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High profit IPO strategies finding breakout IPOs for
investors and traders 3rd Edition Tom Taulli Digital
Instant Download
Author(s): Tom Taulli
ISBN(s): 9781283715140, 1118434188
Edition: 3
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Language: english
ffirs.indd i 26/09/12 10:01 AM
 Chapter Title i

HIGH-PROFIT
IPO STRATEGIES

ffirs.indd i 26/09/12 10:01 AM

 Since 1996, Bloomberg Press has published books for financial profession-
als on investing, economics, and policy affecting investors. Titles are written
by leading practitioners and authorities, and have been translated into more
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The Bloomberg Financial Series provides both core reference knowl-
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For a list of available titles, please visit our Web site at www.wiley.com/
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ffirs.indd ii 26/09/12 10:01 AM

 HIGH-PROFIT
IPO STRATEGIES
Finding Breakout IPOs
for Investors and Traders

Third Edition

Tom Taulli

ffirs.indd iii 26/09/12 10:01 AM

 Cover images: Stock background © Sergiy Timashov/iStockphoto,
Wave and Smoke © Jeannette Meier Kamer/iStockphoto
Cover design: C. Wallace
Copyright © 2013 by Tom Taulli. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
The second edition of Investing in IPOs Version 2.0 was published by Bloomberg Press in 2001.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form
or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as
permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts
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or completeness of the contents of this book and specifically disclaim any implied warranties of
merchantability or fitness for a particular purpose. No warranty may be created or extended by sales
representatives or written sales materials. The advice and strategies contained herein may not be suitable
for your situation. You should consult with a professional where appropriate. Neither the publisher nor
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For general information on our other products and services or for technical support, please contact our
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about Wiley products, visit www.wiley.com.
Library of Congress Cataloging-in-Publication Data:

Taulli, Tom, 1968-

High-profit IPO strategies : finding breakout IPOs for investors and traders / Tom Taulli. — 3rd ed.
p. cm. — (Bloomberg financial series)
Rev. ed. of: Investing in IPOs. c2001.
Includes bibliographical references and index.
ISBN 978-1-118-35840-5 (cloth); ISBN 978-1-118-42033-1 (ebk);
ISBN 978-1-118-43418-5 (ebk); ISBN 978-1-118-41697-6 (ebk)
1. Going public (Securities). 2. Investments. I. Taulli, Tom, 1968- Investing in IPOs.
II. Title.
HG4028.S7T38 2013
332.63'2042—dc23
2012030210
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1

ffirs.indd iv 26/09/12 10:01 AM

 Contents

Foreword xiii
Introduction xv

PART I: IPO FUNDAMENTALS

CHAPTER 1
Getting IPO Shares 3
Risk 4
The Calendar 4
Online Brokers 5
Build Relationships with the Syndicate Firms 8
Dutch Auction 8
Buy on Secondary Markets 10
Private Placements 10
IPO Mutual Funds 10
Directed Share Program 11
Follow-On Offerings 11
Direct Public Offerings 12
IPOs to Avoid 13
Conclusion 14
CHAPTER 2
IPO Basics 15
Why Do Companies Go Public? 15
Reasons Not to Go Public 19
JOBS Act 23
Cast of Characters 23
Conclusion 27
References 27

ftoc.indd v 26/09/12 10:27 AM

 vi Contents

CHAPTER 3
IPO Process 29
Laws That Impact IPOs 29
Steps of the IPO Process 30
Conclusion 38

PART II: IPOs FOR INVESTORS

CHAPTER 4
Finding the Best IPO Information 41
Information to Get Your Feet Wet 42
In-Depth IPO Information 43
Other IPO Information Resources 45
Conclusion 47

CHAPTER 5
Making Sense of the Prospectus 49
Getting a Copy of the Prospectus 50
Main Sections 50
Front Matter 52
Graphic Material 54
Qualification Requirements 55
Prospectus Summary 56
Risk Factors 58
Letter from Our Founder 59
Market Data and User Metrics 60
Use of Proceeds 60
Dividend Policy 61
Capitalization 61
Dilution 62
Selected Consolidated Financial Data 62
Management’s Discussion and Analysis of Financial Condition and
Results of Operations 62
Business 63
Management 63
Executive Compensation 64
Certain Relationships and Related-Person Transactions 65
Principal and Selling Stockholders 65
Description of Capital Stock 66
Shares Eligible for Future Sale 66
Index to Consolidated Financial Statements 67
Miscellaneous Sections 67
Conclusion 67

ftoc.indd vi 26/09/12 10:27 AM

 Contents vii

CHAPTER 6
Balance Sheet 69
Some Fundamentals 69
Balance Sheet Overview 71
The Assets 73
The Liabilities 78
Conclusion 81
CHAPTER 7
Income Statement 83
Management’s Discussion and Analysis of Financial Condition and
Results of Operations 84
Conclusion 91
CHAPTER 8
Statement of Cash Flows 93
Background 93
Focus on Operating Cash Flows 96
Free Cash Flow 97
Stock Options 98
Factoring 98
Footnotes 98
Fraud and Misrepresentation 99
Conclusion 100
CHAPTER 9
Risk Factors 101
Inexperienced Management Team 101
Need for More Financing 102
Legal Proceedings 103
Market and Customer Base 104
Going Concern 104
Competition 105
Dual-Share Structure 106
CEO Dependence 107
Reliance on the Government 108
Unproven Business Model 109
Limited History of Profitable Operations 109
Small Market Potential 110
Cyclical Businesses 111
Conclusion 111
CHAPTER 10
IPO Investment Strategies 113
Neighborhood Investing 113
Invest in What You Know 114

ftoc.indd vii 26/09/12 10:27 AM

 viii Contents

Study Mutual Fund Holdings 114

Strong Backers 115
Analyst Coverage 115
IPO Rules of Thumb 116
Buy on the Opening or Wait for the Lockup to Expire? 117
Buying on Margin 118
Options 118
Conclusion 122
CHAPTER 11
Short Selling IPOs 123
How Short Selling Works 123
Risks of Short Selling 126
Taxes 127
Finding IPOs to Short 127
Conclusion 128

