Business in Black and White

American Presidents and Black Entrepreneurs in the Twentieth Century

Lewis A. Randolph, Robert E. Weems

• Publisher: NYU Press
• Year: 2009
• ISBN:
  9780814795408
• Topic: Geschichte
• Subtopic: Nordamerikanische Geschichte

Business in Black and White provides a panoramic discussion of various initiatives that American presidents have supported to promote black business development in the United States. Many assume that U.S. government interest in promoting black entrepreneurship began with Richard Nixon's establishment of the Office of Minority Business Enterprise (OMBE) in 1969. Drawn from a variety of sources, Robert E. Weems, Jr.'s comprehensive work extends the chronology back to the Coolidge Administration with a compelling discussion of the Commerce Departmen's "Division of Negro Affairs."

Weems deftly illustrates how every administration since Coolidge has addressed the subject of black business development, from campaign promises to initiatives to downright roadblocks. Although the governmen's influence on black business dwindled during the Eisenhower Administration, Weems points out that the subject was reinvigorated during the Kennedy and Johnson Administrations and, in fact, during the early-to-mid 1960s, when "civil rights" included the right to own and operate commercial enterprises. After Nixon's resignation, support for black business development remained intact, though it met resistance and continues to do so even today. As a historical text with contemporary significance, Business in Black and White is an original contribution to the realms of African American history, the American presidency, and American business history.

1
The Origins of the Commerce Department’s Division of Negro Affairs, 1925–1940

It is widely assumed that President Richard Nixon’s black capitalism initiative represented the first time that the U.S. government had expressed any interest in assisting African American entrepreneurs.¹ While Nixon’s domestic agenda for black America received widespread publicity and generated considerable discussion and analysis, the evidence indicates that the government’s interest in promoting black business development actually began during the Coolidge administration. Appropriately, the government agency then in charge of this activity was the Commerce Department. Beginning with the appointment of James A. (“Billboard”) Jackson in November 1927, the Commerce Department’s Division of Negro Affairs established the precedent for later government initiatives to support African American businesspeople.

The origins of the Commerce Department’s interest in Negro affairs appears to have been linked to the political influence of black Chicago businessman Claude A. Barnett. Barnett, born on September 16, 1890, in Sanford, Florida, had a long-standing interest in black business development. When he was an undergraduate at Tuskegee Institute, he reportedly served as Booker T. Washington’s office assistant and was permanently affected by his close association with him. As he later wrote, “It was there [Tuskegee Institute] as a boy I virtually sat at the feet of Booker T. Washington and drank in the magic of his strength, his vision, and matchless wisdom.”² After graduating from Tuskegee, while working full time at the Chicago post office, Barnett organized the Douglass Specialty Company in 1913 as a mail-order firm selling portraits of famous African Americans. Three years later, Barnett was part of a consortium of African American businessmen who established the Chicago-based Kashmir Chemical Company to manufacture and distribute a line of African American personal care products.³ But Barnett’s greatest business accomplishment, which occupied the rest of his life, was his founding of the Associated Negro Press (ANP) in 1919.

Barnett got the idea for the ANP, an African American version of such mainstream wire services as the Associated Press (AP) and United Press International (UPI), while touring the country promoting Kashmir Chemical Company products in 1918. During numerous meetings with black newspaper owners, he observed the need for a wire service that could provide black papers with pertinent news items from across the United States. After returning to Chicago, Barnett immediately approached Robert Abbott, the publisher of the powerful Chicago Defender, for financial and moral support of his national news service proposal. But Abbott, not interested in such a cooperative venture, refused. Undaunted, Barnett asked the Kashmir Chemical Company’s board of directors for start-up funds for the ANP. Because of Barnett’s position in the company, as well as his offer of extensive advertising space to Kashmir Chemical Company products in ANP member newspapers, the Kashmir board voted to give Barnett the funds he needed to start the Associated Negro Press.⁴

Even though Barnett realized his dream of establishing a national black news service, he quickly discovered that maintaining this enterprise would be extremely challenging. To participate in the ANP, member newspapers had to provide both stories and payments each week. While most ANP members regularly submitted local stories that were nationally distributed by the ANP, many members were far less diligent in handing over the weekly fees that helped cover the ANP’s operating costs,⁵ and this prompted Barnett to make a controversial decision. Although during this period many African American newspapers were unabashedly pro-Republican in their coverage of politics, Barnett initially hoped to present the ANP as independent and nonpartisan, but the ANP’s early financial troubles, coupled with the financial and political possibilities associated with openly aligning with the GOP, prompted him to put the ANP at the disposal of the Republican Party.⁶

