"I went to 50 banks over a period of two years," said the muscular young man, eyes glinting in the dim basement light, voice tight as if to control an inner rage. "Fifty. The banks are telling you, 'We only loan niggers enough money to buy a car.'"
The young man finally obtained his bank loan with help from the Greater Washington Business Center, a nonprofit group that helps minority businessmen. Now, working with associates in the basement of his modern Anacostia townhouse, he is preparing to set up a high-volume, fast food business in a black area of the city.
He is a dynamic, confident young man. Seated at his big desk in the basement with his cash flow charts and calenders, his associates relaxing over a chessboard or tapping at a computer console nearby, he evokes a textbook image of American business entrepreneurship.
Except that he is black. As he tells his story he wrestles with the delicate, terrible question of race, struggling to explain the special uncertainty, frustration and fear of being a minority person trying to enter the American economics mainstream.
Two decades after Brown v. Board of Education and a decade after the urban riots and Nixon's Black Capitalism, 38 million minority persons in this country still own little more than 3 per cent of the country's businesses and reap only seven-tenths of 1 per cent of total business receipts, according to officials of the federal Office of Minority Business Enterprise.
In Washington, the nation's promier black city with a minority population of more than 70 per cent, there are about 5,000 minority businesses, or one-third of the total, according to city officials. For the most part they are "Mom and Pop" operations with no paid employees, all of them together grossing less than $200 million a year, or less than 3 per cent of gross receipts for all business in the city.
"The economic field is probably the next great civil rights struggle that we minorities are going to have," said Milton G. Carey, a member of Washington's new Minority Business Opportunity Commission. Frank Kent of the National Association of Minority Contractors on the threshold of "the last opportunity to really open of "the last opportunity to really open up the whole economic system . . . An awful lot of black leaders around the world are saying the capitalist system will not work to include all people."
Minority entrepreneurship in Washington is considered livelier than in most other cities. Federal jobs have made the capital a magnet for talented minority people, and some of them eventually turn to business careers. "It's a very feisty atmosphere, a lot of activity," said one city official.
But, listen to the young entrepreneur in the Anacostia basement:
"I don't want my name going into the paper, understand? A minority going into business must be very careful about revealing his identify for several reasons. Unfortunately, it appears that various aspects of the minority community lack appreciation for certain minority enterprises . . ."
He pauses, voice softening, tiptoeing in a sensitive area. "The black community, once it knows who actually owns a business, often can place demands on the owner . . . He may get milked, see? And also I think that oftentimes blacks expect more of blacks . . . And some blacks lack the necessary confidence in the ability of a minority business to deliver competent services . . ."
To put it bluntly, he is afraid of jealous persons and of getting shot by thieves. As he elaborates imaginatively on the terrible things that could happen to him should be become known as the owner of the business, and on the subject of high crime in black areas, his voice rises to a shout of rage: "How do I know why niggers kill niggers? It's a fact of life, it's just something I have to live with."
In setting up his fast-food business in-a-black area of the city virtually devoid of business enterprise, this man is doing something that city officials say is desperately needed and that they are trying to encourage.
The city's Neighborhood Reinvestment Commission is studying undercapitalized areas of the city - those without enough business firms to support the surrounding population - in an effort to establish a data base for use in persuading the city's banks and savings and loan institutions to increase their lending in minority areas.
The young man in the basement is a Vietnam combat veteran, an ex-officer. He has a Ph.D. He has successfully held jobs, and he had obtained a national food-chain franchise. Still he couldn't get a bank loan.
Finally experts from the Greater Washington Business Center, whose officiers are practiced in putting strong moral and personal pressure on banks, were able to help him obtain his loan from two local banks.
To get a loan the supporting data the young man had to have, along with professional marketing studies, included a petition in his favor signed by 518 local residents, nine school principals and the ministers of six local churches.
"I'm not saying at all that the black community doesn't understand business," said the young man. "In fact, there's no such thing as just one black communtiy, and most minorities, I think, do understand business. There will always be criminals and those people who try to hide behind economic deprivation . . .
"And there's fashionable trend toward being 'sophisticated' and rejecting ownership and profit . . . But America is based on profit and productivity, and I have no reason to deviate from that."
Although ordinarily businessmen like the exposure they get by appearing in a newspaper article, most of the minority businessmen contact for this article said they didn't want their names in the paper.
A car dealer said he was facing a zoning hearing in a white area and was worried about discrimination that publicity might bring on. A successful young developer said, "I'm just interested in getting on and doing my work."
"They don't know what to expect," explained GWBC's finance man Frank Washington. "They have a big fear of being scrutinized, a fear of retaliation if they get too big. If a guy's making too much, people feel he doesn't need help."
Vernon Coleman, 37, is a large man with a tremendous intensity in the way he speaks. He keeps his voice low, precise, and then every so often expels his breath explosively as if holding himself under great control.
Coleman is a very successful black businessman who moved to Washington two years ago to become half owner of the multimillion-dollar Schlitz beer distributorship here.
"Let me just sum it up for you as a black person," he said, sitting behind a neat desk in his large, modern office in Northeast Washington .
Breath explosion. Then, carefully: "It is . . . extremely difficult to get the initial first step in a business . . ."
Coleman, who also had GWBC support in obtaining bank financing, is an amazing American success story. Born the youngest of 12 children in Shreveport, La. he fled to San Francisco at the age of 14 to get away from the vicious racism of the South.
