The Color of Money
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19. Butler, Entrepreneurship and Self-Help, 133.
20. Joseph A. Pierce, Negro Business and Business Education: Their Present and Prospective Development (Westport, CT: Negro University Press, 1971), 9, 30.
21. Harris, Negro as Capitalist, 23-24. It should be noted that credit was also scarce for poor white farmers, but many of them had the option of going west and obtaining private sequestration of assets like gold, timber, and other natural resources.
22. Ibid., 24.
23. Alexander Hamilton, “Report on a National Bank," Communicated to the House of Representatives, December 14, 1790, quoted in The Debates and Proceedings in the Congress of the United States, ed. Joseph Gales (Washington, DC: Gales and Seaton, 1834), 2101.
24. Ibid.
25. According to a black leader at the turn of the century, their “discussions were indulged in at length notwithstanding the fact that the pol itical rights of the Negroes—free men and slaves—were being questioned, debated, and bitterly fought over by the pro-slavery and anti-slavery factions." Harmon et al., Negro as a Business Man, 44.
26. Circular No. 1, issued by Frederick Douglass, U.S. Senate, 46th Congress, 2nd Session, Report No. 440.
27. Dred Scott v. Sandford, 60 U.S. 393 (1856).
28. Frederick Douglass, The Life and Times of Frederick Douglass: From 1817-1882, ed. John Lobb (London: Christian Age, 1882), 331.
29. “Newspaper Account of a Meeting between Black Religious Leaders and Union Military Authorities," Freedmen and Southern Society Project, January 1865, http://www.freedmen.umd.edu/savmtg.htm.
30. Douglas R. Egerton, The Wars of Reconstruction: The Brief, Violent History of America’s Most Progressive Era (New York: Bloomsbury Press, 2014), 100.
31. Ibid., 109. “Disinclined to wait for a reconstituted state or distant president to restore order, blacks along the [South Carolina and Georgia] coast sensibly proceeded to govern themselves."
32. Eric Foner, Reconstruction: America’s Unfinished Revolution, 1863-1877 (New York: Harper, 1989), 102.
33. Ibid., 118.
34. Ibid., chap. 4.
35. The land was bounty from the Confiscation Acts, which declared that the Union could seize the property of Confederate supporters, or property that had been “abandoned” by Confederate soldiers. The government’s purported purpose for confiscation was to pay the expenses of the war, to punish the Confederates, and to provide for “Union loyalists" and freed slaves. Walter L. Fleming, “Forty Acres and a Mule," North American Review 182 (1906): 721, http://www.jstor.org/stable /25105565.
36. Henry Louis Gates Jr., “The Truth Behind ‘40 Acres and a Mule,’ " PBS, http://www .pbs.org/wnet/african-americans-many-rivers-to-cross/history/the-truth-behind -40-acres-and-a-mule/.
37. Brooks D. Simpson and Jean V Berlin, eds., Sherman’s Civil War: Selected Correspondence of William T Sherman, 1860-1865 (Chapel Hill: University of North Carolina Press, 1999), 600.
38. Fleming, “Forty Acres and a Mule," 729
39. Egerton, Wars of Reconstruction, 99.
40. Ibid., 100.
41. “Revolutionary movements can be stopped by violence, provided enough politicians are assassinated, enough party registrars are eliminated, and enough voters are intimidated into remaining home on election day." The violent upheaval led by the Klan and other vigilante groups achieved a restoration of the pre-war social hierarchy through targeted attacks on black legislators and their Republican allies. The first targets were blacks in uniform. Egerton, Wars of Reconstruction, 287.
42. Foner, Reconstruction, 121
43. W. E. B. Du Bois, The Souls of Black Folk (New York: Dover, 1994). 17.
44. Ibid.
45. W. E. B. Du Bois, Black Reconstruction in America (London: Transaction Publishers, 2013), 26.
46. Andrew Johnson, The Papers of Andrew Johnson, vol. 10: February-July 1866, ed. Paul H. Bergeron (Knoxville: University of Tennessee Press, 1992), 174-175. Johnson faced backlash from his party, leading to his impeachment after two attempts, but not before he had successfully opposed Republican reformers. Thaddeus Stevens led the first impeachment effort. Carol Berkin, Christopher Miller, Robert Cherny, James Gormly, Douglas Egerton, and Kelly Woestman, Making America: A History of the United States, vol. 2: Since 1865 (Boston: Wadsworth, 2014), 363.
47. Paul A. Cimbala, “The Freedmen’s Bureau, the Freedmen, and Sherman’s Grant in Reconstruction Georgia, 1865-1867," Journal of Southern History 55 (1989): 597-598.
