The Battle That Raged

Rely on white philanthropy, or create our own resources?

[Reprinted from Issues & Views Fall 1996]

It is hard to believe that at one time vast numbers of American blacks insisted on creating wealth under their own steam. Such blacks were fiercely opposed to those who urged the expedient path of integration into white institutions. A demonstration of this determined self-reliance was the movement, from the late 19th century into the 1940s, to establish banks.

These banks provided capital to farmers and business entrepreneurs, as well as mortgage loans to home buyers. Below is an excerpt from "BANKING PIONEERS," that appeared in the Fall 1996 edition of Issues & Views. For the complete article (with photos and graphics, about 90k), click here.

Self-Help Takes a Back Seat

The opening of the Tri-State Bank, in 1947, did not represent a renewal of an entrepreneurial spirit. Regrettably, the former drive and "indomitable will" was being redirected elsewhere, as blacks turned away from business initiation. During this period, black newspapers reported on business meetings and conventions, where speakers tried to paint a rosy picture of the future. However, the prospect for black business was not a rosy one. In spite of optimistic rhetoric by the diehard faithful, it was clear that the momentum for economic development was waning.

Something else also was becoming clear. Of two prevailing, but opposing points of view, that once vied for the allegiance of blacks, one was fading into the past with memories of the Depression, and one was emerging and taking firm hold. In the life of a man like George W. Lee of Memphis, we get to focus on these two powerful forces that once battled for the attention and even loyalty of the black masses.

During the 1920s, Lee was among those who emphasized group consciousness in economics as a necessity for winning economic independence from whites--a philosophy generally identified as "self-help." Lee was a successful insurance executive and a proud businessman. His path crossed with a Rev. Sutton Griggs, who epitomized those blacks who were aggressively pursuing integration, which was seen as the most practical road to progress. Griggs was one of the earlier concocters of visionary (sometimes crackpot) social programs intended to solve the "race problem," which were outlined in several books he authored. Along with other black church ministers, he formed something called the "Inter-Racial League," which, of course, turned out to have an all-black membership. (Some satirized it as the "lily-black inter-racial league.") Griggs and his cohorts were accused of courting white approval and philanthropy, especially philanthropy.

George Lee was mortified by those blacks who sought after what he called "patronizing white generosity," and claimed that Sutton "sought only to win white funds and friends." Lee blamed the weaknesses of the race's economic and social position on "interracial back door diplomats" and "pussyfoots" like Griggs. In a journal article by David Tucker, "Black Pride and Negro Business in the 1920s," Lee is described as adamantly opposed to Griggs and his integrationist philosophy. Tucker writes, "George Lee feared the Reverend and his League conceded too much in seeking white sympathy." Lee complained about the race being "burdened" with "40,000 ministers," who were busily teaching blacks to depend on God, while little if anything was being done "to teach the Negro to depend on himself."

The only means of winning the approval of the white community and advancing the cause of the race, insisted Lee, was "an intelligent exercise of citizenship rights, buying homes, buying farms, building businesses, and producing wealth." He claimed that if problem-solvers such as Griggs, and other "inter-racial exponents," would simply leave Negro businessmen alone, the race could develop its own community and help to "make the south blossom like a rose."

Businessmen in the Vanguard

And even when black businesses in Memphis suffered serious setbacks after the failure of the Fraternal and Solvent Savings Bank, due to dishonest bank officers, Lee kept the faith. Could Memphis Negroes, who he considered the most advanced in the South, turn back? Never. "We must step forward and build upon the ashes of the ruins. To turn back means disintegration and economic slavery." The day the doors were shut at the Solvent Bank, Lee was already up and eager to establish a new bank. What should the black man do? he rhetorically asked. He must do as the white man, that is, send his criminals to jail, and then build anew. "Crookedness is not a racial trait," he declared. "Main Street has been sending her white crooks to the penitentiary for years. Beale Street must do the same and then march on with confidence in our race and in our God."

