the forties the rise of the express companies, and their transportation of large packets and in some cases of matter which the postoffice undertook to carry, reduced federal revenues and seriously interfered with the efficiency and effectiveness of the government monopoly.30 But at any time the situation could have been remedied by congressional action. On the other hand, objection has been made to the assumption by Congress under the postoffice clause, of the functions of a common carrier, on the ground that they were not comprehended by the original grant.31

Now, Congress clearly has the power to insure, upon the payment of extra fees, the safe transmission of letters or packets to the addressees, but the postal money order system cannot be justified upon any such theory. The act of May 17, 186432 authorized the postmaster general to establish, "under such rules and regulations as he may find expedient and necessary, a uniform money order system at all postoffices which he may deem suitable therefor." The law fixed thirty dollars as the maximum amount for which an order could be issued, 'the purpose of the system being to afford "a cheap, immediate and safe agency for the transfer through the mails of small sums of money."33 In practice the payee or party for whom the money was intended, was not named in the order, which was given to the applicant upon the payment of the sum specified and the proper fee, and his filling out a printed form of application. This was forwarded to the postmaster at the office upon which the order was drawn, and the latter, therefore, had the information necessary to detect fraud if any was attempted. The

30 Reports of the Postmaster General, 1841-1845.

31"It might be easily shown, for instance, that the power over the mails is limited to the transmission of intelligence, and that Congress cannot, consistently with the nature and object of the power, extend it to the ordinary objects of transportation, without a manifest violation of the Constitution, and the assumption of a principle which would give the government control over the general transportation of the country, both by land and water." Speech of John C. Calhoun. 12 Debates of Congress, 1142. See also 18 American Law Review, 218.

32 13 Stat. L. 76.

33 Report of the Postmaster General, 1864, p. 24.

issue of these postal notes was discontinued in 1894,34 although their use has since been urged;35 under the money order system as it now obtains, the payee is named in the instrument.3 36

In the Senate there was no debate other than on the administrative features of the law of 1864;37 the constitutional question was not discussed. Some doubt, however, has since been expressed as to the power of Congress to establish a system of postal savings banks. These were, according to the title of the act, to hold "savings at interest with the security of the government for repayment thereof, and for other purposes." It was provided that available funds should be used in the redemption of United States bonds, and the act recited, "that the faith of the United States is solemnly pledged to the payment of the deposits made in the postal savings depository offices, with accrued interest thereof, as herein provided." This section would seem to imply that the receiving of deposits could be considered as borrowing money on the credit of the United States.

Objection, upon constitutional grounds, was, however, made by Mr. Moon of Tennessee, in a minority report which he presented to the House of Representatives.38 He argued that no express authority could be found in the Constitution, and that "the depository is not a bank within the legal meaning of that word; nor do the trustees created by this act collect money (deposits) from the people for governmental purposes, but simply become federal trustees of private funds for loan or reinvestment at interest."

It would seem, however, that the provision for redeeming United States bonds and the general tenor of the law, could,

34 28 Stat. L. 30.

35 See Reports of the Postmaster General, 1908-1911.

36 Postal Laws and Regulations of 1913, Title VIII, "Money Order System," p. 529 ff.

37 Congressional Globe, 38th Cong., 1st Sess., pp. 1694, 1771, 1861. 38 Act of June 25, 1910; 36 Stat. L. 814. A system had been recommended by postmasters general in 1871-1873, 1880-1882, 18871890, 1907-1909. See 61st Cong., 2d_Sess., House Rept. No. 1445, and for Mr. Moon's argument, ibid., Part 2.

without violence, enable the system to be looked upon as established for the purpose of borrowing money on the credit of the United States, or of obviating in some degree the issuance of emergency currency in financial crises through the deposit with the government, and subsequent circulation, of large sums of money which has hitherto been hoarded. But apart from this, while extensions of the postal function to include banking facilities for the receipt of deposits and the issuance of money orders, were certainly not contemplated by the framers of the Constitution, and are not connected with the transmission of intelligence, they are, from foreign precedent, logical parts of the modern postal power. It is extremely difficult, moreover, for a citizen to show an amount of interest sufficient to bring before the courts the constitutionality of such non-essential functions of the government.39 And especially is this the case when their exercise does not entail taxation, but actually results in increased revenues, and interferes slightly if at all, with the exercise of the same functions by private undertakings. Finally, it should be remembered that the powers granted in the postal clause "are not confined to the instrumentalities of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances."40 According to this view there is no constitutional doubt as to the right of the postoffice to engage in the banking activities thus far attempted.