PART III: IPO SECTORS

CHAPTER 12
Tech IPOs 131
The Cloud 131
Social Networking 133
Mobile 135
Marketplaces 136
Security 136
Big Data 137
Evaluating a Tech IPO 138
Conclusion 140
Reference 140
CHAPTER 13
Biotech IPOs 141
FDA Approval 143
Analyzing Biotech IPOs 144
Conclusion 147
References 148
CHAPTER 14
Finance Sector IPOs 149
Banking 149
Asset Managers 152

ftoc.indd viii 26/09/12 10:27 AM

 Contents ix

Private Equity Firms 153

Online Brokerages 154
Insurance 155
Specialized Online Financial Services 156
Conclusion 157
References 158
CHAPTER 15
Retail Sector IPOs 159
Brand 159
Disruptive Threats 160
Major Consumer Changes 161
Timing 161
Check Out the Store 162
Financial Metrics 163
Narrow Base 163
Conclusion 164
References 164
CHAPTER 16
Foreign IPOs 165
Advantages of Foreign IPOs 166
Risks 167
IPO Process for Foreign Deals 170
American Depositary Receipts 171
Direct Investments in Foreign IPOs 171
Conclusion 172
CHAPTER 17
Energy IPOs 175
Crude Oil 175
Natural Gas 176
Coal 177
Alternative Energy 177
Types of Energy Companies 179
Evaluating an Energy Company IPO 179
Master Limited Partnerships 180
Conclusion 181
CHAPTER 18
REIT IPOs 183
Trends in the Real Estate Market 183
Basics of REITs 184
Conclusion 188

ftoc.indd ix 26/09/12 10:27 AM

 x Contents

PART IV: OTHER IPO INVESTMENTS

CHAPTER 19
IPO Funds 191
Types of Funds 191
Mutual Funds 192
Exchange-Traded Funds 194
Closed-End Funds 195
Hedge Funds 197
Fund Strategies 198
Conclusion 200
References 200
CHAPTER 20
Spin-Offs 201
The Basics 201
Investing in Spin-Offs 204
Conclusion 205
References 205
CHAPTER 21
Fad IPOs 207
Spotting the Fads 208
Knowing When to Get Out of Fad IPOs 212
Conclusion 212
References 213
CHAPTER 22
Secondary Markets, Angel Investing,
and Crowd Funding 215
Pre-IPO Funding Process 216
Accredited Investor 216
How to Become an Angel Investor 217
Angel Deal Structures 217
Strategies for Angel Investing 218
Due Diligence and the Term Sheet 221
Secondary Markets 223
Crowd Funding 226
Conclusion 228
CHAPTER 23
The 100x IPO 229
The Amazon.com IPO 229
Conclusion 233

ftoc.indd x 26/09/12 10:27 AM

 Contents xi

Conclusion 235
Appendix A: The Underwriting Process 239
Appendix B: Analyzing the Financial Statement Items 243
Glossary 247
About the Author 259
Index 261

ftoc.indd xi 26/09/12 10:27 AM

ftoc.indd xii 26/09/12 10:27 AM
 Foreword

Most any small private company that has a vision to become a major influ-
encer in its industry also has a vision to go public. The seeds of an initial
public offering (IPO) are often sown as the company starts up, providing a
framework that guides business evolution over the ensuing years. That was
certainly the case with NetSuite when we launched in 1998, at the height
of the Silicon Valley dot-com boom, with the vision of delivering a business
management application over the Internet. An IPO was in our DNA from
the start.
I met Tom Taulli as we enjoyed an Oakland Athletics baseball game
shortly before we went public. At that game, which I’m sure the A’s won (full
disclosure: A’s General Manager Billy Beane is on NetSuite’s board), Tom told
me about his forthcoming book to demystify the IPO process for individual
investors. This Foreword, which I was honored to be asked to contribute,
appears in the third edition of that groundbreaking book. Having read it, I
would say it is not only incredibly useful to the individual investor, it is also a
must-read for those CEOs facing their first trial in the public markets.
In 2007 when we decided the time was right to go public, we viewed the
IPO as a way to satisfy three main objectives: as a marketing strategy to raise
our profile and credibility among customers, prospects, and industry influ-
encers; as a validation for our employees that their hard work was paying off;
and as a way to raise capital to fuel further growth. Our IPO in December
2007 was remarkably successful. We’d set an offering price of $13 to $16 per
share, but market demand drove the price to more than $26—a figure that
was the largest jump in initial-to-final pricing since the Google IPO a few
years earlier.
Some of our IPO ideas were considered trendsetting in 2007 but have
since become far more prevalent (and of course, this book does a great job
of explaining the ins and outs of these various choices). For instance, we
conducted a true Dutch auction rather than a traditional IPO sale, and
we believe that approach raised more cash for the company than a more

xiii

flast.indd xiii 26/09/12 10:02 AM

 xiv Foreword

common approach to the IPO would have. We raised $175.9 million, and
though we didn’t realize it at the time, that capital would prove useful when
the financial crisis of 2008–09 unfolded. It was a key factor in our ability to
grow the business during the global slowdown, even as companies in tech-
nology and other industries shrank or folded.
We also sold a very small percentage of the company—just 10 percent,
far less than the norm at the time—to raise adequate capital while not dilut-
ing the company. And we decided to list on the NYSE rather than on the
NASDAQ. We were one of the few technology start-ups listed on the NYSE
at the time, and since then, we have been joined by many others, including
LinkedIn and SolarWinds. In the final analysis, the goals we had for our IPO
to enhance our customer success, employee pride, and cash on the balance
sheet were met with flying colors.
Successfully executing an IPO—and meeting the demands for transpar-
ency and compliance that attend a public company—is a rite of passage that
leverages the management skill and processes developed during the private
years. The IPO is a major milestone for a successful company that fosters even
greater discipline, focus, and leadership, and ultimately strengthens our great
engine of capitalism. Conversely, history has shown that ill-prepared compa-
nies can stumble and fail at the IPO and in the harsh light of public scrutiny.
Helping investors understand the risk and rewards of an IPO and apply their
own due diligence is what this third edition of Tom Taulli’s High-Profit IPO
Strategies is all about.

Zach Nelson, CEO

NetSuite Inc. (NYSE: N)

flast.indd xiv 26/09/12 10:02 AM

 Introduction

I’ve been involved in the initial public offering (IPO) market since the mid-
1990s, which was certainly a great time to get involved. Netscape sparked
the Internet revolution with its massive IPO on August 19, 1995. On its first
day of trading, the stock soared from $14 to $57 and then ended the day at
$58.25. The company sported a market value of $2.9 billion even though
revenues were meager.
During this time, I got Internet fever and co-founded a company called
WebIPO. It was an early player in the industry to allocate IPO shares to retail
investors. All in all, it was a tremendous experience, but I also realized how
difficult it was to break through the walls of Wall Street.
Of course, the IPO market today is much different from IPOs during
the dot-com boom. It’s rare to see an IPO double or triple on the first day of
trading. In fact, the volume of deals is much lower today. Whereas the late
1990s may have had 500 to 600 a year, the number is now about 100 to 150.
But this is not necessarily a bad thing. The fact is that the IPO market
provides a vetting process. That is, it makes it tough for a flaky company to
hit the markets. Don’t expect to see crazy deals like Pets.com.
The IPO market remains a great place to find tremendous investment
opportunities. Even though the past decade has seen two recessions and a
horrible financial crisis, there have been standout public offerings, such as
Google and Salesforce.com.
Many of the top deals were not necessarily tech companies, either. Just
look at the successful IPOs from Chipotle Mexican Grill and Buffalo Wild
Wings.
The good news is that the IPO market will continue to be the place to
catch companies that are trailblazing the next big thing. Without a doubt, the
tech sector already has promising megatrends like cloud computing, mobile,
social networking, and big data.
But we’ll also see much progress in other categories like biotechnology,
new forms of energy, and transportation. There may even be advances in

