    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

                          AN ENDURING LEGACY: THE ROLE

                          OF FINANCIAL INSTITUTIONS IN

                           THE HORRORS OF SLAVERY AND

                             THE NEED FOR ATONEMENT

    =======================================================================

                                 HYBRID HEARING

                                   BEFORE THE

                           SUBCOMMITTEE ON OVERSIGHT
                               AND INVESTIGATIONS

                                     OF THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 APRIL 5, 2022

                                   __________

           Printed for the use of the Committee on Financial Services

                               Serial No. 117-77

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                ______

                 U.S. GOVERNMENT PUBLISHING OFFICE
    47-476PDF           WASHINGTON : 2022

                     HOUSE COMMITTEE ON FINANCIAL SERVICES

                     MAXINE WATERS, California, Chairwoman

    CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina,
    NYDIA M. VELAZQUEZ, New York             Ranking Member
    BRAD SHERMAN, California             FRANK D. LUCAS, Oklahoma
    GREGORY W. MEEKS, New York           BILL POSEY, Florida
    DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
    AL GREEN, Texas                      BILL HUIZENGA, Michigan
    EMANUEL CLEAVER, Missouri            ANN WAGNER, Missouri
    ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
    JIM A. HIMES, Connecticut            ROGER WILLIAMS, Texas
    BILL FOSTER, Illinois                FRENCH HILL, Arkansas
    JOYCE BEATTY, Ohio                   TOM EMMER, Minnesota
    JUAN VARGAS, California              LEE M. ZELDIN, New York
    JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
    VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
    AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
    MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
    CINDY AXNE, Iowa                     DAVID KUSTOFF, Tennessee
    SEAN CASTEN, Illinois                TREY HOLLINGSWORTH, Indiana
    AYANNA PRESSLEY, Massachusetts       ANTHONY GONZALEZ, Ohio
    RITCHIE TORRES, New York             JOHN ROSE, Tennessee
    STEPHEN F. LYNCH, Massachusetts      BRYAN STEIL, Wisconsin
    ALMA ADAMS, North Carolina           LANCE GOODEN, Texas
    RASHIDA TLAIB, Michigan              WILLIAM TIMMONS, South Carolina
    MADELEINE DEAN, Pennsylvania         VAN TAYLOR, Texas
    ALEXANDRIA OCASIO-CORTEZ, New York   PETE SESSIONS, Texas
    JESUS ``CHUY'' GARCIA, Illinois
    SYLVIA GARCIA, Texas
    NIKEMA WILLIAMS, Georgia
    JAKE AUCHINCLOSS, Massachusetts

                       Charla Ouertatani, Staff Director
                  Subcommittee on Oversight and Investigations

                            AL GREEN, Texas Chairman

    EMANUEL CLEAVER, Missouri            TOM EMMER, Minnesota, Ranking
    ALMA ADAMS, North Carolina               Member
    RASHIDA TLAIB, Michigan              BARRY LOUDERMILK, Georgia
    JESUS ``CHUY'' GARCIA, Illinois      ALEXANDER X. MOONEY, West Virginia
    SYLVIA GARCIA, Texas                 DAVID KUSTOFF, Tennessee
    NIKEMA WILLIAMS, Georgia, Vice       WILLIAM TIMMONS, South Carolina,
        Chair                                Vice Ranking Member

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on:
        April 5, 2022................................................     1
    Appendix:
        April 5, 2022................................................    27

                                   WITNESSES
                             Tuesday, April 5, 2022

    Bailey, Nikitra, Senior Vice President, Public Policy, National
      Fair Housing Alliance..........................................     9
    Beckert, Sven, Laird Bell Professor of History, Harvard
      University.....................................................     7
    Berry, Daina Ramey, Oliver H. Radkey Regents Professor and Chair
      of the Department of History, University of Texas at Austin....     4
    Darity, William A., Jr., Samuel DuBois Cook Professor of Public
      Policy, African and African American Studies, Economics, and
      Business, Duke University......................................     6
    Federman, Sarah, Assistant Professor, School of Public and
      International Affairs, University of Baltimore.................    11

                                    APPENDIX

    Prepared statements:
        Bailey, Nikitra..............................................    28
        Beckert, Sven................................................    52
        Berry, Daina Ramey...........................................    61
        Darity, William A., Jr.......................................    64
        Federman, Sarah..............................................    68

