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“Going Behind with that Fifteen Cent Policy”: Black-Owned Insurance Companies and the State

  • Christy Ford Chapin (a1)

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1. Katznelson, Ira, When Affirmative Action Was White: An Untold History of Racial Inequality in Twentieth-Century America (New York, 2005); Skrentny, John David, The Ironies of Affirmative Action: Politics, Culture, and Justice in America (Chicago, 1996); Lassiter, Matthew D., The Silent Majority: Suburban Politics in the Sunbelt South (Princeton, 2006); Lieberman, Robert, Shifting the Color Line: Race and the American Welfare State (Cambridge, Mass., 1998); Quadagno, Jill, The Color of Welfare: How Racism Undermined the War on Poverty (New York, 1994); Brown, Michael K., Race, Money, and the American Welfare State (Ithaca, 1999); Freund, David M. P., Colored Property: State Policy and White Racial Politics in Suburban America (Chicago, 2007); Rubio, Philip E., A History of Affirmative Action (Jackson, 2001); Cohen, Lizabeth, A Consumer’s Republic: The Politics of Mass Consumption in Postwar America (New York, 2003).

2. Katznelson, When Affirmative Action Was White, x.

3. Walker, Juliet E. K., The History of Black Business in America: Capitalism, Race, Entrepreneurship (New York, 1998), xviixx, 263, 289–93.

4. Sociologists have attempted to link sociocultural factors to varying degrees of entrepreneurship among ethnic groups. For a summary of this scholarship, see Aldrich, Howard E. and Waldinger, Roger, “Ethnicity and Entrepreneurship,” Annual Review of Sociology 16 (1990): 111–35. For studies asserting that the African American community lacked the necessary characteristics to support a vibrant business tradition, see Light, Ivan, Ethnic Enterprise in America: Business and Welfare Among Chinese, Japanese, and Blacks (Berkeley and Los Angeles, 1972); Bonacich, Edna, “A Theory of Middleman Minorities,” American Sociological Review 38 (October 1972): 583–94; Wilson, Kenneth and Martin, W. Allen, “Ethnic Enclaves: A Comparison of the Cuban and Black Economies in Miami,” American Journal of Sociology 88 (July 1982): 135–60.

For examples of scholars who argue that the black community has indeed had a strong business tradition, citing, for example, self-help and mutual aid activities, see Butler, John Sibley, Entrepreneurship and Self-Help Among Black Americans (Albany, 2005); House, Bessie, “The Impact of Economic Culture on the Business Success of African-American Entrepreneurs,” in Black Business and Economic Power, ed. Jolloh, Alusine and Falola, Toyin (Rochester, 2002), 424–43; Beito, David T., From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890–1968 (Chapel Hill, 2000).

For the argument that integration was the primary cause for the decline of black business and black-owned insurance companies, see Kinzer, Robert H. and Sagarin, Edward, The Negro in American Business: The Conflict Between Separatism and Integration (New York, 1950); Ammons, Lila, “The Evolution of Black-Owned Banks in the United States Between the 1880s and 1990s,” Journal of Black Studies 26 (March 1996): 467–89; Weems, Robert Jr., Black Business in the Black Metropolis: The Chicago Metropolitan Assurance Company, 1925–1985 (Bloomington, Ind., 1996); Puth, Robert, Supreme Life: A History of a Negro Life Insurance Company (New York, 1976); Weare, Walter B., Black Business in the New South: A Social History of the North Carolina Mutual Life Insurance Company (Urbana, Ill., 1973), 280–81.

5. Narratives that emphasize the economic struggle of African Americans in conjunction with the political civil rights movement include Maclean, Nancy, Freedom Is Not Enough: The Opening of the American Workplace (New York, 2006); Biondi, Martha, To Stand and Fight: The Struggle for Civil Rights in Postwar New York City (Cambridge, Mass., 2003); Self, Robert O., American Babylon: Race and the Struggle for Postwar Oakland (Princeton, 2003); Chafe, William H., “The End of One Struggle, the Beginning of Another,” in The Civil Rights Movement in America, ed. Eagles, Charles W. (Jackson, 1986), 127–48; Wright, Gavin, “Economic Consequences of the Southern Protest Movement,” in New Direction in Civil Rights Studies, ed. Robinson, Armstead L. and Sullivan, Patricia (Charlottesville, 1991), 175–83.

