The Color of Money

by Mehrsa Baradaran

  2. Rick Perlstein, Nixonland: The Rise of a President and the Fracturing of America (New York: Scribner, 2008), chap. 23.

  3. Kotlowski, Nixon’s Civil Rights, 106.

  4. Beryl Satter, Family Properties: Race, Real Estate and the Exploitation of Black Urban America (New York: Henry Holt, 2010), 259.

  5. Nixon for President Committee, “Bridges to Human Dignity: An Address by Richard M. Nixon on the CBS Radio Network," April 25, 1968. Folder: Nixon, Richard M., 1968 (1), Box 14, Special Name Series, DDEPPP

  6. For a review of government programs to promote black business, see Robert E. Weems, Business in Black and White: American Presidents and Black Entrepreneurs in the Twentieth Century (New York: New York University Press, 2009).

  7. Richard Nixon, “Address to the Republican National Convention," Miami, FL, August 8, 1968, American Presidency Project, http://www.presidency.ucsb.edu /ws/?pid=25968.

  8. Interview with Roy Ennis, U.S. News & World Report, November 25, 1968, 60.

  9. Rick Perlstein, The Invisible Bridge: The Fall of Nixon and the Rise of Reagan (New York: Simon & Schuster, 2014); Richard Nixon, “Annual Address to the Congress on the State of the Union," Washington, DC, January 22, 1970, American Presidency Project, http://www.presidency.ucsb.edu/ws/index.php?pid=2921.

  10. Kotlowski, Nixon’s Civil Rights, 173.

  11. John A. Farrell, “Nixon’s Vietnam Treachery," New York Times, December 31, 2016, citing Haldeman’s notations of a promise made by Nixon to southern Republicans. http://mobile.nytimes.com/2016/12/31/opinion/sunday/nixons-vietnam - treachery. html?smid=fb-nytimes&smtyp=cur&referer=http%3A%2F%2Fm .facebook.com.

  12. Earl Caldwell, “N.A.A.C.P Softens Anti-Nixon Stand," New York Times, July 6, 1971, http://query. nytimes.com/mem/archive-free/pdf?res=9801E4DF1E3FE63 ABC4E53DFB166838A669EDE .

  13. The National Association of Real Estate Boards (NAREB) vigorously fought provisions in both the 1964 and 1966 Civil Rights Acts that would have penalized segregation. Satter, Family Properties, 194, 212; Taylor Branch, At Canaan’s Edge: America in the King Years 1965-68 (New York: Simon & Schuster, 2007), 517.

  14. Michal R. Belknap, Federal Law and Southern Order: Racial Violence and Constitutional Conflict in the Post-Brown South (Athens: University of Georgia Press, 1987), 219.

  15. As George Metcalf said of the FHA, “what Congress did was hatch a beautiful bird without wings to fly." Nikole Hannah-Jones, “Living Apart: How the Government Betrayed a Landmark Civil Rights Law," ProPublica, June 25, 2015, https://www .propublica.org/article/living-apart-how-the-government-betrayed-a -landmark-civil-rights-law; Douglas S. Massey and Nancy S. Denton, American Apartheid: Segregation and the Making of the Underclass (Cambridge, MA: Harvard University Press, 1998), 196.

  16. Kotlowski, Nixon’s Civil Rights, 50.

  17. Edward J. Blum and Paul Harvey, “How (George) Romney Championed Civil Rights and Challenged His Church," Atlantic, August 13, 2012, http://www .theatlantic.com/national/archive/2012/08/how-george-romney-championed -civil-rights-and-challenged-his-church/261073/.

  18. Russell Baker, “Observer: The Son of Pragmatism," NewYork Times, December 17, 1968, http://query. nytimes.com/mem/archive/pdf?res=9B03EED71730E034BC 4F52DFB4678383679EDE.

