Chase Goes to Harlem: Financing Black Capitalism
Frappier, Jon
"However far we go, I don't think we can ever give up our principal activity of lending money to our principal customers, but I certainly don't think we have exhausted the possibilities of what...
...First, only 112 of the 700 firms "indicated a willingness to build new plants in or near slum areas...
...business income.4 explaining that, "Scientifically speaking, there is no such thing as black economic development...
...Insurance payments of $32 million represented an estimated 65 to 75 percent of the total loss...
...The big bankers talk a good line about capital investments and loans to the black community, but that is not enough...
...Government, State, and municipal bonds are by definition debenture bonds, since they are not secured by mortgages or any other specific pledge of assets...
...However, a 1969 Committee survey revealed only 90 out of 300 banks could provide any indication of progress in their minority lending...
...These loans must benefit a disadvantaged area by "creating new job opportunities, expanding community ownership, increasing the inflow of capital, or enhancing cultural and educational opportunities," and must be genuinely "unbankable" (i.e., other banks will not take them...
...2, Winter 1972, pp...
...Although Fierce acknowledged he had a comfortable position at Chase, he decided that by moving to Freedom National he "could do something for the community and for myself...
...In 1967, loans to minorities accounted for about $50 million of the $800 million in direct loans or guarantees made by the SBA...
...These 90 banks had reportedly loaned black enterprises a total of $100 million between July 1968 and June 1969.23 This average of roughly $1 million per bank pales when compared with what Chase by itself loaned to all customers during this same period - $12 billion...
...Chase's CED loan portfolio includes a low percentage of SBAguaranteed loans (some 20 percent...
...55-56...
...Blaustein and Faux, op...
...During the campaign Nixon even said that black capitalism was no more "radical" than recognizing that with "the ownership of the means of production goes power, prestige, security, the right to decide and to choose...
...NYT, January 6, 1974...
...Maisel said that the banks' stringent loan criteria for determining risk factors "plus over-simplified sociological theorizing led to the concept that it would be most profitable for lenders to concentrate their loans in new homogeneous suburbs while red-lining major sectors of the inner city...
...2 0 In the field of public health, the Rockefellers pioneered the fight against hookworm disease in the South in order, according to their own records, to increase workers' productivity.' But the current black movement forced the Rockefellers to escalate their leadership commitment...
...6. Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966), pp...
...6 These black leaders have accepted the capitalist system and their militancy and mass appeal have fallen in the process...
...and while some blacks began to migrate in the 1880s, by 1910, 80 percent of the black population was still concentrated in the South...
...NYT, May 1, 1970...
...230 Chase and the Rockefellers were involved in still another business organization which sought to direct and channel capitalist activity in the black community, the Interracial Council for Business Opportunity (ICBO).* Formed in 1963, ICBO now claims 400 corporate members who advise aspiring black businessmen...
...and corporate and government officials realized that some blacks desired more organized forms of insurrection that until now had only taken the form of spontaneous riots...
...Business Week (February 9, 1976) indicates that "banks are busily looking for loan customers - but are $3,755,000 Capital Notes and Preferred Stock Freedom National Bank of New York The Bank of New York C. L T. PAmiulM CaspwrlaM Chptr New York Cporamm Tre Chm MumllnoaM n Ch e mi W eleAd Nw YVk Catp i Hterpe dew I The Ford PmmduGNM M u e. n.e d .m m...
...BLACK CAPITALISM TODAY During a recent interview with a black Chase executive, NACLA raised the question of black capitalism...
...7 The banks played a different role...
...327 This historical labor exploitation and racial oppression of blacks by U.S...
...Wally Fon...
...The ruling class needed to coopt those black political leaders who either supported or did not question the legitimacy of the capitalist system (such as the Urban League, National Association for the Advancement of Color People NAACP, Southern Christian Leadership Conference - SCLC, Congress of Racial Equality - CORE, and certain cultural nationalists), and to repress those black organizations who saw capitalism as a primary enemy (such as the Student Non-Violent Coordinating Committee - SNCC, Black Panthers, Black Liberation Army and other revolutionary nationalists...
...Ibid., pp...
...Banks have "helped create major social and economic problems of crime, decay and segregation...
...Finance Capital: Lenin defined finance capital as "the bank capital of a few very big monopolist banks, merged with the capital of the monopolist associations of industrialists...
