The Betrayal of Frederick Douglass

Summary

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Podcast Summary: "The Betrayal of Frederick Douglass"

Podcast: Reconstruction: The Unfinished Promise
Host: Higher Ground Audio
Date: July 2, 2026
Host/Narrator: Malcolm Gladwell
Featured Voices: Kai Wright, Justine Hill Edwards, David Blight, Frederick Douglass (historic quotes)

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Episode Overview

This episode unpacks the tragic story of the Freedmen’s Bank—an institution born during Reconstruction to support Black Americans in their quest for economic independence, and how its downfall became emblematic of the era's ultimate betrayal. Anchored by the experiences and insight of Frederick Douglass, the narrative charts the idealism that fueled Reconstruction's promise, the white mismanagement and cynicism that led to the bank's collapse, and the devastating long-term effects on Black wealth and trust in American institutions.

Gladwell and contributing historians explore the rise of Black self-reliance after emancipation, the toxic intersection of philanthropy, finance, and racism, and the manipulation of Douglass and the Black community by their ostensible northern allies.

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Key Discussion Points and Insights

Frederick Douglass and the Vision of Self-Reliance

• Douglass’s Philosophy (01:48–03:56):
  • Douglass believed American democracy thrived when everyone participated.
  • He championed the idea that Black liberation depended on economic independence: "What the Negro wants, especially just now, is money..." (03:37).
  • Self-reliance, “pulling oneself up by one’s bootstraps,” was a central Douglass theme.

The Creation of the Freedmen's Bank

• Origins (04:24–08:03):

  • Historian Justine Hill Edwards: Black Americans, even while enslaved, had "fully formed ideas about their own economic lives" (04:24).
  • The “wild, wild west of banking”: financial chaos post–Civil War; Black soldiers in the South needed safe places for their pay, inspiring John Alvord, a white abolitionist, to found a bank for the newly emancipated (06:24).

• Uniqueness of the Bank:

  • David Blight: “No place in the world ever tried this…a bank for the freed people.” (07:51)

Early Success—And Deep Flaws

• Community Investment (09:03–11:29):

  • Black families deposited millions; 70,000 accounts, totaling about $57 million (1870s)—equivalent to ~$1.5 billion today.
  • Example: Mrs. Ellen Baptiste Lubon’s story highlights sophistication in organizing wealth succession (09:28–10:59).

• Symbolic Missteps (15:42–16:53):

  • Expensive D.C. headquarters symbolized trustees’ disregard for Black depositors' real needs.

• Fundamental Misalignment & White Paternalism (17:13–19:52):

  • The bank was conceived as a “white projection of what black people need” (19:38, Gladwell).
  • Depositors sought short-term savings to purchase land, not slow interest accumulation; the business model was unsustainable.

Shift Toward Corruption and Collapse

• Deregulation and Exploitation (20:49–22:30):

  • Trustees, unable to keep the bank solvent, lobbied for and received permission to make riskier, more speculative loans—including to themselves.
  • Senator Simon Cameron's warnings went unheeded: “No wisely conducted bank will allow its money to be loaned upon real estate…” (21:36).

• Speculative Lending Frenzy (23:14–23:52):

  • White administrators gambled with Black depositors’ savings: “You have the bank's white administrators essentially gambling with the savings of African Americans” (Justine Hill Edwards, 23:39).

Frederick Douglass: From Advocate to Scapegoat

• Douglass as Bank President (26:28–29:42):

  • Douglass was brought in as a trusted Black figure to restore faith in the bank—“How cynical is that?” (Gladwell, 28:47).
  • Despite warnings from friends and family, he accepted for prestige and a desire for financial stability.

• Collapse and Fallout (28:04–30:02):

  • Within three months, the bank failed (July 2, 1874). Most depositors lost their savings.
  • Douglass: “The signs of the times are not all in our favor. There are even in the Republican Party, indications of a disposition to get rid of us.” (30:02)

Political Consequences and Racist Backlash

• Aftermath Influences National Politics (32:59–34:59):
  • The bank's collapse fueled white Southern Democrats’ argument that “African Americans were not prepared for inclusion in the body politic.”
  • Congressional investigations, often led by former Confederates and KKK members, used the bank’s failure to undermine Reconstruction.

Misused Rhetoric and Lasting Harm

• Douglass’s Infamous Speech (35:55–40:48):

  • His "Peace among the Whites" speech decried self-serving white philanthropy but was twisted by opponents to argue against further help for Black Americans.
  • Quotes: "We must hereafter do our own begging, if any begging is done at all, in our own name." (38:36)
  • Confederates cited Douglass out of context, omitting his calls for protection of Black rights.

• The Bootstraps Trope (40:48–41:57):

  • The right’s misappropriation of Douglass’s words continues to influence debates on Black self-reliance and policy, including Supreme Court decisions.