                          AN ENDURING LEGACY: THE ROLE

                          OF FINANCIAL INSTITUTIONS IN

                           THE HORRORS OF SLAVERY AND

                             THE NEED FOR ATONEMENT

                                  ----------

                             Tuesday, April 5, 2022

                 U.S. House of Representatives,
                              Subcommittee on Oversight
                                    and Investigations,
                               Committee on Financial Services,
                                                       Washington, D.C.
        The subcommittee met, pursuant to notice, at 2 p.m., in
    room 2128, Rayburn House Office Building, Hon. Al Green
    [chairman of the subcommittee] presiding.
        Members present: Representatives Green, Adams, Tlaib,
    Garcia of Illinois, Garcia of Texas, Williams of Georgia; and
    Timmons.
        Ex officio present: Representative Waters.
        Chairman Green. The Oversight and Investigations
    Subcommittee will come to order.
        Without objection, the Chair is authorized to declare a
    recess of the subcommittee at any time. Also, without
    objection, members of the full Financial Services Committee who
    are not members of this subcommittee are authorized to
    participate in today's hearing.
        Before we begin, I would like to announce that it is my
    intention to proceed with opening statements and testimony from
    our witnesses before recessing the subcommittee for the series
    of votes on the House Floor, after which we will reconvene and
    continue with the hearing.
        Today's hearing is entitled, ``An Enduring Legacy: The Role
    of Financial Institutions in the Horrors of Slavery and the
    Need for Atonement.''
        I now recognize myself for 3 minutes, possibly 4, to give
    an opening statement.
        Hello, friends. As Chair of the Financial Services
    Subcommittee on Oversight and Investigations, under the
    leadership of the Honorable Maxine Waters, it is my singular
    honor to convene this historic hearing to examine the role of
    financial institutions in the horrors of slavery. The
    enslavement of Africans was an epitome of evil, and its stain
    on human history cannot be sanitized with the passage of time.
    It was a horrific crime against humanity that demands redress,
    a crime which cannot be whitewashed with a solution of ignoble
    ignorance. This is in part why--a large part, I might add--I
    introduced H.J.Res. 64, calling for an annual day of to prevent
    the sanitization and whitewashing of our seminal sin: slavery.
        We have a day, friends, to remember 9/11 and commemorate
    the thousands of lives lost to terrorism. We have a Pearl
    Harbor Remembrance Day, to ensure that December 7, 1941, will
    forever be a day that lives in infamy. We have a Holocaust
    Remembrance Day, to prevent the horrors of the Holocaust from
    ever being repeated. So, dear friends, we need a Slavery
    Remembrance Day, not only to remind us of the horrors of
    slavery, but also of the need for atonement. And although the
    practice of slavery may have been legal at one time, it was,
    without question, a profoundly immoral practice necessitating
    atonement. Consequently, it becomes important for banks,
    insurance companies, and other financial institutions with
    historic ties to slavery to atone.
        Recognizing that atonement is part and parcel to our need
    for reconciliation, and we have not reconciled in our country,
    I have introduced H.J. Res. 919, calling for a Cabinet-level
    Department of Reconciliation with a budget indexed to the
    Department of Defense, and a Secretary of Reconciliation, who
    reports directly to the President, very similar to having the
    Department of Labor, with a Labor Secretary and
    Undersecretaries, and the Department of Commerce, and all of
    the various departments. We need a Department of Reconciliation
    such that we can reconcile. Reconciliation won't take place
    over a short period of time. This Department would be as
    enduring as the Department of Labor.
        And friends, although atonement for our seminal sin, the
    dehumanization and enslavement of human beings, has been too
    long delayed, I do not believe that the zeitgeist of our time
    will allow atonement for the suffering to be denied forever. I
    look forward to hearing from our witnesses on how contemporary
    financial institutions could address their history with slavery
    and provide measures of atonement in the present day. Thank
    you.
        And with this, I conclude my remarks, and I now recognize
    the acting ranking member, Mr. Timmons, for 5 minutes for an
    opening statement.
        Mr. Timmons. Mr. Chairman, I want to thank you for holding
    this hearing today. And to our witnesses, thank you all for
    taking the time to appear before the subcommittee to share your
    research and experience.
        This afternoon, we are prepared to listen and learn, and I
    look forward to hearing everyone's perspective. Being from
    South Carolina, I am keenly aware of my State's, and our
    country's as a whole, history with race. While slavery ended
    with the Civil War, there are still visual reminders in my
    State of this dark past. You can still see the scars on our
    State House from General Sherman's March to the Sea in our
    capital City of Columbia. And in Charleston, the marketplace
    where human beings were bought and sold still stands as a stark
    reminder of our country's original sin.
        But I have also seen the new South that we have built
    together in the years since these tragedies occurred, and it is
    a much different place. Does work still remain to right wrongs?
    Absolutely, but there is no denying the monumental progress we
    have made. The legacy of slavery and the persistent racial
    economic disparities in the United States are linked, and we
    will discuss that history today. A number of the banks and
    insurance companies that we are going to discuss today have
    acknowledged their history and their connections to the
    practice of slavery. This is an important step, and I look
    forward to hearing from our witnesses about where those
    companies should go next.
        But we also need to be mindful of the fact that rising
    prices are making matters worse for households of color. The
    current inflation rate is 7.9 percent, the highest in my
    lifetime, which means that for working-class families, as well
    as seniors on fixed incomes, in my district and across the
    country, it is getting harder and harder to make ends meet.
        This plainly shows that inflation is exacerbating racial
    disparities. Data from the Federal Reserve and the Bureau of
    Labor Statistics show that Black, Hispanic, and Latino
    households own their homes at a lower rate than White
    households. In an inflationary environment, rents tend to rise.
    Meanwhile, paying the mortgage becomes relatively cheaper, and
    relatively easier. The net effect is an expansion of racial
    disparities.
        The same factors are at play when it comes to buying
    groceries and paying for gas in the last year or so. An
    analysis of CPI data by economists at Penn Wharton found that
    higher-income households had smaller percentage increases in
    their total expenditures because they spend more on services,
    which experienced the smallest price increases in 2021. On the
    other hand, lower-income households spend relatively more on
    energy and groceries, whose prices had large increases. So
    again, inflation is causing racial economic disparities to
    expand.
        As we listen to the history of banks and insurance
    companies who financed slavery in the United States, I hope our
    witnesses will provide some important context and help us
    connect that history to contemporary disparities in
    homeownership and wealth. The data related to racial
    disparities make it clear that households of color are at a
    huge disadvantage when it comes to navigating inflation. I
    think we have a responsibility to legislate with that in mind
    when we consider bills that may further affect the rate of
    inflation one way or the other.
        Again, Mr. Chairman, I want to thank you for holding this
    hearing today, and I look forward to the testimony of our
    witnesses. I yield back.
        Chairman Green. The gentleman yields back.
        The Chair now recognizes the Chair of the full Financial
    Services Committee, the gentlewoman from California, Chairwoman
    Waters, for 1 minute.
        Chairwoman Waters. Thank you very much, Chairman Green.
    Financial services institutions played a powerful role in
    financing channeled slavery. Insurance companies provided the
    financial protection necessary to transport stolen people from
    Africa to the United States, and to protect slave owners from
    loss when a slave died. Banks provided loans to finance the
    purchase of slaves and accepted human beings as collateral, and
    some of these institutions are still in operation today,
    including JPMorgan Chase.
        Today, this committee continues its work to address
    systemic racism. I look forward to discussing the actions of
    our financial industry, and what they can do to remedy and deal
    with the lasting effects of their having profited from the
    enslavement of human beings.
        I yield back the balance of my time.
        Chairman Green. Thank you, Madam Chairwoman. Friends, at
    this time, we would like to welcome the witnesses. It is my
    preeminent privilege to welcome our witnesses and to indicate
    that we are looking forward to your testimony, and we greatly
    appreciate those of you who are here, for traversing some
    distance to be here. And for those of you who could not make it
    in, we look forward to hearing from you by way of technology,
    and we are grateful that you are there as well.
        Our witnesses are: Dr. Daina Ramey Berry, the Oliver H.
    Radkey Regents Professor and Chair of the Department of History
    at the University of Texas at Austin; Dr. William A. Darity,
    Jr., the Samuel DuBois Cook Professor of Public Policy, African
    and African American Studies, Economics, and Business at Duke
    University; Dr. Sven Beckert, the Laird Bell Professor of
    History at Harvard University; Ms. Nikitra Bailey, the senior
    vice president of public policy at the National Fair Housing
    Alliance; and Dr. Sarah Federman, an assistant professor at the
    School of Public and International Affairs at the University of
    Baltimore.
        Witnesses are reminded that their oral testimony will be
    limited to 5 minutes. You should be able to see a timer that
    will indicate how much time you have left. And without
    objection, your written statements will be made a part of the
    record.
        Dr. Berry, you are now recognized for 5 minutes to give an
    oral presentation of your testimony.

       STATEMENT OF DAINA RAMEY BERRY, OLIVER H. RADKEY REGENTS
    PROFESSOR AND CHAIR OF THE DEPARTMENT OF HISTORY, UNIVERSITY OF
                            TEXAS AT AUSTIN

        Ms. Berry. Good afternoon, Chairman Green, Chairwoman
    Waters, and members of the subcommittee. It is an honor to come
    before this body and share my testimony on the legacies of
    slavery in connection to financial institutions. I have been
    studying this history for 30 years, and I appreciate the
    invitation.
        Enslaved people were valuable financial investments, so
    valuable that financial institutions, municipalities,
    universities, private citizens, and medical schools bought,
    sold, gifted, deeded, traded, mortgaged, leased, and
    transported enslaved people as a form of legal tender. Human
    chattel were foundational to the Western economies from the
    15th to the 19th Centuries. They were one of the most unique
    forms of commodity and assets because they were human beings,
    defined as chattel, and a movable form of property.
        We have records confirming their value at every stage of
    their lives, from pre-conception to post-mortem. We also have
    documents that clearly outline the connections between enslaved
    people and specific financial institutions, such as insurance
    companies and banks. Those records can be traced from slavery
    to the present. Such legacies reverberate throughout our
    society today and are reflected in all kinds of disparities.
    The wealth gap is so wide that most of us will not see it
    narrow in any appreciable way in our lifetimes.
        Turning to insurance companies, the Southern Mutual Life
    Insurance Company, founded in 1848 under the name of Georgia
    Southern Mutual, shows evidence of profits generated from
    insuring the bodies and lives of the enslaved. During the
    second year of offering policies to enslavers, the company saw
    growth from 28 to 239 policies, and reported that most of those
    who purchased policies were modest enslavers who had, ``a small
    number of slaves whom they were dependent upon.'' Thus, they
    secured their income by taking policies on the lives of human
    property. Looking at policies from 1856 to 1863, we learned
    that the company insured enslaved people from age 1 to age 60.
    Some policies were for 1 month or 2 months. Other policies were
    for as long as 5 years. Regardless of the length, each enslaved
    person underwent a medical examination to determine their
    value, and the company set premiums and rates based on their
    value.
        Although this company originated in Georgia, Southern
    Mutual Life Insurance Company had agents throughout the South,
    and is still present today. In addition to individual policies,
    some States, including Maryland, passed legislation that
    encouraged people to purchase policies on the enslaved. Here,
    the State-supported policies helped enslavers search for self-
    liberated runaway enslaved people in order to recover the cost
    of those who absconded and had been away for, ``a reasonable
    period of time.'' The enslavers could make money off of those
    who escaped. The fact that enslavers could make money off of
    those who escaped is remarkable.
        They also made money off of what we call elderly at that
    time. Forty-year-old Ellick was valued at $2,000 for 1 year,
    with a premium of $80 and a percentage rate of 4 percent on his
    policy. What did these numbers reflect in terms of contemporary
    times? Fifty-one-year-old Charlotte was valued at $800 in 1860,
    which was equivalent to nearly $23,500 in 2014, and, I would
    argue, much higher today. Insurance policies alone help explain
    why some enslavers kept elderly enslaved people. Many would not
    command the insured value in the market. However, they could be
    replaced with someone younger at death.
        The banking industry literally facilitated transactions
    related to enslaved people by extending loans, and securing
    debts, gifts, and deeds of trust. And banks, including Citizens
    Bank and Union Bank, kept track of collateral payments, and
    issued notes that involved the enslaved, whose names can be
    found throughout the records.
        I would like to close my remarks with the voices of the
    enslaved.
        After freedom, Henry Banner shared, ``I was sold for
    $2,300, more than I am worth now.''
        Tempe Herndon and other enslaved women understood that
    their monetary value was linked to their fertility. ``I was
    worth a heap because I had so many children,'' she explained.
    The more children a slave had, the more they were worth.
         Hardy Miller remembered that enslavers paid $100 for every
    year he was old, claiming, ``I was 10-years-old, so they sold
    me for $1,000.''
        Martha King remembered her sale at 5-years-old. She went on
    the auction block with her grandmother, mother, aunts, and
    uncles. ``I can remember it well,'' she told interviewers in
    the 1930s. ``A White man carried me off just like I was an
    animal, or varmint, or something.'' She also remembered her
    monetary value. ``Old Man Davis give them $300 for me.''
        Today, I share these testimonies as part of mine so that
    the enslaved voice is heard in the halls of Congress 150 years
    after the Thirteenth Amendment, because the wealth generated
    from their labor still serves as the foundation of the American
    economy. Thank you very much.
        [The prepared statement of Dr. Berry can be found on page
    61 of the appendix.]
        Chairman Green. The gentlelady's time has expired. Thank
    you very much, Dr. Berry.
        Dr. Darity, you are now recognized for 5 minutes to give an
    oral presentation of your testimony.

