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Man representing the Freedman's Bureau stands between armed with an American flag behind him groups of Euro-Americans and Afro-Americans
The Freedmen's Bureau, Drawn by A.R. Waud. Harper's Weekly, 1868.

America’s Compounding Debt: The Freedman’s Bank

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This post was authored by Lynn Weinstein, Business Reference Librarian in the Science, Technology, and Business Division.

Large five story brick building which housed the Freedman's Savings Bank.
Freedman’s Savings Bank, Pennsylvania Ave. and Madison Pl., N.W., ca 1990.

In 1865, the American Civil War ended and the Reconstruction era began. On March 3rd of that year, an act to incorporate the first black savings bank, Freedman’s Savings and Trust Company (The Freedman’s Bank), was approved. The Charter and By-Laws of the bank indicate that deposits of $1 or more were accepted from “persons heretofore held in slavery in the United States, or their descendants.” The Freedman’s Bank  maintained some 37 offices in 17 states, including the District of Columbia. At its height, the Bank had over $57 million in deposits (adjusted for inflation) and 70,000 depositors, including individuals, businesses, and organizations.

The bank was created when the United States was struggling to establish a banking system and did not have effective regulatory structures in place. The Freedman’s Bank was not a commercial bank, as it did not give out loans. The bank, which was federally chartered, was not linked to the government and the deposits were not guaranteed. Misleadingly, it was advertised as “established by the authority of the United States Government for the benefit of the Freedmen,” often with the American flag and bearing the names of prominent government officials. The advertisements preached about the benefits of work and savings, and warned against using money for drinking and lottery tickets.  In 1874, as a result of mismanagement, fraud, and the aftermath of the Panic of 1873, Freedman’s Bank closed, leaving many depositors in financial ruin.  Frederick Douglass had been brought on as the bank’s director in an attempt to steady the ship before its collapse.

The information from the Freedman’s Bank records provides genealogists and other researchers a rare opportunity to document the African American family during the period immediately following the Civil War. The bank’s records are valuable for genealogical purposes, since the signature cards contain detailed personal information of the depositor, including in some instances: their employer, occupation, age, height, complexion, if married, names of mother and/or father, children, brothers and/or sisters, and the name of their former plantation. Often there are enough details in the record to form an impression of the individuals behind the depositors. Many were laborers, farmers, blacksmiths, gardeners, shoemakers, nurses, barbers, and others who were earning wages for the first time.

A check from the Freedman's Back from March 20, 1878.
Office Commissioners of the Freedman’s Savings and Trust Company. Pay to the order of Arthur A. Baker. Sixteen Cents.

While the Library of Congress retains some Freedman’s Bank records on CD-ROM and microfilm, they are more readily accessible at the National Archives  and in a number of digitized subscription genealogical services that are available free to those “on campus” at the Library of Congress. Genealogical researchers are encouraged to consult the information available on the home page of the Library’s Local History & Genealogy Reference Services, and record findings in a family group sheet and maintain a Research Log like those provided.

The Freedman’s Bank left in its wake a tragic disenfranchisement of African Americans, and while there were some successful black banks that emerged for these communities, a lingering distrust of the banking system developed among them. The FDIC estimates that the number of African Americans that are unbanked was 16.9 percent in 2017.  Despite this devastating legacy, the records created by the bank serve as an abundant record for African American family research for the period immediately following the American Civil War.

We encourage you to further explore this turbulent period by attending the Library of Congress 2019 Book Festival, featuring  author Henry Lewis Gates, Jr., a leading chronicler of the African-American experience.  He will discuss his new book Stony the Road: Reconstruction, White Supremacy, and the Rise of Jim Crow.

Not even ten additional years of slavery could have done so much to throttle the thrift of the freedmen as the mismanagement and bankruptcy of the series of savings banks chartered by the Nation for their especial aid.
W.E.B. Du Bois, The Souls of Black Folk

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