Douglass’s Regret and Systemic Betrayal

• Testifying on the Bank’s Failure (41:57–43:29):

  • Douglass recounted being the only trustee who actually had money in the bank.
  • “I found out that it was in want of money, for one thing. Very much in want of money.” (Frederick Douglass, Senate testimony, 42:01)

• Long-term Loss:

  • Black depositors received only a fraction of their money, resulting in a catastrophic generational wealth loss.
  • Douglass and the Black community saw their trust irreparably betrayed—not only by white adversaries but by white allies.

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Notable Quotes & Memorable Moments

• On Self-Made Men:
  “What the Negro wants, especially just now, is money…”
  —Frederick Douglass (03:37)

• On White Trustees’ Priorities:
  “It represented the fundamental misalignment between the bank's depositors and the bank's administrators.”
  —Justine Hill Edwards (16:54)

• Gladwell’s Assessment:
  “So the bank in its original conception is like a white projection of what black people need. Correct. It is an established white person's idea of what role a bank ought to play in establishing financial security.”
  —Malcolm Gladwell (19:38)

• On the Trustee's Gambles:
  “You have the bank's white administrators essentially gambling with the savings of African Americans.”
  —Justine Hill Edwards (23:39)

• Douglass’s Cynicism About Allies:
  “The signs of the times are not all in our favor. There are even in the Republican party, indications of a disposition to get rid of us.”
  —Frederick Douglass (30:02)

• On Personal Investment:
  “No. I believe that I was the only trustee that had a dollar deposited there.”
  —Frederick Douglass, Senate testimony (43:29)

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Timestamps for Key Segments

• Introduction and Douglass’s Self-Reliance Philosophy: 00:05–03:56
• Origins and Purpose of Freedmen’s Bank: 04:24–08:03
• Depositor Stories and Bank Impact: 09:03–11:29
• Flawed Business Model and White Paternalism: 15:42–19:52
• Shift to Speculation and Corruption: 20:49–23:52
• Douglass Becomes President; Bank Fails: 26:28–30:02
• Political Backlash and Investigations: 32:59–34:59
• Douglass’s “Peace among the Whites” Speech: 35:55–40:48
• Legacy of Bootstraps Rhetoric: 40:48–41:57
• Senate Testimony and Final Betrayal: 41:57–44:00
• Closing Reflection: 45:09–45:40

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Tone and Final Takeaways

The episode masterfully blends narrative and scholarship—Nuanced, clear-eyed, sometimes rueful, always attentive to historical complexity and heartbreak. Gladwell, Wright, and their guests reveal how racism, paternalism, and financial malpractice intersected to undermine the promise of Reconstruction, tie the Freedmen’s Bank collapse to enduring racial wealth disparities, and recenter Frederick Douglass as both a symbol of hope and a victim of betrayal.

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This is an essential listen (or read) for understanding the depth of Reconstruction’s promise and its tragic betrayal, sharpening the lens on today’s persistent economic and political inequalities.

Transcript

[Malcolm Gladwell]

We've been hearing how Reconstruction fundamentally shifted political power in the south as newly freed black people built schools and black men voted and ran for public office. Many Southern whites were unwilling to accept these changes. And so we've also heard about the violence that ensued during Reconstruction. But there were also more subtle ways to undermine the project. One person who saw that coming was the great abolitionist, Frederick Douglass. We started our series with Douglass's story, and I argued that because of his impact on the direction of the nation, he should be considered one of the founding fathers. Douglass understood American politics so well that he was often called prophetic. And yet this brilliant man somehow got conned by his own allies. I'm Malcolm Gladwell, and this is the unfinished promise. In 1874, about a decade into Reconstruction, Frederick Douglass found himself mired in scandal. In the short run, the scandal would give ammunition to the southern foes of Reconstruction. In the long run, it would foster a mistrust of the financial system for generations of black Americans, contributing to the wealth gap that exists even today between white and black. Kai Wright brings us the story of one of the biggest financial scandals of the 19th century, one that meant the beginning of the end for Reconstruction.

[Kai Wright]

Frederick Douglass is best remembered today for his unwavering clarity about American democracy. It would thrive only when everybody got a chance to participate. Racism, he argued, was and is the Achilles heel of any nation that aspires to greatness. But in Douglass's own era, he was also known for a kind of corollary argument about America's greatness. He believed the country was uniquely suited to produce what he called self made men.

[Frederick Douglass (quoted)]

The lessons which such men teach are valuable in many respects. Chief among them is the dignity of humanity. They teach us too the value of work, self reliance and manly independence.

[Kai Wright]

And actually, one of the speeches Douglass gave most often throughout his life was a stem winding tribute to these self made men. To people who reached down, grabbed their own bootstraps and pulled themselves up.

[Frederick Douglass (quoted)]

Let us appreciate such men and award them the meed of praise due to their heroism.

[Kai Wright]

Self reliance. This, to Douglass, was the essential part of American life. So it's not surprising that throughout Reconstruction, he was preoccupied with the subject of black self reliance. And I think it's even fair to say that Douglass believed the biggest missing piece of black liberation, the piece that would create self reliance and would generate more black self made men, was that we needed to get our money right.

