Black pride and business

Fighting the good fight

[Reprinted from Issues & Views October 15, 2001]

A Slice of History - When we were colored

Because history is written by those whose doctrines and policies come to prevail, the opposition's creeds are often slighted or ignored. Everyone is familiar with the conventional civil rights orthodoxy that now rules and preaches that blacks are a "special case," whose problems, unlike other groups, can be solved independent of the group members' indigenous economic efforts. In fact, entrepreneurial endeavors undertaken outside the parameters of various forms of government subsidy are not even encouraged. [See "John Goode's Troubles."]

Long before this conviction took hold, in a world where there was no possibility for blacks to engage government as a coercive force in their favor, a great many blacks patterned their entrepreneurial efforts on what they learned by observing successful businesses in the mainstream society. People like S. B. Fuller, who launched his first company in the 1930s, openly challenged the establishment's emphasis on non-economic strategies. In the tumultuous 1960s, Fuller insisted that, above all else, blacks' problems were rooted in their "lack of understanding of the capitalist system." This belief did not originate with Fuller; he was simply following the principles of many black men who had gone before him, who had taken great pride in the commercial advances of their race.

One such businessman was Atlanta's Heman Edward Perry, who, between 1913 and 1925, in partnerships or on his own, created and directed the Standard Life Insurance Company, the Service Realty Company, the Service Engineering and Construction Company, the Service Printing Company, and a host of smaller enterprises, such as laundries and pharmacies.

Since housing was an outstanding problem for Atlanta's black population, Perry focused on this, buying 300 acres of land on which he built hundreds of new homes for black families. In African-American Business Leaders, biographers Ingham and Feldman quote Homer Nash, a black Atlantan, who wrote: "Up to Heman's time, if a Negro wanted a decent home to live in, he waited until some white person wanted to sell his. Then, Perry came along and showed that you didn't have to wait for a white man to die or get ready to sell his house. You can have a new one of your own. So he started building these houses."

And a black plumber, who was employed by Perry recalled, "They'd go out and buy a piece of land, develop it and build homes and sell it to our people. I had a lot of that work, putting plumbing into new homes that they built. And our people started expanding, getting into these new homes."

Of Perry's life insurance company, an Atlanta Journal editorial exulted, "Nothing less than an epoch in the material history of the Southern Negro is comprised in the organization and chartering of Standard Life with H. E. Perry as president. . . . The launching of the company under these particular auspices is nothing less than a milestone in the upward history of the race. It illustrates what the Negro can do for himself."

For years, Perry retained the insurance company's deposits in Atlanta's first black-owned bank, the Atlanta State Savings Bank, that had been founded in 1909. However, as time passed, he decided that Atlanta's blacks could use a full service institution, and in 1918, he initiated stock sales for a new bank. Three years later, the Citizens Trust Bank was born, engaging in commercial banking and savings, offering farm and business loans and a full panoply of banking services.

The bank was an enormous success and by 1923 was the largest black-owned banking institution in the country [for more on early black banks, see "Banking Pioneers"]. It filled a critical need by providing the means for blacks to finance the purchase of homes and obtain capital for establishing and expanding businesses. In 1923, Perry's companies employed over 2,500 people, or about 2% of Atlanta's black population.

Perry had dreams of expanding his businesses far beyond the confines of Atlanta and Georgia. Ingham and Feldman claim that he "envisioned creating nothing less than a self-sufficient national black economy." In the Atlanta Independent newspaper, he is quoted as saying, "I am more convinced every day that the ultimate solution of our problem must rest upon the foundation of nationwide economic development."

The fact that particular blacks like Perry failed at achieving this goal is not as significant as the existence of this prominent self-help theme. Those who viewed commerce as the best tool for progress taught that, if economic enterprise made America work for others, it was the obvious path for blacks to follow.

Later, Perry would learn the hard way how fiercely so many blacks were committed to this philosophy and the degree to which many of them even personally identified with the ongoing success of black business institutions. Due primarily to unwise choices and business decisions on his part, Perry found his mini-empire in financial trouble. Because of the development demands of his realty company, he had drawn on the resources of the secure and stable Standard Life. This company was now put in jeopardy.

In an attempt to stave off further financial decline, Perry grabbed the opportunity to buy one of the most revered black institutions in the country, the Mississippi Life Insurance Company, that had been founded in 1908. By the 1920s, the company was in distress and Perry bought it outright. Officials of Mississippi Life believed in Perry's business acumen and assumed that their company would be combined with his apparently successful Standard Life. Ingham and Feldman claim that Mississippi Life's directors envisioned the creation of an "enormous, impregnable" black life insurance company. Instead, Perry committed what was considered a treachery to the race--he sold Mississippi Life to a white-owned company. That was his plan all along. In his anxiety over losing one or more of his businesses, Perry's earlier commitment to upholding black self-sufficiency fell by the wayside.

The wailing among blacks grew intense as the reality struck home, that what had been the oldest black-owned legal reserve firm in the country had now passed out of the race. Mississippi Life could no longer be counted on as a significant financial resource for blacks--to say nothing of years of their invested pride. As might be expected, the furor was great among the agents and staff of Mississippi Life. George W. Lee, one of the company's top agents (who would go on to become an important business figure in Memphis), was so outraged, he staged a revolt. Ingham and Feldman describe the scene:

Lee announced to the new owners: "We refuse to work for you, we will rather go back to the anvil and the forge, to the work bench, and to the cotton patches of Mississippi." Lee was also bitter in his condemnation of Perry, saying that Nashville whites "had made Perry an unwitting dupe in their scheme to sap the black man's economic strength." When Perry went to Mississippi Life's home office in Memphis after committing what they viewed as an act of racial and financial treason, the company's displaced employees drove him out of town with spit, bottles, and threat of even greater bodily harm.

To angry blacks in other towns and cities, the loss of an enterprise that for years not only had provided vital insurance coverage, but also invaluable training, employment and skills, was viewed as a setback on the road to building independent business institutions.

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