How an African American Banker Built an Empire During the Height of Jim Crow
During the 1950s and 1960s, the civil rights movement dominated the political landscape. But for Bernard Garrett, an African American born and raised in the South, the surest way to improve conditions for black Americans was to achieve economic freedom.
Garrett, unbeknownst to many, purchased at least 177 buildings, including what was considered the tallest structure in downtown Los Angeles in 1961, the Banker’s Building, while creating life-changing opportunities African Americans.
“The only time a man is really truly wealthy is when he controls the money,” Garrett said years later in an interview about his life.
Born in the small town of Willis, Texas in 1922, Garrett demonstrated a talent for business at an early age. He did odd jobs, completed grade 11 in Houston, and ran his own cleaning business. Garrett knew, however, that he would have to quit Texas racial oppression if he wanted the chance to become a wealthy entrepreneur.
Bernard Garrett settles in California with his family
In a battered pickup truck, Garrett, his first wife Eunice and their grandchildren, traveled to California in 1945 in search of an opportunity. Once in the Golden State, Garrett started another cleaning service and an old paper collection business, ultimately saving enough money to buy property in Los Angeles. But his path to wealth accelerated when he met a white real estate investor, which Garrett officially called Mr. Barker. Barker owned a building for sale in a white neighborhood that Garrett wanted to buy. And with a convincing plan, he did it.
Garrett paid below the asking price because the units needed to be repaired and obtained small loans from Barker and a bank to complete the project with an agreement that Garrett would rent the building and repay the loans. Garrett kept his word, achieving two exploits: he made a profit and rented accommodation to blacks looking for better accommodation in an integrated area.
Barker and Garrett decided to form a partnership investing in properties, where Barker was the face of transactions and Garrett remained invisible.
“He operated behind the scenes because he had to do it,” says Brandon Winford, historian at the University of Tennessee, Knoxville, and author of John Hervey Wheeler, Black Banking and the economic struggle for civil rights. “He was looking for capital where capital was not available to African American business people.”
In 1954 Garrett was worth $ 1.5 million, the equivalent of $ 14.3 million at the time, making him one of the richest blacks in the country. But he wanted to do bigger business, and after Barker’s unexpected death, Garrett became bolder in his mission.
Garrett hires white “ faces ” to make deals
Garrett approached Joe Morris, a successful black businessman who owned two nightclubs. He offered to buy the Banker’s Building, where most of Los Angeles’ banks were located. The plan required what Garrett later described as hiring “faces,” white men whom he trained in finance to carry out his transactions, while he and Morris remained anonymous.
The faces pretended to be the CEO, overseeing daily operations, while Garrett and Morris, the real owners, posed as drivers and janitors to monitor their businesses under the radar, either by cleaning their business floors or by advising their faces during journeys to work.
Garrett hired Matt Steiner to deal with the Banker’s Building acquisition, and it worked. Garrett traded his residential property titles for shares in the banker’s building, obtaining a majority stake in the company that owned the property.
Garrett returns to Houston
But Garrett hadn’t finished. “I wanted to return to Houston, Texas, my birthplace, to relieve local people of color who had great difficulty obtaining home loans,” he said later in a testimony about his transactions before a Senate subcommittee.
“There was an orchestrated effort to prevent African-Americans from becoming a viable economic competitor in this country,” said Blair Smith, chief investment officer of the Upper Manhattan Empowerment Zone Development Corporation, a commercial real estate lender. “The cornerstone of success, of wealth creation, is equity. You must have ownership. This is why real estate is so important. “
Creating opportunities for African Americans
Garrett wanted to create opportunities for African Americans who were regularly subjected to redlining, where banks refused them loans, relegating them to segregated and poor neighborhoods and limited income potential. Thanks to the capital of Don Silverthorne, president of the San Francisco National Bank who knew Morris, Garrett and Morris bought in 1963 the Main Land Bank & Trust Co. in Texas City, Texas, with Steiner as leader. Steiner also announced the purchase of another bank in Texas, the First National Bank of Marlin.
Garrett’s banks have become a lifeline for the black community. “Black-owned banks have been able to help African Americans participate in the economy in a way that they have never been able to participate,” said Winford. “They were able to buy houses, take out a small loan to buy a household appliance or a car. Many black churches and schools were helped and saved thanks to African American banks. “
When Steiner committed a series of incidents as banking laws changed, Garrett and Morris found themselves under government investigation, led by Arkansas Senator John McLellan, an anti-corruption detective and a vocal opponent of the law on civil rights.
In 1965 Garrett and Morris were sentenced to three years for misusing $ 189,000 in bank funds. They served nine months. Garrett started other businesses, but none on the scale he knew before. He died in a retirement home in Los Angeles in 1999. His life is portrayed in the film 2020, “The banker. “
“It could have worked and worked and been successful without even thinking,” What about African Americans in Texas? “” Said Winford. “But he saw a bigger picture.”