Financial History Issue 130 (Summer 2019) | Page 23
By Shennette Garrett-Scott
Maggie Lena Walker probably was no
longer surprised that she was the lone
woman among the 50 or so African Amer-
ican business, banking and insurance
leaders attending a banquet in late 1924
in New York City. The banquet had been
called “to stabilize, strengthen, and protect
Negro business.” As president of the St.
Luke Bank and secretary-treasurer of the
Independent Order of St. Luke (IOSL)
in Richmond, Virginia, Walker stood as
the most powerful Black woman in the
financial industry. She had worked most
of her life to prove that women could excel
in the financial world, and her presence
lent legitimacy to, if not full acknowledg-
ment of, women’s critical roles in the
financial industry. She surely wondered
whether her lifelong efforts counted for
much, because here she was again: the
only woman in a room full of Black men
who were charting, as they imagined, the
economic future of the race.
The select group of business leaders
outlined plans for the National Negro
Finance Corporation (NNFC), a million-
dollar corporation that would launch Black
business into a new financial age. Walker
took advantage of the novelty of her pres-
ence. She offered the St. Luke Bank as a
model to emulate for the young finance
company. She told the austere group, “We
shall not stop, but put our moneys and
brains together and achieve a commercial
emancipation.” Walker echoed her call to
IOSL members two decades earlier, when
she had first shared her vision for a bank
that was largely owned and run by women
for women.
The NNFC shared ambitious goals with
another Black-owned finance company
launched in the early 1920s: the Allied
Industrial Finance Corporation (AIFC).
Bitter rivalries for control over the vision
for the future of Black business, how-
ever, soon emerged between the two
companies. The finance companies dif-
fered in their opinions about the role that
Studio portrait of Maggie Lena Walker,
president of the St. Luke Bank and secretary-
treasurer of the Independent Order of St. Luke
(IOSL) in Richmond, Virginia.
capital and expertise from White investors
should play. Black investors responded in
complex ways to the heightened appeals
of Black-owned finance companies to race
pride, racial uplift and risk. Finally, inter-
nal difficulties undermined the finance
companies and highlighted the difficulties
in achieving a true economic emancipa-
tion for Black communities.
Origins of the Allied Industrial and
National Negro Finance Corporations
Both the AIFC and the NNFC companies
grew out of the National Negro Busi-
ness League (NNBL). Formed in 1900 by
Booker T. Washington, the NNBL was
the largest association of Black business-
people and professionals in the country.
Washington served as president of the
NNBL until his death in 1915. For some
years, even before Washington’s death,
Emmet J. Scott, Washington’s personal
secretary for nearly two decades and sec-
retary of the NNBL, had longed to see the
NNBL evolve. Scott imagined an organi-
zation that provided critical services to
Black-owned businesses. Once out from
under the long and formidable shadow of
Washington, Scott attempted to shift the
NNBL’s center of gravity from Tuskegee,
Alabama, to more cosmopolitan climes in
Washington, DC or New York City. He
also wanted to reconstitute the executive
committee and leadership to tap into the
dynamism of a younger generation of self-
made men.
Stymied in his efforts to remake the
NNBL, in late 1920 Scott organized the
Allied Industrial Finance Corporation
(AIFC) to provide capital to Black busi-
nesses. Initially, Scott planned to raise
the majority of the $3.75 million of capi-
tal from leading White financiers such
as the Rockefellers, Julius Rosenwald,
George Foster Peabody and others who
had been longtime financial supporters
of the NNBL. Scott also dug into his deep
contact list of Black business leaders to
constitute the AIFC board. The AIFC
made its headquarters in the sparkling
new Southern Aid Building in Washing-
ton, DC.
Fearful that Scott’s AIFC might actually
succeed and best the NNBL, in early 1924
Charles C. Spaulding arranged a secret
meeting in Durham with a select group
of businessmen and then an open organi-
zational meeting in early June. Spaulding,
co-founder of the North Carolina Mutual
Insurance Company and president of the
Mechanics and Farmers Bank in Durham,
was arguably the most well-known and
respected Black businessman in the coun-
try. At the banquet in New York City in
November, where Maggie Lena Walker
had declared “a commercial emancipa-
tion,” Spaulding officially announced the
launch of the NNFC.
The goals of the NNFC were even more
ambitious than the AIFC’s. In addition
to providing capital for new Black busi-
nesses, the NNFC wanted to maintain a
corps of industry experts to advise busi-
ness people. The NNFC planned to create
a stock exchange that would sell stock
in and securitize assets backed by Black
businesses. The corporation’s prospectus
and publicity documents dangled the pos-
sibility that the NNFC would invest in
non-Black-owned businesses but made
clear that the NNFC, unlike the AIFC,
would not court capital investment from
White businessmen and philanthropists.
The NNFC wanted to put Blacks’ assets
to work in the larger US financial market,
blurring and perhaps even erasing the
color line in high finance while com-
pounding the assets of Black investors.
Future plans included establishing a credit
information clearinghouse, similar to Dun
and Bradstreet, for Black businesses.
Competing for the Hearts
and Minds of Black Investors
The organizers of both finance corpora-
tions also hoped to woo investors away
from the charismatic Marcus Garvey,
leader of the Universal Negro Improve-
ment Association (UNIA) headquartered
in Harlem, New York. Garvey’s assertive
calls for Black pride had helped him raise
millions of dollars to support UNIA pro-
grams, ancillary businesses and develop-
ment projects. In January 1920, Garvey
organized the short-lived Negro Factories
Corporation (NFC). Capitalized for $1
million, working-class Blacks gobbled up
shares at $5 each. The NFC eventually
operated a laundry, a millinery store, a
small chain of grocery stores, a restaurant
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