History
As early as October 1874, the United States Post Office recognized common abbreviations for states and territories. However, they only accepted these abbreviations because of their popularity, preferring that patrons spell names out in full to avoid confusion.
The traditional abbreviations for U.S. states and territories, widely used in mailing addresses prior to the introduction of two-letter U.S. postal abbreviations, are still commonly used for other purposes (such as legal citation), and are still recognized (though discouraged) by the Postal Service.
Modern two-letter abbreviated codes for the states and territories originated when the Post Office introduced ZIP codes in 1963. The purpose was to make room for ZIP codes in the address, rather than to standardize state abbreviations per se.
Since 1963, only one state abbreviation has changed. Originally Nebraska was "NB," but in November 1969, the Post Office changed it to "NE" to avoid confusion with New Brunswick in Canada.
The two-letter postal abbreviation system is complicated by the fact that eight state names begin with M and to avoid duplication, some abbreviations are not intuitive.
Prior to 1987, when the U.S. Secretary of Commerce approved the two-letter codes for use in government documents, the United States Government Printing Office (GPO) suggested their own set of abbreviations, with some states left unabbreviated. Today, the GPO supports United States Postal Service standard.
Read more about this topic: List Of U.S. State Abbreviations
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