...Since capitalism had institutionalized racism in the form of segregation, the movement's goals became equal access to public facilities, education, ballot boxes, housing and jobs...
...Although some had affirmative action hiring programs for blacks (see section on Chase's labor force), the banks' unique task was to provide the capital through loans and deposits necessary for black capitalism to develop...
...Today, revolutionaries of many nationalities see the need for building a multinational, working-class movement for socialism...
...Chase and the Rockefellers have assumed a leadership position in developing a strategy in response to black demands...
...3 Soon after, a "tombstone" advertisement appeared in Black Enterprise showing that Chase, along with other white-controlled financial institutions had provided $3.7 million in capital for Freedom National Bank...
...CHASE AND THE ROCKEFELLERS TAKE THE LEAD Chase and the Rockefellers were leaders within the corporate community in identifying the problem (economic and racial oppression of blacks) and in putting forth a program (build black business through loans, investments and hiring...
...Over a three-year period, the average size of individual loans has increased from $25,000 to $61,000...
...Until the urban riots forced bankers to respond, loans to black businesses were almost non-existent...
...The Committee set a five-year goal of lending one billion dollars to minority business and the implementation of equal opportunity employment...
...Then, during the 1968 presidential campaign, Richard Nixon put forth the idea of black capitalism...
...Ibid., pp...
...7 Such statements led Roy Innis of CORE to declare that among the candidates only Richard Nixon was hospitable to black power...
...Chase Annual Report, 1971, p. 31...
...Guichard Parris and Lester Brooks, Blacks in the City: A History of the National Urban League (Boston: Little, Brown & Co., 1 9 71), p. 180...
...Merchant banks helped to finance the slave trade, and later when the plantation economy was established, northern banks began to finance the commodity trade between the South, Britain and New England.* Through its control over trade, northern bank capital and the forces of industrialization were instrumental in subordinating the agricultural South and paving the way for economic development by an ascendant northern bourgeoisie...
...However, by early 1969, Project OWN was far below its goal because private banks indeed did not respond to the call...
...Chase was able to postpone this for seven years by putting up $430,000 in equity and the remainder of the price in a ten year loan...
...Also, the Watergate investigation has since revealed that Nixon was using SBA contracts to bribe black business and political leaders in exchange for political support and campaign contributions...
...SBA administrator Howard Samuels' job was to convince private bankers of the wisdom of financing these black businesses...
...According to a recent study, the total receipts of black-owned firms accounted for 0.3 percent of all U.S...
...Herschel Johnson, "Freedom National: A Bank that Almost Failed," Black Enterprise...
...Business Week, February 9, 1976, p. 22...
...2 Some information on such lending comes from the Council on Economic Priorities study, Shortchanged: Minorities and Women in Commercial Banking (1972...
...In a statement directed at his ruling class friends, David Rockefeller hinted at the possible consequence of corporate inaction: Today, there is a growing realization that management is not doing the job it should for the stockholders simply by earning as large a profit as it can this year, unless at the same time it is helping to shape an environment in which the business can continue earning a profit four or five or ten years from now...
...When asked whether the capitalist system could improve the economic condition of black people, he said, "I don't think we can expect any substantial change under our present system but it's all we've got...
...July 22, 1971...
...84, 95, 107...
...and until recently, it was the largest of the nation's 45 black-owned banks...
...In addition to the ad campaign, Chase worked through the American Bankers Association (ABA) to establish in 1968 the Urban Affairs Committee...
...A moratorium with local unions that would agree to stabilize new construction costs and open their ranks to minority workers...
...21, No...
...e o .webm Hmw uWA nmme C0= ne 6WiHUub...
...An agreement was worked out whereby Fierce would take a three-to-five year leave of absence, thus maintaining the Chase affiliation and also heading Freedom National Bank...
...However, they seem to have had fantasies about the potential...
...Minbanc also was an example of a joint effort by bank capitalists and the state...
...And in 1962, when the League's funds were almost drained, the Rockefellers initiated "Operation Rescue" which garnered support through a series of luncheons for corporate executives...
...3-4, (unpub...
...Northern bankers and industrialists supported the civil war as the necessary means to gain economic domination over the slave-owning oligarchy of the South...
...53-57...
...The amount of loans going to black businessmen from Chase is insignificant...
...The industrial sector provided jobs and training for blacks with an initial emphasis on the hard-core unemployables...
