THE 1910 POSTAL SAVINGS
SYSTEM
AND
POSTAL DEPOSITORY
By an Act of Congress, June
26, 1910, the Postal Savings System in designated Post Offices was
established. It became effective January 1, 1911.
The Federal Government
aimed the legislation toward immigrants to get money out of hiding,
attract their money into savings, provide safe depositories to those
who had no confidence in American banks and furnish convenient
depositories for many working people. Bankers who at first viewed
the system as unfair competition soon agreed it brought considerable
money out of mattresses and cookie jars.
The law establishing the
Postal Savings System directed the Post Office Department to
redeposit the money in the local banking system where it earned 2.5%
interest of which 2% was paid to depositors. The ½ % was intended
to pay for the system operation.
Certificates were issued
for proof of deposit. Interest compounded annually. Allowable
balance
was first set at $500 but by
1918 had been raised to $2500. Also at first a dollar was minimum
deposit and there were 10 cent stamps to be saved until the minimum
was raised.
At first deposits were slow
but by 1929 $130 million was on deposit and during the 1930's
saving spurted to 1.3 billion, 1947 savings were $3.4 billion.
By 1964 the deposits had dropped to
$416 million. April 1966 the
Post Office Department stopped accepting deposits and officially
ended July 1, 1967. At that time there were more than 600.000
depositors with $50 million unclaimed. His was turned over to the
Treasury Department to be put in Trust indefinitely. No claims
made after 13 July, 1985 have been honored.
Abstract: Harrison Howeth,
2017; Historian United State Postal Service, July 2008
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