        STATEMENT OF WILLIAM A. DARITY, JR., SAMUEL DUBOIS COOK
       PROFESSOR OF PUBLIC POLICY, AFRICAN AND AFRICAN AMERICAN
           STUDIES, ECONOMICS, AND BUSINESS, DUKE UNIVERSITY

        Mr. Darity. Thank you, Mr. Chairman. In our book, ``From
    Here to Equality: Reparations for Black Americans in the
    Twenty-First Century,'' Kirsten Mullen and I argued that the
    fundamental attribute of a reparations plan for Black American
    descendants of U.S. slavery must be elimination of the racial
    wealth gap. The Black-White wealth gap serves as the premier
    economic indicator of the cumulative intergenerational effects
    of American racism on the conditions confronting living Black
    Americans whose ancestors were enslaved in the United States.
        As economist William Spriggs puts it, ``The racial wealth
    gap is the central measure of opportunity stolen from Black
    Americans.'' The minimum sum needed to close the Black-White
    chasm in wealth is $14 trillion. Only the Federal Government
    has the capacity to fund such an amount. If private individuals
    and institutions paid $1 billion a month into a,
    ``reparations'' fund, it would take a millennium for the fund
    to reach $14 trillion. The combined budgets of all State and
    local governments in the United States are less than $3.5
    trillion. It would take 4 consecutive years of devoting all of
    their spending to a reparations fund, thereby foregoing all of
    their usual obligations to their constituents, to approach $14
    trillion.
        A true reparations plan must necessarily be a Federal
    project aimed at making direct payments to eligible recipients
    in an amount sufficient to build average Black assets to a
    level comparable with average White assets. However, this
    conclusion is not a recipe for paralysis on the part of private
    individuals and institutions, nor other levels of government,
    for that matter. There are steps that can be taken to enhance
    racial equity by these institutions, even if they cannot
    execute a project for true reparations.
        For example, a central financial weakness of Historically
    Black Colleges and Universities (HBCUs) is the underfunding of
    their endowments relative to Predominantly White Institutions
    (PWIs.) Private institutions do have the resources to
    facilitate elimination of the HBCU endowment gap. I turn to
    Louisiana to illustrate the possibilities, a State where its
    four Historically Black Colleges and Universities have
    significantly lower endowments per student than peer
    Predominantly White Institutions--I matched comparable
    institutions.
        The gap per student between the States to Catholic
    institutions at Xavier and Loyola University is $7,650 per
    student. The gap between Tulane University and Dillard, two
    nondenominational schools, is $13,000 per student. The gap
    between two of the public universities in the State of
    Louisiana, Grambling State and the University of Louisiana, is
    $12,230. And the gap between the two land grant institutions,
    Southern University and Louisiana State University, is $14,575
    per student.
        To close the endowment gap would require, at minimum, an
    additional contribution of $26 million to the endowment for
    Xavier University, an additional $28.75 million to Dillard
    University, $61.4 million to Grambling State, and $102 million
    to Southern University. The total would amount to approximately
    $218 million. There is compelling evidence that larger
    endowments per student are associated with higher graduation
    rates, but increased endowments are unlikely to be sufficient
    to bring about full improvement in graduation rates. The target
    for all of the institutions should be at least to match
    Tulane's graduation rate of 85 percent, but closing the
    endowment gap holds tremendous promise for improving the
    quality and performance of the HBCUs. It will give them an
    opportunity to fully excel and to go beyond the accomplishments
    that they have achieved on the basis of meager resources.
        Whom among potential private contributors could take on
    this task effectively? Certainly, the banking sector has the
    wherewithal, since the top 10 banks in the United States have
    combined assets of approximately $13 trillion, albeit assets
    that are held with varying degrees of risk. The total needed in
    Louisiana amounts to a blip on the financial horizon. They
    could take these beneficial steps towards greater racial equity
    without doing major harm to their balance sheets.
        Thank you.
        [The prepared statement of Dr. Darity can be found on page
    64 of the appendix.]
        Chairman Green. Thank you, Dr. Darity.
        Dr. Beckert, you are now recognized for 5 minutes to give
    an oral presentation of your testimony.

      STATEMENT OF SVEN BECKERT, LAIRD BELL PROFESSOR OF HISTORY,
                           HARVARD UNIVERSITY

        Mr. Beckert. My name is Sven Beckert, and I am the Laird
    Bell Professor of History at Harvard University. I am honored
    to have the opportunity to meet with this committee, and I have
    submitted written testimony summarizing my views. As a scholar
    of the 19th Century United States who has worked extensively on
    the question of the role of slavery in U.S. economic
    development, I want to give you some background on the issues
    in front of this committee, and I would be delighted to answer
    any questions that you may have.
        First and foremost, I want to emphasize that slavery was
    exceedingly important to U.S. economic development. Initial
    findings of an ongoing research project have shown that during
    the 1840s and 1850s, between 10 and 14 percent of the U.S.
    gross national product (GNP) was derived directly from the
    labor of enslaved people. In large parts of the South, almost
    half of the regional GNP was produced by enslaved people. We
    also know that the capital stored in these enslaved people
    exceeded the combined value of all of the nation's railroads
    and factories at the time.
        The most important industry using enslaved workers in the
    19th Century, cotton production, produced about 5 percent of
    the nation's GNP in 1850. And cotton constituted more than half
    of the United States' exports in most years from the 1820s to
    the 1850s. These numbers are significant. Even if we take the
    lowest estimate and assume that just 10 percent of the nation's
    GNP derived from the labor of enslaved people, that unpaid
    labor mattered greatly to the American economy. We can see this
    clearly if we compare it with contemporary industries. In 2021,
    all manufacturing activities in the United States combined
    contributed 11 percent to the nation's economic output, which
    is roughly the same share that the labor of enslaved people
    contributed during the Antebellum years.
        These numbers are also still incomplete. The economic
    impact of slavery went beyond the actual production in
    agriculture and industry. Many other industries directly served
    or benefited from slavery as well, including northern
    manufacturers supplying the Southern plantation economy, the
    slave trade itself, mercantile houses, and industries dependent
    on slavery-produced inputs, as well as banks and insurance
    companies. Therefore, if we do not yet know the exact figures,
    we do know that the total importance of slavery and slavery-
    related industries in the United States in the 19th Century was
    definitely greater than just the value produced by the labor of
    enslaved people alone.
        It is a mistake to think only about the Southern States
    when thinking about slavery. Slavery's economic impact was
    national in scope. Also, Northern States began abolishing
    slavery in the wake of the American Revolution. Northerners
    were deeply implicated in enslavement. Northerners shipped,
    insured, and financed plantation crops. They provided
    plantations with manufactured wares, and they used plantation
    crops in industrial production.
        To comment on the subject at the core of your
    deliberations, financial institutions played a crucial role in
    enabling enslavement, making slave labor profitable and
    facilitating slavery's territorial expansion. The United States
    was the world's most important supplier of the industrial
    world's most important commodity: cotton. As cotton fueled an
    industrial revolution, European and U.S. financial institutions
    rushed into the cotton business. Slavery rested on the capital,
    institutional know-how, and varied services of the finance
    sector, and it was the finance sector that connected
    plantations to factories, and London money markets to New
    Orleans credit markets.
        Advances on crops enabled planters to acquire land and
    enslaved workers. Planters offered the enslaved workers as
    collateral to access capital markets. While most credit
    relationships in the Antebellum South were mediated by so-
    called factors, these factors, in turn, drew on banks and
    merchant bankers to finance the growing of the crop and the
    extension of agriculture into new areas. And this applies both
    to private banks as well as to public institutions, such as the
    First and Second Banks of the United States.
        Insurance companies, as we have heard, were also involved
    in slavery. Since much of the Atlantic trade consisted of the
    products of enslaved labor, marine insurance received a boost
    from an expanding slave economy. Life insurance also expanded
    under slavery, and scholars have estimated that at the
    beginning of the 1830s, several thousand life insurance
    policies were written on the lives of enslaved people. The
    historical evidence is therefore clear: Slavery was an
    exceedingly important part of the U.S. economy before the
    American Civil War.
        It also had devastating effects on millions of enslaved
    women, men, and children, and it left a deep legacy of patterns
    of inequality in the United States. While millions of African
    Americans labored for generations without pay and under
    inhumane conditions, the wealth they produced accumulated
    elsewhere. In 1860, for example, White Southern men made up 59
    percent of the wealthiest 1 percent of adult males in the
    United States. Many Northern merchants, manufacturers, banks,
    and nonprofit institutions gained from the uncompensated labor
    of African Americans. Meanwhile, African Americans received no
    compensation for their labor and could not secure family
    networks or accumulate property. They could not access
    educational resources and suffered from extreme forms of
    exploitation and maltreatment.
        After slavery, African Americans continued to suffer more
    than a century of further economic, social, political, and
    educational discriminations. The legacy of patterns of
    inequality and opportunity, or the lack thereof, that came from
    slavery is with us in the United States to this very day.
        Thank you.
        [The prepared statement of Dr. Beckert can be found on page
    52 of the appendix.]
        Chairman Green. Thank you, Dr. Beckert.
        Ms. Bailey, you are now recognized for 5 minutes to give an
    oral presentation of your testimony.