...At the official ceremony Nixon said, "I have often made the point that to foster the economic status and the pride of members of our minority groups, we must seek to involve them more fully in our private enterprise system...
...8. Robert L. Allen, Black Awakening in Capitalist America (Garden City, N.Y.: Anchor Books, 1969), p. 231...
...Debenture: A term for all forms of unsecured, long-term debt, whether for corporate, state or municipal government obligations...
...OMBE was to coordinate all existing federal programs relating to minority-owned businesses and to help establish new ones and expand those already in existence...
...Adequate security and fire protection...
...However, by World War I blacks had begun leaving the rural South in greater numbers, both because of the mechanization of farming and the increased labor needs of northern industries...
...Black Enterprise, March 1975...
...NYT, February 11, 1976...
...The usual rule is that an investor should 'go hunting where the ducks are,' and take it from me there are no 'ducks in the ghetto.' "29 CHASE'S MAN AT FREEDOM NATIONAL Whether or not certain actions by Chase and other banks promote black capitalism is not always apparent...
...Maisel made a final warning to banks that an over-concern for immediate profits would have an adverse effect in the long-run...
...Samuels said the project's success would depend on the willingness of commercial banks to make loans to blacks...
...As the following table indicates more loans were granted to businesses in the service and retail sector (like dry cleaning, auto mechanics and shoe repair) than to manufacturing or construction...
...He explained that, "All I know is that the guys that call me for money are more interested in what I can tell them about tin production in Malaysia than in where I come from...
...Brooklyn's Robert Carson said, "We feel there cannot be any negotiations with industry and capitalism since capitalism is what put us [black people] in the situation we're in...
...This super-exploitation and the super-profits which accrued to the plantation capitalist significantly contributed to the future development of U.S...
...Once the northern capitalists gained hegemony they allowed the re-enslavement of black labor through peonage, sharecropping and wage labor...
...It seems clear to me that the entire structure of our society is being challenged...
...ICBO co-chairman was David Rockefeller's nephew, Rodman, who was vice-president of the Rockefeller's International Basic Economic Corporation (IBEC...
...Involvement in business has always been a major route toward participation in the mainstream of American life...
...Blacks in High Finance," Black Enterprise...
...To suggest that blacks take over large corporations on a ready-made basis is very much akin to suggesting that the fox be placed in charge of the henhouse...
...253-255...
...2 Moreover, Allen seems to say that black capitalism won't work because .. .. any organization formed for the exclusive purpose of assisting the establishment of capitalism in a major urban area of our country is doomed to failure from the start...
...Rockefeller's support included the demand that, "They (the League's staff) should forget and eliminate entirely the question of the labor unions...
...98-101...
...Minbanc's stock was offered to the ABA's 14,000 members with the stipulation that no single bank could own more than 5 percent...
...At a press conference after the convention, McKissick said this position came from "disrupters and political losers...
...In such a trust, the fiduciary is known as the trustee...
...The exploitation of blacks continued in the weakened southern agrarian economy...
...The term includes bonds, stocks, mortgages, notes, coupons, scrip, warrants, etc...
...NYT, July 23, 1971...
...Arthur I. Blaustein and Geoffrey Faux, The Star-Spangled Hustle (Garden City, N.Y.: Anchor Books, 1973), p. 130...
...Chase paid Number of Percent of Loans Chase Total 77 99 34 .017% .046% .033% By mid-1971 Chase's net CED volume was $10 million, of which 5 percent was written off as "bad" loans...
...But Chase had not changed its mind...
...but he soon realized that Freedom National needed an experienced banker and Hughlyn Fierce at Chase was his first choice...
...Indeed, when confronted by the powerful control of monopoly capital the task of black capitalism seems futile...
...All we really have left is affirmative action...
...are 75 percent purchased by the federal government...
...In an article in the Harvard Business Review titled "Making Capitalism Work in the Ghetto," Allen tries to answer a black critique of tokenism...
...In fact, OMBE's administrative budget came from the OEO - the anti-poverty agency...
...The context for this analysis will be set by a brief history of the relations between black labor and finance capital...
...He can not be anything but a bloodsucker if he's going to be a capitalist...
...3 Malcolm X stated the contradiction very simply: You show me a capitalist, I'll show you a bloodsucker...
...Fierce had made it in to the upper ranks of white banking and he refused to acknowledge any limitations on his career because of being black...
