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FROM HAVERHILL, MASSACHUSETTS

A room from the Eagle House, formerly Brown's Tavern, showing a highly decorative and colorful wall paper of a hunting scene, imported from France.

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Named after the donor of the paintings which decorate the walls-portraits of Washington by Charles Willson Peale, Rembrandt Peale, John Trumbull, and Adolf Wertmüller, typical American artists-of the era after the Revolution. The pictures of Commodores Hull and Decatur are by Gilbert Stuart and John Trumbull (probably).

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WHEN DECORATION HAD PATRIOTIC MOTIVE

A mantel made of plaster composition by Robert Welford of Philadelphia for a house in Carlisle, Pennsylvania. The central decoration is the American eagle mourning on the sarcophagus of the dead of the War of 1812, flanked by weeping willows. The Washington clock was imported from France.

The Possibilities of Trade Union and Coöperative Banks in Great Britain

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BY PHILIP SNOWDEN
Chancellor of the Exchequer in the Macdonald Cabinet

HE recent advent of American labor unions into the sphere of banking, described in the November issue of this magazine by Mr. Warren S. Stone, President of the Brotherhood of Locomotive Engineers, has been followed with much interest by organized labor in Great Britain. The success which has attended this adventure is admitted on all sides to have been as remarkable as it was unexpected. I have talked over this subject with some of the leading orthodox bankers of the United States, and they all express their surprise and satisfaction with the success of the movement.

The labor union banks have met with no hostility from high finance in the United States. The reasons for this are made plain by Mr. Stone. The purpose of these banks is not to augment the funds of the labor unions for fighting the employers by means of strikes. On the contrary, the purpose is to make organized labor a co-partner, or a coöperator, in capitalist enterprise. The Brotherhood of Engineers is responding to an appeal similar to that which has been so often addressed to British trade unionists: to use their funds to carry on capitalist enterprise, and to share in its profits-and in its losses.

Just recently Mr. W. H. Hichens suggested to the British railway unions that they might buy out one of the British railways and work it themselves. I would not suggest that this invitation is prompted by the same motive which induced the spider to invite the fly to step into its parlor; but the acceptance of the invitation would certainly have a like result. Apart from the rather conclusive objection that the total funds of all the transport unions of Great Britain at the time of last return were less than £3,000,000

hardly sufficient to buy a branch linethere are grave objections in the public interest to a trade union owning and controlling an essential public service. Such a proposal is syndicalism in its worst form.

THE PURPOSE OF TRADE UNIONS

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OREOVER, the unions have been formed for certain purposes.

It

is no part of their object to engage in business. In many of the unions a considerable part of the funds is definitely earmarked for benevolent purposessuperannuation, death benefits, and unemployment. However deplorable strikes and lockouts may be, and however desirable it may be to find some satisfactory method of settling industrial disputes by arbitration, the fact must be recognized that the trade unions must have funds in reserve which will be available for the support of their members in case of a stoppage of work through an industrial dispute. For these reasons the trade unions cannot risk their funds in a competitive industrial adventure, or lock them up in such a way as not to be available, if needed, for trade union purposes.

These objections do not apply to the banking scheme of the American labor unions. I do not understand from Mr. Stone's account that the labor unions are using their invested funds as capital for ordinary banking purposes. Their resources are the investments of individuals, and not the reserve funds of the labor unions. Mr. Stone does not say how the original capital of the banks was raised, but I presume it was provided out of the funds of the labor unions. His account of the operations of the banks is confined mainly to the savings bank side of the business.

But the main interest which one has in

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The Tight Grip of the "Big Five"

this development of trade union activity is in the extent to which these banks are fulfilling the functions of the ordinary commercial banks. Savings bank business is a comparatively simple matter. The American labor banks do not encourage depositors to keep their savings in the banks, but recommend them to invest their accumulated savings in wellsecured bonds.

These banks are fulfilling a very useful function indeed in affording advice to their customers as to suitable investments.

WHEREIN BRITAIN LEADS AMERICA

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FAR as the savings bank business of the union banks is concerned I do not think that they have much to teach the working class organizations in Great Britain. The United States is a long way behind Great Britain in the matter of coöperation, in its varied forms, among the working classes. The cooperative movement has never taken hold of the working class in America. But in Great Britain this movement has long been doing what America's labor banks are now undertaking in the matter of encouraging thrift among the working classes. It is much more likely that any further development of facilities for working class banking will, in Great Britain, take place through the coöperative societies than through the trade unions. The coöperative societies have all the facilities, and the organization for an unlimited extension of banking. These societies accept deposits from their members and make advances for the purpose of house building. The coöperative wholesale society, with which the retail societies are affiliated, has its own bank, which does not confine its operations to its own business and its own members but also does ordinary banking for the general public.

There is a very important difference between the system of ordinary banking in the United States and in Great Britain, a difference which makes it easier to establish banks in the former country. In Great Britain banking has become almost a closed corporation. Practically the whole of the commercial banking of the

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country is now in the hands of five big banks, and had it not been for the hostility of the Treasury to further amalgamations, it is likely that by this time the number would have been smaller still. In Great Britain it is now next to impossible to start or to maintain an independent commercial bank outside the Big Five. The coöperative wholesale society's bank has been able to maintain its separate existence because it has its own huge trading business and its affiliated societies.

In recent years there has been quite a remarkable awakening of interest in the British labor movement in the question of banking and credit. It is being increasingly realized that the money power in these modern times exercises a domination over the lives of the people, and over economic and industrial conditions, compared with which the power of an autocratic ruler was a mere simulacrum. Credit, which is now controlled by a few banking corporations, is the mainspring of trade and industry. But it is a most delicate piece of mechanism, and tampering with it by ruthless and unskilled hands is likely to break it, and bring the whole machinery of industry to disaster.

The advantages which such working class efforts as these American labor banks, and the coöperative organizations in Great Britain, confer upon the workers are rather indirect than direct. Labor banks will not secure the financial control of the operations of trade and commerce. They will make little impression in that respect. But they will indirectly do a great deal to benefit the working man. They will increase his self-respect and his self-confidence, and encourage him to go forward to bigger things. They will encourage thrift, and give to the proceeds of thrift greater security. They will assist what has been the greatest achievement of the great coöperative movement in Great Britain-which is not the fact that it has built up the most colossal trade organization in the country-but that it has built up a new working class, with a wider experience, a wider outlook, filled with a confident belief in its own capacity and in the future of democracy.

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