The Negro and Free Enterprise; J. A. Still

The mistreatment of the Negro was such an embarrassment to the American past that Thomas Jeffer son confessed to having "trembled for his country" when he considered the implications of slaveholding practices. 1 However, when the United States government was re turned to the concept of universal in dividual worth-when, with the Emancipation Proclamation, every The author is the daughter of William Grant Still (1895-1978), the "Dean of Negro Composers." Still was the first colored man to write a symphony which was played by a major orchestra in the United States, and the first to conduct a major symphony orchestra in America. 40 man was theoretically free to func tion within the economy-the Negro advanced rapidly· toward legitimiz ing the democratic promise and to ward expanding the meaning of the American Revolution. Operating singly and earnestly within the free enterprise system, the members of the colored race triumphed over slavery, illiteracy and discrimination in a shorter pe riod of time than any other people in history. Owing to the ability of man kind to seize opportunities where available and to excel where merit is required, the Negro has made strides which are phenomenal, es pecially in view of the gauntlet that the black man has run from the sev enteenth century to the present.

The Negro has been a victim of a subjugative economic system which was destined to fail, if not through industrialization or Civil War, cerTHE NEGRO AND FREE ENTERPRISE 41 I like America because-de spite all its imperfections it is the land of promise and the proof of progress. A part of something is better than all of nothing. Negroes have a part of the great promise; they are working to win all of it. -Edith S. Sampson, The Negro Digest, December 1950 tainly through the efforts of individ uals who would not be subjugated. Afro-Americans very early revealed themselves as men of initiative. Some few of the achievers were still in bondage, and therefore were not often credited with their advances: Eli Whitney's cotton gin, patented on March 14, 1874, was, in reality, invented by one of the Whitney slaves. Even so, most of the enter prising Negroes were freemen, who, like the white nation-builders, made use of their freedom to grow and prosper. In fact some 500,000 free Negroes resided in the United States by 1860.

Freeman Anthony Johnson, the first Negro capitalist, was the owner of 250 acres and 5 servants in 1651, a little more than thirty years after he made his home in Jamestown, Virginia. Paul Cuffe (1759-1817), whose father was a free Negro and whose mother was an Indian, edu cated himself and then set out to learn the skills of a shore whaling man. By the early nineteenth cen tury he was a ship captain, the owner of a trading schooner, and a mer chant capitalist. With a portion of the money that he saved from his livelihood he built a meeting house and a school for his community.2 Progress Among Freemen As the nineteenth century un folded, there were other Afro-Amer icans who found acceptance into the life and economy of the nation re gardless of slavery. One of Boston's largest clothing businesses was owned by Thomas B. Dalton, a Ne gro; John Forten, an Afro-American sail-maker in Philadelphia, had a forty-man interracial staff; and John Jones, a Negro in Chicago, devel oped such a prosperous tailoring business that he was worth close to one million dollars at the end of his career. 3 As the biographies of men like Paul Cuffe and John Jones suggest, most of these achievements in the days of slavery were individual efforts, al though some group projects were be gun. The first Negro mutual benefit insurance society was established in Philadelphia in 1787, and was called The Free African Society. Member ship cost 16¢ per week and benefits after a year were 57¢ per week. Af terwards came Philadelphia's Afri can Insurance Company in 1810.

At the onset of the Civil War, Ne gro businesses primarily provided 42 THE FREEMAN January personal services, and for awhile af ter the War these businesses contin ued to prosper. There were Negro laundries, secretarial schools, buggy factories, confectioners, livery sta bles, undertakers, hair dressers, res taurants, boarding houses, hotels, catering outfits, coal yards, tailor and barber shops, cleaning and dyeing establishments and carpet making and construction enter prises. A significant figure in the pe riod was Madame C. J. Walker (1867-1919), whose invention and manufacture of hair preparations made her America's richest Negro woman. PostWar Setbacks Post-Civil War industrialization and the enlargement of capitalism pushed the Negro out of the higher ranks of labor and even out of some of the personal service enterprises which had been his. In addition, though the Negro was gaining in farm ownership, the unscientific ag ricultural system in the South pro duced failures which impelled him to leave the land and to migrate to cities in the North and Midwest. This migration brought an increase in economic rivalry, labor discrimina tion and racial unrest. As a result, The Freedmen's Bank, a project of white philanthropists designed to give ex-slaves the means to purchase property, failed in 1873.

