Chapter 18

DEALING WITH THE COMMUNITY

The severest test of a business enterprise is its relation to the community, both the commercial houses with which it deals and the consuming public to whom it sells. With the former a firm must establish credit, with the latter it must build up confidence. Credit is established by the prompt payment of bills, the length of time a firm has been in operation allowing time to make a good reputation and its business methods in dealing with its suppliers. The confidence of customers is secured by the care and accuracy with which orders are filled, the length of time the firm has been in a certain locality and patrons have dealt with it and by the whims and prejudices of the community or locality.

It was out of the question to get data which would cover all of these points, but sufficient material was gathered to throw considerable light on (1) the length of time the firms had been established, (2) the length of time they had been situated at the particular address where they were found, (3) the means used in keeping the accounts of sales, expenditures, _etc._, (4) whether they gave credit to customers and whether they received credit from suppliers, and (5) what proportion of their customers were white and what proportion were colored.

I. AGE OF ESTABLISHMENTS

Negroes are often said to be able to start but unable to continue in undertakings which require determination, persistence, tact, and which involve strenuous competition. This opinion is certainly not borne out by the age of their business enterprises in New York. For, in the face of conditions they had met in beginning business in New York City, only 51 out of the known 309 enterprises had been established less than one year; 67 between one and two years; 114 between two years and six years, and 33 between six years and ten years. Twenty-two had been established between ten and fifteen years, and twenty were fifteen or more years old, nine of them having been established twenty years or more; the age of two was unknown. When it is remembered that during the first decades after emancipation the larger number of the most energetic Negroes was absorbed in professional occupations, principally teaching, because of the great need in race uplift, and that business pursuits have had until within the last few years minor consideration, to say nothing of trials and failures in the effort to gain business experience, the age of these enterprises must be counted a creditable showing. And it is a good recommendation to the commercial world that the Negro has not made a reputation for bankruptcy assignments. When one reflects that nearly all of these proprietors and promoters have migrated to New York City from less progressive communities and that the chances to get experience in a well-established business before they attempt to start an enterprise for themselves is, except in very rare cases, denied Negroes, the permanency of the ventures in the commercial current deserve commendation.

2. PERMANENCE OF LOCATION

No less interesting than the length of time a firm had been established was the length of time it had been located at the address where it was found by the canvasser in 1909. The exact causes which induce the Negro firms to change addresses could not be ascertained, but 81 out of 275 had been at the address where they were found less than one year, although, as shown above, only 51 were less than one year old; 72 had been at their present address between one year and two years, which leaves a smaller margin between that number and the 67 shown to have been established that length of time. There was a similar small margin of comparison in the groupings of two to four and four to six years between the time the firms were established and the length of time they had remained at the one address. This shifting is due probably to the movements of the Negro population upon which the firms depend for patronage, but partly to inexperience.

TABLE XXVI. SHOWING LENGTH OF TIME 309 BUSINESS ENTERPRISES HAD BEEN AT ADDRESSES WHERE FOUND, MANHATTAN, 1909.

+---------------------------------------- |Length of time at present address. --------------------------+-------+-------+-------+-------+-------+ | Less | 6 mos.| 1 yr. | 2 yrs.| 4 yrs.| Class of | than | to 11 | to 1 | to 3 | to 5 | establishment. | 6 mos.| mos. | yr. 11| yr. 11| yr. 11| | | | mos. | mos. | mos. | --------------------------+-------+-------+-------+-------+-------+ Barber shops | 5 | 1 | 13 | 10 | 5 | Brokers | 1 | 2 | 3 | 2 | 2 | Coal, wood and ice | 1 | 2 | 2 | 3 | 1 | Dressmaking and millinery | 1 | 1 | 2 | 3 | -- | Employment agencies | -- | 3 | 2 | 5 | 1 | Express and moving vans | 2 | 2 | 1 | 1 | 1 | Groceries | 4 | 6 | 12 | 7 | 4 | Hairdressers, etc. | 1 | 1 | 2 | 2 | -- | Hotels and lodging houses | -- | 2 | 3 | 5 | 1 | Pool and billiard rooms | 1 | 3 | 1 | 2 | 1 | Printers | -- | -- | 3 | 1 | -- | Restaurant and lunch rooms| 5 | 8 | 3 | 7 | 2 | Saloons and cafés | -- | 2 | -- | 2 | -- | Tailoring, pressing, etc. | 2 | 5 | 10 | 7 | -- | Undertakers | 1 | 1 | -- | 3 | 1 | Miscellaneous | 6 | 12 | 13 | 6 | 3 | --------------------------+-------+-------+-------+-------+-------+ Total | 30 | 51 | 70 | 66 | 22 | --------------------------+-------+-------+-------+-------+-------+