      STATEMENT OF NIKITRA BAILEY, SENIOR VICE PRESIDENT, PUBLIC
                 POLICY, NATIONAL FAIR HOUSING ALLIANCE

        Ms. Bailey. Thank you, Chairman Green, Ranking Member
    Emmer, and members of the subcommittee. Thank you for the
    opportunity to testify at today's hearing. I am Nikitra Bailey,
    senior vice president of public policy at the National Fair
    Housing Alliance, the country's only national nonprofit civil
    rights organization dedicated to eliminating housing
    discrimination and creating equitable opportunities. As I
    represent an office of more than 170 local fair housing
    enforcement agencies today, my testimony honors the sacrifices
    of my ancestors.
        Despite founding principles of justice and liberty for all,
    the atrocious institution of slavery helped to establish the
    United States as one of the world's largest and most
    competitive economies. The free labor of enslaved Blacks
    undergirded the financial health of America and its
    institutions. Every American institution stands on this
    foundation, including banks, where the institution of slavery
    revolutionized credit markets, creating complex new forms of
    financial instruments and trade networks through which slaves
    could be mortgaged, exchanged, and used as leverage to purchase
    more slaves, according to Professor Baradaran.
        The legacy of slavery endures. It is woven into every
    aspect of our economy and continues to manifest. Let me name a
    few. The Freedmen's Bank, created to provide Black soldiers and
    their newly-freed citizens a secure place for their savings,
    ended up being looted by its White trustees. Despite its
    promise of economic freedom and self-determination, in the end,
    more than 60,000 of its depositors lost $3 million, which was
    nearly half the wealth of Black citizens. I ask you to imagine
    for a moment the toil it took on these Black Americans to amass
    $3 million, as most worked on the very same plantations where
    they were enslaved, as sharecroppers in a system that locked
    them into perpetual debt.
        The unfounded association between race and risk in
    financial institutions was established by New Deal housing
    policies. The Federal Housing Administration (FHA) systematized
    lending discrimination as its policies both reflected and
    reinforced the practices of banks and insurance companies. FHA
    provided affordable housing for Whites, leaving communities of
    color relegated to riskier, costlier, wealth-stripping
    financial services.
        Other examples: the $1 trillion from Blacks and Latinos
    lost during the subprime mortgage boom after being steered into
    risky products that led to foreclosure, despite many qualifying
    for loans with safer and more affordable terms; the failure of
    lenders to maintain homes in communities of color that they
    took back through foreclosure, or to market those homes in a
    manner that would maintain neighborhood stability; and during
    this current crisis, failing to provide lower interest rates
    and the cost savings to consumers of color, placing them at
    greater risk of foreclosure during this COVID-infused housing
    boom. White homeowners have been able to save $3.8 billion
    through refinancing annually, in comparison to $198 million for
    Black homeowners. The Federal Reserve's ongoing monthly support
    of mortgage-backed securities is fueling these disparities,
    while simultaneously allowing investors to buy up all of the
    affordable houses.
        The stain of slavery spreads well beyond our banking
    system. But it is appropriate for this committee to focus on
    the role of banks, because they are different from other kinds
    of businesses, and they have a special relationship to the
    Federal Government. As the United States Supreme Court stated,
    national banks are instrumentalities of the Federal Government
    created for a public purpose. They are critical to the
    effective functioning of our economy, facilitating financial
    transactions, providing liquidity, and serving as a vehicle for
    monetary policy. Because of the public interest in these
    functions, the government gives banks special treatment that no
    other business gets, such as deposit insurance, access to the
    Federal Reserve's lender of last resort, and a system of
    regulation that curbs risk and boosts public confidence.
        Now is the time to redress the legacy of their involvement
    in slavery and ongoing discrimination, not only to stop
    discrimination, but to take affirmative steps to heal the harms
    done over centuries. Following the people-led protests in the
    wake of the murders of Mr. George Floyd and Ms. Breonna Taylor,
    financial institutions made pledges to extend billions of
    dollars in the pursuit of racial equity. Fulfilling those
    pledges will not cure the stain of slavery from their
    foundations, but it will go a long way in advancing opportunity
    for the descendants of the enslaved.
        This committee has also taken action to address these
    issues, particularly the housing provisions in the Build Back
    Better Act, especially the First-Generation Down Payment
    Assistance from Chairwoman Waters' bill that ended up in the
    bill for $10 billion. We need the Senate to act without delay
    to pass this legislation so that all of us as a nation can
    start to take actions for atonement.
        I look forward to discussing my other recommendations with
    the committee. Thank you again for the opportunity.
        [The prepared statement of Ms. Bailey can be found on page
    28 of the appendix.]
        Chairman Green. Thank you, Ms. Bailey.
        Dr. Federman, you are now recognized for 5 minutes to give
    an oral presentation of your testimony.

      STATEMENT OF SARAH FEDERMAN, ASSISTANT PROFESSOR, SCHOOL OF
       PUBLIC AND INTERNATIONAL AFFAIRS, UNIVERSITY OF BALTIMORE

