Seed Money in Georgia

Much as businessmen talk about the need to help the poor, ghetto betterment projects often seem to generate more rhetoric than results. "Whenever the average businessman has done something, he has done it in a condescending spirit and at a distance, not in a face-to-face partnership," says Mills B. Lane, president of the Atlanta-based Citizens & Southern National Bank. "He likes to sit around and debate, then go write a check to some agency or other."

Lane decided that his bank, the biggest in the Deep South (assets: $1.5 billion), should become deeply involved in increasing home ownership and black capitalism in deprived areas. As a first step, he devised "the Georgia Plan," which starts with local cleanup drives and leads to high-risk improvement loans.

The plan is well under way in Savannah, where 40 impoverished Negroes have been helped to buy homes and 23 have received loans to begin or expand their own businesses. The bank has also mounted cleanup campaigns in the Negro neighborhoods of Valdosta and Albany, Ga., where thousands of blacks and whites together swept up and carted away hundreds of tons of junk. When the campaign was repeated in Savannah, some 30,000 people showed up to participate. Last week Lane introduced his plan to seven other Georgia cities, including Atlanta.

Discovery in Jamaica. Until recently, Lane, 57, was a political conservative with segregationist sympathies. His dealings with non-U.S. blacks over the last two years, when he helped organize the Jamaica Citizens Bank (49% owned by Citizens & Southern), radically changed his outlook. Back in the U.S., he drove around the slums of his native Savannah and was appalled by what he saw. "It is high time," he said, "that we get around to emphasizing what a person is, not who he is."

The Georgia Plan permits loans even to people who can offer no security at all. To circumvent banking regulations that prohibit such lending, Citizens & Southern set up a subsidiary called Community Development Corp. and capitalized it at $1,000,000. CDC approves the risky loans and advances the down payment if a customer cannot. Then Citizens & Southern steps in with the balance, and the down payment is handled as part of the total loan. Normal interest rates are charged, but the terms can be adjusted so that the borrower can meet his installments, which are usually no more than the rent he used to pay to a landlord.

No to Whisky. Business loans go only to those who show an ability to manage enterprises that promise to benefit the community. Thus CDC turned down applications for liquor stores and a hippie-trinket shop. Instead, it put Savannah's first Negro used-car dealer into business and financed dry-cleaning shops, groceries, beauty parlors, even a small firm that manufactures porches for mobile homes. Thus far, $1,000,000 has been distributed in loans ranging from $2,200 to $25,000. Another $1,000,000 went to the biggest slum landlord in Savannah, a Negro. The money will pay for the renovation of dilapidated houses.

Lane is prepared to lend $15 million in the poor neighborhoods and spend $1,000,000 a year in cleanup campaigns. He also intends to expand his program far beyond that by seeking such large depositors as the Ford Foundation and converting their money into high-risk loans. "Lowincome people need money," says Lane, "and the banks have got to give it to them."

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