This Black History Month, we honor Ruth Wells, Clyde Ross, Charlie Baker, and the many other members of the Contract Buyers League who fought to end racial housing injustice in Chicago, and across America.
Imagine you purchase your home but won’t receive title or deed to the property until you completely pay off your loan. The interest rate is high, the maximum allowed by the state. You have no option to negotiate terms with the lender. Also, the lender who sold you the home charged you more than double what he purchased it for even though he put no work into the property. He told you the home adhered to building code and was in good condition, but two weeks after you move in, an inspector shows up saying you must pay thousands of dollars to correct building code violations. Oh, and your boiler blows out. You’re also responsible for paying property taxes and insurance, and the lender/seller gets to choose the insurance policy. If you fall behind on your loan payments, you get evicted and lose everything you’ve paid into the property so far. You can’t obtain a conventional mortgage because you aren’t building equity in the property since you’re not the legal owner. But regardless of that, you can’t obtain a mortgage because of your neighborhood and your race.
From the 1930s to the 1960s, it’s estimated that 85% of black home buyers in Chicago bought on contract. Between 1958 and 1961, more than half the homes in Lawndale (what we call North Lawndale today) were purchased on contract. The law did not protect black home buyers from predatory contract sellers.
Ruth Wells was one of the first to confront her contract seller. She was born in West Point, Mississippi and came to Chicago with her husband in 1959. That year, Mr. and Mrs. Wells bought their duplex in Lawndale on contract. Their contract allowed them the option to obtain a mortgage after 50% of the principal of their contract loan had been paid. The Wells family had finally paid off 50% by 1967, but the contract seller told them he would only agree to the mortgage if they paid an additional, arbitrary $1,500.
Mrs. Wells called Monsignor Jack Egan, a Catholic priest who had been doing community work on the West Side, and asked if he could recommend a lawyer for her. Monsignor Egan sent one of his seminarians, Jack Macnamara, to see Mrs. Wells. With research help from Macnamara and other seminary students, Mrs. Wells discovered that the contract seller only paid $14,000 for the house, even though he sold it to the Wells on contract for $23,000. The Wells had made many improvements to the home, significantly increasing its value. In December 1967, Mrs. Wells, accompanied by Monsignor Egan and Macnamara, went to her contract seller’s downtown office. He wouldn’t renegotiate the contract, so they picketed his office.
The first community meeting of contract buyers in Lawndale was held the following month.
Contract Buyers League
In January 1968, Mrs. Wells and other contract buyers in Lawndale met in the basement of Monsignor Egan’s Presentation Roman Catholic Church (now closed) at 743 South Springfield Avenue. At the second meeting, when Mrs. Wells told her story and asked if others in the room were in the same situation, practically every hand shot up. Attendees spread the word, and at the third meeting, around two dozen contract buyers formed an organization called the Contract Buyers League of Lawndale. Their goal was to get contract sellers to renegotiate to reasonable prices, but when that failed, they spent the rest of 1968 picketing offices. Word spread to the South Side and another contract buyers group was formed there. The two contract buyers groups were more than 500 members strong.
“The reason black people are so far behind now is not because of now. It’s because of then.” - Clyde Ross
Clyde Ross served as co-chairman of the Contract Buyers League. He came to Chicago from Clarksdale, Mississippi in 1947 after fighting in Word War II. In 1961, Mr. and Mrs. Ross bought their home, a two-flat on Flournoy Street in Lawndale, on contract for $27,000—although the seller bought the home for $12,000 a few months prior—after being denied a mortgage. Knowing his wife and their five children might face eviction if he missed one payment, Mr. Ross worked three jobs, often from 6 o’clock in the morning until 1 o’clock the next morning, to make sure that didn’t happen.
“The problem was the money,” Clyde Ross said. “Without the money, you can’t move. You can’t educate your kids. You can’t give them the right kind of food. Can’t make the house look good. They think this neighborhood is where they supposed to be. It changes their outlook. My kids were going to the best schools in this neighborhood, and I couldn’t keep them in there.”
Mr. Ross met Father Macnamara in 1967, and within a year, became the co-chairman of the newly formed Contract Buyers League.
