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Friday, February 24, 2012

Has Congress Made It Impossible For The Postal Service To Survive

Is Another Of Americas Founding Institutions Fading Away Into History Foreverby Jack Swint

“It is said that as many days as there are in the whole journey, so many are the men and horses that stand along the road, each horse and man at the interval of a day’s journey; and these are stayed neither by snow nor rain nor heat nor darkness from accomplishing their appointed course with all speed”… Herotodus, referring to the courier service of the ancient Persian Empire

A Continued Collision Course For Failure

Without the federal government interceding soon, the United States Postal Service will have insufficient funds to pay its obligations. Should the feds bail out the Post Office in the same fashion as the auto, banking and other lenders were? And, do we even need them when private companies like United Parcel Service and Federal Express deliver packages and letters while showing a yearly profit?

Even Postmaster General Patrick Donahoe told a Senate committee that he would like to run the Post Office more like the way private competitors are run, but that current federal law and policy prevent him from doing so. Bottom line, Congress may have both tied its own hands from offering a bailout to the Post Office while at the same time helping the USPS go under.

For one, US Congress members mandated that the USPS must annually prepay $5.5 billion in health retirement benefits, and has otherwise imposed obligations to employees while also mandating that some aspects of the Postal service be run at a loss. Federal Statute 39 USC 101 “Postal Policy” mandates obligation of the USPS to keep open post office branches that are running at a deficit in order to ensure “effective postal services . . to residents of both urban and rural communities.”

Congress provides the Post Office with no subsidy, demanding that it fund its operations in the way that a private firm would, from fees for the services and goods it provides while also imposing mandates on the Post Office that it does not impose on competing private firms such as forcing them to take a loss deficit in order to provide service. In light of these contradictory requirements, it’s hard to believe any bailout can effectively save the USPS from impending disaster.

Bottom line, when looking back at the history of the Post Offices role in the development of America since 1775, it’s hard not to demand our government ensure that they succeed. And for those of us that have forgotten the role this American institution has played in forming this country, here is a quick lesson in history… 

The Beginning Of The United States Post Office (Parts taken from the USPS website)

Three weeks after the battles of Lexington and Concord, the Second Continental Congress met in Philadelphia in May 1775 to plan for the defense of the colonies against British aggression and “to take into consideration the state of America.” The conveyance of letters and intelligence was essential to the cause of liberty. A committee, chaired by Benjamin Franklin and including Samuel Adams, Richard Henry Lee, Philip Livingston, Thomas Lynch, and Thomas Willing, was named to consider the creation of a postal system.

The committee reported back to Congress on July 25, 1775. The Continental Congress agreed to the committee’s recommendations on the following day, creating the position of Postmaster General, and naming Franklin to it. Richard Bache, Franklin’s son-in-law, was named comptroller, and William Goddard was appointed surveyor. Under Franklin and his immediate successors, the postal system mainly carried communications between Congress and the armies. Postmasters and post riders were exempt from military duties so service would not be interrupted.

Benjamin Franklin served as Postmaster General until November 7, 1776. He was in office when the Declaration of Independence created the United States in July 1776, making Franklin the first Postmaster General of the United States. America’s present Postal Service descends from the system Franklin placed in operation.

The Postal Role in U.S. Development

The 19th century saw the growth of the United States. The Post Office Department, the communications system that helped bind the nation together, developed new services that have lasted into the 21st century and subsidized the development of every major form of transportation.

Between 1789, when the federal government began operations, and 1861, when civil war broke out, the United States grew dramatically. Its territory extended into the Midwest in 1787 through the Northwest Ordinance, reached down the Mississippi River and west to the Rocky Mountains after the Louisiana Purchase in 1803, and stretched to the Pacific coast by the 1840s. The country’s population grew from 3.9 million people in 1790 to 31.4 million in 1860.

The Post Office Department grew too. The number of Post Offices increased from 75 in 1790 to 28,498in 1860. Roads where mail traveled increased from 59,473 miles at the beginning of 1819 to 84,860 by the end of 1823. By the end of 1819, the Department served citizens in 22 states, including the newest states of Illinois and Alabama. In 1828, there were 7,530 Post Offices and 29,956 postal employees, mail contractors, and carriers, making the Department the largest employer in the executive branch.

They believed that if the system of mailing and receiving letters was more convenient, people would use it more often, and pointed to increasing postal revenues in England, which already had adopted free city delivery. By 1831, postal employees accounted for 76 percent of the civilian federal workforce. Postmasters outnumbered soldiers 8,764 to 6,332 and were the most widespread representatives of the federal government.

As the country grew, people in new states and territories petitioned Congress for even more post routes, regardless of their cost or profitability. The Post Office Department, and thus the federal government, had to decide whether to subsidize routes that promoted settlement but did not generate enough revenue to pay for themselves or to operate in the black.

The Department struggled with this issue. With congressional support and keeping fiscal responsibility firmly in mind, the Department ultimately made decisions in the 19th century that reflected public service as its highest aim. It funded post routes that supported national development and instituted services to benefit all residents of the country.