...Dan Aldridge, "Politics in Command of Economics: Black Economic Development," Monthly Review, Vol...
...A member of Chase's Urban Affairs Department reflected this fact when he stated: "Sometimes you have to be satisfied with hearing somebody say that all banks are bad but that the Chase is least bad...
...NYT, October 22, 1967...
...Fiduciary: A person, corporation, bank or trust company in whom certain property is entrusted for a purpose specified in the trust agreement...
...In 1969 when Louis L. Allen was president, CMCC had about one-third of its portfolio invested in black businesses...
...350, 402...
...Constr...
...Black critics explain that this approach will not lead to rapid economic development and does not provide many jobs...
...Securities: A general term applied to documents evidencing ownership or creditorship in a corporation, other business organization or public institution...
...The initial capital for Minbanc was raised from Chase and 12 other banks represented on the committee...
...We feel capitalism should be destroyed...
...manuscript...
...of every kind...
...Estimates for the present-day value of equity in black labor during the period 1790-1860 range from 5448 to $995 billion...
...Even Black Enterprise, the magazine which Chase helped finance, concluded that black business did very poorly in 1974, and the current economic crisis can only worsen their condition...
...During this period, northern capitalists relied on immigrants from Europe, Asia, Mexico and Canada as the primary industrial labor force...
...The SBA would guarantee the loans made by the private sector (banks and small investment companies...
...It took a while, but eventually we got the law which prevented Hugh's [Fierce] coming - Regulation L -- amended...
...NYT, December I, 1973...
...He claims the SBA insists on such a strict repayment schedule that it limits Chase's ability to participate...
...Debenture Bonds: Bonds without any security other than the general assets of the issue...
...WSJ, Dec...
...Blacks had other reasons to be skeptical since OMBE's chief, Commerce Secretary Maurice Stans, announced, shortly after the agency was established, that the Administration was dropping the slogan black capitalism in favor of the more inclusive "minority business enterprise...
...Emancipation was used by the North to deprive the southern oligarchy of its slave labor force...
...The Senate Watergate Report: The Final Report of the Senate Select Committee on Presidential Campaign Activities(the Ervin Committee), Vol...
...The29 Rockefellers, for example, have been the strongest financial supporter of the Urban League...
...The borrower promises to pay to the lender (I) the principal amount on a stated future date and (2) a series of interest payments...
...34-35...
...2 7 However, if the CMCC president's other, more racist comments are to be taken seriously, blacks should not hold their breath waiting for CMCC help...
...Allen, op...
...The bourgeoisie and the State were forced to develop a strategy for dealing with this crisis...
...David Rockefeller understood the importance of the black movement and the need to contain it...
...First, Llewellyn went to Morgan Guaranty Trust president Walter Page to ask if he would talk to David Rockefeller about it...
...The riot had started when the Detroit vice squad raided a black after-hours club during a homecoming party for some servicemen - two of whom were back from Vietnam...
...It did not want to lose one of its few ranking black officers...
...but black capitalism also became a slogan which, on the surface, responded to the demands of black people for economic Cleveland's East Side, July 1968...
...The following table lists the value and number of Chase's CED loans...
...isn't going to make a loan, he isn't going to make it with government money behind him either...
...The capitalists divided the tasks of pacification and tokenism...
...cit., p. 271...
...Under the conditions of the Small Business Administration, Watts Mfg...
...capitalist system...
...Jon Frappier GLOSSARY Bond: An interest-bearing certificate of debt, constituting a loan made to a government or business corporation...
...The title of a typical ad was "Cities: An Action Report by the Chase Manhattan Bank on Urban Decay...
...3. "Black Equity in the Slave Industry," The Review of Black Political Economy, Vol...
...When the smoke cleared, 43 persons (mostly black) were dead...
...Damages, originally set as high as $500 million, were later scaled down...
...Ample land at reasonable prices, adequate roads and utilities and new zoning codes...
...However, one indication that capitalism cannot resolve the problem is provided by a 1967 survey of 700 major corporations conducted by the Dun and Bradstreet subsidiary, the Fantus Company...
...Louis L. Allen, "Making Capitalism Work in the Ghetto," Harvard Business Review, May-June, 1969, p. 85...
...Underwriting: The act or process of guaranteeing the sale of an issue of securities at a stated price from the issuing corporation or government by the underwriting syndicate...
...The Fantus report adds, "These companies are interested in good publicity and profits...
