Uncle Sam, the Monopoly Man: Heroes of the Private Post
Wooldridge discusses the history of private competition with the government postal monopoly.
Uncle Sam: The Monopoly Man, “Preface” and “Chapter One: The Post Office,” New Rochelle (NY): Arlington House, 1970, 1-31. (Excerpts)
By William C. Wooldridge
Several years ago I was a student at St. Andrews University in Scotland, and I found that placing a telephone call constituted one of that environment’s greatest challenges. Private phones were too expensive to be commonplace, so a prospective telephone first had to accumulate four pennies for each call he desired to make, a project complicated by the absence of any nearby commercial establishment open beyond the hour of six or seven. Next, the attention of an operator had to be engaged, in itself a sometimes frustrating undertaking, whether because of inadequate manpower or inadequate enthusiasm on the switchboard I never knew. Finally, since the landward side of town apparently boasted no more telephones than the seaward, a long wait frequently followed even a successful connection, while whoever had answered the phone searched out the party for whom the call was intended. A few repetitions of this routine broke my telephone habit altogether, and I joined my fellow students in communicating in person or by message when it was feasible, and not communicating at all when it was not.
Nevertheless, the experience rankled, so I raised the subject one night in the cellar of a former bishop’s residence, which now accommodates the student union’s beer bar. Why were the telephones socialized? Why weren’t they a privately owned utility, since there was so little to lose in the way of service by denationalization?
The reaction was not, as might be expected, in the least defensive, but instead positively condescending. It should be self-evident to even a chauvinistic American that as important a service as the telephone system could not be entrusted to private business. It was inconceivable to operate it for any other than the public interest. Who ever had heard of a private telephone company?
That incredulity slackened only slightly after a sketchy introduction to Mother Bell (then younger and less rheumatic than today), but at least the American company’s example demonstrated that socialized telephone service was not an invariable given in the equation of the universe. My friends still considered the private telephone idea theoretically misbegotten and politically preposterous, but no longer could it remain literally inconceivable, for there we all were sitting around a table in the bishop’s basement talking about it. It had been done. It might—heaven forfend—be done again. The talk necessarily shifted from possibility to desirability, to what lawyers call the merits of the case.
Similarly, to redirect discussion surrounding a number of government monopolies is the object of this book. Like the St. Andrews students, Americans show a disposition to accept our government’s customary functions as necessarily the exclusive province of government; when city hall has always done something, it is difficult to imagine anyone else doing it. I am going to recount a number of instances in which for better or worse someone else has done “it,” with the hope that these anecdotes will awaken the reader to at least the possibility of choice…
Today, most Americans probably feel the telegraph naturally belongs within the private sphere, and few doubt the Post Office should naturally be a public monopoly. “Naturally,” however, in such a context means only that’s-the-way-it’s-been-for-as-long-as-we-can-remember, an Americanized version of Pope’s declaration that “Whatever is is right.” Yet few could think of a convincing a priori rationale for distinguishing the postal from the telegraphic mode of communication. At least one Postmaster General could not: in 1845 his Annual Report prophesied intolerable competition from the telegraph and suggested it might appropriately be committed to the government. At that early stage in its history, the telegraph might conceivably have become a government monopoly for the same reasons the Post Office already was, but the mere passage of time has obliterated any consideration of whether they were good reasons or bad reasons…
The United States Post Office was organized in 1789. It went $40.00 in the hole that year, thereby establishing one of the most venerable of American traditions. More than a decade before Parson Weems immortalized the cherry tree, the United States Post Office was losing money. For most of the years since Postmaster General Thomas Osborne reported the first deficit to President George Washington, it has continued to lose money, receiving all the while less critical attention than the cherry tree it antedates. Yet the stars in their courses do not ineluctably dictate a government postal monopoly. One of the most fascinating and least known chapters of American history is the saga of the private individuals who in the nineteenth century captured between a third and a half of the Post office’s entire business, forced the government monopoly into a fight for its very life, and drove some officials to the prediction that the United States Post Office was doomed to an early collapse. This point was reached in the 1840’s, but the story begins one hundred thirty years before, when a governmental postal monopoly was first established on the North American continent.
In 1692 the King of England granted Thomas Neale a patent (license) to provide postal service in the American colonies, but in 1710 the British government itself assumed the sole right to conduct the business. Rates were increased all along the line to about twice the previous level. The colonists shortly stopped using the royal service, and the King lost money on his putative monopoly for thirty-five years.
