Free Labor Bank
The first military bank, the Free Labor Bank, was established by General N.P. Banks in New Orleans to provide a secure repository for black Civil War soldiers and formerly enslaved persons.
The Civil War offered 180,000 African Americans an opportunity to serve their country and make a steady wage. It was an opportune time for learning thrift and economy; thus, the first military bank, the Free Labor Bank, was organized to provide financial services to African-American soldiers, freedmen who owned land, and freedmen who worked on government-seized plantations. Two other sites were opened in South Carolina and Virginia, where a large number of African-American soldiers were stationed.
The soldiers deposited a portion of their pay, which was saved for a relative or for the soldier's use at a future date. Sad to say, many of the soldiers did not understand how banks worked, and they left nearly $200,000 unclaimed in the bank at the end of the war. The government would use these funds as seed money for the Freedman's Savings and Trust Company.