I Never Had It Made: An Autobiography of Jackie Robinson Page 20
I can recall now that several people whom I respected highly questioned the judgment of our board in selecting Mr. Hudgins, but I dismissed these comments as having no basis except possible personal prejudice against the man. As the bank opened with great acceptance initially from the community, I felt even better about the situation. Because of the publicity about disagreement with McLaurin, there were those who had doubted that we would ever open and that, if we did, our career would be short-lived. I felt very proud to be associated with the only interracially owned and operated bank in the Harlem community and also the only bank in Harlem which was black controlled. The attendance at the opening was heartening not only in terms of numbers but also because of the pride that so many Harlemites, young and old, seemed to take in the bank. Throughout the ceremonies, as people passed through, I heard several references to “our bank.”
Bill Hudgins really took hold. He delighted in saying that Freedom was a bank which is “color blind.” It was, for him and for all of us, a bank which would not discriminate against anyone because of color, but also it would make a real difference in the economic health of Harlem. And since Harlem is regarded as the black capital of the black national community, its success could become a very influential factor in this country.
Bill pledged that Freedom would also be a bank to which anyone could come to discuss a problem directly with the president.
I would find it hard to describe how hard Bill Hudgins worked at building our new bank. There were times when we directors feared he was seriously jeopardizing his health with the energy and industry which he applied.
Naturally, the growth of Freedom also did much to ease the problem New York City blacks have had for years in getting mortgage credit. As Carver president Joe Davis once said, “Where there is a lack of mortgage credit, there is no money to improve the ghetto, no money to get out of the ghetto.”
Bill Hudgins voiced well the philosophy of our bank when he said that we did not subscribe to the idea of chasing the white merchant out of Harlem. He felt that as Freedom became more competitive in quality, knowledge, and service, we would automatically move to the forefront and render a more competitive service. He felt that this would motivate the white banks to become more competitive, to hire more blacks, and to expand the services to the community which they had withheld while accepting the community’s deposits.
A typical reaction about Freedom National Bank on the part of aware Harlemites was voiced by Clarence Funnye, a CORE leader. He said, “Before Freedom National, you went into the white bank with the distinct impression you went with what you had in your hand, begging the powers that be and generally you were turned down. With Freedom the community looks less like a colony, less of an area for exploitation.”
In February, 1966, Mayor Lindsay participated in our first anniversary, unveiling a plaque of the bank which honored more than two hundred “charter depositors” who opened major accounts with us. The list included institutions, corporations, individuals, agencies, and labor unions which had deposited with us a minimum of $10,000. When we marked that anniversary, we had gone from the initial $1.5-million capitalization to a volume of more than $9,000,000. We had loaned more than $300,000 to small businessmen. We could feel justifiably that the future of Freedom was assured.
During the years since its founding in 1964, Freedom National Bank had really become a source of pride for black people. It had grown in status to the largest of the black banks in the nation.
I was happy about that, but I had mixed emotions, which I had entertained for a couple of years. I finally began to feel convinced that, although we had made tremendous strides, we were approaching the brink of disaster.
Among those closest to me—family, friends, and close business associates—there are two schools of thought as to whether I should be talking about the behind-the-scenes story of how we at Freedom Bank narrowly averted a major crisis which could have wrecked the institution. Today, since we have successfully weathered the storm, some people think that it will do damage to public confidence in us to talk about the danger we confronted and overcame. I have given a great deal of thought to that point of view because I love the bank and what it has achieved and would not want to hurt it. But I think there are vital lessons to be learned by telling frankly what happened to us and why. I think that my own ego or that of any other individual is not as important as the need for maturity and stability in black business.
In the first place, I want to declare honestly that I, as chairman of the board of directors, and some other members of the board were guilty of a very serious mistake. I don’t choose to confess for anyone else so I will focus upon my own shortcomings. I think that if I had taken more time to probe into the daily administration of the bank, I could have helped to avoid trouble long before we had to confront it the hard way. Even to me, a novice in banking and financial matters, it was becoming obvious in the latter part of the sixties that we were not being cautious enough with the processing of loan applications—auto loans and otherwise—that we were not doing enough research on applicants, and that we had a tendency to favor friends on the basis that one can trust one’s friends in business—an utterly risky philosophy. I also began to get worried about the large amounts of money we were writing off in bad loans.
My worries were constantly lulled whenever these questions came up in board meetings, and Bill Hudgins and Irv Altman, our white executive vice-president who had a thorough banking background, would reassure us with what seemed to be perfectly logical explanations. At the same time, I was hearing warnings coming from respected friends and business associates who were telling me that I would have terrible regrets if I didn’t check out what was going on at the bank. People who were knowledgeable in the financial community were persistently telling me that the word was around that the bank was headed for serious problems.