xv

flast.indd xv 26/09/12 10:02 AM

 xvi Introduction

space exploration. Consider that SpaceX launched a rocket that docked with
the International Space Station in May 2012. The company’s ultimate goal is
to reduce the costs of space exploration by a factor of 10. Oh, and the com-
pany has plans to go public.
Now, as of this writing, there is still a lot of skepticism. The U.S. economy
is sluggish and unemployment is too high. Europe is having severe troubles,
and even China is experiencing a slowdown.
Yet such things will not blunt innovation. After all, Bill Gates started
Microsoft in the mid-1970s, when the U.S. economy was mired in a terrible
recession. It didn’t matter much to him.
So in my book, I want to help make your IPO investing a success and
catch the next big waves of innovation. To this end, there are four main parts.
Part One covers the fundamentals, such as the IPO process and how to obtain
shares. Next, we do a deep dive into strategies and research. This includes
covering online resources like EDGAR and RetailRoadshow. We also look at
how to interpret the S-1 document—spotting the risk factors and analyzing
the financial statements.
There’s even coverage of short selling. Unfortunately, there are still many
lackluster IPOs, but you can short them to make a tidy profit.
Part Three covers the many sectors of the IPO market. These include
technology, biotech, financial services, retailers, energy operators, and real
estate investment trusts (REITs). We also look at how to invest in foreign
companies. Let’s face it—there are many growth opportunities in global
markets.
The final part of the book looks at specialized transactions, such as
spin-offs. There is also coverage of the emerging area of secondary markets.
Essentially, these allow you to buy shares in pre-IPO companies.
Throughout the book, I cover a variety of short-term investment strate-
gies. While they can be good for decent gains, I think these can miss the big
picture, though. Getting the big gainers often means holding on to a stock for
several years. Just imagine if you had sold Amazon.com or Microsoft in the
early days. If so, you would have missed out on massive profits.
It’s true that IPOs are unpredictable. But then again, buying the no-
brainer blue-chip stocks can be risky, too. Just look at what happened to
companies like Eastman Kodak and Lehman Brothers.
As with any effective investment strategy, the way to deal with risk is to
diversify. You might, for example (depending on your risk profile), invest 5
percent of your net worth in IPOs. You can then allocate the rest of your funds
to other asset classes, such as stocks, bonds, and perhaps a little bit of gold.

flast.indd xvi 26/09/12 10:02 AM

 Introduction xvii

In fact, chances are that you have already participated in the IPO market
and don’t realize it. How is this possible? The reason is that mutual funds are
the biggest purchasers of IPOs.
But again, if you want to get the big gains, you’ll need to do some research
and buy the stocks. And in this book, I give you all the information you need
to get going.
So let’s get started.

flast.indd xvii 26/09/12 10:02 AM

flast.indd xviii 26/09/12 10:02 AM
Discovering Diverse Content Through
Random Scribd Documents
 any; yet, without this, it may be fairly said that the Methodist Episcopal
Church, not less devoted than the best, is, by its greater numbers, the
most important of all. It is no fault in others that the Methodist Church
sends more soldiers to the field, more nurses to the hospitals, and more
prayers to Heaven, than any. God bless the Methodist Church! Bless all
the Churches! And blessed be God, who, in this our great trial, giveth us
the Churches!
“A. Lincoln.”

Memorials were sent up to this General Conference, also asking

for a colored pastorate and conference organization. Several
petitions from the colored members within the District of Columbia
and the States of Delaware and Maryland were presented, praying
for this. The wisdom of the petitioners is best seen by noting the
fact that most of the best work among the colored people within the
Church is in the bounds of the territory from whence came most
petitions for a colored pastorate and separate conferences. The
Church began to see a new door open at the sesame of belching
cannons for her admission into the South. She then declared: “As a
Church we have never sought, do not now seek, to ignore our duty
to the colored population.” And besides this, the Church at that
conference declared: “Justice to those who have been enslaved
requires that in all the privileges of citizenship, as well as in all the
other rights of a common manhood, there shall be no distinction
founded on color.” These were strong words at that early day, and
meant what the Church has been teaching ever since. That General
Conference created a special committee to look after the interests,
hear the appeals, consider what ought to be done by that
conference to further the work among the colored members It was
known as “the Committee on the State of the Work among the
Colored People,” to whom all such petitions and memorials were
referred. This was not one of the regular standing committees, but a
special one appointed for the occasion. After the General Conference
had been in possession of said petitions and memorials two weeks
or more, they submitted a report, in which they said that they based
their report on “direct information from delegates to the General
Conference familiar with the work; from intelligent and trustworthy
local preachers who have been deputed by the colored charges in
Delaware and Maryland and the District of Columbia to represent
them before the committee, and from various memorials setting
forth the wishes of our colored members.”
That the Church trusted and desired to honor her sable sons, no
one doubts. That she was proud of feeling herself loved by them,
and an instrument in God’s hands of helping to uplift them, is told in
the following expression of that conference: “If it be a principle
potent to Christian enterprise that the missionary field itself must
produce the most efficient missionaries, our colored local preachers
are peculiarly important to us at this time.” The memorialists were
filled with ecstasy when the committee reported the following:
 COLORED PASTORATE.
“(1.) Our colored members, ministers, and laymen feel that the times
are auspicious to the development of their mental and moral power, and
request from us the facilities necessary to this end.

“(2.) A colored pastorate they recognize as among the most important

of these facilities, securing to them a ministry adapted to their wants,
encouraging their young men to enter the ministerial field, and offering
motive and opportunity for general ministerial advancement.
“(3.) They do not, however, propose to secure this by—indeed, they
are utterly opposed to—separation from our Church, either with a view to
a union with another, or to independent organization. With such a feeling
on their part, the General Conference can not consistently with its own
responsibility, with their constitutional rights, or with any decent
recognition of their loyalty to our Church in all the troubles through
which, on their account, she has passed, adopt any measure which shall,
even indirectly, look to such a result.
“(4.) Conference organization is asked for from two quarters; other
memorials urge that the requests should be granted. The local ministers
who have been before us have shown deep solicitude in this direction....

