by Thomas Healy
Asked for comment by a group of reporters, McKissick’s message was simple: “We’re doing something good here for the whole country.”
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AS IMPORTANT AS it was, the loan from Chase solved only a small part of McKissick’s problem. Once he bought the property he still needed huge sums to prepare it for development—to turn pastures and woods into improved land, with water, sewer, electricity, and paved roads. Up-front costs in Columbia had run close to $50 million, while developers in Irvine, California, had spent several times that amount. Soul City might cost less, being located in an economically depressed region where land, labor, and materials were cheap. But even conservative estimates suggested McKissick would need at least $30 million. And in 1969, there weren’t many places a Black man could get his hands on that kind of cash. As a headline in BusinessWeek put it, “Soul City’s Need Is Green Power.”
The most obvious source of that power was the federal government. The New Communities Act not only provided loan guarantees of up to $50 million for new cities approved by HUD, it also offered planning grants to help developers put together all the documents—feasibility reports, environmental impact studies, population projections—required for HUD approval. Indeed, it was the New Communities Act that had encouraged McKissick to proceed with Soul City in the first place. But now that he had secured the land, McKissick was having reservations about relying on government loans. For one thing, he had been consulting regularly with James Rouse, who warned him about the pitfalls of doing business with the government—the bureaucracy, the scrutiny, the timidity. A 1969 case study of Soul City prepared by Harvard Business School also raised questions about the wisdom of participating in the HUD program. Noting that government assistance could often be “untimely and inflexible,” the authors explained that most businesses prefer tax breaks and subsidies to active government involvement.
Aside from these practical concerns, there was a larger, more theoretical objection to government assistance. The whole purpose of Soul City was to promote Black self-determination, to give Black people control over their own destiny. Relying upon the government would necessarily undercut that goal. It would mean giving up a degree of autonomy and submitting to the supervision of white officials. This was another dilemma familiar to Black leaders, and one McKissick had often lamented. In an interview the previous year, he voiced frustration about constantly having to rely upon and report to whites. That was the reason he had started McKissick Enterprises: to end the cycle of financial dependence. “You’ve got to go to the man and beg him for every damn thing,” he complained. “If you want money now there ain’t no way for you to move for nothing without your going to the white folks for the money, including McKissick Enterprises. We ought to be able one day to get out of that bag.”
There was also no guarantee the federal government would agree to fund Soul City. It was true that Orville Freeman had offered the Agriculture Department’s full support when McKissick announced his plans in January. But Freeman had been replaced by Nixon appointee Clifford M. Hardin, the former chancellor of the University of Nebraska. And although Nixon had embraced Black capitalism during the presidential campaign—and had met privately with McKissick and Innis the previous spring—he wasn’t sending positive signals now. Almost immediately upon taking office, he had gutted the Office of Economic Opportunity, the agency responsible for overseeing the War on Poverty, declaring that it was “time to quit pouring billions of dollars into programs that have failed.” At the same time, he appointed as its director Donald Rumsfeld, a former congressman from Illinois who had opposed the creation of the office five years earlier. Then, in early March, Nixon issued an executive order establishing the Office of Minority Business Enterprise without consulting Black leaders beforehand and without yet allocating any funds for the new office.
Troubled by these actions, McKissick reached out to Bob Brown, an old friend who had recently become Nixon’s top Black aide. Born in High Point, North Carolina, Brown had started his career as a police officer and federal treasury agent before opening his own public relations firm in 1960. Over the next decade, he built a lucrative business helping companies improve their relations with the Black community. He also formed close ties with many civil rights leaders, including McKissick and Martin Luther King Jr. When King was assassinated in 1968, Brown accompanied his wife, Coretta Scott King, to Memphis to retrieve his body, then joined the presidential campaign of Robert F. Kennedy. But after Kennedy was killed two months later, Brown was approached by a Black staffer on the Republican National Committee, who asked him to consult with the Nixon campaign. Although a Democrat, Brown had a favorable view of Nixon, recalling his 1957 trip to Ghana, the first time an American vice president had visited Africa. He accepted the offer and began doing advance work for the campaign. His most important assignment was in Rochester, New York, where Nixon was scheduled to give a speech in mid-October. A month earlier, the Democratic candidate, Hubert Humphrey, had been greeted in Rochester by hundreds of Black protesters lying in the streets. Hoping to prevent a similar spectacle from marring Nixon’s trip, Brown spent several days negotiating with local activists, assuring them that if Nixon were elected he would make sure their concerns were heard. His efforts paid off: Nixon’s speech to twelve thousand supporters at the Rochester Community War Memorial went off without a hitch. When Nixon learned who was responsible for averting a confrontation, he instructed a senior adviser to make sure Brown was with him for the remainder of the campaign. Relaying this news to Brown, the adviser told him, “You go on back home and get yourself together because you ain’t going to be able to go home again.”
