I am trying to find out why the Treasury department requested that US
Savings Bonds not be sold through the US Post Office.  The only
reference I found at USPS.gov was:
"The USPS discontinued over-the-counter sales of US savings bonds on March 26,
1977, at the request of the Treasury Department."

This is just a shot in the dark, but maybe sale in post offices was
discontinued to avoid its being a way of washing money.

myoarin-ga,

Interesting idea -- but there are limits now (at least) to how much
you can buy in Savings Bonds -- plus, they are fairly "illiquid" (the
Series EE bonds that is).

Anyway, hoping to hear anyone's answer.

Howdy ljb-ga,

The rest of the entry on the topic on the United States Postal Service
(USPS) website suggests the reason.
http://pe.usps.gov/text/dmm300/509.htm

"Inquiries should be made to local financial institutions or the Treasury
Department."

As US Savings Bonds can now be purchased only through the US Treasury
or an agent of the US Treasury, such as a commercial bank, it would seem
that the Treasury Department wanted to restrict the sales of something
such as an obligation of the US government to a financial institution.

More on US Savings Bonds can be found here.
http://invest-faq.com/articles/bonds-us-savings.html

Looking Forward, denco-ga - Google Answers Researcher

Denco-ga,

Another interesting idea.  Thanks for the thoughts.  However, the
Treasury department does sell US Savings Bonds through employer
deductions.  I think I read somewhere that almost 40% of all Series EE
bonds are sold through employee payroll deductions.

Thus, the treasury apparently isn't wedded to the idea of only
financial institutions issuing savings bonds.  In fact, the treasury
issued a new order in 1998 (317.2(d)) which stipulates for unique
electronic sales of savings bonds (e.g. over the web).  Subsequently,
the treasury limited those internet sales by excluding credit card
purchases of savings bonds.

The Treasury also eliminated its marketing department back in
2001/2002.  It's almost like it doesn't really want to sell bonds to
individuals anymore???  Perhaps the cost at the Post Office was just
becoming too expensive?  I'm still wondering.

Howdy ljb-ga,

Both the payroll deduction and online purchases of US Savings Bonds are
directly through the Treasury Department.

With the online options, as well as payroll deductions and the traditional
method of purchasing Savings Bonds, I wouldn't think that the Treasury
Department would have to do much marketing.  Others (CPAs, etc.) do a good
job of promoting Savings Bonds as well.

Looking Forward, denco-ga - Google Answers Researcher

I think Denco has suggested the reason.  As of July 1971 the US Postal
Department was reorganized as the US Postal Service, apparently a step
removed from being a direct government agency.  Maybe it took a few
years for the Treasury Dept. to learn about this ;)  or just took a
while for it to decide to drop the USPS as a distributor for savings
bonds.