  19. Arthur I. Blaustein and Geoffrey P Faux, Star Spangled Hustle (Garden City, NY: Doubleday, 1972), 130.

  20. Nikole Hannah-Jones, “Living Apart: How the Government Betrayed a Landmark Civil Rights," ProPublica, June 25, 2015, https://www.propublica.org/article /living-apart-how-the-government-betrayed-a-landmark-civil-rights-law.

  21. Charles M. Lamb, Housing Segregation in Suburban America since 1960: Presidential and Judicial Politics (New York: Cambridge University Press, 2005), 137.

  22. Kotlowski, Nixon’s Civil Rights, 55; “Balanced Communities” and “Position Paper on Open Communities (II),” n.d., Box 10, Richard C. Van Duesen Subject Files, Record Group 207, General Records of the Department of Housing and Urban Development, National Archives, College Park, MD.

  23. Romney had said that to “solve problems of the ‘real city,’ only metropolitan-wide solutions will do.” Florence Wagman Roisman, “Affirmatively Furthering Fair Housing in Regional Housing Markets: The Baltimore Public Housing Desegregation Litigation,” Wake Forest Law Review 42 (2007): 333, 387.

  24. Christopher Bonastia, Knocking on the Door: The Federal Government’s Attempt to Desegregate the Suburbs (Princeton, NJ: Princeton University Press, 2006), 106.

  25. Lamb, Housing Segregation, 82-85.

  26. Hannah-Jones, “Living Apart.”

  27. Kotlowski, Nixon’s Civil Rights, 56.

  28. Ibid.

  29. Hannah-Jones, “Living Apart.”

  30. Kotlowski, Nixon’s Civil Rights, 61

  31. Lamb, Housing Segregation, 129.

  32. Hannah-Jones, “Living Apart.”

  33. “We will not seek to impose economic integration upon existing local jurisdictions; at the same time, we will not countenance any use of economic measures as a subterfuge for racial discrimination.” Richard Nixon, “Statement about Federal Policies Relative to Equal Housing Opportunity,” June 11, 1971, American Presidency Project, http://www.presidency.ucsb.edu/ws/ ?pid=3042.

  34. James v. Valtierra, Brief for Appellants James et al., 402 U.S. 137 (1971), 17-18.

  35. Dempsey Travis, An Autobiography of Black Chicago (Evanston, IL: Agate,

  2013), 156.

  36. “What We Want,” New York Review of Books, September 22, 1966, 5-6, 8.

  37. “Black Power Idea Long in Planning: S.N.C.C. Dissidents Wrote Document Last Winter,” New York Times, August 5, 1966.

  38. A1968 survey by the Ford Foundation found that “94 percent” of blacks surveyed in fifteen major cities said they wanted more black banks and stores in their communities. Over 70 percent believed that the black community should strive to shop at black stores whenever possible. Weems, Business in Black and White, 102.

  39. F. Nailor Fitzhugh, vice-president, Pepsi-Cola, Inc., personal interview, New York City, July 18, 1968.

  40. Thomas A. Johnson, “M’Kissick Holds End ofViolence Is Up to Whites,” New York Times, July 22, 1967; A. Phillip Randolph Institute, A “Freedom Budget” for All Americans: Budgeting Our Resources, 1966-1975 to Achieve “Freedom from Want” (New York: Author, 1966).

  41. “Words of the Week,” Jet, June 13, 1968, 30.

  42. Robert E. Weems and Lewis A. Randolph, “The National Response to Richard Nixon’s Black Capitalism Initiative: The Success of Domestic Detente,” Journal of Black Studies 32(1) (2001): 70.

  43. James Forman, “Total Control as the Only Solution for the Economic Needs of Black People,” Speech presented at the National Black Economic Development Conference, Detroit, MI, 1969, 7, http://www.episcopalarchives.org/Afro -Anglican_history/exhibit/pdf/blackm anifesto.pdf.