I couldn’t help feeling uncomfortable at constantly hearing all these warnings. But I had a lot of confidence in Bill Hudgins and his administration of the bank.
One day in 1968, one of the most powerful men in Wall Street circles bluntly said to me: “If you want to save Freedom National Bank, the only way you are going to be able to do it is to take it over and clean house. You are in serious trouble.”
Shortly thereafter, I was leaving the bank one afternoon and met Bob Murray, our in-house attorney, and a former employee of the bank, Hector Williams.
We began talking and they said that they hated to bring up a negative subject but I had better check out the administration at Freedom. I smiled and told them that I thought everything was going well even if there might be a few problems.
“Jack, all we’re asking you to do is to take a look at five specific loans. We’ll call them for you and you just look into them, and if you are still satisfied that conditions are fine, we’ll forget about it.”
I couldn’t ignore a challenge like that.
From that day forward, I began to seek out sincerely concerned staffers and to ask questions. I soon realized that my informal investigations could prove very distressing for some of the employees who wanted to cooperate but who were afraid that if they went too far, they might get caught in a cross fire between me, as chairman of the board, and their day-to-day boss, Mr. Hudgins, the president of the bank. It was late in February, 1971, when I began really digging in. Never having been a banker and having had no experience with such matters, I began talking with Madeline Walburg who was in charge of the mortgage department. I have to say that this lady played a heroic role in what turned out to be a dramatic behind-the-scenes struggle to literally save the bank. When I first began to talk with Madeline, I found her eager to help, and surprised that I was interested. It was valuable to me to learn that she had been deeply concerned about conditions for some time. Though she was a key employee, she was still an employee, and she had decided not to stick her neck out by calling attention to certain problems since she didn’t think the directors were really interested anyway. I le
arned that there were several times when she had sat in on meetings and heard questions raised by us with management. She said she shuddered to hear the answers which were given to soothe us. That was when I began to realize how much more fully informed directors of a corporation should make themselves.
There was one other factor involved in the false sense of security I experienced toward management. As is their duty with all banks, various representatives and examiners from the office of the Comptroller of Currency in New York would come around to the bank periodically and check out our situation. I had made it my business to question some of these examiners, raising the question whether our operations were sound. I kept getting the reply that “Things are not as bad as you think they are,” or something equivalent. Yet I knew that we were writing off thousands of dollars in bad loans at each examination.
One day, one of the examiners came to visit us. Someone told me he was the best they had in the state. I took him aside and really laid it on the line. I said that I had a growing suspicion that the Comptroller’s office was patting us on the back when they should be hitting us over the head with a club. I told him that I thought we were not being judged by the same standards that would have been applied if ours were a white bank. I said that they were doing us no favor if they were telling us everything was all right when things were not right. The response from him was amazing. He never admitted it, of course, but it became apparent that my suspicions had validity. We were being handled with kid gloves because certain officials did not want to get themselves accused or suspected of persecuting a black institution. From that day on the Comptroller’s office began to focus in on what we were doing right and what we were doing wrong, and it became absolutely clear to me that we were in trouble.
By this time my concern about the bank had become a major preoccupation. I found myself losing sleep nights and involved in a great deal of activity at the bank trying to make certain that I had a strong basis for making a move. It happened that during this period I was having a very serious health crisis. My breathing had become constricted at times to the extent that I could not bear the pressure. I was having trouble with my legs and my doctors were unable to pinpoint the problem, unable to tell whether there was a direct relationship to my diabetes. The more involved I got with the bank problems, the sicker I became.
My personal health wasn’t my sole concern. I had to give serious attention to the position in which my one-man investigation was placing Madeline Walburg. The fact that I was checking out the situation in the mortgage department and that she was spending a great deal of time assisting me had to have come to the attention of Mr. Hudgins, to whom she was directly responsible. Madeline didn’t complain to me, but it was obvious that the situation was far from comfortable for her. She knew quite well that she could have lost her job and that, even if I went to bat for her as I would have, the whole affair could become messy. As for me, I had decided that I could no longer go it alone in my investigation. I decided there were two steps I must take. I had to confront Bill Hudgins frankly and confirm what I was certain he already knew—that I had serious questions in my mind about the administration of the bank and intended to get to the bottom of matters. Also, I had to advise some of my fellow directors about the probing I had done, the information I had gained, and get them involved.
I phoned Bill Hudgins at his home one Saturday. Our New York apartment is in the same neighborhood as the Hudginses’ home. I told Bill I had to talk with him. When I arrived at his place, I asked him if he wanted Mrs. Hudgins in on the conversation. I did this because we had been longtime friends. Bill said that it would not be necessary to involve his wife. I told him all of my concerns and how I had been investigating. Bill assured me that the bank was in great shape, that I had been grossly misinformed, and he told me that everything about the operation was on the up and up.
