Early in the twentieth century, Edward A. Filene founded The Co-operative League in order to promote the credit union movement throughout the United States. In 1919, he incorporated the group as a not-for-profit foundation as a means of funneling contributions to many other causes that were important to him as well. Two years later, his goal became loftier: his ambition was for his foundation to bring together the greatest minds in the nation as a means of changing the world. And so he renamed the League the Twentieth Century Fund, and provided it with a generous endowment to pursue its work. He demanded that it find solutions and promote action, that it make certain that it was “furthering progressive measures for the public good.”
As the end of the twentieth century approached, the name was changed once again, becoming The Century Foundation, an organization that continues to be guided by Filene’s vision.
A Life Well Lived
Just who was this visionary, and what shaped him? For most people, the name Filene brings to mind Filene's department store. And it is that successful business enterprise that provided Edward Albert Filene the money that allowed him to become a noted philanthropist.
Edward Filene was born on September 3, 1860, in Salem, Massachusetts, to William Filene, a German Jewish immigrant who came to this country in 1848 and Clara Ballin a native of Bavaria, who was visiting the United States when she met William. They married a few years later and had five children, of whom Edward was the second. William Filene worked as a peddler of women’s apparel, eventually setting up a number of small shops that in 1881 were consolidated in Boston as William Filene's Sons Company. Edward Albert and his younger brother Albert Lincoln worked in the stores alongside their father, putting in long hours. But Edward, a graduate of the Lynn, Massachusetts, public high school, wanted to attend Harvard, and devoted all his spare time to acquiring the skills needed to pass the entrance exam. When the letter of admission arrived, it became something he treasured for the rest of his life.
Fate intervened, however, and in 1890, when his father became seriously ill, he gave up his plans to attend Harvard and along with his brother took over the family business. He proved to be a resounding success as a businessman, growing the store into a Boston landmark, along the way successfully introducing the sale of ready-made women’s apparel of high quality and developing the “bargain basement” concept. He was also an innovative thinker as an employer, bringing many liberal ideas into the company. For example, he and his brother formed the Filene Cooperative Association, perhaps the earliest American company union. He worked diligently to give his employees shares of the company with the intention of passing control of it to them, and was disappointed when it became clear that they had little interest in assuming ownership.
Some of the solutions he offered and some that he put in place in his own business became things that other progressive businessmen emulated, such as profit-sharing, health clinics, paid vacations, and welfare and insurance programs. He also helped establish minimum wages for female workers and introduced a five-day, forty-hour work week.
But Edward Filene’s social consciousness went beyond his own employees. He played a pivotal role in getting America's first Workmen's Compensation law passed in 1911. He also helped launch the U.S. credit union movement by working with the Massachusetts Bank Commission to get legislation enacted, and later he established the Credit Union National Extension Bureau, to which he contributed over $1 million between 1920 and 1934. In addition, he founded the Good Will Fund, served as chairman of the Metropolitan Planning Commission of Boston, and was planner and co-organizer of the Boston Chamber of Commerce, the U.S. Chamber of Commerce, and the International Chamber of Commerce. His interests also went beyond the social problems of the United States. He was active in the world peace movement, joining the League to Enforce the Peace in 1915 and backing the League of Nations after World War I.
While Filene was not the most successful retailer of his time, and the fortune he amassed was smaller than that of philanthropic contemporaries, like Andrew Carnegie and John D. Rockefeller, his personal involvement in his philanthropies was extensive. Perhaps the focus on the work of those philanthropies, especially this organization, was a result of the fact that by 1928, his fellow stockholders, troubled by his liberal management policies, made him president of the firm for life, but barred him from management of the company.
Ideas and Ideals
Most important to The Century Foundation, Filene’s actions were motivated by progressive ideas and ideals that were remarkable in their vision. Those ideas, about business as well as the major challenges facing the nation, are set forth in the books he wrote, including The Way Out (1924), Successful Living in This Machine Age (1931), Morals in Business (1935), and Next Steps Forward in Retailing (1937), as well as in the numerous articles he published and speeches he delivered, many of which are collected in Speaking of Change, which was published in 1938 after his death as a tribute to him.
Filene’s ideas about the world were in large part a result of the fact that he remained a student at heart throughout his life. He studied every aspect of business and explored social issues, adding to his knowledge of the world through numerous trips abroad to examine the way things were done in other nations. This led to his developing a world view that can best be described as liberal, though he chafed at that term, especially when applied to men of business. When discussing the “liberal business man” in an article in Harper’s in 1923, although expressing a dislike of the word, he admitted,
I do not know of a better word for describing the sort of business man, who broadly speaking, is the opposite of reactionary, the sort of business man who faces fresh problems with a fresh mind, who is more interested in creating a better order of things than in defending the existing order of things, who realizes that a private business is a public trust.
