W. E. B. (William Edward Burghardt) Du Bois.

Economic co-operation among Negro Americans. Report of a social study made by Atlanta University under the patronage of the Carnegie Institution of Washington, D.C. together with the proceedings of the 12th Conference for the Study of the Negro Problems, held at Atlanta University, on Tuesday, May t online

. (page 18 of 22)
Online LibraryW. E. B. (William Edward Burghardt) Du BoisEconomic co-operation among Negro Americans. Report of a social study made by Atlanta University under the patronage of the Carnegie Institution of Washington, D.C. together with the proceedings of the 12th Conference for the Study of the Negro Problems, held at Atlanta University, on Tuesday, May t → online text (page 18 of 22)
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1,814 92

61,842 68

14,450 11

14,000 00

440 00

197 82

.$ 104,645 58

This bank was organized in October, 1904, and opened its doors January, 1905,
with total resources of $12,000. January 1, 1906, total resources had increased
to $36,000; January 1, 1907, total resources had increased to over $50,000. I here
with enclose you one of our last statements, which will show you that we now
have total resources of over $100,000.

Your readers will likely recall the stir that was created some mouths ago
because President Roosevelt sought to retain a colored woman, Mrs. Minnie
Cox, as postmistress at Indianola, Miss. So much disturbance was created
that the President finally closed the post office and Mrs. Cox withdrew from
the otfice. In the meantime her husband, Mr. W. W. Cox, was a railway pos
tal clerk. Because of the disturbance Mr. Cox later gave up his position on
the railroad, and for a while both of them lived out of Indianola. Some months

146 Economic Co-operation Among Negro Americans

ago, however, Mr. Cox determined to open a Negro bank in Indianola, and I
can indicate the progress and success of this bank in no better manner than
to quote the following sentences which have just come to me from a reliable
business man in Mississippi:

" Now with reference to Mr. W. W. Cox, of Indianola, Miss., I beg to advise
that no man of color is as highly regarded and respected by the white people
of his town and county as he. It is true that he organized and is cashier of
the Delta Penny Savings Bank, domiciled there. I visited Indianola during
the spring of 1905 and was very much surprised to note the esteem in which he
was held by the bankers and business men (white) of that place. He is a good,
clean man and above the average in intelligence, and knows how to handle
the typical Southern white man. In the last statement furnished by his bank
to the State Auditor, his bank showed total resources of $46,000. He owns and
lives in one of the best resident houses in Indianola, regardless of race, and
located in a part of the town where other colored men seem to be not desired."

Progress Savings Bank, Key West, Fla. Established 1905. Stockholders, 44;
business done in 1906-7, $800; total paid up capital, $450.

This institution commenced with only $50 capital about two years ago. The
death of its principal founder, Mr. J. R. Shackelford, a few months after its
organization greatly retarded its progress. However, there is light ahead.

Southern Bank, Jackson, Miss.

(Established 11*06)

The bank, though but one year old, is in a prosperous condition, having
earned 22 per cent upon average capital employed. A great deal of good has
been done for the colored people, through this bank by inducing the people to
save their earnings, as will be shown from the following statement as made
to the stockholders.

The Board of Directors ordered that the earnings be retained in the bank
during the present financial panic throughout the country :

Resources Liabilities

Cash... $12,65377 Capital stock $10,<XX) 00

Furniture and fixtures 4,107 43 Dep. Sub. stock 27,693 52

Expense 1;67 77 Savings deposits 11,369 52

Loans and discounts 4,04969 Undivided profits 2,21084

Mortgage loans 21,518 96 Cashier s checks 80 05

1 me from banks 8,06427 Bills payable .10333

Bills receivable. . . 95 00

Total $51,45689 Total $51,45689

American Trust and Savings Bank, of Jackson, Miss., which I have the
pleasure to represent, opened its doors about two years ago with a paid up
capita] of only $2,700 and deposits of only $41,000

This same bank that had such a small beginning in two years time earned
23 per cent dividend for the first year, and thereby startled the Mississippi
banking world, while the Xegro bankers sat back wreathed with smiles of joy,
and the second year this same little bank earned 28.8 per cent; paid to its
stockholders on the fifth day of last February, 20 per cent dividends in cash
and placed 8.8 per cent to surplus, after paying all expenses for the year which
was the largest dividend earned and paid in the State of Mississippi, where
Mr. Vardaman wields the scepter of state and sometimes shapes the destinies
of men. And, now in its third year s work, the American Trust and Savings
Bank has already earned, since February 5th (which marks the beginning of

