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The Freedman's Savings and Trust Company, popularly called the Freedman's Bank, was established in 1865 by white philanthropists to assist African American soldiers and newly freed blacks as they made the transition into legal freedom. The bank moved its operations to Washington in 1867. Its national headquarters was completed at this site in 1872, and by 1874 more than 61,000 African Americans had deposited more than $3 million. The original charter created an institution to save and invest funds in securities of the United States. It did not provide for making loans with depositors' money. Between 1865 and 1871, Freedman's Bank opened some 37 branches in 17 states and the District of Columbia.

In 1870 the bank's charter was amended to allow for loans and wider investments. Then the national Panic of 1873, problems of overexpansion, and mismanagement, including questionable loans to white businesses, brought the bank to the point of collapse. In March 1874, bank officials elected Frederick Douglass as president in order to restore the confidence of depositors. Unfortunately Douglass was unaware of how bad the situation was and invested $10,000 of his own money in the bank. After a few months, he realized the situation was hopeless and recommended that Congress close the bank, which it did four months later. Depositors were able to recover only a portion of their savings and were devastated by the loss. Despite its congressional charter, the bank's assets had not been protected by the federal government. Its closure left behind a bitter distrust of the American banking system that lasted for many generations.

The building was sold in 1882 and later razed. A plaque marking the site, which originally faced Pennsylvania Avenue, is found on the current U.S. Treasury Annex. The original records of Freedman's Bank are found at the National Archives and are a rich resource for researchers. In addition to the names and ages of depositors, the files contain places of birth, residences, occupations, names of family members, and in some cases names of former slave owners.

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