African Americans began forming their own community-based mutual aid and financial institutions almost nine decades before the U.S. Congress established the Freedmen's Savings and Trust Company in 1865. Apart from encouraging group efforts at social advancement, communal associations facilitated both enslaved and free Africans and African Americans saving money long before the Civil War era. Accumulations of financial resources were critical factors enabling many enslaved African Americans, who were "hired-out," to purchase their freedom before the war. Financial assets would become even more important in assisting the freedpeople to survive "freedom" and its myriad challenges in the post-emancipation era. (1) Although they faced enormous difficulties and inhumane treatment, with the outbreak of war in 1861 African Americans began attempting to enlist in the Union Army and eventually over 180,000 served in the various branches of the military. During the war, military savings banks were established for African Americans by Union officers and these became the forerunners of the Freedmen's Savings Bank (FSB). The military banks provided important financial services for African Americans in southern and northern communities. (2)
This essay examines the persistence of thrift among African Americans, focusing on the depositors of Washington, DC's Freedmen's Savings Bank and the patterns of communal saving in the form of mutual aid, benevolent, and charitable societies among the members of two Washington, DC churches, Mt. Zion United Methodist Church and Union Bethel African Methodist Episcopal Church (renamed Metropolitan African Methodist Episcopal Church). It appears that these church and community members pooled their resources to survive slavery and freedom and did not wait for government officials and others to act on their behalf. They made efforts to take care of their families and friends in economically harsh and prosperous times. Many did this long before the FSB began operations in 1865 and long after the bank's collapse in 1874. (3)
Moreover, the bank's deposit ledgers and signature books provide key documentation for identifying the activities of African American antebellum and postbellum mutual benefit societies, providing information on the longevity of the concern with mutual financial assistance and saving. More importantly in the years after the collapse, associations comparable to the ones found in the FSB's records were in full operation and instrumental in providing the funds for collective and individually-initiated banks, insurance companies, and other financial institutions. In many ways the FSB records document various aspects of collective economic activities in the transition from slavery to freedom.
ORIGINS OF THE FREEDMEN'S SAVINGS BANK
In 1864 as the Civil War waged, Union Army officials established military savings banks at army posts in Norfolk, Virginia and Beaufort, South Carolina where African American soldiers deposited their money. A "Free Labor Bank" was established that same year near an army post outside of New Orleans for the same purpose. (4) Apart from providing safe places for soldiers to store their earnings, the banks lessened the likelihood that they would squander their pay and bounty money. African American civilians in nearby refugee camps who worked in various capacities in the war effort also deposited their earnings in the military savings banks. By the end of the war hundreds of thousands of dollars remained unclaimed in these military banks because many depositors had died or left without withdrawing their funds, while others had changed their names making many depositors or their relatives difficult to trace. (5)
The Army paymaster and other military officers sought government approval to use the unclaimed money to establish a new financial institution that would continue to provide formerly enslaved African Americans the opportunity to save. …