+----------------------------------------- |Length of time at present address. --------------------------+--------+--------+-------+--------+------ | 6 yrs. | 8 yrs. | 10 | | Class of | to 7 | to 9 | yr. | |Total. establishment. | yr. 11 | yr. 11 | and |Unknown.| | mos. | mos. | over | | --------------------------+--------+--------+-------+--------+------ Barber shops | 3 | 3 | 5 | 5 | 50 Brokers | 2 | 1 | -- | 3 | 16 Coal, wood and ice | -- | 2 | 1 | 7 | 19 Dressmaking and millinery | -- | -- | -- | 1 | 8 Employment agencies | -- | 1 | -- | 2 | 14 Express and moving vans | -- | 1 | 1 | 3 | 12 Groceries | -- | -- | 1 | 2 | 36 Hairdressers, etc. | -- | -- | -- | 2 | 8 Hotels and lodging houses | 3 | -- | 2 | 1 | 17 Pool and billiard rooms | -- | -- | 1 | 1 | 10 Printers | 1 | -- | -- | -- | 5 Restaurant and lunch rooms| -- | -- | -- | 1 | 26 Saloons and cafés | 1 | -- | -- | -- | 5 Tailoring, pressing, etc. | -- | -- | -- | -- | 24 Undertakers | 2 | 1 | 1 | 1 | 11 Miscellaneous | 2 | -- | 1 | 5 | 48 --------------------------+--------+--------+-------+--------+------ Total | 14 | 9 | 13 | 34 | 309 --------------------------+--------+--------+-------+--------+------

The first of these facts would have effect on the question of a firm's getting credit on purchases of supplies and both facts mean a great deal in securing and holding a retail trade.

That a detailed comparison may be made, Table XXVI, showing length of time firms had been at addresses where they were found, is added (p. 119).

3. BUSINESS METHODS

The age and permanence of a firm does not influence its success so much as its business methods. And an index of its efficiency in this respect is its methods of accounting. These are shown in the means used for keeping accounts Negro business men were asked whether or not they used ledger, journal, cash-book, day-book, or other records. Some enterprises such as grocery stores, would have need of a mechanical register. If a firm had one, it was inspected. Facts about 49 establishments were not available. Of these, 35 firms had no means of keeping accounts, other than the memories of those running the place. These were, however, very small enterprises. Of the 260 remaining, 60, or 23 per cent, kept a ledger, 122, or 46.9 per cent, kept a cash-book, and 33.5 per cent had day-books. Thus showing that 37 more firms kept day-books than kept ledgers, and 62 more firms kept cash-books than ledgers. Of the 260, 28 had mechanical cash registers and 64 had some form of record in addition to or other than those named. In a phrase, the Negro business man is learning the methods of the business world in keeping track of his business affairs, though in most cases they are small. Table XXVII gives the details on this point. (See p. 121.)

TABLE XXVII. MEANS FOR KEEPING ACCOUNTS USED BY 309 NEGRO BUSINESS ENTERPRISES, MANHATTAN, 1909.

