Evening star. [volume] (Washington, D.C.) 1854-1972, 1888-07-28
CITY AND DISTRICT.
TIE FREEDNsN,s RANK.
VIE Propesit n to Have the Covers
ment Reimburse DcpOsit0rs.


INC rsE REIIEP THAT The GOVERNMENT WAS
BEHIND u-eLAMs ALREADY PARTLY PAID
The bill that was recently passed by the senate
SppFopriating sI.oOOOoO TO reimburse the deposi-
tors nf the Freedmen's savings and Trust Co.
brings up an interesting bit OF history. This com
pssy. COMMONLY known as the Freedmen's Bank,
was chartered by a act OF Congress approved
March Z 1865 for the benefit Of the most illiterate
and Impoverished class OF citizens possible the
freed slaves. There was a large number OF lncor-
pOratOrs. among them being many OF the Govern
ment's highest officials. The ayowed object Of
the undertaking was TO organize and maintain q
savings bank TO receive the small deposits OF
negrOes with the idea OF encouraging them
% Industry and thrift. In order to give the
scheme as far-reachng effect as possible the bank
was org laized on multiple plan, the central
branches located In thirty-three other cities all
but two being IN the south These cities were as
fOlloNS: New YORK, Philadelphia, Baltimore, Al
eNandria, Norfolk, Richmond, and Lynchburg, Va.
NewOern, Raleigh, and Wilmington, n. c.; Beau
1ort and Charleston, ). G.; Atlanta, Augusta, Ma
hassee, Fla; HUNTSVILLE and Mobile, Ala; ColuIn-
bus, Natchez, and yicksburg, Miss; Columbia.
Memphis, and Nashville, Tenn: Lexington and
Louisville, KY; New Orleans and Shreveport, La.
St Louis, No., and Little Rock, Ark. Each bank
had separate organization with different Officers
but ali were bound by the same rules and forming
part OF the general company.
RUSH OF DEPOsIToRs
Organized as II was. under an act OF Congress,
and officersd by Government officials, confidence
IN the new concern came quickly and with IL flood
Of depOsttOrs eager 70 put their paltry scrapings
In a place that was more secure than the stock
ins-he-l or the fireplace. As the money flowed In
II was placed In Investments that were calculated
&c draw sufficient income TO pay the enormous
expenses OF the great organization These
Investments were all directed by the central bank.
some OF them were wisely placed In established
schemes that gave sure profits on the Invested
capital while others were fOOlishly put into new
schemes with golden promises and no foundation
TheSe latter investments did not hurt the bank at
nrst, cut their effect became apparent few years
Later, when money became little tight and times
began to grow harder and harder. Then there
were occasional runs on the bank; now at this
CITY, then at that, and ~ became necessary, In
10 sell out some Of the inyesIments, In many in
stances at runOus sacrifices In fact, the money
panic Of 1874 was at It's height, bankSHere failing
IN syerJ direction, going down like bricks that
stand on edge In a line. one failure caused an
other. and finally, on the 18th day OF June, 1874,
The Freedmens Bank
CLOSED MS DOORS
IN the thirty-four cities and refused to pay any
further demands. Such a storm OF popular indig-
ration has seldom been knowA In this country.
There were, az the time OF the failure, 81 13l de-
s0sitOrs, 10 whom there was due the sum OF
S,Ol3,eyo56, OF which <73,774.34 consisted OF
sg,ecIs4 deposits, and the balance OF general de-
posts subject TO dividends. Thus the average de-
pOsiL amounted 10 little 10 than $50, but TO the
GAss OF people forming the bulk Of the deposltors
this SUN represented a much greater comparative
value, and was the result OF nine years or econ
omy- Fully $1,000 OF these deposits were OF sums
less than 50. IL was not strange, then, that there
were cries OF fraud, OF under handed WORK, OF en-
bezZlement, when IL Is considered that these peo-
PIE would be the very last 10 reason, or 10 realize
Tie situation when 10 was explained.
COMMISSION APPOINTED.
shortly after the failure OF the bank, on the 18th
OF July, Messrs Leipold, Creswell, and Purvis OF
this city, were appointed a commission 70 settle
the Affairs OF the company. II Vas hercuIean
rhSvh had hAfD
anime. "a sets OF books to inspect, and 81, 900
claimants To listen To- The books OF the central
eank, which Kept the general accounts OF the
branches, were hrst balanced, and then the other
books were obtained, balanced, and the results
compared After months OF labor it was discov-
cred that the nominal assets of the bank at the
time OF tue failure were - 100 $50 IA thus leaving
z denCr over and above the Gains OF depOSltOrs
OF EsUst, But these nominal assets In many
casS mad snrunk In value. bringing the actual re-
sources at hand down To a much lower nyure.
