The Freedman's Savings and Trust Company
The Freedman's Savings and Trust Company was the first banking institution created to help emancipated slaves transition into the American economy. It was chartered by the federal government and the Act was signed by Abraham Lincoln in 1865. The historical site is in Washington DC but was originally created in New York City. In the present day, the site is now the US Department of Treasure Annex.
Backstory and Context
This Freedman’s Savings and Trust Company Bank was established by the United States Congress on March 3, 1865 to help aid ex-slaves transition to freed citizens. The initial thought of the savings bank was to benefit African Americans who were compensated for their services in the Civil War and needed a safe place to deposit their money. However, John W. Alvord, a congregational minister and abolitionist, advocated to Congress for the savings bank to help all emancipated slaves transition to freedom and be integrated in the economic system.
Massachusetts Senator Charles Sumner brought a bill before Congress to have the bank secured by the federal government. President Abraham Lincoln signed into law the “Act to Incorporate the Freedman’s Savings and Trust Company”. The charter allowed low-risk investments and no loans. Between 1865 and 1871, the bank expanded to thirty-seven branch offices in seventeen state and District of Columbia. Printed on the bank materials was “on temperance, frugality, economy, chastity, the virtues of thrift & savings”. In 1867, the bank’s headquarters was moved to Washington, D.C. Eventually, Congress lightened the regulations and allowed loans and higher-risk investments.
The bank brought promise to the African American community but then it failed miserably. The Panic of 1873 and other series of breakdowns caused the bank to collapse. Contrary to the proposition that the bank was secured by the federal government, it collapsed in June 1874. The branches also closed and many African Americans lost their account balances. At the time of closing, $2,993,790.68 was due to 61,144 account holders. This event caused a major rift in the economic development for African Americans.
Because of its existence, the bank records provide valuable information for African American history. The bank records hold information on ex-slaves that include birthplace, residence, age, employer, family members, and former slave owners and name of the plantation. The information can be found at the National Archives and is used by the genealogical websites.
The institution was created with good intentions but it was damaging to the population it was trying to advance. The failure hindered growth and prosperity for many African Americans after the civil war. The Freedman’s Savings and Trust Company Bank is an important story in African American History. The US Department of Treasury Annex is now located on this site.
Sager, Julie. (2017). Historical Echoes: The Legacy of Freedman's Savings and Trust. Retrieved from http://libertystreeteconomics.newyorkfed.org/2017/02/historical-echoes-the-legacy-of-freedmans-savings-trust.html
Freedmen's Savings and Trust Company (1865-1874). Retrieved from http://www.blackpast.org/aah/freedmen-s-savings-and-trust-company-1865-1874