Correspondence did not simply cease when the rates went up. Rather it shifted to an extensive private network of postal riders, who carried the mails in cheerful defiance of the law. Not the least energetic of the extragovernmental posts were conducted by men ostensibly in the King’s employ, men not above accepting a private commission on the side, who stuffed His Majesty’s mailbags with “bundles of shoes, stockings, canisters, money, or anything they get to carry, which tears the Portmanteaus and rubs the [legal] letters to pieces.” So reported Hugh Finley, a Canadian postal inspector sent out by the crown to investigate the anemia afflicting the government service. At Newport, Rhode Island, he found “two post offices, the king’s and Peter Mumford’s,” and everywhere the independent carriers flourished, beyond the power of the King to interdict. Finley reported an indignant public would tar and feather anyone who interfered with its private postal arrangements, and no jury would convict a rider of violating the law, since, as a later historian summarized, the official postal service was a “byword and a hissing” to all concerned.
This silent standoff between King and colonies sixty years before the Revolution foreshadows all the major features of the developments that almost put the United States Post Office out of business in the 1840’s. Private carriers offered better service at a lower price than the government. Public sympathy made it impossible for the government to move against them successfully.
Our original postal laws borrowed heavily from the British laws the colonists had so cavalierly ignored for many years, but the service must have markedly improved, for there is very little evidence of any serious private competition with the government until the 1830’s. Of course, any such competition would have been illegal, but that obstacle had not inhibited the eighteenth-century carriers.
By 1840, however, something had happened. The country was ebulliently heaving in the early stages of industrialization. Speculation was rife, commerce boomed and plummeted, and the earliest railroads tentatively webbed out from the major cities, a curiosity rather than a threat to the thriving steamboats. Business attained a systematization and volume that demanded something more than casual intercity communication, and the railroads and steamboats made something more possible.
This if ever was the era of real-life Horatio Algers, and one of them realized that the Post Office was not keeping up with transportation progress in general and the demand for efficient communications in particular. His name was William F. Harnden. In 1839 he invested his savings in a half-bushel carpet bag and “without capital, health, or influence” laid the small beginnings of the first American express company.
A set of accidents had transformed Harnden from a lowly clerk to a man who in a few years would be the incubus of the United States Post Office. Frail son of a Boston housepainter, he did not have the physique to follow his father’s outdoor trade, and instead found work as a clerk for the Boston and Worcester railroad. But that calling, too, overtaxed his always precarious health, for sixteen hours in a ticket office was as debilitating as twelve hours on a painter’s scaffold was exhausting. Casting about for some healthier vocation, Harnden conceived the idea of chaperoning the messages and remittances of Boston businessmen to New York and vice versa.
Harnden hardly began his route in the thought of breaking the Post Office monopoly; instead, he contemplated something akin to a present-day express or armored-car service for packages. In fact, he was well aware of the postal monopoly laws and did not choose to flout them. With his characteristically meticulous attention to detail, he instructed his employees to “receive nothing mailable. You will have no small number of Post Office spies at your heels. They will watch you very close. See that they have trouble for their pains.” But, as a postal inspector reported it, the letter-carrying business practically forced itself upon Harnden. Merchants importuned him to give their letters the benefit of his expedition. The devil could be accorded his due if regular United States postage were collected on the letters in addition to Harnden’s fee, but the Department eventually hit upon a more reasonable expedient: making the diminutive ex-ticket clerk government contractor for transportation of letters between Boston and New York. In this capacity Harnden is said to have carried twenty thousand dollars worth of legal mail in two and one-half years.
That statistic, one of the few available, gives some idea of the volume of Harnden’s business in the early years, substantial notwithstanding discouragingly thin early returns, sometimes as low as a few dollars a day. Like many of his successors, Harnden had a keen sense of advertising, and the story is told of his overhearing a colleague place an order for a thousand white cards “a little smaller than his hand.” “His hand!” Harnden interjected. “Have them a foot square, five thousand of them and the color red.” Such tactics evidently proved eminently successful; the distinction between mail carried on contract for the Post Office and that transported entirely on private account did not seem to hold up well, and within a year, despite his disclaimers, Harnden’s express had a near monopoly on commercial mail moving along its route.
A merchant testified that he did not send one letter in fifty by the regular Post Office. The New York postmaster lamented that he had lost a third of his revenues to the private express, and the estimated loss in Massachusetts was forty percent. Harnden had recruited his brother Adolphus, another minuscule individual—together they weighed under two hundred pounds—to aid him as the business expanded, and the latter’s death in the burning of the steamer Lexington in 1840 confirmed what many had believed. When Adolphus’ body washed ashore, one hundred forty-eight letters were found with it, all of which he had been carrying out of the mails. The express had become a private post office.
