, 1923-10-27
Labor and the Banking Business

Tho renort of the American Federation OF La
bor,s executive council upon the subject OF lapor
hanks serves to direct attention anew TO the iac'
that labor is rapidly invading the field OF the
once disposed capitalist.
rive veors ago such a thing as a labor union
hank was unknown in this country, although the
larger labor organizations had tremendous
funds on deposit and their accounts were mucn
sought after by banking institutions. Ihere was
never any difficulty upon the part oil any "en'
organized labor union to obtain loans from CON
s~ervative banking institutions, even though tne
loans we're for the purpose OF financing strikes,
Several authenticated instances are on record
where labor unions negotiated large loans from
hanLs for the purpose of wnging strikes and Sc
cured the loan through the depositing of gilt
,.dce5 securities such as government bonds.
Tho first bank to be established by organized
labor was opened in Washington by the Inter
national Association of Machinists. The second
strictly labor union bank to be incorporated and
onened was at Cleveland, Ohio. 1t was opened
Inv the brotherhood of Locomotive Engineers and
was known as the brotherhood of Locomotive
Engineers Cooperative National bank.
This institution was so successful that the
Rrotberhood of Locomotive Engineers and other
railroad brotherhoods have gone extensively into
the banking business. They control the Peoples
CO-ODeratlVe state Dirk HI IldiAihNAN, NHN1 .
bank in Minneapolis, one at Spokane one at
Pittsburgh. and it is announced that before tne
close of the year the railroad brotherhoods VIII
open banks in Cincinnati, New YORK Clty ana IN
Boston, Mass, tho arrangements in each case
now being practically complete, buildings being
leased and capital stock subscribed
In addition to these banks which the railroad
brotherhoods own outright, the brotherhood OF
Locomotive Engineers recently bought very neaV-
lily in the Empire Trust company of New York,
one of the oldest financial institutions OF that
city, and representatives of the brotherhood VIII
sit on the board side by side with men whose
names have long been cited as horrible exam
pies" by labor publications.
Inspired by the banking success Of the rail
road brotherhoods, other large labor unions have
gone into the banking business rather extensive
". The Amalgamated Clothing Workers of New
York State Federation of Labor, and the Inter
national Ladies' Garment Workers have opened
banks in New York City. The brotherhood OF
Railway Telegraphers has opened a cooperative
national bank in st. Louis. The Central Trade
Unions of Philadelphia have opened a bank at
that place. The Alabama State Federation oil
Labor controls the Federated Bank and Trust
company Of Birmingham. a number OF local Ia
Dor unions control a bank at Tucson, Ariz. Lo-
cal unions control a bank at San Bernadino,
Cal, and Chicago labor unions operate the Am
%algamated Trust and Savings bank Of Chicago.
Labor leaders deny there is any motive back
of their entering the banking field other than
the fact that it is sound policy. They believe that
by depositing the tremendous funds of national
and international labor organizations in labor
banks and by handling individual accounts of
the members and friends of labor organizations
they can consolidate the financial resources of
organized labor in a perfectly legitimate way
and at the same time earn for the organizations
owning these banks n very handsome return on
tho money invested. All the labor banks thus far
are run on the cooperative plan, whereby the
dividends to stockholders are limited TO n Ger.
tain per cent and all earnings in excess of that
are shared with all depositors.