Last week's announcement that the Postal Service will cease Saturday delivery starting in August highlights the core paradox of the system: that it should both serve a universal civic function and generate enough revenue to sustain its enormously expensive operation.

Since 1971, the postal service has been run as a businesslike independent government agency. As email and other forms of digital communication have proliferated and health-care costs have soared, the system's finances have deteriorated.

This isn't the first time the country has discovered that running a profit while maintaining a vastly complicated service that no other entity will provide is almost impossible. The earliest precedent for treating the postal system first as a business and second as a public institution - the Confederate Post Office - suggests some important lessons for today.

For much of its early history, the postal service was clearly an institution with a "civic mandate," as Richard John, a professor at the Columbia School of Journalism, has said. It was created during the American Revolution and supported in the decades that followed to maintain free and open channels of communication for news and public information as well as the private correspondence of a geographically dispersed nation.

But as it became embroiled in the vitriolic politics of the antebellum era, the postal service grew controversial. Southerners recoiled at Northerners' use of the postal service to spread anti-slavery literature. To them, the system was becoming another intrusion of the federal government into their affairs.

The South had a history of trying to control information to maintain order and prevent slave rebellions, and Southerners saw little value in subsidizing the spread of news and public debate. When they had the opportunity to design their own post office, they structured it not as a civic system of information but a revenue-generating business.

Meeting in February 1861, Confederate delegates revised the U.S. Constitution into something that would meet their vision of government, in particular the argument that the document was a compact of the states rather than a reflection of the people's will.

When it came to the post office, the Confederacy abandoned the principle of free and open communication. The Confederate Constitution, like its U.S. predecessor, granted the power "to establish post offices and post routes," but it stipulated that postal service expenses "shall be paid out of its own revenues."

The Confederate states thus offered a dramatically different answer to the question of the government's role in facilitating communication. Unlike the Union, which had a long-established policy of encouraging the circulation of news and, more recently, personal correspondence through cheap postage, the Confederacy was more concerned with ensuring that the post office could pay for itself.

Based on Southern patterns of postal use in the decades before the war, however, keeping the service thriving without subsidies would prove a tall order. The Confederate Congress organized a committee to examine expenses and revenue in the states that had seceded. It found that expenses were about $1.6 million in 1859 - on revenue of $578,000.

When the Confederate Congress finally wrote legislation for the new post office, the provisions on postage mirrored those of the U.S. Post Office. However, the Congress also moved to close down a number of routes "the cost of which is greatly disproportioned to their convenience," and a number of "minor post offices, which occasion great expense without corresponding profit or convenience." They estimated this would save several hundred thousand dollars.

Such cuts made it difficult to maintain enough service to encourage people to use the post office - which initiated a self-fulfilling cycle of further service cuts.

And these reforms weren't universally welcomed in the South. Newspaper editors, for instance, depended on the post office to circulate their publications. "The idea for making the post office a self-supporting system has no good reason to support it," the editor of the Savannah Republican wrote, comparing it to other government departments, such as the courts. "All past experience shows that to make the post office self-supporting must cut off a very large portion of the people, in the more sparsely settled sections of the country, from this important advantage of government."

In other words, the post office couldn't survive without government support.

The Confederate postmaster general, a former congressman from Texas named John Reagan, actually succeeded in bringing the Confederate Post Office's ledgers into balance, but it ended up serving the Confederacy poorly. With a shrunken and limited network for circulating news and information, the Confederacy was hamstrung in its efforts to marshal public opinion to the war effort.

In constructing a postal system, the Confederacy made an explicit decision to force the service to generate enough revenue to support itself. The U.S. Congress has managed to avoid addressing that issue directly for four decades. Given the events of this week, it may not be able to wait much longer.

Joseph M. Adelman is a visiting assistant professor of history at Framingham State University in Massachusetts. He wrote this for Bloomberg News.

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