Our Black Year

by Maggie Anderson

  Just one year after Stewart delivered her speech, the National Negro Convention, the first national organization of African Americans that opposed slavery and advocated for Black economic empowerment, issued a directive that “black businesspeople would only sell, and black consumers would only buy those products that had not been produced from slave labor.”

  The “free produce movement,” organized with these goals in mind, began in the mid-1820s. An African American produce store owner in Philadelphia, Lydia White, received this vote of confidence from the Convention in 1833: “All who feel an interest in promoting the cause of universal freedom, is [sic] cheerfully recommended to her store.” In 1841 the Female Trading Association, a New York grocery store cooperative run by one hundred African American women, sold grits, rice, soap, candles, brooms, and brushes, among other items. At least one newspaper, the Colored American, advocated for Blacks to support it because, as the newspaper stated, “We believe this is the first successful organized effort of this kind among the colored people of this city.”

  Twenty years later Martin Robison Delaney, a Pennsylvania newspaper publisher and physician, documented the growth of Black businesses prior to the Civil War in his book, The Condition, Elevation, Emigration and Destiny of the Colored People of the United States. Delaney was an ardent supporter of touting Black business success as a vindication of Black society that would enhance racial pride and keep money in Black communities. In his book Delaney uses the phrase “buy black” in a chapter entitled, “Our Elevation in the United States,” in which he encourages antebellum Blacks to do just that. Without this, African American–pur-chased consumer goods “are the products of the white man, purchased by us from the white man, consequently our earnings and means, are all given to the white man.”

  After the Civil War the devastated South needed Blacks to rebuild it. African Americans worked as tradesmen and established construction companies, but their mutual aid societies also expanded into other cooperatives, including manufacturing, real estate, banking, and insurance, mainly in response to the lack of capital available to them. By the end of the 1800s Black leaders, including W. E. B. Du Bois, were speaking at African American conferences, where they would present strategies for Blacks to succeed in business. Those strategies included, as Du Bois stated, “the mass of the Negroes (who) must learn to patronize business enterprises conducted by their own race, even at some disadvantage.” He also encouraged Black churches, schools, and newspapers to promote African American–owned businesses.

  In addition to Du Bois, Booker T. Washington and Marcus Garvey became prominent leaders of the Black economic empowerment movement in the late 1800s and early 1900s. Washington, after witnessing African American rights recede in the post–Civil War South, emphasized industrial business development over political and civil rights for Blacks. His theory: “No race that has anything to contribute to the markets of the world is long in any degree ostracized.” In 1900 he helped establish the first formal business advancement network for African Americans, the National Negro Business League (NNBL), which spawned other African American business and professional groups, including the National Negro Bankers Association, National Negro Insurance Association, National Association of Funeral Directors, National Negro Retail Merchants Association, even the National Bar Association. The birth of the NNBL ushered in what has been called “the Golden Age of Black Business.”

  Marcus Garvey established the Universal Negro Improvement Association (UNIA) in 1914 in his native Jamaica with the goal of boosting Blacks politically and economically all over the world. Two years later he came to Harlem and expanded the UNIA. In addition to advocating Black businesses, he lobbied for liberating Africa, promoting Black nationalism, and appreciating Black culture, in the process converting UNIA into one of the most powerful Black organizations in the world.

  Groups were springing up all over the country to support fellow Blacks. In 1915, for example, the Atlanta Mutual Insurance Association organized a Boosters Club “to encourage Negroes to trade with one another, to buy groceries, take out insurance, buy medicine, and employ Negro professional men in every case where it can be done without inconvenience or inefficiency.” By 1919 more than 140 chartered Negro Business Leagues were functioning in 30 states. In the 1920s these groups took their actions national, urging African Americans to “Buy Something From a Negro Merchant!” and promoting National Negro Trade Weeks. In the 1930s editors of the Chicago newspaper Whip established “Don’t Buy Where You Can’t Work” campaigns that caught on in other cities. In a July 1931 editorial appearing in The Crisis magazine, Du Bois wrote, “If we once make a religion of our determination to spend our meager income so far as possible only in such ways as will bring us employment consideration and opportunity, the possibilities before us are enormous.... A nation twice as large as Portugal, Holland, or Sweden is not powerless—is not merely a supplicant beggar for crumbs—it is a mighty economic power when it gets vision enough to use its strength.”