        Ms. Federman. Thank you for inviting me today. My research
    considers how corporations can atone for participation in mass
    atrocities such as genocide and slavery. My comments are based
    on two projects, one involving the French National Railways,
    known as the SNCF, for its efforts to atone for participation
    in the Holocaust.
        My second project came at the urging of my Baltimore
    students, who rightly encouraged me to study corporate
    atonement for slavery. Through this, I discovered Alexander
    Brown & Sons, founded in Baltimore, first in cotton, then
    shipping, and then fundamentally developing investment banking
    to fund plantation agriculture. Legacy companies exist today,
    as do those of Barings Bank.
        It is easy to look at a City like Baltimore and think that
    its golden days have passed. Those who followed the wealthy
    bankers and industrialists just didn't care for the City the
    way they did, one might think, but a deeper look suggests that
    the poverty, addiction, and violent crime we see today is not
    unrelated to how those industrialists acquired their wealth.
    Where to start? Well, for those seeking atonement, it is
    tempting to treat today's executives as the slaveholders
    themselves. Although their institutions benefited from slavery,
    today's individuals inherited these histories, they did not
    write them, so we want to separate the people from the problem.
    And there is a problem, that institutional wealth has
    compounded for over 200 years without addressing the souls who
    suffered for it or the harm they inflicted upon descendants.
        I offer a corporate historical integrity model in my recent
    Harvard Business Review piece. In it, I advise corporations to
    commission an independent study of their history, to update
    their company's origin story based on these findings, to make a
    public statement about the history, often an apology, and
    especially, to engage with affected communities to develop a
    meaningful response, commemoration, compensation, and other
    programs.
        JAG Holdings commissioned an independent study of its
    Holocaust connections and will make that public. They have also
    donated to Holocaust education. Georgetown University now works
    with the descendants of the slaves it sold back in the 1800s to
    determine the best use of the funds it will raise. The French
    National Railways (SNCF) opened its archives, put up plaques,
    funds Holocaust commemorative activities, and engages in
    survivor communities.
        But perhaps most relevant today is Lloyd's of London, an
    insurance company. They have researched their historical ties
    to slavery. They have made those findings available. They have
    opened their archives. They have offered an unequivocal apology
    on the website. They also outlined their commitment to develop
    Black and minority talent, increase Black and minority hires,
    and prevent participation in slavery in their supply chain.
    Their statement on their website reflects the correct spirit, I
    believe: ``We approach this work with profound humility, a
    spirit of openness, and real enthusiasm for change. We will
    continue to listen to and be guided by our Black and minority
    ethnic colleagues.''
        But what about U.S. financial institutions? America's 50
    biggest public companies and their foundations collectively
    committed roughly $50 billion since George Floyd's murder to
    address the issue of racial equity. That sounds great. However,
    The Washington Post found that more than 90 percent of that
    amount is allocated as loans or investments they could stand to
    profit from. Many people don't need more loans. They need help
    paying them.
        A Brookings Institution study showed the Black-White
    disparity in student loan debt after graduation. Therefore, if
    we engage with communities, we will see the need for student
    loan forgiveness; they need to offer free higher-education to 3
    generations of descendants. We will also see the need for
    housing assistance grants, as we have heard, better public
    transit, grocery stores, healthcare access, childcare, elder
    care, after-school programs, and music, and sports. Engaging
    with the communities also addresses the enormous dignity
    violation that slavery and segregation inflicted. To make any
    of these programs without people's input reinforces a
    paternalistic approach to the participation in society.
    Furthermore, corporate efforts towards racial equity will fall
    flat unless the companies take seriously their own
    institutional histories.
        I am grateful for this collective opportunity to respond to
    a too-long and unatoned-for aspect of our history. And
    addressing it together, we can help heal our country and be who
    we say we are. Thank you.
        [The prepared statement of Dr. Federman can be found on
    page 68 of the appendix.]
        Chairman Green. Thank you, Dr. Federman.
        Friends, votes are being called shortly, and we will have
    to move to the House Floor to cast our votes. The committee
    will stand in recess, and reconvene immediately following the
    conclusion of this series of votes. I do want you to know that
    you have my apologies. I would not have this happen to you. If
    I had my way, and I rarely get my way, but if I had, I assure
    you, you would not have to wait while we cast these votes, but
    do know that we will be back immediately after votes have been
    cast.
        And the committee will stand in recess.
        And witnesses, I would just like to come down and thank
    each of you individually, if I may.
        The committee stands in recess.
        [recess]
        Chairman Green. Thank you, everyone, for being patient with
    us.
        We will now proceed with questions. And at this time, I now
    recognize the gentlewoman from California, the Chair of the
    Full Committee, Chairwoman Waters, for 5 minutes of questions.
        Chairwoman Waters. Thank you very much for holding this
    hearing and affording the opportunity to start to get into some
    serious questions about slavery, the wealth gap, who is
    responsible, how it was created, and the role that insurance
    companies and banks have played, and, absolutely, some have
    disclosed that they had policies. In some cases, I have heard
    that there were those with bank accounts that just got wiped
    out, et cetera, et cetera.
        I guess my question is, I know that there is a lot of
    discussion going on about reparations, and we have a study
    going on here, and in some States, they have created
    commissions, et cetera. But if they don't get around to getting
    reparations for a long period of time, shouldn't those banks
    and insurance companies that have disclosed--for example, New
    York Life Insurance Company reported under its previous name,
    Nautilus Mutual Life Insurance Company, that they wrote 508
    insurance policies on enslaved persons. And knowing that, and
    they haven't admitted that, shouldn't we not wait for
    reparations? We should say that you owe the descendants of
    these policies who paid these premiums for maybe 20, 30, 40
    years, some way by which to compensate the descendants of the
    people whose policies you had. Shouldn't there be a way that
    the banks and insurance companies should move forward, now that
    some have disclosed, and those that we are going to encourage
    to disclose, to do its own reparations?
        I will start with you, Ms. Berry.
        Ms. Berry. Thank you for the question. I agree, absolutely.
    We have records. We have the names of individuals. We can trace
    the descendants not only of the enslaved, but also of the
    people who took out policies from the banks. We have these
    records that have been readily available. The policies that I
    quoted from Southern Mutual, I have 4,000 individual policies
    and a chart with all the names and when they were purchased,
    who they were purchased by, what the premiums were, and the
    name of the enslavers, as well as those who were enslaved. So,
    we absolutely can do this. It is a matter of those companies
    coming forward and being held accountable.
        Chairwoman Waters. Thank you very much. Can I get each of
    you to weigh in on that? What do you think?
        Ms. Bailey. Absolutely.
        Mr. Beckert. I agree.
        Chairwoman Waters. Thank you. Again, as I complimented Mr.
    Green for holding this hearing, this hearing should not be for
    naught. This hearing, given the information that you shared
    with us, the disclosure that has been done, it seems to me that
    the Federal Government ought to move to do whatever it takes to
    encourage, to legislate, to get the compensation for the
    descendants based on the information being available. Do you
    think that is fair? Ms. Berry?
        Ms. Berry. Yes, I do.
        Chairwoman Waters. Mr. Beckert, do you think it is fair?
        Mr. Beckert. Yes, it is. And it is obviously a very large
    issue that affects many parts of American society and many
    businesses, not just insurance companies, and so I think this
    is fair. But I think it should be embedded within a broader
    conversation about the impact of slavery on American society
    and the institutions that have benefited from slavery in the
    past.
        Chairwoman Waters. I appreciate that, but I think it is
    time to stop talking about it. We are way beyond the discussion
    part, and I am thinking that perhaps this is a time that we
    should move very aggressively, if we can. Would anybody else
    like to weigh in?
        Mr. Darity. Yes, I have a slightly different take on this.
    I certainly think that organizations that have been complicit
    with slavery, and not just slavery, but there are a host of
    atrocities that took place after slavery ended. Certainly, they
    should take steps to improve conditions of racial equity in the
    United States, but I think we do have to be careful not to
    refer to whatever steps they take as being reparations.
        Chairwoman Waters. Yes.
        Mr. Darity. Because they simply do not have the capacity to
    meet the bill that is appropriate for reparations. And the
    other point that I would like to make is, while all of the
    actions that they took are wholly immoral, they were actually
    legal under the conditions of law that existed in the United
    States of America, so the ultimate degree of culpability has to
    be assigned to the Federal Government. And it is the Federal
    Government that must ultimately pay the bill for reparations.
    We don't have to wait for anything to happen with respect to
    Federal action, but we do have to be very careful and
    circumspect about what we think are the magnitude of the
    actions that can be taken by private institutions and
    organizations.
        Chairwoman Waters. Thank you so very much, and maybe we
    should take that into consideration, all of us, who have
    policies that we hold now from AIG and New York. I yield back.
        Chairman Green. The gentlelady yields back.
        The Chair recognizes the gentleman from California, Mr.
    Timmons, for 5 minutes.
        Mr. Timmons. Thank you, Mr. Chairman. Dr. Federman, I know
    you have done a lot of work with the French rail company, SNCF,
    in regards to their involvement with the Holocaust. What
    lessons from that work can we learn from to inform this
    discussion?
        [No response.]
        Mr. Timmons. I believe you are still on mute. Thank you.
        [No response.]
        Mr. Timmons. You are still not coming through. You are not
    muted, though. I can come back to you in a second, if that is
    okay.
        Dr. Darity, inflation is disproportionately more difficult