6. Trent, W. J. Jr., “Development of Negro Life Insurance Enterprises” (M.B.A. thesis, University of Pennsylvania, 1932), 1015; Davis, Daniel Webster, The Life and Public Services of Reverend William Washington Browne, Founder of the Grand Fountain United Order of True Reformers (Philadelphia, 1910), 9192; Rick Soll, “Maceo Sloan—Sells ‘Bets on Life,’” Chicago Tribune, 25 July 1974, A4; Beito, From Mutual Aid to the Welfare State; Henderson, Alexa Benson, Atlanta Life Insurance Company: Guardian of Black Economic Dignity (Tuscaloosa, 1990), 1517; Butler, Entrepreneurship and Self-Help Among Black Americans, 85–149.

7. Histories of black-owned insurance companies include Puth, Supreme Life; Weems, Black Business in the Black Metropolis; Weare, Black Business in the New South; Henderson, Atlanta Life Insurance Company; Stuart, M. S., An Economic Detour: A History of Insurance in the Lives of American Negroes (College Park, Md., 1969); Trent, “Development of Negro Life Insurance Enterprises”; Thomas J. Gardner, “Problems in the Development of Financial Institutions Among Negroes” (D.B.A diss., New York University, 1958); Winfred Octavus Bryson Jr., “Negro Life Insurance Companies: A Comparative Analysis of the Operating and Financial Experience of Negro Legal Reserve Life Insurance Companies” (Ph.D. diss., University of Pennsylvania, 1947); David Abner, “Some Aspects of the Growth of Negro Legal Reserve Life Insurance Companies” (D.B.A. diss., Indiana University, 1962).

8. Cohen, Lizabeth, Making a New Deal: Industrial Workers in Chicago, 1919–1939 (New York, 1990), 66, 74, 150–51.

9. Puth, Supreme Life, 59–60; Abner, “Some Aspects of the Growth of Negro Legal Reserve Life Insurance Companies,” 62; Mjagkij, Nina, Organizing Black America: An Encyclopedia of African American Associations (New York, 2001), 427–29; Trent, “Development of Negro Life Insurance Enterprises,” 49–53.

10. Trent, “Development of Negro Life Insurance Enterprises,” 15–18.

11. Walker, History of Black Business in America, 216–17, 226; Light, Ethnic Enterprise in America, 159; Cohen, Making a New Deal, 150–51.

12. Abner, “Some Aspects of the Growth of Negro Legal Reserve Life Insurance Companies,” 62; Life Insurance Fact Book(New York, 1940).

13. Klein, Jennifer, For All These Rights: Business, Labor, and the Shaping of America’s Public-Private Welfare State (Princeton, 2003), 1652, 210–11; Hacker, Jacob S., The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (New York, 2002), 93, 200–201, 306. For statistical data that document black insurance companies’ deteriorating growth rates, see Abner, “Some Aspects of the Growth of Negro Legal Reserve Life Insurance Companies,” 62; Life Insurance Fact Book(New York, 1960).

14. Abner, “Some Aspects of the Growth of Negro Legal Reserve Life Insurance Companies,” 91–92; Henderson, Atlanta Life Insurance Company, 157–58. One black-operated insurance company was permitted to participate in the Federal Employee Benefits Program.

15. Faulkner, Edwin J., Health Insurance (New York, 1960), 491–92.

16. Beito, From Mutual Aid to the Welfare State; Drake, St. Clair and Cayton, Horace R., Black Metropolis: A Study of Negro Life in a Northern City (New York, 1945), 526715; Greenbaum, Susan D., “Economic Cooperation Among Urban Industrial Workers: Rationality and Community in an Afro-Cuban Mutual Aid Society, 1904–1927,” Social Science History 17 (Summer 1993): 173–93; Fahey, David M., The Black Lodge in White America: “True Reformer” Browne and His Economic Strategy (Dayton, 1994).

For works that examine African American participation in voluntary associations after World War II, see Babchuk, Nicholas and Thompson, Ralph V., “The Voluntary Associations of Negroes,” American Sociological Review 27 (September 1962): 647–55; Olsen, Marvin E., “Social and Political Participation of Blacks,” American Sociological Review 35 (August 1970): 682–97; Skocpol, Theda and Oser, Jennifer Lynn, “Organization Despite Adversity: The Origins and Development of African American Fraternal Associations,” Social Science History 28 (Fall 2004): 367437; Beito, David T., “Black Fraternal Hospitals in the Mississippi Delta, 1942–1967,” Journal of Southern History 65 (February 1999): 109–40; Muraskin, William A., Middle-Class Blacks in a White Society: Prince Hall Freemasonry in America (Berkeley and Los Angeles, 1975). On church affiliation, see Raboteau, Albert J., African American Religion (New York, 1999).

