security. As for ordinary borrowers, the president "had ideas" about the purposes of loans.

His decisions were considered quixotic. For example, a man applied for a loan of sixty-five hundred dollars for a poor widow. The security offered was easily worth twenty-five thousand. The bank was ready to let him have the money at seven per cent., but in drawing up the papers it was discovered that he was charging the widow ten.

"How 's that?" demanded the president.

don't want to do business with you," retorted the president.

As strict on credit as the usual bank, the Coöperative on occasion has accepted personal security quite outside the ordinary field. A teacher long in Cleveland applied for a loan of several hundred dollars. She had no security. On inquiry, inquiry, Mr. Mr. Stone found that both her sisters, with excellent reputations for probity, were working. They were not propertyholders, but on their signatures the loan was granted. The money was duly paid back. As she closed the

"You can't have our money," decided the president. "If that woman wants the loan, she can come here and get it herself at seven per cent."

"But what are the three hundred of us fellows engaged in this kind of business in Cleveland going to do?" protested the money-middleman. "Do you mean to say that this bank is not going to work with us?"

"We don't have to make a profit at the expense of people in trouble," laconically replied the head of the bank.

Social intention is a factor in all decisions. A landlord also applied for a loan to remodel his house. He explained he could double the rent of his tenants. The application was refused.

"Why?" the landlord demanded angrily.

"That 's rent profiteering. This bank is n't lending for that business." The landlord drew himself up haughtily.

grateful, asked Mr. Stone:

"I want to know something. What did you loan that money on?" "On character," he replied.

"I'll bring you a thousand depositors for that."

"Ten will do," he answered, smiling. And in time such friends bring hundreds.

There was something "queer," of course, about the new Coöperative National. Not one or two, but seven, bank inspectors descended in a body last February to ferret out its dark secrets.

Why seven bank examiners at once?

The president welcomed them all, and detailed seven members of the bank's staff, one to stand behind each inspector as he counted the securities. Mr. Stone actually spent fifteen years as the human brain of a locomotive, leaving it at fifty to become grand chief. He has just become a banker, but he displays the caution which marks the breed.

"The other side of that is that we

We have no higher class of labor than these responsible, determined men in the cabs of locomotives. To them the traveling public intrusts its life and its inland commerce. Feeling that some evil might still befall so promising a beginning, I pressed an obvious question.

"What is to prevent persons who wish to gain control from buying up the bank's stock?"

"In applying for shares," replied Mr. McCaleb, "each purchaser promises in writing that if he ever desires to dispose of his holdings, he will first offer them to a purchasing committee, created by the board of directors of the bank, at a price to be determined by the book value of the stock ascertained from the capital surplus and undivided profits. No paper will ever go on the market. Virtually no chance exists of any outsider gaining even a voice, let alone control.”

"Could it not be attacked through its demand obligations?"

"It could not be successfully raided, inasmuch as it has to-day in its hands cash and credits far in excess of every dollar of demand or time obligations. It expects to continue in this liquid condition. Besides that, the brotherhood owns several millions of bonds and has several million dollars in cash, which, if need be, could be brought to the support of the bank. Its position is well nigh invulnerable. It could not be menaced by legal restraint, inasmuch as the laws which command it are the same laws which command the other eight thousand odd national banks. A change in the national law which might affect it adversely would do the same thing to them."

Possible sources of danger remain, such as arbitrary dissolution or improb

able weakening of the brotherhood itself; court injunctions that prevent unions from utilizing their own funds; possible levies; legislation contrary to collective bargaining, which might, of course, deeply affect any union in the land, even this one. But without the loss of all the rights labor has fought for in the last hundred years, it is unlikely that this extraordinary achievement will be jeopardized by industrial conditions.

§ 6

If depositors appreciate their new equity in the Coöperative National's profits, it is even probable that the general public may come to see in prevalent use the present "revolutionary innovation" of limited-dividend credit service. Just as Cleveland has found it advisable to follow suit with the thirty-day interest period, so financiers generally may discover that they are more or less obliged to answer the challenge thus laid down, and compete for business on the same terms.

A New York banker visiting Cleveland, hearing the buzz of interest in the engineers' successful attempt to mobilize their own credits, remarked with indulgent condescension to Mr. Stone:

"We fellows down in New York are inclined to be very good to you fellows out here."

"You 've got that wrong," quietly replied the amazing Mr. Stone. "We little fellows out here are mighty good to let you fellows down there live at all."

Money, like water, does not run up hill unless forced by artificial power. Under our present artificial credit system, Wall Street commands surplus much of which should be locally

employed. The brotherhood is planning conservation at the head sources. It will encourage the opening of credit unions at the eight hundred railroad division points. The little upland reservoirs of credit will naturally feed the big pool.

Democratically and economically, it is of foremost importance that we should have more credit unions and such modifications of service as this great labor bank offers. Only thirteen States authorize coöperative banks, although several more, among them Nebraska, are acting on bills. Federal legislation is proposed. Henry W. Wolff, the international authority on people's banks, deplores the American requirement that every depositor must hold stock. Freedom to accept deposits from all comers partly accounts for the fact that in Europe people's banks

have grown into a mighty system, with several billions of assets. While legislatively encouraging financial democracy, the dynamic heart of economic power, why not extend credit unions' powers to accept deposits? Our safeguards through inspection are certainly stiff enough to warrant that leeway.

Coöperation rests primarily upon a permeating voluntarism; its ways are the ways of peace. The transformation which the world is already realizing through the multiplication of coöperative banks is not destructive change. It is the gradual conversion of one community after another to the belief that mutual benefit is the ultimate individual benefit, the substitution of a remarkably direct method for one which, in its deification of profit, has overlooked necessary services.