Also, before 1863, postage paid only for the delivery of mail from Post Office to Post Office. Citizens picked up their mail, although in some cities they could pay an extra two-cent fee for letter delivery or use private delivery firms. Among the postal reforms suggested by progressive Postmaster General Montgomery Blair in his 1862 report to the President was free delivery of mail by salaried letter carriers, which he felt would “greatly accelerate deliveries, and promote the public convenience.”

Congress agreed. An Act of Congress of March 3, 1863, effective July 1, 1863, provided that free city delivery be established at Post Offices where income from local postage was more than sufficient to pay all expenses of the service. For the first time, Americans had to put street addresses on their letters. 

The Post Office Grinds Mail Delivery To A Halt in 1960's

By the mid-1960s, the Post Office Department had deep problems due to years of financial neglect and fragmented control in the areas of facilities, equipment, wages and management efficiency. Highly subsidized rates bore little relation to costs.

In October 1966, the Chicago Post Office ground to a virtual halt under a mountain of mail. In less than a week, the logjam was broken, but so was confidence in the status quo. During February 1967 hearings before the House Appropriations Subcommittee on Treasury-Post Office, Postmaster General Lawrence F. O’Brien said that the Department was in a “race with catastrophe.” O’Brien described the crisis:

"At the peak of the crisis in Chicago, ten million pieces of mail were logjammed. The sorting room floors were bursting with more than 5 million letters, parcels, circulars, and magazines that could not be processed. Outbound mail sacks formed small grey mountain ranges while they waited to be shipped out."

The Chicago postmaster summed it up pretty well when he said: “We had mail coming out of our ears.”

What happened in Chicago to cause the crisis? The answer is not that something specific happened in 1966, but that enough did not happen in the previous 33 years. … we are trying to move our mail through facilities largely unchanged since the days of Jim Farley when our mail volume was 30 percent of what it is today.45  After O’Brien spoke, Oklahoma Congressman Tom Steed, chairman of the subcommittee, asked…

“Would this be a fair summary, that at the present time, as the manager of the Post Office Department, you have no control over your workload, you have no control over the rates of revenue, you have no control over the pay rates of the employees that you employ, you have very little control over the conditions of the service of these employees; you have virtually no control, by the nature of it, of your physical facilities and you have only a limited control, at best, over the transportation facilities that you are compelled to use"... all of which adds up to a staggering amount of “no control” in terms of the duties you have to perform. 

The answer was, "yes". Congress, the President, and the Post Office Department moved to improve this situation.

Going Independent

The Post Office Department was then transformed into the United States Postal Service, an independent establishment of the executive branch of the Government of the United States. The mission of the Postal Service remained the same, as stated in Title 39 of the U.S. Code:

“The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities.”

In the 36 years since the Postal Reorganization Act was signed, technological advances have both improved the operations and services offered by the Postal Service and increased competition and customer expectations. A decade of prosperity in the 1980s, with a concomitant growth in mail volume, was followed by slower economic growth in the 1990s. Bankruptcies, consolidations, and restructuring of markets reduced the flow of business mail. In 1991, overall mail volume dropped for the first time in 15 years.

The following year, volume rose only slightly, and the Postal Service narrowly avoided the first back-to-back declines in mail volume since the Great Depression. In an effort to address financial challenges and hold rates steady, in 1992 the Postal Service created a new organizational structure that replaced 5 regions and 73 field divisions with 10 areas and 85 districts.

Total mail volume began to grow again and, from 1992 through 2000, reached record levels. Then, in 2001, the Postal Service again saw a slight drop in total mail volume compared to the previous year. The 9/11 terrorist attacks on the World Trade Center buildings caused a tragic loss of human lives and rippled out to affect many areas. One was to intensify recessionary effects on the mailing and advertising industry. In 2002, total mail volume dropped to 202.8 billion pieces, down nearly five billion pieces from the previous year. 

In 2005, for the first time, the volume of Standard Mail exceeded that of First-Class Mail. However, First-Class Mail continued to generate more revenue than any other class of mail. In 2006, the Postal Service sorted and delivered more than 213 billion pieces of mail, about 40 percent of the world’s total mail volume and more than any other postal administration in the world.

In Closing,

In 2001, the USPS created a television commercial edited to Carly Simon's song "Let the River Run" The commercial, which ran after the 911 attacks and the anthrax mailings, featured no voice over, only the following text interspersed on title cards…

“We are mothers and fathers. And sons and daughters. Who every day go about our lives with duty, honor and pride. And neither snow, nor rain, nor heat, nor gloom of night, nor the winds of change, nor a nation challenged, will stay us from the swift completion of our appointed rounds… Ever”

In 2006, 224,400 letter carriers delivered mail in the nation’s cities.

End Of Story…

Jack Swint-Publisher
West Virginia News
E-Mail: WestVirginiaNews@gmail.com
Website: http://WVNewsOnline.com
Blog: http://WestVirginiaNews.blogspot.com
Twitter: @WVNewsOnline
LinkedIn: Jack Swint


Federal Statute 39 USC 101 “Postal Policy”

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