"First we need a savings bank. Let us put our moneys together; let us use our moneys; let us put our money out at usury among ourselves, and reap the benefit ourselves. Let us have a bank that will take the nickels and turn them into dollars."
-Maggie L. Walker Independent Order of St. Luke Annual Convention August 20, 1901
At the annual convention of the Independent Order of St. Luke (IOSL), Maggie Walker laid out her goals for her order, including the formation of a bank, emporium, newspaper, and factory. The one most important in her mind was the creation of a bank. To many, banks represented the pinnacle of financial achievement. To Walker, this bank would combat the oppressive conditions of Jim Crow and segregation while encouraging economic independence and thrift in the black community. Relegated to second-class citizenship, African Americans were denied rights in all aspects of life: education, employment, politics, and business. This bank, along with other black-owned businesses, provided courteous, safe places to conduct business away from the racism and harsh treatment often found in white owned businesses.
Mrs. Walker's idea for a bank was not new. Several fraternal orders also opened banks in turn of the century Richmond. The most famous was the Grand Fountain of the United Order of the True Reformers. Led by W.W Browne, the True Reformers became one of the largest African American fraternal and business orders in America. In March of 1888, the True Reformers made history by receiving the first charter granted to African Americans to open a bank. Between 1888 and 1920, five other black owned banks opened in Richmond, including Walker's St. Luke Penny Savings Bank and the Mechanics Savings Bank, which served as the main depository for another fraternal order, the Knights of Pythias.
There were numerous reasons for African Americans to open and patronize banks within their own community. Racial stereotypes discouraged many white bankers from loaning money to African Americans, fearing that loans would never be repaid. If black customers were issued loans, in many instances they were charged a higher rate of interest than white customers. While many white-owned banks accepted deposits from black customers, some did not. They feared the black customers would scare away white patrons. Also, as Mrs. Walker argued, why should African Americans "feed the lion of prejudice?" By patronizing black owned banks, money was kept within the black community, allowing Richmond's black community to prosper.
While Walker first announced her vision of a bank in 1901, it would take over two years to see the dream realized. During that time, the order was devoted to recruiting new members, financing and building a new headquarters, and beginning publication of the St. Luke Herald.However, the bank was never far from Walker's mind. St. Luke attorney James Hayes drew up the charter, which was approved Virginia's Corporation Commission on July 28, 1903. Local newspapers carried the story, many noting the distinction that the bank would be led by an African American woman. Her notoriety grew when the Virginia Banker's Association extended membership to Walker. This offer had not been extended to any of the other presidents of the black owned banks in Richmond. She accepted the invitation and remarked, "I shall hope to conduct myself so as to reflect credit upon my race and people."
As the plans came together, Walker used the network of St. Luke councils to promote the bank. At the annual IOSL convention in August of 1903, she urged each council to open accounts, buys stocks, and each individual member to open an account, even if it was only a dollar. Walker realized for the bank to succeed she would need the full support of her fraternal family.
The Executive Committee of the IOSL was named Board of Directors for the bank. At the first board meeting held on August 19, 1903, the group set an opening date for the business, sold 200 shares of stock to the Grand Council of the IOSL, and decided that most stock would be sold only to IOSL members. At another meeting, held on August 21, 1903, the board approved the hiring of clerks and set their salaries. Emmett C. Burke was appointed cashier at a salary of $50 per month, Mary Dawson was appointed assistant cashier at $25 per month, and Maggie Walker was appointed president, earning $25 a week for her work. To prepare herself for the position, Walker spent two hours a day at the Merchants National Bank of Richmond, studying procedures and operations of the bank.
On November 2, 1903, the St. Luke Penny Savings Bank opened for business at the St. Luke Headquarters Building at 900 St. James Street. While music played and speeches were given, nearly 300 eager customers, many of them members of the IOSL, waited patiently to open bank accounts. While some deposited more than one hundred dollars, some started accounts with just a few dollars, including one person who deposited 31 cents. At the end of the day, the bank had 280 deposits, totaling over $8,000, and sold $1,247.00 worth of stock, bringing the total to $9,340.44. While Mrs. Walker had originally hoped for deposits exceeding $75,000, she was pleased with the first day's success but recognized the hard work ahead to find success and security for the St. Luke Penny Savings Bank.
