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 www.MoAF.org  |  Summer 2019  |  FINANCIAL HISTORY  21