This is volume 13 of my monthly column titled Black Dollars Matter. As I point out monthly, this column is generally designed to compel white businesses/entities and white employers in Philadelphia to treat black consumers and black applicants/employees/businesses with respect. But, more importantly, it is also designed to convince black people in Philadelphia to “do for themselves” economically and politically because, in a capitalist democracy, money and politics talk – which means to persuade – and people BS are walking – which means leaving empty-handed. .
Speaking of “doing it for yourself,” the first step to making money is saving money. In other words, if you spend it as soon as you get it, you never really got it; you just “held” it while it burned a hole in your pocket until it got to someone else who doesn’t look like you or care about you and has it saved by banking and then investing it strategically for his/their people in his/their community.
You remember the two most important old sayings about money, right? “A penny saved is a penny earned.” And “A fool and his/her/their money are soon parted.”
Let’s focus on the first, the saving part, in this month’s article. And let’s start at the beginning, shall we?
After the nation’s first “whites-only” bank opened in Philadelphia in 1791, America’s first pro-black bank, which was also the nation’s first military bank, was established. Called the Free Labor Bank, it was established in 1864 – a year before the passage of the 13th Amendment – by Union General Nathaniel Prentice Banks (real name) in New Orleans to provide a secure repository for soldiers from the Black Civil War and former slaves. It offered an opportunity, as noted on fedpartnership.gov, for black people “to learn about thrift and economics…. [It was designed for Blacks] who owned land…and who worked on plantations seized by the government…”.
That’s the good news. But the bad news was:
“The [Black]soldiers would deposit a portion of their pay, which was saved for a relative or for the soldier’s use at a later date. Unfortunately, many of these soldiers did not know how banks worked and they left close to $200,000 [which equals over $3.5 million in 2022] unclaimed from the bank at the end of the war. Fortunately, however, the government would use these funds as seed capital for the Freedman’s Savings and Trust Company in 1865.
By the way, in addition to being a brave and victorious general, Nathaniel Banks, who was white, was also an abolitionist and a reconstructionist. In other words, he was a cool white guy.
The first black-owned and operated bank in America was the Capital Savings Bank, founded in Washington, DC, in 1888. It was so successful that by 1892 it had more than $300,000 in deposits. This equates to more than $5.3 million in 2022.
Speaking of 2022, less than 0.5% of the 4,236 FDIC-insured U.S. banks (including credit unions) are currently black-owned. One percent is 42. We have 20. Twenty is less than half a percent! WTF? ! There are 44.5 million black people in this country, and less than half of one percent of FDIC-insured U.S. banks (including credit unions) are black-owned. Brothers and sisters, we must do better. We must “do for ourselves”.
Between 1888 and 1934, there were 134 black-owned banks across the country. Currently, there are only 20. This is objective proof that things have gotten worse financially for black people in America. And the fault is integration. The numbers prove it. Look at 134 to 20. Look at what happened to Negro Leagues Baseball and the hundreds of small but successful black businesses that relied on Negro Leagues Baseball but died with it when Jackie Robinson was signed and brought to Major League Baseball.
Founded in 1920, Negro Leagues Baseball was a powerful force in and for the economies of many black communities across the country. Tragically, despite good intentions (and bearing in mind that the road to hell is paved with good intentions), these black leagues and their resulting black economies were killed by integration into Major League Baseball. with the death knell sounding in 1947 when Robinson was signed by Plug Rickey to the Brooklyn Dodgers.
Negro Leagues Baseball had been the catalyst for many hugely profitable Black-owned and operated businesses nationwide, including but not limited to hotels, restaurants, convention halls, jazz clubs, livery services, drapers, hair salons, newspapers, insurance companies and most. especially banks.
But enough about the economic flaws of integration. Back to today’s black banks.
As investopedia.com made clear in regards to the Brookings Institution’s preeminent report titled “Examining the Black-White Wealth Gap”, dated January 26, 2022:
“Today, the net worth of a white family is almost ten times greater on average than that of a black family. This is the result of inequality, discrimination, [and] racism…throughout America’s history. This is also why the decline in the number of black-owned banks is of particular concern, given the role these institutions play in combating modern systemic racism in the financial sector.
I’m proud to say that I fight modern systemic racism in the financial industry by working as a law firm at the black-owned and operated United Bank right here in Philadelphia.
Additionally, I have a personal checking account and a “New Black Wall Street/Greenwood” online credit card at One United Bank, which has branches in California, Florida, and Massachusetts. One United is America’s largest black-owned bank because it was created by financially combining, that is, culturally uniting, black-owned banks in Los Angeles, Miami and Boston.
For more information on the history of One United and its cultural ties to the incredibly profitable Black Wall Street from 1906 to 1921 in the Greenwood section of Tulsa, Oklahoma, and for helpful information on how you can help build this that the Whites of Greenwood burned down in 1921, log on to oneunited.com and open a “New Black Wall Street/Greenwood” checking/credit/debit account.
Also, log on to kansascityfed.org and read “Let’s Put Our Money Together: The Founding of America’s First Black Banks” by Tim Todd.
Let’s turn that aforementioned less than 0.5% into at least 50% by opening accounts large and small in one of America’s 20 Black Banks so they can unite and eventually multiply. You can do it in person or you can do it online. Anyway, do it.
In other words, “Do for yourself”, Brothers and Sisters. “Do for you!”