Semrow probably would have been fired if he had worked at a private company, but postmasters did more than just keep track of the mail. They got out the vote on Election Day for their political patrons, and in Semrow’s case the patron would have been Mayor Richard Daley. Rank-and-file clerks and letter carriers were no longer patronage hires, but none of them got promoted without the blessing of their postmaster, who kept files on the political affiliations of his or her employees. As long as Semrow was taking care of that side of his job, he would weather a Christmas mail backup.
Not surprisingly, then, Semrow stayed on the job until 1966 when he left to run for a seat on the Cook County Board of Review, which handled property tax appeals. That year, President Lyndon Johnson appointed Chicago’s first African American postmaster. His name was Henry McGee, and he was a broad-shouldered 56-year-old who may not have played the accordion like Semrow but knew a lot about mail delivery. He had started out in 1929 as a substitute carrier making 65 cents an hour and earned his bachelor’s degree by going to college at night. He wrote a thesis entitled “The Negro in the Chicago Post Office,” which condemned its discriminatory employment practices and called for replacing them with a merit system.
McGee had barely settled into his new position when there was another logjam at the Chicago post office, one that would make the previous breakdown look almost laughable. The Post Office Department had given most businesses until January 1, 1967, to begin mandatory zip code usage. After that, they would be required to presort their mail by zip code so the Post Office could move it faster. That wasn’t a problem for magazine publishers and banks; they had computerized their mailing lists long ago. But it was arduous for junk mailers whose systems weren’t as sophisticated. Hoping to beat the deadline, they flooded the system with uncoded advertisements and circulars. Much of this mail ended up at the Chicago post office. Inside the building, piles of mail rose as high as 40 feet, dwarfing Mount Semrow. At the pinnacle of the crisis, there were 10 million unsorted pieces of mail languishing in the building. “We had mail coming out of our ears,” McGee lamented. Tractor-trailer trucks laden with mail were backed up for blocks outside the building. Trains full of it sat idle on the tracks beneath the post office. The magazine Saturday Review called it “the most incredible snarl in the mail movement since the inauguration of the U.S. postal system—and, in the view of some experts, a nightmarish preview of mail service horrors that lie ahead.”
Finally, the department closed the Chicago post office for 10 days and sent in a team of troubleshooters to unclog the world’s largest mail processing facility. They diverted mail to post offices in Nashville, Milwaukee, and Kansas City so it could be sorted there. They got the first-class mail out of the building before anything else. What about the heaps of unsorted junk mail? The Post Office telephoned mailers and asked if the department could burn it. Afraid of setting a precedent for incinerating their product, the junk mailers insisted that the Post Office deliver it anyway. So in the following weeks, letter carriers around the country dropped flyers into people’s mailboxes for promotions and sales that had expired weeks before.
Reporters from national publications descended on Chicago to find out what had gone wrong. They found plenty to write about. On a typical day, 10 percent of the employees at the Chicago post office were out sick. Those who showed up disregarded the 10-minute coffee break limit, lingering in the cafeteria for half an hour. For years, a parcel clerk had run a loan-sharking operation during work hours under the noses of his supervisors. Postal inspectors finally arrested him after they noticed dozens of his fellow workers queuing up at his window on payday. The Chicago post office was also plagued by racial tension. White supervisors complained that their black employees, who made up 65 percent of the workforce, were ignorant and lazy. Black employees accused white managers of engineering the crisis to make the city’s first black postmaster look bad. Some people blamed the crisis on female postal workers. “There’s no doubt they slow things down,” a union leader claimed. “A man can carry a heavy tray of mail from one place to another like nothing, but a woman has to make three trips.”
Racial tension, chronic absenteeism, and criminal activity contributed to the crisis, of course, but Lawrence O’Brien, Lyndon Johnson’s postmaster general, testified before Congress that the real reason for the breakdown in Chicago was more fundamental. “The conditions that produced chaos and the mail logjam are not confined to Chicago,” O’Brien said. “We are trying to move our mail through facilities largely unchanged since the days of Jim Farley.”
Like James Farley, O’Brien was the son of Irish immigrants and a man who was accustomed to getting things done. Born in Springfield, Massachusetts, in 1917, O’Brien grew up in a political household. His father was a Democratic Party organizer who frequently hosted household visitors like James Curley, Boston’s legendary mayor and political boss. O’Brien himself became an able party operative, one who knew how to charm crusty, older, working-class Democrats and their college-educated children. In 1952, Joseph Kennedy asked O’Brien to manage his son Jack’s campaign for the U.S. Senate against Republican Henry Cabot Lodge Jr. “Larry, Jack is a man of destiny,” Kennedy’s father told O’Brien over lunch one day at the family’s home in Hyannis Port, Massachusetts. “He is going to defeat Lodge and serve with distinction in the Senate, and eventually, he is going to be president of the United States.” O’Brien was more bemused than impressed. He later wrote, “I thought to myself, ‘Fine, but why am I knocking myself out helping to build a political operation for Kennedy if destiny is going to take care of everything?’”
O’Brien used what he referred to as “womanpower” to gather votes for Kennedy. He sent Jack Kennedy’s mother Rose and his glamorous sisters Pat, Eunice, and Jean out to campaign for him. Kennedy’s cousin Polly organized receptions around the state (the press called them “tea parties”) where the handsome and still single candidate spoke to groups of adoring female voters. O’Brien also recruited female campaign workers, something that wasn’t done much at the time. Mothers with young children might not be able to come in and work the phones at the Kennedy campaign office, but they had telephones at home. O’Brien had them call each person on a single page of the phone book, ask for their support, and promise to transport them to the voting booth on Election Day. Kennedy defeated Lodge. Six years later, O’Brien organized Kennedy’s successful reelection campaign, in which he won by 874,608 votes, then a record in Massachusetts.
Naturally, Kennedy turned to O’Brien in 1960 when he ran against Richard Nixon for president. After Kennedy won by a slim margin, he asked O’Brien to become his liaison to Congress. O’Brien did well enough that Time magazine put him on the cover in September 1961, calling him “one of the most important of the New Frontiersmen” and celebrating him as a quintessential backroom operative who smoked three packs of Pall Malls a day and consumed “a Niagara of coffee” while prodding lawmakers to support Kennedy’s agenda. O’Brien also served as a buffer between the president and the many supplicants who wanted things from him. When people on the Hill pressed Kennedy for favors, Kennedy responded, “Have you cleared this with Larry?”
O’Brien was in the motorcade in Dallas on November 22, 1963, when Kennedy was shot, and he was at first lady Jackie Kennedy’s side at the hospital when Vice President Lyndon Johnson showed up. Johnson begged O’Brien to stay on and work for him. “I need you more than you need me—and more than Jack Kennedy needed you,” Johnson told him. At first O’Brien wasn’t sure. He was devastated by Kennedy’s slaying and couldn’t believe that Johnson was making his plea at a time like this. Like many members of the Kennedy administration, O’Brien also didn’t especially care for Johnson, an old-school Texas politician. But O’Brien succumbed to the new president’s persistent overtures and became his man on Capitol Hill and the manager of Johnson’s landslide victory over Republican Barry Goldwater in 1964. When O’Brien tried to leave the White House the follow
ing summer, Johnson named him postmaster general, announcing it at a press conference at his Texas ranch before O’Brien could say no, just as Franklin Roosevelt had done with Frank Walker two decades earlier. When O’Brien telephoned his sister in Massachusetts to tell her the news, Johnson snatched the receiver from his hand. “Well, what do you think about this?” Johnson told her. “Your brother’s got two jobs now.”
Johnson wanted O’Brien to take the oath of office at an old-fashioned post office in Hye, Texas, where the president claimed to have sent his first letter. When they arrived, Johnson introduced O’Brien to Levi Deike, the long-serving local postmaster. “I want you to meet your new boss, the postmaster general,” Johnson told him. “Tell him who appointed you as postmaster.”
