        Applicability of 18 U.S.C. § 1721 to Collection of Fee for
                             Stamped Cards
T he Postal S erv ice m ay ch arg e a fee for stam ped cards in addition to the face value o f the postage
    w ithout violatin g 18 U .S.C . § 1721.

                                                                                                                        January 7, 1999

           M   em o ra n d u m     O   p in io n fo r t h e     V   ic e   P   r e s id e n t a n d    G   eneral   C   o u n sel

                                           U   n it e d   Sta   tes   Po   stal       S   e r v ic e



  This responds to your letter of July 27, 1998, requesting the Justice Depart­
ment’s legal opinion whether the provisions of 18 U.S.C. § 1721 (1994) prohibit
the sale of stamped cards for a one-cent fee that has been authorized by the Postal
Service Board of Governors and that is to be charged in addition to the value
of the postage charge identified on the stamp that appears on the face of the
cards.1 We conclude that § 1721 is not properly construed to impose such a
prohibition.

                                                                      I.

   “ Stamped cards,” formerly known as postal cards or postcards, are postcard­
sized items of stationery bearing a preprinted postage marking. They are presently
sold by the U.S. Postal Service ( “ Service” ) at postal retail units throughout the
United States at a price of twenty cents per card. Heretofore, the Postal Service
has not charged a separate fee for the cost of the stationery component — as distin­
guished from the face postage value — of stamped cards. Consequently, the price
currently recovered by the Service for stamped cards accounts for postage value
only; the stationery component is effectively provided free of charge.
   Pursuant to its statutory authority to establish postal rates, fees, and classifica­
tions, the Service has undertaken to establish a new fee on stamped cards that
would enable it to recover its costs for the stationery component.
   Under the procedures established by the Postal Reorganization Act, Pub. L. No.
91-375, 84 Stat. 719 (1970) (“ P R A ” ), changes in postal rates, fees, or classifica­
tions are initiated when the Postal Service proposes the change to the independent
Postal Rate Commission (“ Commission” ). See 39 U.S.C. §3622 (1994), as
amended by Postal Employees Safety Enhancement Act, Pub. L. No. 105-241,
§ 5, 112 Stat. 1572, 1573 (1998) ( “ PESEA” ); id. § 3623. If the Commission favor­

    1 L e tte r fo r th e H o n o rab le Jam es K. R obinson, A ssistant A ttorney G eneral, C rim in al D ivision, fro m M ary S Elcano,
S e n io r V ice P resid en t and G eneral Counsel, U .S . P ostal S ervice (July 27, 1998) ( “ U SPS L e tte r” ). Y our inquiry
w as referre d to th is O ffice fo r response S e e 28 C F R § 0 .25(a) (1998) W e requested, and you h ave provided,
th e S e rv ic e ’s ag reem en t to b e bound by o u r opinion on this issu e S ee L etter fo r B eth N olan, D eputy A ssistant
A tto rn e y G en eral, O ffice o f L egal Counsel, fro m M ary S. E lcano, S en io r V ice P resident and G en eral C ounsel, U.S
P o stal S erv ic e (A ug. 14, 1998).
            Applicability o f 18 U.S.C. § 1721 to Collection o f Fee fo r Stamped Cards


ably recommends the Service’s proposal, the Governors of the Postal Service
( “ Governors” ) are vested with the ultimate authority to approve or reject new
rates, fees, and classifications. See id. §§3624, 3625. Changes adopted by the
Governors are then formally promulgated as provisions of the Domestic Mail
Classification Schedule (“ DMCS” ), which is published at 39 C.F.R. pt. 3001,
subpt. C, app. A (1998), and in the form of Postal Service rules implementing
changes to the Domestic Mail Manual (“ DMM” ). See 39 U.S.C. §401(2) (1994);
39 C.F.R. pt. I l l (1998).
   In 1996, the Service petitioned the Commission to recommend the adoption
of a new two-cents fee to be paid on the purchase of stamped cards to recover
the costs of manufacturing such cards. In the proceedings before the Commission,
two individual mailers intervened in opposition to the proposed fee. Among other
things, the intervenors argued that collection of the fee would violate 18 U.S.C.
§ 1721, a criminal statute, which provides in relevant part:

           Whoever, being a Postal Service officer or employee, knowingly
       and willfully: . . . sells or disposes of postage stamps or postal
       cards for any larger or less sum than the values indicated on their
       faces; or sells or disposes of stamped envelopes for a larger or less
       sum than is charged therefor by the Postal Service for like quan­
       tities; . . . or sells or disposes of postage stamps, stamped enve­
       lopes, or postal cards, otherwise than as provided by law or the
       regulations of the Postal Service; shall be fined under this title or
       imprisoned not more than one year or both.

   The Commission did not reach the intervenors’ contentions regarding § 1721
in its initial disposition. Although it declined to recommend adoption of the pro­
posed fee at that time on factual grounds unrelated to the issue posed here, the
Commission did recommend the fee classification proposed by the Service in the
form of a “ shell classification” — i.e., a classification earmarked for distinct rate
treatment, but without the recommendation of any particular current rate level.
   In 1997, the Service again proposed adoption of the two-cents card fee to the
Commission, and one of the previously noted intervenors again contended that
charging such a fee would violate 18 U.S.C. § 1721. The Commission Presiding
Officer, however, determined that the proposed fee “ likely” would not violate
§1721, stating “ [e]ven if the face value of a stamped card did not equal its price,
postal employees would likely not be in violation of the statute.” Presiding Offi­
cer’s Ruling on Popkin’s Motion to Dismiss, No. R97-1/31, at 3 (Sept. 26, 1997)
(“ Popkin Ruling” ).


