In December of 1865, Nashville's first black bank, the Freedman's Savings and Trust Company Bank, was organized by local black leaders. It was one of thirty-three branches which the Congress authorized in the fifteen former slave states. Black Tennesseans organized other Freedman's Bank branches: Chattanooga (1868-1874), Columbia (1870-1874), and Memphis (1865- 1874). But none of the other Tennessee branches generated more capital than the Nashville branch. The Congress designed the banks to allow a depositor to place ten cents a day in savings, receive six percent interest, and accumulate $489.31 in ten years.
        The Nashville branch bank had a black cashier (manager) and nearly all black trustees. The early trustees included a white bank president and a list of Nashville's elite black leaders: chairman Nelson Walker (businessman, barber), Frank Parrish (barber), Peter Lowery (preacher, real estate dealer), Henry Harding (hotel owner), Richard Harris (preacher), William C. Napier (hack operator), Daniel Wadkins (preacher), Benjamin East (businessman), and Nelson G. Merry (preacher). Local black businessman Alfred Menefee became the first cashier of the local branch after putting up a $5,000 bond. Menefee also acted as an agent for the National Freedmen's Relief Association and its Freedman 's Journal, distributing copies and collecting and depositing funds in the Freedman's Bank. Later John J. Cary, a more formally educated black man and migrant from Canada, became the permanent cashier. By June of 1866, the Nashville branch had $19,653.28 in deposits.
        Between 1866 and 1874, the Nashville branch serviced 16,444 accounts and handled $555,000 in deposits. Institutional assets rose steadily to $6,075 (1866), $43,974 (1869), and $70,146 (1871). The Nashville branch had $78,535 in deposits, compared to $19,823 for the Columbia branch and $56,775 for the Memphis Freedman's Bank. Cary invested nearly forty percent of the bank's funds in government securities and local real estate. In 1871, Cary and the trustees completed a three-story bank building, Liberty Hall, at 44 Cedar Street. Black cultural events and annual sessions of the State Colored Men's Conventions were held in Liberty Hall.
        The national Freedman's Bank and all its branches collapsed in 1874, due to the economic depression of 1873, the accumulating effects of fraud and mismanagement of the national branch by poorly-trained white administrators, and risky loan policies. Nashville's Freedman's Bank also collapsed, because it had $62,755.87 deposited in the failed national branch. Frederick Douglass received appointment as the first national black president of the troubled banking system shortly before its collapse, but he had no choice except to ask the Congress to liquidate all remaining assets. The United States Comptroller of the Currency closed all Freedman's Banks.
        When rumors of the impending disaster circulated in Nashville, John Cary tried to allay the depositors' fears. He published a sound financial statement in the Union and American newspaper and persuaded the trustees to make positive public statements to quiet depositors' apprehensions. The Davidson County Chancery Court began bankruptcy hearings on the Nashville branch, and on December 21, 1874, the court appointed Cary as receiver for liquidation of the bank's assets. Most depositors received a small percentage of their money. Yet large investors, such as Henry Harding, lost thousands of dollars--a fortune in that day. Part of the whites' reaction to the collapse of the black banks was expressed by the Memphis Avalanche, which heartlessly mocked the dejected blacks with the following headline: "WHAR'S DAT MONEY."

Bobby L. Lovett