He started in San Francisco as a milk truck driver and began fighting his way up. In 1968 he went to work for Schlitz in San Francisco, and soon was rising up the ranks there.
Then Coleman was caught up in one of the great ironies of history, which he is not at all averse to discussing: Being black started to help him. I was a period in which corporations were seeking to promote blacks into highly visible positions. Coleman quickly rose to be chief of the brewery's distribution in the San Francisco District, known as one of the "A" districts because it is heavily populated and lucrative. Schlitz has about 140 districts nationally, of which only 30 have the "A" designation, Coleman said.
"Being black, it's had its negative and positive sides," said Coleman. "The first district (San Francisco) I wound up with as a result of being black was one of the highest value, highest populated ones. Butte, Montana (a less lucrative district) wouldn't have been ready for a black."
The negative side of all this, said Coleman, was that "Others were envirous because they didn't have A districts." The others, he said, were mostly white since the brewery has very few minority district managers.
After turning aside several chances to go to Milwaukee because he didn't want to get bottled up in the political infighting of a corporate headquarters, Coleman seized the chance to come to Washington and buy half interest in the Schlitz distributorship here, American Sales Co. Inc., which he said has more than $10 million in annual gross sales. This distributorship is independent of the brewery corporation, for which Coleman worked directly in San Francisco.
"I came here making a lot more than most supergrades in this town," said Coleman. "It's difficult for people even in Washington accept that I am half owner of this corporation . . . There is a built-in envy thing from both blacks and whites."
Coleman would not disclose the source of his financing, saying however that it was far beyond the capability of the SBA or local minority financial institutions to provide. His record at Schlitz, the helped him to get his loan, he said.
"It's unfortunate," he said, "that institutions tend to look at blacks as 'they' rather than as individuals."
He added that the failure rate of minority businesses is higher than for businesses as a whole, however, and that financial institution cannot afford to overlook this.
Joseph McLaughlin, 44, a black Washington businessman who was successful running the Black Nugget Restaurant and has now opened an Oldsmobile dealership in Prince George's County, said that minorities get involved in a vicious circle when seeking bank loans.
To get a loan collateral is needed. Since minorities frequently have little collateral to start with, the loans they can qualify for tend to be small. Thus minorities often find themselves in the position of starting a business without the extra capital needed to carry them across the rough spots to success.
The chief of the Greater Washington Business Center, which helped McLaughlin as well as so many others, is a 33-year-old man named Darryl Hill who played football briefly for the New York Jets in the mid-1960s before becoming consultant to minority businesses.
Hill still retains the relaxed physical mannerisms of an athlete. He is friendly, with sparkling eyes and a pleasant hesitancy in his speech, as if he doesn't want to scare his listener with too much at once.
But he has plenty to say, and his organization, which helps about 2,000 small businesses a year, mostly in preparing SBA and bank loan applications, is a bustling place.
There has been an overall slowdown in the development of minority businesses, said Hill. For one thing, the great optimism that accompanied the start of Black Capitalism programs a decade ago has wanted.For another, there has been limited in appropriations and not been able to handle all who want to benefit from them.
Then too, he contends, white resistance is growing as it appears that minorities can be successful. "As long as (aid to minorities) was all in the area of welfare, that was cool. But when they see effective business competition, then it gets heavy."
Hill has recently gone into business himself, joining a group of entrepreneurs to open an expensive eatery in Southwest Washington called W.H. Bone & Co. (for "Washington Ham Bone," Hill says) that instantly became the fashionable hangout for the city's prominent black social and political elite and liberal whites.
Over chittelings, spareribs and several bottles of French wine at the restaurant on a recent night, Hill expounded on the vexations and rewards of going into business as a minority person.
"Only about one in every 1,000 people is really mentally and emotionally equipped to be an entrepreneur - if the number's that high," said Hill. "Only 5 per cent of the U.S. population receives income from nonemployment sources, and only 2 per cent are self-employed."
Against that background he said, the added burdens of being a minority person can be a great additional impediment to success.
Hill said that "massive injections of capital into the minority business sector are needed if the nation is really serious about attaining some level of parity (for minorities) . . .
"The backbone of economic prosperity is business enterprise. You've got to create black millionaires . . . We need (black) magnates and moguls . . . not just corner grocery stores . . . This is not welfare. You get it back in spades. It's the cheapest welfare program in the world . . .
Speaking of black magnates, Hill, said that two years ago he helped Theodore R. Hagans Jr. - developer of the $275 million Ft. Lincoln New Town and considered to be perhaps Washington's wealthiest black businessman - to obtain a multimillion dollar noncompetitive contract under the SBA program to aid "socially and economically disadvantaged" minority businessmen. The contract was to run the 3,300-space parking concession at Dulles International Airport.
"SBA's reaction was that Ted Hagans was too affluent," said Hill, "but at the same time the FAA said (whoever gets the contract) must have a certain bonding capacity, lines of credit and so on. I said, 'You got us between a rock and a hard place . . . You gotta be rich, you gotta be poor'."
Hagans finally did land the contract. Ironically, he did so well with it that, according to confidential FAA audits obtained by The Washington Post, he will realize three times the profits anticipated. The audit recommended that FAA renegotiate the contract to limit Hagans' profits and increase payments to the government in the future.