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VOL. XV-No. 5.

MAY, 15

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S labor banking a promise or a menace to the labor about labor banking, labor insurance, workers educamovement? Equally loyal friends of labor differ tion, cooperative enterprises, labor politics, etc. Of widely on the answer to this question.

course, I am an officer of a labor bank myself, but a "I don't approve of this labor banking move- bank owned by many, not by one union, and its effect ment," I heard one prominent conservative trade union on any one union for good or evil cannot be very great." president say recently. “The prime function of a trade “I'm against labor banking," flashed another trade union is to gain better hours, wages and improved work- unionist at me, this time a member of the extreme left ing conditions for labor. To do this, it must be able wing, “because labor banking leads to class collabora. to clear its decks for action and strike at a moment's tion. It gives labor the capitalist psychology. It internotice. It must be free from entangling alliances. When feres with his militancy. It obscures the class struggle. a union goes into the banking field, there is danger that You need but to read the praises to this movement sung its officers, in deciding for or against a strike, might by such financial leaders as Dwight Morrow of J. P. be influenced too much by a consideration of the effect Morgan Company and Charles E. Mitchell of the Nationof the strike on the interests of the bank.

al City Bank, on the ground that it will make for the "I am further opposed to the unions going into the stability and conservatism on the part of labor to real- . banking business because I am opposed to trade union ize the danger of this movement. Investments by labor paternalism'. I think that a union should concentrate banks in big financial enterprises; the meeting of trade on the one job of improving labor's economic condi. union banker, and Wall Street banker, around the table tions, and should not try to act as a big brother in as fellow members of the banking fraternity, are bound other fields of effort. That is why I am not enthusiastic to change the psychology of the workers' leaders.”

“I am enthusiastic about labor banking,” said a syn- able terms than from the ordinary banks and fort! dicalist friend of mine. “The society of the future is union itself to invest their funds more advantageous going to be grouped around the trade and industrial They gave financial advantages to the union and union. The more functions labor controls, the nearer members as stockholders and depositors. They ena to the syndicalist society."

the unions to support certain sound cooperative entzy “It is not true," answered another progressive trade prises. And they create an additional bond of lova unionist, "that labor banking of the right sort leads to between the union and the membership.' conservatism. If labor is ever to manage industry it “What do you think of labor banking?” I asked must make a beginning. If labor unions remain merely philosophic student and trade union member. negative, fighting organizations, and their members learn “It all depends," he said taking a long puff of 1 nothing about the actual management of industry, they union label cigar, “on the kind of labor banking yol will be absolutely incapable of running industry should refer to and the spirit with which the banking vento hey suddenly, by means of a revolution, gain control of is undertaken. I see a grave danger in the policy po industry. If, on the other hand, they, here and now, sued by some of buying into old capitalist banks, 2 assume ever increasing responsibility in the manage- continuing to run those banks in the same way as fo ment of industry, they will be able to accomplish the merly. The menace there, I think, is greater than th transition to a workers republic peacefully and without promise. And then there are labor banks owned b a violent reaction.

some hundreds of unions, none of which have a co “Five years ago, the control of credit was almost trolling interest. These can neither harm nor can the wholly in the hands of the financers. Labor felt that assist any one union to any extent. banking was such an intricate business that the workers “I believe that banks owned by one union have certain


OR the last few years the organized workers have been working out new lines of thought and policy.

Hit by the Open Shop drive on the one hand, and by the post-war depression on the other, the

Labor Movement turned to the business of trying to strengthen is control over its own resources. One of the most signal of these ventures was the Labor Banking Movement. It has grown with the greats -rapidly in comparison with the growth of banking in general.

No one is more familiar with that effort than the brilliant Editor of the Brotherhood of Locomotive Engineers' Journal, Albert Coyle. The Union with which he is associated has been the leader in the new field of financial control. His arguments for a wider extension of this movement will be read with great interest by trade unionists everywhere. Jack Anderson has come to other conclusions. One of the ablest organizers in the labor ranks, he has reached the conclusion that labor banking harms the union fight.

This debate will assist greatly, we believe, to clear the air. We are calling the discussion to the attention of a number of distinguished labor leaders and students of labor problems, to get their opinions, in the light of the facts brought out here. These opinions shall be run later, as a symposium. In addition, each of the debaters shall have a chance at rebuttalwhich shall appear in our July issue. Out of the exchange of views should come some crystallization of opinion on what should be done about this remarkable development in the future.

could not possibly assume control. The labor banking dangers to contend against. The union should me to it movement emerged. Labor is now beginning to mobil- that the trade union funds invested in its bank are kep! ize its own credit. It is making good. It is getting an in a liquid form, readily obtainable in time of a crisis. insight into the financial and business world which is It must seek to secure the major part of its depositors helping it in its day today trade union policies.

from outside of the industry. It must be wary about “ Labor banking gives the labor movement additional lending money to employers of its trade union members. prestige. Psychologically it places the union in a strong- It must not permit its main trade union strategists to er position in its negotiations with the employer. The divert too much of their attention from the trade union successful conduct of labor banks whets the worker's field. It must be ever on the outlook o help in a legitiappetite for the management of other businesses. mate fashion sound cooperative enterprises. It wisi er

The trade union leader in any case must invest the ploy experts, but the union must dominate the general funds of the union. He must come into contact, through policies of the bank. If it observes these and other these investments and through trade union negotiations rules, it may be a big asset to the union and a worthwith the capitalist and financial world. He is often while social experiment in a more democratic form of asked to serve on boards of private banking institutions

industrial organization." because of the funds possessed by the trade unions to Which view will history prove to be correct? Labor which he belongs. If contact with financiers is contamin- banking has been among us but a brief half-dozen years ating, he is already contaminated.

