The Elk Mountain pilot., 1922-07-06
THE BANKING MYTH is
EXPLODED BY ENGINEERS
Heart and Conscience Invade Prof.
tably Sacred Finance Realm

etnOOu OF Locomotive Engineers 20
perative National Bank of Cleveland,
Ohio. of which he is president. This
Institution is pointing the way to a
new era in finance in which credit
will be used exclusively for the pro-
luction of wealth and not for the ex-
ploitation of the people. The Brother
hood Bank opened for business on No
vember |, 1920. May 5, 1922, it had
nearly S15,000.000 in deposits and
money was still coming in from all
over the United States
During the first year the bank
earned expenses, paid the stockholders
six per cent, set aside 20 per cent to
be added to the surplus, and on No
vember 1, 1921, issued the first divi-
end check ever paid by national
bank, paying more than five per cent
on savings. This record is phenome-
nal for national bank is not expect
ed to make more than expenses at
the outset
Mr.. Stone, president, is Grand Chief
of the Brotherhood of Locomotive En-
gineers and in telling how the bank
came to be organized, said:
"Some of us had teen thinking
about starting bank for a number
of years, but we were restrained by
the thought that the banking business
was a 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
mare Of the little cooperative banks
of Europe. To our surprise and graf
ification. we found that they were be-
ing managed by ordinary people.
There ere $4,000 small banks or credit
unions scattered over Europe and
Asia They did business in 1918 of
O0o,o0o,000. 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
Neen in operation they have not lost
a cent. We decided that if the illit-
crate working people of Europe could
succeed as bankers, we might hope to
do likewise. So we decided to make
the venture.
"The proposition was laid before
the international Convention of the
Locomotive Engineers in Cleveland
in 1918, and the advisory board of the
twelve grand officers was given power
to act. A capitalization of 1000, 900
was fixed, the stock to be held exclu-
sively by members of the Brotherhood
of Locomotive Engineers. In the
stock subscription blank, we inserted
provision that the maximum 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 car
rying out the cooperative 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 stockholders. In
the Brotherhood Bank, stockholders
are restricted to 10 per cent, all over
that amount being divided among
savings depositors. We pay four per
cent on savings accounts, compounded
quarterly, in addition to which saw
ings depositors share in the surplus
savings. 1t is possible for depositors
to receive as much in interest as the
stockholders do in dividends.
I'm July, 1920, we mailed stock sub
scription to the 10000 members of
the brotherhood. During July not
dollar was received. In the latter
part of August, subscriptions began
to come in with the cash and, by No
vember l, we had received $1,300,0 900,
an over subscription of 100000. De-
posits have been made at the rate Of
81 100000 a month for Is months.
The stream of money is still flowing
Our depositors live all over the Unit
ed States from California to Maine"
The Brotherhood of Locomotive En-
gineers is housed in its own History
Office building in Cleveland, short
lcck north of the public square. The
bank occupies building on the oppo-
side side also owned by the brother
hood.
The bank occupies the basement
and first floor, while the upper floors
are rented for offices. Eventually,
this building will be removed and
21-story Office and bsnk building
erected.
Undoubtedly great deal of money
that had been hidden in old tin cans
has been called into activity by this
bank. People who were not suspected