48. Du Bois, Black Reconstruction in America, 602.
49. Du Bois, Souls of Black Folk, 20. E. Franklin Frazier echoed, “for a brief period, less than a decade in most Southern states, the Negro enjoyed the rights of a citizen. If the Second American Revolution had not been aborted it would have established a democracy in the South in which the poor whites and black freedmen would have shared power. Franklin Frazier, Black Bourgeoisie (New York: Free Press Paperbacks, 1997), 141.
50. Claude F. Oubre, Forty Acres and a Mule: The Freedmen’s Bureau and Black Land Ownership (Baton Rouge: Louisiana State University Press, 1978).
51. Veto of the Freedmen’s Bureau Bill, Andrew Johnson, February 19, 1866. Cited in Edward McPherson, The Political History of the United States of America during the Period of Reconstruction: April 15,1865-July 15,1870 (Washington, DC: Solomon and Chapman, 1875), 71.
52. Foner, Reconstruction, 463-469.
53. Carol Anderson, White Rage: The Unspoken Truth of Our Racial Divide (New York: Bloomsbury, 2016), 16. The lack of systematic land grants to the freed slaves during this era contrasts sharply with the generosity and speed with which whites were acquiring cheap land. Seventy-five percent of white farmers came to own their farms due to nineteenth-century federal land grant programs from which blacks were either legally or practically barred. Dalton Conley, Being Black, Living in the Red (Berkeley: University of California Press, 1999), 35. Christie Farnham Pope, “Southern Homesteads for Negroes,” Agricultural History 44(2) (1970): 201-212, http://www.jstor.org/stable/3741673.
54. A white southerner, when asked if it would not have been better for both whites and blacks if blacks were given land, responded: “No, for it would have made the Negro ‘uppity’ . . . and the real reason . . . why it wouldn’t do, is that we are having a hard time now keeping the nigger in his place, and if he were a landowner, he’d think he was a bigger man than old Grant, and there would be no living with him in the Black District. . . . Who’d work the land if the niggers had farms of their own?" Gunnar Myrdal, An American Dilemma: The Negro Problem and Modern Democracy (New Brunswick, NJ: Transaction, 1996), 227.
55. Alexander Tsesis, The Thirteenth Amendment and American Freedom: A Legal History (New York: New York University Press, 2004), 51.
56. McPherson, Political History, 36.
57. Claudine L. Ferrell, Reconstruction (Westport, CT: Greenwood Press, 2003), 65.
58. Sven Beckert, Empire of Cotton: A Global History (New York: Vintage Books, 2014), 281.
59. 2/3/1866: John W. Chandler- Democrat, New York re: Freedmen’s Bureau. The Congressional Globe: Containing the Debates and Proceedings of the First Session of the Thirty-Ninth Congress, vol. 36, part 5, ed. F. and J. Rives (Washington, DC: Congressional Globe Office, 1866), 82.
60. Kenneth Pomeranz and Steven Topik, The World That Trade Created: Society, Culture, and the World Economy, 1400 to the Present, 2nd ed. (Armonk, NY: M. E. Sharpe, 2006), 82.
61. Foner, Reconstruction, 102-110.
62. 11 / 7 / 1865 A. J. Willard to George W. Hooker, quoted in Julie Saville, The Work of Reconstruction: From Slave to Wage Laborer in South Carolina, 1860-1870 (New York: Cambridge University Press, 1996), 17; Levy, Freaks of Fortune, 122-123.
63. Foner, Reconstruction, 108.
64. Beckert, Empire of Cotton, 281.
65. Ibid., 284. At a New York meeting of the business community in 1865, a cotton trader expressed that the freed people’s mobility “cannot be deemed anything more than a temporary state
of affairs to be corrected by the joint influence of the vagrancy laws and the necessity of the vagrants."
66. Foner, Reconstruction, 55-56.
67. Ferrell, Reconstruction, 72-73
68. Douglas A. Blackmon, Slavery by Another Name: The Re-Enslavement of Black Americans from the Civil War to World War II (New York: Anchor Books, 2008), 335-337.
69. Ibid., 207.
70. Ibid., 128-140.
71. James Baldwin, The Price of the Ticket: Collected Nonfiction, 1948-1985 (New York: St. Martin’s, 1985), 329.
72. “In the backwoods of the Gulf States, for miles and miles," Du Bois observed, the black southerner “may not leave the plantation of his birth; in well-nigh the whole rural South the black farmers are peons, bound by law and custom to an economic slavery, from which the only escape is death or the penitentiary. . . . Before the courts, both in law and custom, they stand on a different and peculiar basis. Taxation without representation is the rule of their political life. . . . That is the large legacy of the Freedmen’s Bureau, the work it did not do because it could not." Du Bois, Souls of Black Folk, 24.