Collectivist Activities.—The primary purpose of the postal power is, of course, the transmission of intelligence, but with vast equipment and organization once in existence, it is a comparatively simple matter for the government to increase in number and in kind, the services which the postoffice may perform for its patrons. In New Zealand postoffices,

39 Wilson v. Shaw, 204 U. S. 24 (1907).

40 Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1 (1877).

for example, a person can buy stamps, mail a letter or parcel, send a telegram, deposit money, collect a pension, report births and deaths, and insure his life.41

It is due, in part, at least, to the federal system of government in the United States that Congress has been reluctant to increase the functions of the postoffice. But the money order system and postal savings banks have now been established, and it seems inevitable that the telegraph and telephone systems of the country will shortly be nationalized.12 So also rural free delivery has caused congressional aid to be given to the good roads movement and several schemes have been proposed for extensive road construction under federal auspices.

43

The inauguration of the parcel post, which in fact has made the postoffice a common carrier, has led to serious efforts on the part of the government towards an adequate appreciation, by possible users, of the advantages of the new facilities, and a campaign of education is carried on, not so much with a view of increasing revenues, as of fostering the "producer to consumer" movement, particularly in farm products. Congress authorized the Secretary of Agriculture "to acquire and diffuse among the people of the United States useful information on subjects connected with the marketing and distributing of farm products" and under this authority the Office of Markets was established on May 16, 1913. It employs specialists in marketing various commodities, and issues bulletins on the facilities for, and advantages of, shipping different products by parcel post. Agents are sent to appropriate sections of the country to do personal work and local offices are active in collecting lists of the names of farmers and others who have produce to

44

41 Davies, The Collectivist State in the Making, p. 39. 42 Below, Chapter VI.

43 Below, p. 80 ff. See also "The States and their Roads," N. Y. Nation, August 20, 1914, and Bourne, "Practical Plan to Spend $3,000,000 for Public Roads," N. Y. Times, May 11, 1913.

44 Annual Reports of the Department of Agriculture, 1914 (Report of the Chief of the Office of Markets).

sell, and printing and distributing these lists to postal patrons who may become purchasers.45

It is proposed, furthermore, to use postoffices as employment bureaus, and a bill, the adoption of which was strongly urged on the Sixty-third Congress by Senator Clapp, provided that the postmaster general establish, “under such rules and regulations as he may prescribe, mutual employment exchanges at all presidential postoffices, where registers may be kept of any and all persons who make application to be registered, as either seeking employment, or seeking employees, which information may also be exchanged between such offices, all in the interest of the proper and timely distribution of labor throughout the country.' 1946 This service would be made self-sustaining through the sale of registration stamps. The bill failed of passage.

But pending action of this character, or the adoption by Congress of legislation designed to lessen unemployment without using the postoffice, the Secretary of Labor and the Postmaster General, cooperated in formulating an arrangement by which "information relating to the distribution of labor could be widely scattered and posted under the auspices of the United States Government.

"The plan," Secretary Wilson goes on to explain, “consists of dated bulletins sent out by the Department of Labor to postmasters throughout the country, by whom they are posted on the bulletin boards so that every postoffice patron, —and this means every man, woman and child, can easily refer to the information. These are known as 'Bulletins of Opportunities.' They are replaced with others from time to time as necessary, and suitable notice is given when they become inoperative. This plan has received the indorsement of the various state authorities, who have been, and are, cooperating with the Department of Labor in scattering in

45 Report of the Postmaster General, 1914, p. 8 ff. See also U. S. Department of Agriculture, Farmers' Bulletins, inter alia, Nos. 594 and 611, and The National Parcel Post News (Washington), October 7, 1914, and weekly thereafter.

46 6 S. 5180, 63d Cong., 2d Sess. (April 8, 1914).