business] is simply a record of failure, just as similar attempts were for so long a time among whites in France, England, and America. Just as in the case of these latter groups, however, failure was but education for growing success in certain limited directions, so among Negroes we can already see the education of failure beginning to tell” (1907, 149). Du Bois identified several challenges to cooperative business development, including the lack of capital and the nature of poor people who will not invest because they are afraid of losing their hard-earned money. He also emphasized the lack of trained managers and workers, particularly in democratic business participation. He noted that in some early attempts at cooperation, poor judgments were made. In some cases, a company did not wait until at least 25 percent of the capital stock had been raised, which often resulted in failure. This increased the perception that “promoters of cooperative enterprises were unscrupulous” (1907, 150). Despite his pessimism, Du Bois held a conference in 1907 (the twelfth Atlanta conference at Atlanta University; see chapter 4) titled “Negro Business Development and Cooperatives,” promoting cooperatives and economic cooperation. The conference also launched his latest academic report on African Americans, Economic Co-operation Among Negro Americans.
Du Bois documented the existence of 154 African American–owned cooperatives: 14 “producer cooperatives”; 3 “transportation cooperatives”; 103 “distribution or consumer cooperatives,” and 34 “real estate and credit cooperatives,” in addition to hundreds of mutual-aid societies and cooperative projects through religious and benevolent institutions, beneficial and insurance societies, secret societies, schools, and financial institutions in 1907. While most of the cooperative businesses were joint-stock companies or collectively owned enterprises rather than Rochdale cooperatives, he made a case for how often it occurred, how necessary joint ownership was, and how difficult it was for African Americans. He attributed difficulties to poor management, lack of know-how, low levels of capitalization, and racial discrimination. He used the case study of Baltimore to illustrate the kinds of businesses that African Americans engaged in collectively, in some sense of the term. The “successful cooperative businesses” he studied include the Douglass Institute (a social entertainment house), the Chesapeake Marine Railway and Dry Dock Company, Samaritan Temple, the Afro-American Ledger newspaper, and the North Baltimore Permanent Building and Loan Association (1907, 151–78). By the early 1900s, African Americans were forming cooperative businesses based on the international principles of cooperation; these businesses are the subject of the following seven chapters.
Four early African American cooperative businesses that followed the Rochdale principles were the Mercantile Cooperative Company in Ruthville, Virginia, Citizens’ Co-operative Stores in Memphis, Tennessee, the Pioneer Cooperative Society in Harlem, New York City, and the Cooperative Society of Bluefield Colored Institute of West Virginia.
The Mercantile Cooperative Company
The Mercantile Cooperative Company, the earliest urban Rochdale cooperative my research has uncovered (after the nineteenth-century unions and farmers’ alliance co-ops, and the ones mentioned by Du Bois in 1907), was established in Ruthville, Virginia, in 1901. Charles City County, where Ruthville is located, is a relatively prosperous county for African Americans. Until John Craig’s account, however, most historians “ignored the role of the area’s free black population” and “the degree to which community cooperation during the early years of the twentieth century helped move local farmers away from economic dependence on whites” (1987, 133–34). Craig highlights collective efforts in Ruthville and observes that Black farmers’ cooperative activity in the early twentieth century through the Mercantile Cooperative enabled them to “achieve a level of economic independence” that contributed to their later success in achieving voting rights and other civil rights (134).
In the first quarter of the twentieth century, according to Craig’s research, 90 percent of residents in Charles City County owned their own homes and the land they farmed, and fewer than 6 percent of local farms had a mortgage. These statistics stand out during a time when the number of Whites in the county was decreasing; between 1900 and 1930, the Black population of the county rose by 2 percent, while the White population declined by 20 percent (139). Ruthville, a predominantly Black town, had a history of fraternal organizations. In 1901 the Odd Fellows Lodge helped to establish the Mercantile Cooperative Company. According to Craig, this was a Black-run cooperative store chartered by the state. Shares were sold at $5 each, and no one member could hold more than twenty shares. Shares could be bought in installments. Members bought a store outside Ruthville and moved it to the main crossroads opposite the County Training School. They raised $1,300 to buy supplies in Richmond. They decided not to take credit, so that they would not have to rely on outsiders. The cooperative coexisted on cordial terms with a White-owned store across the street (135). By 1923, the Mercantile Cooperative had twenty-eight shareholders. The cooperative then bought trucks and was able to hire three employees. The new United Sorghum Growers Club met regularly above the store (136). The community also founded the Intellectual and Industrial Union, which raised money to build a new school (137–38). Craig remarks on the “strength of community solidarity” in the town and the way the Black community “banded together to overcome common problems.” The cooperative store was an important example of this and a mainstay of the community.
Citizens’ Co-operative Stores
Citizens’ Co-operative Stores of Memphis was established in direct response to a Negro Cooperative Guild meeting in August 1919 (see chapter 4).9 From the details in a Crisis article, we know that the citizens of Memphis eagerly joined the project, as evidenced by the large number of participants and the resounding success of the equity drive. According to the Crisis, the cooperative raised more equity than expected, selling double the amount of shares initially offered. Members were able to buy shares in installments, and no one could own more than ten shares. By August 1919, five stores were in operation in Memphis, serving about seventy-five thousand people. The members of the local guilds associated with each store met monthly to study cooperatives and discuss issues. The cooperative planned to own its own buildings and a cooperative warehouse ([Du Bois] 1919).
The Crisis article, written by “the editor” (presumably Du Bois himself), read in part:
The good results of co-operation among colored people do not lie alone in the return of savings. They show, also, new opportunities for the earning of a livelihood and in the chance offered our colored youth to become acquainted with business methods. . . . [They hire members of the community.] Thus, in a larger and different sense, we have another form of co-operation. Colored people are furnishing their own with work and money for services received and the recipients are handing the money back for re-distribution to the original colored sources. ([Du Bois] 1919, 50)
The Citizens’ Co-operative Stores illustrate how advocacy, public education, and self-education can promote cooperative development in the Black community. This story also shows how cooperatives in low-income communities can be made affordable (shares can be bought in installments), and how cooperative businesses can improve community life by hiring local residents and allowing money to recirculate among all the participants. However, Du Bois also noted that the cooperative was later converted into a conventional stock company and went out of business (1940, 759). It was more prosperous and provided greater benefits to the community under cooperative ownership, but under pressure it ceased being a cooperative and became a conventional business.
The Pioneer Cooperative Society
According to Mr. Moore, the manager of the Pioneer Cooperative Society in Harlem, he founded the co-op because it was difficult for Blacks to buy food at affordable prices in Harlem. Moore was “interested in bringing down the high cost of living for our colored people” and was inspired by a newspaper article about cooperatives. He pulled together a group of interested people who started meeting once a week “to study and plan cooperation.” The co-op started a small grocery