Banks 147

its third fiscal year), the year being only half gone and the capital much
larger on which to earn this year than last, 12 per cent after paying all ex
penses. *

The Knights of Honor of the World Savings Bank was organized in 1902, and
was domiciled at Vicksburg, Miss., being the pioneer bank of the State; in
1903, it was decided to change the location to Greenville, Miss., which was done,
the Lincoln Savings Bank succeeding it at Vicksburg

The Knights of Honor Bank is capitalized at $10,000, with nearly one-half of
the stock paid in ; we have a deposit account of nearly $13,000, there being a
greater demand just at this season for cash than for deposit slips. Our busi
ness is, as I am told, like most institutions working on a small capital, con
fined principally to chattel mortgages and short loans, they being a source of
greater revenue and quicker returns, t

People s Bank and Trust Co., Muskogee, I. T. Established 1906. Stockhold
ers, 14; 200 acres of land and several lots in Indian Territory.

Penny Savings Bank, Columbus, Miss.

Statement of the Penny Savings Bank of Columbus, Miss., Oct. 10, 1907

Capital Stock, $10,000
Resources Liabilities

Loans and discounts on person- Capital paid in $ 1,920 00

al endorsements, real estate or Undivided profits 23396

collateral securities $ 6,08253 Individual deposits subject to

Overdrafts secured 7170 check 7,12405

Furniture and fixtures 1,08500 Time certificates of deposit 1,71624

Expenses 21628 Cashier s checks 282 00

Sight exchange 61)2 50

Cash on hand 3,128 24

Total $11,27625 Total $11,27625

Of the above amount of loans and discounts

To officers of the bank $514 70

To directors of the bank 240 00

To stockholders of the bank 473 45

The Forsyth Savings and Trust Co., Winston- Salem, N. C.

(Established 1907)

We have done a business of more than $75,000 since we opened in May of this
year (1907). Total paid up capital, $1,354; capital subscribed, $10,000, to be paid
in ten annual installments.

This movement originated with Prof. S. G. Atkins. A temporary organiza
tion was formed in 1906, January. We tried various plans to raise the money
necessary to open a bank under State laws. Finally we appealed to Hon. J. C.
Buxton, State Senator from this county, who secured a special act from the
General Assembly of North Carolina in January, 1907. We elected officers in
February, 1907, and opened our doors for business May 11,1907.



Loans and discounts

Fixtures, furniture, etc

Cash due from other banks

In safe in office

Other cash ...

Total $ 10,274 87

* National Negro Business League, 1906, pp. 180-1.
{National Negro Business League, 1906, p. 174.


Economic Co-operation Among Negro Americans


Cash capital 1,354 00

Time deposits 4,297 45

Deposits subject to check 2,547 77

Bills payable 2,000 00

Undivided profits 75 65


FROM MAY 11, TO DEC. 24, 1904:

Total receipts from all sources.
Paid out for all purposes :

$ 10,274 87

47,423 79

44,157 67

Volume of business.

Earnings from real estate loans

Earnings from all other sources

$91,581 46

$ 173 01
. 211 88

Total earnings

$ 384 89



Interest on time deposits. ..


Recording papers

Printing and Ads

Supplies and sundries


Total expense

Balance from earnings


.$ 148 29

. 55 50
26 09
21 93

. 14 50
15 09

. 22 99
4 85

$ 309 24

75 65

G. U. O. Galilean Fishermen Consolidated Bank, Hampton, Va.

Report of the condition of the Grand United Order of Galilean Fishermen Consoli
dated Bank, at the close of business on the 22d day of August, 1907:


Loans and discounts


Other real estate

Furniture and fixtures

Checks and other cash items. . . .

Due from National banks

Due from State banks and pri
vate bankers

Specie, nickels and cents

Paper currency


Capital stock paid in $ 8,695 79

Undivided profits, less amount
paid for interest, expenses and

taxes 233 14

Dividends unpaid 13 32

Individual deposits subject to

check 21,45600

Bills payable 3,000 00


$33,398 31

Authorized capital stock

Total .

$33,398 31


St. Luke Penny Savings Bank, Richmond, Va.



Loans and discounts

Stocks, bonds and mortgages

Banking house

Furniture and fixtures

Exchanges for clearing house . .

