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“The ascent of money has been essential to the ascent of man.”
― Niall Ferguson, The Ascent of Money: A Financial History of the World

“The scheme began to unravel following the Panic of 1873 when railroad investments failed. The bank experienced several runs at the height of the panic. The panic would not have affected the bank if it had been a savings bank, but by 1866, the business of the bank had become…reckless speculation, over-capitalization, stock manipulation, intrigue and bribery, and downright plunderingâ€�. In a last ditch effort to save the bank, the Trustees appointed Frederick Douglas as Bank President in March of 1874. Douglass did not ask to be nominated and the Bank Board knew that Douglass had no experience in banking, but they felt that his reputation and popularity would restore confidence to fleeing depositorsâ€�.Douglas lent the bank $10,000 of his own money to cover the bank’s illiquid assetsâ€�.Douglass quickly discovered that the bank was full of dead men’s bones, rottenness and corruption. As soon as Douglass realized that the bank was headed towards certain failure, he imposed drastic spending cuts to limit depositorsâ€� losses. He then relayed this information to Congress, underscoring the bank’s insolvency, and declaring that he could no longer ask his people to deposit their money in it. Despite the other Trusteesâ€� attempts to convince Congress otherwise, Congress sided with Douglass, and on June 20, 1874, Congress amended the Charter to authorize the Trustees to end operations. Within a few weeksâ€� time, the bank’s doors were shut for good on June 29, 1874, leaving 61,131 depositors without access to nearly $3 million dollars in deposits. More than half of accumulated black wealth disappeared through the mismanagement of the Freedman’s Savings Bank. And what is most lamentable…is the fact that only a few of those who embezzled and defrauded the one-time liquid assets of this bank were ever prosecutedâ€�.Congress did appoint a commission led by John AJ Cresswell to look into the failure and to recover as much of the deposits as possible. In 1880, Henry Cook testified about the bank failure and said that bank’s depositors were victims of a widespread universal sweeping financial disaster. In other words, it was the Market’s fault, not his. The misdeeds of the bank’s management never came to light.”
― Mehrsa Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap

“Perhaps because the bank was identified with the endeavors of the newly freed negro, wrote historians Kindsor and Sagarin, anyone who dared to raise a cry against the mismanagement was charged with being anti-negro. In as much as the enemies of the negro were not interested in the bank, and the friends were effectively silenced with the anti-negro charge, there was no exposure of the condition of the bank. The belief that the failures of black institutions could not be accurately studied because of the sensitivity of the race issue, whether accurate or not, would be a recurring theme through history.”
― Mehrsa Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap