Were black entrepreneurs displaced from the retail trade by white immigrant merchants? A study of northern cities in the early twentieth century

Abstract

Black leaders in the early twentieth century often claimed that black retail enterprise in the urban North was impeded by competition from white immigrant merchants. Their argument rested on a set of beliefs now called “saturation theory.” To test this theory, I analyze census data from 1910 to 1930, when blacks established themselves in northern urban economies. The results fail to support the theory. The level of retail enterprise of blacks was unrelated to that of foreign-born whites. Thus, contrary to assertions of many activists, black entrepreneurs were not displaced from retailing in northern cities during the early twentieth century.