                                                9
                                Opinions o f the Office o f Legal Counsel in Volume 23


  Subsequently, the Commission issued a decision recommending a one-cent fee
for stamped cards over and above the twenty-cents postage charge.2 In June 1998,
the Governors approved the one-cent fee on stamped cards, “ in addition to post­
age,” under the authority of 39 U.S.C. § 3625, and determined that the fee would
go into effect on January 10, 1999. The authorized fee was officially published
in the form of a change to the DMCS, domestic rates and fees. See Changes
in Domestic Rates, Fees, and Mail Classifications, 63 Fed. Reg. 39,124, 39,145,
and 39,163 (1998).3 Further implementing the authorized fee, the Postal Service
promulgated a Final Rule on July 14, 1998, setting forth the DMM standards
adopted by the Service to implement, among numerous other new provisions, the
stamped card fee approved in the Decision of the Governors of the Postal Service
in Postal Rate Commission Docket No. R97-1. See Domestic Mail Manual
Changes To Implement the Rate, Fee, and Classification Changes in Docket No.
R97-1, 63 Fed. Reg. 37,946, 37,957 (1998) (to be codified at 39 C.F.R. pt. 111).
The new provision of the DMM states:

               A $0.01 fee per stamped card and a $0.02 fee per double stamped
            card will be added to cover manufacturing and printing costs. A
            fee of $0.40 will be added to the price of a sheet of 40 stamped
            cards. This is consistent with the existing fee structure for stamped
            envelopes, where customers are charged postage plus a small fee
            for the envelope itself.

Id. at 37,957.
  In light o f the intervenors’ contentions in the rate proceedings, you have sought
the Department’s opinion as to whether charging the one-cent fee on the stamped
cards, without changing the postage imprinted on the cards to include the amount
of that fee,4 would result in criminal violation of 18 U.S.C. § 1721.



   2 T h e reasons w hy the C o m m issio n recom m ended (and the G overnors later approved) a one-cent fee rather than
the tw o -cen ts p ro p o sed by the S erv ic e was ex p lain ed by the C om m ission as follow s “ A o ne-cent fee fo r a stam ped
card ea sily co v e rs m a n u factu rin g costs and m a k es an adequate contributio n w ith a co st co v erag e o f 125 percent
. . . T h e c o st co v e ra g e sh o u ld be relatively lo w for this service, so th at it w ill pro v id e a low co st m ethod by
w hich an individual can send m ail ” Opinion a n d R ecom m ended D ecision, D ocket N o R 9 7 -1 , at 595 (Postal Rate
C o m m ission, M ay 11, 1998).
   3 T h e D om estic M ail C la ssificatio n Schedule is incorporated by referen ce in the P ostal R egulations set forth at
3 9 C F . R § 111.1 (1998).
   4 W e are ad v ise d that it w o u ld b e financially an d otherw ise im practicable fo r the S ervice to alter o r m odify its
large ex istin g in v en to ry o f stam p ed cards so th a t the face value im printed on the card s (presently tw enty-cents)
w ould b e increased to tw en ty -o n e cents, reflectin g the o n e-cent non-postag e fee in addition to p o stag e value See
U SPS L etter at 4. M o reo v er, b ec au se the p n ce in d icia stam ped on the ex istin g card s represents the co st o f po sta g e
only, it w o u ld ap p e ar an o m alo u s an d m isleading to alter the stam ped p n c e to read “ tw en ty -o n e c e n ts” w hen the
actual p o stag e v alu e is o n ly tw enty-cents


                                                                  10
            Applicability o f 18 U.S.C. §1721 to Collection o f Fee fo r Stamped Cards


                                               n.
   In its various submissions to the Commission and the Governors, the Service
has asserted that charging the one-cent fee on stamped cards, in addition to the
imprinted postage of twenty-cents, would not result in violation of 18 U.S.C.
§ 1721. Invoking the relevant legislative history, the Service argues that the
criminal statute was enacted solely to remedy fraudulent pricing practices engaged
in by postmasters in order to inflate their salaries; that § 1721 is therefore con­
cerned solely with unauthorized price manipulation by postal employees; and that
it is in no way intended to prevent the authorized collection of supplemental postal
fees duly approved by the postal authorities. See USPS Letter at 4. The Service
also contends that interpreting § 1721 to prohibit implementation of the proposed
fee arrangement would be inconsistent with the powers and authorities designedly
granted the Service by Congress under the PRA. As the Service asserted in a
brief to the Commission:

       A stamped card fee would not give rise to a violation of section
       1721, since, if implemented, it would be entirely consistent with
       the policies of Postal Service management, and therefore would not
       result in the unauthorized sale of postage at inflated rates. It is evi­
       dent that Congress did not intend the restrictions in 1721 to apply
       to pricing policies recommended by the Commission, approved by
       the Governors, and implemented by postal management, since,
       simultaneously with the enactment of conforming amendments to
       section 1721 adopted in connection with the Postal Reorganization
       Act and 39 U.S.C. § 410(b)(2), Congress contemplated that mail
       classifications such as postal cards would be subject to change, as
       it created an elaborate scheme for the implementation of and
       changes to the Domestic Mail Classification Schedule. See 39
       U.S.C. §§3623, 3625.