Clearly the post-Civil War Negro was facing incredible barriers against advancement. Most ex slaves lacked schooling and employ ment, and those who had jobs re ceived such low wages that they were unable to gather investment capital. They were, in truth, "the last hired and the first fired."4 Furthermore, there were laws restricting the col ored man's ability to own property, to use public facilities and to get re dress of grievances in the courts. Ne gro businessmen, excluded from the leading trade associations, were left to cater to an impoverished market. Into this atmosphere of unreason able confinement stepped the Negro churches and fraternal societies. Mi nority preachers and teachers began to encourage ex-slaves to become self-confident, to adopt an aggres sive but Christian attitude toward race relations, and to cooperate with one another in the establishment of new businesses.

Insurance Companies The surge toward cooperation led the fraternal orders and lodges to stimulate the creation of the first significant Negro insurance compa nies. In 1881 the "True Reformers" insurance company was organized in Richmond, Virginia. The True Re formers Bank was added to this en terprise, soon after the first Negro savings bank, Capital Savings, opened its doors in Washington on October 17, 1888. The True Reform1985 THE NEGRO AND FREE ENTERPRISE 43 ers organization was so solid that it managed to weather the economic traumas of 1893, and by 1900 it in sured 50,000. Moreover, it main tained ownership of a newspaper, a home for the aged, a hotel, several grocery and merchandise stores, and a real estate department with a handsome amount of property. 5 .By 1905 twelve banks had been opened by colored people, and the largest Afro-American insurance companies had been formed. The in surance firm which inspired the greatest faith in the future of Negro free enterprise was North Carolina Mutual.

In 1898, Dr. Charles Clinton Spaulding, a grocer, John Merrick, the barber to the head of the Amer ican Tobacco Company, and Dr. A. M. Moore, another barber, formed the North Carolina Mutual and Provi dence Association. This association was to become the biggest minority enterprise in the nation and gave impetus to the formation of numer ous other companies. Among these companies was At lanta Life, the second-ranked Negro insurance company, founded by Alonzo F. Herndon. Like Merrick and Moore, Herndon was a barber, and the owner of one of the most pros perous shops in the country. A third important firm was Liberty Life in Chicago, parented by Frank L. Gil lespie. Gillespie was so enthusiastic about his work that he secured the authority to sell $100,000 in stock for Liberty Life, then sold $300,000 in stock in just sixteen months. As one of the insurance men said in this era, there was a "missionary spirit"

among educated young Negroes about going into business. 6 Booker T. Washington Assuredly some of this missionary spirit was attributable to the Negro preachers. Some was also due to the work of Booker T. Washington, a po litical and social theorist who dom inated the thinking of Negro busi nessmen at the turn of the century. Washington felt that colored people could seek economic integration with white people, while giving up social integration. He promoted college training, "thrift and capital accu mulation,"7 economic opportunism and self-reliance. Ultimately his be liefs motivated him to organize the National Negro Business League. Washington's influence was so widespread that, by 1915, there were 600 chapters of the League, and he could point with pride to the steps that had been taken in the right di rection. He wrote, "Recently there was organized in Indian territory a company for owning and operating oil wells. In Jacksonville a company of colored men built and conducted a street railway. In Nashville a com pany has been organized to run a line of automobiles in opposition to the street railway company of that city.

