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article imageLysander Spooner and the United States Postal Monopoly

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By Michael Billy     Apr 18, 2009 in Politics
On May 11 the US Post Office is raising the price of stamps by 2¢. Even in the face of increasing prices, many people will argue that the Post Office is necessary because a private organization could never perform these functions for a similar cost.
The story of Lysander Spooner, however, might rekindle the debate over the necessity of a monopoly Post Office.
WHO WAS LYSANDER SPOONER?
Lysander Spooner is an obscure figure in American history. He is so forgotten, in fact, that his voluminous Collected Works has remained out of print for many years. The six-volume collection, which contains 36 works, can be found used on sites like Amazon.com for upwards of $400. This current obscurity, however, does not mean that he was an unimportant figure.
Spooner achieved many great things in his lifetime including his active campaigning against slavery and the publication of his most famous work titled The Unconstitutionality of Slavery (1846), which influenced the likes of Fredrick Douglas. One of his lesser-known ventures, however, was his creation of the American Letter Mail Company, which was a private mail delivery service that was meant to compete directly with the United States Postal Service.
Spooner was born on January 19th 1808 at a farm in Athol, Massachusetts. He studied law under John Davis, who would later serve in the House of Representatives and Senate and as Governor of Massachusetts, and Charles Allen, who would serve in the House of Representatives. Spooner, however, never attended college. Under state law, non-graduates were required to study under attorneys for five years, while graduates were only required to do so for three years. Spooner, however, saw this law as unfair and he therefore flaunted it, setting up his own practice in Worcester, Massachusetts after only three years. He also viewed the regulations as unfair discrimination against poor individuals who might not be able to afford attend school.
Spooner’s legal career turned out to be a disappointment, as his radical writings seemed to have driven customers away. He also attempted to make a living as a real estate speculator, but that venture failed as well. Spooner decided to move back to his father’s farm in 1840. His time spent as lawyer, nevertheless, was not a total waste, as it would eventually aid him in his future court battles over his private mail delivery company.
Spooner’s most well known book, The Unconstitutionality of Slavery, was published in 1846. The book was very influential at the time, inspiring such prominent individuals as Fredrick Douglas. Douglas was originally a disunionist abolitionist who believed that the United States Constitution legally recognized and enforced the oppression of slaves. He would later come to accept the pro-Constitution argument, citing Spooner’s arguments as his rationale.
From the time the book was published to 1861 Spooner actively campaigned against slavery. He provided his legal services to escaped slaves, often free of charge, while also publishing pamphlets on the concept of Jury Nullification. This theory provides that a jury may find a defendant innocent despite their violation of the letter of the law, if they believe that said law is inherently unjust. Spooner presumably believed that informing the public about this idea would allow them to find escaped slaves innocent even though they violated the law.
Previous to the publication of The Unconstitutionality of Slavery Spooner founded the American Letter Mail Company as a direct opposition to the United States Post Office. Today, many Americans believe that it is a necessity to have a government sanctioned monopoly organization, such as the Post Office, deliver the mail. They will argue that a private company could never fulfill such a daunting task as delivering the mail across the entire country without charging outlandish prices. Not only does Lysander Spooner’s saga prove this mentality wrong, it also shows that the government is just as likely over charge for the delivery of mail as a private corporation.
POSTAL RATES IN THE 1840s
By 1843 the cost of postage in the United States was spiraling upward. At the time, the average cost to send a one-page letter was 14.5 cents. It cost nearly 19 cents to deliver a letter from Boston to New York, and 25 cents from Boston to Washington DC. For a comparison, it actually cost less to send a 200-pound barrel from Troy to New York City then it did to send a quarter-ounce letter over the same distance. It has even been claimed that the cost of sending mail was actually 140 times greater than the freight rates in New England per pound-mile. The general consensus among the American population was that these rates were oppressive, especially since the British had recently reformed their postal system, changing the cost to a flat rate of 2 cents per letter.
The rates were so high for a couple of reasons. First, came the obligation of the Post Office to run specific routes on a regular basis. Mail was often delivered in urban areas once or twice per day, but the story was much different, and less cost-effective, in rural areas. Often times a postal worker was dispatched to one of these areas carrying only a handful of letter, which was far from an optimal load. When it was determined that the post office was making too little revenue from one of these routes it was supposed to be shut down, but that was rarely the case. They were often kept open for political reasons, such as a fear of political blowback from angry voters in the area.