Tucker describes Lee as an outstanding example of that era's spirit of self-help and writes, "Negro capitalists of the 1920s did much more than seek personal gain; providing, as they did, the real cutting edge of Negro protest. In Memphis, the businessmen contributed the most aggressive local leadership, and provided a militant philosophy of black pride." Allan Spear, in Black Chicago, adds, "The doctrine of self-help, although prominent in the development of Negro social service institutions, was above all a business philosophy. Its leading exponents were businessmen and it constantly emphasized the importance of Negro business enterprises in increasing the affluence and self-respect of the Negro community."

Men like George Lee, Robert H. Boyd, and Richard R. Wright often used the term "progressive" in describing themselves and others who shared their views. For them, the term was tied to particular notions about the advancement of blacks. Those who failed to understand the central role of money and the need for wealth accumulation, to bring about greater freedom, were looked upon by these men as backward thinkers, or "unprogressive." A progressive was one who worked at creating capital. For many years, battles like the one between George Lee and Sutton Griggs were commonplace in black communities around the country.

An Era Ends

By 1944, there was not one black-owned bank in Chicago. A Defender editorial entitled, "We Need Banks," lamented the fact that in Chicago, "with approximately 300,000 Negroes, there is not a single bank owned by them." . . . The writer rejected excuses about bank failures during the Depression. "But didn't this happen to big white institutions all over the country?" he queried. After all, there were now banking laws to provide greater protection. White businessmen had the courage to reinvest and bounce back, he claimed. "And all we do is groan and complain because other racial groups with more money for capital move into our areas and gobble up opportunities for new ventures. . . . We have the men with money; there is certainly the need. There is only one question. Do our men with means have the courage, imagination and vision to pool their resources to create this necessary institution?"

The consequences of the Depression made it harder for the proponents of self-help to make their case. What chance did they now stand against those who were urging blacks to cease initiating their own ventures and work for further integration into white institutions? In an interview, the late writer Vincent Baker, who had actively participated in the civil rights movement, reflected on the Depression as a turning point.

He claimed that, as New Deal policies were put into effect to cope with the devastation caused by the Depression, this increased the role of government in the life of the average person. Gradually the American mindset began to adapt to this growing presence in their lives. The new circumstances proved especially injurious to blacks, since there were now no leaders to signal an alarm and warn of the inevitable increased dependence on whites. If anything, said Baker, the projected agendas and policies being drawn up in Washington fit right in with the preachments of the leaders who began to emerge in the 1940s.

One legacy of the 1930s' catastrophe was a defeatism which grew among the most influential blacks. This defeatist spirit was augmented by a growing band of black "intellectuals," who publicly disparaged self-help efforts. In the pages of their academic publications, they made fun of the small black businesses that once dotted the landscape of every black community, and found no virtue in them. "Puny" was a favorite term these elites liked to apply, when comparing black efforts to the mammoth Sears Roebuck or Ford Motor Company. The leading black sociologist of the time, E. Franklin Frazier, led the assault on the entrepreneurial past, and downplayed the importance of black business, because, as he claimed, "the profits of these enterprises did not compare to those of large-scale corporations in America."

It now became fashionable to deride the teachings of people like Booker T. Washington and the Tuskegee elders. In fact, such teachings were soon wiped clear from the history textbooks. This educated, intellectual class of blacks now taught that "the poor have no bootstraps," thus reinforcing notions that leaders in an earlier age vigorously fought against. David Tucker captured the truth when he wrote in 1969, "Black capitalism suffered a drastic loss of prestige in the 1930s when the economic depression led the race intellectuals to initiate an anti-business tradition which has continued into the present."

Issues that once were debated among blacks were no longer open for debate. Now the advocates of economic independence were downgraded and ostracized, while integrationist forces, subsidized by wealthy whites, grew stronger. The era of the NAACP had begun.

Men like William Pettiford, John Whitelaw Lewis, Jesse Binga and Richard R. Wright proved their mettle by their willingness to become active participants in America's economic system, while providing the resources for thousands of blacks to uplift their families out of the reaches of poverty.

To learn more about this early conflict over economics, and the outside influences that eventually drove blacks to opt for integration over economic independence, read Tony Brown's book, BLACK LIES, WHITE LIES.

Copyright 1996 Issues & Views