...4. Eric Williams, Capitalism and Slavery (New York: Capricorn Books, 1944, 1966), pp...
...An important account of the Nixon Administration and black capitalism...
...w &Co.,msme UWOW Uu Tnl C=Wny G.iM.UA.A& ce.6 mV e.n shey a OeI32 unwilling to cut price or shade their new, tougher credit standards to get them,"" which is what they did previously to make minimal loans to black businesses...
...Wall Street Journal (WSJ), August 13, 1968...
...The Rockefeller Foundation, and numerous other Rockefeller philanthropies have all maintained contact with the black community through grants to organizations such as the National Urban League, the Urban Coalition, United Negro Colleges, Harlem Community Project, and others...
...Pleasant environmental conditions including quality housing in the immediate area and assurances that "ghetto blight" would be removed...
...NYT, January 17, 1968...
...2 The violence of the Detroit rebellion was not isolated - Harlem (1964), Watts (1965), Cleveland (1966), Newark (1967) and the riots protesting the assassination of Martin Luther King (1968) were indications of a deeper problem in the entrails of the U.S...
...The recent phase of the black liberation struggle (which has its roots in the early slave rebellions) began in the mid-1950s as a movement for civil rights...
...Lower real estate taxes...
...In the process, some black leaders were coopted, one example being CORE's national directors...
...Initially, Chase did not want to release Fierce, who also had reservations...
...Fierce was a black vice president (the only one) in Chase's corporate banking department where, in his 12th year at the bank, he was handling a loan portfolio of over $150 million...
...Berkeley G. Burrell, head of the black National Business League, explained the problem: "A banker is a banker is a banker and if the S.O.B...
...This small, but long established black bourgeoisie supported the idea of black capitalism since, if successful, they would be the primary benefactors within the black community...
...However far we go, I don't think we can ever give up our principal activity of lending money to our principal customers, but I certainly don't think we have exhausted the possibilities of what we can do...
...The ruling class supported the tactics of state repression against black revolutionaries which took the form of infiltration, disruption, fomenting rivalry between different groups, manipulation of the media, arrests, imprisonment and assassination...
...Many of the ads which appeared regularly in the New York Times and other publications depicted an urban poverty scene...
...Ibid., p. 87...
...E. Richard Brown, "Public Health in Imperialism: Early Rockefellers at Home and Abroad" (Berkeley, California: School of Public Health, University of California, 1975), pp...
...power...
...The miniscule commitment is indicated by comparing the CED's to Chase's total loans...
...Founded in 1964 by former baseball star Jackie Robinson, the bank attempted to make loan funds available to the black community...
...capitalism.* Banks were involved in this process from the very beginning...
...J. P...
...This dispersal process has continued to the present period...
...Note: A promise of the maker to pay a certain sum of money on demand or at a fixed or determinable future date...
...and the ruling class, weakened by economic crisis, will be more limited in its ability to use cooptive tokenism...
...5. Ibid., p. 182...
...in 1967 to guarantee bank loans to black businesses...
...The Black Panther newspaper, December 20, 1975...
...Business Week, May 9, 1970...
...The SBA goal was to establish 10,000 new black businesses annually...
...Many blacks who did not participate in rioting and looting refused to condemn the actions...
...2, 1967...
...He saw this movement as a potential threat to his class interest, and his own family had long ago established mechanisms for intelligence-gathering, penetration and possible cooptation of the black movement...
...CORE was pivotal in the ruling class strategy because its militancy since its formation in 1942 and its adoption of the black power slogan in 1966 had produced strong community support...
...It was felt that the lumpen proletariat were actively involved in the rioting and therefore, in order to help stabilize the community these men had to be removed from the streets and put to work...
...Black Enterprise, February 1974, p. 10...
...Milton Moskowitz, San Francisco Chronicle, June 28, 1975...
...Although the movement faced heavy repression, its ranks began to swell under the leadership of Martin Luther King's Southern Christian Leadership Conference, the Student Non-Violent Coordinating Committee (SNCC) and other organizations...
...This campaign was aimed not only at other corporations but also at the black community which Chase hoped to convince that capitalism would respond to their needs...
...But Nixon's resolve was immediately questioned when it was discovered that the new agency was not to have any funds of its own to lend...
...a In 1953, the Rockefellers gave the League $124,000 worth of stock for the purchase of their national headquarters in New York...