17. For examples of church groups, fraternal associations, and mutual aid societies that North Carolina Mutual turned away, see Ralph Riley to C.C. Spaulding, 28 June 1939; E. M. Bella to A. T. Spaulding, 14 November 1940; A. T. Spaulding to S. S. Abrams, “Insurance for Members of Corinth Baptist Church,” 10 February 1941; A. T. Spaulding to W. H. Headen, 28 August 1941; A. T. Spaulding to Charles N. Ford, 12 August 1942; A. T. Spaulding to C. W. Moore, 8 December 1942; A. T. Spaulding to F. I. Neiderer, 21 April 1944; A. T. Spaulding to J. W. Windham, 19 November 1946; all in Box NCM-29, Asa and Elna Spaulding Papers (Special Collections Library, Duke University, Durham) (hereafter Spaulding Papers).

For examples of small black enterprises that North Carolina Mutual rejected for group coverage because of state laws requiring a certain number of employees, see A. T. Spaulding to J. B. Danes, “Insurance for Hub Laundry Corporation,” 10 February 1941; A. T. Spaulding to A. J. Clement Jr., “Group Insurance for Booking Agency for Dance Orchestra Employees,” 15 April 1941; A. T. Spaulding to Joseph Connelly, 11 August 1941; A. T. Spaulding to J. D. Lewis, 2 June 1943; all in Box NCM-29, Spaulding Papers.

18. Asa Spaulding, “Life Insurance Operations Yesterday, Today, and Tomorrow,” 24 June 1948, Box AWS-9; N. H. Bennett Jr., “Let’s Design the Product to Fit Today’s Market,” 21 March 1962, Box AI-20; Richard W. Foster, “Statistical Report for Year Ending Dec. 31, 1960,” National Insurance Association, Box AI-19; Harold J. Whalum, “National Insurance Association Actuary’s Report,” 31 December 1960, Box AI-19; all in Spaulding Papers.

19. Lewis, J. Leonard, “The President’s Annual Address,” Proceedings of the Thirty-Third Annual Session of the National Negro Insurance Association, 21–24 September 1953, Miami, 6170.

20. N. H. Bennett Jr. to the Board of Directors of the National Negro Insurance Association, 15 September 1952, Box AI–19, Spaulding Papers; Dickerson, Earl B., “Problems and Responsibilities in a Changing Economic and Social Order,” Proceedings of the Forty-Fourth Annual Session of the National Insurance Association, 20–23 July 1964, Philadelphia, 3537; Bennett, N. H. Jr., “Report of the Reinsurance Committee,” Proceedings of the Forty-Fourth Annual Session of the National Insurance Association, 20–23 July 1964, Philadelphia, 4243.

21. See note 4.

22. Blackford, Mansel G., “Small Business in America: A Historiographic Survey,” Business History Review 65 (Spring 1991): 126; Conklin, George T. Jr., “Institutional Size, Life Insurance,” Law and Contemporary Problems 17 (Winter 1952): 219–38. On the size of the African American market after World War II, see Newman, Kathy M., “The Forgotten Fifteen Million: Black Radio, the ‘Negro Market,’ and the Civil Rights Movement,” Radical History 76 (Winter 2000): 115–35; Goodloe, Joseph W., “A Black-Operated Firm,” Vital Speeches of the Day 37 (15 September 1971): 711.

23. On investments, see Puth, Supreme Life, 252–53; Dowell, Dudley, “Men to Match Your Markets,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 6673; Bryson, “Negro Life Insurance Companies,” 105–21; Bennett, N. H., “The Changing Business Environment, Panel Discussion,” Proceedings of the Forty-Third Annual Session of the National Insurance Association, 19–22 August 1963, Chicago, 6566.

On public relations and advertising, see Lyons, Robert P., “Developing Manpower and Markets: The Challenge for Ordinary Sales,” Proceedings of the Forty-Ninth Annual Session of the National Insurance Association, 21–24 July 1969, Miami Beach, 94–10; Gillespie, Edward, “The Concentric Rings of Public Relations,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 100101; Taylor, L. R., “President’s Report,” Proceedings of the Fifty-First Annual Session of the National Insurance Association, 26–29 July 1971, Detroit, 3839.

On business expertise and employee quality, see Puth, Supreme Life, 154–68, 193, 207; Weems, Black Business in the Black Metropolis, 48–52, 97–99; Gardner, “Problems in the Development of Financial Institutions Among Negroes,” 63, 107; Restel, James D., “Work Measurement: Staff Productivity Control,” Proceedings of the Fifty-Sixth Annual Session of the National Insurance Association, 18–21 July 1976, New Orleans, 3840; Townes, Clarence L., “President’s Address,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 52; Johnson, Benjamin J., “Personnel Selection: A Key to Management Success,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 102; L. R. Taylor, “President’s Report,” 40.