Reply Brief of United States Postal Service at 111, Special Services Reform, 1996,
U.S. Postal Rate Commission, Docket No. MC96-3 (1997).
  The Service’s position was subsequently endorsed by the Commission Presiding
Officer in his opinion denying the intervenor’s motion to dismiss based on the
§1721 argument. The Presiding Officer concluded:

          Even if the face value of a stamped card did not equal its price,
       postal employees would likely not be in violation of the statute.
       As the Postal Service convincingly argues, this particular criminal
       statute appears to have been aimed at preventing the misuse of
       postal items by postal employees attempting to increase their sala­

                                               11
                                Opinions o f the Office o f Legal Counsel in Volume 23


            ries (postmasters’ salaries are determined in part by a post office’s
            revenues). By all appearances, it is not an effort to regulate postal
            fees. It would be remarkable if Congress had regulated postal fees
            by criminalizing conduct. ‘‘I f Congress wished to prevent the Postal
            Service from authorizing the sale of stamped cards for a fee in addi­
            tion to postage, Congress would have enacted a law directed at the
            Postal Service rather than its individual employees and officers.”
            Opposition at 4 n.2.

Popkin Ruling at 3.
  The Postal Service also invokes an early opinion of the Solicitor of the Post
Office Department to bolster its position that § 1721 is solely concerned with
unauthorized sales and pricing practices by postal employees, as distinct from offi­
cial changes in postage rates and fees authorized by the Service under the provi­
sions of the PRA. As the Postal Solicitor’s opinion explained with reference to
the “ face value” sale requirements o f an earlier version of § 1721:

            [B]ut accepting the broad and specific terms of the law as applying
            here, it must be borne in mind that this is a criminal statute, and
            in order to constitute a violation a criminal intent is necessary, and
            while it is well established that intent may be presumed from the
            commission o f the acts prohibited, the circumstances in this case
            would negative the existence of such intention, especially should
            the procedure be authorized by the department. . . . For it is to
            be observed that the purpose of the law is not to secure an exact
            return, for accounting purposes or otherwise, for the stamped paper
            disposed of, but to regulate and control postal employees in their
            handling o f stamped papers, this being apparent from the numerous
            other provisions o f the law.

6 Op. Solicitor of the Post Office 652, 655 (1918) (emphasis added).5
   Thus, the Service, the Commission, and the Post Office Solicitor’s early opinion
all appear to agree on the basic proposition that the relevant requirement of 18
U.S.C. § 1721 was intended to apply only to unauthorized and deceptive acts or
transactions by Postal employees, and has no proper application to their
implementation of authorized fee provisions adopted by the Service in accordance
with the provisions of the PRA.

   5 T h a t o p in io n con c ern ed th e peculiarities o f U .S . postal operations in S hanghai, C hina, w here a P ostm aster G eneral
o rd er w as p ro p o sed that pro v id e d for the sale o f stam ps to the public in exchange fo r foreign currency pegged
to th e v alu e o f th e prevailing d aily rate of e x c h a n g e o f U.S currency. T h e issue p resented w as w hether the sale
o f stam p s d u rin g p erio d s w hen th e banks w e re closed and, consequently , n o official exch an g e rate (an d therefore
no ac c u ra te sales value) co u ld b e ascertained, w o u ld constitute a violation o f the version o f §1721 th en in effect
B ased o n th e c o n sid e ratio n s q u o te d above, th e S olicitor con clu d ed that n o violation o f the statute w ould result


                                                                  12
                   Applicability o f 18 U.S.C. §1721 to Collection o f Fee fo r Stamped Cards


   By contrast, the intervenors in the Commission’s proceedings argued that
§1721, by its terms, applies to criminalize the sales arrangements proposed by
the Service. Section 1721 prohibits the sale by postal employees “ of postage
stamps or postal cards for any larger or less sum than the values indicated on
their faces,” and it makes no express exception for official actions. Because postal
employees would be selling stamped cards bearing a twenty-cents postage indicia
on their face for a total sales price of twenty-one-cents, it has been argued that
the sale of the cards would constitute sales for a “ larger . . . sum than the values
indicated on their faces.” 18 U.S.C. § 1721.

                                                             III.

                                                              A.

   In determining whether the Service’s proposed sales arrangement for the
stamped cards would violate the criminal prohibition set forth in § 1721, we need
not resolve whether the Service is correct to contend that the criminal prohibition
is inapplicable to official, authorized acts by Service employees. For even if we
assume that § 1721 may apply to some official, authorized acts, we do not believe
that the plain text of § 1721 bars the proposed sales arrangement that we have
been asked to consider. To see why this is so, it is important to consider not
only the precise terms o f § 1721, but also the overall statutory structure and rel­
evant legislative history, each of which supports the conclusion that the Service’s
proposed sales arrangement comports with the terms of the criminal prohibition.6

                                                              B.

   The Service agrees that the literal terms of the statutory prohibition set forth
in §1721, which bars the sale of “ postage stamps or postal cards” for sums
greater or less than the “ values indicated” on their faces, applies to the sale of
“ stamped cards.” The Service concedes that “ stamped cards” are “ postal cards”
for purposes of § 1721, and thus that the criminal prohibition applies to stamped
cards in the same manner that it would apply to any type of postal cards. The
analysis that follows, therefore, accords no weight to the fact that the Service
has designated the sales item in question here with a nam e— “ stamped cards” —
 that does not expressly appear in § 1721.
   The analysis that follows does accord weight, however, to the Service’s conten­
tion that, in adopting the proposed sales arrangement, it has exercised the discre­
tion that Congress has delegated to it pursuant to the PRA. The Service’s conten­
tion is important because the enactment of the PRA dramatically altered the legis­
   6 T h e C rim inal D ivision o f the U nited States D epartm ent o f Ju stice concurs m th is conclusion. See M em o ran d u m
for B eth N olan, D eputy A ssistant A ttorney G eneral, O ffice o f Legal C ounsel, fro m Jam es K. R obinson, A ssistan t
A ttorney G eneral, C rim inal D ivision, R e ■Collection F ee f o r Stam ped C ard s (D ec. 30, 1998)


