The Ludlow neighborhood straddles the Cleveland/Shaker Heights boundary and, through an arrangement with the Cleveland School Board in 1912, became part of Shaker Heights School District. Although Oris and Mantis Van Sweringen's garden suburb of Shaker Heights used restrictive covenants to practice social exclusion, soon after the mid-20th century a number of African Americans began to move into Ludlow by purchasing delinquent Van Sweringen lots. John and Dorothy Pegg were not the first to purchase lots, but their property did become the focus of an attack by white neighbors on January 3, 1956, when a bomb destroyed their garage and blew a hole in their dining room wall. The Peggs banked at the Cleveland Trust, which refused to give them a mortgage at a time when African Americans found it incredibly difficult to secure the means to afford home ownership, but the Peggs were able to secure a mortgage from the black-owned Dunbar Life Insurance Company.
The roots of Dunbar Life Insurance lay in the business success of Herbert S. Chauncey, a prominent African American lawyer who attracted many of his friends to his idea of creating a savings and loan company. With the help of his friends, Chauncey was able to secure a state charter and opened the Empire Savings and Loan Company in 1919. Empire SLC was first located in the offices of 2316 East 55th Street and became the first banking venture in the black community. Before World War I, many black-owned businesses found it difficult to acquire a strong economic base among their own race, but the modest success allowed Chauncey to open another branch.
Empire began operating at a time when the ghetto in Cleveland was forming and a large migration of blacks from the southern states were pouring into the city. The 1910 African American population of 8,448 soared to 34,451 ten years later. By 1930, the population nearly doubled to 72,000. The Depression hit Empire SLC hard, and in January 1935 the firm had to file for bankruptcy. All of the money loaned out by Empire was on black homes. During the Depression, African Americans were hit the hardest, but many black homeowners were able to keep up payments in whole or in part to keep from defaulting.
Chauncey was one of the first who began helping blacks gain homes with mortgages and loans, but ultimately it was Melchisedech Clarence (M.C.) Clarke who further helped blacks in insurance matters. As the state insurance examiner in 1935, Clarke was assigned to investigate the fraternal insurance societies in Cleveland, including two that were founded by Chauncey. While investigating four Cleveland insurance companies, Clarke realized that these companies should be consolidated to reduce expenses and protect policy holders. This merger became known as the Dunbar Mutual Insurance Society, which combined the assets of those fraternal societies and reinsured their policy holders. Clarke became operating head of the organization and resigned from his position as state examiner.
Dunbar Mutual expanded in 1943 after Clarke convinced his associates at the company that providing home loans would give stockholders a larger profit on their investments as opposed to investing in government and municipal bonds. Dunbar Life Insurance Company became licensed as insurance company on April 11, 1945. Clarke had anticipated that the Midwest would continue to see industrial and economic growth after World War II and that this was the “most opportune time” to launch the company.
Clarke expressed a desire to help the housing crisis for blacks by “relieving much of the congestion in our urban cities.” During World War II, another migration brought Cleveland’s black population to 147,847 by 1950, and many of the original migrants who occupied the area west of East 55th Street began to move eastward from the original settlement, primarily into an area bounded on the east by East 105th Street, on the north by Euclid Avenue and Woodward Avenue on the south. A growing number also gravitated toward Glenville, which had been a largely Jewish neighborhood for a generation. In 1940 the African American population in Glenville was just 899, but by the end of the decade, the population increased to 22,060, or 24 percent of the total population. In the same years, the Jewish population decreased from 27,000 to 15,000 as many Jews moved to Cleveland Heights and other eastern suburbs. Black population influx was located almost entirely in western Glenville on the streets off East 105th Street just south of St. Clair Avenue, and by 1960 this area of Glenville was 90 percent black.
In 1948 Dunbar Life had invested more than $300,000 in first mortgage loans to more than 100 black families. By the end of 1950, Dunbar Life had over $7 million in total insurance force and a capital surplus of $198,760. This success had allowed Dunbar Life to open a new branch office in the Glenville area on January 3, 1952, where hundreds of the company’s policyholders resided. Dunbar Life passed the $1 million mark in total assets in 1952 and held over half their assets invested in first mortgage loans on black property valued at $578,195.24.
The year 1952 also saw Clarke and his Dunbar investors purchase the outstanding stock of Quincy Savings and Loan Company. Quincy became approved for FHA mortgage loans under provisions of the National Housing Act in 1954. Before this approval, Dunbar Life was the only black-operated financial institution making FHA insured loans to the African American community. With the approval of Quincy, this increased the capital available to blacks in Cleveland to purchase homes.
In 1956, at the age of 66, M. C. Clarke died at the Cleveland Clinic. Clarke would not live to see Dunbar Life merge with the third largest black insurance company in the country, Supreme Liberty Life Insurance Company of Chicago, in 1958. The combined life insurance in force would total more than $140 million and combined assets exceeding $22 million. Quincy Savings and Loan would see incredible financial success as well. The company’s assets grew to more than $11 million by 1979. That year two Cleveland businessmen bought controlling interest of Quincy Savings and Loan and renamed it Cleveland Community Savings Company. By 1982, the company had liabilities that exceeded their assets, and in the following year Cleveland Community Savings was closed by the Federal Savings and Loan Insurance Corporation.