+----------------------------------------------- |Means used in accounting by Negro business | enterprises. +-----------+-----------+-----------+----------- Class of | Ledger. | Journal. | Cash-book.| Day-book. establishment. | | | | --------------------------+-----+-----+-----+-----+-----+-----+-----+----- | Yes.| No. | Yes.| No. | Yes.| No. | Yes.| No. --------------------------+-----+-----+-----+-----+-----+-----+-----+----- Barber shops | 2 | 43 | -- | 45 | 23 | 22 | 7 | 38 Brokers | 13 | 3 | 3 | 13 | 16 | -- | 8 | 8 Coal, wood and ice | -- | 13 | 1 | 12 | 2 | 11 | 7 | 6 Dressmaking and millinery | 1 | 7 | -- | 8 | 5 | 3 | 1 | 7 Employment agencies | 3 | 11 | 2 | 12 | 10 | 4 | 4 | 10 Express and moving vans | -- | 10 | -- | 10 | 4 | 6 | 5 | 5 Groceries | 10 | 25 | 3 | 32 | 12 | 23 | 21 | 14 Hairdressing, etc. | 1 | 4 | -- | 5 | 1 | 4 | 3 | 2 Hotels and lodging houses | 4 | 6 | -- | 10 | 3 | 7 | 4 | 6 Pool and billiard rooms | 1 | 9 | -- | 10 | 5 | 5 | 2 | 8 Printers | 2 | 3 | -- | 5 | 3 | 2 | -- | 5 Restaurants and | | | | | | | | lunch rooms | 2 | 10 | -- | 12 | 8 | 4 | 1 | 11 Saloons and cafés | 3 | 2 | 1 | 4 | 2 | 3 | 2 | 3 Tailoring, pressing, etc. | 2 | 19 | 2 | 19 | 7 | 14 | 8 | 13 Undertakers | 8 | 3 | 1 | 10 | 5 | 6 | 5 | 6 Miscellaneous | 8 | 32 | 2 | 38 | 16 | 24 | 9 | 31 --------------------------+-----+-----+-----+-----+-----+-----+-----+----- Total | 60 | 200 | 15 | 245 | 122 | 138 | 87 | 173 --------------------------+-----+-----+-----+-----+-----+-----+-----+-----

+------------------------------------------ |Means used in accounting by Negro | business enterprises. --------------------------+--------------+-----------+-------+------- | Mechanical | Other | | |cash-register.| records. | | Class of +------+-------+-----+-----+ | establishment. | Yes. | No. | Yes.| No. |Unknown|Totals --------------------------+------+-------+-----+-----+-------+------- Barber shops | 10 | 35 | 2 | 43 | 5 | 50 Brokers | -- | 16 | 5 | 11 | -- | 16 Coal, wood and ice | -- | 13 | 1 | 12 | 6 | 19 Dressmaking and millinery | -- | 8 | 1 | 7 | -- | 8 Employment agencies | -- | 14 | 14 | -- | -- | 14 Express and moving vans | -- | 10 | 1 | 9 | 2 | 12 Groceries | 7 | 28 | 2 | 33 | 1 | 36 Hairdressing, etc. | -- | 5 | 5 | -- | 3 | 8 Hotels and lodging houses | -- | 10 | 2 | 8 | 7 | 17 Pool and billiard rooms | 5 | 5 | -- | 10 | -- | 10 Printers | -- | 5 | 2 | 3 | -- | 5 Restaurants and | | | | | | lunch rooms | -- | 12 | -- | 12 | 14 | 26 Saloons and cafés | 4 | 1 | -- | 5 | -- | 5 Tailoring, pressing, etc. | -- | 21 | 7 | 14 | 3 | 24 Undertakers | -- | 11 | 11 | -- | -- | 11 Miscellaneous | 2 | 38 | 11 | 29 | 8 | 48 --------------------------+------+-------+-----+-----+-------+------- Total | 28 | 232 | 64 | 196 | 49 | 309 --------------------------+------+-------+-----+-----+-------+-------

