March 29, 1879

Thomas Nast


Black Americans; Business Scandals; Business, Banking; Reconstruction;

No 'People' indexed for this cartoon.

American South;

A debt that the Republican party ought to wipe out.

This Harperís Weekly cartoon by Thomas Nast is set over 20 years in the future (1900), and features a weary, old black manó"the last poor depositor"ó clinging patiently to the hope that his embezzled savings will be returned to him.

In March 1865, shortly before the end of the Civil War, Congress chartered the Freedmenís Savings and Trust Company, commonly called the Freedmenís Savings Bank. The white-abolitionist owners aimed to encourage the newly-freed slaves to set aside a portion of their wages by giving them a financial institution they could trust. In its various branches, black men sat upon its advisory boards and were hired as bank tellers. Over 100,000 black individuals, families, churches, charities, and societies deposited a total of $57,000,000 with the Freedmenís Savings Bank, although most accounts were under $50.

In the early 1870s, the bank directors began making speculative investments in Washington, D.C., real estate and providing substantial, unsecured loans to railroad and other business firms. Jay Cooke, president of the Northern Pacific Railroad Company, for example, borrowed $500,000 on favorable terms. Other loans were handed out to friends, political cronies, and allegedly even to members of the Ku Klux Klan (as Thomas Nast pictures in another cartoon), all of which undermined the bank's reserves. Embezzlement schemes occurred at several bank branches.

Already overextended, the onset of an economic depression in 1873 was the fatal blow to the bank. In an attempt to save it, Frederick Douglass, the esteemed black leader, was appointed bank president and convinced to deposit $10,000 of his money in the institution as a show of good faith. Nevertheless, the Freedmenís Savings Bank failed in June 1874, with only $31,000 to reimburse the remaining 61,000 depositors. The average loss was $20 per customer.

The Freedmenís Savings Bank was a private corporation, but it had benefited from an assumption that it was affiliated with the Freedmenís Bureau, an agency of the federal government. Customers were solicited by army officers and by advertisements displaying the authoritative image of Abraham Lincoln. Several American presidents called for the federal government to repay the lost deposits, but successive Congresses refused. Half of the depositors eventually got back about three-fifths of their accounts. As this cartoon accurately predicts, some depositors desperately appealed to the federal government for their funds even into the twentieth century.

Robert C. Kennedy

July 14, 2024

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