Banking on Freedom: Black Women in U.S. Finance Before the New Deal by Shennette Garrett-Scott (review)

Shennette Garrett-Scott’s history of black women’s participation in the world of banking and finance from emancipation to the New Deal is richly detailed and nuanced. Employing a sophisticated intersectional analysis, Garrett-Scott argues that black women, their families, and their communities faced three mutually reinforcing barriers to fulfilling their dreams of economic security and meaningful citizenship: the U.S. financial system; gendered and class-based norms of domesticity and respectability; and the racist regimes of Jim Crow. Garrett-Scott makes a significant contribution to African American, economic, and women’s history in her deft explications of the ways race, gender, and class combined to make “complicated entanglements” with American capitalism (p. 4). She carefully explores the complex and sometimes conflicting ideals of the women bankers, clerks, depositors, and investors at the heart of her study who built and sustained the St. Luke Penny Savings Bank in Richmond, Virginia, for more than three decades. In so doing, Garrett-Scott offers important insights into the myriad ways that American financial institutions both encouraged and subverted the desires of black citizens to fully participate in wealth building from emancipation to the 1930s. Garrett-Scott’s insistence that freedwomen and their daughters used both formal and informal banking and insurance structures, such as mutual benefit and benevolent societies, also broadens the traditional scope of histories of banking in the United States to include black women as hopeful developers of new insurance products, as bank founders, and as discerning and often cautious consumers.

Banking on Freedom: Black Women in U.S. Finance Before the New Deal supplies the wider context of southern black women’s often fraught relationships with banking and insurance products by beginning in the 1850s and using the Independent Order of St. Luke (IOSL, founded in 1869) as its central case study. Garrett-Scott expertly mines rich sources in the records of southern mutual benefit societies, fraternal organizations, black banks, and personal papers to recover women’s activities and ideals. In the early 1880s a young energetic and entrepreneurial normal school graduate, Maggie Lena Draper Mitchell Walker (1864–1934), became an officer of her IOSL lodge and a clerk for the central governing body. Over the next two decades, Walker rose to be the IOSL’s most respected official and made black women’s economic empowerment central to the organization’s purpose as its leader from the turn of the twentieth century to the dawn of the New Deal.

Under Walker, the IOSL continued as a fraternal order and insurance company, under regulation in every state that had a lodge, and it pushed further into the world of finance by establishing the St. Luke Penny Savings Bank in 1903. It was one of hundreds of black banks but the first to be chartered by a woman. At the same time, southern insurance and bank regulators increased their scrutiny of small undercapitalized financial institutions. Garrett-Scott keeps her focus on Walker’s balancing efforts to keep the IOSL’s communitarian principles for evaluating lenders’ worthiness while adopting a more stringent analysis of risk and reserves demanded by regulators. The St. Luke Bank and the IOSL became the largest private employer of black women in Richmond, but its prosperous niche in Richmond’s lively black economy also made it a target. An audacious attempt to compete directly with white Richmond merchants by opening an IOSL department store was short-lived.

The Great Migration expanded the IOSL’s membership to more than 85,000 people nationwide with millions of dollars invested in deposits and insurance on the eve of the Depression, yet as Garrett-Scott observes, black financial success did not prove to be a panacea that alleviated the strictures of Jim Crow. In...