54 THE FREEDMEN’S SAVINGS BANK 
the “available” fund was usually invested in very 
poor securities;' the rate of interest—six per 
cent—paid on deposits was too high; and there 
was a general shrinkage in real estate values 
after heavy loans and investments had been 
made. It will be of interest to examine in detail 
some of the conditions that undermined the 
strength of the institution. 
Of the thirty-four branches only about half 
were able to meet expenses regularly, and not 
until 1872 was the institution as a whole making 
more than expenses, while even at that date 
several branches lacked much of being self-sup- 
porting. The organization was unwieldy, and the 
central administration found it difficult to con- 
trol the branches. Frequently the local cashiers 
neglected or disobeyed the orders of the inspec- 
tors and other higher officials. The establish- 
ment of each branch bank necessitated some 
expenditure of funds, and after the quarters 
loaned by the Freedmen’s Bureau were with- 
drawn about $170,000 was spent, contrary to 
the charter, to purchase offices and equipment 
for the branches. In Washington $260,000 was 
spent for a banking house. These expenses added 
to the usual costs of administration and the pay- 
ment of a high rate of interest on deposits con- 
sumed the entire income from the United States 
securities in which deposits were invested. The 
branch banks suffered, too, from the hostility of 
the Negro politician, who was unable to get his 
hands on the deposits. One of the Negro trustees 
! Statement of Bank Examiner Meigs in Sen. Misc. Doc. No. 88, 43 
Cong., 2 Sess.