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 propose to build and operate a cotton mill in the interest of the race.” Many of the stockholders were influential Black businessmen and White citizens around Concord, North Carolina. After raising the first $50,000, they offered the second $50,000 at $100 per share (payable in installments of 10 percent). The company produced between forty and fifty thousand bricks a day and planned to begin bricklaying for the mill that would employ three to four hundred people. It planned ultimately to establish (on its own or with others) a boardinghouse, truck farm, livery stable, and dairy, according to Coleman’s letter. The White-owned Concord Times enthusiastically reported on March 10, 1898, that
the [Coleman cotton] mill is to have from 7,000 to 10,000 spindles and from 100 to 250 looms, and, by their charter, will be allowed to spin, weave, manufacture, finish and sell warps, yarns, cloth, prints or other fabrics made of cotton, wool or other material. They own at present, in connection with the plant, about 100 acres of land on the main line of the Southern Railway and near the site of the mill. The mill and machinery with all the fixtures complete will represent an outlay of nearly $66,000, and will give employment to a number of hands. (Du Bois 1898, 26–27)
The newspaper projected that the cotton mill would be a successful Negro business. Calling the new board of directors “some of the highest lights of the Negro race,” the Concord Times also noted that it was “the only cotton mill in the world owned, conducted and operated by the Negro race” (27). In the twentieth century, a few cooperative sewing factories owned by African American women in North Carolina would also be successful and important businesses in their communities. Coleman foreshadows these later developments.
The Lexington Savings Bank
The Lexington Savings Bank, in Baltimore, was incorporated in 1895 with $10,000 of capital stock raised by Black leaders in Baltimore (Maryland State Archives 1998). The bank’s president, Everett Waring, was a graduate of Howard University School of Law and reportedly admired Capital Savings Bank in Washington, D.C. According to the Maryland Archives summary, Waring planned to gain as much of the Black savings in Baltimore as possible. Prominent African Americans in Baltimore—businessmen, lawyers, ministers, elected officials—were charter members and stockholders. Depositors came mostly from the Black working class: the bank “was supported entirely by colored people . . . and catered entirely to the poorer classes” (Baltimore Morning Herald, news clipping, ibid.). Several hundred people held deposits in the bank by 1896, and all celebrated the success of its first year.
In the second year there was a major scandal, from which the bank did not recover. This is another example of an attempt to pool Black resources and jointly own a business that would provide needed services to the Black community. It is also an example of mismanagement and apparent lack of transparency and adequate oversight. There are many examples of both throughout the history of African Americans. The failures, especially of Black banks, also feed the collective Black memory of distrust of and aversion to business ownership, which in the twentieth century has limited the willingness of many African Americans to become involved in Black-owned business ventures. The devastating failure, after the Panic of 1873, of the Freedman’s Savings and Trust Company (signed into law along with the Freedmen’s Bureau at the beginning of Reconstruction) in 1874 (Hine, Hine, and Harrold 2010),4 and the failure of Marcus Garvey’s Universal Negro Improvement Association business ventures in the early 1900s (see below), also contributed to Black ambivalence and often aversion to business ownership and investment in Black-owned banks. However, there remain many other examples of successful ventures and of people willing to give joint ownership a chance, as we will see in chapter 4.
Marcus Garvey and the Universal Negro Improvement Association
Shipp (1996) and Martin (1976) report that Marcus Garvey and the Universal Negro Improvement Association had a model of cooperative economic development. Shipp writes, “Marcus Garvey’s Universal Negro Improvement Association (UNIA) produced an alternative cooperative model for Black community development that has also been utilized by other groups including the Nation of Islam and many Black religious denominations. It shares many characteristics with the Mondragon. Although never fully realized, Garvey’s strategy envisioned the collective economic advancement of African peoples throughout the world” (1996, 86).5 Similarly, Martin contends that Garvey had a “grand design” to link all the UNIA businesses into a “worldwide system of Pan-African economic cooperation.”
Garvey’s attempts to establish economic self-reliance went beyond cooperative business enterprises, for UNIA branches acted as mutual aid friendly societies for the payment of death and other minor benefits to members. In rural areas among poor communities, this aspect of the organization’s operations assumed greater importance. Local divisions also were required to maintain a charitable fund “for the purpose of assisting distressed members or needy individuals of the race,” a fund for “loans of honor” to active members, and an employment bureau to assist members seeking work. (1976, 35–36)
Martin also lists the ways in which the UNIA businesses operated cooperatively. He observes that one manager engaged in cooperative buying for all the stores and restaurants of the Negro Factories Corporation (34). In Colón, Panama, the UNIA ran a cooperative bakery, and in Kingston, Jamaica, the African Communities League Peoples Co-operative Bank sold shares only to UNIA members (35). For Garvey, economic self-reliance was primary, according to Martin. Successful political action required an independent economic base. Blacks needed to be independent producers, not just consumers. Many businesses and assets should be jointly owned by all UNIA