Evening star. [volume] (Washington, D.C.) 1854-1972, 1876-05-19
TIE FRFEDMEN's SAVINGS BANK,
Report of fhe select Committee.

Hon. B. b. Douglass, chairman OF the select
committee TO investigate the causes which
led to the failure of the Freedmen's Savings
and Trust company, submitted the follow
ing report from the majority of said COM
Mite:
Your committee have had under consider
alton the matters referred TO it by the pre-
annie and resolutions prehxed hereto, and
nave nave taken a large amount OF evidence,
fully submitted TO the House OF Representa-
tivts.
AS BETTING Introduction TO their report.
your committee offer the following BRIEF ac-
count OF the origin, structure aud early his
tory nj the institution commonly known as
lieved that, IL not originally conceived In
frsud, 1t will be easy to discover how natu-
rally 1t degenerated into monstrous swim
aieo sf9 nous 5ns, tbn suspicion that II was
selhshness under the guise of philanthropy
and, to Its confidiDg victims. an incorporate
war was still In progress 1t had occurred TO
some of the generals in the federal armies
mat repositories for receiving and keeping
the pay ard bounties OF the colored Union
soldiers would he a convenient and neces.
sary provision for their benefit, and accord
lpgly military savings banks Were estab-
South Carolina. They seem to nave been
well timed and suitabl- to the object
in view: as the colored soldiers eager
therein such portions of their pay and boun.
ties as they did not need for their own i'm.
mediate use, and large sums were found to
nave accumulated in them when active hos
tflities ceased. From some cause or other,
but doubtless by the death of many, the dis
persion OF the survivors. and the prevailing
ignorance OF the class of depOsi tors, this
money remained uncalled for, and following
for some peculation) for the most part a prof
itless incumbrance to the stockholders. To
utilize this fund, and to collect and turn 10
profit the large sums still due and to be paid
by the government, seem to have led to the
conception of the idea OF a Freedmen's Saw
heneft of "persons lately held in slavery"
but as the sequel proves, for their spoliatfon
and robbery. The Freedmen's bureau, so
adept in the ways and means of squandering
public moneys, readily supplied the personal
agencies requisite for the undertaking. OF
these the chief, and the real founder OF the
so called Freedmen's bank. was one John
w. Alvord, an attache of the bureau and
superintendent OF Its educational depart
but success, Astounding In pious plati-
tudes about the good of mankind in
general, but with keen eye 10 the main
chance at the same time, having proved
failure in both lay apd clerical pur-
suits In other sections, now turned his be-
nevOlent regards to the -confiding and igno-
rant black element of the south. He GOT up
the charter for the bank, a charter SO singu-
lar In Its array Of high and eminent names
for coIporators, for Its business organization
tuted quorum, and so utterly aud entirely
without safeguards or protection for those
who were to become it's patrons and deposit
tors, that IL is hard TO believe that its au-
thor, whatever might have been his other
deficiencies did not thoroughly understand
now to organize cunning against simplicity
and make II pay for the pleasure OF being
cheated. AS no Intentional Injustice is de-
signed by your committee in their search for
and exposure OF the men who are responsible
Tor the outrages perpetrated upon the colored
people by the bank we desire to say right here
that many OF the distinguished and eminent
ly worthy gentlemen who figure In the char
ter never gave the use of their names and
never accepted or undertook to execute, the
trust 1t created. They were thrust in for APP
pearance sake, and to make the delusion at
tractive and complete. Some, who really
jectors of the scheme and its adapta bility to
promote the welfare OF those for whose
benefit 1t was apparently intended, aud
OF trustees, quickly vacated them in dis
gust, and the whole management soon de-
volved, as was manifestly the intention that
II should doSdpon cabal in Washington
constituting small minority of the acting
trustees. Still further to protect the inno-
cent from reproach for even an apparent con-
proceed point out those who really deserve
reprobation and punishment for the shame
full management OF its affairs. II not a
der OF the House, and demanded BY Justice
to that class of citizens who have been SO
grossly betrayed and feeced by this new
ines and Trust Company"
The charter of the company was obtained
from Congress by an act approved the Sd
day Of March: 1SSS: The objects Of the cor
to receive on deposit, Tor safekeeping and In
vestment for their benefit, all sums that
mieht be offered by "persons lately held In
received was to be invested or loaned upon
United States government bonds and stocks
alone, except that sum "not exceeding one
MAS to kx4
as "an available fund, at interest or
otherwise, to meet current payments"
The idea Of general banking con-
all parts of the country is nowhere Inn
pressed upon the charter, and IL 1t had been,
would have exposed IL to grave constitu-
pany speedily organized. with its principal
office at first i'm New York, where at least
some regard was paid to the requirements
Wher 20 tne nd baNa h OF she chaIteT ana
itors II 1t had remained. 1t was not until
Alvord became president and the bank in
Iact brought 10 washington, where It was
fuencss-political and speculative-sole and
corporate, that the "irregularities" OF which
the management was guilty, became so fire.
quent and portentious as to attract attention
and call forth the animadversions OF such
newspapers as were not subsidized TO con-
ceal or palliate the abuses. But located bere,
with no bars to its vaults which thieves
might not break through and steal, and no
penalties for embezzlemeut or misuse of its
funds which, substituting fear for integrity
where lacking, might have afforded some
security, the deposits were sQuandered and
wasted without regard to the sacred nature
of the trust on which they were held and in
cruel mOckery Of the hopessand expectations
of the deluded freedmen. Theoretically, the
design and the structure of the bank were
admirable. The pecunisry beneft OF the
freedmen and the moral and social ad-
Vantaees which attend upon material
prosperity were the avowed objects. The
various duties of this benencent scheme
were SO divided and allotted out to
boards and committees as seemingly to en-
sure efficiency and fidelity In the officers
and agents, and proper guarantees to deposi.
tors. But the human Instrumentalities on
which the system depended for its successful
operations were lanentably detective. AS
before said, the law had no efficacy to the
moral obligations assumed by the trustees
officers and agents, and the whole concern
inevitably became as "whited sepulchre,
fair on the outside, but within, full of dead
mems bones' rottennees and Corruption,
The inspections provided by the bylaws
were OF little or no value either through the
connivance and Ignorance of the inspectors
or the indifference OF the trustees % their
reports, the latter clearly appearing fr,m
the testimony OF A. II. Sperry, the principal
fngpeCfOY. who SAWS he lQhOrf,d lone ana a.,