Why Fani Willis Pays with Cash
Why Fani Willis Pays with Cash
Spoiler alert: It’s a Black thing.
Back when I was working in Arkansas, I dropped by the home of an aunt and uncle for lunch. The pair lived across the Arkansas River in a town once called Argenta, but now known as North Little Rock. The trip was a five-minute drive from my job, and the ham sandwich and syrupy-sweet glass of tea that awaited me was well worth the trip. As I chatted with my uncle, my aunt entered the room, with a request. “I need you to help me move some things in the bedroom,” she said.
Upon entering the bedroom, my aunt motioned to a chest of drawers positioned against a wall. I assumed she needed a strong back to rearrange the item of furniture. Instead, she opened one drawer, then another, revealing their contents. The drawers of the dresser were stuffed with draw-stringed bags of coins, each labeled with the denomination of its contents.
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Some contained nickels, others dimes or quarters. Several were stuffed with Kennedy half-dollars. “Would you carry these bags to the car?” my aunt asked. “They’re too heavy for me and your uncle.” They planned to exchange the coins for dollars at a nearby bank.
Once I lugged the cache of coins to the trunk of their Lincoln Town Car, I cautioned my aunt on the wisdom of keeping more than a thousand dollars in coinage inside a bedroom dresser. After considering my comment, she responded, “Well, I guess I ought to show you this.”
With that, she opened the drawer of a smaller bedside chest, withdrawing a stack of certificates of deposit, each issued by a different local bank. More commonly known as CDs, the instruments are short-term loans to a bank in the form of a deposit at a negotiated interest rate.
After perusing the stack of CDs, some of which were set at interest rates as high as thirteen percent, I realized my aunt and uncle were loaning money to every bank in town—at double-digit rates.
Between the mountain of coins and the CDs, almost a hundred thousand dollars was stashed in the bedroom of their modest North Little Rock home. After I picked my jaw up from the floor, I advised my relatives to rent a safe deposit box at a local financial institution, instead of keeping such a large pile of loot in their bedroom.
My relatives were not a pair of hedge fund millionaires. My aunt, who I’ve written about before, was a retired educator. My uncle was a certified workaholic who retired from the U.S. Postal Service and the Safeway grocery chain. But the couple saved every spare cent they earned.
And they always paid in cash.
The only time they took out a loan was for their home mortgage, which they'd paid off years earlier. Everything else, even the expensive gifts they exchanged on anniversaries, they paid for in full. When they swapped their Lincoln Town Car for a newer model, they paid cash rather than finance the purchase.
Possessing a credit card was anathema to the way my aunt and uncle did business. They wouldn't be caught dead financing a purchase. Even the cards they gave us on birthdays contained a crisp C-note, never a check.
It really is a Black thing
In a recent hearing aimed at removing District Attorney Fani (not Fannie) Willis and Nathan Wade the special prosecutor assigned to lead the Georgia election interference trial, Scott McAfee, the judge in the case, threatened to toss Trump co-defendant David Shafer from the courtroom.
The judge's warning was in response to Shafer’s laughter during Wade’s testimony. Wade stated that while he paid for their trips together, Willis always repaid him for her portion of their travel in cash. But Shafer wasn’t alone. The gaggle of attorneys representing the defense resisted the urge to laugh, but it was clear that they too found Wade’s testimony not credible.
The effects of the Freedman’s Bank’s demise were long-lasting; many historians believe the bank’s collapse marked the genesis of African American distrust in the banking system.
John Clifford Floyd, Willis’s father, gave similar testimony regarding his and his daughter's preference for cash transactions. Floyd underscored a truism every Black person of a certain age knows all too well: cash is king. That sentiment isn't exclusive to African Americans, but it is, as Mr. Floyd put it, “a Black thing.”
In last week's closing arguments, the defense attorneys in the Georgia case, all of whom are white, argued that the idea that Willis, or anyone for that matter, would pay for expensive transactions in cash is absurd. Their dismissal of Willis’s explanation leads me to two conclusions: a) they don't have many Black friends, and b) they don't know much about America’s history.
The preference among African Americans for cash stems from a general distrust of the financial system, a sentiment that can be traced to the years immediately following the Civil War.
Does this cash thing have something to do with slavery? Yeah, kinda
Founded in 1865, the Freedman's Saving and Trust Company, more commonly known as the Freedman's Savings Bank, was a private, congressionally chartered financial institution established to hold the deposits of the formerly enslaved.
By 1872, the bank had grown to more than 67,000 depositors in branches across 17 states and assets of over $3.7 million—over $93 million in today's dollars.
According to the U.S. Department of the Treasury, the bank's difficulties began after it relocated its headquarters from New York City to the nation's capital (emphasis added):
Soon after, a group of local bankers, politicians, and businessmen began to take control. At the urging of the new trustees, Congress amended the bank’s charter. The trustees now began to invest in real estate projects and railroads, and they made risky loans to friends, some with no collateral. Some of the trustees were in charge of other banks, as well, and when they made bad loans at those banks, they transferred the bad loans to the Freedman’s Bank.
…When a financial panic hit the country in 1873, most of the Freedman’s Bank’s investments lost value or became worthless. The bank was doomed. Several branches were hit by bank runs, during which crowds of depositors demanded their money. The branches met demands, but the cash reserves of the Freedman’s Bank were drained.
By the time Congress got around to auditing the bank’s financial records, the bank was circling the drain. In a desperate attempt to save the institution, the bank’s trustees brought in the most respected African American in the country, Frederick Douglass, to take over as president of the institution.
After the bank’s failure, Frederick Douglass said the Freedman’s Bank had become “the black man’s cow but the white man’s milk.”
It was too late. Douglass asked Congress to close the bank just six weeks after accepting the job. The Freedman’s Bank shut its doors in June of 1874. Most individuals with deposits in the bank lost every cent.
The effects of the Freedman’s Bank’s demise were long-lasting. Many historians believe the bank’s collapse is the origin of African American distrust in the banking system.
Counterintuitively, the structural racism that persists in traditional finance is responsible, at least in part, for the outsized interest among Black Americans and other people of color in digital currencies. I wrote about this phenomenon a few years ago.
One last thing…
When I launched my investment firm in the mid-nineties, I sunk every penny I had into the business. It took me a few days to set up bank accounts for the business, so I had a significant amount of cash on hand.
I was starting from scratch, so had to buy everything from furniture to pens and paper. One day, one of my brothers and I went to a local office supply store to purchase a dozen chairs for my conference room.
We found some chairs we liked that cost about a hundred dollars each. I planned to buy them and have them delivered to my office the next day.
When we reached the checkout counter, I peeled off the number of hundred-dollar bills necessary to pay for my purchase. The clerk looked at the money suspiciously, then eyed me and my brother. Instead of ringing up the sale, he beckoned the store's owner. Long story short, the store refused to accept my money.
As we stood in front of the store a few minutes later wondering what the you-know-what had just happened, a police car eased up beside us. The store owner had called them, convinced that a pair of drug dealers were attempting to launder money through his business.
Why else, the store owner said when he reported us, would a pair of Black men walk around with that much cash? Fortunately, my brother knew the officer, so we weren't arrested or worse. That said, I learned a valuable lesson that day.
Cash might be king, but if you are Black in America, that adage doesn't always apply to you.
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