(FORTUNE Small Business) – Anyone who's ever been in a business mailroom has heard of Pitney Bowes, the company that makes postage meters. But the firm's ubiquity makes it easy to overlook how incongruous it is for a corporation to be in the business of dispensing postage, an activity that is constitutionally and congressionally reserved as a government function. So who were Pitney and Bowes, and how did they crack the U.S. post office's statutory monopoly?

The answer to that question begins in the late 1800s, when the Industrial Revolution, Manifest Destiny, and America's population boom had all made bulk mailing more attractive to businesses. But affixing stamps to hundreds of envelopes was tedious and inefficient, and it left companies vulnerable to large losses via stamp theft--a common crime at the time.

Arthur Pitney, an inventor in the classic tinkerer-putterer mode, recognized those problems and became obsessed with creating a device to simplify business mailings. In 1902 he received a patent for a hand-cranked gadget with two locking counters--one counting down the amount of postage remaining from the original amount purchased, the other counting up to show the total postage dispensed. Postal officials were intrigued, and in 1903 they gave his device a trial run.

Efficiency, of course, has never been the post office's strong suit. The officials turned Pitney down and then kept him waiting nearly a decade as he refined his device and petitioned for another test. Despite entreaties from various businesses that had seen Pitney's meter and were eager to use it, the post office rejected him again in 1912 and 1914. A disgusted Pitney--his finances and marriage both wrecked by the project--resorted to selling insurance.

It was around this time that a businessman named Arthur Bowes began wondering about his company's future. Bowes ran the American Stamping Machine Co., which sold stamp-cancellation equipment to the post office. He'd come to believe that rising mail volume would soon make stamps, and hence his business, obsolete, so he began exploring the notion of a stampless postage machine. When he broached the idea to his post office contacts, he was surprised to learn that someone else had been pursuing the same concept for years: Arthur Pitney. The two men soon met and decided to pool their expertise. Pitney Bowes was born.

Unlike Pitney, Bowes was a highly successful businessman, and he had an established relationship with the post office. His connections and presentation skills finally put the postage meter over the top. After another trial run, the post office granted Pitney Bowes an exclusive license to dispense postage. Congress passed the enabling legislation in 1920, and the first piece of metered mail--a letter from Bowes to his wife--was posted Dec. 10 of that year. By 1922, 400 meters were in service, accounting for more than $4 million in postage. Within 20 years this annual figure had grown to $190 million, about 20% of post office revenues.

Today Pitney Bowes is a $4.1 billion company, making it a mainstay of the Fortune 500. Over the years the firm has produced mail-sorting machinery, copiers, and fax machines, but its signature products are still its postage meters, which have been continually upgraded and are now used by postal agencies around the world.

And for all you wiseacres who might be wondering: Yes, Bowes' letter to his wife arrived just fine, without being lost, delayed, shredded, or delivered to the wrong address.