The second, and more insidious reason for the high costs was corruption. Thomas Jefferson was weary of a government controlled Post Office saying; “I view it as a source of boundless patronage to the executive, jobbing to members of Congress and their friends and a bottomless abyss of public money. You will begin by only appropriating the surplus of the post-office revenues; but other revenues will soon be called in to their aid and it will be a source of eternal scramble among the members, who can get the most money wasted in their states; and they will always get most who are meanest.” Jefferson was correct, and many of his fears came to fruition by 1843.
In the 1840s, over 80 percent of those who worked for the government and were not members of the military were postmasters and postal clerks. The fact that these positions were often changed when a new politician was elected points to conclusion that they were often overpaid. If you knew a politician in your area then you could likely secure a well-paid postmaster position that likely required very little work.
Businesses -- specifically coach contractors, railroads, and steamboats -- also benefited greatly from the Post Office’s monopoly. Most of the cost of postage, in fact, went to the rent that was paid for these services. The government, for example, subsidized the building of railroads. This led to a lowered transportation cost in the private sector, but it ironically resulted in higher postal rates. This was because the postage served as a tax to pay for the subsidization of the railways.
The appropriation of coach contracts was also lined with corruption. The coach contractors lobby was very influential in Washington politics and the routes were often given to those companies who had the strongest political connections. There was a façade of competition and auctions for the routes, but strong allegations were made that the process was rigged. The same kind of situation often occurred for steamboat route.
INFORMAL COMPETITION TO THE US POST OFFICE
The corruption and high costs were beginning to anger the general population. This was made evident as individuals began to respond to the high costs through political protests by groups of citizens and even state legislatures. The result was the formation of new and creative ways to transport letters. Even before Spooner’s challenge Americans were finding ways to deliver mail without the use of the Post Office. One specific trick was to send a newspaper, which was cheaper than a letter, with a message indicated in underlined letters of words.
With the increased popularity of the steamboat and railway came a new way to get mail delivered. Often times, individuals with letters would go to the railway station or boat dock and find a respectable looking gentleman going to the same place they wished to send their letter. They would ask him to carry the letter and, if he agreed, he would either drop it off at the post office where it could be picked up for a penny, or drop it at some other previously agreed upon location. This way there was no extra tax to pay and the sender was responsible for sorting the mail.
Hotels and taverns also picked up on this idea as a convenience to their customers. In these case the owners would set out boxes labeled with the names of various cities. If a customer had a letter that needed to be delivered they could drop it in the corresponding box. When a traveler came along that was heading to one of those cities they could take the letters with them and drop them at a post office or other hotel or tavern.
An informal mail delivery system also developed between businessmen in large cities. Owners who were sending an employee to another city would notify others who would bring them their mail. Larger businesses could send mail daily between Boston and New York. Some merchants claimed that nearly four-fifths of the mail they received came from this method.
Government postal rates for mail sent to the Midwest were much higher than the average, costing 25 cents per letter. Since those living in these areas could rarely afford the outlandish Post Office rates, organizations began to pop up that would make the deliveries at a much lower cost to the consumer. These companies, often dubbed “expresses”, were also much quicker than the US Postal Service. One of the most famous of these companies was the Pony Express, which is now often romanticized in the lore of the American West.
The set-up of the Pony Express, which delivered mail to the western frontier, was an ingenious innovation on the current mail carrying system. Stables were set up at intervals of roughly 10 miles apart. This was about the distance one horse could travel at full gallop. At each stable the rider switched horses, and at roughly every ten stables the rider was switched. Each rider was paid $100 per month for his services. This company was much better than what the government had to offer.
Organizations like these were allowed as long as they did not compete directly with Post Office routes. Often times, people in scarcely populated rural areas were forced to hire private contractors, else they would not receive mail at all. So, if private organizations were allowed, then why is Spooner’s Company so important?
THE AMERICAN LETTER MAIL COMPANY
In 1844 Lysander Spooner created the American Letter Mail Company. He set up the service to run between New York, Boston, Philadelphia, and Baltimore, in direct competition with Post Office routes. His main goal, however, was not to make money, though he hoped that he would, but to challenge the constitutionality of the United States Post Office’s government enforced monopoly on the delivery of mail.
Spooner ran a front page ad in the New York Daily Tribune announcing the creation of the company, while stating that his rates would be 6.25 cents per half-ounce letter, or 20 stamps for a dollar. He also stated that delivery would be daily, or twice daily between New York and Philadelphia. The most audacious part of the ad, however, was his direct challenge to the Constitutionality of the Post Office: "The Company design also (if sustained by the public) is to thoroughly agitate the questions, and test the Constitutional right of the competition in the business of carrying letters - the ground on which they assert this right are published and for sale at the post offices in pamphlet form." Spooner wanted competition to be legal.
