Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-12-24
MEN AND MONEY
By NJ. S. Rukeyser.
(Copyright. 1921

lean workingman.
After the war. the organized toiler
was no longer satisfied with the full
dinner pail: he also came to want a
safe deposit box filled with securities.
Accordingly, in the last six years, 81
State and national banks. owned and
managed by labor. have sprung into
existence
AS one of the labor leaders, j. S.
Potofsky, a young man OF 80, who
used to be a pants maker, and who Is
now vice president of the Amalga-
mated Bank in New York City, the
first labor bank at the Nations fore
most citadel Of capital, characterized
the movement:
1.-THE days when labor was satisfied
with just bread and butter are gone.
Today labor justly requires leisure
beauty, culture and things that It
could not have unless 1t asserted IT.
self by assuming power and RESPONSE
bility. It is to the credit Of the labor
movement that 1t has made its ap-
proach to the problem of labor bank
ing without Utopian dreams and scho-
lastic formulate. It's practical applica-
ton has assured its success"
Movement I'm Infancy.
The movement is still apparently in
its early stages, and statistics become
obsolete as soon as they are compiled.
Many new labor banks have been pro-
jected. The best available estimate
places the resources of the 81 labor
banks at more than 1920 900 900 in the
aggregate, with those Of individual in.
stitutions ranging from 100000 to
SGT ,009, 900. Most Of these banks are
less than three years old, and the
Brotherhood Of Locomotive Engineers
National Bank Of Cleveland, the first
folowingthe opening of labor-owned
savings bank in Washington, was
launched in November, 1920, under the
guidance Of the late Warren s. Stone,
the leading personality in the new Ia
Dor capitalism. It is significant that
what Mr.. Stones conservative union
initiated was followed not only by
other brotherhoods and by unions at
filiated with the American Federation
of Labor, but also by the radical
Amalgamated Clothing Workers Of
America.
In an address before the Academy
Of Political Science, Sidney Hillman
head Of the Amalgamated, disclosed
the underlying motives, saying: la
boris interest in banking Is a product
labor toward the general problems OF
industry and of political and social life
Organized labor today is looking be-
yond the formula of fair days pay
for fair days work. 1t exhibits a
growing tendency to become a con
structive and positive force. 1t Is
looking for a way to use its economic
power to it's own advantage. Labor
seeks to assume responsibility for
management, to obtain greater securi
ty for its members, to extend its
sphere Of influence in all directions
and to receive whatever benefits may
come from accepting these respon
sibilities."
Some Paying Dividends.
At least five of the banks are paying
dividends. Most Of them have shown
surprising growth. and traditional
banks for the most part have been
friendly to them. The Brotherhood
Bank of Cleveland made history by
forming syndicate with the National
City Company, bond subsidiary OF
New York's largest bank, to purchase
a block of railroad securities. and i.
now regularly invited to participate in
Wall Street syndicates which bring
out new stock and bond offerings. For
the most part, the labor banks have
been conservatively managed. AnC
yet, like ordinary banks, each institu
ton must be judged on it's own mer
it's. Only one Of the labor banks-ir
Philadelphia-ha thus far run into
a serious snag, and there were specia
circumstances operating. The bank
has since been taken over by a group
Of capitalists.
The distinguishing marks of a labor
bank are widely diffused ownership OF
the stock, limited transferability OF
shares, and limitation of dividends
usually to 10 per cent.
The Analgamated in New York. for
example, has pioneered in fighting loan
sharks by making character loans to
individuals at a gross rate of s per
cent. The bank has also made it pos
sible for immigrants to send dollar re-
mittanceS to relatives in Russia and
other Eastern European countries, oh.
Waiting the extravagant charges which
a specious group OF so-called private
bankers used to make. AS a general
rule. the bank avoids loans to en-
ployes in the clothing industry in or
der to Obviate complications in case
Of q strike. However. the bank is glad
to make ordinary commercial loans to
OuS1ACSS illc1 OuLSlUG tn0 ClOInlnG
trade. although it purports to avoid
making loans for anti,social and non.
essential purposes.
Diffusion OF Wealth.
Labor banks will succeed to the
extent that they concentrate on max.
ing safe loans. and conservative in.
vestments. They are playing an i'm.
portant social role in the movement
which Prof. T. n. Carver of Harvard
University describes as the present
economic revolution in the United
States" in which laborers are becom-
ing capitalists. The labor banking
movement is closely related to the
phenomena associated with the sale
OF securities to employees of corpora.
tlonS and to customers
The late Warren Stone once told me
that. if workingmen saved their
money, they could control the rail.
roads as owners in 10 years.
The diffusion of wealth Is swelling
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