44 THE FREEMAN January Since 1906 no less than 15 banks have been organized in different parts of the country. A large number of grocery and dry goods stores have been organized and conducted as joint stock companies."8 This mo mentum, coupled with the economic stimulation brought about by World War I, effectively generated the "Gilded Age of Negro Business" in the 1920s. Negro Business in the 1920s By 1924 there were 65,000 colored businesses with an aggregate wealth of $1,700,000,000. 9 New corpora tions proliferated, and their num bers included an oil company, a stock exchange, a steamship line and a fi nance association. Heman Perry, a Negro entrepreneur, built a mag nificent financial empire made up of banks and real estate development companies, as well as farming, fuel, construction and engineering firms. 10 Perry's business pyramid eventu ally collapsed due to overextension of his resources, but other firms sur vived difficulties by merging. Harry Pace of Northeastern Life in New Jersey, Earl B. Dickerson of Su preme Life and Casualty in Ohio, and Truman K. Gibson Sr., the Har vard graduate who began Liberty Life in Chicago, brought their en terprises together. They created Su preme Liberty Life of Chicago, which supplanted Atlanta Life as the second most profitable Negro business on the globe.

While the larger businesses im proved their financial status, indi vidual businessmen also prospered. Robert Goode built a fine Negro summer resort, and Edward Brand ford set up one of the most promi nent advertising agencies on the East CoastY The reason for the triumph of individual Negroes like Brandford and Goode over great odds was given by Paul E. Johnson, the manufacturer of Universal Physical Therapy Equipment for hospitals and physicians. Johnson declared, "I reject the dictum that color alone is ample to prevent patronage being secured from other racial groups pro viding merit is built into the prod ucts or services that are offered for sale. Such has been my experience in life."12 The ability of the colored busi nessman to gain mastery through merit was the primary source of his survival during the Depression. It was significant that only two Negro insurance companies failed during the lean years. In addition, there were many Negro intellectuals who spoke to the rank and file in oppo sition to a welfare economy. James H. Hubert, colored journalist, de nounced Negro farmers who de clared that their land was too sub standard to provide income. Hubert noted that his father had been al lowed to buy land in Georgia only be1985 THE NEGRO AND FREE ENTERPRISE 45 cause he purchased property so in fertile that no white person wanted it. It was only by virtue of his fath er's unstinting labor that the farm became one of the most-sought-after in the state.

James Hubert's conclusion, drawn from personal history, was that eco nomic security gleaned from an out side source was not a desirable goal. "The road to success," he observed, "is not always the road most dotted with service stations. Permanent se curity still seems to come to him who can do that which most people can not do, or can do very much better."13 As an example of this principle of "equality inspired by quality," Hu bert told the story of John Miller of Georgetown, Kentucky, the mer chant who attracted a 75 per cent white trade by selling products su perior to those of his competitors. Faith in Free Enterprise It was their faith in the effective ness offree enterprise and hard work that brought Miller, Hubert and oth ers through the Depression and World War II unconquered. By the late 1940s the colored man still fought the battle of retail competi tion with chain stores and mass marketing organizations, and he did not cease to have the problem of se curing credit. But his insurance companies, banks, real estate firms and cosmetic manufacturing plants continued to grow. Afro-American publishing flourished, particularly when John J. Johnson organized The Johnson Publishing Company, Inc., soon to be the third largest Negro business in the country.