                                                              13
                                 Opinions o f the Office o f Legal Counsel in Volume 23


lative and regulatory context in which postal pricing and sales practices —
 including those covered by 18 U.S.C. § 1721— must be evaluated. Indeed, Con­
gress amended § 1721 at the time that it enacted its postal reform legislation and
thereby expressly linked the existing criminal prohibition with the broader statu­
tory and regulatory changes effected by the PRA. See Pub. L. No. 91-375, sec.
6(j)(29), § 1721, 84 Stat. 719, 780 (1970) (extending the prohibition to the sale
of postal cards and other postal items “ otherwise than as provided by law or
the regulations o f the Postal Service.'").1
   Most significantly, the PRA shifted control over postal pricing and sales prac­
tices from Congress to the Service. See National Ass ’n o f Greeting Card Pub­
lishers v. U.S. Postal Service, 462 U.S. 810, 813 (1983) (citation omitted)
(“ When, in 1970, Congress enacted the Postal Reorganization Act, it divested
itself of the control it theretofore had exercised over the setting of postal rates
and fees.” ). In doing so, Congress afforded the Service broad discretion to carry
out its functions in a businesslike and cost-effective manner. See S. Rep. No.
91-912, at 2 (1970) ( “ [PJostal management must now be given the unfettered
authority and freedom it has been denied for years to maintain and operate an
efficient service.” ); 39 U.S.C. § 404(a)(2) (1994) (giving the Service specific
authority “ to prescribe, in accordance with this title, the amount of postage and
the manner in which it is to be p a id ” ) (emphasis added); id. §401(2) (granting
the Service authority “ to adopt, amend, and repeal such rules and regulations
as it deems necessary to accomplish the objectives of [the PRA].” ). Accordingly,
§1721 should be construed, to the extent that its text will allow, in a manner
that will permit the Service to exercise the kind of broad discretion to establish
fee changes and to implement them in a businesslike and cost-efficient manner
that appears to have been contemplated by Congress when it enacted the PRA.
   Here, the Service’s proposal to sell postal cards for twenty-one cents, adopted
to recover the cost of producing the stationery component of such cards, furthers
the statutory purpose of ensuring that postal items are sold for amounts that reflect
the costs of their production. Specifically, the PRA requires that postal rates and
fees must be established in accordance with “ the requirement that each class of
mail or type o f mail service bear the direct and indirect postal costs attributable
to that class or type plus that portion of all other costs of the Postal Service
reasonably assignable to such class or type.” 39 U.S.C. § 3622(b)(3). The addition
of a one-cent fee for the costs of the stationery plainly comports with that statutory
command, as the Service has determined that the postage price no longer accounts
for the costs of the stationery on which the postage mark appears.
   In addition, the Service’s proposal to sell its existing inventory of postal cards
at the new price, even though these cards do not set forth the new sales price
on their face, furthers the statutory purpose of ensuring that fee changes are imple-

  7 F o rm erly, th e statu to ry p ro h ib itio n had a p p lie d to the “ P o st O ffice D e p a rtm e n t” S e e A ct o f Ju n e 25, 1948,
ch 6 4 5 , § 1721, 62 S tat. 683, 7 83.


                                                                     14
            Applicability o f 18 U.S.C. § 1721 to Collection o f Fee fo r Stamped Cards


merited in a businesslike and cost-effective manner. See UPS Worldwide For­
warding, Inc. v. United States Postal Service, 66 F.3d 621, 638 (3d Cir. 1995),
cert, denied, 516 U.S. 1171 (1996) (explaining that “ [i]n enacting the PRA, Con­
gress repeatedly explained the fundamental reason for the dramatic changes man­
dated by the Act; it wanted the Postal Service to operate less like a bureaucratic
agency and more like a business. The relevant committee reports repeat this prin­
ciple again and again.” ); see, e.g., H.R. Rep. No. 91-1104, at 11 (1970), reprinted
in 1970 U.S.C.C.A.N. 3649, 3660 (“ The Postal Service is a public service but
there is no reason why it cannot be conducted in a businesslike way and every
reason why it should be.” ). As we have noted, the Service has advised that it
would be financially and otherwise impracticable to alter its large, existing inven­
tory of postal cards to account for the newly-determined fee on the face of those
cards. See USPS Letter at 4. The Service’s proposed sales arrangement therefore
would appear to promote the statutory aim of economic efficiency by imple­
menting the new fee for postal cards — which has been selected to serve the
congressional mandate that the fee reflect all of the costs of production — in a
manner that makes use of already-printed postal cards without incurring substantial
alteration costs.
   The foregoing analysis demonstrates that the adoption of the intervenors’ pro­
posed construction of the criminal prohibition set forth in § 1721 of title 18 would
effectively preclude the Service from adopting a cost-effective means of imple­
menting a fee change that meets the statutory requirement that postal fees reflect
all of the costs of the production of the postal item. Because the Service’s pro­
posed sales arrangement appears to represent an exercise of the very type of
discretion in the implementation of a fee change that Congress appears to have
contemplated when it enacted the PRA, § 1721 should be construed to preclude
the exercise of that discretion only if the plain terms of the criminal prohibition
would compel that result. In our view, as we explain more fully below, they do
not.

                                                C.