[Frederick Douglass (quoted)]

No people ever yet made any considerable progress in civilization or in the estimation of their fellow men who had not had money and what the Negro wants, especially just now, is money and this

[Kai Wright]

fixation on the idea of self reliance. It's eventually how Frederick Douglass gets himself mixed up in this horrible financial scandal. But that's getting ahead of ourselves. First we need to go back all the way back to the end of the Civil War and the start of Reconstruction. Back then, Frederick Douglass was actually not the only one who could see that the path to freedom in America was at least partially paved with money.

[Justine Hill Edwards]

Black Americans were transitioning into this period of freedom with fully formed ideas about their own economic lives themselves as financial actors.

[Kai Wright]

I called up Justine Hill Edwards because she literally wrote the book on how black people tried to build wealth during Reconstruction. She's a historian at the University of Virginia.

[Justine Hill Edwards]

They were thinking about this when they were enslaved, and she's like, surely they were bringing these ideas with them into the period of freedom.

[Kai Wright]

Justine says America was buzzing with missionary zeal during Reconstruction. A small army of civilians in the north went south during and after the war looking for ways to help. And one of these helpers was a guy named John Alvord.

[Justine Hill Edwards]

John Alvord was a white abolitionist and minister from New Jersey, a true believer

[Kai Wright]

in abolition who worked for the Union Army. A family man, white, in his late 50s, he felt he was genuinely called by God to aid the newly freed people. And at the end of the war, he lingered in the south looking for his next ministry. That's when he had this crazy encounter.

[Justine Hill Edwards]

He is talking to a white officer in Beaufort, and this officer tells him that he has about $75,000 in black soldiers pay.

[Kai Wright]

$75,000?

[Justine Hill Edwards]

Yes.

[Kai Wright]

Justine says black soldiers stationed in the south needed someplace safe to put their cash. So a bunch of them, their earnings to this white army officer who was riding around with it in a trunk. Where was he going with the truck of money?

[Justine Hill Edwards]

It's a good question. I'm not sure. Probably just, you know, a trunk filled with, you know, dollars in coins and hoping that nobody stole it.

[Kai Wright]

It is. It's such an evocative scene in thinking about how chaotic the financial world was at that moment. There's a truck full of $75,000 just Dr. Around in Buford, South Carolina.

[Justine Hill Edwards]

And this is not adjusted for inflation. That would probably today be a million dollars or so. I think we, as kind of modern humans like to think about the financial system as being fairly stable. But we're talking about a period of time in American and really world history where banking was inherently a risky venture. And so I call it the kind of wild, wild west of Banking.

[Kai Wright]

This encounter gave John Albert an idea. He could help the cause of emancipation by starting a bank just for the free people. So he returns to the north, he starts promoting his idea among all the movers and shakers in Lincoln's Republican Party. And pretty quickly it materializes as one of the first high profile projects of Reconstruction.

[Justine Hill Edwards]

The Friedman Savings and Trust Company, I'll call it the Freedmen's bank, was a financial institution, a savings bank creating specifically for African Americans recently emancipated from slavery. Kind of helping them establish a firm financial footing during this new period of freedom.

[David Blight]

A completely new idea. No place in the world ever tried this, by the way, where slavery had ended, throughout the Spanish Empire, British Empire and so on and so forth. A bank for the freed people.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

Whoa.

[Kai Wright]

David Blight is Frederick Douglass biographer. We met him earlier in the series and he says Douglass really loved the. This whole idea.

[David Blight]

Well, I think it was so important to Douglas because it does fit in the best sentiments of that idea of self reliance. If you had 10 bucks, 20 bucks or a hundred bucks, put it in that bank, earn some interest, become your own capitalist, become self sustaining. See, the Freedman's bank was a moral issue to Douglas. It meant that if the government creates this and it sustains, becomes one of the principal examples, physical examples, that the United States truly means the emancipation they committed and they will sustain it.

[Justine Hill Edwards]

There is nothing in the world like

[Frederick Douglass (quoted)]

a little purse put aside for a dark day.

[Kai Wright]

Black people absolutely welcomed the Freedmen's Bank. Whole families deposited their money.

[Justine Hill Edwards]

Parents, grandparents, wives and husbands.

[Kai Wright]

There were dozens of branches all over the country, but primarily in the South. And people walked in with deposits large and small, just building up this store of dreams and plans.

[Justine Hill Edwards]

One of the beautiful stories that I love, I talk about the New Orleans branch and a black woman who opens an account on July 2, 1866. And her name is Mrs. Ellen Baptiste Lubon. And I love how she. She puts Mrs. In her deposit record.

[Advertiser voice]

It's a beautiful name also.

[Justine Hill Edwards]

Right. She was born and raised in New Orleans. She had two daughters, Marguerite and Mary Lou Baum. She was married, she worked as a washer woman, and she lived close to the French Quarter. But there's a lot that's actually not there. Nowhere on her depositor record is the name of her husband. Instead of putting her husband's name, she puts the name of her two daughters, which I just find so fascinating.

