Edward Filene

 ( 1860 Births ) 

In 1865, at the age of 5, Edward was injured in a fall that left him with a permanent limp. Eczema plagued him throughout his life. In 1872, Clara Filene enrolled her three boys in the "Brüsselsche Handels und Erziehungsinstitut", a boarding school known for excellence in instruction and discipline in her hometown Segnitz. The headmaster at that time, Samuel Spier, was one of the founding fathers of the early German democracy movement and an outspoken Atheism; one of Edwards schoolmates was a certain Ettore Schmitz from Trieste who later became famous as the Italian writer Italo Svevo.Hans Michael Hensel (editor) (1996) John Gatt-Rutter: "In dieser Zeit der rauhesten Prosa." (transl: "In this time of the roughest prose.") − Italo Svevo, Samuel Spiers Schüler. Segnitz: Zenos pages 75–125. An updated short version of this book chapter is online in English: "Ettore, Anna and the Spiers", see Chapter 2: "A School in Germany". Most of the pupils in Segnitz were the sons of German and Austrian Jewish entrepreneurs or merchants like, for instance, Edwards classmate Richard Fluss, a childhood friend of Sigmund Freud. But there were also some Christian schoolmates. The boys remained at the school until 1875, and it was a period of intense loneliness and homesickness for him as a young teenager. Filene was shy as a youth, and never married. Upon his return to the US, Edward attended high school in Lynn, Massachusetts, and worked in his father's store evenings, weekends, and summers.

Together with his younger brother Abraham Lincoln Filene, he reorganized his father's department store into "William Filene's Sons Company", which would later become Filene's. Though the store did not make a profit for many years, it attracted more customers, and eventually turned a profit, even supporting the main store of Filene's during the Great Depression.Bacher, Marcus. "Edward Albert Filene." In Immigrant Entrepreneurship: German-American Business Biographies, 1720 to the Present, vol. 3, edited by Giles R. Hoyt. German Historical Institute. Last modified March 19, 2014.

By 1928 Edward was ousted from store management by his fellow stockholders who were "troubled by his liberal management policies", but retained an office and the title of President. His ouster allowed him to dedicate more time to his passions of travel, civic organizations, and philanthropy. Our Founder: Edward A. Filene (1860-1937) The Century Foundation. undated. He wrote numerous speeches, pamphlets and several books.

Edward Filene was a proponent of the scientific approach to retail management. In 1909, he introduced the "bargain basement" principle. Under this plan, merchandise had to be sold within 30 days or it was marked down; after a further 12 days, the merchandise was further reduced by 25% and if still unsold after another 18 days, a further markdown of 25% was applied. If the merchandise remained unsold after two months, it was given to charity."Pioneers in Marketing: Edward A. Filene, Lincoln Filene and Daniel Bloomfield," Journal of Marketing, Vol. 23, No. 3, 1959, pp. 296–300 Although Filene's Basement was not the first 'bargain basement' in the U.S., the principles of 'automatic mark-downs' generated excitement and proved very profitable."Pioneers in Marketing: Edward A. Filene, Lincoln Filene and Daniel Bloomfield," Journal of Marketing, Vol. 23, No. 3, 1959, pp. 296-300 Filene personally supervised construction of the first basement in Boston. An advocate of consumer education, he introduced color matching tools in the clothing departments of his stores.

Filene was a pioneer in employee relations. He instituted a profit sharing program, a minimum wage for women, a 40-hour work week, health clinics and paid vacations. He also played an important role in encouraging the Filene Cooperative Association, "perhaps the earliest American company union". Through this channel he engaged constructively with his employees in collective bargaining and arbitration processes.

He realized that credit unions could help ordinary American workers to access loans at reasonable rates. Equally important, workers could save their money so that when hard times hit, they were prepared.

Subsequent to this trip the philanthropy he practiced, combined with the steady implementation efforts of his associate Roy Bergengren were critical to the emergence of credit unions in the United States. He also donated $1 million to the Consumers Distribution Corporation to help them organize a national network of cooperative retail stores.

In 1908, Filene and Massachusetts banking commissioner Pierre Jay, helped organize public hearings on creating credit union legislation in Massachusetts. The Massachusetts Credit Union Act of 1909 was the first comprehensive credit union law in the United States, and would serve as a model for the Federal Credit Union Act of 1934.

Inspired by the experience in many European countries where credit unions were called "people's banks", Filene organized the National Association of Peoples Banks to advance the credit union cause in the US. However, little came of this until 1921, when Filene observed in Roy Bergengren the key organizer he needed. Together with Bergengren he founded the Credit Union National Extension Bureau.

In 1921, Edward A. Filene formed a savings and loan association for employees which later became the Filene Federal Credit Union of Boston, then merged with Webster First Federal Credit Union.

Filene seems to have been responsible, with the collaboration of Pierre Jay, for the adoption of the term "credit union" in the United States. His concern with fighting and excessively costly consumer loans led to the choice of the word "credit", while his interest in working people made him want to cast trade union in a more positive light.

