Former PMG Benjamin Bailar, in 1976 speech, predicted troubles ahead for USPS

Washington Postal Scene — By Bill McAllister, Washington Correspondent

Long before the word “Internet” was whispered at the United States Postal Service, Benjamin Franklin Bailar was warning the public about the dangers of the Postal Service’s high labor costs and its falling mail volume.

The nation’s 61st postmaster general, Bailar was probably one of the first senior postal executives who saw the coming electronic diversion of mail and the possible loss of the Postal Service’s highly profitable first-class mail.

A noted collector of classic U.S. stamps who died Feb. 20 at age 82, Bailar laid out his vision for the Postal Service’s future in a March 8, 1976, speech to the Economic Club of Detroit.

Connect with Linn’s Stamp News: 

    Sign up for our newsletter
    Like us on Facebook
    Follow us on Twitter

“We’re headed for a potential disaster,” the Harvard-trained business administrator warned.

“Our basic difficulty lies in providing a service that may become less and less economically justifiable and could become obsolete,” he said.

Bailar believed that mail volume had peaked in 1974 at slightly more than 90 billion pieces. That prediction was overly pessimistic.

Mail volume peaked in 2006 at 213 billion pieces, but after the 2008 recession, volume has dropped precipitously.

But much of what troubled the 42-year-old Bailar in his Detroit speech was his clairvoyant view of a troubled future for mail.

It was not just the specter of electronic diversion, which he saw coming, but the soaring costs of mail and labor costs that were troublesome.

“Faced with increased postage costs, businesses have reduced their mail usage or gone to other means altogether,” said Bailar.

He had just managed to raise the price of a first-class stamp to 13¢ from 10¢, and Congress, he noted, still had to appropriate funds to keep the USPS solvent.

The telephone worried the postmaster general, but “even more important,” he said, was something called “electronic funds transfer” between computers.

This change “has only one place to go in the future — and that, of course, is up.”

Why, he said, there is even talk of “innovative payment systems in which direct transfer of funds can be executed by an individual.”

Loss of remittance mail could present a serious problem to future first-class mail, he said.

“Since over half our first-class mail volume involves bills and payments, losses such as I have been discussing would deliver us a mighty blow,” he told the Detroit gathering.

Bailar also warned that while first-class mail might shrink, the number of houses that the USPS must visit six days a week would continue to grow.

And, he said, the USPS must pay the costs of getting the mail to the door rather than to curbside boxes.

All this to deliver mail being generated largely by “commercial mailers,” he said.

What Bailar feared was a four-step process that would devolve into “a vicious spiral which will destroy the postal system.”

The four trends that would feed this failure would be:

                1. Rising postal costs.

                2. Continued demand for “the full range of traditional services.”

                3. Fewer mailers will have to bear the increases.

                4. Mailers will desert the USPS for cheaper alternatives.

Whatever its shortcomings, Bailar argued the new Postal Service was a success.

It should not be viewed as a “solution but rather a beginning,” he said.

Lawmakers will still need to make changes to the organization, he said.

“If the public elects to continue the postal system in its present form, it will have to pay a steep price,” he said.

“It may find the first-class stamp becoming a luxury item in the next decade and the Postal Service a ponderous and costly left-over from simpler, more affluent times.”

Saving the Postal Service might require “a fundamental change in attitude” by the public, he said.

“We must recognize that postal service is a service like any other — a service that we pay for through postage and tax dollars — not a political birthright, deeded to us as a gift by our government,” he concluded.

Cary Brick, a former congressional chief of staff who served with Bailar on the Citizens’ Stamp Advisory Committee, said they discussed the chances for passage of legislation that would help with the Postal Service’s financial plight.

“We agreed that Congress will not believe or understand USPS’s pleas for legislative help until there is a massive breakdown of mail delivery in the nation’s largest cities,” Brick said. “Only then will Congress take notice.”

As for stamps, Brick said he and Bailar “found common ground in matters relating to a balance of stamp subjects. What we feared was a growing trend toward commercialization.”