Why Stamp Prices Keep Rising as the Post Office Sinks Slowly

The U.S. Postal Service was established in 1775 by the Continental Congress, making it even older than the United States itself. As the nation grew during its first 100 years, so did the USPS, establishing roads, delivery routes, and offices to serve the burgeoning population. By 1901, there were more than 76,000 post offices from coast to coast, and home delivery of mail in urban and rural areas was the norm. The 20th century brought innovations including parcel delivery, airmail, the introduction of ZIP codes, and computer automation.

Since 1792, the cost of mailing a letter has been raised 40 times. The way those rates are determined also has changed over the years. Until 1855, prices were based on distance, not weight, and it wasn't until 1885 that the USPS settled on 1 ounce as the default weight for first-class postage. Since then, postage stamp prices have gone in only one direction: up. In the past five years alone, first-class stamps have jumped 22% in price. Here's a look back at how the price of postage has increased since America's beginnings.

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Before independence, the postal service existed mostly for the benefit of the Continental Congress and the Army. The Articles of Confederation, passed in 1781, laid the groundwork for a national postal network, and was codified in Article I, Section 8, of the U.S. Constitution. Initially, rates were based on how far a letter (defined as a single sheet of paper) had to travel between post offices. Prices ranged from 6 cents for delivery of 30 miles or less up to 25 cents for distances greater than 450 miles. In 2020 dollars, that's about $1.60 to $6.68, which is a heck of a lot more than the 55-cent cost of a first-class stamp today.

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In an attempt to recoup some of the costs of the War of 1812, the USPS doubled its rates, which had last been increased in 1799. Deliveries of 40 miles of less, which had cost 8 cents, were now 16 cents. Mail that had to travel 500 miles or more, which had cost 25 cents, now cost 50 cents. Congress repealed the rate increase in April 1816. A month later, it even rolled back rates. Deliveries of 30 miles or less again cost 6 cents.

President John Tyler had been in office for just a few months when Congress overhauled postal rates in July, the first time it had done so since 1816. With steamboats and railroads beginning to stitch together the nation, rates dropped precipitously. Letters traveling less than 300 miles now cost 5 cents to send; deliveries of more than 300 miles cost 10 cents. The first official postage stamps, featuring George Washington and Ben Franklin, appeared in 1847, costing 10 cents and 5 cents, respectively.

The USPS established its first overland mail route to California in 1851, 18 years before the first transcontinental railroad would be completed. Two more routes linking California and the western territories were established in 1857 and 1858. Traveling by stagecoach, mail leaving St. Louis took about three weeks to arrive in San Francisco. Deliveries of less than 3,000 miles were now just 3 cents prepaid, 5 cents if paid upon delivery; destinations of more than 3,000 miles cost 6 cents prepaid, 10 cents if postpaid. In 1855, Congress revised postal rates again, requiring all deliveries to be paid for at the time of shipping.

The USPS provided a crucial link between Union soldiers and their families during the Civil War. Recognizing this, Congress abolished the system of distance-based postal rates, replacing it with a flat rate of 3 cents for all letters based on increments of a half-ounce. That rate would stand until 1883, when the price of mailing a half-ounce letter fell to 2 cents. Two years later, the weight limit was doubled to 1 ounce; the 2-cent price stayed the same.

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As the nation entered World War I, the need to raise postal revenue was clear. Postage rates had gone largely untouched in a generation, even as the nation continued to grow and technology evolved. That same year, Congress authorized $100,000 to fund an experimental airmail service using Army planes. In 1918, regularly scheduled air service between New York City and Washington, D.C. began. On Nov. 2, the price of a first-class stamp rose to 3 cents from 2. In July 1919, the price returned to 2 cents.

It was the worst of the Great Depression: Not a great time to be raising the price of postage stamps, one would think. But it was the first time rates for first-class mail had been increased in 15 years. Between 1930 and 1935, the volume of mail handled fell to 22.3 billion pieces from 27.9 billion; it wouldn't return to 1930 levels until 1940. First-class postage once again cost 3 cents. The Depression also saw many post offices decorated with patriotic or scenic murals, painted by artists employed by federal agencies from 1934 to '43. More than 1,000 of these works survive.

