Article 1, Section 8,
The Congress shall have Power....
[Paragraph 7]To establish Post Offices and post Roads;
That is all the US Constitution says about Post offices. Stamps were 63 years in the future (70 years if you use the US use of Postal Stamps), thus if you sent a letter, you paid someone to take the mail, who then transferred that letter to other people, most of whom expected payment from the receiver of the letter. The Postal Stamp was invented to show payment HAD been made by the sender and whoever had the contract to drop of that letter did NOT have to depend on the receiver paying for the letter.
While the concept of pre paying for postage had been kicked around since the 1680s (When one person used a hand stamp on the letter to show someone prepaid to have the letter delivered), till England adopted its "Penney Black" in 1840, the norm was the receiver had to pay for delivery of the letter.
In the US, the Postal Stamp was NOT adopted till 1847 (Through some local Postal Master issued stamps as early as 1845).
http://en.wikipedia.org/wiki/Postage_stamp
Even after that date, you had to go to the Post Office to pick up your mail. Home Delivery in urban areas did not start in the US till 1863 and Rural Free Delivery did not start till 1890 (Experimental only). In 1893 Congress finally approved the idea but it took till 1896 to get it started but not fully implemented nationwide till 1902:
http://www.postalmuseum.si.edu/exhibits/2b2_reaching.html
http://en.wikipedia.org/wiki/Rural_Free_Delivery
Now the above involved letter service only, parcel post did not start till 1913:
http://www.postalmuseum.si.edu/exhibits/2b2f_parcel.html
Through the line between mail and packages was thin. In one case in the late 1800s a contractor who was building a bank determined it was cheaper to send each brick he needed by mail then by wagon. The Post Office at that point put a weight limit on packages, which of course force people to work around those limitations, which lead to Parcel Post .
1912-1920 is considered by many to be the height of the Post Office. Parcel Post was in place, RFD was in place. Most urban areas had twice a day mail delivery (Yes TWICE a day, six days a week, you could send a letter and get a letter in response on the same day). You could even deposit money into a savings (But NOT checking) accounts at the Post Office (This was implemented do to many immigrants from Europe expecting the US Post Office to provide such service, for in Europe, the National Post Offices in many nations provided such services. The banks complained and the Permission to provide such services was removed by Congressional action, but the Post Office retain the use of Postal Money Orders to this day). This system lasted till 1966. Its peak was doing the banking crisis of 1930-1933 (Unlike the banks, the Post Office remained open). You had to give 60 days notice to withdraw AND had to pay in DOLLARS (remember this is the day when most people used CHANGE not Dollar Bills, for example Streetcar fare was a Nickel, Bread was 8 cents, 1 pound of hamburger was 22 cents a pound, A dozen eggs was 18 cents). For deposits of less then a dollar the Post Office issued Savings stamps (which were big during WWII).
http://postalmuseum.si.edu/museum/1d_PostalSavings.html
The Commercial banks never liked the Post Office Bank, and the restrictions imposed on it was to discourage its use, i.e. dollar deposit only, at a time where most people only saved in terms of dimes, 60 day notice to withdraw and no checking. All designed to discouraged the use of the Post Office System. The problem was people still preferred it till the Banks finally had Congress outlaw it in 1966. Today it is proposed to bring it bank, this time with checking.
Also remember till long after WWII, most companies paid their employees in CASH not CHECK. While the movement to Checks instead of Cash started around 1900, it was still a very tiny minority when the bank crisis hit in 1930. One of the reasons for the bank crisis was employers needed to withdraw money from their banks to pay their employees, when other were also withdrawing money from the banks. Thus the Federal Government started to encourage institution of checks during the 1930s, and embraced the concept of Free Checking coming out of Pittsburgh. After WWII, the norm became issuing of checks, but as late as the 1980s the US Government issued troops in basic training checks and then had them cash them right then and there, thus the troops had cash. In some ways the worse of both worlds. Today the Military wants its Soldiers to have bank accounts for direct deposits
When the conversion to checks
By far the largest object ever moved through the Parcel Post System was a bank. Not all at once, of course, but practically brick by brick. When W. H. Coltharp, in charge of building the Bank of Vernal, Utah was confronted with the task of getting bricks for the bank, he turned to the Parcel Post Service. The bricks which Coltharp wanted were produced by the Salt Lake Pressed Brick Company, located 127 miles from Vernal. Instead of paying four times the cost of the bricks for them to be shipped by wagon freight, Coltharp arranged for the bricks to be shipped in 50-pound packages, through the Parcel Post Service, a ton at a time.
The Salt Lake City and Vernal postmasters as well as the Uintah Railroad, all responsible for hauling the bricks became frantic as tons of bricks piled up. Memos flew between postmasters and finally to Postmaster General Burleson. Although it was too late to stem the tide of bricks which threatened to overwhelm the tiny post office, Burleson and his staff rewrote the affecting legislation to limit to 200 pounds the total weight of parcel post which one consignor could send to one consignee in a day. In a letter announcing the amendment to the legislation, he noted that "it is not the intent of the United States Postal Service that buildings be shipped through the mail." In the end, all 40 tons of bricks were delivered for Coltharp's bank.