“Jim Farley,” Deike told him.
That wasn’t the answer Johnson was looking for. In 1934, he told O’Brien, he had arranged for Deike get the job. Apparently, Deike had forgotten all about it. Johnson ended the conversation abruptly, and posed for a picture instead with O’Brien, who couldn’t have been more entertained by the exchange.
O’Brien moved into Jim Farley’s expansive former office in the Post Office headquarters on Pennsylvania Avenue in Washington. A portrait of Ben Franklin already hung over one of the two fireplaces. O’Brien hung a picture of Farley over the other. Even before the Chicago crisis, he could see that the mail system was breaking down. But after the logjam in America’s second-largest city, there was no longer any question. The country’s magazines, most of which were delivered by the Post Office, were full of stories about the deteriorating mail system. “Time is running out and trouble is spreading,” Fortune wrote. A Reader’s Digest article bore the headline “Crisis in the Post Office.” U.S. News and World Report asked, “Can Anything Be Done About U.S. Mail Service?”
The Post Office needed more optical character readers. Detroit still had the only one. O’Brien asked Congress to fund a $100 million modernization plan to increase the number of these devices in large post offices in the next few years. But he didn’t think it would be enough. Service was deteriorating around the country, and there was little O’Brien could do about it. He was running an organization with $4.8 billion in sales, more than any American companies except AT&T; Sears, Roebuck & Company; and A&P. But he couldn’t appoint a postmaster in a large city without congressional approval. He couldn’t raise stamp prices or give his employees a raise without a vote on Capitol Hill. O’Brien literally risked imprisonment if he spent a dime of stamp money without congressional permission.
So he asked four of his closest advisers what they would do if they could create the Post Office from scratch. He announced their conclusions in a speech before the Magazine Publishers Association and the American Society of Magazine Editors on April 3, 1967, at the Shoreham Hotel in Washington. The speech must have stunned his listeners, who were some of the country’s biggest postal customers. O’Brien said the Post Office was being strangled to death by congressional micromanagement. “If we had run the telephone system in this way, the carrier pigeon business would still have a great future, and I would sell my shares in AT&T—if I had any,” O’Brien said. “If we sought to build the atomic bomb in this way, we’d still be surveying sites in Tennessee, Washington, and New Mexico—or arguing whether we should survey the sites. Ladies and gentlemen, the Post Office Department, as presently constituted, reminds me of the classic definition of an elephant—a mouse built to government specifications.”
O’Brien said the Post Office should be removed from the president’s cabinet and transformed into a government corporation run by a chief executive selected by a board of directors appointed by the president of the United States. Rather than pleading with Congress for funding for new buildings and new equipment, O’Brien argued that the Post Office should be able to set its own prices and raise money by issuing bonds just as private companies did. He also said the new postal service’s managers and employees should be paid salaries comparable to those enjoyed by their counterparts in private industry. And O’Brien didn’t want anybody to think that he was making this proposal because he was looking for a raise. “In case there is any doubt, I want to state that while I am advocating the abolition of my job, I will not under any circumstances take an executive position in the government corporation I am proposing,” O’Brien said.
Five days later, Johnson appointed a commission to study O’Brien’s proposal, led by none other than Frederick Kappel, the recently retired chairman of AT&T. Who better to come up with a plan to fix the Post Office than the man who had run the world’s largest telephone company? AT&T had taken over the role the Post Office had once played in America as the country’s primary communications provider. In 1964, AT&T handled 251 million calls a day, more than twice as many as the pieces of mail the Post Office delivered. Unlike the Post Office, however, AT&T was considered a beacon of American innovation. In his final years at AT&T, Kappel had introduced the soon-to-be ubiquitous touch-tone phone. He also unveiled the picture phone, which would go down in history as one of the company’s greatest failures. But AT&T could afford a few missteps. It made three times as much money as the Post Office and it generated nearly $2 billion in yearly profits, compared with the Post Office’s annual deficit, which was approaching $1 billion. More people held shares in AT&T than in any other company in the world.