73. Ibid., 39.
74. Lionel C. Bascom, Voices of the African American Experience (Westport, CT: Greenwood Press, 1978), 362.
75. Martin Luther King Jr., personal note, Crisis in Black and White by Charles E. Sil-berman (New York: Random House, 1964).
76. Andrew Johnson Presidential Papers, Freedmen Bureau Congressional Reports (Johnson opposed the Freedmen’s Bureau and urged repeal its measures, but he did not seek repeal of the bank charter or vocally oppose it).
77. For a thorough history of the Freedmen’s Bank, see Carl R. Osthaus, Freedmen, Philanthropy, and Fraud: A History of the Freedmen’s Savings Bank (Urbana: University of Illinois Press, 1976); and Walter Fleming, The Freedmen’s Savings Bank: A Chapter in the Economic History of the Negro Race (Chapel Hill: University of North Carolina Press, 1927).
78. John Alvord to Major General O. O. Howard, Commissioner of Bureau of Refugees, Freedmen, etc., United States Congressional Serial Set, vol. 1256 (Washington, DC: Government Printing Office, 1866), 348.
79. Douglass, Life and Times, 487. “The history of civilization shows that no people can well rise to a high degree of mental or even moral excellence without wealth. A people uniformly poor and compelled to struggle for barely a physical existence will be dependent and despised by their neighbors and will finally despise themselves. While it is impossible that every individual of any race shall be rich—and no man may be despised for merely being poor—yet no people can be respected which does not produce a wealthy class.”
80. Sheldon Garon, Beyond Our Means: Why America Spends While the World Saves (Princeton, NJ: Princeton University Press, 2013), 104.
81. Harmon et al., Negro as a Business Man, 46.
82. These leftover funds served as the starting capital of the Freedmen’s Savings Bank. Harris, Negro as Capitalist, 27.
83. President Abraham Lincoln, Speech at Signing of Freedmen’s Bureau, March 3, 1865.
84. Quoted by Osthaus, Freedmen, Philanthropy, and Fraud, 55.
85. Harris, Negro as Capitalist, 26. U.S. Congress, Senate, Freedmen’s Savings & Trust Co., Statement by Rev. James L. White relative to the Freedmen’s Bureau and the Freedmen’s Bank, later the Freedmen’s Savings & Trust Co., and the balance due its depositors, together with the establishment of a national memorial home for colored people, June 4, 1912, 62d Congress, 2d session, S. Doc. 759, 192.
86. Harris, Negro as Capitalist, 28.
87. Henry Wilson, Speech, April 1865, in Egerton, Wars of Reconstruction, 128.
88. U.S. Senate, 62nd Congress, 2nd Session, S. Doc. 759, 4.
89. Harmon et al., Negro as a Business Man, 48. In fact, Douglass claimed that “some did not give their consent to the use of their names" in the founding documents. Instead, “[t]hey were thrust in for appearance’ sake and to make the delusion attractive and complete." Report to Accompany Bills S. 711 and S. 1581, at II.
90. Congressional Series of United States Public Documents, vol. 2213, 54.
91. An Act to Incorporate the Freedmen’s Savings and Trust Company, March 3, 1865; quoted in Frederick E. Hosen, Federal Laws of the Reconstruction (Jefferson, NC: McFarland, 2010), 23-24.
92. Section 6 of the charter required the trustees to invest “all sums received by them beyond an available fund not exceeding one third of the total amount of deposits with the corporation, at the discretion of the trustees" in stocks, bonds, treasury notes, or other U.S. securities. Harris, Negro as Capitalist, 31.
93. Whitelaw Reid, After the War: A Tour of the Southern States (Cincinnati, OH: Moore, Wilstach and Baldwin, 1866), 50.
94. Butler, Entrepreneurship and Self-Help, 135.
95. Jonathan Levy, Freaks of Fortune: The Emerging World of Capitalism and Risk in America (Cambridge, MA: Harvard University Press, 2012), 126. Orders issued by Commissioners and Assistant Commissioners of the Freedmen’s Bureau, 4, 20.
96. Osthaus, Freedmen, Philanthropy, and Fraud, 131.
97. Egerton, Wars of Reconstruction, 129.
98. “The fact that men of unquestionable character and unusual ability were advertised as incorporators together with the report that the United States Government protected the savings which were deposited inspired confidence and made easy the successful organization of [the bank].” Harmon et al., Negro as a Business Man, 48.
99. It was not until 1874, when the bank was virtually bankrupt, that Congress amended the bank’s charter to state that any officer of the bank caught embezzling funds or engaging in fraudulent activities would be charged with a misdemeanor. Osthaus, Freedmen, Philanthropy, and Fraud, 123.