  44. William L. Henderson and Larry C. Lebedur, “Programs for the Economic Development of the American Negro Community: The Moderate Approach,” American Journal of Economics and Sociology 30(1) (January 1971): 27-45.

  45. Richard F. America Jr., “What Do You People Want?," in Black Business Enterprise: Historical and Contemporary Perspectives, ed. Ronald W. Bailey (New York: Basic Books, 1971), 136, 140.

  46. Dunbar McLaurin and Cyril Tyson, “The GHEDIPLAN for Economic Development," in Black Economic Development, ed. William Haddad and G. Douglas Pugh (Englewood Cliffs, NJ: Prentice-Hall, 1969), 126-131.

  47. H. Naylor Fitzhugh, ed., Problems and Opportunities Confronting Negroes in the Field of Business (Washington, DC: U.S. Department of Commerce, 1962), 74-75.

  48. Andrew Young and Edward Irons, dean of Howard’s Business School, had also suggested their own versions of a domestic Marshall Plan before McLaurin’s. McLaurin would soon become vice president of one of the country’s largest black banks, Industrial Bank in Washington, DC. Laura Warren Hill and Julia Rabig, eds., The Business of Black Power: Community Development, Capitalism, and Corporate Responsibility in Po
stwar America. (Rochester, NY: University of Rochester Press, 2012), 24.

  49. The Presidential Nominating Conventions, Congressional Quarterly Service, July 30 1968, 62.

  50. Roy Innis, “Separatist Economics: A New Social Contract" in Haddad and Pugh, Black Economic Development, 50-59.

  51. S. 3876, H.R. 18715, 90th Congress, 2nd Session, 1968.

  52. Section 201, § 1921; Robert J. Desiderio and Raymond G. Sanchez, “The Community Development Corporation," Boston College Law Review 10 (1969): 217, 247.

  53. Senate, Committee on Banking and Currency, Subcommittee on Financial Institutions, “Financial Institutions and the Urban Crisis," 90th Cong., 2d sess. (1968), 27.

  54. Weems, Business in Black and White, 115-123. The meeting with McKissick and Innis was kept a secret by the administration, and Nixon made sure never to be seen in public with the black radicals. Innis later shunned the president, but McKissick stayed loyal, and historian Robert Weems suspects that he aligned himself with the president to reap a personal benefit. After he switched from black militant to black Republican, he received $17 million to start “Soul City," an independent black community in North Carolina.

  55. Blaustein and Faux, Star Spangled Hustle, 56-58.

  56. Kenneth B. Clark, Dark Ghetto (New York: Harper & Row, 1967), 189.

  57. For a description of the dialogue surrounding the bill’s passage, see John Mc-Claughry, “Black Ownership and National Politics," in Black Economic Development, ed. Haddad and Pugh.

  58. Weems and Randolph, “National Response," 73.

  59. Blaustein and Faux, Star Spangled Hustle, 58.

  60. Weems, Business in Black and White, 90-95, 107-109.

  61. Memorandum, Howard J. Samuels to Matthew Nimetz, September 27, 1968. Quoted in Ibid., 105, n. 57.

  62. Dan T. Carter, The Politics of Rage: George Wallace, the Origins of the New Conservatism, and the Transformation of American Politics (Baton Rouge: Louisiana State University Press, 2000); Ian Haney-Lopez, Dog Whistle Politics: How Coded Racial Appeals Have Wrecked the Middle Class (New York: Oxford University Press,

  2014).

  63. Campaign ad, “The Wrong Road," https://www.c-span.org/video/?153104-1 /presidential-campaign-commercials-1968.

  64. Nixon campaign ad, “Black Capitalism." Described in Joe McGinnis, The Selling of the President 1968 (New York: Simon & Schuster, 1969).

  65. Both commercials are in the Nixon archives, https://ws.onehub.com/folders /nwsx31jv (start at 55:43).

  66. Nixon Presidential Library files, Q&A with students, transcript, File 8, ARRA 24, at the University of Oregon, 1968 (on file with author).