“(7.) From this exhibit of facts two convictions are natural, namely: We
must retain the oversight of this people; we must give them efficient
colored pastors.
“To retain these pastors as mere local preachers, subject to
appointment by white presiding elders, will impair rather than increase
their efficiency; will promote congregationalism among them rather than
itinerant missionary enterprise.
“To propose their incorporation with the existing annual conferences
will be attended with difficulties too formidable every way to be readily
disposed of, and the delay incident to such a proposition is incompatible
with the urgent requirements of the times.
“In view of these considerations, we recommend to the General
Conference for adoption the following preamble and resolutions:

“Whereas, In the present circumstances of our country, the colored

people occupy a position of peculiar interest, appealing to our Christian
sympathy, and inviting our missionary enterprise; and
“Whereas, This enterprise can not now be made efficient by the policy
of our Church hitherto pursued toward them, and especial measures
have therefore become necessary; and
“Whereas, The exigencies of the case require to efficiency prompt
action; therefore, be it

“1. Resolved, by the General Conference of the Methodist Episcopal

Church in Conference assembled, That it is the duty of our Church to
encourage colored pastorates for colored people wherever practicable,
and to contribute to their efficiency by every means in our power.
“Resolved, That the efficiency of said pastorates can be best promoted
by distinct conference organizations, and that therefore the bishops be,
and they are hereby, authorized to organize among our colored ministers,
for the benefit of our colored members and population, mission
conferences—one or more—where, in their godly judgment, the
exigencies of the work may demand it, and, should more than one be
organized, to determine their boundaries until the meeting of the next
General Conference, said conference or conferences to possess all the
powers usual to mission annual conferences: Provided, that nothing in
this resolution be so construed as to impair the existing constitutional
rights of our colored members on the one hand, or to forbid, on the
other, the transfer of white ministers to said conference or conferences
where it may be practicable and deemed necessary.
“3. Resolved, That our General Missionary Committee be requested to
take into careful consideration the condition of our colored people, and
should conferences be organized among them, make to them—
 consistently with other demands upon its funds—such appropriations as
may be essential to success.”

Annual or mission conferences being composed of traveling

preachers, it was necessary that some colored local preachers be
admitted into the traveling connection before they could be formed
into a conference, which gave rise to a question upon which the
same committee made a report, which was adopted, as follows
(Jour. 1864, p. 253):

“We, the committee to whom this subject was finally referred, beg
leave to report that we are not aware of any legal obstacle to the
reception of colored preachers into our annual conferences.”

This General Conference at a later day made more specific and

direct provision for the Delaware and Washington Conferences in the
following resolution (Jour. 1864, p. 263):
“The Washington Conference shall embrace Western Maryland, the
District of Columbia, Virginia, and the territory south.

“The Delaware Conference shall embrace the territory north and east
of the Washington Conference.
“Resolved, That in order to constitute the first conferences of colored
members, the rule of Discipline requiring a probation of two years, be so
far suspended as to allow the bishops to organize into one or more
annual conferences such colored local elders as have traveled two or
more years under a presiding elder, and shall be recommended by a
quarterly conference, and by at least ten elders who are members of an
annual conference.”

The Delaware Conference was organized July 28, 1864, and the
Washington Conference October 27, 1864. It will be noted that “the
constitutional rights of our colored members” were recognized, as
well as the difficulties of incorporating the work.
 Let us now examine the above resolutions more closely.
Blessings seldom come unattended. At a glance any one can see
that the requests of the colored members had been granted.
Henceforth they were to have (1) colored pastorates, the very thing
for which they had prayed. No one doubts, we think, that the
granting of that very thing gave birth to all the other race questions
that do or may arise touching the relations of the two races within
the Church. The wisdom of that General Conference peered away
out into the future. It probably saw a time when advanced ideas
would lead men within the Church to advanced work. These
pastorates created by that General Conference were to be for
“colored people.” They were to be allowed (2) separate conferences.
There was no way to avoid them where there were “colored
pastorates for colored people.” Just so. These separate conferences,
however, were (3) “not to impair existing rights of our colored
members, nor yet (4) to forbid the transfer of white ministers to said
conferences where it may be practicable and deemed necessary.”
What “existing rights” had colored members? To remain in any
Church they chose within Methodism, or join with and worship in any
congregation within the Methodist Episcopal Church. It did not stop
there, but action was taken looking to the education of the race. The
General Conference Committee on Education reported as follows:

“The committee have had before them the memorial of Rev. J. F.

Wright in reference to the Wilberforce University, and, in view of its
peculiar character and relation to the Church, we offer for adoption the
following resolution:
“Resolved, That we heartily sympathize with the noble purpose
contemplated in the establishment of Wilberforce University and we do
hereby earnestly commend the institution to the prayers and liberal
contributions of the friends of humanity.”

Just what “the peculiar character and relation” were, is not stated.
It may have been that the enterprise was sprung upon the Church
before it had been duly authorized. It may have been that its
“peculiar character and relation” meant that it was to be exclusively
colored. It makes no difference as to what was meant, some way or
other that institution soon passed into other hands.

BENNETT SEMINARY, GREENSBORO, N.C.

Again, it would have been folly to grant separate conferences for

the colored membership and leave standing the old rule, and allow it
to apply in this case, requiring a probation of two years before being
admitted to an annual conference. This was brought forward at
once, and the animus of the General Conference on the subject was
at once manifested by the following resolution:

“Resolved, That in order to constitute the first conference of colored

members, the rule of the Discipline requiring a probation of two years be
so far suspended as to allow the bishops to organize into one or more
annual conferences such colored local elders as have traveled two or
 more years under a presiding elder and shall be recommended by a
quarterly conference and by at least ten elders who are members of an
annual conference.”

This was a wise and prudential action. Wise in that it at once

dissipated any thought that might have arisen in the minds of the
less stable members, that the matter was simply put in a
complicated shape to keep the colored members at bay, and thereby
eventually drive out of the Methodist Episcopal Church all the
colored people. To have kept them waiting under the probationary
rule would probably have done much harm. Prudential in that even
the local elders were to come up well recommended: (1) By their
own people, among whom they lived and worked, and who therefore
could testify as to their moral, religious, and literary fitness for the
traveling connection. (2) To be recommended “by at least ten elders
(white) who are members of an annual conference.” Who were
better qualified than such elders to know who were and who were
not qualified for traveling preachers—our own people had no
experience in matters of that kind—in that they would naturally be
able and more willing to speak against those “wolves in sheep’s
clothing” who sometimes “climb up some other way” into our annual
conferences for the purpose of fleecing, instead of feeding, the flock
of God? Our own people might have been in some way related to
the applicants or ignorant of their devices. Why should not some
precautions be observed when clothing with authority those who,
even then, must have been witnessing “the pains, the groans, the
dying strife” of an institution that had grown gray in crime and
debauchery—under which for two hundred and forty-four years the
race had suffered in more ways than the Hebrews in Egypt? They
had never enjoyed even the privilege of elementary training in any
way fitting them for happiness and usefulness in the world. They
were poor and ignorant. Poor in that even the good name of the
race was gone; and who does not know that a
 “Good name, in man and woman,...
Is the immediate jewel of their souls?
Who steals my purse steals trash; ’tis something, nothing;
’Twas mine, ’tis his, and has been slave to thousands;
But he that filches from me my good name
Robs me of that which not enriches him,
And makes me poor indeed.”

We do not know that additional weight attaches to the above by

knowing that Shakespeare put these words into the mouth of Iago;
but it is a fair statement of the condition of the race when the
Emancipation Proclamation was issued. The morality of the race
under the old régime is the prodigy of the age! And yet they knew
nothing theoretically of morality, and had opportunities for but few
examples of it. They knew nothing of home economics, and not five
in one hundred of the rank and file could count correctly ten dollars
in small change. Hence the Church was wise in throwing around this
people safeguards as well as charity. They knew but little, if
anything, of the comforts of home life, the proper training of
children; while the fantastic mode of dressing immediately after the
war tells a tale at which a heathen should blush. They knew
comparatively nothing either of Church polity or moral science.
Those who have found occasion to laugh at the huge mistakes of
some of our ministers, as well as some others who had enjoyed
better opportunities, must find a sufficient explanation in the
previous condition of the race. Was the Methodist Church not right in
doing as it did?
 CHAPTER VIII

THE BEGINNING OF A GREAT WORK.