24. Puth, Supreme Life, 41, 115, 191; Duker, Jacob M. and Hughes, Charles E., “The Black-Owned Life Insurance Company: Issues and Recommendations,” Journal of Risk and Insurance 40 (June 1973): 222, 227–28; Asa Spaulding, “Immediate Problems Facing Our Companies: Specific Agency Expense,” 27 May 1937, Box AWS-8, Spaulding Papers; David E. Longley, “Norfolk District Program–1941,” Box 6, Leon M. Bazile Papers (Virginia Historical Society, Richmond) (hereafter Bazile Papers); B. T. Bradshaw to Coworkers, 5 December 1950, Box 6, Bazile Papers; B. T. Brashaw to the Board of Trustees, 11 October 1960, Box 6, Bazile Papers. See also Friedman, Walter A., Birth of a Salesman: The Transformation of Selling in America (Cambridge, Mass., 2004), 5051, 181–82, 204–6.

25. Bryson, “Negro Life Insurance Companies,” 47–48; Gillespie, Edward L., “Underwriting: Its History and Development,” Proceedings of the Thirty-Third Annual Session of the National Negro Insurance Association, 21–24 September 1953, Miami, 8592.

26. Vivian W. Henderson, “Preliminary Report on the National Insurance Association Market Research Project,” 19–20 July 1962, Box AI-20, Spaulding Papers.

27. Henderson, “Preliminary Report,” 16–17. See also Weems, Black Business in the Black Metropolis, 115; Robert P. Lyons, “Developing Manpower and Markets,” 94–101; Mauck, Fred A., “Trends in Marketing and Sales,” Proceedings of the Fifty-Fourth Annual Session of the National Insurance Association, 21–24 July 1974, Chicago, 56; Walker, S. W., “Golden Opportunities for Insurance Industry,” Proceedings of the Fiftieth Annual Session of the National Insurance Association, 20–23 July 1970, Richmond, 8893; Houston, Ivan J., “Agency System: Endangered Species?The Pilot 26 (Spring 1977): 78, 17; Davis, J. Mason, “An Overview of the Program,” The Pilot 30 (Summer 1980): 14. The NIA published The Pilot.

28. Abner, “Some Aspects of the Growth of Negro Legal Reserve Life Insurance Companies,” 62–63, 73, 83; Duker and Hughes, “The Black-Owned Life Insurance Company,” 225.

29. Puth, Supreme Life, 192, 205, 218–23; Puth, Robert C., “Supreme Life: The History of a Negro Life Insurance Company, 1919–1962,” Business History Review 43 (Spring 1969): 18; Duker and Hughes, “The Black–Owned Life Insurance Company,” 225; Bryson, “Negro Life Insurance Companies,” 67–72, 88; Olive, B. G. Jr., “Reducing Costs Through Organized Planning,Proceedings of the Thirty-Third Annual Session of the National Negro Insurance Association, 21–24 September 1953, Miami, 108–10; Marvin, Murray J. Jr., “Executive Director’s Report,” Proceedings of the Thirty-Third Annual Session of the National Negro Insurance Association, 21–24 September 1953, Miami, 53; Elliott, J. L., “Introduction,” Proceedings of the Fifty-Fourth Annual Session of the National Insurance Association, 21–24 July 1974, Chicago, 3031.

30. Weare, Black Business in the New South, chaps. 7 and 8; P. L. Prattis, “Insurance and Integration,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 24–32; North Carolina Mutual Life Insurance, “News Release,” January 1961, Box AWS-5, Spaulding Papers; Actuarial Department to Asa T. Spaulding, “Information for Report to Policyholders,” 5 January 1968, Box NCM-20, Spaulding Papers.

31. B. T. Bradshaw to Board of Trustees, 12 November 1958; “Virginia Mutual Benefit Life Insurance Weekly Bulletin,” no. 1234, 12 November 1956 for quote; B. T. Bradshaw to the Board of Trustees, 11 October 1960; 17 September 1963; 15 January 1964; “Virginia Mutual Benefit Life Insurance Weekly Bulletin,” no. 1630, 17 June 1964; all in Bazile Papers. North Carolina Mutual purchased Virginia Mutual in the 1980s.

32. Isaacs, Benno and Barbour, Charles, “The Only Color That Matters Is Green: The Black Insurance Companies Face the 80’s,” The Pilot 30 (Fall 1980): 11.