4. CREDIT RELATIONSHIPS

The manner and care with which a firm keeps record of the business it transacts is closely connected with its credit relations with the buying and selling community. And both these determine to a large extent its business operations. Considerable light was thrown upon the credit relations of Negro enterprises by finding out, wherever possible, whether a firm gave credit occasionally or habitually to customers and whether it received credit from suppliers. Naturally, many proprietors would not give any reply to such an inquiry, and especially about their credit standing with wholesale firms. On such a delicate point, however, information about the giving of credit was secured from 205 firms, and about the receiving of credit from 94 firms. Of the 205 that furnished statements on the matter of giving credit, 87, or 42.4 per cent, occasionally, and 69, or 33.6 per cent, habitually had given credit to customers, while 49, or 23.9 per cent, did not allow credit. When asked about their credit relations with suppliers, 47 replied that they did receive credit, and 47 that they did not receive any; and 215 gave no reply on this point.

5. THE PURCHASING PUBLIC

Length of time established, length of location at an address, methods of accounting and the credit relations play no more important a part in the efforts of Negroes to build up their business enterprises than do the subtle whims and prejudices of the community. This is shown first by the location of nearly all the enterprises in Negro neighborhoods. Of all the 309 enterprises, 288 were located either within or upon the border of the Negro districts. It may be expected, of course, that Negroes will look to their own people first for their patronage, but they should be allowed to cater to the public at large, especially in a cosmopolitan commercial center like New York. In the case of real estate brokers, this is partly true and has grown partly out of the Negro broker's ability to handle more successfully than others properties tenanted by Negroes. It is not generally the case in other lines of business, however, as the testimony of many Negro business men shows.

It was difficult to get statements that would be a basis for a percentage estimate of how liberally white people traded with these Negro firms. Brokers gave no statements that could be so used because nearly all of the 16 brokers had many transactions which involved white owners and colored tenants, white or colored sellers and white or colored buyers. Employment agencies faced a similar situation. Of the other 279 firms, 81, or 29.7 per cent, reported no white customers; 92, or 33.3 per cent, reported that less than 10 per cent of their customers were white. Thus 63 per cent of the Negro business firms have to depend upon the small purchasing power of their own people for the trade with which to build up their enterprises. This is partly due to the feeling of the Negroes in business that they are to cater mainly to Negroes and partly to their inexperienced way of handling customers. But the main reasons are the difficulties they have in renting places in desirable localities and in the refusal of white people to patronize Negroes in many lines of trade.[76] Of the remaining firms 42, or 15 per cent, reported between 10 and 49 per cent white customers. The numbers above were small and only one firm, in the class of dressmaking and millinery, and three in the miscellaneous class, reported an exclusive white trade.

What a battle the Negro business man has to fight can be surmised when to the fact of a narrow patronage from his own people, who have the small purchasing power of their low-paid occupations, is added the severe competition of white firms with larger capital, with more extended credit and larger business experience, that vie with him for even this limited field. Table XXVIII (p. 125), which follows, was compiled on the basis of proprietors' statements of the probable number of white and colored customers over a given number of months. It is about as accurate as such an estimate can be and is far more reliable and definite than general impressions. The percentages of white customers are given, it being understood that the remainder were Negroes. This small amount of information is very significant in showing how the attitude of the white public affects the economic advancement of the Negroes.

In the foregoing chapter we have reviewed some very definite facts concerning the Negro business man's dealing with the community. We have seen that his enterprises are permanently established although against great odds, but that permanence of address is not so well secured. Nearly all, 260 out of 309, were known to have some of the usual methods of keeping accounts, and of the 205 from whom information on the matter was obtained about three-fourths gave credit either occasionally or habitually; while of the 94 who answered as to their receiving credit, about half did and the other half did not receive credit.

TABLE XXVIII. ESTIMATED PROPORTIONS OF WHITE CUSTOMERS OF 279 NEGRO BUSINESS ENTERPRISES, MANHATTAN, 1909.