    to bear for lower-income households. You don't necessarily have
    to be an economist to understand that rising prices at the pump
    and the grocery store hurt more when you have less money to
    spare. We also know, and we have had a number of hearings on
    this issue, that there is a persistent racial disparity in
    terms of household wealth.
        To offer a few examples, the Food Index has risen 7.9
    percent over the last year, with dairy products rising 1.9
    percent just in the month of February alone. The Energy Index
    has gone up 25.6 percent over the last 12 months, absolutely
    crushing every American's finances. And the index for used cars
    and trucks has risen by 41.2 percent over the last year. So,
    Dr. Darity, keeping all of this in mind, can you share your
    perspective on how inflation exacerbates these racial
    disparities?
        Mr. Darity. I think that inflation exacerbates these
    disparities in quite the ways in which you described because of
    the nature of the goods and services that are experiencing the
    most rapid price increases. These are items that hit families
    with the lowest incomes hardest in the present moment. But by
    the same token, I think that we always have to be cognizant of
    the potential inflationary effects of any new expenditure
    program. And there are ways in which new expenditures can be
    managed to mitigate the inflationary effects, so we should not
    view inflation as a barrier to new social initiatives. We just
    have to be very, very careful about the way in which we design
    them. And in our book, ``From Here to Equality: Reparations for
    Black Americans in the Twenty-First Century,'' Kirsten Mullen
    and I talk about ways in which a reparations program could be
    structured and financed to minimize the inflation risk.
        Mr. Timmons. Thank you, Dr. Darity.
        Dr. Federman, again, my question was in regards to SNCF,
    their involvement with the Holocaust and what lessons from that
    work can we learn from to inform this discussion.
        Ms. Federman. Yes, great. One, it is very important to have
    the discussion before they are being sued by descendants,
    because that creates a very difficult dialogue once you are in
    the middle of a lawsuit. So, I think it is great we are doing
    this ahead of time. The other is, the SNCF did a lot around
    transparency, public dialogue, engagement with survivor
    communities and descendants, and committed to changing their
    ethos. There are many Holocaust-complicit companies that are
    still in trouble today for all kinds of different modern
    slavery and complicity and all kinds of other crimes. So, you
    want to make sure the ethos of the organization has changed as
    well, so that slavery or genocide just doesn't become another
    bill or invoice for doing business, right? You are not just
    paying for having done that.
        I think having conversations with the executives is very
    important. I think also the employees of the company want to
    belong and making it part of the diversity, equity, and
    inclusion (DEI) efforts that they are already doing within
    these organizations. It is very difficult to do DEI work if you
    are not willing to look at your institutional history.
        Mr. Timmons. Sure. And along those same lines, you
    mentioned that leaders of modern financial institutions
    inherited the histories of their companies, but didn't write
    that history themselves. Can you help us understand the
    significance of that distinction? And why is that distinction
    important in this discussion?
        Ms. Federman. Thank you for asking about that, because
    during the French National Railways debates, there was so much
    anger being expressed. It was as if the individuals running the
    SNCF today were, in fact, living Nazis and they weren't. In
    many cases, they were Jewish themselves. So, it is important to
    set a tone of, we are working together on this problem and
    there is a problem. There is a problem of that inherited,
    compounded wealth, but just in the tone of these conversations,
    that it can be restored if it is a larger restorative cultural
    conversation that we are having. And of course, it is very
    difficult because somebody is going to have to pay the bill,
    and they will do part of it. But I think many of them--Lloyd's
    of London and some of the other ones are starting to step up.
    But I do find that when it is more of our attributive model,
    people close up, and we want to have a more restorative
    conversation.
        Mr. Timmons. Thank you. I will close with this. We are
    seeing the Russian invasion of Ukraine, the atrocities, the
    genocide that is being committed there. The international
    community, the business community is actually imposing
    sanctions. They are literally taking huge financial hits.
    Whether it is McDonald's, Visa--there are just dozens and
    dozens of multinational corporations that are foregoing profits
    to try to hold the Russian war crimes accountable. So, it is
    very promising, the direction that we are going right now. And
    I am hopeful that we can hold the Russians accountable and
    address past wrongs in other areas too.
        Thank you, Mr. Chairman. I yield back.
        Chairman Green. The gentleman's time has expired.
        The Chair now recognizes the gentlewoman from North
    Carolina, Ms. Adams, for 5 minutes.
        Ms. Adams. Thank you very much, Chairman Green, and Ranking
    Members McHenry and Emmer. And to Chairwoman Waters, thank you
    for hosting today's hearing, and to our witnesses, thank you
    for being here.
        As a college professor for over 40 years, it is always a
    pleasure to be surrounded by academicians. I was blessed that I
    have been able to teach at Bennett College in Greensboro, an
    HBCU, for 4 decades, and it is because of another HBCU in
    Greensboro, North Carolina A&T, that sits right across the
    street from Bennett, that this poor Black girl from the ghetto
    of New Jersey is now able to walk the halls of Congress today.
    I remember the boys saying of all of the civil rights for which
    the world is struggling for 400 to 500 years, the right to
    learn is undoubtedly the most fundamental. So, it is clear that
    education is part of the solution to helping Black America
    overcome the centuries of discrimination that we have discussed
    so far today.
        Dr. Darity, thank you for being here, and in your
    testimony, you discussed ways to enhance racial equity in our
    country. One of those ways was to invest in HBCU endowments.
    So, can you tell us why HBCUs have endowments that are smaller
    than those of other comparable schools?
        Mr. Darity. Yes. It is not because HBCU administrators are
    flawed at trying to manage their endowments. It is not because
    their alumni are not interested in making donations and
    contributions to their institutions. The central reason is,
    first, that there is a long discriminatory history of the
    provision of resources to these institutions.
        And second, their alumni, while being very willing to make
    contributions to their institutions, do not have the types of
    resources that the alums of Predominantly White Institutions
    have. And this is because of the magnitude of the racial wealth
    gap, which amounts to approximately $840,000 on average between
    a Black and a White household.
        Ms. Adams. Wow. Can you speak about why the institutions
    that we discussed today should help close the endowment gap,
    and how they could do so?
        Mr. Darity. I think the reason that they should be
    motivated to do so is linked to the importance of enhancing and
    strengthening Historically Black Colleges and Universities
    (HBCUs). Historically Black Colleges and Universities are a
    disproportionate source of Black students who enter graduate
    and professional school. Xavier University in New Orleans, for
    example, with only about 3,000 students, leads the nation in
    Black graduates who finish medical school. And so, if these
    organizations are interested in making a true commitment to
    diversity and inclusion, they would want to have the most
    outstanding candidates possible coming out of these
    institutions. And the better these institutions can do in terms
    of supporting their students, the better we can all be in terms
    of how American society functions.
        I would also like to add that Historically Black Colleges
    and Universities seem to be a safer haven for students who are
    Black. They seem to be stereotype-safe environments for the
    students, and also, they provide insulation from predatory for-
    profit colleges and universities. Students seeking higher
    education will not feel as much pressure to go to the for-
    profit sector if there are a wider range of opportunities to go
    to HBCUs.
        Ms. Adams. Do you have any examples of what it would take
    to close this endowment gap at HBCUs in North Carolina, for
    example?
        Mr. Darity. Yes, actually, I do. I did some back-of-the-
    envelope calculations after doing the work on Louisiana, and
    North Carolina is going to be much more expensive than
    Louisiana. I compared North Carolina State University with
    North Carolina A&T, and to eliminate the per-student endowment
    gap would require $705 million. I compared Duke University and
    Shaw University, two of the older private institutions in the
    State. And to close the per-student endowment gap between those
    schools would require $1.5 billion, and it would also require
    $1.5 billion to close the endowment gap between the University
    of North Carolina at Chapel Hill, and North Carolina Central
    University.
        Ms. Adams. Wow. Thank you, sir. Listen, you get an, ``A,''
    in my class. Thank you so much, Mr. Chairman. I am going to
    yield back.
        Chairman Green. The gentlelady yields back.
        The gentlewoman from Georgia, Ms. Williams, who is also the
    Vice Chair of our Subcommittee on Oversight and Investigations,
    is now recognized for 5 minutes.
        Ms. Williams of Georgia. Thank you, Mr. Chairman. I need
    you all to hang in with me for a little story here. I want you
    to think of the biggest, oldest tree. Its deep roots may be
    buried, but the state of those roots forever shapes what you
    see above ground. Today, we are going to take a shovel and
    explore the deep roots of our financial institutions.
        No big financial institution was built overnight. Many have
    grown over generations. Some absorbed financial institutions of
    the past, and this includes institutions that profited from
    lending moneyc, which purchased enslaved people. This includes
    institutions that accepted enslaved people as collateral for
    loans. And this isn't what you see today, but this is part of
    the roots that grew that tree. I have never seen any tree's
    roots dissolve with time, and time alone won't heal the sense
    of oppression. For any tree to bear the fruits of justice and
    equality for all, we must reckon with these roots. Achieving
    the promise of America means fully atoning for slavery, and
    this hearing is helping to do just that.
        Dr. Berry, enslaved individuals were denied the opportunity
    to build wealth for themselves and their families. Facing
    slavery, segregation, and invidious discrimination across
    generations, the average Black household today has only
    accumulated one-eighth of the wealth of the average White
    household. This is critically important to me, since Atlanta,
    my home City, leads the nation in the racial wealth gap. What
    connections can we make between the wealth that was
    historically captured from the forced labor of enslaved
    individuals and the persistent racial wealth gap today?