...CED opened in 1969 with Chase vice-president Lawrence Toal and five loan officers...
...As late as July 1971, Federal Reserve Board governor Sherman J. Maisel blasted the banks, charging that inner city problems had been heightened by their refusal to grant loans to black projects...
...The bankers' role in overall economic development was indicated through their appearance in the board rooms of the large industrial corporations.s By the turn of the century the U.S...
...After the riots ICBO stepped up its activity by creating ICBO Fund Inc...
...The first chairman of the committee was Thomas W. McMahon, Jr., a Chase executive vice-president, and its five-member board of directors included Chase chairman George Champion...
...As of 1974, CED's total loan volume had reached only $19 million...
...The first of these was hosted by David Rockefeller and A. L. Nickerson of Mobil Oil.' 9 The Rockefellers have also been influential in black education since the 1880s...
...Los Angeles Times...
...CHASE'S COMMUNITY ECONOMIC DEVELOPMENT LOANS Gross Value (millions) 1969 $2.0 1970 $5.7 1971 $2.1 (6 months) The types of projects Chase finances in the black community has come under criticism from black leaders for being primarily "mom and pop" and other small serviceoriented businesses...
...3 THE CONTRADICTIONS OF BOURGEOIS COOPTATION Some apologists have said that one of the reasons black capitalism did not work is because the government and the private corporate sector did not coordinate their efforts...
...The Freedom National Bank in Harlem was the first black bank in the State of New York...
...October 1974, p. 36...
...Rockefeller money went to Spelman College and the Hampton and Tuskegee Institutes...
...BLACK CAPITALISM 1. Chase Manhattan Corporation Annual Report, 1971, p. 31...
...After the Civil War, the concentration of capital accelerated and the financial institutions became influential as the main coordinators of surplus capital...
...Chase Loans Few of the large banks will reveal the size of their loan commitments to black businesses, but apparently Chase's minimal effort is more than others...
...Originally, it had made some "bad" investments in Harlem real estate, but loan losses in other sectors have been a constant drain on the bank's resources...
...The focus of the strategy was the black political leadership who had organized large sectors of the black community...
...3 0 Arranging for Fierce to go to Freedom National was no easy task...
...None of them indicated any interest in philanthropy...
...Earl Ofari, The Myth of Blqck Capitalism (New York: Monthly Review, 1970), p. 5. A very important and useful study...
...What were black people to think when the OEO was being dismantled by Donald Rumsfeld, and Nixon's Urban Affairs advisor Daniel Patrick Moynihan was criticizing the government's interference in black capitalism, calling instead for corporations to take the initiative...
...In part, this was a move to deemphasize the poverty program, which he opposed...
...It will certainly fail economically...
...Chase Manhattan Capital Corporation (CMCC) is in charge of making direct investments in small venture enterprises...
...economy had reached the stage of finance capitalism the merging of bank and industrial capital...
...A P. for The New York Times Louis L. Allen, president of the Chase Manhattan Bank Capital Corp., and Leon O. Woods, president of Watts Manufacturing Co., after signing of purchase agreement.31 $1.1 million for the company whose main products (tents, food containers, automotive glove compartments, etc...
...11% 4% 28% 8% Other 9% 12% Vice president Toal justified Chase's participation in the minority lending program by saying that CED creates customers for the bank and the costs of the program will be covered in three to five years when the loan portfolio matures...
...Army paratroopers...
...In March 1969 he announced the creation, within the Department of Commerce, of the Office of Minority Business Enterprise (OMBE...
...The question naturally arises as to why Chase has not taken fuller advantage of the SBA minority loan guarantee program...
...In 1974, J. Bruce Llewellyn, a successful black supermarket owner, became the new president...
...CHASE INVESTS IN BLACK CAPITALISM...
...The capital was to then be loaned to 23 established minority-owned banks (primarily members of the black counterpart of the ABA, the National Bankers Association...
...the merging or coalescence of the banks with industry - such is the history of the rise of finance capital and such is the content of that concept...
...At the same time, several reforms were instituted to help defuse the militancy...
...I (Pinebrook, N.J.: Dell Books, 1974), pp...
...The Committee chose 54 cities in which to concentrate their efforts...
...and What Private Enterprise is Doing to Combat it...