  This was an era of robust growth for Black cooperatives—individuals or businesses (agricultural, financial, or social) can pool their resources to exert stronger economic leverage than any one or two of those entities could alone. There was the Colored Merchants’ Association, a chain of thirty-five Black grocery stores, established in 1928 in Montgomery, Alabama; the Florida Farmers’ Cooperative; and the Tyrrell Credit Union, in Columbia, North Carolina. Churches operated cooperatives. Even Black colleges had the Community Consumers Cooperative, founded at Georgia State College in 1934, and the People’s Cooperative supermarket at the Tuskegee Institute. Du Bois’s 1907 study, “Economic Co-operation among Negro Americans,” details the extensive number of “cooperatively supported schools, mutual aid societies, hospitals and churches in the late nineteenth century.” There were also seventy-five to a hundred homes for orphans and the elderly as well as forty hospitals, all supported by African Americans. This kind of cooperation, according to Du Bois, was a direct result of Whites’ economic oppression of Blacks and centuries of extreme poverty for African Americans.

  Whatever the reasons for its genesis, nobody would dispute the impact of that cooperation. Du Bois published a study in 1898 that reported only nineteen hundred “Negro-owned” businesses; in 1930 that number was seventy thousand. What’s interesting about this explosion of enterprises is that it came with growing numbers of Blacks in white-collar jobs, many of which were in Black businesses. Imagine what might have occurred if the number of white-collar jobs continued to increase.

  At about this time thriving Black business communities were emerging in midsize cities. Two of the more prominent were the “Black Wall Streets” of Durham, North Carolina, and Tulsa, Oklahoma. In Durham an assortment of Black businesses flourished on the south side of Parrish Street, including fifteen grocery stores, eight barbershops, seven meat and fish dealers, and two drugstores, not to mention doctors, lawyers, and other professionals as well as financing and insurance companies. Hell, I could have done 90 percent of my shopping without getting in a car—or buggy—if I lived near such a business district. White businesses occupied the north side of the street, and apparently the setup worked. “We have in Durham today the outstanding group of colored capitalists who have entered the second generation of business enterprise,” sociologist E. F. Frazier wrote in 1923. “These men have mastered the technique of modern business and acquired the spirit of modern enterprise.”

  In his 1927 book The Story of Durham, City of the New South, historian William Kenneth Boyd attributed the success of Parrish Street to Blacks who’d come to Durham after the Civil War, folks he described as “industrious and thrifty citizens” who “established a tradition of industry, reliability, and integrity.” And here’s one of his more intriguing observations: “A second factor in the progress of the Negro,” Boyd wrote, “has been the policy of white people, a policy of tolerance and helpfulness.”

  The Tulsa story was similar, except on a larger scale. Greenwood
Avenue was the main artery of the commercial district, which folks also called Greenwood. From the early 1900s until 1921 the number of Black-owned businesses grew to more than six hundred, including a Black-owned bus line, six real estate companies, wealthy oilmen, construction firms, and other entrepreneurs. African American attorneys and about fifteen Black doctors and surgeons also had offices on Tulsa’s Black Wall Street. More than forty grocery stores and meat markets were there, as were thirty restaurants and four hotels. Several Black millionaires had businesses in Greenwood, six of whom owned private planes—at a time when there were only two airports in the entire state.

  Urban renewal in the 1960s destroyed Durham’s Black Wall Street. This “renewal” brought construction of the East-West Expressway—now known as the Durham Freeway—through the neighborhood, killing hundreds of Black-owned businesses and displacing thousands of residents.

