Savings and Trust: The Rise and Betrayal of the Freedman’s Bank

On June 29, 1874, a bank closed its doors. The 61,144 depositors, many of whom poured their meager savings into this financial institution, collectively lost almost $3 million. In the 19th century, a single bank failure did not typically garner national attention. However, this bank was no ordinary financial institution. It served a particularly vulnerable population of people: recently emancipated African Americans. The bank that closed was the Freedman’s Savings and Trust Company, also known as the Freedman’s Bank. 

The racial wealth gap is one of America’s most pressing issues. Over the past several years, especially since the 2008 economic downturn, researchers have investigated why racial and economic inequality endures in the United States. This research has led to policy discussions that have focused overwhelmingly on issues such as access to affordable credit and redlining. While these issues are important, we cannot understand fully why racial and economic inequality persists by only looking at what has happened in modern American history. Savings and Trust shifts the conversation to the nineteenth century and considers the role of the federal government and America’s banking industry in exacerbating economic inequality at a pivotal moment in American history: the destruction of slavery in 1865. Savings and Trust interrogates the relationship between democracy and capitalism during the Reconstruction era by exploring the short and tumultuous history of the Freedman’s Bank. 

For a discussion of the Freedman’s Bank and the impact of the bank’s failure on Black communities today, see her conversation on Marketplace.