...To support black capitalism, Chase makes "soft" loans (i.e., those that do not meet normal credit standards) through its Community Economic Development program (CED) which keeps track of the amounts, the losses incurred, the percentages guaranteed by the Small Business Administration and other agencies, and the nature of the businesses being funded...
...pledged $13,500 to help start the League's Industrial Relations department, whose main purpose was to open northern industry to black workers...
...It called for dividing the movement between those who would support capitalism and those who saw capitalism as directly responsible for the racism within society...
...In 1924, John D. Rockefeller, Jr...
...However, Freedom National was plagued with problems from the start...
...Also, this book is an invaluable source of historical information and analysis on the recent phase of the black liberation struggle...
...There is capitalist development and there is socialist development, but black economic development does not exist...
...Vice-president Toal's explanation points out the inadequacy of the program...
...2 2 One of Chase's first projects was an expensive advertising campaign urging other corporations to get involved...
...8 Before the election, President Johnson tried to undercut Nixon's potential black support by initiating "Project OWN" within the Small Business Administration (SBA), which aimed to establish black-owned businesses in the urban areas...
...Today, Chase contributes to the United Negro College Fund and several black colleges...
...The concentration of production...
...Intransigence on the part of the bourgeoisie coupled with white racism and rising black consciousness led in the 1960s to the formulation of black power, more militant forms of protest, and the urban rebellions...
...President Allen's assessment was, "It's a pretty fair business deal that should make money for everyone...
...capital has been fought continuously by black people and their leaders...
...376-382...
...This was the back-up for the entire Detroit police force, 800 State Police officers and 5, 000 National Guard...
...WP, July 12, 1971...
...Our aim is to open that route to potentially successful persons who have not had access to it before...
...The underwriters dispose of the securities at a price which insures their sale, yet yields the underwriters a profit...
...We don't use the term black capitalism anymore...
...Moreover, not one of them would make the move unless certain conditions were met: -A large and non-aggressive labor pool...
...He's got to get it from somewhere other than himself, and that's where he gets it - from somewhere or someone other than himself.36 While the bourgeois strategy of dividing the black movement has succeeded temporarily, conditions in the black community continue to worsen...
...THE CONFLICT BEGINS Black people and bankers know better than most the meaning of capitalism in the United States, for they both played key roles in its development...
...from Aerojet-General which had founded the black-managed firm one year after the riot...
...cit., p. 183...
...President Johnson, on pleas from Mayor Jerome Cavanaugh, had dispatched General John Throckmorton and veteran troubleshooter Cyrus Vance, along with 2,700 US...
...the monopolies arising therefrom...
...Relations only with "responsible community groups" - not militants...
...was supposed to be minority-controlled by October 1970 or else lose its federal contracts...
...The following case should be watched to determine whether it represents black capitalism or, in fact, a take-over of a black bank by Chase and its friends...
...The original idea for Minbanc had come from Charls E. Walker, then executive director of the ABA...
...He argues that capitalism must be built slowly to test the "black entrepreneurial spirit...
...For a more graphic picture of the problem, compare the sales charts of the leading black and white industries: 3 3 Black Controlled (sales in millions) Motown Industries ($45) Johnson Publishing ($34) Johnson Products ($33) Fedco Foods ($30) Garland Foods ($17) White-Controlled (sales in billions) Exxon ($42) General Motors ($31) Ford Motor ($23) Texaco ($23) Mobil Oil ($18) I The most significant fact about this information when viewed in the context of the historical struggle for black liberation, is that the level of economic self-determination which blacks have achieved while remaining part of white-controlled capitalist society, is so limited as to be inconsequential for the 24 million black people in the United States...
...Presently, only about 150 out of the nation's 14,000 banks have any kind of program for minority business lending.28 Once the ballots had been counted, the black community was skeptically waiting for President Nixon to act on his campaign promises...
...Kidnapped from their African homelands, blacks were brought to this undeveloped country to provide the slave labor necessary for the rapid accumulation of capital...
...John D. Rockefeller Sr...
...The ensuing strategy adopted by the ruling class had been used many times before throughout the world...
...This tokenism characterized many race-related projects...
...This article attempts to show how the ruling class, and specifically the Chase Manhattan Bank and the Rockefellers understand the black liberation struggle as a potential threat to capitalism...
...While ICBO claimed to be a national organization, the Fund functioned initially only in the New York area, where it was headed by Chase vice-president John J. McFadden.2...
...founded the General Education Board to channel northern money into southern education...
...October 1975, pp...
