The Continental Congress created a national postal service on July 26, 1775, appointing Benjamin Franklin the first United States Post Master. The Founding Fathers (apparently unanimously) believed Federal establishment of a national mail delivery service extremely important. Franklin had been postmaster for the colonial mail system which was run like any business; to create the NPS, Franklin merely had to change the signs on the doors and the pictures on the stamps.
In 1789, when enacting the US Constitution, Congress emphasized their belief that a national postal service was very important. Constitution Article I directs Congress “To establish Postal Services and post Roads.” This provided the impetus for enormous USPS expansion and profits. Most of our roads, still used today, were established by and paid for by profits earned by the United States Postal Service.
President Washington strongly supported a national postal service. He felt that it would help bind out nation together and assist with expansion. Washington appointed Samuel Osgood, a businessman from Massachusetts, US Postmaster in 1789.
Osgood had several ideas for improving integrity and efficiency. One recommendation was to prohibit free riding, where private mail carriers paid by the government also had their own little side business. This allowed people to skim profits while use the roads and routes mostly paid for by the US government. Prior to 1792, people could lawfully take profits for themselves by putting private letters on the USPS carriers. Or they could just open a competing business along a USPS pioneered profitable route. Osgood proposed Congress stop that. In 1792, Congress did. It enacted the private express statutes, created a mail monopoly.
By creating a mail monopoly and leaving only express delivery in private hands, Congress cut out the many free loaders siphoning off USPS profits. To make the USPS's job easier, Congress also restricted USPS delivery points solely for USPS use.
Another Osgood idea: prepaid postal service. Prepaid delivery was also a successful innovation. Previously, the recipient paid upon delivery of the mail. Prepaid postage is far more efficient. First, the post office got paid more quickly; second, prepaid post eliminates the arduous task of chasing people for the postage fee after the USPS had already having performed its service.
Today, the USPS has run so well for so long people take it for granted. The rest of the world has copied us. Before national postal services, mail delivery was chancy, delivered by ship captains and merchants. Reliable mail delivery over distance was rare. For most places, it did not exist.
By 1795, at the end of the eight year Washington administration, the number of post offices had increased from 75 to 453; postal roads lengthened from 2,000 to 13,207 miles; postal income increased from $25,000 to $160,620. Even with expenses required to create roads and establish post offices, the United States Postal Service was profitable in each year of Washington's administration.
The next post master was Gideon Granger, another able manager. Using Osgood’s reforms and continuing with further efficiency improvements, the postal service became so profitable that President Jefferson wanted to reduce mail rates. Unlike postal champions Franklin and Washington, who each died quite wealthy, Jefferson lived on loans, the labor of slaves, and died bankrupt. Sound business practice was not a Jefferson strength. Still, the USPS remained profitable until it ran into President Andrew Jackson's administration, which finally enacted some of Jefferson's small government ideas to disastrous effect on the US economy and caused the first USPS deficit.
As Franklin, Washington and others predicted, the postal service greatly helped settlers as they moved west. Many towns and cities owe their existence to the USPS, as they were located on roads around post offices paid for by the United States Postal Service.