Abstract
Excerpted From: Harseerat Kaur Dhillon, Reckoning with History's Impact: Financial Institutions and Reparations for American Enslavement, 28 North Carolina Banking Institute 335 (March, 2024) (245 Footnotes) (Full Document Requested)
“[Frederick I.] Cox transfers ownership of two [enslaved men], Bryan and Southy ... as collateral [for his debt of 797 dollars]. If Cox repays the debt within four years' time, he may reclaim the [enslaved men].” This quote comes from the Portland State University Library Digital Exhibits, which describe a mortgage deed for two enslaved men in their collection. The mortgage deed was entered at the Wayne County, North Carolina, Registrar's Office on January 24th, 1850.
The mass enslavement of Black people is a significant and harrowing portion of United States history with which American society continues to reckon with. The lasting harmful impacts are still present today, specifically in the form of the racial wealth gap. The early growth of the American economy owes a large part to the labor of enslaved people and to financial institutions that facilitated the use of enslaved people as human collateral. The oppression of Black people continued in the following centuries. Anti-Black policies and practices like JimCrow laws and racial redlining perpetuated the idea that BlackAmericans were meant to be second-class citizens. These policies also made it harder for BlackAmericans to succeed financially compared to White Americans. The idea of reparations for the harm committed against Black people has been discussed and fought for since the abolition of slavery. Arguably few, if any, forms of reparations have come to fruition.
This Note examines how early financial institutions in the United States used enslaved people as collateral for mortgages and explores whether payment of reparations for this practice is necessary or feasible. The discussion proceeds in five parts. Part II first provides background on early banks' practices of using human collateral for mortgages in the American South before exploring how the Northern states helped finance slavery. Part III discusses the road to the contemporary racial wealth gap. Part IV explores the idea of reparations for the harms caused by slavery and anti-Black policies in the United States. It also recounts reparations plans already implemented in the United States and other countries, and it compares them to the potential reparations that could be provided to BlackAmericans. Part V discusses whether financial institutions should be responsible, in courts or through federal legislation, for paying reparations, and if so, what those reparations could entail. It also discusses a reparation effort that has already been made, both commanded by a local government and undertaken voluntarily by a financial institution. Part VI concludes this Note.
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The horrors of slavery continue to plague our country in deep-rooted ways that federal legislation likely has the power to significantly remedy. The passage of H.R. 40 or something similar to it will likely not happen for several more years, given its history. However, financial institutions with links to slavery should consider reparative action for BlackAmericans with or without the command of the federal government. This is because the banking industry is a significant contributor to the nation's racial wealth gap. As financial institutions continue to reckon with their ties to enslavement, they should research and be transparent about their companies' past relationships with slavery; recognize the hardships that American descendants of enslaved people have endured because of their companies' historical practices; and, most importantly, exercise the reparations options available to them.
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