THE UNITED STATES POST OFFICE DOMESTIC POSTAL MONEY ORDER SYSTEM IN THE 19TH CENTURY: A NASCIENT BANKING SYSTEM
Tom Velk () and
Terence Hines ()
Departmental Working Papers from McGill University, Department of Economics
The domestic United States Postal Money Order System was established in 1864 to allow Union soldiers to send money home to their relatives and to reduce the risks of sending cash through the mails. By the late 1800s, this system had become a major means of conveying smaller (less than $100) sums of money throughout the country. By 1890 the total value of money orders issued was over $110 million a year. In this paper we describe the development and basic structure of this system. The system performed a major function of a bank by providing a cheap, safe and highly reliable means of transferring funds to almost any place in the country where there was a post office. This system has gone unnoticed by previous writers on 19th Century financial history. This paper is divided into two parts. The first is a description of the origin, operation and magnitude of the system. The second part uses a detailed record of money order activity in a small 19th century New Hampshire town to show that records of the postal money order system can provide unique windows into the economic activity at the local level.
Pages: 28 pages
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Persistent link: https://EconPapers.repec.org/RePEc:mcl:mclwop:2009-11
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