African American Barbers and Bankers

 

African American Barbers and Bankers

 

Abstract

African American entrepreneurship was always a part of the American Business landscape. Even during Antebellum many took advantage of the limited opportunities available. The Postbellum economy created new opportunities for Black Businesses to prosper by attracting and serving particular patronage.

 

African Americans continued to fight for a better life and carve out an existence after Reconstruction ended. With a long tradition of creative capitalism, African Americans found ways to participate in entrepreneurship for decades before the Civil War. Granted that the participation was minimal, given the restrictions placed on both enslaved and free black people, institutional racism, and legal restriction, they were indeed participants in the antebellum society.[1] In fact, in 1860, there were approximately 1,048 Black Businesses in the lower south; Alabama, Florida, Georgia, Louisiana, Mississippi, South Carolina, and Texas.[2] While by no means a majority, this still represents a significant amount for the time. This essay will explore two avenues of Black Entrepreneurship and how they were able to find success by designing their businesses to attract certain clientele.  

After the Civil War two industries, barbering and banking, played an important role in the growth of black entrepreneurship. Because both played an important role in the growth of Black Business, we can look at to understand how they helped to grow entrepreneurship in the community. Barbering is an interesting example, chief among them is the need to adapt to changes in business through the period. Before and immediately following the Civil War, Black Barbers designed their shops to attract and cater to White Patrons, including refusing to serve African Americans and servicing exclusively White men. It was a successful strategy and many barbers ranked as some of the wealthiest Black Business owners in their respective counties. Barbers were some of the largest investors in their business, by 1899 more barbers had invested $500 or more in their business than any other Black Owned Business and they were the largest investors in “capital improvements in prominent commercial buildings in their respective cities.  The most successful of them had turned their shops into luxury barber shops serving elite white clientele.[3]

This success was created by catering to the expected stereotype and investing capital in their shops in order to attract White clients. Given the limited opportunities for entrepreneurial success, this was an understandable innovation. However, it would also, eventually become an issue, with both African Americans criticizing the barbers for not allowing Black customers in their shops and White Barbers who competed with them for customers. In the Jim Crow South, this would lead to violence in cities like Atlanta, where the 1906 race riot would see many black-owned businesses along Peachtree Road destroyed. After the Riot many businesses relocated to Wheat Street, now known as Auburn Avenue, where they would create a thriving Black Business district until after the Civil Rights Movement. Not all African American Barbershops left the Peachtree Street area. Alonzo Herndon, the founder of Atlanta Life Insurance Company located in Sweet Auburn, repaired and reopened his shop and by diversifying his clientele was able to remain open for business.[4]

While the success of barbers was, initially, dependent on its ability to attract business from White customers, the first wave of African American banks were established to cater to the Black Community. Between 1888 and 1828 these banks were founded to serve as a source of loans and other services not otherwise accessible to them. Mainstream banks were reluctant to give loans to Black Business and with the failure of the Freedmen’s Savings and Trust in 1874, there were virtually no banks left willing to serve the African American community.[5] In many cities, these Banks would become the “anchor institutions” for many of the prosperous Black Business districts.

While there were fewer in number, when compared to Barbershops, Black-owned banks provided most of the capital to Black Businesses, and “penny savings banks” were the primary source of savings for these communities.[6]  From 1880 to 1920 some 88 Black Banks were formed and at their peak, they held about Thirteen Million in assets. This did not include the roughly fifty Savings and Loans and Credit Unions that served the community by accepting the smaller deposits.[7] The segregated economy had formed an opportunity for Black Entrepreneurs much like it had with Barbers. However, Black Banking prospered by primarily serving the African American Community.

African American entrepreneurship has been an important part of the Black Community, particularly after the Civil War and Reconstruction. Two businesses, Barbering and Bank provided a source of wealth and opportunity for Black Entrepreneur by focusing on different Customers. Barbers focused externally by playing to the prejudice of the day and focusing on attracting White Clientele. Banks on the other hand focused internally by securing customers denied by traditional banking. Both are examples of the need for innovation and market adaptability to succeed and survive in the segregated Business world.   

 

 

Works Cited

 

Baradaran, Mehrsa. The Color of Money: Black Banks and the Racial Wealth Gap. Cambridge, Massachusetts: The Belknap Press of Harvard University Press, 2017.

 

BRISTOL, DOUGLAS. “From Outposts to Enclaves: A Social History of Black Barbers from 1750 1915.” Enterprise & Society 5, no. 4 (2004): 594–606.

 

Ingham, John N. “Building Businesses, Creating Communities: Residential Segregation and the Growth of African American Business in Southern Cities, 1880-1915.” The Business History Review 77, no. 4 (2003): 639–65. https://doi.org/10.2307/30041232.

 

Juliet E. K. Walker. “Racism, Slavery, and Free Enterprise: Black Entrepreneurship in the United States before the Civil War.” The Business History Review 60, no. 3 (1986): 343–82. https://doi.org/10.2307/3115882.

 

Schweninger, Loren. “Black-Owned Businesses in the South, 1790-1880.” The Business History Review 63, no. 1 (1989): 22–60. https://doi.org/10.2307/3115425.

 

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[1] Juliet E. K. Walker, “Racism, Slavery, and Free Enterprise: Black Entrepreneurship in the United States before the Civil War,” The Business History Review 60, no. 3 (1986): 343–82, https://doi.org/10.2307/3115882.

[2] Loren Schweninger, “Black-Owned Businesses in the South, 1790-1880,” The Business History Review 63, no. 1 (1989): 22–60, https://doi.org/10.2307/3115425.

[3] DOUGLAS BRISTOL, “From Outposts to Enclaves: A Social History of Black Barbers from 1750 1915,” Enterprise & Society 5, no. 4 (2004): 594–606.

[4] Ibid,.

[5] Lila Ammons, “The Evolution of Black-Owned Banks in the United States Between the 1880s and 1990s,” Journal of Black Studies 26, no. 4 (1996): 467–89.

[6] John N. Ingham, “Building Businesses, Creating Communities: Residential Segregation and the Growth of African American Business in Southern Cities, 1880-1915,” The Business History Review 77, no. 4 (2003): 639–65, https://doi.org/10.2307/30041232.

[7] Mehrsa Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap (Cambridge, Massachusetts: The Belknap Press of Harvard University Press, 2017). 70-78.17). 70-78.