The Connecticut labor news., 1923-07-13

DGtlSl IIdI1dSSIICIIl, pEOpluSu lue wages, of course, are not forced to unreasonable heights and provided the men getting the wages give their full return in work. There is room for disagreement as to the sound ness of some of his economic views, but there can be no doubt as to his personal sincerity in his beliefs and also there can be no disagreement on his position that wages in dollars do not mean anything until they become wages in buying power and that 1t is up to every organization of wage earners to increase the buying power of their dollars. And 1t is in part to increase the buying power of that dol lar that he went into banking.
 First of all, he began with coop eratives stores and cooperative en- terprises generally. He has helped organize more than four thousand
 stores in railway centers. He will
 not touch anything that IS not on a cooperative basis. Back in 1915 he began to think that there was too
 much bunk in banking. And also he
 saw the widows of locomotive. engi-
 neers getting swindied out of the in
 surance money that the brotherhood paid to them. Then, again, the broth erhood itself had large funds. It
 must keep several million dollars practically in cash as strike fund. This money was on deposit earning two or three per cent. and the banks
 in which the money was deposited were, he knew, earning an average of
 about IS per cent. on this money. Everything pointed to opening a bank.
 A Bank From a Barroom. In the spring of 1920, Tn co-opera- ton with MT. Walter McCaleb and MT. w. B. Premier, he got the bank movement under way. MT. Premier is
 the treasurer of the brotherhood. M. McCaleb Is graduate of the Uni philosophy of the University of Chi |cago He has been vice chairman of the Federal Reserve Bank of Dallas, was managing director of the Massa-
 chusetts Credit Union Association, and for three years was member of
 the executive council of the Amer
 eican Bankrs' Association. No mat ter how simple MT. Stone considered
 banking, he was not going into 1t blind He became president and MT.
 McCaleb vice president. These gen
 tlemen had no idea of beginning a
 bank on other than banking princi- pels, but they thought that too many
 banks were managed too narrowly in
 the interests of officers, directors, and
 leading stockholders They did not
 admire the particular sort of thrift
 which enables bank president draw ing fifty or hundred thousand dol lars year to retire in 10 years worth ten. millions. And also they thought that since a bank made its earnings 1f ha he da- positors ought to have a look in once in while.
 [ They organized a close corporation.
 The brotherhood took 5I per cent of
 the stock. The remaining 4o per cent.
 was offered to members in good
 standing under the usual close-cor- poration agreement that a stockhold-
 CT desiring to sell his stock must
 first offer 1t to the corporation at an
 agreed-on price The control of the bank must always be with the broth erhood and it's members.
 It was further, provided that pro- fits above a 10 per cent. dividend should be shared with the depositors, that little borrowers should be pre- ferred to big borrowers, and that no loans should be made to officers or directors. On these principles the bank opened it's doors on November l I, 1920, with a capital of $5oo,ooo and
 a surplus of $1oo,ooo all paid in For bank building they bought the saloon property opposite the
 Brotherhood building. At first they had just the old barroom, but from the minute the doors opened the bank was a success. Money began pouring in from every quarter. De- posits grew at the rate of about a million dollars month. These were not big deposits gained from labor organizations. In fact, less than A per cent of the total money on de- posit belongs to labor organizations: All the rest is money of Cleveland business men or of small savings fund accounts. A fair part of the de posits is in cash, and 1t is a daily af-
 fair for the receiving tellers to get rolls of dirty bills, mostly ones, which show by their dates and their condi- ton that they have been hoarded somewhere for years.
 The foreigners in Cleveland are us- ing this bank as they have never be- fore used bank They believe in 1t, and so they are taking their savings out of their trunks.
 The Brotherhood Band Is not man. aged by amateurs, but by men trained in banking. These men, it Is expect ed, will train other men in banking and provide staff for new labor banks that will be formed. But it is only in ownership, in the limitation of dividends, and in the profit sharing that this bank differs from bank that might be organized by railway owners.
 There is nothing dramatic in its management-Jit is a national bank and the bank examiners are opposed to mixing drama and banking. It prefers small borrowers to large ones, but it does not lend to man simply