I grew up in the pre-Vietnam era. Our high schools taught a sanitized version of American history. I was in college before I learned about the country’s incarceration of ethnic Japanese, many of whom were citizens, during World War II. I was shocked. Our country had concentration camps, and we put our own people in them.
I had a bit of the same feeling when I was reading The Color of Law: A Forgotten History of How Our Government Segregated America, by Richard Rothstein. I’d known that the GI Bill offered financing for veterans returning from World War II to buy homes, and how that financing led to suburban developments like Levittown on Long Island. What I didn’t know is that the federal government, through both Veterans Administration (VA) and Federal Housing Administration (FHA) loans, secured financing only for white veterans. And, as I’ll soon discuss, both VA and FHA went beyond merely not providing financing for black veterans. Further, the educational opportunities for black veterans were often limited to vocational schools. Some benefit administrators refused to process applications to four-year colleges for black veterans. I guess I shouldn’t have been surprised, but I was. Black veterans, like their white counterparts, had just returned from fighting a nearly four-year war only to be treated like second-class citizens.
The book goes back to post-Civil War era and especially the end of Reconstruction, but I’ll start with a 1917 Supreme Court ruling in Buchanan v. Worley, which ruled that racial zoning violated the Fourteenth Amendment, not because of protections granted freed slaves, but because of a business rule—the freedom to contract, or the right of a property owner to sell to whomever he wanted.
In our day, a Supreme Court decision would be final, but not in the 1920s. Buchanan was not only ignored, but flouted. As it would turn out, in the post-War housing boom, which was largely financed by VA and FHA loans, subdivisions were not only encouraged, but required to include covenants restricting the subdivisions to “Caucasians.” Our government, in other words, enforced segregation in any area where VA or FHA loans were used to finance homes. In one example, a man in Berkley, California bought a house financed by FHA and was not able to move into the house. He let a black teacher rent the house until he could move in. As a result he was advised he’d lost his participation in the FHA insurance program and that he’d never again be able to obtain a government-backed mortgage. And this was in 1959. In Berkley.
The result of black people’s not being able to get financing was they often paid more than white people would in areas less desirable. Additionally, they frequently bought using a contract for deed, meaning the house was theirs only after all payments were made. These contracts for deed were frequently at high interest rates, and one missed payment meant the loss of everything they’d invested in the house. Because they paid higher prices for the homes and higher interest rates, they frequently subdivided the homes and deferred maintenance. The neighborhoods looked bad. Whites feared blacks’ moving in or even near their neighborhoods (when, had black families had the same access to mortgages whites did, their neighborhoods would have looked just as good). Realtors took advantage of white fears. They started moving black families into white neighborhoods and going door to door spreading fear among the white residents that their neighborhood was about to be “taken over.” Whites sold at a loss. Racial prejudice was a lose-lose proposition. Whites lost money on their homes. Blacks paid more for their homes, both initially and in interest, than whites. Unscrupulous Realtors made out like bandits.
Mr. Rothstein makes the point that the IRS was involved in housing discrimination by not revoking the tax-exempt status of churches and other tax-exempt organizations for advocating for, financing, and participating in lawsuits designed to maintain segregation.
Cities that had integrated middle class neighborhoods in the 1920s, among them Austin, Texas and Raleigh, North Carolina, were effectively segregated by cities’ building segregated schools far enough away from these neighborhoods to require a move so children could easily go to school.
Mr. Rothstein goes into the history of black labor during the Depression and World War II. Government programs often refused to hire black workers. When they did hire them, black workers were given the worst jobs and paid less than white workers. The Tennessee Valley Authority (TVA) is a good example (and for a good look at what went on with the TVA, see the 1960 film Wild River). Black workers were housed in shacks and paid less. The same thing went on in defense plants during World War II. During and after the war, most labor unions would not accept black workers as members, so again, black workers remained in the worst and lowest paid jobs. Government housing built to house defense workers was almost always segregated, and black workers were left to fend for themselves.
He even points out how the Interstate Highway system was used to remove black residences from areas near downtowns across the country.
And to demonstrate this is not all in the past, he even ties in how government agencies knew or should have known about “reverse redlining,” or the practice of getting black homeowners—especially elderly black homeowners--to sign up for subprime mortgages in the runup to the crash of 2008, pointing out that the most egregious lender, Countrywide, was regulated by the Federal Reserve Board until 2007, and that the Federal Reserve knew or should have known what Countrywide was up to.
And now, as many people want to live near downtown areas, gentrification threatens the homes of those who live in formerly low-rent areas.
Mr. Rothstein makes an excellent argument that black people have been kept poor not because they did not have the same abilities as white people, but because they were denied access to the same opportunities—good jobs, union representation, government financing for homes, etc. that white people took for granted. Cumulatively this has left them far behind economically, and their economic status is a direct result of government policy.
I would recommend this book to anyone who thinks poor black people should “pull themselves up by their bootstraps” and that their poverty is their own fault. I almost guarantee you won’t finish the book with that same belief.
I have a few criticisms of the book. It needed a lot more editing, and it is not chronological. You might be reading one paragraph about the 1960s and the next paragraph you’ll find yourself in the 1920s. My concept of history is linear, and I find it jolting to have to “time travel” to keep what I’m reading in context. As for editing, one example is a photo on page 138 supposedly taken in Levittown, Pennsylvania in 1954 that contains a 1957 Ford. But I suppose that’s a minor complaint. My biggest criticism of the book is there are no concrete solutions proposed.
I’d like to hear from you. That’s what the comment section is for, after all. Our government discriminated against its own citizens for many years, leaving them far behind financially. What do you think should be done to make up for this discrimination?
© 2017 Larry Roth
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