By the late 19th century, rural Americans -- emboldened by political movements like the Farmers’ Alliance, which set the stage for the later Populist Movement -- began agitating for subsidies that would better integrate the country’s rural population into the postal network. In 1890, 65 percent of the population still lived in rural areas.
In response, Postmaster General John Wanamaker proposed the idea of Rural Free Delivery, or RFD: Rather than making farmers travel to retrieve their mail, the mail would come to them. Congress permitted a trial experiment in 1896. Three years later, RFD became national policy.
But that still left the question of parcels and packages unresolved. By this time, two companies had anticipated the strategy that Amazon revived for the internet era: Sears Roebuck and Montgomery Ward. Both began small with a handful of mail-order goods, and then swiftly expanded into selling, well, everything. Sears would eventually sell entire houses by mail. The link between the customer and the company was a catalog, not a computer. Otherwise, the strategy was the same.
Both companies had massive fulfillment centers with a bewildering array of goods in stock: clothing, toys, farming implements, books -- you name it. Customers would send their orders by mail, and the retail giants would send the requested goods. But that’s where things got complicated: The Post Office couldn’t deliver these packages, and the private express companies charged exorbitant rates -- or simply ignored customers outside major population centers.
In the early 20th century, rural interests began clamoring for the Post Office to expand its mandate to parcels. The private express companies, horrified at the idea, stymied attempts for the legislation to get a public hearing before committees.
In 1909, some of the express companies made the blunder of paying their stockholders a particularly generous dividend. Wells Fargo, for example, paid out $300 per share in surplus earnings. The Christian Science Monitor quietly observed that it was almost certain that Congress would not appreciate the companies' unwillingness “to share a part of their prosperity with their patrons.”
Over the next few years, legislation giving the Post Office the power to deliver parcels at subsidized rates moved forward. The reasoning was evident to most observers. Indeed, the Atlanta Journal Constitution, writing in 1912, explicitly described the pending bill as a “logical extension” of Free Rural Delivery. If the government was going to subsidize the delivery of mail to rural farmers, why not packages? In 1913, Congress passed legislation that made Parcel Post national policy.