The quote comes from "A Talk to Teachers", an article published by he Saturday Review in December 1963 and which you can read following the first link below. The text is a transcrip of the lecture "The Negro Child - His Self Image".
In the text, Baldwin continues the quote by arguing that it is "astounding" to him to hear that so many people believe in the myth that America was founded by "a band of heroes who wanted to be free". This may be one perspective on American history, created by the American white man. Yet, to Baldwin, the founders of America were "convicts" or people who weren't making it in England. American whites should learn that their experience and values are not universal and that they are not the sole foundation of American identity. Such identity therefore is not something natural and given once and for all, but socially constructed and can be contested by other groups. Baldwin addressed his text particularly to teachers of "Negro schools" where heroic talks about American being founded on freedom would sound particularly false. The role of the teacher is to make students aware that America history is "longer, larger, more various, more beautiful and more terrible" than everything they have ever been told about. Baldwin thus appeals for teachers to find ways to give African American students meaningful intellectual and practical tools to analyse the political, social and cultural reality around them.