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The Afro-American Realty Company

payton harlem african continued

In 1903 Payton formed a partnership with nine African American businessmen to acquire five-year leases on Harlem properties owned by whites with a plan to rent the properties to African Americans. Payton indicated that the idea for the company had come to him while attending the annual meeting of Booker T. Washington’s National Negro Business League in 1902. The league had been founded in 1900, and its annual meetings served as a gathering place for African American businessmen. Since the league was led by Washington, Payton’s involvement in it most likely provided him with valuable access to the most powerful African American in the United States. Payton’s real estate business was incorporated in 1904 as the Afro-American Realty Company with authorization to issue 50,000 shares of stock at $10 per share. According to Gilbert Osofsky, the company’s prospectus stated that it would “buy, sell, rent, lease, and sub-lease, all kinds of buildings, houses … lots; and other … real estate in the city of New York….”

In 1904, when the subway opened, Payton’s observations of potential opportunity proved to be accurate. The number of new apartments built in Harlem far exceeded the residential demand of white New Yorkers. Residential segregation, while not the law in New York City, became more a part of the city’s tradition as the African American population of the city increased. African Americans were not a logical alternative tenant group for white Harlem property owners. The Afro-American Realty company facilitated occupancy by African Americans of these properties. The company eventually leased and managed buildings in which it placed African American residents. Yet the process was not without obstacles. There was organized resistance by white property owners to the incursion of African Americans into Harlem. White property owners formed organizations such as the Anglo-Saxon Realty Corporation and the Save-Harlem Committee promising not to lease or sell to blacks and justifying their activities as efforts to prevent a decline in property values. But the economic pressure of continuing to hold vacant properties that were not generating income proved too much for some white Harlem property owners, and Payton continued to receive contracts to manage buildings. He also purchased buildings. As he prospered Pay-ton and his wife Maggie purchased a home in the community as well, an eleven-room brownstone at 13 West 131st Street.

The African American movement to Harlem continued through the first years of the twentieth century, and to meet the demand, the Afro-American Realty Company continued to sell stock advertising in the black press with promises of 10 percent profit. Payton continued to expand operations to meet the growing demand, leasing and purchasing buildings using high interest financing. The Afro-American Realty Company’s board of directors advised caution but the expansion continued although the company did not issue a dividend to stockholders. In 1906 a lawsuit was filed by forty-three disgruntled stockholders. The suit, filed in the name of stockholder Charles Crowder, claimed that in the prospectus used by the company to generate stock sales, the realty company had exaggerated the amount of property it owned and also had failed to disclose that much of this property was mortgaged. At a 1908 trial the court concluded that 37 of 134 allegations had been proven, including a finding of guilt in the company’s misrepresentations in its prospectus. The stockholders recovered their initial investments, plus damages and legal costs.

The Afro-American Realty Company declared its first dividend in June 1907, but the negative publicity associated with the trial led to a devastating loss in investor confidence. The recession of 1907–08 exacerbated the company’s problems, reducing the demand for housing in Harlem. Payton searched for ways to keep the company afloat, appealing to Booker T. Washington to intercede with philanthropist Andrew Carnegie. Washington refused and Payton approached Carnegie on his own, but was turned down. In 1908 the company ceased to do business. In spite of appeals from Emmett Scott, a shareholder, and Booker T. Washington’s secretary, for Payton to formally communicate the end of the company’s operations, Payton never formally announced its having closed.

Payton’s confidence did not seem dimmed or his reputation tainted by the lawsuit or by the end of the Afro-American Realty Company. He continued in real estate work doing business as the Philip A. Payton Jr. Company, owning and managing buildings in Harlem identifiable by signs containing his “PAP” logo. Newspapers continued to seek his opinion on matters related to Harlem real estate. Payton continued to appeal to African Americans’ heritage in naming his properties. A Payton advertisement for Harlem apartments included buildings with the names Attucks Court, Toussaint Court, and Wheatley Court.

Philip A. Payton, Jr. died of liver cancer on August 29, 1917 at his summer home in Allenhurst, New Jersey. His funeral took place at St. Marks Methodist Episcopal Church on West 53rd Street in Manhattan. He was survived by his wife Maggie and his sister Susan Payton Wortham. His brothers James and Edward had predeceased him. William Wortham, Susan Payton’s husband, continued to operate the Philip A. Payton Jr. Co. at least until the early 1940s.

Although the Afro-American Realty Company was short-lived, the company and its leader Philip A. Payton played a significant role in the racial transition of Harlem. By the time of Payton’s death a substantial area of Harlem was occupied by African American residents and businesses, setting the stage for the Harlem Renaissance of the 1920s when the community became known as the “Negro Capital of the World” with Payton remembered as the “Father of Colored Harlem.”

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over 2 years ago

I would like to know the names of the 9 partners in the The Afro-American Realty Company.

In particular I would like to confirm it Percival Cover was involved in this company. He may have gone by a different given name.

Can you tell me where I might find this information please?

Thank you.

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about 7 years ago

just interested someday in selling my property in.n.j. wondering if anyone would like venturing out of n.y. to n.j. my property is on a main st. it has a barber shop on ground fl. and three small rooms on top floor.if your interested or know who is feel free to e-mail me.