On this date, June 28, in 1874, Freedmen’s Bank closed. Black depositors had some $3 Million in the bank, which had an imposing headquarters in Washington and branches in various cities President Frederick Douglass said later that the Freedmen’s Bank had been “the Black man’s cow and the white man’s milk.” [source]
The Freedman’s Savings and Trust Company opened in March 1865 and closed in June 1874 because of mismanagement, abuse, fraud, and the economic climate of the day. Thousands of African Americans were faced with financial ruin.
The unclaimed $200,000 in the Free Labor Bank left unclaimed by the African-American Civil War soldiers prompted the U.S. Congress to incorporate the Freedman’s Bank. Originally designed as a trust that invested solely in government bonds, the Freedman’s Savings and Trust Co. focused on charity as opposed to profit; consequently, it did not participate in the larger banking community. Although the bank denied representatives of the African-American community the right to be involved in decision-making, African Americans kept considerable amounts on deposit at the bank and trusted its soundness. [Continue reading.]