The beginning of a work among these images of God cut in ebony is

found in the following resolutions looking to the protection of the
interests of the colored man by the civil government. It is nothing
against a system that it was badly managed or fell into bad hands,
or else our venerated Constitution is involved. That General
Conference (1864) in its report on freedmen, said:

“(1) Resolved, That in the events which have thrown the thousands of
freed people upon the benevolence of the humane and loyal people of
the North, we recognize a providential call to the Christian public for
contributions for their physical relief and mental and moral elevation and
especially to the Church of Christ for the means of their evangelization.
“(2) Resolved, That the best interests of the freedmen of the country
demand legislation that shall foster and protect this people, and we do
hereby respectfully but earnestly urge upon Congress the importance of
establishing, as soon as practicable, a Bureau of Freedmen’s Affairs, as
contemplated in the bills now pending.”

What did this mean? If it meant anything, the Church meant to

practice, at its earliest convenience, the doctrine it had been
preaching for the last eighty years and more,—that the poor
enslaved colored man should be properly trained to enjoy this life
and that which is to come. It meant that just as soon as the alarms
of war had sufficiently subsided and God opened the way, or
signified that an entrance could be gained, to go at once up and
down through the Southland carrying the gospel of free salvation to
the downtrodden, poverty-stricken, and demoralized colored man.
While but few, if any, believe the only mission of the Methodist
Episcopal Church in the South was to the poor colored man, but few
will doubt that, had it no other call to go into the South, that were
enough. But few rational Christians believe the Church had no call
into the South.
That the Church was needed there, no one will question when the
condition of the colored man at that time is considered, as well as
the relation the Methodist Episcopal Church, South, sustained to the
colored man before and during the war, and that other significant
fact that the colored man, as such, was, and for that matter is,
peculiarly either a Baptist or a Methodist. From the beginning
Methodism took hold of him, and he learned that, wherever found, a
true Methodist was his friend. This in itself is sufficient explanation
of the peculiarity referred to above. What was the condition of the
colored man at the close of the war? When the black smoke of battle
arose from a hundred battlefields the entire colored population—four
and a half millions—came forth ignorant, superstitious, degraded,
and poverty-stricken. The only beam of hope rested entirely on the
education of the race. The emancipation was followed by the
enfranchisement of these ignorant and superstitious people. The cry
of opposition was heard vociferously in the South, while in some
places in the North leading newspapers and men expressed doubts
as to the wisdom of the thing. Who, under the then existing
circumstances, doubted the earnestness of those who cried out as
they saw the colored men clothed with freedom and franchise, yet
slaves to superstition and ignorance:
 “A poor, blind Samson is in our land,
Bound hand and foot, and prone upon his back;
But who knows that, in some drunken revel,
He may rise and grasp the pillars
Of our temple’s liberties, shake the foundations
Till all beneath its broken columns lie in ruins?”

Amid the religious training received from that part of the

Methodist Episcopal Church, South, that trained them at all, did not
appear anything different from the system of slavery in vogue, save
the promise of an eternal Sabbath. It is true a colored membership
was reported by the Methodist Episcopal Church, South; but this did
not mean that the colored people within that Church were permitted
to worship God in their own congregations, or that there were any
colored pastors or class-leaders among that membership. If slavery
had continued, the condition of the colored man religiously could
never have become better. Just how—unless force of circumstances
played a part in the drama—a brotherly feeling could have arisen or
existed in the bosom of the poor colored man under that régime, we
can not, for the life of us, surmise. But all that was ended with the
war, and still there was but little, if any, change. The withdrawals at
first opportunity of colored people from the Methodist Episcopal
Church, South, meant something. The Methodist Episcopal Church,
South, was then, at any rate, unwilling to educate the colored man.
In proof of the last assertion, we turn to page 148 of Dr. A. G.
Haygood’s book, “Our Brother in Black.” The following, published in
1881 by this leading philosopher and clergyman in the Methodist
Episocopal Church, South, is as significant as sound. He says:

“If the work of educating the Negroes of the South is ever to be

carried on satisfactorily, if ever the best results are to be accomplished,
then Southern white people must take part in the work of teaching Negro
schools. There have been some very sad and hurtful mistakes in the
relations assumed by most of us of the South to this whole matter, and
 especially in the fact that, with very rare exceptions, our people have
steadfastly refused to teach Negro children, especially since they were
made free, for love or money. They have recoiled from Negro schools as
if there were personal degradation in teaching them. Perhaps the state of
things that existed at the South for a full decade after the war, and for
which Southern people were not alone responsible—a state of things that
made it impracticable for Southern white men and women to teach Negro
schools—was inevitable. But so it was; they could not do it without
‘losing caste.’ As I am trying to state facts honestly, I should add, the
prevailing sentiment of the South would not even now look favorably
upon such teachers; but I must say we are growing in sense as well as
grace on this subject.”

Without further comment, the above corroborates the statement

that the condition of the freedmen in the South directly after the
war, temporally, spiritually, morally, and intellectually, was a loud
enough call, and the mission of enough importance to warrant the
action of the General Conference of 1864 in its action that virtually
announced the intention of the Methodist Episcopal Church to go
into the South. The fact that conferences had been opened in the
South for colored people was sufficient proof.
 THE CHURCH IN THE SOUTH.
When the General Conference of 1868 met in the city of Chicago,
Ill., for its twentieth session, among other things it took up the
subject of the relation of the Church to the colored man. There were
present at that General Conference two hundred and forty-three
delegates. When the General Conference of 1864 authorized the
formation of mission conferences in the South for colored people, as
a Church, it “had been practically excluded for twenty years” from
Alabama, North and South Carolina, Georgia, Florida, Tennessee,
Mississippi, Louisiana, Arkansas, and Texas, while a generation had
grown up under the immediate care, as if were, of the Methodist
Episcopal Church, South. It is true that the Methodist Episcopal
Church had held on in some sort in the city of Baltimore—this being
her strongest fort—while through some parts of Delaware, Maryland,
Virginia, Kentucky, and Missouri it had a foothold. Our Church in
1863, in the last-named States, claimed 332 effective preachers,
84,673 members, and 919 church-buildings. By the next year, when
the General Conference of 1864 met for its nineteenth session in
Philadelphia, it claimed in the above-named five slave States 309
effective preachers, 87,072 members—15,898 being colored—and
982 churches, being an increase in these five States of 2,399
members, not including probationers, and a decrease of 23 effective
preachers, and an increase of 63 church-buildings. Thus it may be
seen that a wise Providence proclaimed the mission of our Church;
and there was then, as we see now, no mistake made on the part of
our Church when it heard and obeyed the commission in this case,
“Go ye into all the world, and preach the gospel to every creature.”
The crowning act touching the subject we discuss was given by the
General Conference of 1864 in these words: “We are not aware of
any legal obstacle to the reception of colored preachers into our
annual conferences.” Touching the work done by the last General
Conference, and showing somewhat of the results attained, the
Bishops’ Address to the Twentieth General Conference contained the
following:

“They [the Delaware and Washington colored conferences] now

contain one hundred and one ministers and twenty-six thousand four
hundred and eighty-seven members and probationers. The creation of
these conferences was hailed by our colored ministers and membership
with great joy, and has, we believe, been productive of much good. The
ministers are becoming familiar with the mode of conducting business,
and many of them are rapidly improving. At their recent sessions they
elected representatives to this body according to the form of the
Discipline for electing delegates. Whether these representatives should
be admitted, you alone have authority to decide. In our judgment, the
success of this work demands all the encouragement which the General
Conference can properly give.”