I’ve said that my fellow board members didn’t know about my probe of the bank. There was one exception, and I have to give this lady credit because she was a tower of strength to me. Mrs. Rose Morgan is the founder and owner of the Rose-Meta System of Beauty which operates on a national level. Rose, a dear friend of many years, is an amazingly gifted woman. She has an inborn talent for good business operation. Rose can cut straight through the niceties to the heart of the matter, and she does this because she doesn’t believe in wasting time or sentiment. I had not asked her to do anything to help me in my investigation, but I certainly am glad that I chose her early as a confidante.
Having talked with Bill Hudgins, I now felt it appropriate to bring in the total board for consideration of the state of the bank. Here, of course, I was to become more aware of what I had always known—that there are cliques on boards of directors. Of course, there were some members who were still very much committed to Bill, and, unfortunately, he began to get out the word that I was out to get him and that I was being vindictive about it. That really bothered me because my only concern was the welfare of the bank and how awful it would be for so many people all over the country if the bank went under.
Marty Edelman, a lawyer friend of mine and member of the firm of Battle, Fowler, Stokes and Keel, and Charlie Jaffin, the senior partner of that firm, responded to my request for help and guidance during this period. Through them we were able to chart a proper course in getting to the basics of what was wrong with Freedom National Bank’s operation.
Before the problems at the bank were resolved, a sad thing happened. Madeline Walburg, without whom I could not have got the probe going, had become increasingly ill, nervous and upset. She suffered from high blood pressure. I am sure she was worried about what might happen to her. A couple of times she had told me she wanted to quit. But Bob Murray, who himself was putting his job on the line, joined forces with me to persuade her that without her help, our efforts might be in vain. So she continued to help, and one day a blood vessel burst in her head. She died a few days later. Madeline’s death hurt me as much as if she had been a member of my own family. I think her family and friends should be proud of the contribution Madeline made to a very important matter affecting black people.
Bob Murray also deserves a lot of gratitude. His attitude was that if he lost his job, so be it. He wanted to see the bank problems straightened out, and that was his main desire. People like Madeline and Bob only strengthen the conviction I’ve held over the years that the people who want to shut white people of goodwill and dedication out of black life and black affairs are so wrong.
As the board continued to check out my own investigation, Bill Hudgins and I really lost faith in each other. Our friendship became a thing of the past. I made it clear to him that, as far as I was concerned, there would have to be a drastic change in administration. Some of the board members still found it hard to believe that Bill could do any wrong. I can’t blame them. I won’t soon forget the utter faith I had in the man.
The concern we all had at the bank—even after a majority of the board agreed that there had to be a change in administration—was that if Bill was summarily dismissed there would be the strong hint of scandal which could badly hurt the bank. Furthermore, we could not, in fairness, say that he had done anything illegal or dishonest, and he had worked very hard over the years in the interest of the bank. He was respected by many in the community.
Furthermore, being a black bank we were in a delicate position in the business community. On the one hand, we did not want the white banking community to coddle us, to overlook mistakes we made because we were a black bank. The more they had patted us on the back where we were wrong, the deeper we had become involved in our problems. Our doors could have been closed because of this kind of paternalism. We wanted to mature and grow toward an equality of experience and ability. Otherwise we would always be subservient. Yet on the other hand, with regard to certain internal affairs, there are some ways that we had to be different because we were a black bank. Without being loose in policies, we had to be a lot less rigid than white banks have been under s
imilar circumstances. A delicate balance had to be struck. This is what we had in mind when we settled the matter of the need for a new administration. Some people may criticize us for it or not understand it, but we believe we did the right thing. We accepted Bill Hudgins’ resignation as president. We brought in a new president, Bob Boyd, formerly of the Los Angeles Rams, a brilliant football player in his athletic days and a businessman of proven ability.
The thing we did which might be called unorthodox is that we refused to allow Bill Hudgins to resign completely from the bank. He became vice-chairman of the board. He had no jurisdiction in areas where some of us had questioned his judgment. But he could still contribute his very definite skills to our growth and development. The job Bob Boyd has done and is doing to turn Freedom around covers a wide range. For example, he has made a number of personnel changes and works closely with staff. He attends various outside meetings which are helpful to him in the administration of the bank, and he often invites members of the board to accompany him. But mainly he has tightened up procedures throughout the bank and raised the standards of our operation considerably.
As it is probably quite obvious, the telling of this episode in my personal and business life is painful to relate. I suppose I take the chance of being misunderstood for telling it. I have told it because I feel there are lessons to be learned from it by many people—black and white.
XVIII
Hope and Disillusionment in White Politics