From 1900 to the 1940s, the Negro population increased 46 per cent, while the number of Negro-owned businesses rose 116 per cent. 14 The high growth rate was collective, yet the source of the ascendancy was in indi vidual effort: that is, in singular men putting education, experience and energy above racial distinctions. For instance, designer Robert S. Blackburn, the developer of plastic books for children and other edu cational toys, said that he reached his professional goals by going after what he wanted without antici pating discrimination. While job hunting in New York he interviewed many personnel managers to ask what the chances were for his at tainment of a responsible position in their companies. When he finally found a firm which promised pro motion in spite of race, he accepted a job as a guard and worked his way up to designer. IS At mid-century Negro business was still small business, but its ac complishments were admirable con sidering the odds against it. Dis criminatory employment practices continued, and Afro-Americans still encountered problems in cultivating the general market; the only colored bank in the Federal Reserve System 46 THE FREEMAN January was Citizens Trust Company of At lanta. 16 In spite of obstacles, how ever, Negro purchasing power rose to $17% billion in 1954, having in creased 250 per cent since the early 1940s. 17 The 60 leading Negro insur ance companies had assets of $137,708,766, with over $20 million in first mortgage loans. 18 The fitness of the leading firms at tracted the interest of professional men who had money to invest. In 1965 a group of doctors, lawyers and dentists in Chicago established a bank surrounded by the first Negro built shopping center, a project which covered four acres. Also in Chicago in the 60s, a multi-million dollar car wash complex was built by colored people. And S. B. Fuller, the international Negro industrialist and publisher, covered an entire city block with his mammoth depart ment store, food mart and office building .19 In ,Chicago and beyond, some in roads were made into the general market by Parker House Sausage Company and Fuller products. The majority of Negro businessmen looked with favor upon attempts to integrate with the larger economy of the nation because, as Earl B. Dick erson put it, "Corporations have no color or complexion. We must get into the mainstream." Unless we do, "we cannot be free-economically or otherwise."20 Today the field of progress has been virtually won. Only a quarter of a century after the time that Spauld ing, the president of North Carolina Mutual, was prevented from pur chasing a soft drink at a stand in his own twelve-story building, North Carolina Mutual proclaimed assets of over a billion dollars 21 and re mained the largest Negro-owned business in the world. Afro-Ameri can firms have proved themselves in the corporate field, have entered trade associations, ~nd have made advances in mass retailing, manu facturing and wholesaling.

Successful Blacks The encyclopedia volume, 1,000 Successful Blacks,22 lists over 150 executives and owners of thriving businesses. Negro-owned enter prises include airlines, machinery leasing corporations, land develop ment companies, mortgage and investment companies, certified public accounting firms, an employ ment bureau for executives, mar keting and management consulting companies, computer operations firms, plastics manufacturing com panies, advertising agencies, con sulting engineers and so on. In addition, in the mid-1970s there were 72 Afro-American board mem bers of corporations such as IBM and General Motors. There were also nu merous Afro-American corporate ex ecutives in companies like Atlantic Richfield, General Foods, Chase 1985 THE NEGRO AND FREE ENTERPRISE 47 Manhattan Bank and Johnson Prod ucts Company.23 Other examples of integration into the mainstream are significant. Ad vertising men such as Vincent T.

Cullers hold accounts of major cor porations, including Sears Roebuck, Bristol-Myers, and Bell Telephone. Willie L. Daniels began the first Ne gro firm to become a member of the New York Stock Exchange. Negro Clarence C. Finley is executive vice president of Burlington House Prod ucts Group. E. Frederic Morrow, a vice-president of Bank of America, the world's largest bank, was the first colored man to become a White House aide when he was appointed to President Eisenhower's staff. Morrow has also served as a public relations analyst for Columbia Broadcasting System. George An thony Moore was the first of his race to become a producer and director of a United States television station. It is probably through the influ ence of these aspiring Negroes that the majority of Afro-Americans are moving into the middle class. In 1973 over 50 per cent of the black popu lation in the North earned more than $8,000 annually, and in the South over half made $6,000 per year. 24 There has been over a hundred per cent increase during the last ten years in the numbers of Negro col lege students, managers, officials, business owners, and professional and technical people.

Individual Advancement Clearly the Negro has advanced individually, and, owing to individ ual advancement, as a race. The col ored man's energetic functioning in the free enterprise system has been an indicator of his developing status, and an aid to his progress socially and politically. Furthermore, as each singular Afro-American entrepre neur has risen above his circum stances, he has extended the signif icance and reality of democratic principles in the United States. Undoubtedly, when each of these men is accepted on his own merits rather than as part of a group, the nation will be freed from the be trayal of democracy inherent in race prejudice. Bigotry is the main weapon of oppression. Meanwhile, freedom and humanity are compa triots in the democratic cause; if one exists, so will the other also, in an atmosphere of cooperation and de veloping excellence. The essence of the victory won by Negro individualism and enterprise is revealed in the achievements of Paul R. Williams, one of the first Ne gro architects in the country. Wil liams was noted for designing more than 3,000 elegant homes, hospitals and government buildings. He con tended that one of the reasons for his pre-eminence in his work was a fierce desire to prove himself in spite ofjob discrimination and institutionalized bias. When he was forced to ride in 48 THE FREEMAN Jim Crow cars he became committed to presenting evidence that he "as an individual deserved a place in the world."25 He concluded, "We march forward singly, not as a race. Deal with me, and with the other men and women of my race, as individual problems, not as a race problem, and the race problem will soon cease to exist!" I -FOOTNOTESlAlain Locke, The Negro in America, The Reading with a Purpose Series, #68 (American Library Association, 1933) p. 19.