  The demise of Tulsa’s Black Wall Street came in a cauldron of racial violence. It started with the arrest of a young Black shoeshine man, Dick Rowland, on dubious charges that he’d raped a White woman. While he sat in the courthouse jail on May 31, 1921, an angry mob of Whites gathered outside with the plan to lynch him. Armed Blacks intervened, and a scuffle ensued. A gunshot was fired, and a race riot ignited.

  A total of thirty-five square blocks was destroyed in about fourteen hours of rioting. That event was “the worst civil disturbance since the Civil War,” according to an Oklahoma state commission’s 2001 report on the riot. Historian John Sibley Butler set the number of dead at more than fifty, and “over 1,000 homes and businesses lay in ruins. Thousands of occupations were lost.”

  There is so much to mourn about these catastrophes. Think of the enduring value those businesses would have provided for countless families as well as all the dreams that nurtured those businesses that were lost to subsequent generations.

  When the Great Depression arrived in 1929, Blacks suffered more than other groups did. About one-quarter of African Americans were on relief in 1935, a figure that looks comparable to the overall unemployment rate of 25 percent, although the percentage of Blacks receiving assistance was much higher in certain cities—up to 81 percent in Norfolk, Virginia, and nearly 66 percent in Atlanta. At the same time, from 1929 to 1939, retail sales among Black businesses declined nearly 30 percent, while the national aggregate retail sales drop was only 13 percent.

  In the aftermath of the Depression and, later, with Black soldiers returning home from World War II, a growing, politically active Black middle class emerged. Occasional waves of discontent over economic mistreatment and human rights violations flared, like the 1955–56 Montgomery Bus Boycott, organized after Blacks suffered humiliating treatment in the city’s public bus system. That protest gave Blacks an increasing sense of power, leading them to patronize local, Black-owned businesses. In 1955–57 Blacks in Mississippi boycotted a chain of stores that the families of the murderers of African American Emmett Till operated, a move that led to the demise of the family’s business.

  Throughout this period, as in others, African American leaders were trying to rally the people to use the power of their dollars. In a 1957 book by Black economic empowerment advocate William K. Bell, 15 Million Negroes and 15 Billion Dollars, he states, “15 MILLION NEGROES cannot be kept from gaining economic power if they determine to keep within the race a certain portion of that 15 BILLION DOLLARS that is running daily through their fingers, as water does over a dam. . . . There is GREAT POWER in 15 BILLION DOLLARS!”

  Other boycotts occurred. In Nashville, starting in late 1959, Black leaders and students waged sit-ins at diners across the city. About six months later, stung by a drop of about 20 percent in business, six department stores began serving African Americans, who then broke racial barriers in movie theaters, workplaces, hotels, and other public services.

  That kind of action was the backbone of the civil rights movement, of course, as it was used in Tallahassee, Savannah, New Orleans, and elsewhere. One of the most successful boycotts was the Southern Christian Leadership Conference’s Operation Breadbasket in Atlanta and Chicago in 1966 and 1967. Employing a strategy known as “selective patronage,” Breadbasket called on Black ministers and their churches to pressure companies to employ a reasonable percentage of Blacks in businesses that sold primarily to the Black community. Armed with employment figures for those companies, the ministers would attempt to “negotiate a more equitable employment practice.” If they couldn’t reach a solution, the ministers would encourage their parishioners to boycott certain products. In Atlanta Operation Breadbasket created jobs for African Americans that accounted for an additional $25 million a year going to Black neighborhoods. In Chicago, in just fifteen months, Breadbasket brought about two thousand jobs, worth about $15 million.

  In fact, it was economics, or at least the unacceptable treatment of Black consumers, that “sparked the civil rights protests of the mid-twentieth century,” writes Professor Robert E. Weems Jr. in Desegregating the Dollar. In his view the Civil Rights Act of 1964, “in large part, appeared to be the culmination of years of sustained black consumer economic retribution.”

