Edward Filene

Tom Shipka

Filene's was a Boston-based department store chain founded by William Filene, a German Jewish immigrant, in 1881. When William became ill, his son Edward left Harvard in 1890 to run the business. Edward oversaw the expansion of the chain and the introduction of marketing innovations such as the bargain basement, money back guarantees, and automatic markdowns. With these markdowns, the cost of an item dropped the longer it remained on the selling floor. (1)
Although Edward Filene was a hugely successful entrepreneur, he was also deeply committed to his employees and their families. To promote the quality of their work and their life, Filene

  • established "a profit sharing program..., a 40 hour work week, health clinics and paid vacations," (2) *lobbied for the first Workmen's Compensation Law in 1911,
  • organized a community council to deal with urban problems such as crime and run-down housing, and
  • submitted to collective bargaining and arbitration long before passage of federal law conferring the right to unionize on private sector workers. (3)

But Edward Filene's most important and lasting contribution to American workers is the credit union. Early in the twentieth century, few banks offered small loans to workers. Those who needed a loan usually turned to street lenders or loan sharks who charged excessive interest rates. To provide people of modest means with access to low-cost credit, and to help them cultivate a habit of saving, Filene launched the credit union movement in the United States, first in Massachusetts, with the passage of the Massachusetts Credit Union Act in 1909, and then state by state across the nation. (4)
One of Filene's smartest decisions was to hire Roy Bergengren, a Harvard-educated lawyer, to lead his nationwide campaign for credit unions. Bergengren joined the project in 1921. Within fourteen years his accomplishments were staggering. Thirty-eight states had credit union laws. A national credit union law had been signed by President Franklin D. Roosevelt. There were 3,600 credit unions in the nation with 750,000 members. Credit unions were growing at a pace of 100 per month. Each week brought 6,000 new credit union members. And a national credit union organization had been formed. It continues today as CUNA, the Credit Union National Association. (5) Filene spent more than $1 million of his own funds to bankroll this cultural revolution.
Today there are more than 8,100 credit unions which serve more than 86 million members. (6) Nevertheless, despite all the good that credit unions have done, Filene's goals for workers – low-cost credit and regular savings – are once again in jeopardy in America. As a people we are spending more than we save. Payday lenders, today's version of loan sharks, give $28 billion in loans a year at triple digit interest rates. Credit card debt is off the chart. And there is a national epidemic of foreclosures and bankruptcies. (7) One wonders if the heroic efforts of Edward Filene and Roy Bergengren were in vain. Next time we'll take a look at a group that believes it has a workable plan to revive Filene's hopes for American workers.


  1. http://www.filenesbasement.com. Click on "Our Story."
  2. http://en.wikipedia.org/wiki/Edward_Filene
  3. Ibid. Filene also established the Boston, U.S., and international chambers of commerce and a major philanthropic foundations which still exists.
  4. For a New Thrift – Confronting the Debt Culture: A Report to the Nation, Institute for American Values, 2008, p. 44.
  5. Ibid., p. 44
  6. Ibid., p. 46
  7. See For a New Thrift: An Appeal to Prospective Colleagues at www.NewThrift.org.

© 2008 Tom Shipka