In 1844, Lysander Spooner launched the American Letter Mail Company, a private alternative to the government-owned U.S. Postal Service. His young firm took the country by storm, leading to dramatic improvements in delivery time and vast decreases in postage costs. But the U.S. Postal Service didn’t appreciate the competition and fought to regain its monopoly. What was the U.S. Postal War?

The U.S. Post Office Monopoly?

Until 1844, the U.S. Post Office held a monopoly on mail delivery. Service was slow and rates were high.

“It cost 18 3/4 cents to send a letter from Boston to New York and 25 cents to send one all the way to Washington DC. A letter sent from Boston to Albany, NY written on a 1/4-ounce sheet of paper and carried by the Western Railroad, cost 2/3 as much as the freight charge for carrying a barrel of flour the same distance.” ~ Lucille J. Goodyear, Spooner vs. U.S. Postal System

Lysander Spooner Launches the U.S. Postal War

Lysander Spooner knew an opportunity when he saw one. Spooner was an individualist anarchist hailing from Massachusetts. Although partly motivated by profit, his true purpose was to “challenge the constitutionality of the postal monopoly.”

While the Articles of Confederation had empowered Congress with “the sole and exclusive right and power” of “establishing or regulating post offices,” the Constitution was far more vague on the matter. Article I, Section 8, Clause 7 of the U.S. Constitution empowered Congress “To establish Post Offices and postal roads.” But the document was silent on the matter of private competition. With this loophole in mind, Spooner organized his own company, which he called The American Letter Mail Company. And he wasted no time in advertising his new venture, which attacked the idea of a governmental postal monopoly head-on. In effect, he launched the U.S. Postal War.

“The American Letter Mail Company has established post offices in New York, Philadelphia, Baltimore and Boston, and will deliver letter daily from each city to the others – twice a day between New York and Philadelphia. Postage 6 1/4 cents per each half-ounce, payable in advance always. Stamps 20 for a dollar. Their purpose is to carry letters by the most rapid conveyances, and at the cheapest rates and to extend their operations (as fast as patronage will justify) over the principal routes of the country, so as to give the public the most extensive facilities for correspondence that can be afforded at a uniform rate.

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.” ~ New York Daily Tribune Advertisement

Spooner’s company and the U.S. Postal War caused considerable angst among politicians. The U.S. Post Office earned gigantic profits, but often reported losses. That was because the profits were distributed by politicians via patronage to politically connected groups, namely: “(1) coach contractors, (2) rail and steamboat companies, (3) postmasters, (4) publishers of printed matter, (5) officials with the franking privilege, and (6) rural voters.”

The U.S. government fought back in the U.S. Postal War, initiating lawsuits against Spooner. They threatened to jail him and pressured railroad operators to stop delivering his mail. But this proved unsuccessful and by 1845, the Post Office found itself rapidly losing business. The Postmaster General appealed to Congress and received permission to lower postage rates. Undeterred, Spooner lowered his own rates even further, causing even greater distress for politicians.

Alas, Spooner’s efforts and those of others like him (most notably James W. Hale), were in vain. In 1851, Congress lowered the postal rate to three cents per half-ounce letter and enacted laws giving the U.S. Post Office an effective monopoly over mail distribution. The U.S. Postal War was over. Spooner’s company was forced out of business and by 1860, private mail delivery was virtually eliminated in the United States.

Guerrilla Explorer’s Analysis

On December 5, 2011, the U.S. Postal Service announced “major budget and service cuts.” First-Class mail will take a day or two longer to deliver and stamps will rise one cent to $0.45. Despite those changes, the U.S. Post Office is expected to rack up a loss of $14.1 billion next year.

While the rise of email is certainly a factor here, a bigger problem is the postal monopoly itself. Government-enforced monopolies have little reason to cut costs, lower prices, or improve service. Perhaps it’s time we take a page from history and allow true private competition in the mail industry. Between 1845 and 1851, the U.S. Postal War launched by fromSpooner, Hale, and others forced the U.S. Postal Service to cut postage rates by 79%. At the same time, the U.S. Postal War led to service innovations, such as stamp prepayment and small-town intracity delivery. Is there another Lysander Spooner out there, waiting to reignite the U.S. Postal War? We can only hope.