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The postwar boom radically transformed the way many Americans lived, worked, and played. The USPS found itself stretched to the limit as suburban delivery routes grew farther and farther from cities, relying on highways instead of railways to move an ever-growing volume of mail, and building infrastructure to serve these growing communities. All that cost money, so that August the postal service upped the cost of a first-class stamp to 4 cents. Good thing it did; mail volume rose by some 18 billion pieces during the decade.

The USPS raised postage rates by a penny in 1963 and again in '68. Investment in the postal service had not kept pace with the nation it served, and the USPS was foundering badly. Christmas mail volume in Chicago created such a backlog in 1963 that some holiday deliveries didn't arrive at their destinations until February. Three years later, a similar logjam occurred. The government responded in 1967 by appointing a blue-ribbon commission (of course), led by the chairman of AT&T, to recommend ways of reforming the agency

The resulting Kappel Commission report was argued over at length from its release in 1968 until 1970, when, after lengthy Congressional debate and negotiations with postal workers and officials, compromise legislation was signed into law by President Richard Nixon. The USPS was now an independent federal agency whose rates would be set by a board of governors, with a merit-based workforce that had the power of collective bargaining. The postal system was expected to be run like a private business, no longer supported by public subsidies. The result? Four postal rate increases between 1971 and 1978. A first-class stamp that cost 6 cents on New Year's Day 1970 would cost 15 cents by the decade's end.

The digital age arrived in a big way for the post office during the Reagan era. With mail volume still growing, the USPS turned to computer automation, installing the first optical character readers in 1982. These devices could scan a handwritten address, generating a barcode on the envelope that would be used to expedite the mail-sorting process. A year later, the post office began using ZIP codes that contained an additional four digits, also to make delivery more efficient. All that innovation cost money, and the USPS raised rates four times (twice in 1981 alone). The final increase in 1988 raised first-class postage to a quarter.

The drive to automate continued into the early years of the internet. Some innovations — delivery confirmation, digital self-service kiosks, and print-at-home postage — were customer-focused. Other transformative changes, such as the use of robots to sort mail starting in 1997, took place behind the scenes. At the end of the decade, the USPS also began partnering with private package delivery services such as Airborne Express and, later, UPS and FedEx. To pay for these endeavors, postage rates were increased three times, in 1991, '95, and '99. As the decade (and the century) closed, a first-class stamp cost 33 cents.

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In the wake of the Sept. 11, 2001, terrorist attacks, mail volume fell for the first time since the Great Depression; the USPS was on thin ice financially. In 2003 and again in 2006, Congress passed sweeping legislation that radically remade how the postal system could manage its finances. Money that could have been directed toward service improvements was channeled into pension funding obligations and debt repayments — and regulations limited the amount of money the USPS could raise rates by. Although first-class postage rates were raised six times during the decade, topping out at 44 cents, it wasn't enough to compensate for a corresponding 25% drop in first-class mail volume.

In June 2011, the Government Accountability Office reported that the USPS was in "crisis." Cost-cutting measures that limited post office hours, consolidated distribution facilities, and reduced staff were implemented, yet still the red ink flowed as first-class mail volume continued its steady erosion. More aggressive measures that could have saved real money, such as the elimination of Saturday delivery, went nowhere in Congress. Despite this dark outlook, package deliveries continued to expand along with the world of ecommerce. First-class postal rates were raised a whopping seven times to 55 cents during the decade.

What years of financial losses and lack of Congressional support could not do, the Covid-19 pandemic just might: break the USPS. President Donald Trump has made no secret of his contempt for the agency (he has called it "a joke") and blocked a proposal to give the postal service a $13 billion lifeline. First-class mail — at 55 cents, for now — is still being sent less and less, even as package volume rises. Losses into 2022 are projected at more than $27 billion. Despite this gloomy outlook, all may not be lost. According to a Harris poll released June 12, citizens say the company that has done the best job of responding to the coronavirus pandemic is … the U.S. Post Office.