Due from National banks

Due from State banks and pri
vate bankers

Specie, nickels and cents

Paper currency

All other items of resources,


.$20,987 69
. 5,(KX) 00
. 28,000 00
. 3,798 73
265 47
4,838 06

100 (X)
5,942 45
3,641 00

3,305 90
.$76,839 30


Capital stock paid in $20,147 03

Surplus fund 3,500 00

Undivided profits, less amount
paid for interest, expenses and

taxes 2,488 00

Dividends unpaid 15 50

Individual deposits subject to

check 19,380 22

Demand certificates of deposit

Time certificates of deposit 81,308 55

Bills payable

All other items of liability


$76,839 80

The Union Savings Bank, Vicksburg, Miss.

Stockholders, 100; business 1906, $250,000; 1907, $300,576.45 ; total paid up capi
tal, $10,000.

Co-operative Business 149

Resources Liabilities

Loans and discounts $42,01060 Oanital and snmlim u w o

Overdrafts secured 2 05 46 Undivided promts $280

rash on hand* flXtUr6S fi SS 21 Individual deposits . . \ " .: \ \ . . \ ! . 86,876 i

n oana 5,774 41 Time deposits 10,892 91

Bills payable 2,775 00

Unpaid dividends 28 08

Cashier s checks 50 00

Total $ 49,999 14 Total $49,999 14

The Capital City Savings Bank, Little Rock, Ark.

(Established 1903)

We are lending money to the Negro men of the city ; we are securing them
credit and accommodation with wholesale houses which they never enjoyed
before. We are redeeming homes for many Negroes who, in a measure, had
lost them. At the close of 1905 the entire loss of the first year had been
covered, and a dividend of 4% per cent declared. Our growth has not been
anything like phenomenal, but steady and firm. At the close of business, in
1903, our deposits were $12,000; 1904, $20,000; 1905, $27,000; July 31, 1906, $45,000.

We started out with one salaried employee, we now have five. The Insur
ance Department, within less than two years, had passed through the bank
$20,000, and besides, serving as a financial adjunct to the bank, furnishes em
ployment to 120 young Negroes. Salaries range from $6 to $20 per week.

Summing up the whole thing in a nutshell, get up and hustle, some money
and the co-operation of those interested, have made our bank a success.*

There are, then, in the United States forty-one Negro banks; twenty-
seven of these have a capital of $506,778 paid in ; twenty-five have
$1,387,429 on deposit, and the total resources of twenty-seven of the
banks are $1,197,005.

Section 15. Cooperative Business

The history of co-operative business among Negroes is long and inter
esting. To some it is simply a record of failure, just as similar attempts
were for so longa time among whites in France, England and America.
Just as in the case of these latter groups, however, failure was but edu
cation for growing success in certain limited directions, so among
Negroes we can already see the education of failure beginning to tell.

How co-operation began in church, school and beneficial society, we
have already seen. During slavery a kind of quasi co-operation was
the buying of freedom by slaves or their relatives. In Cincinnati, for

In 1835 there were in Cincinnati, the center of the colored population in
Ohio, 2,500 colored people of this number, 1,195 had once been slaves, and had
gained their freedom by purchase, manumission or escape; 476 had bought
their freedom at an expense of $215,522.04, making the average price of each
person $452.77. Some had earned their purchase money while still in slavery
by working Sundays, cultivating a little patch of ground which had been
allowed them by their masters, and by hoarding the small gifts which would
from time to time be given the slaves. Sometimes an indulgent master would
allow a favorite slave to buy his time ; he would then hire himself on a neigh-

* National Negro Business League, 190(5, pp. 185-6.

150 Economic Co-operation Among Negro Americans

boring plantation, making some profit by the transaction. Others were per
mitted to go North, where they would have more opportunity to earn money,
and here, by dint of hard work and most exacting economy, they would man
age to collect the price of their liberty. In 1835 there were a large number in
Cincinnati thus working out their freedom, the masters retaining their "free
papers" for security. One woman paid for herself $400, and then earned
enough to buy a little home valued at |600, every dollar earned by washing
and ironing. The majority of freedom earners, as soon as their own was paid
for, at once began to work for the freedom of a father, mother, brother or sis
ter, who were still in slavery. Four-fifths of the colored people in that city
had members of their families yet in bondage. Of course, it was only the
kinder and more indulgent masters who would allow slaves to work their
freedom. *

We can best see the state of co-operative business among the Negroes
by studying the experience of a single city, and then turning to a more
general survey.