100. Harris, Negro as Capitalist, 33. There were too few deposits—less than $100,000. Alvord believed that this was because the people had no confidence in the bank, but in fact it was because they had no wages to save during this time. In 1867, there was a proposal to close the bank for good, but it did not pass. Osthaus, Freedmen, Philanthropy, and Fraud, 136-142.
101. First National Bank was financing the federal debt, which was where the Freedmen’s Bank’s assets were primarily invested. Levy, Freaks of Fortune, 130.
102. Ibid., 134.
103. Ibid., 132.
104. Ibid., 133.
105. Report to Accompany Bills S. 711 and S. 1581, S. Rep. No. 46-440, app. 41. Monique Nelson, “The Freedmen’s Savings Bank: A Historical Place in the Financial Empowerment ofAfrican Americans,” Department of the Treasury, February 21, 2014, http://www.treasury.gov/connect/blog/Pages/Freedmans-Savings-Bank.aspx.
106. Harris, Negro as Capitalist, 28. Harmon et al., Negro as a Business Man, 49. Branches were established in Alexandria, LA; Atlanta, GA; Augusta, GA; Baltimore, MD; Beaufort, SC; Charleston, SC; Chattanooga, TN; Columbia, TN; Columbus, MS; Huntsville, AL; Jacksonville, FL; Lexington, KY; Little Rock, AR; Louisville, KY; Lynchburg, VA; Macon, GA; Memphis, TN; Mobile, AL; Montgomery, AL; Nashville, TN; Natchez, MS; New Bern, NC; New Orleans, LA; Norfolk, VA; Philadelphia, PA; Raleigh, NC; Richmond, VA; Savannah, GA; Shreveport, LA; St. Louis, MO; Tallahassee, FL; Vicksburg, MS; Washington, DC; and Wilmington, NC. I think the confusion is that Harmon et al. (p. 48) list the New York branch as one that was established during this time period, while Harris (p. 28) considers the New York branch to be headquarters and thus excluded as a “branch.” See also Richard Zuczek, Encyclopedia of Reconstruction Era: A-L (Westport, CT: Greenwood Press, 2006), 268.
107. This $260,000 in 1870 would be worth approximately $4,565,000 today.
108. Egerton, Wars of Reconstruction, 128-129.
109. Levy, Freaks of Fortune, 140.
110. An Act to amend an act entitled “An act to incorporate the Freedmen’s Savings and Trust Company” (Approved May 6, 1870) in United States Congressional Serial Set, vol. 1 (Washington, DC: Government Printing Office, 1875), 88. Specifically, the amendment stated:
[T]he fifth section of the act entitled “An act to inco
rporate the Freedmen’s Savings and Trust Company” . . . is hereby amended, adding thereto, at the end thereof, the words following: “and to the extent of one-half in bonds or notes, secured by mortgage on real estate in double the value of the loan; and the corporation is also authorized hereby to hold and improve the real estate now owned by it in the city ofWashington.”
111. Harris, Negro as Capitalist, 35.
112. Ibid., 41.
113. Earl Louis Brown, “Negro Banks in the United States" (M.A. thesis, Boston University, 1930), 11, http://archive.org/stream/negrobanksinunit00brow/negro banksinunit00brow djvu.txt; Harmon et al., Negro as a Business Man, 51.
114. Upon reviewing the kinds of self-dealing loans made, Lindsay observed, “such banking practices are almost incredible, but authoritative sources record even grosser irregularities at the bank." Harmon et al., Negro as a Business Man.
115. Harris, Negro as Capitalist, 34. Fleming, Freedmen’s Savings Bank, 39-40.
116. U.S. House of Representatives, Select Committee on the Freedmen’s Bank, H.R. Rep. 44-502 (1876), VII.
117. Brown, “Negro Banks in the United States," 11.
118. Levy, Freaks of Fortune, 141-142.
119. Because there was no mechanism or process to resolve such conflicts of interest, and because the freedmen were unaware of the fraud and were politically powerless, these transactions went unnoticed. Report to Accompany Bills S. 711 and
S. 1581, S. Rep. 46-440, III.
120. Harris, Negro as Capitalist, 33. As one observer put it, “there were, of course, many other causes [of failure] but the most obvious cause was the audaciously planned schemes of the officers to fill their own pockets, to feather the nests of their business associates and friends who had formed cliques, rings and other combines for selfish gains." Harmon et al., Negro as Businessman, 52.
121. Armand J. Thieblot, The Negro in the Banking Industry (Philadelphia: Wharton School of Finance and Commerce, 1970), 181.
122. Harris, Negro as Capitalist, 42.
123. Douglass, Life and Times, 355-356.