The importance of the new capitalism in overturning what black power existed in the postwar South is affirmed by Horace Mann Bond's study of Alabama Reconstruction, which shows, after 1868, "a struggle between different financiers." Yes, racism was a factor but "accumulations of capital, and the men who controlled them, were as unaffected by attitudinal prejudices as it is possible to be. Without sentiment, without emotion, those who sought profit from an exploitation of Alabama's natural resources turned other men's prejudices and attitudes to their own account, and did so with skill and a ruthless acumen."

It was an age of coal and power, and northern Alabama had both. "The bankers in Philadelphia and New York, and even in London and Paris, had known this for almost two decades. The only thing lacking was transportation." And so, in the mid-1870s, Bond notes, northern bankers began appearing in the directories of southern railroad lines. J. P. Morgan appears by 1875 as director for several lines in Alabama and Georgia.

In the year 1886, Henry Grady, an editor of the Atlanta Constitution, spoke at a dinner in New York. In the audience were J. P. Morgan, H. M. Flagler (an associate of Rockefeller), Russell Sage, and Charles Tiffany. His talk was called "The New South" and his theme was: Let bygones be bygones; let us have a new era of peace and prosperity; the Negro was a prosperous laboring class; he had the fullest protection of the laws and the friendship of the southern people. Grady joked about the northerners who sold slaves to the South and said the South could now handle its own race problem. He received a rising ovation, and the band played "Dixie."

That same month, an article in the New York Daily Tribune:

The leading coal and iron men of the South, who have been in this city during the last ten days, will go home to spend the Christmas holidays, thoroughly satisfied with the business of the year, and more than hopeful for the future. And they have good reason to be. The time for which they have been waiting for nearly twenty years, when Northern capitalists would be convinced not only of the safety but of the immense profits to be gained from the investment of their money in developing the fabulously rich coal and iron resources of Alabama, Tennessee, and Georgia, has come at last.

The North, it must be recalled, did not have to undergo a revolution in its thinking to accept the subordination of the Negro. When the Civil War ended, nineteen of the twenty-four northern states did not allow blacks to vote. By 1900, all the southern states, in new constitutions and new statutes, had written into law the disfranchisement and segregation of Negroes, and a New York Times editorial said: "Northern men… no longer denounce the suppression of the Negro vote… The necessity of it under the supreme law of self-preservation is candidly recognized."

While not written into law in the North, the counterpart in racist thought and practice was there. An item in the Boston Transcript, September 25, 1895:

A colored man who gives his name as Henry W. Turner was arrested last night on suspicion of being A highway robber. He was taken this morning to Black's studio, where he had his picture taken for the 'Rogue's Gallery". That angered him, and he made himself as disagreeable as he possibly could. Several times along the way to the photographer's he resisted the police with all his might, and had to be clubbed.

In the postwar literature, images of the Negro came mostly from southern white writers like Thomas Nelson Page, who in his novel Red Rock referred to a Negro character as "a hyena in a cage," "a reptile, "a species of worm," "a wild beast." And, interspersed with paternalistic urgings of friendship for the Negro, Joel Chandler Harris, in his Uncle Remus stories, would have Uncle Remus say: "Put a spellin-book in a nigger's han's, en right den en dar' you loozes a plowhand. I kin take a bar'l stave an fling mo' sense inter a nigger in one minnit dan all de schoolhouses betwixt dis en de state er Midgigin."

In this atmosphere it was no wonder that those Negro leaders most accepted in white society, like the educator Booker T. Washington, a one-time White House guest of Theodore Roosevelt, urged Negro political passivity. Invited by the white organizers of the Cotton States and International Exposition in Atlanta in 1895 to speak, Washington urged the southern Negro to "cast down your bucket where you are"-that is, to stay in the South, to be farmers, mechanics, domestics, perhaps even to attain to the professions. He urged white employers to hire Negroes rather than immigrants of "strange tongue and habits." Negroes, "without strikes and labor wars," were the "most patient, faithful, law-abiding and unresentful people that the world has seen." He said: "The wisest among my race understand that the agitation of questions of social equality is the extremest folly."

Perhaps Washington saw this as a necessary tactic of survival in a time of hangings and burnings of Negroes throughout the South, It was a low point for black people in America. Thomas Fortune, a young black editor of the New York Globe, testified before a Senate committee in 1883 about the situation of the Negro in the United States. He spoke of "widespread poverty," of government betrayal, of desperate Negro attempts to educate themselves.

The average wage of Negro farm laborers in the South was about fifty cents a day, Fortune said. He was usually paid in "orders," not money, which he could use only at a store controlled by the planter, "a system of fraud." The Negro farmer, to get the wherewithal to plant his crop, had to promise it to the store, and when everything was added up at the end of the year he was in debt, so his crop was constantly owed to someone, and he was tied to the land, with the records kept by the planter and storekeeper so that the Negroes "are swindled and kept forever in debt." As for supposed laziness, "I am surprised that a larger number of them do not go to fishing, hunting, and loafing."

Fortune spoke of "the penitentiary system of the South, with its infamous chain-gang… the object being to terrorize the blacks and furnish victims for contractors, who purchase the labor of these wretches from the State for a song… The white man who shoots a negro always goes free, while the negro who steals a hog is sent to the chaingang for ten years."

Many Negroes fled. About six thousand black people left Texas, Louisiana, and Mississippi and migrated to Kansas to escape violence and poverty. Frederick Douglass and some other leaders thought this was a wrong tactic, but migrants rejected such advice. "We have found no leader to trust but God overhead of us," one said. Henry Adams, another black migrant, illiterate, a veteran of the Union army, told a Senate committee in 1880 why he left Shreveport, Louisiana: "We seed that the whole South — every state in the South — had got into the hands of the very men that held us slaves."

Even in the worst periods, southern Negroes continued to meet, to organize in self-defense. Herbert Aptheker reprints thirteen documents of meetings, petitions, and appeals of Negroes in the 1880s — in Baltimore, Louisiana, the Carolinas, Virginia, Georgia, Florida, Texas, Kansas — showing the spirit of defiance and resistance of blacks all over the South. This, in the face of over a hundred lynchings a year by this time.

Despite the apparent hopelessness of this situation, there were black leaders who thought Booker T. Washington wrong in advocating caution and moderation. John Hope, a young black man in Georgia, who heard Washington's Cotton Exposition speech, told students at a Negro college in Nashville, Tennessee:

If we are not striving for equality, in heaven's name for what are we living? I regard it as cowardly and dishonest for any of our colored men to tell white people or colored people that we are not struggling for equality… Yes, my friends, I want equality. Nothing less… Now catch your breath, for I am going to use an adjective: I am going to say we demand social equality… I am no wild beast, nor am I an unclean thing.