Baltimore +

From the testimony of many persons, the colored people of Baltimore appear
to have been actively engaged in all manner of business ventures even before
the Civil War. These ante-bellum enterprises were carried on generally by
individual ownership. But immediately after the Civil War, numerous co
operative movements sprang up among the people all over the city. Co
operative grocery stores, coal yards, beneficial societies and other kinds of
business met with marked success for short periods, but each one in its turn
finally failed owing either to lack of capital or trained business management
or both. The experience of these earlier business undertakings, like that of
the later ones, seems to show that the patronage of the colored people, both as
stockholders and consumers, has never been withheld from any business,
launched by colored men, that showed the slightest stability or promised
reasonable values for money expended. Indeed the faith of our people in
standing by co-operative enterprises in face of the signal failures of co-opera
tive undertakings among us here, is most remarkable. And at the present
time, so ready and willing is the support of the masses of the people, that the
most pessimistic would hesitate to say that the dozen or more co-operative
enterprises now doing business will not come through all right. Aside from
two secret orders, the Masons, who own a public hall on North Butaw street,
and the Nazarites, who own one on North Calvert street, and a few charitable
institutions, the only successful business carried on in the past has been by
individuals. Of flourishing establishments of all kinds, conducted by indi
viduals, we have a great many.

Why the individual has succeeded while his co-operative neighbor failed is
not to be answered here. But, that one, in reading the following sketches of
co-operative undertakings, may not marvel that the same causes for failure
are given in nearly every case, we will set forth briefly the cause of these
recurring causes.

The first cause generally assigned for failure is lack of capital. This is cer
tainly a real obstacle and well nigh impossible to be avoided. An organization
on its first legs, so to speak, gets its capital from a people reluctant to part for
a short time with their hard wrought savings, and when the enterprise in the
stress of losses and current demands needs additional aid, its stockholders.,

Hlckok: The Negro in Ohio, pp. 111-112.

t Report by Mr. Mason A. Hawkins of the Baltimore High School.

Co-operative Business 151

becoming panic stricken, refuse to invest more money and thus lose all. It
has been a hard lesson for the colored stockholder to learn, viz: that a non-
paying enterprise might be made prosperous by the addition of more capital.
This, however, is not surprising when one considers the poverty of the stock
holders. He clings every time to what he has.

A second cause is the lack of trained managers and workers. This also is a
real cause, which still obtains, because our small business concerns have not
had time either to graduate persons capable of managing large business or
any large number of trained helpers, and the opportunity is not elsewhere

Of the several causes assigned for failure these are the chief. And they
must continue the causes for some time to come. And yet in spite of these
real causes, I believe that co-operative stores, like those of England, where
the stockholders are taught economy, and co-operative building associations
that will build or remodel dwellings to house poor people comfortably and
cheaply, ought to be possible even now.

One general criticism might be made against all co-operative movements of
the past. That is, the promoters were too anxious to begin business and did
not wait until the stockholders had paid in sufficient money to insure a fair
beginning. Of the enterprises cited below, in no case was there more than 25
per cent of the capital stock available at the opening of the business, and in
the majority of cases it was much less. If the opening of the business could
be delayed until sufficient capital was actually in hand; if this capital could
be held indefinitely and the management placed in the hands of competent
persons, the success of these movements would have been assured. But in
many cases there have been no competent managers. In other cases the
stockholders either ignorantly or otherwise failed to select the best men
available. And in a number of cases, especially is this true of building asso
ciations, the stockholders have withdrawn their money prematurely. Almost
without exception these enterprises, without providing a surplus for increas
ing business, declared exorbitant dividends. It is said in some quarters that
dividends had to be made in order to satisfy the clamor of subscribers of stock.
No doubt this explanation is in part true; but ignorance of sound business
principles is the chief reason for declaring dividends so large and so early in
the history of a company.

There are some people, naturally, who think that the promoters of these
enterprises cheated the people and themselves benefited. Without attempting
to prove the honesty of every promoter some have been dishonest the
causes already assigned, small capital, lack of trained managers, lack of
trained helpers, lack of almost everything that means success, are sufficient
reasons for the failure of co-operative enterprises among us in the past.

Without further comment, I will give such information as has appeared to
me reliable, although in some instances it may seem somewhat indefinite.

