By Jolie A. Doggett
NABJ Black News & Views
Reprinted – by Texas Metro News
https://blacknewsandviews.com/
The American dream has been a dream deferred for many Black Americans.
More than 17 percent live below the poverty line. The median household income for Black families is almost half of that of white families. Black students are less likely to graduate from college and be hired into high earning jobs. And those who do make it to the workforce earn 15 cents less on the dollar than their white counterparts and carry a heavier burden of student loan debt.
These situations are not due to bad luck or bad choices – it’s by design, says Rodney Brooks, author of “The Rise and Fall of the Freedman’s Savings Bank and its Lasting Socio-Economic Impact on Black America.”
Systemic disenfranchisement, racial bias in education, and mismanagement of finances are at the root of a growing racial wealth gap in this country, and the seeds of that marginalization were planted over 150 years ago, according to Brooks.
“The economic trajectory and development of capitalism in the U.S. are inextricably linked to the brutal institution of slavery,” writes the award-winning journalist, columnist at U.S. News & World Report, author, and financial advisor. “Black wealth issues are not a new problem, rather, they are historically rooted in a persistent pattern of loss and mistreatment beginning with the mishandling of freedmen and freedwomen’s money during Reconstruction.”
Brooks has spent the majority of his career educating Black Americans about the history of the racial wealth gap and researching ways it can be brought to a close. The connections he makes between Reconstruction and the financial discrimination America grapples with today is published in his most recent book, “The Rise and Fall of the Freedman’s Savings Bank and its Lasting Socio-Economic Impact on Black America.”
After the passing of The Emancipation Proclamation and the end of the Civil War, Congress established the Freedmen’s Bureau on March 3, 1865 to begin the reconstruction of the American South and provide for newly freed Black people. Part of that reconstruction initiative included creating The Freedman’s Savings and Trust, the first banking institution specifically for the Black population, Brooks told Black News & Views in an interview.
“Today economists point to the failure of the Freedman’s Savings Bank as a contributor to this nation’s [current] racial wealth gap,” Brooks said. “These people were putting in hard-earned money, some of them were earning money for the first time. It was a big deal to dress up and go to the bank because it meant economic freedom as well as their freedom from slavery.”
Black veterans who fought in the Civil War deposited their pensions in the bank while other newly freed Blacks were saving any money they were able to earn in menial jobs. Unfortunately, mismanagement by the trustees, racists and risky lending practices, and poor investments doomed the promising financial establishment. By the time of the Panic of 1873 financial crisis, the institution was no longer sustainable.
The Freedman’s Bank officially dissolved in 1874 and with it, millions of hard-earned Black dollars were lost forever and the newly freed American citizens were left with almost nothing. With the collapse of the bank, so too fell African Americans’ trust in government institutions, a habit that persists today. In the years afterwards, any attempts Black Americans made to build wealth were continuously thwarted by racist policies, mob rule that was legally sanctioned for almost a century for over a century.
Frederick Douglass, who served as the last president of the bank, said the impact of the failure of the Freedman’s Savings Bank was worse than an additional 10 years of slavery.
Over several chapters, Brooks follows the ripples felt after the fall of the Freedman’s Bank that are still being felt.
“We’re only to imagine the possibilities if those millions lost by Black depositors 150 years ago had been used to buy farms, homes property, educate children…what those resources would have meant for Black generational wealth,” Brooks writes.
Rebuilding the generational wealth that was lost is not something Black folks will be able to resolve simply by working hard and saving; it requires major political intervention on the state and federal level, according to “Rise and Fall.” Brooks’ book explains significant policy changes that can help, including baby bonds, guaranteed income, federal housing programs for first-time home buyers, and reparations in detail. However, there are actions that people can take themselves to improve their financial futures, the author explains. He encourages his readers to invest in stocks, pursue financial literacy, remain politically active and, above all else, hold onto hope.
The choices that were made in history and the choices Black Americans are forced to make today are interconnected, according to the author. What happened to the Freedman’s Bank and the subsequent suppression of Black wealth was a tragedy but it can still have a happy ending, he explains. Through education, investments, and new laws, Brooks believes future generations can move closer to realizing the American dream.
“You can’t lose hope, you can’t not dream,” Brooks implored Black Americans. “That affects the next generation, that affects your children. If nothing else, make your financial goal to make sure [the] children don’t face the same obstacles you have.”
The book is available here.
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