As per the title. This claim was made in the book "Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling" by John Taylor Gatto. He makes numerous dubious claims, however this one interested me most (p. 67):

A Massachusetts Senator said a while ago that his state had a higher literacy rate before it adopted com- pulsory schooling than after. It’s certainly an idea worth considering: schools reached their maximum efficiency long ago, meaning that “more” for schools will make things worse, instead of better.

He repeats a similar claim several times; i.e. that literacy before compulsory schooling was actually almost as high (at least, among those who weren't slaves/servants) as after compulsory schooling - to further his thesis about the negatives of schooling.

Simply; is the claim in the title/quote true? Is it true/false in other instances?