Citizen savers: The family economy, financial institutions, and social policy in the northeastern United States from the market revolution to the Great Depression

In the United States in the early nineteenth century, banks primarily served the commercial needs of merchants and tradesmen and few ordinary Americans used formal financial institutions for personal saving and borrowing. By the mid twentieth century, most American households had access to and relied on government-stabilized financial institutions to meet such important lifecycle needs as education, housing, and retirement.; Focusing on the northeastern US in the century before the New Deal, Citizen Savers examines the ideas, public policies, laws, and institutions that underlay this expansion in access to opportunities for personal saving and borrowing and explores how it reshaped the family economy. It concentrates in particular on a group of savings institutions—savings banks, building and loan associations, and the postal savings system—that were specifically established and regulated to serve the personal financial needs of ordinary people. The dissertation argues that the development of formal opportunities for personal saving and borrowing emerged as an integral part of the development of American social policy and played an especially important role in the formation of the modern household economy. Concerned about the problems of poverty and dependence in American society, nineteenth-century policymakers and reformers established savings institutions to help working people prepare for unemployment, old age, and misfortune, while simultaneously reducing their dependence on public relief. Promoted and stabilized by state governments and courts, these opportunities for saving and borrowing became an integral part of the personal economic strategies of a growing portion of the population so that by the early twentieth century many families depended on financial institutions to mitigate the risks of unemployment, sickness, and old age and to pursue opportunities for mobility and homeownership. Only with the integration of personal finance and commercial banking in the early twentieth century and with the development of a new regulatory framework during the New Deal did the quasi-public role of savings institutions fade. Even then, the precedent established by savings institutions persisted in New Deal era regulatory policies that sought to ensure personal opportunities for saving and borrowing.