He even went as far as to send a personal letter to the Postmaster General informing him of his intent to form a letter delivery company. In the letter Spooner said that he proposed, “soon to establish a letter mail [company] from Boston to Baltimore. I shall myself remain in this city, where I shall be ready at any time to answer to any suit…” Accompanying the letter was a copy of his pamphlet, The Unconstitutionality of the Laws of Congress Prohibiting Private Mails.
The Constitution, he argued, granted the United States Government the ability to create postal roads and post offices, but he doubted that it was intended for them to have a monopoly on mail delivery. Spooner was so convinced that preventing competition was unconstitutional that he agreed to cooperate with the government if the issue were brought in front of the Supreme Court. He also requested that his company remain unmolested by the government until the issue of constitutionality was dealt with.
Indeed, it was only a few short months before the Post Office felt the pain of competition. As they refused to lower their rates they began to lose significant profits to the American Letter Mail Company and other private mail companies that were less likely to flaunt their activities in front of the Post Office. The government, of course, was not going to back down without a fight.
THE GOVERNMENT FIGHTS BACK
While the general public approved of Spooner’s venture, the government was not so easily swayed. How dare he try to compete with their elaborate money making scheme? Lawsuits against Spooner and many of his employees began to pile up and it was not long before the government hit the company with their first blow. One of Spooner’s carriers was found guilty and fined for transporting mail on a railway that was part of a postal road of the United States.
The government also took extra legal means to hurt the American Letter Mail Company. They did this by threatening railroad companies and other transport businesses with their lucrative government contracts if they dare allow mail from the American Letter Mail Company on their vehicles. It would become increasingly difficult for Spooner to find ways to deliver his mails.
Spooner, however, was not going to give up easily either. He continued to press on with the company, even in the face of increased pressure from the government. Spooner’s business, nonetheless, was becoming harder for him to maintain. Sure, he had cheap rates, but his delivery was becoming inconsistent due to the confiscation of his letters by the United States government.
SPOONER'S SUCCESSES AND FAILURES
Spooner’s quixotic quest faced a constant barrage of fierce opposition from the government. He knew he could win, if only the court system would hear his arguments. They, however, were not interested. The postal monopoly was established through precedent, and those benefiting from that precedent had no desire to question it. In one specific Circuit Court case, nonetheless, Supreme Court Justice Story ruled that the question remained open “whether the United States had an exclusive right to establish post offices and post routes.”
The Post Office’s revenues continued to decline and the Postmaster General was forced to beg Congress to take action, and they listened to reason. In an act passed on March 3, 1845 Congress reduced postal rates to 5 cents to send a letter less than 300 miles. This was a small victory for Spooner, but the decreased rate ultimately led to increased use of the US Postal Service. This, combined with increased pressure from the government, eventually brought an end to the American Letter Mail Company.
Spooner stayed out of the postal business for nearly three years before joining a campaign in 1848 to further reduce the postal rates. This venture also led to success and by 1851 Congress lowered rates to 3 cents per letter giving Spooner his title of “Father of the Three Cent Stamp.” This victory, however, also came with a devastating loss. The act contained a provision that legally protected the government’s monopoly on the distribution of mail. This new law made Spooner’s original arguments on the illegality of the postal system basically moot. It was a huge moral blow.
Spooner’s fight was ultimately a failure to himself, as one of his main goals was to, “test the Constitutional right of the competition in the business of carrying letters.” The outcome of this test, however, was not to his liking as the government secured the US Post Office’s monopoly on the business of carrying through a legal act from Congress. He had lost his personal fight, but not before playing a major role in a victory for the average citizen. He had helped to lower the Post Office’s oppressively high rates.
Postal rates, however, increased in the following years and have continued to climb ever since. Spooner passed away on May 14th, 1887 at the age of 79. Benjamin Tucker arranged his funeral and wrote his obituary titled “Our Nestor Taken From Us”, which appeared in the magazine Liberty on May 28th. Since Spooner’s odyssey no one else has tried to take on the behemoth that is the United States Postal Service.
In the face of increased prices maybe the United States needs another Lysander Spooner; someone who is willing to take on the bureaucratic behemoth that is the US Postal Service. That law -- the one that gives the USPS a monopoly in First Class mail -- however, is a major roadblock preventing any competition. With FedEx and UPS prospering as well as they do, it would be interesting to see what such a company could do with First Class Mail.
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