[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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