+---------------------------------------- |Estimated Proportion of Whites of Total |Customers of Negro Business Enterprises. +-------+-------+-------+-------+-------+ Class of establishment. | None. | Less | 10%- | 25%- | 50%- | | | than | 24%. | 49%. | 74%. | | | 10%. | | | | ---------------------------+-------+-------+-------+-------+-------+ Barber shops | 16 | 23 | 7 | 2 | -- | Brokers | -- | -- | -- | -- | -- | Coal, wood and ice | 5 | 5 | 3 | 1 | 1 | Dressmaking and millinery | 1 | 1 | -- | -- | 1 | Employment agencies | -- | -- | -- | -- | -- | Express and moving vans | -- | 1 | 1 | 1 | 5 | Groceries | 10 | 18 | 2 | 4 | 2 | Hairdressers, etc. | 1 | 5 | -- | -- | -- | Hotels and lodging houses | 15 | 1 | -- | 1 | -- | Pool and billiard rooms | 3 | 3 | 2 | -- | 2 | Printers | -- | -- | -- | 2 | 2 | Restaurant and lunch rooms | 16 | 7 | 1 | 2 | -- | Saloons and cafés | 1 | 1 | 1 | -- | 2 | Tailoring, pressing, etc. | 4 | 9 | 1 | 5 | 2 | Undertakers | 5 | 6 | -- | -- | -- | Miscellaneous | 4 | 12 | 4 | 2 | 11 | ---------------------------+-------+-------+-------+-------+-------+ Totals | 81 | 92 | 22 | 20 | 28 | ---------------------------+-------+-------+-------+-------+-------+

+---------------------------------------- |Estimated Proportion of Whites of Total |Customers of Negro Business Enterprises. +-------+-------+-------+--------+------- Class of establishment. | 75%- | 90%- | 100%. |Doubtful|Total. | 89%. | 100%. | |and | | | | |Unknown.| ---------------------------+-------+-------+-------+--------+------- Barber shops | -- | -- | -- | 2 | 50 Brokers | -- | -- | -- | -- | -- Coal, wood and ice | 1 | -- | -- | 3 | 19 Dressmaking and millinery | 2 | 2 | 1 | -- | 8 Employment agencies | -- | -- | -- | -- | -- Express and moving vans | 2 | 1 | -- | 1 | 12 Groceries | -- | -- | -- | -- | 36 Hairdressers, etc. | -- | 2 | -- | -- | 8 Hotels and lodging houses | -- | -- | -- | -- | 17 Pool and billiard rooms | -- | -- | -- | -- | 10 Printers | -- | 1 | -- | -- | 5 Restaurant and lunch rooms | -- | -- | -- | -- | 26 Saloons and cafés | -- | -- | -- | -- | 5 Tailoring, pressing, etc. | 1 | 2 | -- | -- | 24 Undertakers | -- | -- | -- | -- | 11 Miscellaneous | 4 | 6 | 3 | 2 | 48 ---------------------------+-------+-------+-------+--------+-------- Totals | 10 | 14 | 4 | 8 | 279 ---------------------------+-------+-------+-------+--------+--------

The attitude of the white purchasing public has had a tremendous effect on Negro business, because it has failed to forget color in its business dealings. In many lines of business white people will not patronize Negroes at all and about two-thirds of all enterprises depend upon the low purchasing power of the Negro group. The idea that white people will not trade with them to any considerable extent and that they must depend upon their own people is so steeped into the mind of the Negro that he often does not perceive that he is catering to the whole public, white and black.

FOOTNOTES:

[76] This conclusion is based upon the statements of Negroes that white people have entered their stores apparently to buy, but beat a retreat upon finding a Negro in charge. Two Negro proprietors employed white workmen to call at residences, _etc._, in the operation of their businesses while they kept in the background. The writer traced out cases of refusals to rent places to Negro firms. Some of the incidents would be amusing if they were not tragic.