33. Puth, Supreme Life, 146–47, 157–58, 169–71; Chambers, Jason, Madison Avenue and the Color Line: African Americans in the Advertising Industry (Philadelphia, 2009), chap. 1; Newman, “The Forgotten Fifteen Million,” 115–35; Lewis, “The President’s Annual Address,” 61–70; Martin, Dan B., “Annual Report of Agency Section Chairman,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 115–19.

34. Wilson, Kennedy O., “The Changing Business Environment, Panel Discussion,” Proceedings of the Forty-Third Annual Session of the National Insurance Association, 19–22 August 1963, Chicago, 66. See also Cohen, Making a New Deal, 150–54; Weems, Robert, Desegregating the Dollar: African American Consumerism in the Twentieth Century (New York, 1998).

35. Frazier, E. Franklin, “The Negro Middle Class and Desegregation,” Social Problems 4 (April 1957): 297, 300. See also McKissick, Floyd, Three-Fifths of a Man (Toronto, 1969), 122–23, 141; Ofari, Earl, The Myth of Black Capitalism (New York, 1970). See Weems’s discussion of the “black-businessman-as-villain thesis.” Weems, Robert E. Jr., “Where Did All Our Customers Go? Historic Black-Owned Businesses and the African American Consumer Market,” in Black Business and Economic Power, ed. Jolloh, Alusine and Falola, Toyin (Rochester, 2002), 405–23.

36. Weare, Black Business in the New South, 250–57, 276; Archibald Rutledge, “They Call Him ‘CO-OPERATION,’” Saturday Evening Post (27 March 1943): 15–16, 98; “Negro Self-Aid Urged at Insurance Session,” New York Times, 12 July 1946, 24.

37. Asa T. Spaulding to Annual Meeting of the Board of Directors, 8 January 1940, Box NCM-54, Spaulding Papers; Asa T. Spaulding, “Is the Future of Private Enterprise Being Jeopardized?” April 1947, Box AWS-8, Spaulding Papers; Gilliam, H. A., “The Road Ahead: An Introspective Look at Agency Management,” Proceedings of the Thirty-Fourth Annual Session of the National Negro Insurance Association, 1–3 September 1954, Durham, 138; Thompson, Donald, “Report of Region I,” Proceedings of the Forty-Ninth Annual Session of the National Insurance Association, 21–24 July 1969, Miami Beach, 43; Hamrick, William J., “This I Believe,” Proceedings of the Thirty-Third Annual Session of the National Negro Insurance Association, 21–24 September 1953, Miami, 76.

38. Roy Wilkins to George A. Beavers, Proceedings of the Forty-Third Annual Session of the National Insurance Association, 19–22 August 1963, Chicago, 46; “Resolution to the National Insurance Association,” Proceedings of the Forty-Second Annual Session of the National Insurance Association, 23–27 July 1962, Los Angeles, 106–7; Henderson, Atlanta Life Insurance Company, 168–88; Asa T. Spaulding, interview by Walter Weare, Southern Oral History Program, 16 April 1979. See also Wilson, James Q., “The Strategy of Protest: Problems of Negro Civic Action,” Journal of Conflict Resolution 5 (September 1961): 291303; Thompson, Daniel C., The Negro Leadership Class (Englewood Cliffs, N.J., 1963), 4243; Eisenstadt, Peter, ed., Black Conservatism: Essays in Intellectual and Political History (New York, 1999).

39. Myrdal, Gunnar, An American Dilemma: The Negro Problem and American Democracy (1944; New Brunswick, 1996), vol. 1, 212–13, 304–7.

40. Young, Whitney M., Beyond Racism: Building an Open Society (New York, 1969), 9094, 116–18, 153, esp. 80; Weiss, Nancy J., Whitney M. Young, Jr., and the Struggle for Civil Rights (Princeton, 1989); Skrentny, Ironies of Affirmative Action, 31–33.

41. King, Martin Luther Jr., Why We Can’t Wait (New York, 1964), 137–38, esp. 134; Dyson, Michael Eric, I May Not Get There with You: The True Martin Luther King, Jr. (New York, 2000).

42. Katznelson, When Affirmative Action Was White. Similarly, Katznelson employs a broad interpretation of affirmative action. Today, we use a narrower definition of the term “affirmative action” to signify programs for individuals in the job market and higher education. This usage reflects history, in that mainstream civil rights leaders won the argument about how to redress economic inequality, namely, through integration into the white economy rather than through black-operated institutions.