In an attempt to encourage deposits by children, Walker distributed home savings banks among St. Luke families. A teacher at heart, Walker hoped the banks would encourage the children to save their pennies and learn the importance of thrift. Once children had one hundred pennies in their bank, they could open an account at the St. Luke Penny Savings Bank. As a shrewd businesswoman, Walker also realized that every penny counted and each deposit opened by a child would help strengthen the bank.
To further the success of the bank and expand the empire of the IOSL, in 1904, Walker recommended that the bank purchase a millinery store and re-locate the bank. The vision of an emporium, run by African American women, was first vocalized by Walker in 1901, at the same time she announced her dream for the bank and the St. Luke Herald. As the bank slowly prospered, the time seemed ripe for the IOSL to further its influence in Richmond.
In September 1904, the IOSL purchased a building at 112 Broad Street to house the St. Luke Emporium and the St. Luke Penny Savings Bank. The bank moved to this new location in October 1905. The bank would continue to grow steadily at this location.
The year 1910 brought many changes not only to the St. Luke Penny Savings Bank, but banks throughout the state. The Virginia General Assembly added legislation that required all state banks to be examined annually by the State Corporation Committee. As a result, many banks were closed. However, the St. Luke Penny Savings Bank passed the examination and continued to operate. One bank not as fortunate was the True Reformers Bank. The Corporation Committee ordered the closure of the bank in October of 1910. Unsecured loans, lax operations, and embezzlement by a clerk led to its downfall, with most depositors losing their savings. The fall of the first black bank in Richmond shattered the confidence of black Richmonders.
At the annual meeting of the Board of Directors in 1910, the board voted to erect a new bank building. Charles T. Russell, one of the first black licensed architects in the state, designed the plans. In November 1911, the St. Luke Penny Savings Bank opened its' doors at First and Marshall Street.
While the bank continued to do moderately well, it would never again see the growth experienced in the previous years. In 1920, two other black owned banks were chartered in Richmond, Commercial Bank and Trust and Second Street Savings Bank, creating more competition. In 1922, the Mechanics Savings Bank, operated by John Mitchell Jr., was closed by the State Corporation Committee, again causing confidence in black owned banks to decline. By 1928, resources of the St. Luke Penny Savings Bank dropped below their 1926 totals. To save the bank and to ensure that depositors' assets were secure, Walker took action.
In 1929, Walker met with officers and directors for the Second Street Savings Bank and Commercial Bank and Trust to discuss a merger. While the Commercial Bank dropped out of discussions, the two remaining banks adopted a resolution to merge. The new institution, the Consolidated Bank and Trust opened for business on January 2, 1930 at the 1st and Marshall Street location of the St. Luke Penny Savings Bank. Still facing financial troubles, Commercial Bank and Trust merged with Consolidated in 1931.
Walker was appointed Chairman to the Board of Directors for Consolidated Bank and Trust, a position she would hold until her death in 1934. While many banks did not survive the Great Depression, Consolidated Bank and Trust thrived until 2009. In that year, it was bought by the Premier Bank, ending it's' distinction as a black-run, independently-owned bank. It was believed to be the oldest continuously black-owned bank in the country until then.
During its long history, between 1903 to 1929, the St. Luke Penny Savings Bank would have a direct impact on the black community in Richmond. It issued more than 600 mortgages to black families, allowing many to realize the dream of home ownership. It provided employment for African Americans, giving some a chance to leave the menial, labor intensive jobs available in the white community. More than anything, the St. Luke Penny Savings Bank was a source of pride in the black community. The bank served as a reminder of the lasting and beneficial impact that one woman's dream and perseverance can have on an entire community.