Filene hired Roy Bergengren, and their collaboration and the work of the Extension Bureau proved very effective, bringing state laws to fruition in 26 states and substantially revised flawed legal frameworks in 5 others. In 1934 the Roosevelt Administration passed the Federal Credit Union Act, making it possible to form a credit union anywhere in the United States.

The Extension Bureau has been a model for many projects related to international development and microfinance since. Foreshadowing debates that still rage, Filene's and Bergengren's views diverged on two key issues:

First, Bergengren believed that the Extension Bureau should attempt to secure federal legislation first, rather than work state by state. Filene maintained that a national law should be based on a sound understanding of the diverse circumstances of people across America—from shrimp fishermen in Louisiana, to factory workers in Massachusetts or farmers in the mid-West. Only by developing many state laws first would such a sound national understanding be possible. He prevailed in this debate.Johnson, Gerald W. Liberal's Progress. Coward-McCowan Inc., New York, 1948.

Second, as the Great Depression set in the Reconstruction Finance Corporation under Herbert Hoover sought to stimulate the economy with soft loans targeted to banks, railways and large companies. Filene favoured asking for $100 million in reconstruction credits to be pumped into credit unions. Bergengren strongly opposed this position, and his view prevailed this time. "To him, it meant destroying the vital principle of the whole movement by converting a community enterprise into an agency of the government. To teach people how to help themselves was more important by far in times of depression than at any other time."

Several writers mention the fact that Filene never married may be why "his family in a very real sense became society as a whole." Filene "played a pivotal role in passing America's first Workmen's Compensation Law in 1911" and was a founder of the Boston, American and international chambers of commerce.

Filene believed in the intrinsic capability of ordinary people to improve their own condition, given "good information and the discipline to use it effectively." This faith led not only to his involvement with credit unions, but to a wider interest in research into critical social and economic trends. This research, if clearly explained to the public, would advance the causes of both democracy and peace. These views led him to found the Twentieth Century Fund in 1919, since renamed The Century Foundation.

Living in the era of Henry Ford, Filene believed that the problems of mass production had essentially been solved. But he feared that production by itself would not ensure prosperity; if ordinary workers could not afford to continue financing this expansion with their purchasing power, the result would be either reduced production or worse, increased social inequality leading to violence or dictatorship. He saw credit unions as an important part of the answer.

In a speech in California in 1936 he summed up his view:

An important initiative was the "Boston-1915", a multi-sector, private-public sector partnership that organized leaders and committees to take leadership roles in solving key urban problems, including slums, public health, crime and local governance.

Filene was for world peace; he joined the League to Enforce Peace founded 1915 in New York after World War I had broken out, and he supported the League of Nations after the war.

Filene corresponded with a wide range of leaders from Woodrow Wilson and Georges Clemenceau to Mahatma Gandhi and Vladimir Lenin.

His other major concern was mass production. He argued that higher wages and shorter hours for workers would enable them to buy materials they could not otherwise afford. He wrote several books on the subject and proposed that mass production, mass distribution and worker purchasing power were the answer to economic depression. He admired the methods of Henry Ford in the auto industry.

In 1935, at the age of 75, he made a visit to Moscow and was stricken with pneumonia. His assistant, Lillian Schoedler was able to get him the best of care and he did recover. In 1937, however, he made another trip to Europe to attend the International Chamber of Commerce meeting in Paris. He again contracted pneumonia and died in the American Hospital of Paris in Neuilly-sur-Seine on September 26, 1937."Edward A. Filene of Boston Dies in Hospital at Paris." Springfield (Mass.) Republican, September 30, 1937, p. 12.

His death was reported on the front page of every major newspaper in the world. A man who thought of himself as a "seller of pins" would have been honored indeed by the tribute paid to him by President Franklin D. Roosevelt when he heard of Filene's death Roosevelt wrote:

Roy Bergengren conducted a series of memorial meetings for credit unionists around the country. The Board of Directors of Credit Union National Association and CUNA Mutual Insurance Company voted to raise funds to build a memorial to their founder. Filene House in Madison, Wisconsin was the result. President Harry S. Truman dedicated the building in May 1950.

A credit union think tank and research organization, the Filene Research Institute, is named in his honor. A building of the Hillman Housing Corporation, a housing cooperative on the Lower East Side of Manhattan, is named after him. Bronze busts honoring Filene and seven other industry magnates stand outside between the Chicago River and the Merchandise Mart in downtown Chicago, Illinois.

The first credit union to be named after Filene outside the United States was Filene Credit Union in Broad Cove, Nova Scotia in December 1932.

In 1931, Lincoln Steffens agreed to write a biography of Filene. He asked Whittaker Chambers to help him write it; when Chambers declined, he turned to Robert Cantwell. In December 1931, Cantwell accepted–and Steffens had a heart attack. In 1936, Steffens died with the book incomplete. In 1937, Cantwell gave the manuscript to Filene–and Filene died. The book went unpublished.