Hh THE FREEDMEN’S SAVINGS BANK 
received scant consideration at the ordinary 
bank. In scores of cases loans were made without 
any real security whatever, and second mortgage 
paper was frequently accepted. This practice 
was gradually checked and was stopped in most 
of the branches in 1872. But since public senti- 
ment favored the lending of money in the com- 
munity, deposits began to dwindle as soon as 
local loans were forbidden. 
The law of 1870, requiring that loans be made 
only on real estate valued at double the amount 
of the loan, was often violated, and the cashiers 
proceeded to make investments on their own 
responsibility. Some of them loaned funds 
against the nearly worthless scrip or bonds issued 
by the carpetbag state and local governments; 
others loaned on cotton; some even made loans 
on perishable crops. The Jacksonville branch 
put out money on nearly everything that was 
offered, from sawmills located in the Florida 
swamps to shadowy claims on property in the 
city. Several branch banks, notably Beaufort 
and Jacksonville, began to go into the regular 
banking business, and, with a few others, en- 
deavored to act somewhat independently of the 
central office. 
CASES OF FRAUD 
Not only were the cashiers sometimes incom- 
petent and disregardful of laws, regulations, and 
business principles, but several of them were 
personally guilty of defrauding the institution 
1 Bruce Report, p. 28; Douglas Report, pp. 25, 39, 48, 49; C. A. 
Meigs, Report, in Ho. Misc. Doc. No. 16, W Cong., 2 Sess., p. 66; 14 
Florida Reports (1874), pp. 418-434. > 
a