   The proposed sales arrangement arguably contravenes the plain terms of
§ 172l ’s face-sale provision in two distinct ways. First, the Service proposes to
sell postal cards for a price — twenty-one cents — that is not set forth on their
face. Second, the Service proposes to sell these cards for a price that is greater
than the only monetary amount that does appear on their face — namely the
amount set forth on the twenty-cents postage stamp that is imprinted on the face
of the card.
   To assess the seriousness of these two potential points of conflict between the
statutory text and the Service’s proposed sales arrangement, it is necessary to
answer two questions. First, does § 1721 require that postal cards indicate a value

                                                15
                    Opinions o f the Office o f Legal Counsel in Volume 23


on their face? If it does not, as we conclude below, then the Service may authorize
the sale o f postal cards for an amount — twenty-one cents — that is not indicated
on the face of the card. This conclusion, however, leads to a second question:
Even if the value need not be indicated on the face of the card, when a monetary
amount does appear on the face of a postal card in the form of the price of the
postage stamp, is the postage amount the only price at which the card may be
sold, or is it possible that the card m ay be sold for a value other than the postage
amount? If the latter is possible, as we also conclude below, then the Service
may authorize the sale of a postal card for an amount that is greater than the
stamped postage mark and that is not otherwise indicated on the face of the card.
  In addressing the first question, it is clear that the plain terms of § 1721 are
consistent with the conclusion that the Service may sell postal cards for an amount
that is not specified on their face. That is, § 1721 does not require that the face
of a postal card must indicate the value of the postal card. The statute prohibits
the sale of a postal card for a sum greater or lesser than the indicated value of
the postal card, but it does not, by its terms, mandate that the face of the postal
card indicate what that value is. Nothing in the text of the criminal prohibition
appears to require the conclusion, therefore, that the proposed sales arrangement
would be prohibited by the face-sale provision of § 1721 simply because the
Service proposes to sell cards that would not have set forth the official value
of the cards, as opposed to the official value of the postage of the cards, on
their face.
   This reading of the statutory text accords with longstanding administrative prac­
tice with respect to the sale of postage stamps, which, like postal cards, are subject
to the face-sale requirement of § 1721. The Service has regularly issued letter-
series postage stamps, which do not indicate a monetary amount but have only
a letter of the alphabet indicated on their faces, for a price authorized by the
Service but not indicated on the faces of the stamps themselves. To be sure, letter-
series stamps do contain a marking on their faces that signifies their value. The
actual sales price that a purchaser must pay for the stamp, however, is not discern­
ible from the face of the stamp. A purchaser may verify the official, authorize
sales price only by consulting an official Service document that states the price
of a stamp bearing a certain letter. In this respect, letter-series stamps are similar
to postal cards that do not bear their sales price on their faces. In each case,
a purchaser must look beyond the face of the postal item, and consult official
materials, to determine the official price.
  Thus, if § 1721, which requires that both postage stamps and postal cards be
sold for no more or less than “ the values indicated on their faces,” imposed
a requirement that these items always indicate the monetary amount of their sales
price on their faces, then letter-series stamps would have been prohibited. Instead,
however, the Service advises that letter-series stamps have not been considered

                                              16
                  Applicability o f 18 U.S.C. § 1721 to Collection o f Fee fo r Stamped Cards


 problematic under § 1721,8 and Congress has not precluded the issuance of such
 letter-series stamps despite ample time within which to do so. This longstanding
 administrative practice with respect to postage stamps comports with our conclu­
 sion that the plain terms of the criminal prohibition do not require that the Service
 indicate the sale price of the postal cards on their faces.
    We find additional support for our conclusion in the fact that § 1721 explicitly
 permits the sale of stamped envelopes at prices not indicated on their faces. The
 provision regarding stamped envelopes suggests that the criminal prohibition set
 forth in § 1721, when considered as a whole, was not intended to embody a gen­
eral policy that the price of a postal item must be indicated on the face of the
item. Such a policy, after all, would be inconsistent with the provision regarding
 stamped envelopes. As a result, the overall structure of the statutory criminal
prohibition does not provide clear support for a conclusion that the plain terms
of the face-sale provision should be construed to include, even if only implicitly,
a requirement that the value of a postal card be indicated on its face.
   Even though we do not believe that § 1721 precludes the sale of postal cards
for an authorized amount not indicated on their faces, we are still left to consider
the second question: whether postal cards must be sold at the price of the postage
indicated whenever a postage amount is indicated on the faces of the cards. Here,
the Service proposes to sell postal cards not only for an amount, twenty one cents,
that would not appear on the faces of the cards, but also for an amount that would
be greater than the only monetary value, twenty-cents, that would appear on the
faces of the postal cards — namely, the amount of the postage price marked on
the postage stamp. If § 1721 is properly construed so that such a monetary amount
necessarily “ indicates” the “ value” of the card itself, then § 1721 arguably would
appear, by its terms, to bar the proposed sales arrangement. If the provision may
be construed so that such a monetary amount may be understood to “ indicate”
only the value of the postage, however, then the Service’s sale for twenty-one
cents of a card stamped with a twenty-cents postage mark would not contravene
the express terms of the criminal prohibition. Under such a construction, the Serv­
ice’s sale for twenty-one cents of a postal card stamped with a twenty-cents post­
age mark would not be for a sum greater than the “ value indicated” on the card’s
face because the card’s face would indicate only the value of the postage and
not the value o f the card itself.
   In our view, the plain text of § 1721 does not require the conclusion that the
amount of postage that appears on a postal card necessarily constitutes the “ value
indicated” of a postal card, even when there is no express countervailing indica­
tion of the postal card’s value on the face of such a postal card. The statutory
text does not reveal, by its terms, the circumstances in which the face of a postal
card may be said to have indicated the value of the postal card as opposed to

   8 T elephone conversation betw een G eorge S m ith, A ttorney-A dvisor, O ffice o f Legal C o u n sel, an d A nthony
A lvem o, A ttorney, N ational Litigation Section, U nited States Postal S ervice (D ec. 22, 1998).