...Small, competitive businesses, which includes most black firms, are struggling against the monopolies and the economy to escape bankruptcy...
...According to a Fantus official, "With 21 million Negroes in this country imagine what a plant in Harlem could do for the sales of these companies...
...CMCC's most publicized investment was its 1970 purchase of Watts Manufacturing Co...
...II, No...
...I David Rockefeller, 1971 After flying over the Detroit riot area in the early evening of July 23, 1967, Governor George Romney lamented, "It looked like the city had been bombed on the west side and there was an area two-and-a-half miles by three-and-a-half miles with major fires, with entire blocks in flames...
...9. Jack Anderson, Washington Post (WP), December 9, 1968...
...RULING CLASS STRATEGY By the mid-1960s the black movement had become a formidable political force and the riots had triggered a growing fear among the ruling class that organized military force might follow, since weapons from Vietnam and other sources were finding their way into the black community...
...9 However, black businessmen called him naive in thinking that the banks could be coaxed to take on significant amounts of riskier loans...
...And unless banks and other businesses take greater interest in what happens to society, there's a real possibility that our system will be radically changed or abandoned, and I can't see that that would be constructive...
...By 1977, 80 percent of the stock is to be held by the black management and employees and 20 percent by Chase...
...6 * The form and extent of exploitation of blacks is similar in many ways to that of the Third World by imperialism...
...However, CORE's 1968 convention was the turning point as the reformist policies of the organization's national directors, James Farmer, Floyd McKissick and Roy Innis, defeated the position of CORE's Brooklyn chapter which charged that CORE was betraying the liberation struggle by working with white corporate interests...
...The ABA's Urban Affairs Committee also set up the Minbanc Capital Corporation, an investment company which sold stock to raise $10 million...
...He added that "I'm not sure that black business really makes a lot of sense...
...Chase's own activities in promoting black capitalism will be examined in an effort to determine the strategy's strengths and weaknesses...
...32 After numerous aborted projects, OMBE's death knell was sounded when the press suggested that Nixon's campaign promises were being sacrificed in response to Southern opposition...
...In fact, the arrangement was illegal and Llewellyn explained how the problem was overcome: "I got in touch with Andrew Brimmer who at the time was [the only black] governor on the Federal Reserve Board, I told him about the problem...
...In 1969 shortly after Walker became Undersecretary of the Treasury, he headed a joint private-government plan to deposit $100 million into these minority banks by October 1971...
...WP, August 14, 1968;New York Times (NYT), March 11, 1969;Newsweek, August 26, 1968...
...Programs to train local workers with new and useful skills...
...COMMUNITY ECONOMIC DEVELOPMENT LOANS (BY SECTOR) Service Number 40% Value 34% Retail 36% 18% Mfg...
...The role of black business leaders in this process was not a major problem...
...The Johnson Administration developed new legislation to deal with voting rights, school desegregation, housing and job training...
...2. Report of the National Advisory Commission on Civil Disorders (Kerner Report) (New York: Bantam, 1968), pp...
...4 (James Farmer joined the Nixon Administration, Floyd McKissick received a $14 million federal Housing and Urban Development loan to build Soul City in North Carolina,'s and Roy Innis, dependent on huge corporate and foundation grants, has been recruiting black veterans to fight with the CIA-backed forces in Angola...
...7. Business Week, August 3, 1968, p. 60...
...130-131, 135, 146...
...In fact, neither group ever intended to foster economic development for black people, but rather these programs were designed to give the appearance that something substantial was being done...
...and Thomas C. Cochran and William Miller, The Age of Enterprise: A Social History of Industrial America (New York: Harper& Row, 1961), pp...
...However, Chase's previously established affirmative hiring policy now placed it in a real bargaining position...
...White supporters, primarily from the North, also became actively involved...
...Underwriting Syndicate: A group of investment banking houses or broker-dealer firms, which organize to underwrite an issue from a corporation or government...
...The poverty program, through the Office of Economic Opportunity, was established and some black leadership was brought into its bureaucracy...
...While black businesses were struggling to gain a one percent sales increase during an inflationary 1974, the top Fortune 500 industrial corporations increased their sales by 25 percent...
...6, November 1969, p. 16...
...Nancy J. Weiss, The National Urban League: 1910-1940 (New York: Oxford University Press, 1974), p. 81...
Vol. 10 • April 1976 • No. 4
