Black $ green: black entrepreneurs wage uphill struggle in 20th century - excerpt from 'The Shaping of Black America' - part 2

Ebony, Oct, 1997 by Lerone Bennett, Jr.

A common impression to the contrary notwithstanding, Black businessmen made major gains in the post-Civil War period, establishing major firms and moving to positions of dominance in several industries, including catering and barbering. All this changed drastically, as we pointed out in the first installment (see February 1996), in the last decade of the 19th century, with the creation of a Jim Crow system that systematically undermined the foundations of both Black laborers and entrepreneurs.

As the great octopus of this system grew, spreading its tentacles across the whole landscape of Black life, the Black business world contracted. White customers started drawing the color line in their dealings with Black merchants, and White property owners stopped leasing to Blacks, who began a one-way migration to the Black Main Streets -- Auburn Avenue in Atlanta, Beale Street in Memphis, South State in Chicago, Lombard in Philadelphia, Lenox and Seventh in Harlem.

Not content with the White Main Street triumph, White merchants pursued Black merchants into the Black community and laid claim to the so-called Negro trade. The "freeing" of Blacks had created an enormous Black market, and White merchants were not slow in recognizing its significance. As early as 1870, Charles Nordhoff noted that "the Negro is the principal producer in Mississippi, and since the war he has become a large consumer also.... The [White] men who have the Negro trade all get rich."

To understand the Black response to that situation in the last decade of the 19th century, and to understand the status of Black business in the last decade of the 20th, it is necessary to go back to the Black business future and reconstruct the bridges of self-determination that Black people built to the new century.

The first bridge was the Black church. From 1865 onward most Black people were engaged in a frenzy of church organizing and church building. By 1876 the Black South was linked by a network of churches of every denomination. Because they were generally the largest buildings in the area, because they were usually the only major buildings owned by Blacks and because they touched all of the raw nerves in Black America, these churches soon became the spiritual and economic centers of the community.

True to the spirit of the fathers of the Black Church, almost all of these institutions linked spiritual development and economic development, organizing and sponsoring mutual aid societies. These societies were in form and in fact embryonic insurance and burial societies, and most of them had their origin, as W.J. Trent Jr. has observed, in the minister's "attempt to hedge against illness and death through his church organization. Practically every church of any size throughout the country had one or more of such benevolent organizations attached to it."

Somewhat more worldly but equally relevant to our study were the bridges erected by the fraternal organizations, which were major factors in the Black community from 1865 to 1915. During the whole of this period, there were lodges of fraternal orders (Masons, Elks, Odd Fellows, True Reformers etc.) in every city with a sizable Black population, and most of the social and political life of the community revolved around the meetings, conventions, and feuding of lodge members.

These orders collected large amounts of money. (One student estimated that Blacks contributed $168 million to fraternal orders between 1870 and 1920). Some orders, as we shall see, created the first Black banks, primarily as a depository for order funds. Others loaned mortgage money to their members. Still others started business enterprises. The Grand Lodge of Masons of Mississippi, for example, bought 1,000 acres of timber land and went into the lumber business. The True Reformers organized a bank, a chain of retail stores, a hotel, a newspaper, an old folks home, and an all-Black community called Brownville. The Independent Order of St. Luke, under the leadership of a dynamic Black woman, Maggie L. Walker, operated a printing plant, a bank, an office building, a regalia and supply house, and an emporium.

Supported by the bridges of the church, mutual aid societies and the fraternal orders, Black businessmen moved in the 1880s and 1890s to a new ledge of economic activity, organizing the first Black banks and the first Black insurance companies. The first Black-owned banks were organized in 1888, 15 years after the Freedmen's Bank debacle. The Capital Savings Bank opened in Washington, D.C., in October 1888. The Savings Bank of the Grand Fountain United Order of True Reformers was chartered in March 1888, and opened in April 1889. Between 1899 and 1905, 28 banks were organized by Blacks. Most of these banks were destroyed by mismanagement and the recurring depressions of the period. But the strongest survived, leaving behind a legacy of homes, businesses, and trained businessmen.

There was a close connection, as we have seen, between the founding of these banks and the fraternal orders and the Black Church. The True Reformers Bank was an organ of the True Reformers, which was organized in 1881 by a former slave, the Rev. William Washington Browne. The Rev. W. R. Pettiford, pastor of the Sixteenth Street Baptist Church, was the first president of the Alabama Penny Savings Bank. It is worth noting, at least for perspective, that the vice-president was a bartender.