43. This account challenges the assertion that affirmative-action programs were primarily initiated by Washington, D.C., elites. Part of the reason for this different interpretation is my more expansive characterization of affirmative action. For traditional narratives that stress affirmative action as a top-down process, see Graham, Hugh Davis, “The Origins of Affirmative Action: Civil Rights and the Regulatory State,” Annals of the American Academy of Political and Social Science 523 (September 1992), 5062; Graham, , The Civil Rights Era: Origins and Development of National Policy, 1960–1972 (New York, 1990), 4043; Skrentny, Ironies of Affirmative Action, 4–5; Kevin L. Yuill, Richard Nixon and the Rise of Affirmative Action: The Pursuit of Racial Equality in an Era of Limits(New York, 2006); and Kotlowski, Dean, Nixon’s Civil Rights: Politics, Principle, and Policy (Cambridge, Mass., 2001).

For revisionist works that challenge the top-down template, see Sugrue, Thomas, “Affirmative Action from Below: Civil Rights, the Building Trades, and the Politics of Racial Equality in the Urban North, 1945–1969,” Journal of American History 91 (June 2004): 145–73; Weems, Robert E. Jr. and Randolph, Lewis A., “National Response to Nixon’s Black Capitalism Initiative: The Success of Domestic Détente,” Journal of Black Studies 32 (September 2001): 7273; Moreno, Paul D., From Direct Action to Affirmative Action: Fair Employment Law and Policy in America, 1933–1972 (Baton Rouge, 1997).

44. Brimmer, Andrew F., “The Trouble with Black Capitalism,” Nation’s Business (May 1969): 79. See also Young, Beyond Racism, 245.

45. Wright, Nathan Jr., “The Economics of Race,” American Journal of Economics and Sociology 26 (January 1967): 112; Cruse, Harold, The Crisis of the Negro Intellectual: A Historical Analysis of the Failure of Black Leadership (New York, 1967).

46. See, for example, Walker’s discussion of 1930s “Don’t Buy Where You Can’t Work Campaigns” in History of Black Business in America, 226–30.

47. Weems, Black Business in the Black Metropolis, 106–7; A. Maceo Walker Sr., “Management and Markets,” Proceedings of the Fifty-Fifth Annual Session of the National Insurance Association, 20–23 July 1975, Memphis, 21; Goodloe, “A Black-Operated Firm,” 712. Not surprisingly, during the 1970s, black-operated companies almost always emphasized their racial heritage in advertisements in Black Enterprise, Jet, and Ebony. See, for example, North Carolina Mutual’s ad “A Soul and a Service,” Black Enterprise4 (June 1974): 136. However, white-operated insurance firms had the resources to more frequently run ads in black-operated magazines, and these ads often featured African American sales agents.

48. Weems, Black Business in the Black Metropolis, 106–7. See also Weare, Black Business in the New South, 2nd ed., 282–84.

49. Weems and Randolph, “National Response to Richard M. Nixon’s Black Capitalism Initiative”; Innis, Roy, “Separatist Economics: A New Social Contract,” in Black Economic Development, ed. Haddad, William F. and Pugh, G. Douglas (Englewood Cliffs, N.J., 1969), 5059; Ofari, The Myth of Black Capitalism; McCartney, John T., Black Power Ideologies (Philadelphia, 1992), chaps. 7–10; Van Deburg, William L., New Day in Babylon: The Black Power Movement and American Culture, 1965–1975 (Chicago, 1992), 116–20; Allen, Robert L., Black Awakening in Capitalist America (Garden City, N.Y., 1969), 1720, 119, 155–57.

50. Hill, Jesse Jr., “A Bicentennial Look at Black Americans in Business,” Vital Speeches 42 (1 September 1976): 695.

51. Pomerantz, Gary M., Where Peachtree Meets Sweet Auburn: A Saga of Two Families and the Making of Atlanta (New York, 1996), 220–21, 266–69, 401–2, 460–61; William Schemmel, “Profile: Jesse Hill, Jr.,”Atlanta Magazine (January 1971); Henderson, Atlanta Life Insurance Company, 182.

52. Hugh Davis Graham, Civil Rights Era, 314; Skrentny, Ironies of Affirmative Action, 78–91; Seeger, Murray, “President Offers Plan to Find 500,000 Jobs,” Los Angeles Times, 24 January 1968, 5; Frankel, Max, “President Offers Project to Spur Hiring of Jobless,” New York Times, 24 January 1968, 1, 24; Otten, Alan I., “Politics and People,” Wall Street Journal, 26 April 1968, 15.

53. “Nixon Urges ‘Black Ownership’ to Help Solve Racial Problems,” New York Times, 26 April 1968, 27.

