The Triumph of Profit-Seeking: The Post Office Becomes the Postal Service

Crisis struck the United States Post Office in October 1966. For nearly a week, the Chicago Post Office was crippled by volumes of mail that overwhelmed antiquated facilities and equipment and stretched the post office’s financial resources to the breaking point. To members of Congress and to the Johnson Administration, decades of neglect from patronage appointments, administrative mismanagement, and inattention to the system’s finances had come to a head. The logjam was eventually broken, but the extreme nature of the problem prompted Congress and President Lyndon B. Johnson to action. In 1967, Johnson created a Commission on Postal Reorganization, headed by AT&T Chairman Frederick R. Kappel. Based on its findings, Congress in 1970 passed a Postal Reorganization Act that converted the Post Office Department into the United States Postal Service, making it an independent agency removed from political considerations, including the removal of the Postmaster General from the President’s Cabinet.

This paper will explore this moment of transition as a key development in the way Americans saw the post office as a public institution with a role in national civic life. The U.S. Postal Service was in many ways the first creation of the deregulation and privatization crazes that overtook Congress and state legislatures from the 1970s onwards. At the same time, it had been central during the nineteenth and early twentieth centuries in literally connecting the small towns and big cities of the United States as part of its Constitutional mandate to serve the entire nation. The paper will seek to explain why the Post Office—an institution older than nearly every other federal agency—became the target of privatization, and in particular why at this moment the push to force the Post Office to turn a profit gained the upper hand.