Harnden, too, died prematurely a few years later at the age of thirty-three, his frail constitution no more impervious to the hardships of big business than to those of housepainting. His business was only five years old, and had he survived and concentrated on its domestic side (his last years had been devoted largely to unprofitable international operations), Harnden would assuredly have grown rich competing with the Post Office, for his career amply demonstrated that the customers were there, eager for the opportunity to avoid the government’s service, and the Boston-New York route itself was an extremely lucrative one…
Anyone who could afford the price of a railroad ticket could become an illegal postman. For a very few years the East Coast enjoyed something that has never since recurred: a private, competitive postal service with constantly decreasing rates and constantly increasing efficiency, as well as all the normal accoutrements of a mail system…In short, the carriers had developed the organizational details of a major industry, and together constituted a complete alternative postal system, to which more and more people habitually entrusted their letters, leaving the official service to wither away like the ideal Marxian state.
The business attracted some odd sorts. Alvin F. Harlow…describes a man named Ross who ran the Worcester-Providence express. He was four feet ten inches tall, sported a black swallowtail coat, crimson velvet collar, plaid trousers, and “sharp toed, upcurving boots.” None of the Post Office blue for him; Ross meant his customers’ mail to be carried in style!
The prime example, however, of an eccentric converted into a useful human being by the lure of the new industry must be Lysander Spooner. He had been a deistical bachelor who whiled away the hours in the Boston Athenaeum before the success of his American Letter Mail Company earned the fulminations of the Postmaster General. Mr. Wickliffe denounced the “low conniving” that could make enough money during the course of one trial to pay every penalty for ignoring the law. Spooner replied by returning to the shadows of the Athenaeum and shortly emerging with The Unconstitutionality of the Laws of Congress Prohibiting Private Mails, a fire-breathing pamphlet…One can imagine Spooner enjoyed composing his little treatise as much as he did carrying letters…
A postal monopoly, he argued, is derived from the practice of arbitrary governments…Therefore he dismissed it as inconceivable on American soil.
Spooner analogized the postal power to the coining power; just as any man can stamp and sell his own coins, any man can carry letters. He cited the private minting activities of Christopher Bechtler…in North Carolina to exemplify the analogy. Today, at least, that particular line of argument will not persuade many people, since a man can be put in jail as quickly for selling his own coins as for selling his own stamps. Yet Lysander Spooner also presented arguments that still merit serious consideration. The Articles of Confederation had given Congress “the sole power” to establish post offices and post roads, while the Constitution conspicuously changed this to “the power,” implying by the alteration that it was not an exclusive power. If the question remained open today, it would at least be debatable; but even when Spooner wrote, the practice of many years argued against him.
Switching to arguments of expedience rather than pure legality, Spooner reasoned that if the justification for suppressing private carriers was to protect the revenues of the Post Office, it would be better simply to appropriate to it the deficiency entailed by permitting private competition and allow the people to continue to enjoy the lower rates and faster service of the carriers. And in reply to an old, familiar, and still current argument for the postal monopoly, he stated outright that it was “palpably unjust and tyrannical” for the populous sections of the country to have to support government mail delivery on the frontiers through the payment of high rates on the seaboard. But the real reason the Post Office loathed competition and always fell before it, he concluded, was that “government functionaries, secure in the enjoyment of warm nests, large salaries, official honors and power, and presidential smiles, feel few quickening impulses to labor,” a situation that inevitably renders the government postal service “cumbrous, clumsy, expensive, and dilatory…” There is a timelessness to bureaucracy that makes the study of its past as instructive as the analysis of its present…
Lysander Spooner’s constitutional arguments probably attracted few readers and made fewer converts, but the better service he and the other carriers rendered provided all the persuasion that was necessary. The local presses hailed them because the expresses brought them news from other cities well ahead of the Post Office. Businessmen desperately needed the faster and safer communications provided by the carriers and backed them unswervingly, the merchants of Rochester going so far as to offer Pomeroy’s Express, with which Henry Wells had become associated, a subvention of six thousand dollars to begin an illegal daily express. And the public at large accepted the carriers as an indispensable contribution to the speed and economy of their everyday correspondence, seeing no reason to jail a man simply because he ran circles around the Post Office.
The private carriers became, in fact, minor folk heroes, Robin Hoods whose speed and stealth constantly eluded the bungling Postmaster of Nottingham, poachers in a preserve which royal fiat had unpopularly declared its sole domain…Shades of Paul Revere, Jack Jouett, and Odysseus! Small wonder the people overwhelmingly supported those who scorned the monopoly.