54. Kotlowski, Dean, “Black Power—Nixon Style: The Nixon Administration and Minority Business Enterprise,” Business History Review 72 (Autumn 1998): 409–45; Yuill, Richard Nixon and the Rise of Affirmative Action; Weems and Randolph, “The National Response to Richard M. Nixon’s Black Capitalism Initiative,” 66–83; Fergus, Devin, “Black Power, Soft Power: Floyd McKissick, Soul City, and the Death of Moderate Black Republicanism,” Journal of Policy History 22 (November 2010): 148–92; Skrentny, Ironies of Affirmative Action, 100–103, 176–221; Graham, Civil Rights Era, 330–35.

55. Charles A. Davis to Asa T. Spaulding, 9 December 1968; Charles A. Davis to Donald C. Stow, 9 December 1968; Charles A. Davis to Asa T. Spaulding, 7 August 1969; all in Box AI-23, Spaulding Papers.

56. Croft, Wardell C., “The President’s Annual Message,” Proceedings of the Forty-Ninth Annual Session of the National Insurance Association, 21–24 July 1969, Miami Beach, 6266; Connally, Norris L., “Report of Budget Committee,” Proceedings of the Fifty-Seventh Annual Session of the National Insurance Association, 17–20 July 1977, Hollywood Beach, 6667.

57. Croft, “The President’s Annual Message,” 62–66; Jess Hill Jr., “The President’s Address,” Proceedings of the Fiftieth Annual Session of the National Insurance Association, 20–23 July 1970, Richmond, 32–38; “Report of the Committee on Governmental Relations and Market Development,” Proceedings of the Fifty-First Annual Session of the National Insurance Association, 26–29 July 1971, Detroit, 135.

58. Kotlowski, “Black Power—Nixon Style,” 427; Charles A. Davis to Blake T. Newton, “Institute of Life Insurance,” 12 March 1969, Box AI-23, Spaulding Papers; Charles A. Davis, “Executive Director’s Report,” Proceedings of the Fiftieth Annual Session of the National Insurance Association, 20–23 July 1970, Richmond, 115–17; “Joint Conference on Company Problems,” 21 January 1970, Box AI-20, Spaulding Papers; L. R. Taylor, “President’s Report,” 36–44; “Report of the Joint Conference on Company Problems,” Proceedings of the Fifty-First Annual Session of the National Insurance Association, 26–29 July 1971, Detroit, 132–34.

59. Prugh, Peter H., “Black-Owned Insurers Seek More Business at White Companies,” Wall Street Journal, 25 February 1970, 10.

60. “Report of the Joint Conference on Company Problems,” 132–34; Hill, “A Bicentennial Look at Black Americans in Business,” 695; Prugh, “Black-Owned Insurers Seek More Business at White Companies,” 10.

61. For a discussion of Jackson’s transformation from critic to promoter of black capitalism, see Weems and Randolph, “The National Response to Richard M. Nixon’s Black Capitalism,” 80–81. See also Walker, History of Black Business in America, 364–65; Gerald West and Patricia Krizmis, “Blacks Find ‘Green Power’ Is What Really Gets Action,” Chicago Tribune, 2 December 1971, 1; Frank Baltchford, “Jackson Calls Economics Blacks’ Top Goal in ‘70s,” Chicago Tribune, 2 January 1972, 5; Paul Delaney, “Operation PUSH Gains Strength in Its Second Year,” New York Times, 2 June 1973, 21 for quote.

62. Weems, Black Business in the Black Metropolis, 110; Weare, Black Business in the New South, 284–85; Goodloe, “A Black-Operated Firm,” 710–15; “Westinghouse and Black Insurance,” Wall Street Journal, 27 September 1972, 35; Alexander Auerbach, “Old Idea Pays Off for Black Insurance Firm,” Los Angeles Times, 5 December 1976, Il; “Black Firms to Share MIT Life Insurance Business,” The Pilot25 (June 1976): 4.

63. Croft, “The President’s Annual Message,” 62–66; Kotlowski, “Black Power—Nixon Style,” 430–32; Duker and Hughes, “The Black-Owned Life Insurance Company,” 227; “New Minority Technology Clearing House Announced,” The Pilot25 (August 1976): 14.

64. Davis, Edward D., “Five Billion Dollar Group Insurance Program,” Proceedings of the Fifty-Sixth Annual Session, 18–21 July 1976, New Orleans, 24.

