LABOR STARTS BANKING
Maoriland Worker, Volume 14, Issue 1, 9 January 1924, Page 2
LABOR STARTS BANKING
How American Unions look after their Cash
The most renxaa'kaMa feature <>t : //mei-ican banking to-day is. the rise of the Labour Bank. Waen, throe years ago, the International Association of Machinists opened the Mount Vernon Savings Bank at Washington, the' great" corporations predicted disajs'teiH It tobk, they said, a'hanker 'to. run. a-bank". ■■-~ .Timq .hasproved them wrong. Since then, .....in,."three short years. Labour banldng J; has . passed unscathed through tlie experimental stages and emerged as a force in the world of commerce! To-day tiero arc Labour Banks from one end of America to the other. .There, have been no failures; ..the records have been consistently sucoessfiil.
For tho 'first time in history a Labour hank has. opened it» doors in the centre- of "America's financial heart. The Amalgamated Bank of New York, owned and governed by the cloth.-, workers of America, has started business . wlttL a capital of £40,000, and 60,000 steady depositors.
AykOW&tCE-, OF INDUSTBIALISffIL The story of the pioneer Labour banks is a romance of industrialism; hut •it is* more than that. It its a tribute to the keen-sigluedness of those workers who saw that they, justas well as anybody dse, could manage their, joint savings. The ordinary bank accepts the small depositor on sufferance; he receives no advantage except tho Safe custody of his money. Yet these combined small deposits in the aggre. gate form the- capital, with which tho ■ big corporation makes its profits. .To-day, in America, the workers are seeping thos*? profits for themselves.
The Labour banks are run for the depositors, and the "profits of - the stock-holders arc limited to 10 per Cent., ovter which tho depositor shares a sdioe of the cake.
The success of the Mount Vernon savings bank was so remarkable that seven months after its formation the Brotherhood of Locomotive Engineers launched out with a hank of their owr at Cleveland, Ohio.,
BIG SURPLUS CAPITAL. The entire stock is owned by members of the Brotherhood. The capital is 5200,000, and now, after a little more than two years' business, it has a surplus of £100,000 in hand. In twenty months this bank .took in deposits no less than £3>200,000. To-day its total .resources are &,--000,000. ' ......... The President of this remarkable.. concern is also , President of. the 'Brotherhood, ah engineer, and not a banker. _
Tho Brotherhood of Locomotive Engineers now not only own a flourishing bank of their own, but they have acquired a controlling interest in two other banks —one at Hammond, Indiana, another at Nottingham. Ohio.
Nor did their enterprise end there. In January, of this year the Engineers' bank acquired a large block of the stock of the' Empire Trust of New
York. Shortly they are to open a >*'ew York office. •
SECRET 01' SUCCESS."' How is it, it may be .asked, that these Labour banks have succeeded so rapidly?
First, undoubtedly, because there was a real demand on the part of the Unions for better and more generous banking faciliLes. Secondly, because those who ha'fce had control have called-in experts to advise and assist them. Thirdly, because they had the tremendous advantage of a ready-made clieatelevr-their members. There was no problem of getting depositors, a problem which every young bank must face. . '
• The depositors were there;" they were themselves. With a steady flow of deposits; with expert and judicious financial operations; with, the best expert advice obtainable, Labour banking in America has come, and come to stay.
Plans are being matured to launch eleven new Labour b.anks almost immediately. .
The Central Labour Council is about to complete its organisation of •the new. Federation Trust Company. The Brotherhood of Railway Clerks and the Order of Railroad Telegraphers ..have authorised their representativesto open banks in Cincinnati and St. Louis. ■ -s
OTHER LABOUR BASKS TO OPEN. Other Labour banks are to open in Harrisburg, Spokaine, Minneapolis, Port Huron, Buffalo, and Los Angeles. American bankers now recognise the merits of these Labour banks, and f iio longer regard them as dangerous -eushroom srowtluv
j Indeed, their stability, since __•> i vvci;e.-started, stands comparison with niany of the smaller chartered banks lin a country wheie banking is run on mor>e easy-going lines than is the caso with" us. In this enterprise American Labour loads the way. "What about ourselves? Why has the idea never been "taken un in. En gland: 1 There is no reason vhy British Labour banks should not do the same. Millions of pounds of Uniuns funds an I deposits of are in the bor.>s of the great joint stock cornbit.-•;. Hitre is vne ruiuy to aand for tho ta'AiubL'.g of a sound Labour bank. Our big f'nions could handla their sa-. iu'43 as well a.i ;.he.-*e gr**at joint fjLo<.it r..-C3iiiswtior.s. T"ey >».' :J, more-over, do so with. .onsidpr.tb.y more profit to their members lb an is the case to-day with. those v/ho ha-, o .srcr«H accounts with, tno arcat bar.ks who regard tb« opening of such accounts as - concession to ihe small man. Ail that is needed is courage, organisation and ct>-operrition. Am artca has shov,n ihe way.—Geo. Goodwin. In "Boci'.ui»T. Uevtsw" (Lando©)*