LABOUR TURNING CAPITALIST

Otago Daily Times, Issue 18871, 25 May 1923, Page 5

LABOUR TURNING CAPITALIST

A new phase in the history of American trade unionism is brought sharply to the' public’s attention by the announcement that the Brotherhood of Locomotive Engineers has purchased “a substantial interest” in the Empire Trust Company, of New York City, which, already has resources of nearly. 60,000,000 dollars. “The affiliation of this, the most powerful financially of all the American labour unions, with a well-known trust"' compahy, marks an important step in; the brotherhood’s recent incursion into -the field of organised finance and banking,” remarks the New York Herald., '"But banking, other editors point out, is hot a new undertaking for the brotherhood; it has been in the banking business since its Co-operative National Bank ,'waa opened in Cleveland in 1921. That institution, which began business with 635,000d01, now has 20,000,000d0l in, .resources, and the experiment is said to have been so successful that 10 other pooperative banks have been organised, and half a dozen more are in process of ■ formation. These include one in New York, aside from the recent affiliation, and pne in Spokane. The brotherhood also Owns extensive coal -properties, a' mail-order department store, and several other , cooperative businesses. ; Under the New York arrangement, Canital and Labour are eoing to • ideal with each other on even terms over a directors’ table. For this reason, believes the New York Globe, the affiliation'"“is of the highest importance, not only as a development in banking, but also as the movement, of which it is a part,, may ultimately affect the whole troubled matter of the relation between 0 Capital and Labour.’’ According to Warren, A. Stone, who for 25 years has been . the brotherhood’s chief: “It has been the purpose of our organisation to further peace, liberty, and justice by entering the banking field in New York, where hitherto no labour union liasi had official connection with a financial institution. By entering the field of economics through banking, the brotherhood feels it will be enabled to exert an influence that will further develop those principles which underlie all our endeavours.”

' Apparently the president and largest stockholder of the trust company is satisfied -with the new arrangement, for \he said many complimentary things about the brotherhood in announcing the news; “Under arrangemenfts that havje been worked out, the brotherhood has purchased a substantial interest in the' Umpire Trust Company. This arrangement unquestionably will .add many millions to the deposits of the latter institution., In all the negotiations with Mr Stone , and his colleague we have found them to 'ba keen, capable, forward-looking business men. They think straight, talk straight, and act straight. Throughout the negotiations our relations have been most pleasant. We will work together in close harmony under the present management' and organisation of the trust company, 1 which will remain intact.” The Pioneer in Labour Banking in the United States was the International Association of Machinists, which first acquired an interest in a large Washington bank, and later the balance of power. The garment workers also have a bank with large resources in Cleveland. Other co-operative banks have been established in Philadelphia, Pittsburg, Harrisburg, Chicago, Birmingham, and in. several Pacific Coast cities. According to Frederic C. Howe, writing in Labour Age, New York, labour organisations have become interested, in banking mainly because 'of the problem connected with handling the large sums of money * in their -hands, and also from _ a realisation that labour was not using its powers to the fullest when it confined itself to collective bargaining. Other influences, says Mr Howe, were: “The recent organised assaults, by the banking associations of the country on organised labour through coercive measures, applied not only on railroads, mines, and the major industries, but on factory-owners, contractors, and employers generally. This nation-wide war upon the closed shop, existing wages, and conditions of labour was inspired largqly by the banks, not only in New York, but in, local communities all over the country. “In addition, men are coming to realise that credit rules the world. Industry is fast passing under banking control. The railroads, mines, trusts, and major industries are already bankcontrolled industries; while the tendency all over the country is .■ for economic power to pass into the hands of those who control credit.

“The co-operative movement is fast assuming prominence in the minds of labour, as it is among farmers, as a means of still further' mobilisation of economic power. The co-operative movement needs credit—the credit which it cannot secure from the existing banks. “Tlie wages of labour run into the billions. The savings of labour run into billions more. They need only to be mobilised under the control of labour, as they are now mobilised under the control of private bankers, to give labour a position of power. If 'labour controlled its own credit resources to-day it would profoundly influence all forms of industrv and profoundly check the aggressions of the capitalistic system. ' While the Cleveland "bank is owned outright by members of the brotherhood, and dividends on stock are limited to 10 per cent., in tho New York affiliation the labour organisation becomes merely a part owner with individual capitalists in an established non-co-operative banking institution. But, in this way, thinks the Brooklyn Eagle, “the brotherhood men may get a new light on the conditions, and tho financiers may get a new light on the way labour feels and thinks.” “Participation by Labour' in such an enterprise ought to work against class consciousness,” believes the New York Hreald; while The World says “tne significance of this step <m the future of labour unionism ana its relations to Capital iii industry must be regarded as profound.” “Whatever way it is viewed,” concludes the Washington Post, “tins new alliance is an economic portent of the first magnitude, whose ramifications and development will be watched by all with a great deal of interest.”