[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
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]