How is this quote important to The Color of Water?
"But there was a part of me that feared black power very deeply for the obvious reason. I thought black power would be the end of my mother. I had swallowed the white man's fear of the Negro, as we were called back then, whole."
This is a great question and a great quote. The Color of Water by James McBride explores the author's quest for his identity. While everyone is on this journey to some degree, McBride has good reason to feel conflicted and confused about his place in the world. One of the two primary sources of identity and conflict for McBride is religion (his mother is Jewish but works for most of her adult life to hide that fact). The other is race, and this is the focus of the quote you cite.
McBride's father was black and his mother Ruth is obviously white, though in every possible way his mother denies her whiteness. She lives most of her life in a predominantly black neighborhood in New York City and raises her children to be black in every way except their educations. Though Ruth is relatively colorblind, this is a racially charged time and the black militant movement is gaining momentum. It was not always safe to be a white person in the middle of this environment.
This quote expresses a black son's fear for his white mother. He is afraid the "black power" movement will result in harm to his white mother--an odd feeling for someone who is also black. When he says,
"I had swallowed the white man's fear of the Negro, as we were called back then, whole,"
he is admitting that he believes what most white people of the time believed--that all blacks were out to somehow conquer or destroy the oppressive white world.
The search for racial identity which is a major theme in this book is perfectly demonstrated through this quote.