Woodson also highlights the fact that the True Reformers added death insurance to burial insurance so that families would have something to live on after the death of a family member, especially a breadwinner (1929, 209–10).
The organization also supported a savings bank founded in 1887, the Reformers Mercantile and Industrial Association (a chain of stores with annual business of more than $100,000), a weekly newspaper, a 150-room hotel, a home for the elderly, a building-and-loan association, and a real estate department (Du Bois 1907, 103). The True Reformers bank enhanced its reputation in 1893, during the financial panic, by paying all claims made on it (Woodson 1929, 210). Other banks in Richmond did not.
The Independent Order of Saint Luke (discussed in chapter 1) developed along similar lines. It rapidly became more than a mutual-aid society and included a successful insurance company and bank. Under Maggie Lena Walker’s direction, “this order with more experience and better trained workers than those of others overcame the difficulties which worked the undoing of the True Reformers. The Independent Order of St. Luke still carries on its insurance work, operates a printing plant, publishes a newspaper, and conducts a bank” (Woodson 1929, 211; for more details on the Order of Saint Luke, see Barkley Brown 1989).
The North Carolina Mutual Insurance Company was the largest of the state-based, locally owned insurance companies until World War I. It was established in 1903 out of the mutual-aid movement. At its first annual meeting in 1904, at the Colored State Fair in Raleigh, the company’s agents “testified to the powers of racial cooperation” and offered resolutions at sessions open to the public to promote the message of racial solidarity (Weare 1993, 86). It became the largest Negro insurance company in the world (118). The company’s standing was so strong that it qualified as a legal reserve company in 1912–13 with loans from Fidelity Bank in Duke (a White bank that must have believed in its solvency and reliability in order to back those loans) (94). North Carolina Mutual was very involved in the Black community and “formed the heart of a black political economy in Durham” and beyond (182–83; see also Woodson 1929). In 1927, North Carolina Mutual’s president, Charles Clinton Spaulding, worked with the federal government on what would become President Hoover’s “black capitalism” initiative (Weare 1993, 147–48). That same year, Spaulding started the “Durham stock taking and fact finding” conferences. The first conference was attended by well-known African American scholars and leaders, among them W. E. B. Du Bois; R. R. Moton, the president of Tuskegee University; Mordecai Johnson, the president of Howard University; and Asa Philip Randolph, editor of the Messenger and founder of the Brotherhood of Sleeping Car Porters. Weare notes that “Randolph, like Du Bois, recognized that the Mutual spirit stood for race cooperation at least as much as individual entrepreneurship” (152). Spaulding was also influential in the National Negro Business League and took over its leadership after the death of Booker T. Washington, its founder and first president (for more about the NNBL, see chapter 4).
Weare assesses the significance of the North Carolina Mutual Insurance Company. Every success it had was seen as a racial success: buying a policy meant “double protection”—life insurance and Negro employment (96). White rejection actually brought more customers (98), so that, in a way, the company thrived on Black economic marginalization. North Carolina Mutual “stood as an expression of Afro-American thought centering on the doctrine of self-help and racial solidarity” (95). These are some of the same attitudes held by members of African American cooperatives in the twentieth century.
Du Bois’s critique of the insurance company model suggests that some of the businesses were conducted in an “unscientific” way, using “speculation and dishonesty” and depending on lapsed policies for profits (1907, 108–9). On the other hand, they yielded one of the strongest business models (and models of mutual economic cooperation) of Black economic development.2 In addition, Weare notes that Negro banks “sprang almost involuntarily from Negro insurance companies” (119), continuing the progress of economic development started by mutual-aid societies.
Early African American–Owned “Cooperative” (or Joint-Stock) Businesses
The Chesapeake Marine Railway and Dry Dock Company, the Coleman Manufacturing Company, and the Lexington Savings Bank were early joint-stock companies that may have been cooperatives; they were definitely collectively owned. Marcus Garvey and the Universal Negro Improvement Association also made use of the joint-stock ownership model to develop Black businesses.
The Chesapeake Marine Railway and Dry Dock Company
Between 1865 and 1883, African American caulkers and stevedores owned their own company with the help of prominent African Americans in Baltimore, Maryland. According to Du Bois, the Chesapeake Marine Railway and Dry Dock Company was organized in part to combat the growing demand among White laborers in Maryland that all free Blacks be fired from the shipyards and leave the state or “get a master.” Baltimore had become famous for its caulking, but it was the Black caulkers who “were the most proficient in the state” (Du Bois 1907, 152–53). Shipyard owners were not willing to reduce their Black workforce until White mobs attacked Black caulkers and stevedores on their way home, and White carpenters boycotted shipyards that hired African American caulkers. At that point, a group of Black men decided that they needed to own their own shipyard, to protect and secure jobs for Blacks.
The jointly owned business, which Du Bois (1907) called a cooperative, was quite successful. The Chesapeake Marine Railway Company bought a shipyard—encompassing the property that included the spot where Frederick Douglass describes sitting on a cellar door studying a stolen spelling book to teach himself how to read. According to Du Bois, the founders of the company raised $40,000 by selling eight thousand shares at $5 per share. They paid off their $30,000 mortgage in five years and employed between one and two hundred Black and White caulkers and stevedores per year. In the sixth year of operation, the company paid stock dividends to members totaling $14,000. In the seventh year, it paid dividends of 10 percent, and for four years after that paid dividends of between 4 and 10 percent per year. Therefore, we know that for at least six years the company was profitable enough to pay dividends. The company went out of business in its eighteenth year, in part because of repair problems, changes in the industry, and management issues, but also because of “the refusal of the owners of the ground to release the yard to the colored company except at an enormous rate of increase” (Du Bois 1907, 153). The ground rent was doubled. The cooperative went out of business soon after.3
The significance of this joint-stock company is manifold. The success of the Chesapeake Marine Railway and Dry Dock Company showed that African Americans could successfully use joint ownership in the face of racial oppression and ostracism, particularly to save jobs, create jobs, and accumulate wealth. It showed that African Americans could run a substantial industrial enterprise at a profit. The company also changed the nature of industrial relations in the state of Maryland. Du Bois observes that even after Chesapeake’s demise, “the organization of the ship company saved the colored caulkers, for they are now members of the white caulker’s union. The failure of the whites in driving out the colored caulkers put an end to their efforts to drive colored labor out of other fields. And although the company failed, it must surely have been an object lesson to the whites as well as to the blacks of the power and capability of the colored people in their industrial development” (1907, 153). Du Bois reminds us that even if the shipyard went out of business after eighteen years, much was accomplished, particularly in terms of job creation, profit distribution, civil rights, unionization, and the overall security of the livelihoods and reputation of Black stevedores and caulkers in Maryland.
Coleman Manufacturing Company
The Coleman Manufacturing Company of Concord, North Carolina, was incorporated in 1897 with $50,000 of capital stock. According to a letter from W. C. Coleman published by Du Bois (1898, 26), Coleman Manufacturing was “a co-operative stock company of colored men who