[Kai Wright]

She had a sophistication about wealth transfer.

[Justine Hill Edwards]

And so if she died, the contents of her account could go to her daughters. I Mean, we often don't acknowledge enough the education that African Americans, especially the formerly enslaved, were bringing with them. But it's reflected in these records.

[Kai Wright]

Is this a first brush with officialdom? You know, a first brush with being able for yourself to write down, here's who I am.

[Justine Hill Edwards]

Absolutely. And so it was important for them, I think, to kind of put down as much information as possible or not any information at.

[Kai Wright]

Depending on your temperament.

[Justine Hill Edwards]

Exactly. Exactly. In terms of the bank's life, African Americans, by and large, deposited about $57 million into the bank. And this is across about 70,000 accounts.

[Kai Wright]

That's $57 million in today's terms or those terms.

[Justine Hill Edwards]

No, this is in an 1870s terms today. And this is a conservative amount. Conservatively, that would be about $1.5 billion.

[Frederick Douglass (quoted)]

Wow.

[Justine Hill Edwards]

We're talking about African Americans recently emancipated from slavery, depositing millions upon millions of dollars. That's mind blowing.

[Malcolm Gladwell]

I'm just waiting for the other shoe to drop. You know, this does not end well.

[Kai Wright]

Well, but it does get off to a pretty good start, Malcolm. I mean, in five years time, they opened 34 branches all over the south and as far north as New York City. I mean, it's precisely the kind of thing that Frederick Douglass had been people needed in order to sustain the political momentum of reconstruction. But no, it's not going to end well.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

Reconstruction promised freed families a fair start for millions. That promise was broken and its consequences are still with us today. The typical black family holds about $15 in wealth for every hundred held by typical white family. But the same statistic means different things to different people. It all depends on how you frame it. That's the kind of thing Ground News was built for. It puts coverage from every side in one place. So you can compare how each outlet frames the exact same figure. And here's the power of it. Ground News shows you the ownership behind the source, who funds the outlet doing the framing, which matters a whole lot when the subject is money and who has it. So go to groundnews.com R C that's G R O U N D N E W S.com R C 40% off the unlimited access vantage plan. Keep it for yourself or send it as a gift. Use my link groundnews.com R C so you get the discount and they know I sent you. I really value learning all sides of a story and Ground News can help you do that. One more time. Ground news.com R C We are in uncharted territory.

[David Remnick]

Staff writer Evan Osnos on the New Yorker Radio Hour.

[Tommy Vietor]

I think all of us right now are trying to make sense of an avalanche of news every day. And there aren't very many places where you can go and understand how something looks in the grand scope of history and context. That's what I come to the New Yorker for.

[David Remnick]

I'm David Remnick and each week my colleagues and I try to make sense of what's happening in this chaotic world. And I hope you'll join us for the New Yorker Radio Hour.

[Kai Wright]

The Freedman's bank launched quickly. John Alvord, the guy who started it, knew absolutely nothing about finance. Remember, he was a Baptist minister, not a banker, but he was a well connected Baptist minister. So he was able to recruit a bunch of influential northern men to help out.

[Justine Hill Edwards]

We are talking about a who's who of Republicans who supported Lincoln. We are talking about bankers and financiers, we're talking about businessmen who owned kind of export trading companies. And so we, we are talking a fairly tight knit group of white men who saw their affiliation with the bank as being an extension of their kind of civic dedication.

[Kai Wright]

They were the wealthy white liberals of their time.

[Justine Hill Edwards]

Exactly. And during the period of slavery, many of them were supportive of abolitionism and anti slavery activism. And so this was kind of an extension of that. They saw the kind of next step is being affiliated with an institution like the Freedmen's Bank.

[Kai Wright]

They went to their allies in Congress and got their project chartered as a national savings bank. The bank rapidly became one of the most visibly successful institutions of Reconstruction. Its trustees even created a sort of monument to their own achievement.

[David Blight]

They built a beautiful building in Washington just up the street from the White House.

[Justine Hill Edwards]

It is one of the most expensive buildings in the city. It is kind of outfitted with black walnut and marble. The furnishings were beautiful. Frederick Douglass writes about this and he writes about how he first saw the building and he said he felt like the Queen of Sheba looking at this beautiful building,

[Frederick Douglass (quoted)]

its towering height, its perfect appointments, and the fine display it made in the transaction of its business. It was a sight I had never expected to see.

[Kai Wright]

But that beautiful, expensive D.C. headquarters was not a symbol of the bank's prosperity and industry. It was the opposite. First off, if the D.C. building symbolized anything, it was the white trustees disregard for their black customers, who, unlike Frederick Douglass, had no particular interest in a fancy headquarters next to the White House.

[Justine Hill Edwards]

Especially since most of them weren't in D.C. right.

[Advertiser voice]

Right.