The regular and natural succession of action touching the relation

of the Church toward the colored man seems to declare, to our mind
at any rate, that it has the divine sanction. The submission of the
above resolution brought at once before the General Conference of
1868 the question of the advisability of admitting—not colored
testimony, or testimony from people of color—but colored delegates
to equality in the General Conference of one of the largest
denominations in the world. The Christ-like spirit of the bishops in
presenting the matter, supported by their modest indorsement of it,
was manly. They said: “In our judgment, the success of this work
demands all the encouragement which the General Conference can
properly give.” It may have been that it was not thoroughly settled in
the minds of all the delegates of that General Conference. The
result, however, was satisfactory, in that James Davis and Benjamin
Brown were seated as delegates, and thereby the equal rights of our
colored members were not only recognized, but everything looking
to their elevation, done by the Church, was stamped with approval.
The adjournment of that General Conference did not take place until
provision for other conferences for our people, at their own request,
was made. The year preceding that General Conference a colored
presiding elder had been appointed over a district in Kentucky; nine
mission conferences had been organized in our Southern field;
colored preachers had been received into the Kentucky and Missouri
Annual Conferences. Notwithstanding this, wherever a mission
conference was organized a new inspiration seemed to overshadow
the entire work. The provision above referred to was as follows:

“‘Resolved, 1. That the bishops who may preside in the Kentucky

Conference during the next four years, are hereby authorized to organize
the colored ministers within the bounds of said conference into a
separate annual conference, if said ministers request it; and if, in the
judgment of the bishops, the interest of the work requires it, to be called
the —— Conference: Provided, that nothing in this resolution shall be
construed to impair the existing constitutional rights of our colored
members on the one hand, or, on the other, to forbid the transfer of
white ministers to said conference, whenever it may be deemed desirable
or expedient.’
“So soon as this resolution was taken up, a motion was made to lay it
upon the table, which was lost.
“A motion to amend by inserting, ‘Provided, that colored members may
remain in the Kentucky Conference,’ was laid on the table.

“A motion to strike out the words ‘the interest of the work,’ and insert
‘the unity and success of the Church,’ was laid on the table; and the
resolution was adopted as matured by the Committee on Boundaries.”

The motions subsequently made show at once the animus of the

white brethren of that conference at that time. While many were
anxious to have restrictions, others objected to it in toto. But, as in
the General Conference, so it has been in nearly every annual
conference, that a wide difference of opinion on the color-line
question existed. It is well that it was so.
 Following hard upon the above action in the interest of the colored
man, this General Conference paid special attention to its work so
grandly begun in the sunny South. While the discussion of the status
of the colored delegates elicited much animation, the restrictions
were removed from the conferences of the Church in the South,
irrespective of color, by a vote of 197 to 15. All our benevolent
societies were instructed to redouble their diligence to meet the
exigencies of the case; our Book Concerns were to publish one or
more papers adapted to the new order of things within the South;
transfers, if needed, were to be sent into this fruitful field; training-
schools and theological schools were ordered for the special training
of the colored people of the South within our Church and without, if
accepted. The bishops were requested to give the colored work
special episcopal supervision. As a finale of the action of that
General Conference, an “enabling act” for the establishment of the
third annual conference among our colored members was passed,
with the provision that in every case the rights of every preacher
were to be fully and carefully, as well as impartially, considered. The
white preachers and teachers who were sent by the Church into the
South to carry out this plan of work were, in too many cases, not
only subjected to insult, but cruel scourgings and false
imprisonment, as if ostracism was not cruel and wicked punishment
enough. But many of those thus treated were men and women of
God, and therefore consistent but firm and true heroes and
heroines.
Dr. Walden (now bishop), in an address, Aug. 13, 1883, at the
anniversary of the Freedmen’s Aid Society, spoke of this work. The
following needs no comment, as he speaks of the period in our work
in the South at which we now are, and we insert it here as a
retrospect:

“Two courses were open—one to delay employing colored preachers

until they could be educated, the other to put these untutored men to
work at once. No people ever needed the gospel more than did the freed
people. Standing in the midst of new relations, the possessors of a new-
found freedom for which they had never been trained, they needed both
the restraints and the inspiration of the gospel. The Wesleyan prescience
of our Church recognized this need, and at the same time the fact that
these unlearned preachers, if divinely called, could so tell the story of the
Cross as to benefit their people. The lives of many of these men had
been an unbroken period of slave-toil; but the sequel proves that they
knew enough of the saving power of Christ and the fullness of his love to
instruct their hearers in the way of life, and we now see that their
relation to this work was not unlike to that of the first of Wesley’s lay
preachers to their work among their own classes in England.
“With this illustration before us of the general principle that a people
may and must be instrumental in their own evangelization, let us study
some of the results of our itinerant system among the freedmen—of our
itinerancy and its auxiliary agencies. All understand our itinerancy to be
the general superintendency and the pastorate; by auxiliary agencies I
mean our sub-pastorate, in which the class-leaders stand, our Church
literature, and our Sunday-schools. The mere suggestion of the fact leads
you at once to see that the real function of each and all of these is to re-
enforce both the general and the particular work committed to the
itinerancy or three fold pastorate—the bishops, presiding elders, and
pastors of our Church. The very fact of taking this comprehensive system
to a people who had no system, of beginning at once to build them up
into it, could not be without producing some marked and favorable
results. I mention the more obvious of these:

“(a) The freedmen who were recognized as having a call to preach

could do little more than exhort, but they were put into the pastoral
relation; a great Church committed to them a new and solemn trust, and
laid upon them grave responsibilities; they were under the leadership of
the superintendents of the missions—good, prudent, self-sacrificing men
—men who in their devotion to duty represented the highest life of their
Church. Such things could not be without affecting these untutored
preachers. Crude as all they did may have been at first, their pastorate
benefited the people they served, and was to themselves a means of
training, of real and rapid progress; and there are still in the effective
ranks of the conferences which came from such beginnings many pious,
able, and successful preachers, who were thus transferred from the
cotton and rice fields and sugar plantations to, and trained in, our
itinerant ministry.
“(b) As the work progressed, these colored men acquired by
observation and experience, and such study as was possible with them, a
wider knowledge of their work; and in due course the bishops began to
appoint some of them as presiding elders, investing them with all the
honors and responsibilities of this important office. It should also be
stated that the Church that acted thus through her bishops was
constantly displaying to them an encouraging interest in them by
furnishing means to aid in the support of their Church work.