  But not everything that emerged from that historic struggle was positive; it’s a little more complicated than the black-and-white newsreels we see on the History Channel. As previously mentioned, the civil rights movement clearly had a deteriorative effect on Black-owned businesses. We traded progress in politics and human rights for economic stability, which is where the Black Power movement comes into play—a well-meaning concept of the 1960s that fizzled. From my perch, Black Power is not much more than a catchy, ambiguous phrase rooted in those secret societies that emerged soon after slavery was established on this continent in the 1600s.

  Black Power leaders did agree on a few general tenets, such as Blacks should be included in national political and economic decision making and should work to help all Blacks achieve success. They stressed business ownership and set the goal of pushing their agenda until Blacks obtained “a stake in the American capitalist system commensurate with their 12 percent of the American population,” writes John T. McCartney, professor of comparative politics and Black political thought at Lafayette College, in the Encyclopedia of African American Business History. These admirable concepts were distilled from the work of Booker T. Washington and Marcus Garvey.

  The problem is that the leaders could never agree on how to generate that economic growth. Some contended that skills training and equal opportunity for jobs were key. Others favored the accumulation of Black capital to spark African American industrialization. A third argument was that Black capital, even if amassed, wasn’t enough to lift up African Americans economically. That thinking was widely accepted among political leaders, including President Richard Nixon, who established efforts to direct capital toward African American business ventures. But the federal government and the business establishment failed to fund the initiatives, so they faded.

  In 1969 the total number of Black-owned businesses in the United States was 163,000, which accounted for 0.25 percent of all businesses in the country. By the late 1990s that number had grown to 620,912, or 3.5 percent of all businesses—a figure hardly commensurate with the nearly 13 percent of Americans who were Black.

  More conventional forms of Black Power that were products of the civil rights movement included Affirmative Action and its cousin, minority business set-aside programs. Established by the federal government in 1972, Affirmative Action, via the Equal Employment Opportunity Act, created a system by which employers were strongly encouraged to hire and promote minorities. Affirmative Action has been successful to a point, but it remains a divisive effort that’s been challenged no fewer than five times in the US Supreme Court, which has sometimes contradicted earlier rulings.

  In addition, research in 1979 showed that an inordinately high percentage of Black executives were placed in personnel positions responsible for implementing Affirmative Action, jobs that are typically outside of the st
rategic power centers in corporations and are traditionally the hardest hit in economic declines.

  Minority business set-asides, the program that originated in the 1977 Public Works Employment Act and calls for awarding a portion of government contracts to minority firms, is nearly as contentious. Research suggests that “efforts to assist minority businesses in obtaining contracts with state, local, and government bodies often help to increase minority employment,” according to University of Minnesota professor Samuel L. Myers Jr., who studies racial inequality and public policy. But other data show that there are less expensive ways to help minority businesses, including subsidizing start-up capital—a huge issue for Black businesses—by waiving bonding and insurance requirements and reaching out “to local enterprises in communities with large minority populations.” Isn’t buying Black a way to do just that—without spending taxpayers’ money? Another problem with minority set-aside programs is that a large chunk of the business they offer is based on federal procurement or sales to minority communities, both of which can be very unstable.

  Any discussion of the civil rights era must include the heroic, iconic Dr. King. It seems that virtually every civil rights action from the late 1950s through the 1960s—even after his death—emerged from or was connected to his work in some way. To properly characterize King’s efforts in a few sentences is impossible, but his legacy in the arena of Black economic empowerment is unclear.

  In short, Dr. King saw Black businesses as very limited in their power to change the economic plight of African Americans, and he held a slightly conflicting view of how Blacks could get ahead economically. On the one hand, he believed that creating more jobs for Blacks and growing a larger consumer bloc of African Americans would help them make economic gains. At the same time, he saw capitalism as exploitive and “denounced American capitalism and the futility of utilizing black businesses as the base for black economic empowerment . . . for anything beyond serving as icons of resourcefulness,” according to Professor Juliet E. K. Walker, a member of our Executive Advisory team and the author of several books on African American business. “Rather than pushing for the expansion of black business,” she writes, “it appears that King preferred that blacks march to the doors of white corporate America and demand employment.”