[Justine Hill Edwards]

A depositor in Shreveport or the depositor in Tallahassee didn't care about this, they wanted to make sure that their money was safe. It represented the fundamental misalignment between the bank's depositors and the bank's administrators.

[Kai Wright]

And that misalignment included a big flaw in the business plan that John Alvern and his friends created at the beginning of this venture. In the most 100 one way, you can.

[Justine Hill Edwards]

Sure.

[Kai Wright]

Can you explain the problem that the bank had?

[Justine Hill Edwards]

Sure. So as the bank is founded as a pure savings bank where depositors would put money in the bank, and if they left their money in the bank, they would earn a small amount of interest on their money.

[Kai Wright]

Think of it like a super conservative retirement account. So you know how you always hear financial advisors today preaching caution, don't touch your 401k. Ignore the ups and downs of the stock market and just focus on long term growth. Well, that was also the initial plan for the freedmen's bank. Convince a lot of depositors to put in a little bit of money, let it sit, and slowly, slowly build a return on their investment, both for the depositors and for the bank itself.

[Justine Hill Edwards]

About a third of the bank's deposits were supposed to be invested in government securities. And these types of financial products kind of take a long time to make a profit. And so the entire infrastructure functioned off of the idea of depositors putting money in the bank and leaving it there for months or years at a time. The depositors were thinking very differently about saving. African Americans weren't concerned with building interests on their savings accounts. They wanted to save money to buy land. Land was tangible. Land was capital. Land was kind of what they needed to protect themselves.

[Kai Wright]

So lo and behold, whenever the black depositors of the freedmen's bank had saved up enough money to buy land, they withdrew their money from the bank.

[Justine Hill Edwards]

They weren't concerned with leaving money in the bank for long periods of time,

[Kai Wright]

which meant that despite the huge sums of money flowing through the bank, it never held on to enough cash to sustain itself. Their business plan, based on slow, cautious investments in government securities, could not work.

[Justine Hill Edwards]

The bank's expenses were going up and the bank's investments weren't making money.

[Malcolm Gladwell]

So the bank in its original conception is like a. Is like a white projection of what black people need. Correct. It is an established white person's idea of what role a bank ought to play in establishing financial security.

[Kai Wright]

That's right. Formerly enslaved people are looking at reality. You know, it's not like this was mystery. Every time the trustees described the bank to depositors, these formerly enslaved people would say, great, here's What I'm looking for a place to put my money until I get land. And they, they just couldn't hear them.

[Malcolm Gladwell]

Not the first time that has happened, by the way.

[Kai Wright]

Within a few years of the bank's founding, John Alvord and the other trustees began to realize that they had created a problem. Despite all the outward signs of success, the huge number of accounts, the dozens of branches, the D.C. headquarters with the black walnut paneling, the bank was barely solvent. The trustees needed a new plan. And this is where the story moves from maybe well intentioned incompetence to something more ugly and more familiar to today's financial corruption scandals.

[Justine Hill Edwards]

The idea of the Freedmen's bank being a benevolent financial institution created first and foremost to serve black Americans started to shift.

[Kai Wright]

In the winter and spring of 1870. The trustees went back to their allies in Congress and they asked for a new charter. They wanted to become a commercial bank. They asked Congress to let them get in on real estate, to make loans to development projects that could generate big fast returns. It's worth noting that at least one senator loudly objected to this idea. Senator Simon Cameron, an old dour faced businessman who controlled the Pennsylvania political machine and who'd been in and out of government for decades.

[David Blight]

No wisely conducted bank will allow its money to be loaned upon real estate where it can never be quickly collected.

[Kai Wright]

Cameron told his colleagues. Look guys, it's a really bad idea to let this bank start making speculative loans, especially on real estate of all things.

[David Blight]

There is nothing so unsafe, so changeable in its character and so easily to be inflated in a board of directors as real estate.

[Kai Wright]

Cameron himself had a storied reputation for corruption and sneaky politics. So maybe this is a case the game sees game. But he tells his colleagues, mark my words, if you let that bank start making loans, the trustees are going to start self dealing and start lending money to their own speculative development projects.

[David Blight]

Remember that this money belongs to thousands of people across the country.

[Kai Wright]

Thousands of formerly enslaved people, primarily people who had slowly scratched together their money, working under unimaginable conditions, just trying to make themselves into one of Frederick Douglass so called self made Americans. I don't know how much Senator Cameron cared about these people, but he clearly didn't trust the bank. Nonetheless, his objections were dismissed. The Senate approved a new charter for the Freedmen's bank and the trustees went on to break every rule in exactly the way Senator Cameron had predicted.

[Justine Hill Edwards]

The floodgates are just let loose.

[David Blight]

Yes sir, 85,000 approved.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

$7,200.

[Frederick Douglass (quoted)]

You got it.

[Justine Hill Edwards]

They Were lending money with stocks and bonds as collateral. YMCA stock was used as collateral.

[Kai Wright]

This is 12,000, sir. Approved.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

$43,225.

