That’s partly why rural groups like The Grange and other populist organizations began advocating for Parcel Post as early as 1887. Allowing the Postal Service to deliver packages would give rural consumers access to the same goods as people living in big cities, they said. Consumer advocates also argued that allowing the Postal Service to do package delivery would help save money for homemakers concerned about the rising cost of living.
“The women of the country are very much concerned in getting articles for their homes cheaper than they can get them now, and they believe the parcel post will help them in that direction,” Harriette J. Hifton, a Consumer’s League member and suffragette, told Congress during the parcel-post debates, according to Kielbowicz. Consumers and producers alike wanted to eliminate the middleman in the shopping process.
On the other side, small retailers and railroads railed against the idea that the government should get involved in delivering packages. Extending government to the private-sector business of delivering packages would be a disaster, they warned. It would force small-town retailers out of business and it would allow manufacturers to sell by mail inferior and poorly-produced products. Plus, they said, the idea of Parcel Post wouldn’t work. “The Postal Department as now organized and operated would be utterly unable to compete with express companies upon purely a business basis,” an essay in the Journal of Political Economy argued.
But these business interests were unable to compete with an alliance of two unlikely groups: rural farmers and progressives in big cities who hated the railroads and wanted the government to have a larger role in many facets of American life. The Constitution, progressives argued, gave the government control over the mail, and so the Postal Service should expand, compete with the railroads, and reduce the cost of delivering packages to all Americans.
These debates came to a head in 1912, after voters ousted Republicans in 1910. Democrats, who had their first majority in the House since 1894, held hearings on the Parcel Post, and ushered through the passage of a bill in August of 1912 establishing the Parcel Post. They did not establish a government monopoly over parcel delivery—though that had been one proposal—but instead created a government delivery service that competed with private firms. The service, which launched in 1913, was instantly popular with Americans clamoring for cheaper goods. In the first year of Parcel Post, for example, Sears handled five times as many orders as it had the year before, and within five years, its revenues had doubled.
Today, the fact that the Postal Service does package delivery has allowed private companies to step out of the very expensive business of bringing packages to some rural areas. Almost immediately after the establishment of the Parcel Post, express companies stopped competing with Parcel Post in many small towns, according to Kielbowicz. But this is also partly why the Postal Service is not as profitable as private companies are today. It has an obligation to deliver mail and packages almost everywhere. FedEx and UPS do not. It loses money on its rural operations, which Congress periodically proposes closing.