He recruited his brother-in-law, Charlie Baker, to lead the group with him.
Charlie Baker was the chairman of the Contract Buyers League. Like his brother-in-law and co-chairman, he came to Chicago after serving in WWII, and found a job working at Campbell’s Soup Company. He and his wife Charlene purchased their two-flat in Lawndale on contract for $26,500, in 1961. Their first month there, they made a payment of $197 according to the agreement with the seller. But they soon found out that with insurance and interest, the monthly payments totaled to $247. Mr. and Mrs. Baker began renting out two other units in the building. An inspector appeared three months later telling them the apartments were not to code, due to alterations the seller had made prior to transferring the property. If they didn’t correct the violations, the Bakers would have to pay $200 per day in fines. The seller only offered help by way of a home improvement loan that added to the Bakers’ monthly payments. Mrs. Baker began working and Mr. Baker took on a second job, sacrificing time with their children in order to make sure they did not get evicted for missing a payment.
When Mr. Baker heard from his brother-in-law about the new group of contract buyers that was forming, he was eager to join, and soon became the group’s chairman.
In November 1968, he delivered a statement on behalf of the CBL during a press conference about the group’s new tactic:
"In spite of our discouragement, we intend to remain non-violent. Nevertheless, we feel that it is necessary to step up our tactics. The only power we have is economic power—our monthly payments.”
The Big Holdout
When picketing and attempts to renegotiate contracts failed, the Contract Buyers League began a payment strike, which they called “The Big Holdout.” Two months into the holdout, 595 families had joined in. Some families striked for months, others for years, between 1968 and the early 1970s. Instead of making their payments to the contract sellers, families made money orders out to themselves and took them to the Contract Buyers League office where they would be put in a safety deposit box to prove to contract sellers that they were able to make payments once their contracts were renegotiated. When families were evicted, members of the CBL and their allies moved the families back in. Up against hundreds of people, the police backed off, in dramatic scenes that garnered publicity for the issue.
Volunteers—many of them wealthy, white homeowners—came from other areas to support the Contract Buyers League and make donations towards the cause. Attorneys offered pro bono services to families facing eviction during the payment strike, including Charlie Baker’s family.
Alongside the Big Holdout, the Contract Buyers League filed two federal lawsuits in 1969 aiming to outlaw contract selling. One of the suits dragged on until 1976, but in the end, both lawsuits failed.
By the summer of 1971, approximately 70 families had permanently lost their homes in eviction. An estimated 155 families, however, were successful in renegotiating their contracts, including Clyde Ross’ family. Many other families saved up enough to find better housing options with the money they withheld during the payment strike.
Since the 1930s, predatory practices have occurred in neighborhoods all over Chicago, including bungalow neighborhoods. Many heroes stepped up to fight back against these practices despite the great personal risk. Today, different forms of predatory practices still remain, and much is left to be done about the vast inequity we see.
We honor the brave members of the Contract Buyers League and so many others who fought for these victories and neighborhoods, and we honor those who continue to fight today.
Delve into our sources to learn more about the history of contract buying, and the ramifications we see today of real estate exploitation and housing discrimination.
The Story of the Contract Buyers League:
Local Catholics helped effort to end contract buying, Chicago Catholic, 2017
Part 2: Local Catholics help end contract buying, Chicago Catholic, 2017
Inside the Contract Buyers League’s fight against housing discrimination, The Chicago Reporter, 2016
Decades later, black homebuyers’ battle for justice back in spotlight, Chicago Tribune, 2015
The Case for Reparations, The Atlantic, 2014
Contract Buyers in Chicago, WTTW, 2014
Ruth Wells, The HistoryMakers, 2004
Remnants of Contract Buying Today:
Racial disparity in mortgages persists, Northwestern study finds, Crain’s Chicago Business, 2020
North Lawndale residents say mortgages, loans still out of reach in some African American communities, ABC7 Eyewitness News, 2020
Black poverty is rooted in real estate exploitation, Crain’s Chicago Business, 2019
The infamous practice of contract selling is back in Chicago, Chicago Reader, 2017