                                                          17
                             Opinions o f the Office o f Legal Counsel in Volume 23


merely the value of the postage stamp that appears on the face of the postal card.
The statutory text states only that a sale of a postal card may not be for a sum
greater or lesser than the “ value indicated” on the face of a postal card. As to
whether the appearance of the monetary amount of a postal stamp on a postal
card, without more, necessarily indicates the value of the postal card within the
meaning o f § 1721, the statutory text is silent.
   The Service’s last regulation that defined the term “ postal cards” accords with
a construction of the criminal prohibition in which the postage stamp that appears
on the face of a postal card need not be understood to reflect the full value of
the card itself. The regulation defined a postal card as follows: “ A postal card
is a card with postage imprinted o r impressed on it and supplied by the Postal
Service for the transmission of messages.” 39 C.F.R., pt. 3001, subpt. C, appx.
A, 222.11 (1996).9 That definition suggests that the postal card is a distinct postal
item from the postage that is impressed upon it, a suggestion that accords with
the conclusion that the postage stamp that appears on the face of a postal card
does not necessarily indicate the value of the card. The statutory prohibition on
the sale of postal cards for a value greater than the “ value indicated” on the
face o f the card would appear to be at least ambiguous, therefore, as to whether
the textual phrase “ value indicated on its face” refers only to the authorized sales
price of the card in those cases in which such a value has been indicated on
the face o f the card, or whether that phrase is instead intended to refer to the
sole monetary amount that appears on the face o f the card even though the Service
has concluded that such an amount actually refers only to the postage price.
   The intervenors reject the notion that § 1721 may be read to be ambiguous on
this point. Their plain meaning argument against the Service’s proposed sales
arrangement hinges largely on the contrast in the language that § 1721 employs
with respect to postal cards as compared to stamped envelopes. The intervenors
contend that because § 1721 refers to the value indicated on the face of postal
cards, but not stamped envelopes, it is clear that § 1721 imposes an additional
limitation regarding the manner o f the sale o f postal cards — namely, that they
may not be sold for a monetary amount greater than the sole monetary amount
that appears on their face, which, in the case before us, is the amount of postage
that is stamped on the cards.
   A review of the historical background to the current version of the criminal
prohibition set forth in § 1721 demonstrates, however, that it is far from clear
that the differing language in § 1721 on which the intervenors rely supports their
plain meaning argument. At the time that Congress first enacted the criminal
prohibition subsequently codified, without material alteration, as 18 U.S.C. § 1721,
see Revised Statutes of the United States, 1873-1874, §3920, at 762 (1878)

   9 T h is reg u latio n w as am en d ed through su bsequent regulation in 1996 so th at the term “ stam ped ca rd ” replaced
th e te rm “ postal card ” S e e A m endm ent to D o m estic M ail C lassificatio n S chedule, 61 F ed Reg. 32,656, 32,662
(1996).


                                                              18
            Applicability o f 18 U.S.C. § 1721 to Collection o f Fee fo r Stamped Cards


(“ Revised Statutes” ), as amended by Act of June 17, 1878, ch. 259, 20 Stat.
 140, 141, it had statutorily established a single “ postage charge” for postal cards
of “ one cent each, including the cost of their manufacture.” See Act of June
8, 1872, ch. 335, § 170, 17 Stat. 283, 304. Congress had in this way set the postal
card fee at a monetary amount that reflected both the cost of postage and the
cost of manufacture. There was therefore no deviation between the postal charge
and the value of the postal card at that time because Congress, in one legislative
act, had established the value of the postal card to be the equivalent of the postal
charge. Indeed, Congress did not even authorize the use of private post cards
until 1898, well after it had enacted the face-sale provision of the criminal prohibi­
tion now codified in § 1721. Act of May 19, 1898, ch. 347, 30 Stat. 419. Thus,
at the time Congress enacted the face-sale provision, there was no market, as
there is today, for post cards that could be purchased for a fee separate from
the costs of their postage stamps.
   In contrast to its treatment of postal cards, Congress, at the time of the first
enactment o f the face-sale provision, had not established a similarly uniform, fixed
statutory value for stamped envelopes. Indeed, it could not have because stamped
envelopes were used to mail a wide variety of materials, including newspapers,
of varying sizes, and thus no single cost could be affixed due to variations in
both the applicable postage rates and the costs of producing differing types of
envelopes. See 25 Op. Att’y Gen. 354, 359-60 (1905). Congress had instead pro­
vided by statute that the Postmaster General shall provide stamped envelopes and
that such stamped envelopes “ shall be sold, as nearly as may be, at the cost
of procuring them, with the addition o f the value o f the postage stamps impressed
thereon.” See Revised Statutes, §3915, at 761 (emphasis added). This framework
meant that the face of a stamped envelope did not set forth the value of the
envelope — it set forth only the value of the postage stamp that was impressed
on the envelope. Accordingly, the statutory prohibition regarding the manner of
the sale of stamped envelopes did not refer to the face value of the envelope
but provided instead that such an envelope could not be sold or disposed of “ for
a larger or less sum than is charged therefor by the Post-Office Department for
like quantities[.]” Act of June 17, 1878, 20 Stat. at 141; see Revised Statutes,
§ 3920, at 762. This statutory restriction served to ensure that the sale of stamped
envelopes conformed to the authorized, albeit variable, fee for their purchase.
   These historical facts regarding the state of nineteenth century postal law make
it difficult to conclude that Congress clearly employed the differing language con­
cerning stamped envelopes that appears in § 1721 in order to ensure that the face
value of the postage stamp that appears on a postal card would necessarily indicate
the value of the postal card itself. The historical context instead may be read
to suggest that the face-sale provision was intended to ensure that postal cards,
like stamped envelopes, were sold for a price authorized by Congress. The statu­
tory reference to the face value of postal cards, but not the face value of stamped

