The labor world. [volume] (Duluth, Minn.) 1896-current, 1922-09-02

BY FRANK HILL in
The Dearborn INDEPENDENT

10y 1 4N<AANAA AXAAA
The Dearborn independent. "
A bank with a soul" is the
way Warren S. Stone. describes
the Brotherhood of Locomotive
Engineers Cooperative National
Bank of Cleveland. Ohio, sof
which he is president. This insti~
tuition is pointing the way to a
new era in finance in which credit
will be used exclusively for the
production of wealth and not for
the exploitation of the people.
Had Good Start.
The Brotherhood bank opened for
business on November 1, 1920. May
5, 1922, it had nearly S15,o00,000 in
deposits, and money was still COM.
ing in from all over the United:
States. "::-s;-
During the first year, the bank
earned expenses, paid the stockhold-
ers six per cent, set aside 20 per
cent to be added to the surplus, and
on November 1, 1921, issued the
first dividend check ever paid by.
national bank, paying more than
five per cent on savings. This record
is phenomenal, for a national bank
is not expected to make more than
expenses at the outset.
Mr.. Stone, president, is grand
chief of the Brotherhood Of Locomo-
tive Engineers. and in telling how
the bank came to be organized. said:
'Some Of us had been thinking
about starting a bank for a number
Of years, but we were restrained by
he thought. that the banking bust
ness was great mystery, which
could be understood only by the elect
few. However, we decided to look
about and find what the people were
doing in other countries. A close
study was made Of the little Coop
era tive banks of Europe. To our
surprise and qualification, we found
that they were being managed by
ordinary people.
labor Banks Abroad.
"There are $1,000 small banks or
credit unions scattered over Europe
and Asia. They did a business in
1913 of 1000. Sixty per cent
of the workers and farmers in
charge of this business cannot read
Or write. Yet during the 70 years
these banks have been in operation
they have not lost a cent. We de-
cided. that it, the lliterates=Morkin1s
pop1e Of Europe could succeed as
+ people Of EUROPE pc: could succeed: as
bankers; we. might hope to-: ddoF11kez
venture.
The proposition was laid before
the International convention of the
Locomotive Engineers in Cleveland
In 1918, and the advisory board of
the IL grand officers was given pow
or to act. A capitalize ton Of $780,
900 was fixed, the stock to be held
exclusively by members of the Broth
erhood Of Locomotive -Efis sife ers:. =
No Profiteers.
'In the stock subscription blank,
we inserted a provision that the maxi
imum annual dividends should not
exceed 10 per cent on the capital
stock, and that any surplus may be
distributed as the board Of directors
may decide in carrying out the CO.
operative purposes which underlie
the organization. This is the big
point in our institution.
THE average earnings on bank
stock in the United States is % per
cent, which goes to the stockhold-
ers. In the Brotherhood bank, stock
holders are restricted to 10 per cent,
all over that amount being divided
among savings 'depositors. We pay 4
per cent on savings accounts, COM
pounded quarterly, in addition to
which savings depositors share in
the surplus savings. IT is possible for
depositors to receive as much in in
terest as the stockholders do in divi-
dends.
"In July, 1920, we mailed stock
subscriptions to the 10000 members
Of the brotherhood. During July not
dollar was r. received. In the latter