Abstract: The Imperial Origins of Reform: American Postal Savings, 1871-1910

Bill Kelson

Abstract

Often dismissed by historians of US social democracy, the postal savings system of the early twentieth century, a federal savings bank run from local Post Offices, was a successful financial reform. European states of the late nineteenth century developed the first postal savings systems, establishing them at home and in their colonies. Postal banks paid low rates of interest to depositors, assumed to be workers and small savers, and invested deposits in safe assets, largely government bonds. These were safer, if less lucrative, places to save than private banks in an era before national deposit insurance. Postal banking made a late appearance the US and only did so as a result of US imperialism in the Pacific. Postal bank bills languished in Congress during the late nineteenth century, stymied by the finance industry and advocates of laissez-faire; but after US administrators developed a postal savings bank in their new Philippine colony, Congress was convinced of the efficacy the reform. In 1910, the US National Monetary Commission cobbled together a postal bank proposal based on European and imperial precedents, and in 1913, President Taft, a former Philippine Governor-General, signed a US postal savings bill based on the commision's proposal into law.