More bad news for yet another South Carolina bank company: Provident Community Bancshares announced Wednesday that it lost $1.4 million during fourth quarter 2008, and added that it has received preliminary approval to receive more than $9 million in bailout funds from the federal government.
By comparison, Provident earned $213,000 during fourth quarter 2007. For all of 2008, Provident lost $397,000, compared with a profit of $2.2 million for the same period in 2007.
Provident’s stock is trading just above its 52-week low of $6.17 a share. The company’s stock has traded as high as $18.50 over the past year.
Provident is just the latest in a long line of SC bank companies to belly up at the government trough to receive federal dollars, part of the US Treasury Department’s bailout program. Other institutions taking part include The South Financial Group, First Financial Holdings and SCBT Financial Corp.
Provident, the Rock Hill-based parent of Provident Community Bank, saw its non-performing assets jump sharply during 2008, from $3.2 million to $16.7 million, with bank officials attributing the increase to the downturn in the residential housing market.
Provident cuts its quarterly dividend sharply, from 11 1/2 cents a share to 3 cents a share, it announced.
Jeff Jacoby, who at times seems The Boston Globe’s only sane voice outside the paper’s sports pages, has an important column that looks at the Jim Crow legislation that blighted the South for more than half of the 20th Century.
Jacoby points out that it wasn’t white businessmen who specifically made segregation the law of the land in the Deep South, but government.
“… it wasn’t an overwhelming grassroots demand for segregation that institutionalized Jim Crow. It was government, often riding roughshod over the objection of private-sector entrepreneurs,” he writes.
“Far from craving the authority to relegate blacks to the back of buses and streetcars, for example, the owners of municipal transportation systems actively resisted segregation. They did so not out of some lofty commitment to racial equality or integration, but for economic reasons: Segregation hurt their bottom line. It drove up their expenses by requiring them – as the manager of Houston’s streetcar company complained to city councilors in 1904 – “to haul around a good deal of empty space that is assigned to the colored people and not available to both races.” In many cities, segregation also provoked blacks to boycott streetcars, cutting sharply into the companies’ profit.”
Jacoby notes a study published in the Journal of Economic History, in which economist Jennifer Roback shows that in one Southern city after another, private transit companies tried to scuttle segregation laws or simply ignored them. Consider:
- In Jacksonville, Fla., a 1901 ordinance requiring black passengers to be segregated went unenforced until 1905, when the state Legislature mandated segregation statewide. The new statute “was passed by the Legislature much against the will of the streetcar companies,” according to Jacoby.
- In Alabama, the Mobile Light and Railroad Company reacted to a Jim Crow ordinance by flatly refusing to enforce it. “Whites would not obey the law and were continually . . . refusing to sit where they were told,” the company’s manager told a reporter in 1902, writes Jacoby.
- In Memphis, the transit company defiantly pleaded guilty to violating a Tennessee segregation statute, explaining that it believed the law went against the wishes of the majority of its patrons, according to Jacoby.
- In Savannah, the local black paper wrote that streetcar officials “are not anxious to carry into effect the unjust laws. . . requiring separate cars for the races,” since it would put them “to extra trouble and expense,” Jacoby adds.
Eventually, politicians got their way and blacks were officially relegated to second-class status across the South, and in some other parts of the country, for the next 60-plus years.
The fact that the political class led the charge toward Jim Crow doesn’t diminish the culpability of all who went along with it, of course, but it does serve to point out the dangers of what can happen when the political class overrides the wishes of the private sector.