Charles Banks, already a successful businessman in Clarksdale, moved to Mound Bayou with the plan of greater accomplishments in the all-black town. Banks quickly became involved in the community, both politically and economically, and worked with Booker T. Washington and Tuskegee. Although some historians have characterized him as a shrewd manipulator who worked for his own self-interest, D.H. Jackson (A chief lieutenant of the Tuskegee machine: Charles Banks of Mississippi) constructed a more positive view of Banks’ service to Mound Bayou, and his efforts to support economic development for “racial uplift” as well as to subvert the racism that underpinned everyday life in Mississippi during those years.
Banks’ most important financial efforts were the establishment of the Bank of Mound Bayou and the founding of the Mound Bayou Cotton Oil Mill. Banks was also influential in securing funds from Andrew Carnegie in 1909 for a town library.
Washington called him “the most influential Negro business man in the United States” (A chief lieutenant). The establishment of a locally owned bank, with residents purchasing shares, meant they could invest in their community, as well as have local access to borrow.
The 1911 decline in cotton prices had a financial impact on the bank’s daily operations, and state regulators closed the bank in 1914. Banks thought they had sufficient assets, but nonetheless, the bank closed. Following the bank failure, white-owned banks raised interest rates and black farmers had to use white-owned gins, further impacting the economic self-sufficiency of the community. A year later, however, Banks had helped to begin a new bank, the Mound Bayou State Bank, and began attempting to pay off the investors from the Bank of Mound Bayou closure.
The Mound Bayou Cotton Oil Mill was an all-black enterprise founded with Banks’ help. Families purchased shares for a dollar each. Banks was able to secure funding from Julius Rosenwald and a Memphis cotton broker named Benjamin Harvey. The mill failed when Harvey reneged on his agreement to repay the Rosenwald bonds, and the mill’s failure helped end the Bank of Mound Bayou for the second time. Under Banks’ leadership, the bank had purchased $40,000 in stock and closed in 1922.
The cotton-price crash of 1923 brought foreclosure to many businesses in the community, and the depression would continue to add to the economic problems experienced in the community.
In spite of hardships, the town has remained an African-American run government and continues to seek not only to preserve its historical significance, but to move into the future in new and empowering ways. Once a center of a busy financial enterprise, what could the Bank of Mound Bayou become with vision, investment, and preservation?