A native of Albert Lea, Minnesota, with a farmer’s square jaw and reserved demeanor, Kappel strongly believed in the inherent virtuousness of the American corporation. His life story seemed to attest to this. He started at AT&T in 1924 as a pole digger earning $25 a week and rose through the corporation’s ranks to become chief executive in 1954 and then chairman in 1961. Like many chief executives in that era, Kappel lived in less than grand style, in a four-bedroom house in Bronxville, New York, with six telephones. He listed his home number in the telephone directory, as did the 25 presidents of the 25 regional companies that made up AT&T’s Bell Telephone system. Kappel worshipped at a local Dutch Reformed Church on Sunday and played bridge every week.
Otherwise, he devoted himself to his company. “A.T.&T. is a pure meritocracy, run by men who started at the bottom and worked up, step by step, winning the nod of many bosses along the way,” Time magazine wrote in a 1964 cover story about Kappel and his corporation. “The executives at A.T.&T. combine in themselves dedication, sense of service, awareness of public responsibility, invocation of old-fashioned virtues, puritan earnestness, Rotary Club friendliness, and a touch of self-righteousness. They consider themselves a breed apart —and they are. They value continuity and gradualism in management more than most, and, though at ease in handling vast sums, run their company with a peasant’s fear of debt and the thrifty conviction that every piece of installed equipment ought to be good for 40 years. Most of all, they view their job—helping the people to speak—as an almost priestly calling.”
Most of the other 10 members of what became known as the Kappel Commission came from the same corporate world. They included a Harvard Business School dean; a vice president of the Ford Foundation; and the presidents of General Electric Company, Campbell Soup Company, Cummins Engine Company, and Bank of America. The only outlier was George Meany, the cigar-smoking president of the AFL-CIO, who rarely attended meetings and was the only commission member who didn’t endorse its eventual findings.
Even Meany, however, agreed that the Post Office was a mess. Customers were unhappy. Rates didn’t make sense. (The commission found that while first-class mail and airmail paid their own way, junk mail covered only 76 percent of its costs and magazines and newspapers paid for a mere 26 percent.) The department’s buildings were crumbling. Employees were frustrated. Worst of all, the men (and they were almost all men) who were supposed to be running the Post Office were powerless to prevent any of this. As a postmaster in a large midwestern city told the commission, “How do I manage this operation? My friend, I don’t manage it, I administer it.”
For Kappel, the solution was to empower the postal service’s managers to make decisions as their counterparts did at AT&T or Campbell’s Soup. The majority of the commissioners believed that the Post Office would have functioned best as a private company with few governmental restraints. But Kappel lamented that this wasn’t possible. Who would buy a deficit-ridden government agency that needed an estimated $5 billion to modernize itself? America was still two decades away from the privatization wave that would be cheered on by President Ronald Reagan. Moreover, as the commission delicately put it, there was still a widespread assumption that mail delivery should be the government’s business just as it had been for nearly two centuries. “If I could, I’d make it a private enterprise and I would create a private corporation to run the postal service and the country would be better off financially,” Kappel later said. “I can’t get from here to there.”
But the committee said there was another option. The federal government had set up so-called authorities or government corporations providing services that generated income and therefore could be self-supporting. Some of the biggest and most successful were created by Franklin Roosevelt, like the Federal Deposit Insurance Corporation, which collected fees from banks and used the money to protect their customers’ savings if the institutions failed; and the Tennessee Valley Authority, which generated electricity for people in rural Tennessee, Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia. The presidentially appointed directors of these agencies had more budgetary and managerial freedom than the heads of federal departments. The Kappel Commission believed the Post Office would flourish if it were restructured along these lines. In fact, these corporate savants predicted that such a reconfigured Post Office would be profitable within a few years.
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