The Freedman’s Saving and Trust Company was a private corporation chartered by the U.S. government to encourage and guide the economic development of the newly emancipated African-American communities in the post-Civil War period. The bank became the leading financial institution of African-Americans.
At the end of the American Civil War, the poor economic conditions of the formerly enslaved freedmen were aggravated by the economic devastation of the Southern states. The newly freed African Americans had few economic resources or capital and less exposure to private enterprise. Many soon turned to sharecropping or forced labor in the South. To help alleviate their these conditions, the Republican-controlled U. S. Congress established the Freedmen’s Bureau, passing an act of incorporation and a charter for the Freedman’s Saving and Trust Company, which was signed into law by President Abraham Lincoln on March 3, 1865. Originally headquartered in New York City, the first branch of the company opened in Baltimore, Maryland. By 1866, the bank had established 19 branches in 12 states, mainly in the South. The national headquarters was moved to Washington, D.C. the following year.
Naturally, after moving the bank’s headquarters to D.C. under the ever watchful eye of politicians, on today’s date June 28, 1874, the bank failed. During the next decade, Congress established a program to reimburse depositors up to 62% of their savings, but many depositors never received any compensation. The failure of the Freedman’s Bank and the loss of their savings led to a distrust of all banking institutions for several generations among the black community. – Another successful government program working for the poor.
The bank’s records of 480,000 names, estimated to be the largest single repository of lineage-linked African-American records, has been indexed by The Church of Jesus Christ of Latter-day Saints. The searchable database is available to amateur as well as professional genealogists.
Pic is of Freedman’s Savings Bank on Pennsylvania Avenue in Washington, D.C.