The Brooklyn Daily Eagle from Brooklyn, New York • Page 62

Capital Talks of Its New "Baby" Labor! President Charles E. Mitcliell of the National City Bank Quotes Figures Showing Labors Financial Success and Sees in the Labor Bank a Means Toward Lasting Peace Be tween the Ancient Antago- Photo, Copyright. Underwood Underwood wk Here's a Capitalist Who Sincerely Wishes Labor Godspeed in Its 1 Banking Venture Capital's Latest Offspring Is Crowing So Fast That It Will Soon Nerd Another Vehicle to Ride In By Stuart Little good reasons for welcoming the Labor banks. Competition in business is a matter of course everybody must expect it and there are certain reasons why we think the Labor banks are a good thing for the whole banking business. "First, there has been in the past an air of mystery about the banking business.

A great many good and sincere persons have not understood the service which banks render in the community, have believed that they enjoyed special privileges of some kind and were parasites on industry. That idea tended to cause ill feeling and antagonism toward business and no amount of protest or argument on the part of bankers themselves could overcome it. Now it has been demonstrated by the Labor banks that banking is not a privileged business, but is open to all and that it performs useful functions in society. That is one of the reasons why from the very start we have welcomed the Labor hank because it banishes mystery and misunderstanding. "Second, we have believed and urged that thrift saving something out of one's income for investment against future needs is not only a good thing for the individual who practices it, but is good for the community.

Every dollar saved and invested means, first, financial independence for the owner; second, a demand, for Labor in construction work of some kind; third, improvement or enlarged facilities of production, the influence of which is to cheapen the cost of living in some way. In short the accumulation and investment of capital are the chief means of improving social conditions. "We have preached this doctrine and other bankers have done so. but the air of mystery about the business and the suspicions which it has engendered have limited our influence, especially with the wage earning class. Now come the Labor banks preaching the same doctrine and able to reach the very people whom we could not reach.

We think the result will be more savings, more banking business, increased demand for labor, greater prosperity and an impetus to social progress. "Furthermore, we think the logical tendency from the development of the Labor banks will be for Labor to take a larger part in all kinds of business and this will be for the general good. We do not think that wage earners should be nothing but employees, but that they should plan to share in the ownership. The modern form of corporate organization makes it possible for thousands of persons to participate in the ownership of an industry, either as bondholders or stockholders, and we believe it will be for the good of the country to have the railroads and large industries owned in this manner. We do not want a sharp line drawn between owners and workers, but rather that the two shall be the same or closely intermingled.

The result will be better understanding and more effective co-operation. "It has been our pleasure to co-operate closely with the brotherhood banks in a recent distribution of securities. This in itself has demonstrated that if we are looking for opportunities for co-operation instead of conflict we shall find the former instead of the latter." And so, the feud is laid in the dust. guided by its grand chief. Warren S.

Stone, with headquarters at Cleveland, and with such success that many millions of dollars have been added to the treasury through wise investments and undertakings. It was natural that Mr. Stone, farmer boy, fireman and engineer, but evidently born with a talent for banking, should conclude to use the organization's credit for the benefit of his own people. In the matter of banks he had always thotfght that the depositor and not the stockholder was the greatest factor for consideration and that it was manifestly unfair to build on the depositors' creative powers for the exclusive gain of the owners; an other words, he voiced for the first time the idea that the mutual or co-operative plan of procedure could be demonstrated by a "stock owned" bank. Accordingly he organized the first of the banks now existing under the Locomotive Engineers' ownership.

This was at Cleveland in 1920, when a national bank charter was obtained and that institution was formed as a model for others, some of which have, however, adopted trust company charters for the express purpose of establishing branches in their respective communities as has been done in New York City. In four years' time the banks have proven themselves do Utopian dream, the actual profits distributed to their saving depositors bringing in a net return on their accounts of five percent for the year ended December 31, 1923, after payment of dividends to stockholders and after placing what the law requires in the "surplus account." The total assets of the Cleveland bank are now in excess of $30,000,000, mute testimony to its success. The whole move has prospered. There are on file nearly a hundred applications from Labor grodps in about forty States asking for assistance in establishing Labor banks or in securing control of existing banking institutions. There are, in actual operation, more than twenty-five such banks with resources last May of a capitalization exceeding $12,000,000 and a surplus of approximately $3,000,000.

These figures have greatly increased since then but even as of May were formidable enough to warrant the respect of the billion dollar National City Bank. It must be considered also that the latter bank took many years to pass its present record, while the Labor banks have sprung to their present pre-eminent position in a little less than four years. Mr. Mitchell encourages them to still greater efforts when he says: "It may seem strange to some persons who are disposed to overemphasize minor features of business and underestimate other features really more important that we should welcome the establishment of competitors, but we think there are THE millennium is close at hand- the lion has stretched itself amicably beside the lamb. Capital has extended a welcoming hand to Labor and has not been rebuffed.

Contrary to popular conception, the gesture of friendship has been accepted in like spirit. It took Charles E. Mitchell to break the illusion of antipathy between what Mayor Hylan jocularly terms the "interests" and the common "peepul." Perhaps Mr. Mitchell's ability to do things despite traditions is one of the factors which made him the president of our largest financial institution the National City Bank, representing, to the radical elements, all that is most cordially hated. At any rate, the head of that bank, billion-dollar stronghold of capitalistic Wall Street, has made a very signal move toward allaying the old feeling of antagonism.

Through an article in the Labor Banker, official organ of the Brotherhood of Locomotive Engineers, he extends his felicitations to the unions, commending their activities in establishing Labor banks. He sees in the inception of these institutions not competition but a decided help to social progress. He foresees the stimulation of thrift and saving among labor unionists, and a tendency toward a larger part in all kinds of business on an ownership basis. From a financial viewpoint he expects more capital for industry and more industry and employment for Labor, a conception which if materialized will do much toward the elimination of the many unsatisfactory conditions of the day. This latter expectation is well under way.

The surprising progress made by the Labor banks connotes a still more amazing growth in the future. They are fast becoming a power with which finance must reckon. That their potency is recognized is amply illustrated by the fact that the National City Bank and the Brotherhood of Locomotive Engineers Co-operativo Trust Company of New York, headed by that intrepid leader, Warren S. Stone, have already co-operated in tho distribution of securities, signifying, at least, the recognition of the lesser bank. Exact statistics are not available.

Labor banks, like mushrooms, seem to spring up over night, bringing a complete revisal of totals. A brief resume of the movement, in which the Brotherhood of Locomotive Krurtne-ers played a conspicuous part, is enlightening. For over twenty years the finances and policies of te Brotherhood of Locomotive Engineers have been.