[Advertiser voice]

Approved.

[Justine Hill Edwards]

You have the bank's white administrators essentially gambling with the savings of African Americans.

[Kai Wright]

Have at it.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

$7,750.

[David Blight]

Approved.

[Kai Wright]

And sure enough, they lent a lot of money to their own speculative ventures. The lead lobbyist for the new charter, who was himself a trustee, borrowed at least a half a million dollars.

[Justine Hill Edwards]

If I had the ability to ask these historical actors, right, I'm sure they. They would say being free, being a citizen, having inclusion in the body politic, required you to take risk. And so if you are not ready to take that type of risk, then you should not have put your money in the bank. And as an extension of that, perhaps African Americans were not ready for the responsibilities of freedom if they weren't ready to gamble. Yeah, yeah.

[Kai Wright]

But as is often the case with gambling, eventually the bankrolled craps.

[David Blight]

The economy just tanked in the spring of 1873.

[Kai Wright]

The panic of 1873, as it was called it is still today. One of the most brutal economic crises in all of American history.

[David Blight]

Within only a matter of a few months, there was huge unemployment, 25% unemployment in most major northeastern cities. Dozens of railroads went under, just stopped functioning. Mining companies just went under. It became a depression that kind of rose and fell and rose and fell for the next, well, more than a decade.

[Kai Wright]

Almost nobody alive today has experienced an economic event like this. But maybe if you were an adult during the 2008 financial collapse, you can remember that sense of panic as the bottom falls out of everything. That kind of panic can create what we call bank runs, which is when huge numbers of people try to take out all their money all at one time. And if the bank doesn't have enough cash on hand to cover all those withdrawals, it fails. It goes under. These runs became common in 1873, including at some branches of the Friedman's bank. And the trustees knew they were in trouble because they had already gambled away almost all the depositors money. They had to convince the depositors that their money was safe. The trustees had a good idea who to call.

[Justine Hill Edwards]

Frederick Douglass is an advocate of the bank. He is constantly supporting the bank publicly,

[Kai Wright]

and he is a great candidate to become the bank's very public new face.

[David Blight]

The board got together and they said, all right, let's put Douglas in charge. That'll give black people confidence. Because if Frederick Douglass is in charge of this, well, that means there's gotta be something Good going on here. That is not what it meant. Almost everybody who was close to him urged him not to take the presidency of this bank. Everyone around him, including his sons and his daughter, said, don't do this. Just don't do this. But he did.

[Kai Wright]

Why do you think he did it?

[David Blight]

Prestige.

[Kai Wright]

And maybe a very particular kind of prestige. Douglas spent decades famous and influential and nonetheless always feeling personally insecure about money.

[David Blight]

He'd made his living as a speaker, an editor and a writer. That's it. And like artists and writers and so on throughout history, he needed a patron here and there. And that is no easy way to get up in the morning and provide for a family and five kids.

[Frederick Douglass (quoted)]

Yeah,

[Kai Wright]

he just turned 56 years old and I can imagine bank president sounded like a lot better gig than newspaper editor and barnstorming activist. And after all, he was a self made man. He could handle a new challenge.

[Frederick Douglass (quoted)]

Right.

[Justine Hill Edwards]

And so he accepts the presidency of the Freedmen's bank and quickly learns that the bank is underwater, that, that he was asked to be the bank's president by a group of trustees who were expecting the bank to fail.

[Kai Wright]

And that's exactly what happened. On July 2, 1874, barely three months after Frederick Douglass took over, the bank collapsed.

[Justine Hill Edwards]

Depositors can't get their money. They actually don't have much money on hand.

[Kai Wright]

Douglas was mortified.

[David Blight]

It's very embarrassing. He did not know what he was doing by entering into it, and it died on his watch.

[Malcolm Gladwell]

How cynical. Bringing in Douglas at the end as the bank is sort of lurching towards disaster. How cynical is that? Is it the only way to save this is to bring in a very trusted black figure and restore the kind of integrity of the bank. Or is it let's get out and blame the black guy? Which of those versions is it?

[Kai Wright]

I don't think we know. And it might be all of the above. Certainly there is no one else that could have convinced black people not to take out their money. And he really spent the rest of his life trying to explain it.

[Malcolm Gladwell]

Was he financially ruined by the collapse of the bank?

[Kai Wright]

He was not. But he was never financially stable in the first place. Right. But he is certainly emotionally crippled by it. And the tenor of his conversation about Reconstruction turns.

[Malcolm Gladwell]

Oh, he becomes, in that moment, he himself becomes disillusioned. Yeah, Reconstruction's kind of greatest supporter. This is his moment when he loses faith in the enterprise.

[Kai Wright]

Well, he doesn't lose faith in the enterprise, but it is the moment where. Well, where he loses faith in his white allies.

[Frederick Douglass (quoted)]

The signs of the times are not all in our favor. There are even in the Republican Party, indications of a disposition to get rid of us.

