The Freedman’s Savings and Trust Company, better known as the Freedman’s Savings Bank, was a corporation established by the U.S. Congress for newly freed Blacks to gain financial footing. The bank, while successful in its early days, ran afoul of corruption and mismanagement before it was shut down for good, but not without some lasting benefit.
The bank was officially established in March 3, 1865 by clergyman John Alvord and abolitionist A.M. Sperry in 1864 to house monies of the emancipated. President Abraham Lincoln signed the bank’s official opening into law and soon after, many began using its services. Freedman’s Savings was linked to the Freedman’s Bureau Act, which was a series of programs and services to assist newly emancipated former slaves.
At its height, the bank housed up to $57 million across several states including Washington, D.C. While most accounts were small, a significant portion of deposits were high for the time and thus showed the power of both Reconstruction and the viability of adding Black folks to the economy. However, the bank faltered around 1874 due to mismanagement of funds. The all-white board of trustees moved to shut down the bank as a result.
Abolitionist Frederick Douglass used $10,000 of his money to keep the bank in operation and became its president. But the bank’s troubles were too much to overcome and Douglass recommended to Congress it shutter its doors.
Due to its impeccable record-keeping, the bank exists as the largest source of family linked documents, which has given genealogists invaluable data in their studies and research.