$675,000 Deposited in Ghetto Banks
Diocesan Press Service. July 15, 1968 [67-2]
NEW YORK, N.Y.-- Deposits totaling $675,000 in Episcopal Church funds have been made in 45 ghetto banks and savings and loan associations located in 24 dioceses of the Church and in 32 different cities from coast to coast.
The deposits are the first to be made under a program approved this year by the Executive Council of the Episcopal Church to invest its funds in ghetto communities as a means of strengthening Negro and other minority businesses and improving living conditions of the ghetto.
The announcement of the deposits was made by Lindley M. Franklin, Jr., treasurer of the Episcopal Church, who said that additional funds are still available for deposits in other ghetto lending institutions which qualify.
Banks and savings and loan associations all over the country were contacted in initiating the program, he said. Important requisites for approval are that deposits be federally insured and that the enterprise be locally owned and managed for the benefit of those who work or live in its community.
All lending institutions in which deposits have been made were screened against these criteria, Dr. Franklin said. A few banks did not qualify, and a few others did not respond to the letters sent them. Each of the banks meeting the criteria received a deposit of $15,000 from the Episcopal Church.
In a letter to all of the Bishops of the Episcopal Church, Dr. Franklin expressed the hope that the deposit program will be implemented by the various dioceses, individual churches and individual Church members through additional deposits in ghetto banks.
"We are very anxious," he said, "that this program have a 'multiplier' effect."
He emphasized that the primary purpose of the program is to encourage loans to local businesses in the ghetto areas, to strengthen small businesses in need of funds, to provide funds for financing home building in the community served, and to aid local enterprises that will help Negroes and other minorities to build the economy of the areas in which they reside.
Responses from all over the country indicate the urgent need for deposits in ghetto banks, Franklin said, and have revealed outstanding examples of leadership by businessmen of the ghetto.
He said a good example of the banks in which the Episcopal Church has chosen to deposit its funds is the Unity Bank and Trust Company of Boston, Mass., which says of itself:
"A Negro bank is not racism. Rather, it's black power in its most positive form. But most important, it is war on poverty in the finest tradition of American free enterprise."
The Unity Bank is located in Roxbury, a Negro and Spanish neighborhood in Boston, and was created through the dream of John T. Hayden, a 23-year-old Negro student at the Harvard Business School. He is described by Roy G. Guittarr, executive vice president, as the "founder of our bank."
Since its beginning as an idea the Unity Bank and Trust Company has now become fully capitalized at $1,200,000, and there are approximately 3,400 stockholders, 65 percent of them residents of the immediate ghetto area. Of the 22 directors of the bank, 16 are Negro.
"The cash flow has been constantly leaving the area and being deposited in the large white banks," Mr. Guittarr said. "So we, therefore, having a positive need for a commercial banking institution of our kind consequently will be the only commercial bank that will be headquartered in the community. This, of course, will cause great community pride and the right kind of financial image that is not only much needed, but has been far too long in being realized."
Mr. Guittarr said that in addition to offering all kinds of commercial banking services, the bank also will provide installment loans and loans under the Small Business Administration program. A special emphasis will be placed on educational loans.
Community educational programs sponsored by the bank will be directed toward such topics as SBA Participation loans, business and personal insurance and education for young people.
[Ed. Note: For a full list of banks involved in this program, contact the Archives.]