Few Americans learned in school that slaves were about half the workforce that built the White House and the U.S. Capitol. A slave named Philip Reid supervised construction of the Statue of Freedom hoisted atop the Capitol dome in 1863. Such revelations rightly disturb our view of important symbols of democracy and remind us that slavery is at the foundation of our nation’s history.
Well-known bastions of American capital also have the institution of slavery at their foundation. Recent reporting has exposed how some of America’s most prosperous companies profited from slavery.
A February USA Today series spotlighted numerous corporate slavery beneficiaries, from Union Pacific railroad and textile giant WestPoint Stevens to J.P. Morgan Chase Manhattan Bank and FleetBoston Financial Group.
Railroads utilized slave labor to lay rail. Tobacco firms used slaves in the harvest. Southern utilities used slaves to construct oil lines. Mining companies used slaves to process salt and coal. Insurance giants Aetna, New York Life and American International Group (AIG) each own companies that reportedly sold policies to slave owners insuring their human assets. Companies may face a lawsuit demanding reparations for their slave-derived profits.
The unpaid productivity of these slaves was converted into corporate income and wealth that still sustains many companies today. Slaves were denied not only wages but the opportunity to build companies and pass assets on to future generations.
Many people know the expression “40 acres and a mule,” but don’t know it was a false promise. In 1865, General Sherman issued an order providing homesteads to freed slaves. But President Andrew Johnson, Lincoln’s successor, overrode the order and gave the land back to white Confederate landowners. Instead of 40 acres and a mule, freed slaves got brutal sharecropping and segregation.
The descendants of slaves continue to find their ability to jump on board the asset-building train impaired. Fault lines laid long ago forged a vast and enduring wealth gap between white Americans and African Americans. In 1998, the median net worth of white households was $81,700, while the median net worth of African-American households was just $10,000. The homeownership rate among white families is 74 percent, while for African-American families it is just 48 percent nationally, and much lower in some local areas.
If the foundation of the Capitol was dug and laid by slaves, and some of America’s most successful corporations have profits from slavery in their early capital formation, perhaps the story we tell ourselves about the creation of all wealth needs to be examined and those invisible foundation stones be brought into the light.
Slaves weren’t poor because people of African heritage are lazy. They were poor because the laws of the land prohibited them from getting paid for their work and from owning assets.
In generations since, structural obstacles have continued to impede Black asset development. African-American homeowners are often subjected to discriminatory and predatory lending practices that unfairly inflate their mortgage costs and rob them of the home equity that so many Americans draw on for college, starting businesses and retirement. Insurance companies are only now coming to acknowledge that for many years they charged African-American customers unjustifiably higher rates than whites. After World War II, the GI bill and Veterans Administration almost exclusively helped white families to become homeowners.
When Black farmers filed their historic lawsuit against the Department of Agriculture (DOA) in 1997, DOA investigators presented damning evidence of decades of discrimination: 84 percent of the white applicants had their loan applications approved, while only 56 percent of the Black applicants received loans. The result was that Black farmers lost their farms at more than triple the rate of white farmers.
We can no more replace the foundation stones of the U.S. Capitol than we can change the wealth foundations of many American businesses. However, with the truth of these foundations now being excavated, we can and should adopt fair rules to redress the injustice of the past and adopt new policies to assure that people of all races can build lasting financial security.
We can protect and strengthen affirmative action policies that redress past discrimination. We can launch a new GI bill to offer all working families a boost to homeownership. We can ban predatory lending practices. We can enforce non-discrimination for farmers of color by the Department of Agriculture. These are the kinds of policies that should serve as democratic cornerstones of our 21st century economy.
Meizhu Lui is the executive director of United for a Fair Economy. Rose Brewer is associate professor of African American and African Studies at the University of Minnesota. Lui can be reached at email@example.com and Brewer at firstname.lastname@example.org