After the election, Brown did go home, intending to resume his public relations business in High Point. He wasn’t there long before he was called to the Pierre hotel in New York to meet with the president-elect. Upon his arrival, Nixon introduced him to the staff as his special assistant for urban affairs. Caught off guard by this announcement, Brown stayed silent. But after they talked for an hour about the needs of the Black community, and Nixon promised that Brown would answer directly to him, he accepted the job. He wasn’t the only Black official in the Nixon administration. James Farmer, McKissick’s predecessor at CORE, had been named assistant secretary at the Department of Health, Education, and Welfare, while Sam Jackson, a holdover from the Johnson administration, had stayed on as assistant secretary at HUD. There were other Black appointees scattered across various agencies—the labor department, the Equal Employment Opportunity Commission, the postmaster general’s office. But Brown was the only Black official on the White House staff, which meant that when Black leaders had concerns about the administration they went straight to him.
McKissick lodged his first complaint with Brown in a letter on February 14. According to McKissick, the Office of Economic Opportunity had agreed several months earlier to transfer funds to the Small Business Administration to establish economic development centers in distressed urban areas; McKissick Enterprises had proposed such a center in Harlem. In spite of the agreement, OEO (now led by Rumsfeld) had not yet transferred the funds. “Can you determine for us the reason for the delay in the transmittal of these funds?” McKissick asked Brown. “Many organizations, like mine, are prevented from assisting the development of Black economic power, by the failure of immediate action on the part of certain agencies.”
Bob Brown with Nixon.
Six weeks later, McKissick followed up with a more pointed letter. “I have been disturbed by the course of events taken by the Nixon Administration the past few weeks,” he began. “To my mind the Administration’s actions have not reflected real concern for the concept of ‘Black Economic Power.’” What precisely was McKissick disturbed about? First, in early March, Nixon had convened a meeting of Black leaders at the White House on the same day as a conference on Black economic development sponsored by the National Association of Manufacturers. When McKissick and other leaders pointed out the conflict, they were ignor
ed, and when McKissick asked to send a member of his staff to the White House instead his request was denied. Nixon had also failed to consult Black leaders about who should lead the SBA and had reappointed the head of its New York office despite complaints from Black entrepreneurs that he was difficult to work with. “I am commencing to lose faith,” McKissick confided in Brown. “Somehow the Administration does not seem to be getting the messages. The nation is still in the ‘honeymoon’ stage, but let us please get the channels of communication opened before the honeymoon ends.”
Not content to criticize Nixon privately, McKissick took his concerns public. Shortly after Nixon’s inauguration, he joined a group of prominent Blacks (including Jackie Robinson and the entertainer Dick Gregory) who gathered outside the White House to complain about the lack of access to the president. Two months later, he skewered the president during a visit to Minneapolis to promote Three-Fifths of a Man, telling a reporter that Nixon had “made an effort to hurt what is really black capitalism” by cutting back at the SBA. And in a radio interview with the journalist Victor Riesel, a noted labor advocate, he complained that the president had never defined his goals for Black capitalism. Attempting to remedy that oversight, McKissick explained that Black capitalism wasn’t just about jobs. “It is about the right to have Black-run factories, Black-run plants, Black-run businesses and the right to be treated as equals in the commercial and political marketplace.”
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THUS, IN THE weeks and months after his Soul City announcement, McKissick had not only begun to sour on the idea of government assistance, he had harshly criticized the very administration whose assistance he would need. So he began to consider alternative sources of funding.
One possibility was to finance the project with investments from Blacks themselves. Although the overwhelming majority of Black people were poor, a handful of Black companies and entrepreneurs had prospered, especially in the insurance and hair products industries. McKissick had long advocated tapping into the wealth of this select group. As head of CORE, he had attempted to shift the organization’s donor base from whites to Blacks, believing this would give him the freedom to chart his own course. As had happened then, however, his effort to raise money from Black investors fell short. Part of the problem was a lack of sufficient assets. Despite all the talk about Black capitalism, it was still mostly an aspiration. As McKissick liked to point out, if you combined all the Black businesses in the country, they wouldn’t crack the Fortune 500. Nor were any Black-owned businesses listed on a major stock exchange. (Johnson Products became the first when it appeared on the American Stock Exchange in 1971.) Even Black corporations that did have significant resources—such as North Carolina Mutual, the nation’s first billion-dollar Black insurance business—couldn’t afford to take a risk on Soul City. As Mutual vice president J. J. Henderson explained in a letter denying McKissick’s request for a $1 million loan, his company would consider providing assistance once Soul City had firm commitments from “national corporations, commercial, institutional, income producing properties and homes.” Until then, Mutual didn’t have the luxury of investing in such a speculative venture.
Another possibility was to rely on the same liberal donors and foundations that had helped finance the civil rights movement. McKissick had extensive contacts within this world, having spent much of his time at CORE sipping cocktails at the homes of wealthy patrons in Manhattan. But in raising money for Soul City, McKissick often found that liberals couldn’t be counted on. Take Ted Kennedy: McKissick had been in touch with Kennedy about Soul City from the beginning, sending him proposals and reminiscing about his friendships with Kennedy’s older brothers John and Robert. After Kennedy fled the scene of a fatal car accident on Chappaquiddick Island in the summer of 1969, McKissick wrote a column for the New York Amsterdam News cautioning against a rush to judgment, then sent the young senator a note reminding him that leaders are forged in adversity. “No man is ever defeated until he admits that he is defeated,” he wrote. Not long after that, McKissick and Carey visited Kennedy in his Washington office, laying out their plans and their need for a short-term loan of two hundred thousand dollars. At the time, Kennedy seemed supportive. He instructed the pair to call his cousin Robert Fitzgerald, a principal at Harbor National Bank of Boston, and promised to put in a good word. But when McKissick made the call, Fitzgerald said he had never heard from Kennedy and knew nothing about the project. The discussion ended shortly thereafter.
