The postal power of Congress: A study in constitutional expansion

by Lindsay Rogers

At the same time there was a commensurate recognition of the importance of the establishment in the attitude of Congress and the executive in dealing with it as an administrative arm of the federal government. The act of 1810 referred to the “postoffice establishment”; an incidental use of the word “department” is to be found in the laws of 1799 and 1810,[58] but the system became an executive department in 1872 when Congress, codifying the postal laws, passed an act under which the department is now organized.[59] In 1827 the postmaster general’s salary was increased to $6,000 per annum, and he was thus placed on an equality with cabinet officers; two years later Jackson made him a member of his official family.[60]

Later in this essay will be found a consideration of the use made by Congress of the postroads clause,[61] in the assumption of authority to aid in works of internal improvement, but here some mention should be made of the connection which has existed between the desire for a speedy transportation of the mail and aid granted to railroads. This aid took the form of donations, with mail service free or at reasonable rates, loans to companies, and general contracts for service, with the purpose of giving aid as well as paying compensation.[62] In debating the desirability of governmental stock subscriptions in transportation undertakings Congress often adverted to the carriage of the mails; and in 1834 it was proposed to give the Baltimore and Ohio Railroad Company $320,000 in return for which the mail was to be carried free forever.[63] Similar suggestions were made from time to time, but there was little definite action, and in 1845 the postmaster general was authorized to contract for the transportation of the mail by railroads, without inviting bids.[64]

Since 1850 the postoffice has not been used, at least avowedly, to aid railways; the period has rather been one of regulation. Disputes have arisen over the proper compensation for service rendered, and companies have refused to give facilities for transportation.[65] It was proposed, therefore, that the roads be forced to carry the mails, and in 1870 an act to this effect was applied in the District of Columbia, compensation to be determined by three commissioners. But in 1872,[66] the codification of the postal laws provided rates for service, with compulsory service by the roads which had received land grants; if the companies were not satisfied with the amounts fixed by Congress, letters were to be forwarded by horse, and the articles for which expedition was not required, were to be sent by stage.[67] At present compensation is determined by an elaborate system, under maximum rates fixed by Congress. The postmaster general may make reductions for refusal to transport, when required, upon the fastest trains,[68] and may impose fines for inefficient service and delays.[69] The necessity has not arisen, but if the railways should refuse to carry the mails, on the ground of inadequate compensation, Congress would have the right to compel transportation, upon reasonable compensation for the taking of private property for public use.[70]

This, however, is only one phase of the financial problem of the postoffice; another, very important phase involves the cost to patrons. Rates for the transmission of letters remained practically unaltered until 1845, while the charges for newspapers were slightly changed in the direction of allowing the publishers special privileges. The act of 1845[71] exercised a broad authority of classification, separating the mail in order to expedite it, and introducing the free privilege for newspapers not more than 1,900 square inches in size, distributed within 30 miles of the place of printing. The act of 1847[72] allowed free exchanges only between publishers, and following this statute many changes were made, both in the conditions of exemption from postage and the rates which were charged. The classification now obtaining was adopted in 1879,[73] and the cent a pound rate for periodical matter admitted to “second class” privileges was fixed in 1885.[74]

But while concessions were made to encourage the circulation of newspapers, Congress maintained rigid restrictions in respect to the size of the packages that could be carried in the mails. The limit was three, and later four pounds. This was originally due to the fact that large packages could not be handled with convenience by the system and were likely to injure or deface other mail matter. But when federal facilities became sufficient to take off, or at least raise, the weight limit, the express companies, which at this time were beginning to derive a large revenue from carrying parcels, were able to postpone congressional action until August 24, 1912[75] when the Parcels Post Act was passed after it had been repeatedly recommended by postmasters general and long desired by public opinion.[76] Such delay has, of course, not been without bitter criticism,[77] and in the forties the rise of the express companies, and their transportation of large packets and in some cases of matter which the postoffice undertook to carry, reduced federal revenues and seriously interfered with the efficiency and effectiveness of the government monopoly.[78] But at any time the situation could have been remedied by congressional action. On the other hand, objection has been made to the assumption by Congress under the postoffice clause, of the functions of a common carrier, on the ground that they were not comprehended by the original grant.[79]

Now, Congress clearly has the power to insure, upon the payment of extra fees, the safe transmission of letters or packets to the addressees, but the postal money order system cannot be justified upon any such theory. The act of May 17, 1864[80] authorized the postmaster general to establish, “under such rules and regulations as he may find expedient and necessary, a uniform money order system at all post-offices which he may deem suitable therefor.” The law fixed thirty dollars as the maximum amount for which an order could be issued, the purpose of the system being to afford “a cheap, immediate and safe agency for the transfer through the mails of small sums of money.”[81] In practice the payee or party for whom the money was intended, was not named in the order, which was given to the applicant upon the payment of the sum specified and the proper fee, and his filling out a printed form of application. This was forwarded to the postmaster at the office upon which the order was drawn, and the latter, therefore, had the information necessary to detect fraud if any was attempted. The issue of these postal notes was discontinued in 1894,[82] although their use has since been urged;[83] under the money order system as it now obtains, the payee is named in the instrument.[84]

In the Senate there was no debate other than on the administrative features of the law of 1864;[85] the constitutional question was not discussed. Some doubt, however, has since been expressed as to the power of Congress to establish a system of postal savings banks. These were, according to the title of the act, to hold “savings at interest with the security of the government for repayment thereof, and for other purposes.” It was provided that available funds should be used in the redemption of United States bonds, and the act recited, “that the faith of the United States is solemnly pledged to the payment of the deposits made in the postal savings depository offices, with accrued interest thereof, as herein provided.” This section would seem to imply that the receiving of deposits could be considered as borrowing money on the credit of the United States.

Objection, upon constitutional grounds, was, however, made by Mr. Moon of Tennessee, in a minority report which he presented to the House of Representatives.[86] He argued that no express authority could be found in the Constitution, and that “the depository is not a bank within the legal meaning of that word; nor do the trustees created by this act collect money (deposits) from the people for governmental purposes, but simply become federal trustees of private funds for loan or reinvestment at interest.”

It would seem, however, that the provision for redeeming United States bonds and the general tenor of the law, could, without violence, enable the system to be looked upon as established for the purpose of borrowing money on the credit of the United States, or of obviating in some degree the issuance of emergency currency in financial crises through the deposit with the government, and subsequent circulation, of large sums of money which has hitherto been hoarded. But apart from this, while extensions of the postal function to include banking facilities for the receipt of deposits and the issuance of money orders, were certainly not contemplated by the framers of the Constitution, and are not connected with the transmission of intelligence, they are, from foreign precedent, logical parts of the modern postal power. It is extremely difficult, moreover, for a citizen to show an amount of interest sufficient to bring before the courts the constitutionality of such non-essential functions of the government.[87] And especially is this the case when their exercise does not entail taxation, but actually results in increased revenues, and interferes slightly if at all, with the exercise of the same functions by private undertakings. Finally, it should be remembered that the powers granted in the postal clause “are not confined to the instrumentalities of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances.”[88] According to this view there is no constitutional doubt as to the right of the postoffice to engage in the banking activities thus far attempted.

Collectivist Activities.—The primary purpose of the postal power is, of course, the transmission of intelligence, but with vast equipment and organization once in existence, it is a comparatively simple matter for the government to increase in number and in kind, the services which the postoffice may perform for its patrons. In New Zealand postoffices, for example, a person can buy stamps, mail a letter or parcel, send a telegram, deposit money, collect a pension, report births and deaths, and insure his life.[89]