The banking needs of formerly enslaved black soldiers, spurred the incorporation of the Freedmen’s Savings and Trust Company in 1865. “This bank is just what the freedmen need, proclaimed Abraham Lincoln on March 3, 1865, as he signed the Freedman’s Bank Act and authorized the organization of a national bank for ex-slaves. Due, in part, to aggressive recruiting tactics, the number of ex-slave depositors grew rapidly from 1865-1870. Thirty-four branches were established in cities across the nation, including Atlanta, Charleston, Philadelphia, and Washington D.C. “Go in any forenoon, and the office is found full of Negroes depositing little sums of money, drawing little sums, or remitting to a distant part of the country where they have relatives to support or debts to discharge,†reported a Charleston journalist in 1867. And yet, thrifting and saving did not yield desired results. The dream of prosperity and abundance slowly spiraled into a nightmare of fraud, mismanagement, and discriminatory lending. In 1871, Congress authorized banks to provide business loans and mortgages. Paradoxically, such mortgages and loans were usually administered to whites at the expense of black depositors. Risky investments and lending patterns, coupled with cronyism and corruption at the level of upper management, slowly undermined the stability of the bank. According to Black Past, “By 1874, massive fraud among upper management and among the board of director had taken its toll on the bank. Moreover, economic instability brought upon by the Panic of 1873, coupled with the bank’s rapid expansion, proved disastrous.” The Freedmen’s Bank was officially closed on June 29, 1874. At the point of closing, 61,144 black depositors were robbed of the modern equivalent of $66 million. The failure of the bank left many black depositors and borrowers distrustful of the white banking community, especially since the Freedmen’s Bank was established and managed by white men. In subsequent years, the white banking community has imposed higher interest rates on black borrowers or simply rejected their applications #generationalwealth #theft #racialwealthgap #wealthgap https://www.instagram.com/p/ClYrhUyLnjW/?igshid=NGJjMDIxMWI=
