By Karen Hall
COLUMBIA, TN — A new historical marker here, unveiled Saturday, October 5, commemorates the short-lived but important Freedmen’s Savings and Trust Company, whose Columbia branch was one of four in Tennessee.
“This is an important marker because it commemorates the struggle for black equality,”
said Dr. Learotha Williams Jr., the keynote speaker at the dedication ceremony. He is an associate professor of history at Tennessee State University.
Though the bank failed less than a decade after it was chartered by Congress, Williams said it was a symbol of thrift and hope for the future for former slaves who were managing their own money for the first time.
“We believe historical markers are very important to our African-American heritage,” said JoAnn McClellan, president of the local African American Heritage Society, as she opened the proceedings at the Maury County Archives building.
“We try to bring little-known facts about African-American history to the surface,” McClellan said. Since its founding in 2012, the Society has had Tennessee State Historical Commission markers placed at the sites of an African-American school, A.J. Morton Funeral Home, the Maury County Colored Hospital, and the 1946 Columbia Riot, which McClellan called the beginning of the Civil Rights movement.
Williams gave an illustrated talk about the Freedmen’s Savings and Trust Company.
About 180,000 African-Americans served in the Union Army during the Civil War, earning around $13 a month, but there were no banks to cater to them, he said. Some were reckless with their earnings, but others wanted to save.
In January 1865, 22 New York businessmen met to create “a savings institution for Negro soldiers,” and the Freedmen’s Savings and Trust Company was incorporated and chartered in March of that year.
The charter said that the institution was the receive the deposits of those who had been enslaved, invest the money in government securities, and return the profits to the depositors. The Freedmen’s Bank grew quickly.
The Columbia branch, located above a livery stable at the corner of North Main and East 6th Street, was established in 1870, in response to a request by Congressman Samuel M. Arnell and Postmaster James P. Baird. It was the fourth and final branch in Tennessee.
“The bulk of the depositors would have been unskilled laborers,” Williams said, but artisans also used the bank, and so did African-American organizations such as churches and benevolent societies.
The 50 white trustees of the Freedmen’s Bank “didn’t have any skin in the game,” Williams noted, and there were no regular inspections. In 1870 the charter was amended, allowing the bank to grant loans, and make speculative investments in real estate and railroads.
“This changed the bank’s mission from philanthropy and racial uplift to profit,” the historian said, and led to its downfall – along with many other banks – in the financial panic of 1873.
The bank officially closed its 37 branches on July 2, 1874, owing about $13 million to more than 61,000 account holders. Around 17,000 of these finally received compensation: about $18 each.
“It was an institution that represented the hopes and dreams of African Americans,” Williams said, and it failed because of mismanagement at the federal level.