The assets were turned into available cash as
quickly as possible, and on the 1st DAY OF NOvem-
Der, 1879, the nrst dividend OF 20 per cent was
declared IN favor vi the depOsitors. The news OF
Wis DIVIDEND was spread through the papers, and
BY means or announcements from the pulpits OF
churches, In every possible way, in order that IL
might reach The ears OF all Of the ignorant depos
iJOrs. The Ddnk-OoOkS soon came flowing In upon
The commissioners, but not half or tlem were
Received AT this nrst dividend about 30 900
claims We're paid, amounting 10 soo5,36o.0s,
leaving 81, l3o claims, representing S47,37g So
pDpail vi these but iew were Presented. Thus
y viii be seen that only those claimants or depos-
ii
took the trouble 10 advance their claims Tine
sec0na dividend, OF 10 per cent, was declared
harca 20, 1873 and 26,o69 claims, amounting TO
S267 6s334, were paid The third dividend also
OF 10 per cent, was declared September /, 1880
and lquidated q, $50 claims. representing
Ss59, IS3Is. On the LIST OF June 1882, the fourth
aivldend, OF 15 per cent, was declared, and 2l527
Claims, amounting to x3S39 IL, were paid A
Lttis 1es0 than year later, May II 1883. came
per cent, which paid 1s.774 claims, 10 the value
IT'S. s,~,.,-.1,, r,r,roi,, A. Au,u.os 49,. -.---
CT The commissioners and completed the payment
CT g. per cent or all claims the bank the actual
Raymen,s amounting TO a.72ls3l 81. while the
Uses. 49372, showing that SAG, CO.. 40 had not
been cI2lineu.
IN CHARGE OF THE CONTROLLER
BY the act or Congress, approved February 81
1ss1, the original commissioners were relieved OF
their duties and the affairs OF the bank were
placed In charge OF the Controller OF the Currency
nat ONCE then being filed by Hon. John jay
Knox Tue same act provided that all dividends
,ot claimed two years after the declaration OF the
tiViueudS should be barred. Another act Febru-
airy IL, 1855. revived certain or these Claims and
some III these have been pad since. AT the time
Of the last report OF the controller OF the state OF
The affairs OF the bank, December IA last there
vas cash balance OF S. l9I.0I on hand The
Ieeelpis Tor the preceding year had amounted TO
I,59p al, from three sOuTces-the proceeds OF the
i!e Of lots In South Washington, dividends on the
stock 81 the Second National Bank OF Washington,
and tie collections on account OF a loan the bank
1ad once made 70 Beaufort County, = G. The ex-
BenditIres aad been $3.IO7.9O being the salary OF
Tie commissioner, $1,000 cOmpe nsation OF an
agent, and Office expenses $500, costs OF suits,
Insurance, printing the annual report, the paw
Hent OF Two barred claims, and the contingent
expenses
THE REMAINING ASSETS.
A statement OF the available assets showed that
rheiI face value was SIS 592 or while their esti-
natec proceeds were but si3sI7.7o. Among the
Sssets are some Items that are gwen no estimate
- To present value, sucn $1,000 In Detroit Car
-Oan Company stock; 50 $50 in Young Mems
CHRISTIAN ASSOCIATION STOCK; s3lS4 In tax deeds.
$.+fo In JaX-neD certificates, aud other asset =
slch - Judgments. real estate IN litigation SUITS
lcnCsus, OH railroad bonds and .ockS. g.. which
nay result In soIle collection, but their realiza-
Ton l. too uncertain 10 warrant any estimate OF
tlelr ya4ue- The claim against Beaufort County
e., i being paid BY taxation. Thus II Will be
zen That The grlSt or the Freednan's Bank l.
ioouL ali ground, ana should the controller by
god fortune, succeed In realizing the assets on
ue books. there would scarcely be enough To paw
.diyIiend OF per cent
TIE PRESIDENTS RECOMMENDATION
The President, aware OF this fact, called the at
entiOa of Congress In his message OF 1856 &c
what he styled "a plain duty which the Govern
Lent owes 20 the depositors OF the Freedmen's
taying and Trust Company" The President said
tat lie thought tie - per cent OF the deposits
naming unpatd should DC paid by the Government
Upon principles OF equity and fairness. inasnuch
J. the circumstances under which the bank was
organized led the depositors 10 think that the In
StaJiOn 70 deposit their hard-earned savings IN
ble Institution implied an undertaking the part
u the Government that their money should De safe
Kept Tor them The controller submitted, with
iran nf n for