94 THE FREEDMEN’S SAVINGS BANK 
Committee in 1876: “I began to discredit the 
bank in the eyes of the Banking Committee of 
the Senate. . . . I spent my time mostly in 
doing that sort of business.”!? 
As a result Douglass with the aid of the Senate 
Committee secured the passage of an act which 
in effect placed the bank in liquidation and 
authorized the establishment of a new bank 
which should have the same name. There was 
much sentiment in favor of continuing the Freed- 
men’s Bank and some interested parties believed 
that in a new organization the mistakes which 
had ruined the old one might be avoided. 
THE BANK TO BE REORGANIZED 
The principal provisions of this new law were 
as follows: The business of the past was to be 
separated from that of the future; loans made 
outside of the state in which the money was 
collected were to be called in; non-paying 
branches were to be closed with the consent of 
the Secretary of the Treasury, and all their 
accounts settled. The new administration was 
to invest one-half of all deposits in United States 
securities, or keep them on deposit in a national 
bank; it was authorized to make loans out of 
the remainder of the deposits on real estate not 
only in the District of Columbia, but also in the 
vicinity of the branches. The rate of interest 
paid on deposits was limited to five per cent; no 
loan over $10,000 could be made to one person 
and the security must be double the value of the 
1° Bruce Report, p. 237; Douglass, Life and Times, p. 491. 
1 Approved June 20, 1874, see Appendix, p. 136.