  67. Draft speech, “Human Dignity," First Draft, April 6, 1968, labeled RN’s Copy, File 8, ARRA 24, Nixon Library (on file with author).

  68. Nixon, “Address to the Republican National Convention."

  69. John Herbers, “New Drive Planned for Negro Self-Aid," New York Times, December 13, 1968, http://query.nytimes.com/mem/archive/pdf?res=9503E6D91 730E034BC4B52DFB4678383679EDE.

  70. “Nixon Urges ‘Black Ownership’ to Help Solve Racial Problems," New York Times, April 26, 1968, http://query.nytimes.com/mem/archive/pdf?res=9C05E5D91E3 9E134BC4E51DFB2668383679EDE.

  71. Earl Ofari, The Myth of Black Capitalism (New York: Monthly Review Press,

  1970), 3.

  72. Kotlowski, Nixon’s Civil Rights, 133.

  73. Monroe W. Karwin, “Best Laid Plans . . ." Wall Street Journal, December 24, 1970,

  1. The Wall Street Journal reported that much of the appeal of Nixon’s voluntary action program “rested in his view that it could serve as a substitute for costly Federal aid programs. Black Capitalism held the same allure."

  74. Max Ways, “The Deeper Shame of the Cities," Fortune, January 1968.

  75. “Black Capitalism," Chicago Defender, May 27, 1968; Tom Wicker, “In the Nation: A Coalition for What?," New York Times, May 19, 1968, http://query.nytimes.com /mem/archive/pdf?res=9F01E7DE1330EE3BBC4152DFB3668383679EDE.

  76. Dean Kotlowski, “Black Power Nixon Style: The Nixon Administration and Minority Business Enterprise," Business History Review 72 (1998): 418. Gerald S. Strober and Deborah H. Strober, Nixon: An Oral History of His Presidency (New York: HarperCollins, 1994), 110.

  77. William F. Buckley Jr., “On Black Capitalism," National Review, March 25, 1969. When the AFL-CIO denounced black capitalism as apartheid, William Buckley offered a forceful rejoinder in the National Review: “What makes apartheid objectionable is not that it is anti-democratic, but that it is compulsory." He then flipped the criticism on its head, “The call for special efforts to help the black people especially develop may be anti-democratic in the sense that it imposes special burdens on the white community, but it is surely democratic in the conventional context in that it helps those who need help the most."

  78. Kotlowski, Nixon’s Civil Rights, 135-136.

  79. “The Black Capitalism program was more alive in the typewriters of the press than in the minds of the President and his chief aides." Blaustein and Faux, Star Spangled Hustle, 128.

  80. Ibid., 131; Kotlowski, Nixon’s Civil Rights, 138; Weems, Business in Black and White, 145.

  81. Kotlowski, Nixon’s Civil Rights, 137.

  82. The board included the chairmen of General Motors, Sears, Woolworth, Continental Illinois National Bank, Levi Strauss, Marriott, Johnson and Sons, Bank of America, State Farm, Quaker Oats, and other CEOs or top management from Fortune 500 firms. The black members of the council were Berkley Burrell, director of the NBL; Joseph Goodloe, president of North Carolina Mutual Insurance Company; and John H. Johnson, president of Johnson Publishing.

  83. Blaustein and Faux, Star Spangled Hustle, 143-146.

  84. Theodore Cross, Black Capitalism: Strategy for Business in the Ghetto (New York: Atheneum, 1969).

  85. Theodore L. Cross, “A White Paper on Black Capitalism," in Black Economic Development, ed. Haddad and Pugh, 34, n. 1.

  86. Ibid., 24-25.

  87. Ibid., 25-26.

  88. Ibid., 27.

  89. Blaustein and Faux, Star Spangled Hustle, 149-150, 154.

  90. Ibid., Star Spangled Hustle, 155-157.

  91. Weems, Business in Black and White, 180-181; Blaustein and Faux, Star Spangled Hustle, 166.

  92. Chicago Tribune, December 7, 1969, section 4, 11, http://archives.chicagotribune .com/1969/12/07/page/67/article/mesbic-multiplies-money-for-minorities#text.