Although based on monetary and political considerations, Barnett’s decision also was based on personal inclinations. As Barnett noted later in life, the Republican Party of the early twentieth century “was the only one offering anything to Negroes in the form of jobs, public offices, and legislation.”⁷

One apparent manifestation of this fact was the aborted presidency of Warren G. Harding. Although the Harding presidency has traditionally been associated with scandal and disgrace, Harding did appear to have a progressive attitude toward American race relations. For instance, during a speech on October 26, 1921, in Birmingham, Alabama, Harding shocked his southern audience by publicly calling for racial equality in American economic and political life.⁸ Harding’s presidency ended before he could use the power of his office to help bring about the goal articulated in this speech,⁹ but the reverberations of his message helped create a political climate that ultimately benefited Claude A. Barnett and other black entrepreneurs.

By the mid-1920s, because of his promotional efforts on behalf of the GOP, Claude Barnett had personal access to prominent Republican politicians. Accordingly, in November 1925, he used his influence and connections to arrange a meeting with Secretary of Commerce Herbert Hoover to discuss the Commerce Department’s seeming lack of interest in black businesses. As Donald J. Lisio pointed out in his definitive study of Hoover’s relationship with African Americans, before his 1925 meeting with Barnett, Hoover had expressed little sympathy or concern with the plight of African Americans.¹⁰

During their meeting, Barnett and Hoover engaged in a spirited discussion concerning what the Commerce Department was and was not doing for black businesspeople. After Barnett asserted that black entrepreneurs were at the bottom of the economic totem pole because the Commerce Department had done nothing to help them, Hoover countered that the Commerce Department regularly published reports that could benefit black businessmen. When Barnett replied that these Commerce Department publications were not written in a style that blacks could easily understand, Hoover sarcastically retorted that these reports were written in English and asked whether blacks spoke a foreign language. At this point, to keep the meeting from descending into unproductive verbal sparring, Barnett asked Hoover to consider appointing a “Negro information specialist” who would help make Commerce Department publications and services more meaningful and relevant to black businesspeople. Barnett further declared that the National Negro Business League, another prominent African American organization with strong ties to the Republican Party, strongly supported such an appointment. Despite Hoover’s initial indifference to Barnett’s suggestion, he ultimately agreed to make such an appointment if Barnett could find him “the right man.”¹¹

Two relevant external circumstances, along with Barnett’s persuasiveness, prompted Secretary Hoover to consider this proposal. First, as Juliet E. K. Walker and John Sibley Butler observe in their studies of African American business history, the period from 1900 to 1930 could rightly be described as a “golden age” of black business activity. Motivated by a spirit of economic cooperation and coupled with the reality of American apartheid, African American entrepreneurs in a variety of industries were able to establish an impressive number of enterprises.¹² Barnett no doubt referred to these accomplishments while making his case for a Commerce Department “Negro information specialist.”

Even though Ellis W. Hawley’s seminal 1974 essay “Herbert Hoover, the Commerce Secretariat, and the Vision of an ‘Associative State,’ 1921–1928” does not mention Hoover’s relationship with African Americans, it does provide another important clue to why Hoover seriously considered Barnett’s proposal. As secretary of commerce, Hoover tried to form a strong working relationship between the federal government and private-sector groups “designed to energize private or local collectivities and guide them toward constructive solutions to national problems.”¹³

In Hoover’s Commerce Department, one of the principal techniques used to “energize private or local collectivities” was the dissemination of useful information. For instance, Hoover and his Economic Advisory Committee (EAC), which coordinated the September 26, 1921, President’s Conference on Unemployment for the current president, Warren G. Harding, agreed “that the primary role of the national government was to disseminate information, to educate the public so that unemployment could be relieved voluntarily by individual communities.”¹⁴ In fact, according to Joan Hoff Wilson, Hoover’s reason for the President’s Conference on Unemployment and the 250 other major conferences that he organized as secretary of commerce was to “pass on to a relatively uninformed public the expertise of his advisors. His American corporate system depended in the last analysis upon voluntary, decentralized implementation of diverse and individual local programs conforming to the general guidelines set by federal experts.”¹⁵

The administrative priority that Hoover gave to disseminating authoritative information adds another perspective to his meeting with Claude Barnett. Because of the black business community’s impressive growth during the first decades of the twentieth century, the rational Hoover could not deny that this was a constituency that could make even greater gains by using the type of information and education promoted by his department.