“(c) In the annual conferences they were and are brought under the
presidency of our bishops—the most efficient presiding officers in this or
any other country, a fact that became most obvious at the Ecumenical
Methodist Conference. The very methods of business in our annual
conferences, and the promptness with which it is dispatched under this
presidency, have had such influence on the older conferences that the
advantages of like administration to the colored conferences are obvious.
The influence of the conference session ought also to be named, as
these annual meetings of the preachers have all along affected most
favorably the character of Methodism. These colored preachers have
been coming together, as do their brethren in older conferences, to
report and review the year’s work, to pass upon the character of each
one, to consider the various connectional and benevolent causes, to
attend to all the business that is usually presented, and to enjoy the
social privileges and religious services to which all our preachers look
forward with deep interest. Every such session tends to make them wiser
and more effective in their work.
“(d) Under our system of study for probationers and deacons, the
colored preachers are steadily improving, and their conferences are
becoming more careful as to the qualifications of those who are received
into the ministry. I well remember the class taken on trial in the South
Carolina Conference in 1867; near a dozen of them were then uncouth
and ill-clad men, who seemed to have come direct from the plantations;
little or nothing was said as to even elementary education; they were
taken as they were, and sent out to do work for the Master, who
ordaineth strength even out of the mouths of babes. But it is radically
different in that conference now; at its session, last January, I heard the
report of examinations, and learned thereby that the standard of
qualification is applied more rigidly each succeeding year. I rejoiced in
this as a fact common to all these colored conferences; and yet I also
rejoiced to remember that when the exigencies required it, our Church
dared to send out the earlier members of that and other conferences,
illiterate as they were, to the work of winning souls.
“(e) These early colored preachers, coming as they did from a
condition in which there was no home, in the better sense of that word,
soon came to know something of the importance that our Church
attaches to Sunday-schools. They were organized, often in the crudest
form; but they have been improved, and now nearly two thousand are
reported in the twelve conferences. This work is important there, not
only because it is in behalf of the youth and children, but also because
there has been, and is, a relatively great demand for such work in the
South. It is a fact that the ratio between the number of Sunday-school
scholars and Church members of any and all Protestant denominations in
the South is far below what it is in the North. The schools organized in
our “new Southern field” have been aided with papers published by our
Church, and especially adapted to the condition of the scholars. All the
teachers employed by the Freedmen’s Aid Society have done good and
faithful service in these Sunday-schools. Through them the Church has
been, and is, furnishing moral and mental instruction to about one
hundred thousand of the youth and children, that will be of incalculable
value to them, and through them to the Church and the nation.
 “(f) The Methodist newspapers published in the South—within this new
field—by our Church, in order to furnish a literature specially adapted to
the condition and needs of the people, have been potent for good. We
may not be able to estimate the force of the fact that papers have been
provided for them which they in a special sense regarded as their own. It
was no mean fact with them that a part of the capital of the Book
Concern was being employed to publish papers which, by their very
location, must chiefly be for them. And the presence of a depository of
books at Atlanta tended to impress the lesson, taught in so many ways,
that our Church was ready and anxious to help them in their every effort
to reach the plane of a higher and better life.
“Other facts might be named to show how every thing that is forceful
in our itinerancy and its auxiliary agencies has been constantly, wisely,
and effectively employed to reach, evangelize and elevate these colored
people. It has been more than a formal recognition of Christian equality;
it has been the continuous presence and power of educational relations
as well as educational agencies among them. The Church, during these
years, has recognized the divine call into her ministry of more than a
thousand of these men, thereby reposing a confidence and conferring an
honor that has been a special inspiration to them, and, in good degree,
to their people. Ministerial position and pastoral duties, prerogatives and
responsibilities, shared in common with the largest corps of preachers in
our country, have been made realities to them. When that whole people
shall come to the plane and glory of a true manhood and womanhood, it
will be known that the impartial planting of our system of itinerancy
among them was one of the early and potent means of their elevation.

“3. The aim of the Methodist Episcopal Church is to enlist every local
society in the support of her benevolent enterprises. She would give to
every person converted at her altars the opportunity to do work for the
Master. For this reason, all her pastors are charged with the duty of
presenting to their congregations the claims of the Missionary, Church
Extension, Freedmen’s Aid, Sunday-school, Tract, and Educational causes,
and of affording to all the opportunity to contribute thereto according to
their ability. Into each sphere of work represented by these causes, the
Church has been led by a marked providence, and her efforts in them
have been attended with her Lord’s signal favor. The presentation of
these causes in the relation they hold to the world’s evangelization, the
end for which Christ established his Church, teaches with special
emphasis the magnitude of her mission, and indicates the certainty of
ultimate success. How the faith of God’s people has enlarged under the
inspiration of this widening work! These causes have been presented
more or less fully to our new societies in the South.
“The colored preachers and people have taken a ready interest in the
Missionary Society because it carried the gospel to them. The preachers
were not learned, and the people were poor; but what if the earlier
missionary sermons were crude presentations of a world-wide cause?
what if but a few pennies were collected in a charge? the people were
thus coming into contact with the genius of the gospel, and beginning to
have some part in the movement that is conquering the world. Among
the many wise things done during the administration of the revered Dr.
Durbin as missionary secretary, the one of all others that has affected
and will continue to affect our Church the most, was providing for the
organization of the Sunday-schools into missionary societies; wise and
potential, because thus, in a practical and methodical way, the idea of the
world’s evangelization is fixed in the thought of the youth and children,
by far the greatest idea touching the human race that can be given to
the human mind.

“The colored preachers have been learning this fundamental idea of

the missionary cause and the purpose of each of the other benevolences
of our Church, and in their own way it may be presenting them to their
people; but the result has been a measure of enlightenment in these
directions, an increasing knowledge of the far-reaching plans of the
Church to which they belong, a clearer consciousness that by being
brought within her pale they have part in one of the great aggressive
Christian movements of the age. Standing as they do in the dawn of a
new day, this conscious identification with all the benevolent plans of the
Church that brought them the gospel can not do less than enlarge their
views of Christian duty, and inspire them with zeal for and devotion to
causes grand in themselves and glorious in their results.
“4. The preaching that is distinctively Methodistic has had its influence
in this as in other fields. While we hold the fundamental truths of
Christianity in common with other evangelical Churches—points of
agreement, each of which is infinitely more important than all the
questions in regard to which there is a difference—all do not place the
same emphasis we do on some of these truths. Our preachers in the
‘new Southern field,’ as elsewhere, have given special prominence to the
willingness and power of Jesus to save every one who comes to him; the
universal call and the gracious ability of every one to come; the radical
character of the change wrought in conversion—a new life through divine
power; the adoption into the divine family, and that adoption clearly,
satisfactorily attested through the witness of the Holy Spirit; the
complete cleansing power of the blood of Christ, and the keeping power
of the promised grace. Need I say in this presence that the emphasis
given to these Scriptural doctrines by our ministry has molded the
experience of Methodists in every society, and made the meeting for
testimony, whether love-feast or class-meeting, a part of our Church life?
The preaching of these doctrines in the earnest Methodist way among
the colored people, the building up of a Church among them under the
molding and inspiring effect of such truths, the leading of the members
up to a clear, well-defined religious experience, is giving them a Church
life, the advantage of which is best known from what Methodism has
done for other peoples. Already the advance of Christian morality, the
growing habits of industry and economy, the increasing spirit of
benevolence and liberality, the new home-life where home was so
recently unknown—the fruits of an evangelical gospel faithfully preached
—show what we have done, and are the promise and pledge of a pure,
strong, and active Church in every part of our new Southern field in the
near future.”
 CHAPTER IX

THE COLORED BISHOP QUESTION.

