Evening star. [volume] (Washington, D.C.) 1854-1972, 1897-12-10
BANK
Exhibit Of AaaEz +: Savings and
Trust Company.
SUMMARY OF C0MM1sSI0NER'S REPORT
Aggregate Of the Deposits Made in
TeniYears.
NUMBER OF THE CLAIMS

| the impression gets abroad among the col
ored people that it means the paying off of
| all balances due them, and they flock to
the office with their pass-books expecting
to get their money. In view of this fact
| and 10 give a better understanding of the
situation, Mr.. T. P. Kane of the office of
Controller Eckels prepared the following
summary of the commissioners report, to-
| gether with brief review Of some matters
| connected with the Institution, not con-
| tanned in the report:
| 1.-The annual report of Controller James H
| Eckels, ex-officio commissioner of the
| Freedman's Savings and Trust Company,
| for the year ended December 4, 1897, sub
mitted to Congress, will recall to the minds
of many the failure Of that colossal bank
| ing institution in June, 1874.
| During the progress of the civil war,
when the colored soldiers became consid-
| cradle element in the military service of
the United States, 1t was deemed necessary
| to make some provision for the safe-keep-
| ing Of their pay and bounty moneys for the
| benefit of themselves and their families.
| TO meet this exigency, military savings
| bank was established at Beaufort, S. e.,
| and another at Norfolk, Va, centers at thai
| time of colored troops
| Increased the Necessity.
1.-The subsequent emancipation OF the
race increased the necessity fon and sug
gested the advisa bility of establishing some
| financial agency which would more fully
meet this demand and Congress, under
| date of March 3, 1865. passed an act con-
stituting Messrs. Peter Cooper, William G.
Bryant and fortyeight others a body cor
porate under the title of the freedman
Savings and Trust Company to receive OH
n
time to time. be offered therefor, by or o.:
behalf of persons heretofore held in slaV-
cry in the United States. or their descend.
ants, and to invest the same In the stocks,
bonds, treasury notes or other securities
of the United States No capital stock
| was required. but, in lieu thereof, the char
ter permitted not exceeding one-third of
the deposits to be retained in readily con-
vertible form, for the purpose of meeting
Withdrawals and to defray the operating
expenses of the bank.
THE principal office of this institution
was located in Washington, opposite the
north front of the Treasury Department,
in a four-s,ory brownstone building. After
the failure Of the bank this building was
purchased by the government for the sum
of $3.50, 900, and has since been occupied
by the Department of Justice and the
Court of Claims. ~
"At the date of failure of this banking
company it had thirty-four branches or
agencies in active operation. which were
throughout the southern states, except one
each in New York, Philadelphia and Bal
timore
Aggregate of. Deposits.
During the ten years of it's active ex-
| istence the deposits in. this institution ag-
gregated over $1,000 600, and it's deposit
| Crs numbered over TO,O0G. I..... -...
From 1865 to 1870 the bank seemed to
| have been honestly and judiciously con-
| Quoted by the trustees lin charge of its
| affairs, and apparently to have enjoyed
the full confidence of its depositors, in
| the knowledge ard belief that their mon
| eys were required by the charter act to
| be safely invested in the stocks. bonds.
| treasury notes and other securities Of the
| United States.
| I'm May, 1870, however, Congress amend
| ed the act of Incorporation, empowering
| the trustees to invest one-half of the de-
| posits received in bonds other notes
| secured by mortgage on real estate in
| double the value of the loan This amend
! ment opened the door to the wild sDecu-
lation in real estate which immedia tely
| followed its passage and to 9th culpa-
! BILE transactions which soon ABSORBED the
| funds of the bank and led to the failure
| of the institution.
| when this proposed amendment was I'M
! der discussion in the Senate Senator Cam
| eron of Pennsylvania strcnuously opposed
| its adoption, and declared that it would
| b,
| as the funds of the bank, he said, once
| invested in real estate, would be difficult
| to get back. He contended that the prn-
| cipal proposed was a dangerous one, and
| one which should rot be Incorporated into
| any banking institution. He said that his
| experience had been whenever a bank of
| that character invested its funds in real
| estate 1t went to destruction. This proph-
| ecy was fulfilled four years later.
The Radical Change.
| thn tir,o hi
authorized in the character of securities to
be taken for loans the deposits amounted
| TO at least $2,000,O0O. Had the original
act been allowed to remain as it was and
! its requirements with respect to invest
| Elents been complied with the face value
| of the United States securities which the
bank should have then held would have
exceeded the sum stated by a very large
percentage, and their market value would
| the failure of the tank only 800 in United
States securities were found among it's
assets.
The same anendatory act provided for
the winding up of the bank and all of its
branches, whenever the trustees might
deem 1t advisable. by the appointment
| ny tneH OF three commissioners, to be APP
proved by the Secretary of the Treasury,
| one or whom should be a colored man.
| 'On June 30, 1874, the bank having been
ascertained TO be insolvent was closed by d
| vote OF the trustees, who appointed three
| commissioners to wind up its affairs. These
| commissioners served from July II, 1874, to
| February p, 1881, on which later date, by
| act OF Congress, all the remaining assets of
| the bank We're transferred to the custody
| and supervision of the controller of the cur
| rency, who. since that time. has had charge
of the liquidation Of its affairs.
Depositors and Their Dues.
| AT the time of the failure of the bank
there were 81 ,1S1 depositoEs. to whom there
was due s2os9, o25. % !" Between November
| l, 1873. and May 12p,. 1853, five dividends
| were declared, amounting to 81 per cent.
and aggregatng 1882, 1882. OF this
amount there was called for and paid ST.
GSs $3.50 49, leaving s1s4 49l.13 unpaid and
| barred by the act approved February p.
1881 which act required all claims against
the trust to be presented within six months
from the date Of its passage, and all divi-
dends to be called for within two years
| from the date of hefr.declaration.
Twenty-six hundred and seventy-six
claims were proved by depositors in the
washington 1, branch. TO whom there was
THE act of F'ebruarv y, 1881, was amend
ed by the act of February II, 1888. which
authorized the payment of all claims filed
within the two years limitation fixed by
ont l.