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[Kai Wright]

Frederick Douglass was correct about his white allies. The times were very much changing. The Freedmen's bank failed in July of 1874. That fall, voters went to the polls for midterm elections to choose a new Congress, and white voters in particular were thinking about their money and the ongoing economic depression.

[David Blight]

As all great economic Events do. It opened up the political door. And for the first time since secession, the Democratic Party had revised sufficiently in the south that it took back both houses of Congress in 1874.

[Kai Wright]

Not today's Democratic Party, of course. At the time, the Southern Democrats were the party of the Confederacy. And with control of Congress, they saw great opportunity in the scandal that grew out of the collapse of the Freedmen's Bank.

[David Blight]

Well, it's a political gift, isn't it? This bank established for freed people, this bank, there wasn't enough money in it to begin with. Black people wouldn't know how to run it anyway. And, you know, a clear obvious failure of the Reconstruction regimes. It was just a political gift to the Democratic Party.

[Justine Hill Edwards]

Democrats jump on the Freedmen's Bank.

[Kai Wright]

Quickly, they launched a formal investigation into why the bank failed.

[Justine Hill Edwards]

The most prominent of which was led by Virginia congressman named Beverly Douglas. He was a member of the kkk. He was a former Confederate. And essentially they were trying to show that African Americans were not prepared for inclusion in the body politic. This was their example of why the project of Reconstruction was not a productive.

[Kai Wright]

And as the political picture grew more and more dark for Reconstruction, an angry and frustrated Frederick Douglass accidentally handed the Southern Democrats a potent political weapon. In July of 1875, Douglass is invited to join the program at an Independence Day celebration in Washington, D.C. it's one year after the collapse of the Freedmen's bank and he's still being asked to justify his own involvement. It's two years into the horrible Depression and former Confederates have just taken over Congress. I imagine amid all of this horrible news, Douglas is not in the mood for soaring oratory. But that's not what he's invited to do anyway. This is really just a gathering in a park and he isn't even meant to be the main speaker. There's a band, a children's choir.

[David Blight]

It's a mostly black crowd in a festival outdoors. We have the full text of the

[Kai Wright]

speech, a short address that has come to be known as his Peace among the whites speech. It remains one of his most infamous.

[Frederick Douglass (quoted)]

I am not here to glorify the heroes of the American Revolution. I simply avail myself of the occasion to say a few plain words of matters which immediately concern the colored people of our whole country.

[Kai Wright]

Douglass can see what is coming. A capitulation. His white liberal allies are about to give up the fight for black political and civil rights. White elites in both the north and the west are increasingly occupied with their own concerns. Unrest among unionized workers in their factories and Railroads, for instance. And Douglass can see them looking for common ground with former Confederates in the South.

[Frederick Douglass (quoted)]

So sure as the stars shine in the heavens and the rivers run to the sea, so sure will the white people, north and south, abandon their quarrel and become friends.

[David Blight]

And he plays out that metaphor. It's a refrain for him.

[Frederick Douglass (quoted)]

Men are seeking new allies and smiling in faces upon which they never smiled before. Since the war a disposition is seen to shake off the Negro and accept the old masters class.

[David Blight]

And this is a very large black community now in Washington D.C. it had swelled to 40, 50,000 black Americans. It's just been a huge southern migration into the capital, most of them former slaves. And here's Douglas saying, everything that you dreamed of coming here, everything that we, a lot of us fought for and probably some of those black men in that audience still had on their Union blues. They were heroes at these things. He's saying to them, we may just now be losing it all politically, losing

[Kai Wright]

it all, but none of this stuff is. The problem with this speech, where Douglas miscalculates rhetorically at least, is when he says exactly the kind of thing that white Southerners want to hear. He starts ranting about Northern liberals, about people who had created a bunch of race based charities only to enrich themselves,

[Frederick Douglass (quoted)]

the swarm of white beggars that sweep the country in the name of the colored race. We must hereafter do our own begging, if any begging is done at all in our own name. This day is a good day to send forth a declaration of independence on this point, repudiating all such beggars now and forever.

[Kai Wright]

Unless there be any confusion. He names specific institutions, including the Freedman's Bank.

[Frederick Douglass (quoted)]

We have been injured more than benefited by the efforts of the so called benevolent societies. While they may have helped a few, they have injured the many. They originate with and are organized by some good men. But they invariably fall into the hands of a peculiar class of men, men who combine shrewdness with religious zeal and who, whether they sing, pray or preach, always mean business.

[Kai Wright]

And this rhetoric becomes another gift Douglass hands to his enemies. Confederates immediately seized upon and distorted the speech. They start to argue that even Douglas says, you know, there shouldn't be any more help for black people. They can stand on their own two feet. Which of course wasn't actually his point. He also said, you gotta give black people a fair chance to be self reliant. We do need voting rights and protection from violence, access to real education. But you know, they ignored that part. Douglas scrambled to clean it up. He argued he was taken out of context. And he republished a draft of the speech in a Republican party newspaper in D.C. but it was too late. The peace among white speech became one of his most well known addresses in all of the Reconstruction era as Confederates cited it over and over again as proof that Reconstruction had gone too far.