2Roger Butterfield, "Search for a Black Past," Life 65 (November 22,1968) p. 92. 3"The Negro in Business," Ebony XVIII (Sep tember 1963) p. 212. 4lbid. 5W. E. B. Du Bois, "Possibilities of the Negro: Advance Guard of the Race," The Booklouers Magazine II (June 1903) p. 5. 6Ebony, p. 215. 70p cit., p. 214. 80p cit., pp. 214-215. 9C. C. Spaulding, 50 Years of Progress in Business (Pittsburgh Courier, 1950) p. 4. l°Ebony, pp. 215-216. llNimrod B. Allen, "He Built His Own Re sort," Opportunity XVII (May 1939) pp. 144 145. Individual Freedom Marjorie Greene, "The Story of Edward Brandford," Opportunity XXV (April-June 1947)pp. 108-109, 127. 12Kappa Alpha Psi Guide Right Commission, Exhibit on Negro Vocational Merit, 1941. 13James Hubert, "The Public Speaks, New Frontiers for the Negro," Flash! II (November 15, 1938) p. 24. 14Spau lding, p. 4. 15Catherine G. Otis, "Off the Beaten Track," Opportunity XXV (April-June 1947) pp. 57-58.

16Ebony, p. 218. 17J. A. Rogers, 100 Amzing Facts About the Negro, 23rd Rev. Ed. (Futuro Press, Inc., New York 1957) p. 45. 18 M. C. Clarke, 50 Years of Progress in In surance (Pittsburgh Courier, 1950) pp. 6-7. 19LewisA. H. Caldwell and A. L. Foster, Chi cago City ofProgress and Opportunity (Chicago Cosmopolitan Chamber of Commerce, 1963 64), p. 94. 2°Ebony, p. 218. 2lEdgar A. Toppin, A Biographical History of Blacks in America (David McKay Co., Inc., New York, 1970), p. 415. 22Charles L. Sanders, Ed., The Ebony Success Library I (Johnson Publishing Company, Inc., Nashville, Tennessee, 1973), 341 pages. 23Sanders, Ed., and Reprint from Time, "America's Rising Black Middle Class," Read er's Digest 105 (October 1974), p. 145. 24lbid. 25Paul Williams, "I Am a Negro," The Amer ican Magazine CXXIV (July 1937), p. 161. IDEAS ON LIBERTY To sustain the individual freedom of action contemplated by the Con stitution is not to strike down the common good, but to exalt it; for surely the good of society as a whole cannot be better served than by the pres ervation against arbitrary restraint of the liberties of its constituent members.

JUSTICE GEORGE SUTHERLAND Hans R Sennholz Employer of Last Resort DURING the 1984-85 school year American high school debaters have been weighing an important resol ution: Resolved: That the federal gov ernment should provide employ ment for all employable United States citizens living in poverty. On the affirmative side students are expected to argue that the federal government shall strive to abolish poverty and, if necessary, act as em ployer of last resort; on the negative side they are likely to oppose the use of government for such ends. High school students at last are catching up with the political debate that has animated their elders since Dr. Hans Sennholz heads the Department of Econom ics at Grove City College in Pennsylvania. He is a noted writer and lecturer on economic, political and monetary affairs. the first New Deal. In 1935, Presi dent Franklin D. Roosevelt proposed to make the federal government the employer of last resort, proclaiming that "one third" of the American people were "underfed, under clothed, and underhoused." Thirty years later, President Lyndon B.