Freedmen’s Bank Fails, Devastating The Black Community

#OnThisDay Jun 28, 1874, The Freedmen’s Savings and Trust Company, more commonly referred to as The Freedmen’s Bank, failed, taking with it millions of dollars in black wealth. The bank was first incorporated on March 3, 1865, the same day the Freedmen’s Bureau was created, and formed to help previously enslaved people economically transition to freedom.

Before Emancipation, most black people in America were enslaved and had no means of accumulating, protecting, or passing down wealth from generation to generation. After slavery’s end, many black people had little foundation from which to develop economic independence and prosperity. The Freedmen’s Bank emerged as an institution seeking to help bridge this gap; as part of its mandate, the bank employed freedmen, providing jobs and training for those on its staff as well as banking services for those in the black community.

With the help of the Freedmen’s Bureau, the Freedmen’s Bank grew strong as tens of thousands of depositors trusted it with their assets. Individual accounts were typically small, ranging between five and fifty dollars, but collectively the bank grew to hold millions of dollars. At its high point, the bank had thirty-seven branches operating in seventeen states and Washington, D.C.

The headquarters, located in the nation’s capital, was an impressive sight on Lafayette Square, but cost more than $200,000 to build and decorate. In addition, the volatile post-war economy that eventually led to the Panic of 1873, took a toll on national economic stability. By 1874, fraud and mismanagement by senior leaders and the board of directors had weakened the bank significantly. For example, white businessman and politician Henry D. Cooke approved unsecured loans to his own quarry operation while sitting on the bank’s board; when his company could not repay the loans following a stock market crash in 1873, the quarry went bankrupt and the bank was devastated.

In an attempt to restore public trust in the institution, prominent black leader Frederick Douglass was brought on as the bank’s president in early 1874. Douglass believed in the importance of the bank's economic power, even putting thousands of dollars of his own money into the coffers to keep the bank afloat. Despite these efforts, the Freedmen's Bank closed its doors in late June 1874; many sources place the exact date of the official closing on June 28 or 29, and press began to report on the failure in early July.

The bank’s closure caused more than 60,000 black Americans and black organizations to lose $3 million in savings. Many victims waited for years for a mere fraction of their deposits to be returned. The failure of the Freedmen’s Bank financially devastated many who had entrusted it with their funds, and has been linked to a cultural legacy of distrust toward the banking system within the black community.
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The Legacy of The Freedman's Bank serves as a reminder that we must continue striving for greater financial inclusion for all Americans.
– U.S. Treasury Secretary Jacob J. Lew

FOUNDING
President Abraham Lincoln established the Freedman’s Bank on March 3, 1865 as part of the Freedman’s Bureau. As the Civil War drew to a close, the United States Congress and President Lincoln recognized the need to aid newly freed black men and women in their transition to freedom. To support the land grants and other elements of the Freedman’s Bureau Act, a Freedman’s Bank was established to help newly freed Americans navigate their financial lives. Call it the financial literacy program of its day.
During it’s existence, The Freedman’s Bank maintained some 37 offices in 17 states, including the District of Columbia. At it’s height, the Bank had over $57 million in deposits (adjusted for inflation) and 70,000 depositors.

Five weeks after the creation of the Freedman’s Bank, President Lincoln was assassinated.

Seven years later, In June of 1872, the U.S. Congress voted to permanently close the Freedman’s Bureau. The Bank however remained operational and in 1874 Frederick Douglass was asked to run the Freedman’s Bank as its D.C. branch relocated to a new home across from the U.S. Department of Treasury, in a grand building which cost $260,000 to construct.

THE HALF HAD NOT BEEN TOLD
When Frederick Douglass arrived at the Bank’s new location in Washington D.C. he wrote:

“The whole thing was beautiful. I had read of this bank when I lived in Rochester, and had indeed been solicited to become one of its trustees, and had reluctantly consented to do so: but when I came to Washington and saw its magnificent brown stone front, its towering height, its perfect appointments, and the fine display it made in the transaction of its business, I felt like the Queen of Sheba when she saw the riches of Solomon, that ‘half had not been told me’.”

When Douglass came on as the Bank’s director however, he found rampant corruption within the Bank and risky investments across industries being made with depositor’s savings. In a desperate attempt to stabilize the Bank, Douglass invested $10,000 of his personal funds, but sadly, later that year, in June of 1874 the Bank failed against the backdrop of the political forces that undermined Reconstruction.

LEGACY
Before it failed, the Freedman’s Savings Bank had 37 branches operating in 17 states and the District of Columbia and lost a total of 3 million dollars. In the District alone over 3,000 depositors—both individuals and cultural institutions—lost their savings. While the failure of the Freedman’s Bank was tragic and left many African Americans with feelings of distrust of the American banking system, the records created by the bank are a rich source of documentation for black family research for the period immediately following the American Civil War. The records of twenty-nine branches of the Freedman’s Savings Bank, including those of the Washington D.C. office, still survive today and are searchable at the National Archives.

What make these records so important are the thousands of signature cards that contain personal data about the individual depositors. In addition to the names and ages of depositors, the files can contain their places of birth, residence, and occupations; names of parents, spouses, children, brothers, and sisters; and in some cases, the names of former slave owners. These records of the individuals, who lived through the transition from slavery to freedom, are the keys that allow their descendants to unlock the mysteries of their largely undocumented family histories.

Within these records are stories that reveal struggle, sacrifice, courage and determination; stories that must be told to our children and left for future generations.

RENAMING
On January 7, 2016, at the urging of Operation HOPE’s Founder & CEO, Secretary Lew publicly renamed the Treasury Annex Building, The Freedman’s Bank Building, in honor of the site where the Freedman’s Saving Bank once stood. Former Mayor of Atlanta and Senior Advisor to Martin Luther King Jr, Andrew Young gave opening remarks and positioned the historic ceremony within a broader history. The Secretary of the Department of Treasury, Jack Lew, then gave remarks and honored the historic legacy of the Freedman’s Bank as well as the work of those who had helped to bring the history to light.

#BHM365 #neverforget #reconstruction #stolenpeople #stolenlands #stolenFinances #banks #americanhistory #decolonizeamericanhistory #TellTheWholeTruth #teachthechildren #Irememberourhistory
#FreedmansBankAndSavings #history #TheyLie

Source: http://freedmansbank.org/

Source: CalendarEJIorg

Source: https://en.wikipedia.org/wiki/Freedman%27s_Savings_Bank