Notice by Postmaster J. Paul Smothers that the postal savings department of the postal service will be discontinued marks the end of a service which for seven years was the only savings depository in Marion.
Prior to the bank failures of 1930 the postal savings department had been used principally by a few older persons and persons of foreign birth who were willing to deposit their funds with the government at two per cent interest rather than use a regular savings bank that paid four per cent. As what might have been a harbinger of things to come the number of persons using this service of the post office began to increase considerably shortly after the stock market crash of 1929. By the time the first Marion bank closed in April, 1930, many depositors had transferred at least part of their savings to the post office. They wore looked upon as the “smart” ones by the end of the year when both Marion banks were in receivership.
From then until opening of the Bank of Marion in 1937, the post office was the only “bank” in town. While out of town banks were used for handling commercial accounts as well as accommodating some savings depositors, the bulk of the savings went into the post office.
By 1934 there were nearly 1400 postal savings depositors. That was half as many depositors as were doing business at the city’s biggest bank in its heyday. Although most people with savings had them tied up in the closed banks, the savings accounts opened at the post office ran into millions of dollars. As late as 1946 when J. L. Eveland now superintendent of mails joined the postal savings department there was nearly three million dollars on deposit.
During the city’s “bankless days”, the savings department was a big part of the post office business. The two per cent interest paid on savings certificates was not compounded to the credit of the depositors account in the early days. Instead, the depositor had to turn in his certificate, collect the accrued interest and principal amount, and then buy a new certificate.
On the first of every month the lobby would be crowded with depositors exchanging their certificates. Sometimes three or four post office clerks were kept busy with postal savings alone. Eveland recalls hearing veteran clerks tell of working until 9 and 10 o’clock at night, rolling coin and counting currency which was mailed to a federal reserve bank in Chicago for deposit.
The work was lightened in 1954 when regulations were altered to permit the compounding of interest without the depositor having to turn in his certificates.
Since the beginning of postal savings at the local post office there have been 10,993 accounts. By 1962 the number of accounts still active had dropped to 751, and by today it is down to 429.
(Glances at Life, Homer Butler article dated April 23, 1966)