No one can afford to dogmatize about it as yet too defi“Labor banking, furthermore, makes it possible for nitely. Its development will be watched with keen in the member of the union to obtain loans on more reason- terest by all elements in our American so it'y.

One of Labor's Greatest Hopes

A Key to Industrial Democracy



Each year

ABOR cooperative banks are not a new fad. 65,000 their union and to produce a greater abundance of life

of them are in successful existence in every civil. for themselves and their children. Can any other ques-
ized land on the globe, with 80 years of re- tion be more vital to labor than this?
markable achievement to their credit. For co-

Labor's Amazing Money Resources
operative banks are not just the same” as other banks.
They go to the very heart of the defects of the present Do


think it a wild dream for labor to control the banking system by taking the control of money and bulk of the nation's finance? On the contrary, it can be credit out of the hands of selfish exploiters and using it accomplished inside of one generation if the workers for the service of the community. They replace auto- will awaken to the amazing possibilities of mobilizing cratic money power with democratically controlled fin- their present money resources under their own control. ance. They enable the workers to use their funds for

the workers of America receive over $20,socially constructive purposes instead of turning them 000,000,000 in wages. The farmers—and they too are over to anti-union bankers to use in financing open- workers-receive another $17,000,000,000 for their shop employers in their efforts to crush organized labor.

crops. These primary producers put in the 902 savings In brief, cooperative banking makes manhood rather banks of the United Stales last year the staggering sum than money, social welfare rather than profit-making, of $7,977,617,000. In addition, they spent about another the chief aim of the banking business.

$2,000,000,000 for such more or less useless luxuries

as chewing gum, face paints and powders for their A New Declaration of Independence

wives, cigars for themselves, booze and its substitutes, Cooperative banking has transformed the lives of shows, admissions to horse race and prize fights, and hundreds of thousands of workers and farmers through- a lot of other unnecessary and expensive “bourgeois” out Europe and Asia. It has solved the credit problem indulgences, with more than another $1,000,000,000 of for the peasant, freed the city worker from the loan their earnings squandered on fake stocks and similar shark, enabled poor men of all classes to own their swindles. Even making allowances for a reasonable own homes and to finance a host of other cooperative expenditure for luxuries and enjoyment, the workers enterprises in order to reduce their living costs and

and farmers of this country could put each year into hence enjoy a better standard of living.

their own cooperative banks savings of at least $6,000,Cooperative banking, if rightly directed, is able to

000,000. This would mean no hardships on their part; bring to the average American worker greater freedom on the contrary, they would profit in health, mind, morand happiness economically than the Declaration of In- als and money by such thrift. dependence conferrd politically. Perhaps you think this

Why Labor Must Have Its Own Banks too strong a statement. Then you do not fully appreciate the vital importance of credit in our industrial civil- Some good trade unionist may ask, But why can not ization. For credit is the real monarch of the modern labor secure the same benefits by entrusting its money to world. It controls railroads, industries, mines. It de- friendly bankers? One might as well ask why labor termines what men shall work and what men shall should organize trade unions, since many employers starve, what industries shall prosper ind what industries are friendly to labor. Granting that some bankers are shall fail, and even what nations shall be free and what not opposed to organized labor, especially in the smallnations enslaved. Credit is power, and no other power er communities where the banker and the worker often in our age wields such a tremendous influence over hu. live side by side, the blunt truth is that the great majorman welfare. It is idle prattle for progressive labority of bankers are hostile to labor unionism because leaders to talk about industrial democracy unless and their large loans are made to employers, not to workuntil they first control the credit power without which ers. and they almost always have their ersonal money even diluted democracy is impossible.

invested big industries where fat profits depend on

keeping wages down. And even the friendly small A Vital Question for Labor

banker may easily be compelled by the big banker to Shall this tremendous power of credit control be adopt an anti-labor policy under penalty of refusing manipulated by a small group of men to exploit both him accommodation in time of need or cutting him off manipulated by the small group of mento-exploit the the list of favored participants in profitable underwritpeople, or shall it be used by the workers for the ings. vital question for the trade union leader to decide is Because the control of credit means prosperity and whether the workers should allow banking power to be power and self-respect for the workers, they cannot employed to destroy organized labor, or whether the afford to entrust it to the hands of outside bankers beworkers should not themselves employ it to protect yond their own control. It is true that workers are not


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