls. I don’t know. Certainly, privatization has spurred technological innovation and greater customer choice. The fact that we can’t think of a good role for the postal system today is indicative of this kind of policy vacuum that arose after the consent decree in the mid-1980s that broke up AT&T.
Alexander Morse 21:12
So looking at 2020 and beyond, how could the Postal Service change and adapt under this universal service rubric?
David Hochfelder 21:20
One idea, Elizabeth Warren just talked about this, would be using post offices as banks. Reestablishing a postal banking system that will target communities that are relatively unbanked. The postal system reaches everywhere. Financial institutions do not. So that’s one idea. Another idea would be package delivery. We know that Amazon uses the postal system to deliver its packages cheaper than UPS or FedEx. But maybe another way to think about this is medications, people who have prescriptions that are elderly or disabled, and may not be able to get out of the house very easily, that’s one natural function for the postal system. And I know the VA is already doing that. So I think we need to be creative about how we can use this national network that goes door-to-door everywhere that has universal service. What kind of functions that can provide today, given that the nature of communications has changed pretty dramatically.
Alexander Morse 22:29
Thanks again to David Hochfelder, associate professor of history at the University of Albany for taking the time to talk to us about the Postal Service, its history, and importance to the American democratic experiment. Thanks for listening. I’m Alex Morse. Until next time.
Alexander Morse 22:59
Policy Outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. The Institute conducts cutting edge nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York State and the nation. Learn more at rockinst.org or by following RockefellerInst on social media. Have a question, comment, or idea? Email us at [email protected].
“Policy Outsider” from the Rockefeller Institute of Government takes you outside the halls of power to understand how decisions of law and policy shape our everyday lives.
Listen to a full episode archive on Anchor, or subscribe on your preferred podcast platform.
