We're talking about a time when blacks were far more likely not to have proper schooling than whites. In some states a majority of blacks could not demonstrate a fifth grade education. The same was not true for whites. So literacy tests were disproportionately administered to blacks. Until 1915, even illiterate whites were exempted under a grandfather clause if they could demonstrate descent from someone eligible to vote in 1867 (before the 15th amendment -- prohibiting the denial of the right to vote based on race -- was ratified). These clauses were struck down by the Supreme Court in 1915, but they illustrate the real purpose of literacy tests -- the disenfranchisement of blacks.

The test itself is patently unfair. It tests far more than just basic literacy, and I do not see how it could be regarded as a proportionate substitute for a fifth grade education. You had to finish it in 10 minutes, and getting even one question wrong counted as failure. Under those conditions, I'm not sure even I could pass the test, and I'm pretty literate. Add to that the fact that many of the questions are ambiguously phrased, allowing multiple "correct" interpretations, and that grading was entirely at the discretion of local (white) officials.