Douglass Institute

Prior to the war, the colored people of Baltimore had no place, aside from
the churches in which to hold public entertainments. To meet this need sev
eral colored men, John H. Butler, Simon Smith and Walter Sorrell, formed a
partnership and purchased in 1863 a large three-story brick building on Lex
ington street, near North, and had it converted into a hall. They named it
Douglass Institute, after the grand old man from Maryland. Besides public
entertainments of all sorts, the hall was used as a meeting place for fraternal

152 Economic Co=operation Among Negro Americans

orders. Douglass Institute remained as such for twenty years. It was finally
owned by J. H. Butler. It is now used as an engine house, having been re
modelled for that purpose. During the period of its use as a hall, it was the
scene of many brilliant social gatherings and the home of the old style liter
ary assembly.

The Chesapeake Marine Railway and Dry Dock Co.

The Chesapeake Marine Railway and Dry Dock Co., a company owned and
controlled by colored men, was organized in the year 1865. The company was
capitalized at $40,000. The stock was divided into 8,000 shares at $5 a share.
The corporation lived for a period of eighteen years or from 1865 to about 1883.
The company was for many years very successful.

Causes which brought the corporation into existence are these: The white
laboring classes of Maryland organized a movement to drive all free Negro
labor out of the State. The Negroes had for many years done all the caulking,
a very profitable employment, and also a business for which Baltimore had
become famous. Besides this, they were very successful as stevedores, and
naturally had a large monopoly of the domestic work. The whites tried to
compel the ship yards to discontinue the employment of Negro caulkers. But
the 200 or 360 colored caulkers were the most proficient in the State, conse
quently the owners of ship yards could not afford to take the less competent
\vhite labor. Failing in their effort to get them out of the work by this means
and failing to get a bill passed by the State Legislature, compelling all free
Negroes to leave the State or choose a master, the whites resorted to brute
force. Without police protection the colored men were fast being driven out
of the ship yards by the white mobs that attacked them as they went home
from work, when further attacks of the mob were rendered unnecessary by
the ultimate agreement of the white ship carpenters not to work in any ship
yard where colored caulkers were employed. As there were few or no colored
ship s carpenters, the colored caulkers were thrown out of the yards.
The movement to procure a yard of their own was started by a number of
colored men. Meetings were held throughout the city with the result that
finally $10,000 were raised. Prominent among the promoters of this organiza
tion were: John W. Locks, Isaac Myers, George Meyers, Joseph Thomas,
James Lemmon, Washington Perkins, and John H. Smith, who paid the first
dollar in the organization. Mr. Smith is the only one of the promoters still
living. It is he, who just related to me, with a memory green and full as of
the events of early youth, the remarkable struggle of this early Negro enter

A ship yard, situated at the corner of Philpot and Point street, said to be the
spot where Frederick Douglass sat on a cellar door and studied his spelling
book, owned by N. Muller, was bought for $40,000. The $10,000 already paid for
stock was paid for the property and the balance through a mortgage of $30,000
to Wm. Applegarth on the yard, etc. At the time the yard was bought the
majority of the corporation thought it was fee simple property, but instead
there was a ground rent of $2,000 a year. However, the opinion is, that this
was the only available place.

In the first year of the company s existence, it did a much larger business
than its most sanguine supporters had expected. In its second and third years
it held Government contracts besides many other large contracts. In the
fourth year the Government work was lost to the white caulkers because of
the fact that the colored company could not compete with the whites, the col-

Cooperative Business 153

ored caulkers refusing to work for a lower rate of wages. Nevertheless, busi
ness was prosperous and in rive years the entire mortgage of $30,000 with inter
est at 6 per cent per annum, a bonus of $1,000 a year, which they had agreed to
pay so long as a part of the mortgage was unpaid, $2,000 a year ground rent,
and the wages of from 100 to 200 men earning from $2 to $3.50 per day besides
other expenses, were paid with the help of a small additional loan.

In the sixth year of the company s history, a stock dividend was declared ;
that is, the remaining unsubscribed stock was divided among the stockholders
in proportion to the amount and age of their holdings. There had been sub
scribed and paid in all told $14,000, In the seventh year a 10 per cent dividend
was paid, and for four years thereafter dividends of from 4 to 10 per cent were

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 20 21 22

Online LibraryW. E. B. (William Edward Burghardt) Du BoisEconomic co-operation among Negro Americans. Report of a social study made by Atlanta University under the patronage of the Carnegie Institution of Washington, D.C. together with the proceedings of the 12th Conference for the Study of the Negro Problems, held at Atlanta University, on Tuesday, May t → online text (page 18 of 22)