        Ms. Berry. Thank you for your question. One way we can look
    at this is to look at the ways in which families pass down
    funding or wealth from their families to the relatives. And you
    see the White families passed down enslaved bodies, enslaved
    people in wealth, and that wealth was listed and named, but the
    slave families and their communities did not receive any funds.
    That is one direct example in probate records that we can find,
    and those are registered in county records. But everywhere we
    turn, when we look at the records of banks, insurance
    companies, and not just public and private companies, but also
    the records of various policies, we find this data, and we can
    make that connection today by bringing the genealogy forward.
        Ms. Williams of Georgia. Thank you. We must have remedies
    for things like the persistent racial wealth gap. Along with
    nearly 200 of my colleagues, I am a co-sponsor of H.R. 40, the
    Commission to Study and Develop Reparation Proposals for
    African Americans Act. This bill has advanced through a
    committee markup, and I look forward to its passage.
        Dr. Berry, when the commission under this bill is
    established, what approaches or methods could it employ to
    review and quantify the historical involvement of the financial
    sector in the institution of slavery? How could the commission
    guide private-sector actors, like financial institutions, to
    achieve appropriate atonement for slavery?
        Ms. Berry. One way is to open up the records, make the
    records available, and allow people to review them. If they
    need help from historians, I know there will be plenty who will
    be available, and I will volunteer myself. But I also know they
    have access to records that may not be available in public
    archives, and I think sharing those records is a starting
    place.
        Ms. Williams of Georgia. Thank you so much, Mr. Chairman,
    and thank you, Dr. Berry. I yield back the balance of my time.
        Chairman Green. The gentlelady yields back.
        The gentlewoman from Michigan, Ms. Tlaib, is now recognized
    for 5 minutes.
        Ms. Tlaib. Thank you so much, Chairman Green. This is
    powerful. I think it is pretty historic to be able to have a
    hearing specifically about the role of slavery in our country
    and the financial institutions, and I just cannot thank you
    enough, Chairman Green, for your courage in taking this on.
    And, of course, thank you to our witnesses for your expansive
    and exhaustive research. I am proud that I grew up in the most
    beautiful, Blackest city in the country, but I have witnessed
    many of my Black neighbors, again, being impacted by the
    historical role of slavery, and the impact it has had on
    homeownership and access to being able to have a good quality
    of life, economic wealth, and so much more. So, I can't thank
    you all enough.
        We all know the role of slavery in the financial services
    industry is not abstractc, because of all of your research and
    work, that its legacy is still being urgently felt in many
    communities across the country, including the one I represent.
    As you all know, several States, including Illinois, Iowa,
    Maryland, and North Carolina, and Cities, including Chicago,
    Los Angeles, Philadelphia, and San Francisco, have active
    legislation requiring financial institutions to disclose their
    involvement in the institution of slavery. That is major. This
    should be something that is set across our nation.
        Dr. Beckert, or Dr. Berry, as historians who have conducted
    this kind of research yourself, do you consider it feasible for
    companies to conduct such an audit to determine their past
    involvement in slavery? And have these local and State laws
    been effective at identifying past involvement in slavery?
        Mr. Beckert. That is a very good question, and the answer
    is, yes, it is certainly feasible. And I think we can see that
    if we look at the one sector of American society that has, in
    the past 10 years, actively engaged its historical involvement
    with slavery, and that is the American universities, and they
    have gone into their archives. They have consulted historical
    records. And in the past 10 years, they have written a pretty
    comprehensive history of how they have been historically
    involved with the institution of slavery, and they are
    grappling with the issue of how they should engage with this
    history in the present.
        So, this would certainly be possible for businesses in the
    United States as well. And I think it would be a very good idea
    because I think that would allow us to have these kinds of
    conversations that are both political and economic, but also
    enable us to have a conversation as a society about how we want
    to deal with this history of enslavement and what consequences
    we want to draw from that history.
        Ms. Berry. I would just add that to the second part of the
    question about how effective has it been with the legislation
    that was passed in 2000, 2003, 2006, I think it was. Some of
    those records were put online, buried on websites. Some of
    those records that were supposedly made available are no longer
    available when you look for them. And I know this because I
    have taught classes and we had students doing projects, and
    they went to those very websites and couldn't find the
    insurance records. So if we are going to make stuff available,
    it needs to stay available. And I do think a commission that is
    going to generate the research to do this work is absolutely
    necessary, because you need to understand how to have the
    research skills in order to conduct the research that is
    involved in making this available to the public.
        Ms. Tlaib. Thank you so much. That was so insightful. Dr.
    Berry, in your opinion, is there enough connection from a 19th
    Century, what I would call the predecessor bank, to a 21st
    Century successor bank to truly warrant the inquiry discussed
    here today? And if so, can you quantify in today's dollars the
    wealth that was generated from slavery?
        Ms. Berry. I cannot quantify the wealth in today's dollars.
    Maybe my colleague, Dr. Darity, can. When we look at company
    records, we understand who their predecessors are. We know when
    there were name changes and when banks were taken over by other
    banks. The same way we trace genealogy or lineage, we could do
    the same thing with corporate companies and organizations, and
    start to see the connectionsz, and then look at the records.
        Ms. Tlaib. Thank you. Ms. Bailey, in your testimony, you
    drew historical connections between the legacy of slavery and
    racial inequality for the systemic barriers that people of
    color face, particularly with obtaining financial services. I
    don't know if you know, but Michigan lost more Black
    homeownership than any other State in the country, and we used
    to be the envy of the nation, at 70 percent homeownership in
    many communities.
        Ms. Bailey, can you briefly explain how the historical
    legacy of slavery and exclusionary policies like redlining
    still present obstacles for my Black neighbors today?
        Ms. Bailey. Absolutely. According to data from the Federal
    Reserve, we have actually seen the Black-White wealth gap grow
    by $20 trillion since the onset of COVID-19. The COVID policies
    to mitigate the impact of the pandemic have exacerbated wealth
    inequalities for those who have assets and those who don't.
    Since the start of the pandemic, the Federal Reserve has been
    purchasing $40 billion in monthly mortgage-backed securities,
    hoping to fuel the housing boom that we are experiencing. So
    because of those ongoing purchases, what we see are the very
    communities that are hardest hit by COVID-19 locked out.
        So communities like Detroit, they struggle not only with
    the historical legacy, but the current legacy of not being able
    to have access to small-dollar mortgages because banks are not
    making loans in those communities. And just some specific data
    on what banks have done in terms of lending to African
    Americans based on 2020 data: Banks originated 3.9 billion home
    mortgage loans in 2020, and only 3.9 percent of those went to
    Black consumers.
        Chairman Green. The gentlelady's time has expired.
        The Chair will now recognize himself for 5 minutes. And the
    Chair, while I enjoy hearing you compliment me for the hearing,
    the truth is that we have a Chair of the Full Committee,
    Chairwoman Waters, who was more than ready to take on this
    challenge. I have to say a word about the Chair of the Full
    Committee, because she is known for what she has done for
    housing across the length and breadth of the country. She is
    known for what she has done to help persons who are homeless,
    but she doesn't limit her reach. She is not afraid to take on
    new challenges. And this is one of the great challenges of our
    time, to deal with our singular sin: slavery. On August 20,
    1619, there were 20 slaves aboard the White Lion when it docked
    here in the Americas. And from that moment forward, we have not
    done the thing that we should have done to deal with this issue
    of slavery.
        I am honored to see that my colleague, the gentlelady from
    Texas, Ms. Garcia, has arrived. And I am going to suspend my
    commentary, because I would like to recognize her. So, Ms.
    Garcia, the Chair is going to recognize you for 5 minutes.
        Ms. Garcia of Texas. Thank you, Mr. Chairman. I apologize
    that we are having a markup in the Judiciary Committee, so I am
    a bouncing ball today, but I did not want to miss an
    opportunity to join you in this very important hearing.
        I am simply devastated about the ways that the horrific
    legacy of slavery is built into the very structure of the U.S.
    banking system today. Racism is baked in. It is literally baked
    in, interwoven to the fabric of society and the laws that
    govern us all. It is our job as lawmakers to study the origins
    of these problems so that we can identify them and root them
    out. I am grateful to all of the witnesses for taking the time
    to speak with us today about how that can be done. I wanted to
    discuss just the actions that we can take. While we cannot undo
    centuries of oppression in one Congress, we certainly can do
    what we can and take some action.
        One major way to close the racial wealth gap is by ensuring
    that all people have access to credit for pursuing
    homeownership, entrepreneurship, and financial solvency. The
    Community Reinvestment Act (CRA) was passed so that banks would
    have to reinvest deposits received from minority communities
    back into these communities, but the CRA has not been updated
    in years. And we all know that the current financial services
    landscape is increasingly digital and not accessible. Measuring
    lending and investment into communities is a bit more
    complicated in a world where so much of the consumer banking is
    done online.
        Ms. Bailey, can you discuss some things that the regulators
    should take into account when they work on a modernized CRA?
        Ms. Bailey. Yes, thank you for the question. We actually
    need to have a more race-conscious CRA. When you look at the
    legislative history about the Community Reinvestment Act, it
    was clear that it was designed to focus on minority
    neighborhoods that were locked out of access to credit. We know
    that because of the legacy of slavery, that banks have over
    time disproportionately not located in communities of color,
    nor adequately applied and extended access to credit in
