Special Juneteenth News Edition: The Collapse of Freedman’s Bank: A Juneteenth Lesson in Financial Justice

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The Collapse of Freedman’s Bank: A Juneteenth Lesson in Financial Justice

Juneteenth is a time for celebration, but it also calls for reflection. While I do celebrate, I also remember the losses endured—lost time as freed people, compounded by greater losses of life, liberty, and justice. Given Climate Money Work Newsletter’s focus on money and work, I’d like to share my take on the loss of financial equality and justice in today’s edition.

The story of Freedman’s Bank, established in March 1865, just months before the joyous Juneteenth, is a crucial lesson in this context. Understanding the collapse of Freedman's Bank sheds light on the financial promises and failures of the Reconstruction era for newly emancipated Blacks. Juneteenth, celebrated on June 19th, marks the emancipation of enslaved Blacks in Texas in 1865 and symbolizes the end of slavery in the United States. It is a day that commemorates freedom and the ongoing struggle for equality—including financial equality.

Freedman's Bank, officially the Freedman's Savings and Trust Company, was founded in 1865 to help newly freed Blacks manage their finances, save money, and invest in their futures. It also aimed to hire and train Blacks in financial services. Black men who had been on the Union Army payroll could engage in capital access and investments. The bank’s purpose aligned with the broader Reconstruction goals of integrating former slaves into the American economy as independent, self-sufficient citizens. The bank expanded to 37 branches with $57 million in deposits (adjusted for inflation), mainly from individuals and families depositing $5 to $50.

The Panic of 1873 sent the bank—and many others—into a tailspin. Adding to the trouble, Freedman’s Bank Board Member Henry Cooke, a white man, was caught embezzling funds for his own business. By 1874, more than 60,000 depositors had lost $3 million, with little hope of recovery.

The bank's failure in 1874 due to mismanagement, fraud, and lack of oversight had devastating consequences for Black communities. Black families lost their life savings, undermining their economic stability and trust in financial institutions. The collapse of Freedman's Bank underscores systemic barriers Blacks continue to face:

• Economic Injustice and Betrayal: The bank's failure reflects broader economic injustices faced by Blacks during and after Reconstruction. Despite newfound freedom, Blacks encountered structural barriers impeding their economic progress.

• Historical Context of Inequality: The bank's collapse highlights long-term impacts of historical injustices on wealth accumulation and economic disparity. Such events contribute to the wealth gap and economic inequalities persisting today.

• Importance of Accountability and Oversight: The failure of Freedman's Bank underscores the need for accountability and proper oversight in financial institutions, especially those serving marginalized communities. It reminds us of the importance of protecting the economic interests of vulnerable populations.

Despite the setback caused by the bank's demise, Blacks demonstrated resilience and resourcefulness in their pursuit of economic independence and civil rights. This led to successful Black business communities from Rosewood, FL, to Memphis, TN, and the well-known “Black Wall Street” in Tulsa, OK. Sadly, these communities often ended in massacres, where Black people were killed, communities destroyed, and financial prosperity obliterated.

In summary, the story of Freedman's Bank is essential to understanding the broader narrative of history, economic, and social justice. Reflecting on this history during Juneteenth enriches the holiday by connecting past challenges with present-day efforts toward equity and inclusion. I hope this reflection fosters learning, healing, and a commitment to economic growth and protection.

Source:

• Schreane, Keesa. 2021. Corporations Compassion Culture. New York. Wiley Publishing.

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