In addition, while Hoover enjoyed a great deal of administrative autonomy as secretary of commerce, which coincided with President Calvin Coolidge’s habit of delegating duties to cabinet officers,¹⁶ circumstantial evidence suggests that Coolidge supported Hoover’s decision to consider establishing a special unit for black businesspeople within the Commerce Department.

Although Coolidge earned the nickname “Silent Cal” for, among other things, refusing to comment on the Ku Klux Klan’s infamous August 1925 March on Washington,¹⁷ he did go on record in June 1924 as someone who was aware of and supported black business development. During remarks as Howard University’s commencement speaker, President Coolidge praised not only African Americans’ literacy gains since Emancipation but also their gains in the realm of business ownership.¹⁸

Buoyed by his successful meeting with Secretary Hoover, who had the tacit support of President Coolidge, Barnett began looking for someone to fill this pathbreaking government position. On May 4, 1927, Barnett wrote Secretary Hoover to inform him that “I have the man for the job. He is available now.”¹⁹ Barnett’s designee, James A. Jackson (affectionately known as “Billboard”), subsequently became the first U.S. government official to take an active interest in African American business activity.

Jackson, born on June 20, 1878, in Bellefonte, Pennsylvania, had a varied professional background that included being Chicago’s first African American bank clerk (while employed by the Jennings Trust Company); working for the “Plant Protection” section of the U.S. Military Intelligence Bureau during World War I; and spending six years (1919 to 1925) with the New York–based Billboard magazine as editor of its Negro Department. Besides acquiring the nickname of Billboard during his tenure at Billboard, Jackson also established wide-ranging contacts in the African American community (which served him well in the Commerce Department). While working for Billboard, Jackson also served as the New York correspondent for Claude Barnett’s Associated Negro Press.²⁰ According to Lawrence D. Hogan, an authority on Claude Barnett and the ANP, Barnett recommended Jackson because he hoped to (and did) use Jackson’s position at Commerce to support the ANP directly.²¹

Before Jackson could begin building a new Commerce Department program to provide useful information to black businessmen, he had to subject himself to the sometimes tortuous process associated with securing government employment. Despite his sponsor’s political connections, Jackson, like other aspirants to federal employment, had to take and pass the Civil Service examination.²² Then when Jackson arrived at the Commerce Department on November 15, 1927, to commence his duties, he immediately had to deal with problems regarding the paperwork for his employment.

First, Jackson discovered that the Commerce Department had sent him a letter, which he never received, stating that he should report for work on December 1, 1927, so when Jackson showed up two weeks early, no one seemed prepared (or interested) in meeting with him. As Jackson revealed in a November 15, 1927, letter to Claude Barnett regarding his disastrous first day, “everybody seemed somewhat chagrined at my presence.”²³

After his rather inauspicious debut, Jackson returned on November 17 and met with Gorton James, head of the Domestic Commerce Division of the Commerce Department. James told Jackson that because he (Jackson) was not filling a “routine” appointment, certifying his dossier had proved to be more complicated and drawn out than usual. Nevertheless, James promised Jackson that he would help cut through the red tape by assuming the responsibility of putting Jackson to work immediately (pending the final certification of his application materials). Nonetheless, reflecting Jackson’s “peripheral” status in the Commerce Department, James told Jackson that his office would be in the old Railway Administration Building.²⁴

The next day, Jackson visited his office, room 722 of the old Railway Administration Building, for the first time. His description of this event, which he recounted in a November 18, 1927, letter to Claude Barnett, included the following:

The room was empty save for the things being placed for me. A woman clerk of the statistical service of the Customs bureau had been moved out two weeks ago. While engaged in this moving a messenger learned that a Negro was to occupy the room and was told that “ No, it is not a Negro, but a dark-skinned foreigner is to be placed there.”²⁵

In a city and a federal bureaucracy that practiced racial segr...