    communities of color in a fair manner. So, we need a more race-
    conscious focus in CRA so that we can look beyond simple income
    solutions because those income-based solutions are not solving
    the problems. Race-conscious policies created today's
    disparities, and only race-conscious policies can solve them.
        Ms. Garcia of Texas. Can you give us an example of some of
    the policies you think we should implement?
        Ms. Bailey. Absolutely. Again, thank you for the question.
    The Equal Credit Opportunity Act (ECOA) already allows banks to
    use special purpose credit programs. So, banks can look at the
    lending that they are doing today and figure out the
    communities of people who are underserved, and they can design
    targeted programs, like the First-Generation Down Payment
    Assistance, which this committee passed in the Build Back
    Better Act, to really help extend credit for first-generation
    home buyers who are underserved. And when we say, ``first
    generation,'' we mean people whose families were excluded by
    Federal housing policies because those redlining practices
    extend directly from the legacy of slavery. So, targeting down
    payment assistance by first generation, actually is a way for
    us to ignite economic growth and to close the existing
    disparities.
        If we invested $100 billion, we would see 5 million new
    homeowners: 1.7 million of them would be Black; 1.32 million
    would be Latino; and 1.4 million would be White. So, these
    policies have raised consciousness while they help solve racial
    disparities. They also provide overall economic growth.
        Ms. Garcia of Texas. So, you believe that redlining still
    exists?
        Ms. Bailey. Absolutely.
        Ms. Garcia of Texas. Every day in America?
        Ms. Bailey. Absolutely. Just based on the data that I just
    shared with you about banks and their originations, when you
    look at the more than 1,500 banks originating more than $1.1
    trillion in home mortgages in 2000, based on the HMDA data,
    only $35 billion, or 3.6 percent, were to Black consumers.
        Ms. Garcia of Texas. Can you tell us, because I am curious
    more than anything, geographically, would you say it is more in
    the South, in the North, the East, the West, or all of the
    above, everywhere?
        Ms. Bailey. I think because COVID ballooned the housing
    challenges that we are experiencing, what we actually see is
    that investors are being able to purchase homes in the
    communities that were hardest hit by the subprime mortgage
    crisis. One out of 7 homes today are actually being purchased
    by investors, and most of those are happening in Black
    communities and also in Midwest communities all over the
    country. So, we see this exclusion on a national basis.
        Ms. Garcia of Texas. Do you think that is what is raising
    the cost of homes, even in minority communities, that it is
    investors and not individuals?
        Ms. Bailey. I think the investors are purchasing all of the
    affordable housing stock, causing a rise in rental homes, but
    also locking out homebuyers who would perform well if they had
    access to homeownership with things like First-Generation Down
    Payment Assistance, which this committee passed in the Build
    Back Better Act, and this is especially why the Senate should
    pass the housing provisions. There are $150 billion in the
    Build Back Better Act that will help alleviate some of the
    challenges that we have seen for homelessness and the lack of
    access to homeownership.
        Ms. Garcia of Texas. Thank you, and I yield back. Thank
    you, Mr. Chairman.
        Chairman Green. The gentlelady's time has expired.
        Reclaiming my time, let me move expeditiously. This will be
    what we will call a voir dire portion of the hearing. Depending
    on where you are from, it is a French term, and it means, ``to
    speak the truth.'' Let me ask you candidly, do you believe that
    it would be a great benefit to have a Department of
    Reconciliation? I support reparations. I support H.R. 40, from
    Congresswoman Jackson Lee. I support Congresswoman Barbara
    Lee's Truth, Racial Healing and Transformation Commission. It
    has nothing to do with those, would in no way prevent those
    things from coming to fruition, but it would give us a person
    who would be called a Secretary of Reconciliation, who would be
    there to every day find ways to deal with the invidious
    discrimination across the country. It is not just about one
    group of folks; it really is about our failure to reconcile
    when we had the opportunity to do so in 1868.
        So, I would like for you now to give me one quick answer,
    each of you, and I will start with Dr. Berry. Do you believe
    that a Department of Reconciliation would be appropriate?
        Ms. Berry. Yes, I do think it would be appropriate, partly
    because we have not healed or had the kind of conversations we
    are having today. Our textbooks don't contain all of this
    material, and a lot of people will say that they didn't learn
    some of what we have talked about today. We can have this
    reconciliation through education, and having that commission
    and having a commissioner in charge of that would be the first
    step in helping educate our nation.
        Chairman Green. Thank you. Now, just to give clarity, and
    make it perspicuously clear, it wouldn't be a commission. This
    would be a Department with a Secretary who reports directly to
    the President. There is a little bit of a difference. There
    could be a commission associated with the work that is done in
    the Department of Reconciliation. This would give us one agency
    within the government that oversees all of the various subsets
    and can bring all of this together for us.
        Dr. Darity, a Department of Reconciliation, yes or no?
        Mr. Darity. Yes, certainly. I think that we would need a
    Cabinet-level position for a secretary who would have the
    responsibility for monitoring the conditions of racial equity
    in the United States.
        Chairman Green. And I would contend that if what you say is
    correct, and I have great respect for you, about the Federal
    Government being the only entity capable of satisfying the
    necessary redress, a department of this magnitude would be of
    great benefit if we had that type of redress available to us.
        Mr. Darity. Yes.
        Chairman Green. Moving quickly now to Professor Beckert,
    your thoughts on a Department of Reconciliation?
        Mr. Beckert. Look, as a scholar, I can tell you that in
    some ways, the effects of slavery are still with us today. We
    still live in a world that is partly structured by the effects
    of slavery. I can also tell you as a scholar, that this nation
    has tried to engage with slavery for 150 years and has not done
    so very successfully. As a citizen, I think we must, as a
    society, confront this history, and we must confront it in new
    ways, and we must draw lessons from this history for the
    present. When we do so, I think we should look at other
    countries in our own history, how this has been done in the
    past. And the way that you suggest would be one way forward,
    and sounds to me like a plausible way forward, because I think,
    as a country, our future depends on being able to engage with
    this history and to learn from this history.
        Chairman Green. Thank you very much. Thank you, folks, so
    very kindly. Ms. Bailey, your thoughts on a Department of
    Reconciliation?
        Ms. Bailey. I think it would be really appropriate, sir.
    But even beyond just the moralness, I think resolving racial
    inequity in our country provides an opportunity for economic
    growth. Research over the past 20 years shows us that
    discrimination is a drag on our economy and that we have lost
    $16 trillion. And if we actually address discrimination, we
    have a chance to grow our economy by a trillion dollars every
    year over the next 5 years.
        Chairman Green. Thank you. I am going to have to go quickly
    to Ms. Federman.
        Ms. Federman. Yes.
        Chairman Green. I thank you for your testimony today. A
    Department of Reconciliation reporting directly to the
    President?
        Ms. Federman. My experience as a conflict professor in
    studying reconciliation around the world is that, yes, I am in
    support. And it might be worth considering adding the word,
    ``truth,'' because there are times in which reconciliation
    efforts push people towards reconciliation before they have
    been able to expose and say what needs to be said. So, that is
    one way to kind of deter some of the negative consequences of
    pushing for reconciliation before that work has been done.
    Thank you.
        Chairman Green. Thank you very much. Two very quick points.
    Dr. Darity made the point of the moral imperative associated
    with atonement juxtaposed to reparations and has made it clear
    that we can have atonement, but let us not assume that would be
    a substitution for reparations. I appreciate you making that
    comment, Dr. Darity. Did I sum that up appropriately?
        Mr. Darity. Yes, you did. Thank you.
        Chairman Green. Thank you. And finally, this Slavery
    Remembrance Day. We do have a 9/11 Remembrance Day, we have a
    Pearl Harbor Remembrance Day, but we don't have a Slavery
    Remembrance Day. We have a Holocaust Remembrance Day. These
    days are important because they help us to assure ourselves
    that we won't forget the transgressions of the past and allow
    them to creep into the future.
        But there is something even more important. They remind us
    that we have not atoned. I have a resolution calling for a
    Slavery Remembrance Day. It is not a paid holiday; it is a day
    that we remember the horrors of slavery and we remember that
    there is still this need for redress. Is there anyone who would
    oppose a Slavery Remembrance Day similar to the Holocaust
    Remembrance Day, the 9/11 Remembrance Day, or the Pearl Harbor
    Remembrance Day? By the way, we also have an Ice Cream
    Remembrance Month. But be that as it may, is there anyone who
    would oppose it? If so, it's time to extend a hand into the air
    or raise your voice. Anyone?
        [No response.]
        Chairman Green. Let the record reflect that all of the
    witnesses are in concurrence that we should have a Slavery
    Remembrance Day.
        Friends, regrettably, this will have to bring our hearing
    to closure. I am greatly appreciative for all of the persons
    who have given their testimony. This has been a most
    informative hearing for me, and I am sure it has been equally
    as informative for all of my colleagues. As you can see, the
    attendance was very good, and with the kind of attendance we
    had, it begs the question of, should we stop now? As you know,
    the chairwoman made a very salient point when she said we need
    to make sure that we do something, not just have a hearing and
    move on. So, with that said, I would like to thank our
    witnesses for their testimony today.
        The Chair notes that some Members may have additional
    questions for these witnesses, which they may wish to submit in
    writing. Without objection, the hearing record will remain open
    for 5 legislative days for Members to submit written questions
    to these witnesses and to place their responses in the record.
    Also, without objection, Members will have 5 legislative days
    to submit extraneous materials to the Chair for inclusion in
    the record.
        This hearing is adjourned.
        [Whereupon, at 5:14 p.m., the hearing was adjourned.]

                                A P P E N D I X

                                 April 5, 2022

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