Who Picked Up The Check?

Adventures in Data Exploration

In November 2012 the United States Postal Service reported a staggering deficit of $15.9 billion. For the historian, this begs the question: was it always this bad? Others have penned far more nuanced answers to this question, but my starting point is a lot less sophisticated: a table of yearly expenses and income.

US Postal Department Surplus (Gray) or Deficit (Red) by Year

So, was the postal department always in such terrible fiscal shape? No, not at first. But from the 1840s onward, putting aside the 1990s and early 2000s, deficits were the norm. The next question: What was the geography of deficits? Which states paid more than others? Essentially, who picked up the check?

Every year the Postmaster General issued a report containing a table of receipts and revenues broken down by state. Let’s take a look at 1871:

1871 Annual Report of the Postmaster General – Receipts and Expenditures

Because it’s only one table, I manually transcribed the columns into a spreadsheet. At this point, I could turn to ArcGIS to start analyzing the data, maybe merging the table with a shapefile of state boundaries provided by NHGIS. But ArcGIS is a relatively high-powered tool better geared for sophisticated geospatial analysis. What I’m doing doesn’t require all that much horsepower. And, in fact, quantitative spatial relationships (ex. measurements of distance or area) aren’t all that important for answering the questions I’ve posed. There are a number of different software packages for exploring data, but Tableau provides a quick-and-dirty, drag-and-drop interface. In keeping with the nature of data exploration, I’ve purposefully left the following visualizations rough around the edges. Below is a bar graph, for instance, showing the surplus or deficit of each state, grouped into rough geographic regions:

Postal Surplus or Deficit by State – 1871

Or, in map form:

Postal Surplus (Black) or Deficit (Red) by State – 1871

Between the map and the bar graph, it’s immediately apparent that:
a) Most states ran a deficit in 1871
b) The Northeast was the only region that emerged with a surplus

So who picked up the check? States with large urban, literate populations: New York, Pennsylvania, Massachusetts, Illinois. Who skipped out on the bill? The South and the West. But these are absolute figures. Maybe Texas and California simply spent more money than Arizona and Idaho because they had more people. So let’s normalize our data by analyzing it on a per-capita basis, using census data from 1870.

Postal Surplus or Deficit per Person by State – 1871

The South and the West may have both skipped out on the bill, but it was the West that ordered prime rib and lobster before it left the table. Relative to the number of its inhabitants, western states bled the system dry. A new question emerges: how? What was causing this extreme imbalance of receipts and expenditures in the West? Were westerners simply not paying into the system?

Postal Receipts and Expenditures per Person by Region – 1871

Actually, no. The story was a bit more complicated. On a per-capita basis, westerners were paying slightly more money into the system than any other region. The problem was that providing service to each of those westerners cost substantially more than in any other region: $38 per person, or roughly 4-5 times the cost of service in the east. For all of its lore of rugged individualism and a mistrust of big government, the West received the most bloated government “hand-out” of any region in the country. This point has been driven home by a generation of “New Western” historians who demonstrated the region’s dependence on the federal government, ranging from massive railroad subsidies to the U.S. Army’s forcible removal of Indians and the opening of their lands to western settlers. Add the postal service to that long list of federal largesse in the West.

But what made mail service in the West so expensive? The original 1871 table further breaks down expenses by category (postmaster salaries, equipment, buildings, etc.). Some more mucking around in the data reveals a particular kind of expense that dominated the western mail system: transportation.

Transportation Expenses per Person by State (State surplus in black, deficit in red) – 1871

High transport costs were partially a function of population density. Many western states like Idaho or Montana consisted of small, isolated communities connected by long mail routes. But there’s more to the story. Beginning in the 1870s, a series of scandals wracked the postal department over its “star” routes (designated as any non-steamboat, non-railroad mail route). A handful of “star” route carriers routinely inflated their contracts and defrauded the government of millions of dollars. These scandals culminated in the criminal trial of high-level postal officials, contractors, and a former United States Senator. In 1881, the New York Times printed a list of the ninety-three routes under investigation for fraud. Every single one of these routes lay west of the Mississippi.

Annual Cost of “Star” Routes Under Investigation for Fraud – 1881 (Locations of Route Start/End Termini)

The rest of the country wasn’t just subsidizing the West. It was subsidizing a regional communications system steeped in fraud and corruption. The original question – “Who picked up the check?” – leads to a final cliffhanger: why did all of these frauds occur in the West?

4 thoughts on “Who Picked Up The Check?

  1. Pingback: bit.ly
  2. This is a great stuff and some nice analysis.

    One thing that is striking to me is the lack of oversight at a time of great postal deficits. Additionally, Congressional committees are reluctant to let the USPOD raise second-class rates and others to compensate for higher transportation costs (and major frauds). Also most postmasters–local and national–are patronage positions. So, it is reasonable to assume that some of them are giving away big contracts to their friends. Patricia Limerick might not be surprised, don’t you think?

    I’m sure you’ve seen this, but the Department also lists all of the fraud investigations in the reports, as well as burglaries and stage coach robberies by state.

    On transportation costs, this is also why the “postal revolution” of the 1840s is so expensive for governments as it makes communications so inexpensive for residents. Calculating postage based on weight rather than distance traveled prioritizes connectivity and unity across huge territories over a balanced budget. There is almost no way that the post office can really make up the difference, even as it experiments with many different programs in the late 19th and early 20th C. And then free city delivery, RFD, and parcel post are implemented in the early 1900s, more subsidies help residents communicate and purchase consumer goods.

    As another historian interested in postal matters, I will be interested in hearing more!

  3. Thank you so much for the comment!

    I totally agree – you get the sense that Congress puts the Post Office Department in an impossible position, insisting on more and cheaper service on the one hand and criticizing them for deficits on the other. Then you have some advocating for civil service reform, but neither political party ultimately wants to give up the patronage side of the post (making administration even less effective).

    The issue of second-class mail is also fascinating. I’ve come across so many mail contractors complaining about Congress continually reducing postage rates on different classes of mail. My favorite quote from one stage driver: “”I wish the Congressman who introduced the bill to have four pound packages of beans, corn, parsnip seeds &c., &c., sent through the mails was a horse, and I had him in my team for one trip on my drive – wouldn’t I make him sweat.”

    I also still haven’t figured out the issue of postmasters. It’s certainly a political patronage position, but in these rural western areas I keep seeing a more muddled picture. It often seems like the local postmaster position is more dependent on who’s store is still in business, rather than political affiliation. Put in conjunction with the fact that so many of these places drew only the minimal annual salary of $12, and the patronage angle seems to have a little less weight. This is all completely impressionistic, so I’d love to figure out a way to explore this more systematically.


  4. Awesome quote!

    You make a good point about the “politics” of small towns. The pay is low but the influence is potentially high, which could also leave them more open to getting kickbacks from contracts. It also means that actions, decisions, et al, will be localized.

    I’m really not sure of a good systematic way other than taking a sampling of rural postmasters, which also may require some trial and error given the availability of records. There is a postmasters’ association and they produce a journal. Almost positive it is not digitized, but could help even browsing through it. It should be available at the Postal Museum library in some format.

    BTW, if you haven’t been already, the National Postal Museum library is fantastic. They have a huge collection of philatelic journals, almost all of the PMG annual reports, plus loads of other goodies. And since it’s small it’s easy to get to the materials you need. And you enter the building from this backdoor that feels very secretive. Post Office library has some good stuff too but is a little smaller. I’ve done some research at NARA downtown but found I spent loads of time and found very little of what I wanted because the late 19th and early 20th records are so spotty.

    Good luck with your research.

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