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                   Opinions o f the Office o f Legal Counsel in Volume 23


envelopes, may merely have been reflective of the fact that, at the time that Con­
gress first enacted the criminal prohibition now in question, the face of postal
cards set forth their legally established value while the face of stamped envelopes
did not. It is not at all clear, therefore, that the criminal prohibition should be
construed to preclude a proposed sales arrangement of the type at issue here.
Under the Service’s proposed sales arrangement, stamped cards would be per­
mitted to be sold only for a price that, although greater than the price of postage
that appears on their faces, would nevertheless conform to the fee that has been
established by the administrative agency that Congress has authorized to set such
fees.
  In light o f the ambiguity as to the inference that should be drawn from the
differing statutory treatment of stamped envelopes and postal cards, we do not
believe that § 1721 should be construed to bar the Service’s proposed sales
arrangement. Such a construction would serve to restrict the ability of the Service
to adopt a method for the implementation of a fee change that appears to serve
the broad purposes of the PRA. Congressional intent is better served by construing
the ambiguity on this point in a manner that preserves the substantial discretion
that the PRA appears to have been intended to confer upon the Service. For that
reason, we conclude that § 1721 does not bar the Service from determining that
the postal mark on a pre-stamped card indicates the value of the postage alone,
not the value of the postal card, and thus from selling stamped cards bearing
twenty-cents stamps for twenty-one cents.

                                            D.

  A review of the legislative history to § 1721 accords with our conclusion that
the face-sale provision should be construed to afford the Service the discretion
to permit the sale of a postal card for an amount that reflects its authorized value
even though it exceeds the amount of postage that appears on its face. It is evident
from the legislative history that § 1721 was primarily intended to deter, prohibit,
and punish fraudulent and unauthorized practices by postal employees in the
pricing and sale of stamps, postcards, and other postal items. That general purpose
accords with a construction of the terms of § 1721 that would permit the Service
to offer a postal card for sale only at a price that had been fixed by regulation,
even though it may be greater than the amount of postage that appears on its
face.
  That is not to dispute that a broad requirement that, in the absence of a counter­
vailing indication on the face o f a postal item, a postal item may not be sold
for a price greater than the postage stamp would also protect against fraudulent
sales practices. Such a requirement would arguably make it more difficult for
postal employees to sell postal items for unauthorized prices because consumers
would need only to consult the face of the postal item to determine the authorized

                                            20
                  Applicability o f 18 U.S.C. §1721 to Collection o f Fee fo r Stamped Cards


price. In that sense, the general anti-fraud purpose of the criminal prohibition
arguably would be furthered by the intervenors’ proposed construction of § 1721.
   Nevertheless, the pertinent legislative history of § 1721 demonstrates that the
predominant purpose of that provision, together with several others enacted or
considered with it, was to prevent postmasters and other postal employees from
engaging in fraudulent or other unauthorized practices in the sale of stamps, post­
cards, and related postal items.10 The legislative history at no point states that
the statute was intended to protect against fraudulent practices through the imposi­
tion of a broad prophylactic rule that would preclude the sale of postal cards
for an amount greater than the stamped postage in circumstances when no other
monetary amount would appear on their faces.
   The House debate on these measures tersely expressed the main purpose of
the reforms under consideration: “ The question and the only question for the com­
mittee to determine is which is the better proposition for the protection of the
Government to prevent dishonest men from swindling the Government.” 7 Cong.
Rec. 2680 (1878) (remarks of Rep. Hewitt). During the debate on related provi­
sions in the bill aimed at postmaster abuses, Representative Hewitt described the
practices underlying the face value sale provision that was included in the bill
under consideration and enacted in language essentially similar to that of § 1721:

              In the law as it now stands, as I said a moment ago, there is
           no prohibition of a postmaster selling stamps to whom he pleases
           and where he pleases. There is no provision in the law that prohibits
           him from trading them for goods or paying his debts with them —
            I mean in the present law as it now stands. And it was under that
           law this abuse had grown up, and just because the law did not
           prohibit i t . . . .

              But now the Committee on Appropriations have reported a bill
           here which . . . absolutely prohibits the sale of stamps for less than
           their face value . . . . This bill not only prohibits that, but it pro­
           hibits postmasters from trading in stamps for goods, from using
           them in buying goods, or paying their debts with them; and it
           affixes a severe penalty for the violation of the law.

7 Cong. Rec. at 2679.
   Later, defending the bill reported by the Appropriations Committee (which
included the predecessor version of § 1721) against an amendment designed to
increase the percentages of postal revenues payable to postmasters as compensa­
tion, Rep. Blount stated: “ The proposition of the Committee on Appropriations

   l0 T he predecessor version o f § 1721 and the related postal reform m easures w ere co nsidered as part o f th e Post
O ffice A ppropriation Bill for the F iscal Y ear Ending June 30, 1879, H .R 424 6 , 45 th C ong. (1878). S e e 7 C ong
R ec. 2 4 7 6 and passim (1878).