[Malcolm Gladwell]

So it sounds like this speech also sets in motion a trope that continues to this day that's specific to liberal efforts to help black people.

[Kai Wright]

Yeah, that's right. I mean, to this day the political right loves to quote just this part of Frederick Douglass message. Bootstraps part. In fact, when the Supreme Court declared affirmative action unconstitutional in 2023, Clarence Thomas wrote the majority opinion and he cited Frederick Douglass's ideas about black self reliance. But Malcolm, you know, there is another part of this tragedy that sticks with me. Douglas goes on trying to square the circle of his involvement in the Freedman's bank for the rest of his life. Depositors keep trying to get their money back and there are more investigations and more congressional hearings at one of them. About five years after the bank's collapse, Douglas gets called before the Senate to testify about what went wrong. It's 1880 at this point and Blanche K. Bruce is in his final year as the only black person in the Senate. Senator Bruce chairs a hearing and he calls Frederick Douglass to testify.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

What caused you, Mr. Douglas, to doubt the solvency of the bank at last?

[Frederick Douglass (quoted)]

Well, I. I found out that it was in want of money, for one thing. Very much in want of money.

[Kai Wright]

Douglas goes on to recount the events of a day when the bank's actuary walked in and announced that they needed $10,000 right then, that very day, or the bank would have to shut down.

[Frederick Douglass (quoted)]

And several trustees that were present were asked if they could raise that amount. And one after another said he could not.

[Kai Wright]

John Alvord, the guy who dreamed up the bank in the first place and who Douglas replaced as its president, he was still a trustee. And Alvord turned to Douglas and said, you know, you've got $10,000 worth of government bonds right here in the bank

[Frederick Douglass (quoted)]

and if we could have these for a few days, it would help us through and it would be all right in a few days. Well, said I, you can take this $10,000. So I loaned the bank $10,000.

[Kai Wright]

But Douglas tells Senator Bruce he did not get his money back in just a few days. He had to chase it down for weeks and weeks. And he says that that's how he really came to understand that the bank was actually Insolvent.

[Narrator/Advertiser (possibly Malcolm Gladwell or ad voice)]

And the trustees were not depositors. Did they not deposit their money there

[Kai Wright]

so far as you knew?

[Frederick Douglass (quoted)]

No. I believe that I was the only trustee that had a dollar deposited there.

[Kai Wright]

For me. It's sobering to think about how many indignities Frederick Douglass had to swallow while he gave this particular Senate testimony. I mean, first off, he's telling a story about how white people he thought were his allies played him for a fool. Then on top of that, he's telling the story to a Congress that has been taken over by former enslavers. And finally, these same former Confederates that now control Congress are using Douglas own words about black self reliance to argue against Reconstruction. And they're winning. They're winning the argument. After all the country has been through fighting a war to end slavery, amending the Constitution three times to create rights for black citizens. The Confederacy is still here, steadily regaining control as if they never declared war against the United States, as if they weren't traitors. And it's been such a brief moment, less than a decade of really trying to have interracial democracy in America. Douglas was betrayed. And all of those black depositors to the Freedmen's bank, they had their trust betrayed. Most of them would only get a fraction of their money back. It was just an incredible loss of generational wealth. And in the end, all the promises of Reconstruction are also gonna be betrayed.

[Malcolm Gladwell]

That peace among the whites speech that Douglass gave, it was more prophetic than even he knew. Less than two years later, the country's most powerful men called a meeting in Washington D.C. representatives from both the north and the south got together and negotiated a backroom deal in which they agreed that Reconstruction was over.

[Advertiser voice]

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[David Remnick]

Through some of the most tumultuous political times our country has ever known. I'm David Remnick, and each week on the New Yorker Radio Hour, I'll try to make sense of what's happening alongside politicians and thinkers like Cory Booker, Nancy Pelosi, Liz Cheney, Tim Waltz, Ketanji Brown Jackson, Newt Gingrich, Robert f. Kennedy, James Jr. Charlamagne, the God, and so many more. That's all in the New Yorker Radio Hour. Wherever you listen to podcasts,

[Tommy Vietor]

the headlines never stop and it's harder than ever to tell what's real, what matters, and what's just Noise. That's where Pod Save America comes in. I'm Tommy Vitor, and every week I'm joined by fellow former Obama aides John Favreau, John Lovett and Dan Feifer to break down the biggest stories unpack what they mean for the future of our democracy and add just enough humor to stay sane. Along the way, you'll also hear honest, in depth conversations with big voices in politics, media and culture like Rachel Maddow, Gavin Newsom and Mark Cuban that you won't find anywhere else. New episodes drop every Tuesday and Friday, with deep dives every other weekend. Listen wherever you get your podcasts, watch on YouTube or subscribe on Apple Podcasts for ad free episodes.