McKissick and Carey had a similar experience with Nelson Rockefeller, the liberal Republican who was then governor of New York. The two men met with Rockefeller in his Manhattan office, presenting their proposal and asking for financial help. Like Kennedy, Rockefeller responded positively and referred them to members of his staff. But as with Kennedy, those discussions went nowhere.
Sometimes McKissick and Carey encountered outright hostility. When they paid a visit to the Mary Reynolds Babcock Foundation, a North Carolina charity founded by an heir to the R. J. Reynolds Tobacco Company, the board responded that it couldn’t support a segregated community. Dumbfounded, Carey looked around at the board’s members, all of whom were white, then pointed out that he and McKissick were different races. No matter, they were told; the foundation didn’t want to get involved. Neither did the Ford Foundation, which sent McKissick a letter expressing concern that Soul City would be virtually all Black and that McKissick’s statements to the contrary were “pro forma disclaimers.” When McKissick read those words, he erupted in anger. “To argue that you cannot support a new town which will provide education and training, good jobs, decent housing and an atmosphere of brotherhood and equality because you are afraid that Negroes may want to live there and might even constitute a majority would be absurd and comical except that it perfectly portrays the deep rooted latent racism of white America,” he wrote back. “You can determine how you spend your money, but you cannot make us all one color and you cannot determine where all of us are to live.”
The one exception to this pattern was Irving Fain, a Rhode Island businessman whose family had made a fortune in the textile and chemical industries. Fain was a longtime supporter of the civil rights movement, as generous with his time as his money. He had donated fifty thousand dollars to bail out demonstrators in Mississippi in 1965, had led the fight for fair housing legislation in Rhode Island, and had financed the construction of University Heights, a residential development in Providence that was racially and economically integrated. His support for civil rights stemmed from his Jewish faith, which he believed imposed a duty to do good, not just an injunction to avoid evil. In the words of the television journalist Fred Friendly, Fain “had soul long before it was fashionable.” McKissick met Fain during his years at CORE, and the two men formed a close bond. Both were committed to relieving the misery of the urban poor, and both believed in the value of social experimentation. It was natural, then, that McKissick would turn to Fain for financial support, and it was characteristic of Fain that he would respond favorably. Writing McKissick a check for thirty-five thousand dollars in late January 1969, Fain agreed to loan him a total of two hundred thousand dollars in monthly installments over a period of six months. The loan was not intended to finance the purchase of the Circle P Ranch. Instead, it was “seed money” to pay for rent, salaries, taxes, and insurance. Fain offered liberal repayment terms to McKissick, explaining that he wanted the loan to be “as flexible as possible so that you will not be handicapped.” He also offered a friendly warning, observing that McKissick’s initial capitalization was “grossly inadequate,” and that “the most common cause of difficulty in new business enterprises is lack of adequate capital. A word to the wise!”
Fain’s loan was critical, helping keep Soul City afloat during the early touch-and-go days. But Fain made clear he was in no position to bankroll the entire project. In a series of meetings at McKissick Enterprises, he and other advisers insisted that McKissick had no choice but to seek a loan guarantee f
rom HUD. The meetings were “real uptight,” McKissick said later, and he was reluctant to accept the conclusion of his advisers. But in the end, he realized they were right. He was not James Rouse. No bank or insurance company was going to lend him $30 million. If he wanted to build Soul City, he would have to depend on the very thing he was trying to get away from: the beneficence of the federal government.
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ONCE MCKISSICK MADE that decision, the next step was clear. Building on the proposal Carey had written the previous fall, he submitted an application for a $33 million loan guarantee to the New Communities Administration of HUD, which had been established to run the new-towns program. In most ways, the application mirrored Carey’s draft. But there was an important difference. While the earlier version included a section titled “Black Orientation of the New Community,” the new proposal deleted that section. It also pushed back against claims that Soul City would be segregated, insisting that the community would not be “a totally ‘Black Town.’” It was true, the proposal acknowledged, that the developers were motivated by concern for the plight of racial minorities. But they recognized that “we live in a multi-racial and multi-ethnic society and that progress for any segment of the nation is dependent upon progress for all.” They also understood that “a community does not exist in a vacuum, but exists as a part of a pattern of inter-dependencies with other communities.” For that reason, the application stated, the developers would undertake an “extensive, honest, and in-depth effort” to recruit a diverse population, offering job training to poor whites, building economically integrated neighborhoods, and developing a range of social and cultural programs. “The number of white residents in Soul City will surprise the skeptics.”