The quadrennium from 1868 to 1872 exhibited a marvelous growth

among the colored membership of the Methodist Episcopal Church.
This was but the pulsation started by Methodism among her hitherto
downtrodden children, by her labor of love in carrying to them the
gospel of free salvation through the agency of her benevolent
societies, the class of bishops, General Conference officers, and the
consecrated and self-denying white teachers from the North, who
left their homes of comfort and joy to go South and put themselves
upon God’s altar for the elevation, morally, financially, intellectually,
and spiritually, of their “brother in black.” The work done, and its
effects in so short a time, seem now the marvel of the age! The
scattered sheep had been gathered from the hills and valleys, the
cane-brakes and swamps, from the villages and the larger cities, into
societies nearly everywhere. Wherever possible they had been
organized into conferences as had been provided by the action of
the General Conference of 1864. With the application for recognition
came that also for separate conferences. Two separate annual
conferences had been organized before 1865—the Delaware
Conference, July 28, 1864, and the Washington Conference, October
27, 1864. Besides this, the Rule of the Discipline, requiring a
probation of two years, had been suspended so far as to permit our
bishops to organize annual conferences with such colored local
elders as had traveled two or more years under a presiding elder,
who were recommended by a quarterly conference and by at least
ten white elders. Thus the constitutional rights of the colored
membership of the Church had been recognized, and the marvelous
growth among them during this quadrennium was but a
manifestation of appreciation on the part of the religious colored
people of the South, evidence of their preference for Methodism,
pure and simple.
The fact that colored delegates were recognized by the General
Conference of 1868, and provision made for the organization of the
Lexington Annual Conference, that had hitherto been mixed with the
Kentucky Conference, white; that separate annual conferences had
been formed; indeed, that every practically conceivable thing was
being done by the Church for her colored members,—caused many
to flock toward her that had fled for safety in another direction. The
tide was soon checked by the ministry and membership of the two
colored denominations—the African Zion and the African Methodist
Churches—that were toiling in the same field, by crying out “the
Methodist Episcopal Church will never permit a colored man to be
elected a bishop.” Consternation seized many of our members when
they were told that the Methodist Episcopal Church would only
tolerate a black membership as “hewers of wood and drawers of
water.” It at last became to many, as they said, “self-evident, that to
retain the better class of colored people there must be no
discrimination anywhere in Methodism on account of race, color, or
previous condition of servitude.” Many, many hard battles were
fought, not with the enemy of souls, but with our brethren of the
above-named two denominations. From 1868 to the adjournment of
the General Conference of 1872 a bitter religious warfare was
waged. At last, as the quadrennium drew to a close, it was evident
that the agitation of the question of a bishop of African descent had
not only done much injury, poisoning and unsettling the minds of our
colored membership, but that, in one way or the other, the question
must be put and answered by the ensuing General Conference. This
was one of the most important questions considered by the General
Conference of 1872, sitting in Brooklyn, New York. This, the twenty-
first session of our General Conference, will be remembered as the
largest ever held by our Church up to that time, there being four
hundred and twenty-one delegates. Several of our colored
conferences sent up memorials in favor of the election of a bishop of
African descent. As they were presented they were respectfully
referred to the Committee on Episcopacy, composed of one delegate
from each annual conference, colored or white. The petition for a
bishop of African descent from the preachers’ meeting of New
Orleans received the following reply:

“The special committee to which was referred the memorial of the New
Orleans preachers’ meeting of May 23d, asking for the election of an
additional bishop, who shall be of African descent, respectfully report:
That at a meeting of the committee, held May 30th, the statements of
the memorialists and their requests were carefully considered. The very
reasonable demand, that at least some action may be taken which shall
assure our people that the Methodist Episcopal Church invites to her
altars peoples of every nation, and extends to them equal rights in her
worship and government, was responded to with great unanimity by the
following declaration of facts which, we are persuaded, will be entirely
satisfactory to the memorialists.”

Then follows the report of the Committee on Episcopacy, viz.:

“The Committee on Episcopacy report to the General Conference

concerning the election of a colored bishop: (1) That they are deeply
impressed with the Christian spirit manifested by those memorializing the
General Conference on this subject. The rapid progress our brethren of
color are making in all that elevates mankind is most commendable, and
we have no doubt there is a future of great promise before them. Your
committee would further report that, in their judgment, there is nothing
in race, color, or former condition that is a bar to an election to the
episcopacy, the true course being for us to elect only such persons as
are, by their pre-eminent piety, endowments, culture, general fitness,
and acceptability best qualified to fill the office. (2) The claims of our
 numerous and noble-hearted membership of African descent to a perfect
equality of relations with all others in our communion are fully recognized
by the Discipline, and amply demonstrated in the administration of the
Methodist Episcopal Church. There is no word ‘white’ to discriminate
against race or color known in our legislation; and being of African
descent does not prevent membership with white men in annual
conferences, nor ordination at the same altars, nor appointment nor
eligibility to the highest office in the Church. (3) Election to the office of
bishop from among candidates who are mutually equal can not be
determined on the ground of color or any other special consideration. It
can only be by fair and honorable competition between the friends of the
respective candidates. And yet the presentation of a well-qualified man of
African descent would, doubtless, secure very general support in view of
the great interests of the Church, which would thereby be more
abundantly promoted. No such opportunity, however, has been afforded
at this General Conference.”

Quite a while before the assembling of that General Conference

the colored bishop question had been widely discussed, receiving
very general consideration and favorable mention in some localities.
It, however, was not of a demonstrative character. The fair, plain,
Christian statements of that General Conference put an end to the
“color question” within the Church, so far as special ecclesiastical
legislation goes. May we not hope that it put a quietus upon those
without the Church who prefer to arrogate to themselves a kind of
aristocratical attitude, because they have solved the Negro problem
by divorce, but who willingly join in any outcry that will have a
tendency to condone any action relating to “the vexed question”
they have taken, or seem to shadow any spirit of unkindness that
would naturally attach to such a wicked divorce? The manliness,
Christian spirit, and unwavering fidelity of the Methodist Episcopal
Church toward the colored man from his arrival in this country, so far
as the heart of the Church is concerned, ought to be “read and
known of all men.” That General Conference said all on the colored
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