  93. The newspaper reported that the fate of the OMBE was riding on the success of this program. Ibid.

  94. Richard Rosenbloom and John Shank, “Let’s Write Off MESBICS," Harvard Business Review (September-October 1970): 94; James K. Brown, “Arcata Investment Company: The Prototype MESBIC," Conference Board Record (April 1970): 58.

  95. The GAO study of the MESBIC program found that only 19 percent of investors in the program had made equity investments and over 65 percent had made loans. “Interagency Report on the Federal Minority Business Development Programs," Executive Office of the President, Office of Management and Budget, Department of Commerce, Small Business Administration, March 1976, 40-42.

  96. “Black Capitalism: The Crowning Blow," Newsweek, October 4, 1971.

  97. Kotlowski, Nixon’s Civil Rights, 141. Moynihan called the program “the most powerful engine of the Federal establishment to help promote minority enterprise."

  98. Blaustein and Faux, Star Spangled Hustle, 202-203.

  99. Kotlowski, Nixon’s Civil Rights, 147-148.

  100. “Financial Institutions and the Urban Crisis," 359.

  101. The Post Office savings bank had been phased out in 1966; the deposits were still in flux until they were formally discontinued in 1971. So the postal deposits were small accounts from the low-income and small cash amounts collected from the Post Office’s money order sales. Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy (Cambridge, MA: Harvard University Press, 2015), chap. 7.

  102. Blauste
in and Faux, Star Spangled Hustle, 203-205.

  103. John David Skrentny, The Ironies of Affirmative Action: Politics, Culture, and Justice in America (Chicago: University of Chicago Press, 1996), 121-125, 142.

  104. Kotlowski, Nixon’s Civil Rights, 106.

  105. Moynihan had urged Nixon to “dissolve black urban lower classes" by turning “militant" blacks into “judges, professors, congressmen, cops." Ibid., 97-98.

  106. Skrentny, Ironies, 121-125.

  107. U.S. Congress, House, Select Committee on Small Business, Subcommittee Chairman’s Report, “Tax Exempt: Foundations and Charitable Trusts," 90th Congress 2nd Session, March 26, 1968, 2.

  108. Karwin, “Best Laid Plans."

  109. Michael Brower and Doyle Little, “White Help for Black Business," Harvard Business Review, May 1970.

  110. Blaustein and Faux, Star-Spangled Hustle, 222, citing Department of Commerce, Office of Minority Enterprise, “MESBIC Report—Summer of 1971," 2 (unpublished document).

  111. “Nixon’s ‘Black Capitalism’ Plan Has Fallen Far Short of Goals," San Bernardino Sun, June 27, 1970, 3.

  112. Whitney M. Young Jr., “It’s Good Business for Business to Solve Social Problems," New York Times, January 11, 1970, http://www.nytimes.com/1970/01/11 /archives/point-of-view-its-good-business-fo r-business-to-solve-social.html.

  113. Whitney M. Young Jr., Beyond Racism: Building an Open Society (New York: McGraw-Hill, 1969), 151, 163-164.

  114. Whitney M. Young Jr., “The Ghetto Investment,” New York Times, March 14, 1971, http://www.nytimes.com/1971/03/13/archives/the-ghetto-investment.html.

  115. In fact, during the years 1968 and 1969, “brutal state repression helped legitimate the Panthers in the eyes of many supporters and fostered increased mobilization.” Joshua Bloom and Waldo E. Martin Jr., Black against Empire: The History and Politics of the Black Panther Party (Oakland: University of California Press,

  2013), 369.

  116. Ross K. Baker, “The Transformation of the Panthers,” Washington Post, February 13, 1971, B1-B2.