The United States Postal Deficit

Report Outline
Chief Factors in Postal Deficits
Development of American Postal Policy
Postal Rates and Postal Revenues
Proposals for Eliminating Postal Deficit
Special Focus

Estimates at the close of the fiscal year 1929 that the postal deficit for the year would amount to $95,000,000, exclusive of the $42,000,000 awarded to railway companies as additional pay for transportation of the mails between 1925 and 1928, brought a statement from the White House on July 9 that has been taken as foreshadowing a thorough reëxamination of the entire postal policy of the United States. It was announced that the President had become convinced that “the rapidly mounting postal deficit must be reduced,” and that the postal establishment must be operated “as a self-sustaining business organization,” so that the cost of the service will be borne “by the persons who receive its benefits and not by the taxpayers of the country.”

The exact amount of the deficit that prompted the Presidents statement will not be known until the annual audit of the Post Office Department's accounts has been completed—probably in September. Including the back-pay awarded to the railroads by the Court of Claims, the indicated deficit for 1929 at present stands at $137,000,000. This figure exceeds the deficit of any previous year, with the exception of 1921 when the excess of expenditures reached $157,517,688. However, the 1921 deficit included substantial payments for rail transportation between 1916 and 1920 and of other obligations incurred during prior years. When these were deduced, the deficit properly chargeable to 1921 was found to be 884,000,000—as compared with the estimated operating deficit for 1929 of $95,000,000.

Postal Deficits and Surpluses of the Past

The audited accounts of the Post Office Department have shown a deficit in all except 14 of the 92 fiscal years since 1837. Surpluses were registered for four years beginning in 1848, after an extensive reorganization had been placed in effect; in 1865, when Montgomery Blair was Postmaster General; in 1882 and 1883, during the Arthur administration; in 1911, under Postmaster General Hitchcock; and in six of eight years beginning in 1913, under Postmaster General Burleson. Even this short list of surpluses would probably be curtailed if proper weight were given to obligations incurred during each year but not settled until later, and to expenditures made for the benefit of the postal service but not charged to its accounts.