Relating to the Community

Harlem is hardly an affluent neighborhood. Yet some 232,000 people live there, making it more than worthwhile for five of New York's biggest banks to maintain branches around 125th Street, Harlem's main stem. They are Chase Manhattan (assets, $15.3 billion), First National City ($13.9 billion), Manufacturers Hanover ($7.6 billion), Chemical ($6.9 billion) and Bankers Trust ($5.1 billion). Dwarfed by these is the Freedom National Bank, which had, as of the close of last week's banking hours, precisely $9,605,878.07 in assets. Yet for all its relative puniness, Freedom National is growing fast, and it celebrates its first birthday this week with 10,000 customers and predictions that assets will quintuple by 1970.

Share the Burden. Freedom National prospers because it is Harlem's first Negro-chartered, Negro-run commercial bank. On 125th Street, people refer to it as "my bank," a significant phrase in a neighborhood where most fixed property has always been controlled by whites. Freedom National's chairman is Jackie Robinson, a Negro folk hero who holds his position mostly for his name's sake. Operative boss is President William R. Hudgins, 56, who came to the new bank from a small savings and loan association. Hudgins was born in Virginia but has lived and worked in Harlem for 37 years, and can remember when "the Childs restaurant on 125th Street turned me away because I was a Negro. I still am, but Childs has changed and Harlem is changing."

One way in which Harlem is not changing fast enough to suit Hudgins and many other Negroes involves the lending policies of the white banks. Negroes complain that these banks are quick enough to make short-term, high-interest loans on such repossessable goods as TVs and automobiles, but are notably cool when it comes to real-estate and small-business loans that would help Harlem more. "The other institutions," says Hudgins, "are not carrying their share of the burden. They do not relate themselves to the com munity." Freedom National makes consumer loans in competition with the five big banks, but real-estate and small-business loans now constitute 50% of its loan portfolio. Another Hudgins complaint is that "the middle-class Negro, the doctor, dentist and lawyer, is not facing up to a fair share of responsibility in Harlem. When he gets to be affluent, he immediately moves away--to Westchester, Long Island or New Jersey. He makes charitable contributions in Harlem, but that's all. And it's not nearly enough."

Virtue in Thrift. Almost like a small town banker, Hudgins gets personally involved in many loan applications. Doubtfuls usually wind up in his second-floor office to plead their cases, frequently get their loans after careful investigation. "We only take bankable situations," insists Hudgins. But these include some situations that most other banks would not touch. Examples: a small businessman who found himself in hock to a loan shark to the extent of $3,000 a month persuaded Freedom National to take over his loan, now pays only $600; another businessman who asked for $10,000, instead was given $25,000 with tight controls in order to save not only his liquor store but the jobs of his Negro employees. Despite the apparently risky nature of such loans, the bank's delinquency rate is a low 5% .

Hudgins' job now is to find enough money to lend, especially since he plans to open a branch in Bedford-Stuyvesant, New York's other big Negro ghetto. To help attract new deposits, he preaches Sundays in Harlem churches. His invariable sermon subject: the virtue of thrift.

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