June 17th 2023.
The concept of "Big Bank Take Little Bank" has been popularized by rap artists from Ice Cube to 2 Chainz, as a succinct depiction of the inequalities within the financial world. However, the origins of this phrase can be traced back to the late 19th and early 20th centuries. At the time, African Americans were acutely aware of the potential of formalized financial institutions for achieving economic and racial liberation.
Despite the exclusionary practices and discriminatory Jim Crow policies, African Americans took matters into their own hands. Between the years 1888 and 1930, they established over 100 banks and thousands of other financial entities that catered to the needs of their communities. These customer-centric banking systems provided credit, loans, and economic development, while safeguarding Black businesses and individuals who were routinely robbed by white predatory practices.
The success of these institutions was remarkable, even outperforming some larger white institutions during financial panics. An editorial published in The Denver Star remarked: “How the Negro has succeeded in this branch of business without previous experience, without a coach and even without the semblance of encouragement is really more surprising to white men than to the Negro himself.”
However, the success of these banks made them prime targets for racism and violence, leading to today's profound intergenerational consequences on Black wealth. The number of Black-owned banks has dwindled from its peak of 100 to a mere two dozen today. Blacks remain more unbanked or underbanked than any other racial group, and they have to contend with higher interest rates on mortgages and other services compared to their white counterparts.
Yet, this is not a story about Black suffering, failure, and repeated injustices. This is a moment of celebration and spotlighting the early organizing efforts and heroic struggles of individual Black bankers. Through the pages of esteemed Black media outlets, we can see how Black people celebrated their hard-won successes. An inspirational narrative unfurls before our eyes—one of unwavering racial pride, Black protest and unity, and the pursuit of self-determination. After all, the greatest riches in all America have arisen from our blood and tears.
Are you familiar with the concept of “Big Bank Take Little Bank?” This phrase, popularized by rap artists from Ice Cube to 2 Chainz, is a succinct depiction of the harsh realities within the financial world, where larger banks and affluent individuals exert their dominance over their smaller counterparts. However, this game has a rich historical background that extends far beyond the modern era, tracing its origins back to the late 19th and early 20th centuries.
During this time, African Americans, acutely aware of the transformative potential of formalized financial systems within a capitalist society, began to establish thriving banks and insurance companies. Visionary pioneers, lacking access to white-operated banks and opportunities for clerical and managerial experience, embarked on a journey of trial and error. The resulting institutions, both large and small, emerged as beacons of liberation, defiantly challenging the pervasive grip of deeply rooted racism.
Prior to Emancipation, the establishment of Black-owned banks in America was non-existent. However, on the eve of the Civil War, free Blacks residing in the North engaged in discussions about the importance of credit and banking and began exploring avenues to establish such institutions. In the face of exclusionary practices and discriminatory Jim Crow policies, African Americans took matters into their own hands. Between the years 1888 and 1930, they demonstrated remarkable independence by organizing and operating over 100 banks, along with thousands of other financial entities, that catered specifically to the needs of their communities.
These customer-centric banking systems bolstered successful entrepreneurs, safeguarded Black businesses and individuals who were routinely robbed by white predatory practices and terrorism, and provided a source of credit, loans, economic development, jobs, and training opportunities for their communities. The rapid growth of Black banks, which allowed Black wealth to stay within our communities and even outperformed some larger white institutions during financial panics, marked a monumental achievement for the first generation of emancipated people.
An editorial published on May 16, 1914, in The Denver Star remarked: “How the Negro has succeeded in this branch of business without previous experience, without a coach and even without the semblance of encouragement is really more surprising to white men than to the Negro himself.”
The success of Black-owned banks, such as those along the prosperous district Tulsa’s Black Wall Street, made them prime targets for racism and violence, laying the groundwork for our present-day profound intergenerational consequences on Black wealth. Presently, we witness a stark reality: Blacks remain more unbanked or underbanked than any other racial group. Our reliance on fringe banks, often ensnaring us in cycles of debt, is a distressing truth. Additionally, we contend with higher interest rates on mortgages, small loans, and basic services compared to our white counterparts.
Yet, this is not yet another story about Black suffering, failure, and repeated injustices, although these forces undoubtedly form a crucial backdrop to any historical reflection on Juneteenth. Instead, this is a moment of celebration and spotlighting the early organizing efforts and heroic struggles of individual Black bankers, who despite their limited or nonexistent access to the circle of finance, emerged triumphant in their quest for racial uplift.
As we delve into the annals of history, particularly through the pages of esteemed Black media outlets such as The Nashville Globe, The Crisis, The Cleveland Call and Post, The New York Age, BLACK ENTERPRISE, and others, we can see how Black people made it a point to celebrate their hard-won successes. An inspirational narrative unfurls before our eyes – a tapestry woven with threads of triumph, resilience, and unabating dedication to the achievements of Black financial institutions. Through these reports and impassioned editorials, we witness a profound story that transcends time—one of unwavering racial pride, Black protest and unity, and the pursuit of self-determination.
Emerging from the shackles of slavery with their spirits unbound, millions of formerly enslaved African Americans had little grasp of the intricate operations of businesses and banking institutions. After all, these were a people who were deprived of self-ownership, as they were legally defined as human chattel for three centuries. The bodies of enslaved people were used as collateral for thousands of mortgages and to finance the acquisition of land or goods, serving as a haunting reminder of their commodification.
Yet, free Blacks residing in the north formed mutual aid societies and fraternal organizations which provided financial assistance and social networks. These organizations pooled money to ensure dignified burials, extended monetary aid in times of need, and fostered economic cooperation and solidarity among Black communities. Black leaders like Frederick Douglass and David Walker used their platforms to advocate for equal rights, access to education, economic justice, and to promote self-reliance.
“America is more our country, than it is the whites—The greatest riches in all America have arisen from our blood and tears,” proclaimed Walker in his influential 1829 “Appeal to the Colored Citizens of the World.” This statement, and the tremendous effort of those who came before us, stand as a testament to the remarkable progress Black communities have achieved in spite of the systemic and institutional obstacles we have faced.
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