65. The MESBIC program was created through the Small Investment Act Amendments of 1972. Kotlowski, “Black Power—Nixon Style,” 423, 427; Richard Nixon, “Special Message to Congress Urging Expansion of the Minority Business Enterprise Program,” 13 October 1971, Public Papers of the Presidents: Nixon (Washington, D.C., 1971), vol. 37, 1041–46; Charles A. Davis, “Executive Director’s Report,” 115–17; “MESBICs: Comforted by Legislative Bandages, the Program May Yet Recover,” Black Enterprise 3 (January 1973): 19–22; “Federal Programs for Financing Minority Business,” December 1978, Box 3, Subject Files of Faye P. Hewlett, Records of the Department of Treasury, RG 56 (National Archives, College Park, Md.) (hereafter NARA); “An Outline Proposal for a Development Company to Assist Minority-Owned Insurance Companies,” Proceedings of the Forty-Ninth Annual Session of the National Insurance Association, 21–24 July 1969, Miami Beach, 124–25; Davis, Charles A., “Report of the NIA Executive Director,” Proceedings of the Fifty-Third Annual Session, 22–25 July 1973, Atlanta, 5254; “President’s Address by Edward D. Davis,” Proceedings of the Fifty-Sixth Annual Session, 18–21 July 1976, New Orleans, 23–24.

66. Imbriano, Robert, “OMBE: The Sound of One Hand Clapping,” Black Enterprise 8 (June 1978): 8793, 188–190; Poole, Isaiah J., “If Acronyms Could Cure,” Black Enterprise 10 (June 1980): 101–8; “Commerce Undersecretary Harman Outlines New Initiatives for Minority Business,” NBA News Report(June 1977), Box 3, Subject Files of Faye P. Hewlett, Records of the Department of Treasury, RG 56, NARA for quote.

Additional obstacles hindered the success of federal programs. The Small Business Administration (SBA) and OMBE hampered the effectiveness of minority aid by engaging in turf battles throughout the 1970s. Within the SBA, frequent scandals infected the minority loan program: federal money found its way to politically connected cronies, the mafia, and businesses that only existed on paper. The SBA’s 8(a) plan also drew political fire as most agencies tasked with assigning government contracts to minority businesses “gave a great deal of lip service to the program” but fell short of making a “total commitment.” See Jonathan Bean, Big Government and Affirmative Action: The Scandalous History of the Small Business Administration(Lexington, 2001), chaps. 5 and 6; Alex Armendaris to the Secretary, “Status Report of SBA/OMBE Coordination Effort,” 6 May 1974, Executive Secretariat’s Subject File, Records of the Department of Commerce, RG 40, NARA; Gerald Marks to John K. Tabor, 29 October 1974, Executive Secretariat’s Subject File, Records of the Department of Commerce, RG 40, NARA.

67. Farmer, James, “Speech at President’s Banquet,” Proceedings of the Forty-Ninth Annual Session of the National Insurance Association, 21–24 July 1969, Miami Beach, 114–16; “Report of Urban Affairs Committee,” Proceedings of the Forty-Ninth Annual Session of the National Insurance Association,21–24 July 1969, Miami Beach, 49–51.

68. “Text of Remarks by Rev. Jesse L. Jackson,” Proceedings of the Fifty-Fourth Annual Session of the National Insurance Association, 21–24 July 1974, Chicago, 65. See also R. C. W. Perry to A. T. Spaulding, 9 March 1948, “Summary of Activity Relating to Group Insurance and Group Annuity Contracts,” Box NCM-54; North Carolina Mutual Life Insurance Company, “News Release,” 12 January 1961, Box AWS-5; The Actuarial Department to Asa T. Spaulding, “Information for Report to Policyholders,” 5 January 1968, Box NCM-20; all in Spaulding papers.

69. At the end of the 1970s and beginning of the 1980s, the black insurance industry was further challenged by political and regulatory attacks on industrial life insurance. Consumer advocates claimed that industrial coverage exploited the poor because high administrative costs meant that subscribers reaped a low benefits to cost ratio. In response, some states increased regulations on industrial life insurance products. “Industrial and Small Policy Home Service Ordinary Life Insurance,” The Pilot 30 (Fall 1980): 2, 22–23; “The Legislative and Regulatory Outlook for 1981,” The Pilot 31 (Summer 1981): 8–10; Hill, George E., “President’s Page,” The Pilot 31 (Summer 1981): 2, 19; Hiltz, Starr Roxanne, “Why Black Families Own Less Life Insurance,” Journal of Risk and Insurance 38 (June 1971): 225–35; Isaacs and Barbour, “The Only Color That Matters Is Green,” 10–12.

The author would like to thank Brian Balogh, Lou Galambos, Sharon Murphy Forziati, Andrew McGee, Laura Phillips, and Stephen Schuker for their advice and help in preparing this article. The Journal of Policy History’s anonymous reviewers provided excellent feedback that greatly strengthened this article.

“Going Behind with that Fifteen Cent Policy”: Black-Owned Insurance Companies and the State

  • Christy Ford Chapin (a1)

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