problems adding user to postfix, shell account exists

I am running Ubuntu 10.04 with postfix and dovecot, I am running into a problem - I am unable to add new mailboxes for some reason

useradd -m James

passwd James

was completed however when I try to login to the mailbox it just says invalid login username. I have other mailboxes set up for other users and I can actively login to those. What am I missing?