Hamilton and the US Postal Service

On February 6, 2013, the US Post Office announced that it plans to halt its Saturday mail delivery service in a move to cut costs.   In the face of an $11.5 billion loss in 2012, many sources have been pointing to this development as a the beginning of the end of the USPS.  I think they’re being a little hasty to dismiss an enduring institution, but time will tell.  [Disclaimer: I LOVE the post office.  Stamps, getting mail, postcards, checking the mailbox- I love it all!  Also, Miracle on 34th Street.]

The history of the USPS is tied closely to the history of America.  It was first signed into law by the Second Continental Congress on July 26, 1775, almost a year before the Declaration of Independence!  Benjamin Franklin was selected as the first Postmaster General.  (This was really a continuation of work that Franklin had done under the British regime in Philadelphia.  He had begun the modernization of the system in some areas, but was removed from the position by the British in 1774 because of his revolutionary activities).  When he became President, Washington appointed New Yorker Samuel Osgood (who would go on to form the bank that evolved into Citibank) to be the first Postmaster General under the Constitution.  The Founders recognized the post office as an important tool of innovation, and one that would help modernize the economy and unite the country.

The post office was also part of a political struggle between Hamilton and Jefferson.  Hamilton wanted the agency to be placed within the Treasury Department, while Jefferson wanted it to be placed within the State Department.  The deadlock led to the post office being separated from other executive agencies, and considered a hybrid until 1836.

Hamilton recognized the potential of the post office to bring in revenue for the country.  In his January 16, 1795 Report on the Public Credit, Hamilton proposed that the funds from the post office should be placed into a “sinking fund.”  Hamilton stated:

“It will hardly have been unnoticed that the Secretary has been, thus far, silent on the subject of the Post Office.  The reason is, that he has had in view the application of the revenue, arising from that source, to the purpose of a sinking fund….[Hamilton described the revenue that the Postmaster General estimated could be derived from the Post Office.]…Under this impression, the Secretary proposes that the net product of the Post Office…be applied…to the discharge of the existing public debt, either by purchases of stock in the market, or by payments on account of the principal, as shall appear to them most advisable, in conformity to public engagements; to continue so vested, until the whole of the debt shall be discharged.”

Hamilton was also involved in helping the postal service with legal challenges it faced as it tried to modernize.  In August of 1786,  Postmaster General Ebenezer Hazard asked Hamilton to provide an opinion on how the Post Office should proceed with enforcing contracts with private stagecoaches without the Postal Service losing money or being forced to accept inadequate service.  These companies had contracted with the government to provide stagecoach service, but had been flaunting the legal requirements of the Post Office Ordinance of 1782.  Hamilton brilliantly answered Hazard’s questions and provided a legal opinion for the Post Office to use to inform the private stagecoach companies of the requirements they needed to meet to uphold the contract.

To wrap up- the Post Office is awesome.  It’s one of the oldest institutions in America, and it played an important role in our economic history and in our national infrastructure.  And you may only be able to send letters on Saturday for a limited time- so send those Saturday packages, cards, and letters while you still can!

A smiling mailman holds a Flat Rate Box.

[Image from https://cns.usps.com/go]

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