Reform Proposal

In [April] 1967, President Lyndon B. Johnson appointed a Commission on Postal Reorganization, chaired by AT&T’s Frederick R. Kappel, to “determine whether the postal system as presently organized is capable of meeting the demands of our growing economy and our expanding population.” In June 1968, the Commission found that it was not.

The men who reached that conclusion included six heads of major corporations; the dean of the Harvard Business School; two prominent Democrats; and the President of the AFL-CIO. Their view … was that “the procedures for administering the ordinary executive departments of Government are inappropriate for the Post Office.”

Having rejected political management, the Kappel Commission was equally clear in rejecting privatization. Leaving the door open for future consideration, its report said that “[T]ransfer of the postal system to the private sector is not feasible, largely for reasons of financing; the Post Office should therefore continue under government ownership. The possibility remains of private ownership at some future time, if such a transfer were then considered to be feasible and in the public interest.”


The Commission recommended:


A self-supporting government


Elimination of patronage, which controlled all top jobs, all Postmaster appointments, and thousands of other positions.


That rates be set by a Board of Directors “after hearings by expert Rate Commissioners … subject to veto by concurrent resolution of the Congress.”


That labor-management impasses over contracts and pay be referred to the President, who “would be free to establish whatever ad hoc methods he chooses to resolve the matter. The uncertainties for both parties… make for more meaningful bargaining and are, in our view, a source of strength.”47


The commission released its recommendations in June 1968. President Richard M. Nixon supported the commission’s recommendations; others, including postal union leaders, opposed it.