ABSTRACT
Starting in 1910, any member of the public could open a savings account at the post office.1 With this new service, the federal government expanded its administrative responsibilities. It would collect hundreds of millions in savings deposits, despite the fact that traditional banks offered savings accounts. For American political development scholars, postal banks are a clear-cut case of the expansion of the state’s administrative capacities. This policy coup, the introduction of a government bank in a capitalist society, suggests the successful vanquishing of traditionally powerful economic interests. The postal bank case provides solid evidence of the theoretical proposition that unlikely social groups can and do win significant policy victories. Scholars have identified the presence of distinct social movements (agrarian populists and urban social welfare reformers) as well as state actors (high-and mid-level bureaucrats in the Post Office Department) in securing this policy change. Despite scrutinizing the politics of postal banks, these scholars have largely overlooked the critical role of urbanization in furnishing a rationale for bureaucratic expansion and the centrality of “shifts in governing authority” in understanding this institution. As a result, existing scholarship has neither documented nor tried to address the public’s reaction to this new service.