                                                          21
                    Opinions o f the Office o f Legal Counsel in Volume 23


is not to change the law as to the percentage that the postmasters are paid, but
it is simply to adopt another method to ascertain what they are paid. It is simply
an effort to avoid fraud; that and nothing m ore." Id. at 2681 (emphasis added).
Describing the Post Office Department’s position on the pending sale and com­
pensation provisions, Rep. Blount further stated: “ The proposition now from the
Department is not to decrease by this legislation the amount of [the postmasters’]
salary, but to protect the Government against fraud.” Id. As Rep. Blount pro­
ceeded to describe his own general approach to the bill: “ [A]s a Representative
upon this floor, bound to protect the Government, I shall not hesitate to provide
proper legislation against fraud, even if some over-sensitive postmasters should
imagine there is some reflection upon their integrity.” Id.
   Authoritative statements accompanying the passage of subsequent amendments
and revisions of § 1721 further confirm the intent indicated in the original debate.
Thus, when Congress modified and recodified the statute in 1909, ch. 321, see
Act of March 4, 1909, § 208, 35 Stat. 1088, 1128, the accompanying legislative
history characterized it as follows: “ This section, like section 207, is designed
to punish certain acts the effect o f which is to defraud the postal revenue or to
misappropriate the postal funds, and by means of the acts forbidden to fraudulently
increase the compensation of postmasters and employees.” S. Rep. No. 60-10,
pt. 1, at 22 (1908). Similarly, the legislative history of the 1956 amendments to
the statute, see Act of Aug. 1, 1956, ch. 818, 70 Stat. 784, again explained that
the purpose of the provision was to prohibit postal employees from “ so disposing
of stamps, stamped envelopes, or postal cards as to inflate receipts artificially.”
S. Rep. No. 84—2720, at 1 (1956), reprinted in 1956 U.S.C.C.A.N. 3814, 3814.
In describing the effect of the 1956 amendments, the accompanying House Report
explained that they were designed to

       broaden the class of postal employees who are prohibited by
       existing law from inducing or attempting to induce any person to
       purchase postage stamps, stamped envelopes, or postal cards for
       the purpose of increasing the emoluments or compensation of the
       postmaster or any employee of any post office or any station or
       branch thereof.

H.R. Rep. No. 84-555, at 1 (1955).
  The review of the legislative history that is set forth above reveals that there
are no statements that directly speak to the issue that is before us in this matter.
Only by drawing a questionable inference from the general anti-fraud statements
that appear in the legislative history, therefore, could one conclude that Congress
intended for § 1721 to establish a broad prophylactic rule against a sales arrange­
ment of the type that the Service has proposed here. The broad nature of the
administrative discretion that the PRA appears to confer upon the Service to make

                                             22
             Applicability o f 18 U.S.C. § 172 J to Collection o f Fee fo r Stamped Cards


and implement fee changes, however, counsels against the drawing of such an
inference. The general anti-fraud statements that appear in the legislative history
simply do not suffice to justify the conclusion that § 1721 should be construed
to preclude the Service from exercising its broad administrative discretion in the
manner that it proposes here. Accordingly, we conclude that the legislative history
accords with our construction of the plain terms of § 1721.

                                                 E.

   We note one final point. Intervenors contend that their construction of § 1721
is supported by an early opinion of the Attorney General. That opinion asserted
that the prohibition against postal sales at less than face value contained in a
late nineteenth century version of §1721, see Revised Statutes, §3920, at 762;
20 Stat. at 141, extended to the Post Office Department and the Postmaster-Gen-
eral as well as to postmasters and other postal employees. See 25 Op. Att’y Gen.
at 360. In that opinion, the Attorney General concluded that the Postmaster Gen­
eral lacked authority to approve a “ Retum-Postage” scheme proposed by a private
contractor which would have relieved advertisers from paying postage on pre­
addressed return cards and envelopes until they were actually deposited in the
mails and reached the designated return address preprinted on the card.
   Among other things, the Attorney General determined that such an arrangement
would “ violate the spirit and also the letter” of numerous provisions of the postal
laws, including the version of § 1721 then in effect. In referring to that provision,
the Attorney General stated that "[tjhe Postmaster-General is clearly within the
inhibition. Indeed, to rule otherwise would be to do violence to the plain and
expressed intent of Congress.” Id. After further noting that the proposal would
allow the contractor to make its initial purchase of the return postal cards and
stamped envelopes at a price far below that paid by the general public (reflecting
the fact that the postage component would not be paid until the stamped card
or envelope was actually returned and delivered), the Attorney General stated:

          I am unable to reconcile such a transaction with the plain and
       explicit injunction of Congress that ‘no stamped envelopes shall
       be sold by the Post Office Department at less (in addition to legal
       postage) than the cost, including all salaries, clerk hire, and other
       expenses connected therewith,’ ‘or sell or dispose of postal cards
       for any larger or less sum than the values indicated on their faces.’

Id.
   We do not find the reasoning of this opinion pertinent when applied to the
matter presented here. Most significantly, the Postmaster-General in 1905 did not
possess the broad statutory authority to change postage rates and fees that is vested

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                    Opinions o f the Office o f Legal Counsel in Volume 23


in the Service today pursuant to the PRA. See 39 U.S.C. §403 (1994); id. §404,
as amended by PESEA, §3, 112 Stat. at 1572; id. §§3621-3625, as amended
by PESEA, § 5, 112 Stat. at 1573. That is why the Attorney General’s 1905
opinion stressed that the return postage scheme under consideration there could
“ not be put into operation without the express authority of Congress,” 25 Op.
Att’y Gen. at 357, or “ without additional legislation.” Id. at 366. In contrast,
changes in postage rates and fees may be adopted today by the Service (with
the Commission’s concurrence) through administrative action alone pursuant to
the procedures of the PRA. Passage of legislation by Congress is no longer
required. The legal and regulatory framework on which the Attorney General’s
1905 opinion was premised has been fundamentally altered by the intervening
enactment o f the PRA. Specifically, the Service is now authorized to impose a
fee applicable to stamped cards, to prescribe the manner in which it is to be paid,
and to promulgate a regulation providing for the collection of that fee. Thus, while
the criminal prohibition may have been relevant to the Attorney General’s late
nineteenth century determination o f whether the Postmaster General possessed
statutory authority to enter into a contract to sell postal cards at a rate lower
than that which had been authorized by Congress, it has no relevance to the
present determination o f how the Service may implement a change in postal fees
that Congress has authorized.

                                                             BETH NOLAN
                                                     Deputy Assistant Attorney General
                                                         Office o f Legal Counsel




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