One of the oddest parcel post packages ever sent was "mailed" from Grangeville to Lewiston, Idaho on February 19, 1914. The 48 1/2 pound package was just short of the 50 pound limit. The name of the package was May Pierstorff, three months short of six years old.
May's parents decided to send their daughter for a visit with her grandparents, but were reluctant to pay the train fare. Noticing that there were no provisions in the parcel post regulations specifically concerning sending a person through the mails, they decided to "mail" their daughter. The postage, 53-cents in parcel post stamps, was attached to May's coat. This little girl traveled the entire distance to Lewiston in the train's mail compartment and was delivered to her grandmother's home by the mail clerk on duty, Leonard Mochel.
http://www.postalmuseum.si.edu/exhibits/2b2f_parcel.html
Now, can Congress abolish the Post Office? In my opinion yes, all Congress has to do is to provide Post Offices where people can go to pick up and drop off mail. Prior to the reforms of the 1840s, that was private companies, often local shop keepers. After the reforms of the 1840s (the introduction of Postal Stamps), it remained local shop keepers. Delivery to and from such shop keepers were by private contractors (Wells Fargo fought for the right to pick up and drop off such mail, it was a steady source of income for them, the passengers and other things shipped was extra profit, it was the postal contractors that paid for the horse, the feed for the horses, the wagon and the drivers).
Urban areas were not forgotten, in most areas mail was dropped off by local people, after 1890 by streetcar operators, and then by bus operators. This was a subsidy to such operation provided by the Post Office (and provided till the 1960s). Airlines were also given this subsidy, which continues to this day, in the form of space available mail service (i.e. if the airline has space NOT taken up by Luggage it gets to haul US Mail, thus rare for an airline to run empty in its baggage compartments) and in the 1920s and 1930s with direct payments to Airlines (Not to haul mail, but to run so mail may be sent by Air). Air Mail was a service that the mail would go by Air instead of by Train, but by the 1960s all mail was going by Air anyway, so Air Mail was discontinued.
Now the above "Subsidy" is NOT a direct subsidy in that the Post Office does not and did not pay for these services but the mail contract gave both the Streetcars operators, the bus operators and the Airlines a steady source of Income they could count on. Direct subsidies were much rarer, such as the payment to the Airlines in the 1920s and 1930s.
A problem for the Post Office Post WWII, was the collapse of the Passenger Train Service. Such Services were tied in with Express packages services and mail sent by train. These were all faster then regular freight service. With the collapse of Passenger Train Service the Post Office had to shift to private truck haulers. Such Contractors were preferred to the Post Office having their own trucks, for one of the mandates from Congress was for the Post Office to support local businesses. Thus, when it could, the Post Office used public Transit to drop off its mail to local post offices, and when it could not used its own trucks. On the other hand, for shipping from one main post office to another, after the demise of most passenger train service, the Post Office started to use private Commercial trucks drivers. Thus unlike UPS and Federal Express, the Post Office has a lot of sub contractors sending the mail to where it belongs. The final delivery is done by Postal Employees but how it arrived at his Post Office included being hauled by private contractors (through shifting the mail, and bagging the mail was done by postal employers, private contractors just hauled the mail bags, like Stage Coaches did in the days of the Wild West).
Thus the Postal Service is a very complex set of public and private businesses working together to get the mail delivered. The post WWII era saw the Post Office losing the ability to use public transit as a way to get mail to local post office for later delivery and thus had to adopt it own trucks to do so. This required moving most Large Post Offices from Downtown areas, where the trains operated to more Suburban areas that were easier for Semi Trailers to enter and exit. That move started in the 1960s and is still going on (Through most large downtown post office moved such mail service to other areas by the 1980s, retaining just a post office to pick up and drop off mail in their old downtown offices).
The Zip Code was adopted by the Post Office to ease shipment of mail and packages. The first three digits indicate which main post office that packages is to be handled by, the last two digits the local post office (and the four digit extension the block the house is on). It ended the need for the Post Office to object to names of local governments, for the Post Office preferred unique names over common names (Came up about five years ago in Allegheny County PA. Some people in South Park Township wanted the Post Office to change the name used on their Addresses from Pleasant Hills, 15236 AND Library Pa 15129 to South Park PA. The Post Office opposed the name change for Library PA was the ONLY Library in the names of Post Offices in the US. On the other hand, there were several South Parks (and the Post Office took no position as to Pleasant Hills, another Common name in its data base).
Just pointing out, yes Congress can abolish the Post Office and transfer its function to private companies (as was the norm prior to the Civil War in Urban Areas AND the norm in Rural Area till 1896)
Side Note: 1896 is a date one should take note when one reads. That is the year the Democratic Party of the US, decided it was a Progressive Party not a me-to Republican Party. As a progressive party its strength was in Rural America more then urban America (Given that more people lived in Rural Areas then Urban Areas till 1920 not a bad base to build on in 1896) the GOP did all it could to undermine that Rural support. One way was to provide what the Democrats proposed, Rural Free Delivery. With it already on the books, meant one less item people could use to justify voting Democratic. Yes, cutting into the Democratic Base one piece at a time is a time honored GOP tradition, just because the GOP does it today, does NOT mean they never did it is the past. This passage of RFD is an example of cutting into the Democratic Base in 1896.
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