In the years leading up to the Great Depression, Filene railed against short-sighted industrial magnates who were blind to the dangers he saw looming for the American economy. In The Way Out, he declared that business and social progress go hand-in-hand. “Good social policies are the surest recipe for big and continuous profits,” he wrote. And so he was adamant about the need for wages that would provide workers with what they needed to acquire the “necessities of life and some of its luxuries, to educate their children, to pay for recreations, and to secure them against illness and want in old age.” He did not do this for purely altruistic reasons, but out of a belief that it was the right and smart thing to do because “if their wages enable them to buy freely, the value of the American market is maintained.”
As Filene and other liberals called for the kind of social progress that would support the market, the 1929 stock market crash crippled the national economy, and the Great Depression ensued. Filene’s retail empire survived that storm, and Edward Filene became one of the voices enthusiastically supporting the New Deal. His beliefs led him to continue to advocate for any number of social changes, often promoting those ideas through the work he encouraged TCF to pursue. Note that he encouraged TCF to pursue these subjects, but did not order it. For although he provided the majority of TCF’s income, he considered himself co-equal with the other Trustees, writing in a letter to them on February 6, 1926, “It is clear, I think, that the Foundation, to broadly achieve its purposes . . . must represent the combined intelligence and wisdom of its directors, pledged to disinterested effort in furthering progressive measures for the public good, as they understand it.”
Under his watch, TCF investigated many subjects of great interest to him. For example, he was unhappy with the role played by the financial community in the years leading up to the Great Depression, and so, among the first publications issued by TCF were examinations of the security markets, especially the study Stock Market Control (1934). At the same time, he promoted numerous examinations of the state of the working class, the all-important consumers who he believed to be the bedrock of the nation.
On the topic of income, he believed that it was essential that the standard of living of all Americans be raised, especially that of lower-income groups, through the payment of more than just living wages, indeed by paying them the highest wages possible without endangering the companies for which they worked. He also believed it critical that there be “economic security, not only in old age, but in the case of any unemployment.” In other words, Social Security and unemployment insurance.
The issue of security in old age became one that would be addressed again and again by this institution. TCF began its ventures in this area by housing the meetings of the Townsend Commission, a plan that included general health care as well as pensions for the elderly, and one that was a precursor of the Social Security Act of 1935. In the years since, TCF has worked diligently to ensure the survival of this legislation.
When it came to housing, he believed that employees should be able to find “attractive, comfortable, and sanitary housing at a fair price.” He was not, however, a paternalistic socialist promoting the idea of workman’s cottages, but rather a believer in the responsibility of businesspeople to endorse “far-sighted social policy for our cities in the matter of housing.”
Regarding finance, his devotion to credit unions was aimed at ensuring that when workers needed access to funds in order to ensure that they could survive hard times, loans at “non-usurious rates” would be available to them, and that there would be a place for them to go to finance the American dream of home ownership.
On the subject of taxes, he actively supported high progressive tax rates on the incomes of the rich, famously quipping, "Why shouldn't the American people take half my money from me? I took all of it from them."
In 1936, he expressed in a speech his belief that “there must be no forgotten man. There must be no discrimination against race, creed, or color.” Perhaps most interesting, was his opinion on health care. In a speech in December 1934, he said,
All too often, the worst thing about sickness is not the sickness itself. Thousands of people recover from severe illness or accidents, only to find themselves unable to recover from the financial ruin which their illness has brought about. It is not the sickness which ruined them, but the cost of the sickness and the cost of medical care.
A year before his death, Filene was asked to participate in a national radio address on the eve of the 1936 election. It was one of the high points in his life. That same year, in an address to the Presbyterian Church Synod of New York he affirmed his views on privilege: “I am making no class appeal. Quite the contrary, I am appealing rather against the theory that those who have, no matter how honestly, come from great possessions, are thereby endowed with some divine right to control the economic and spiritual destinies of their fellow men.”
On September 26, 1937, Edward A. Filene died in Paris, where he had gone to attend an International Chamber of Commerce meeting.
Throughout his business career, Filene eagerly sought new ideas and new approaches to a new age. In a speech before the School of Business Administration of the University of Buffalo he confessed: “I have been constantly embarrassed in my later years by having to spend so much time unlearning things which were true enough when I learned them but which aren’t true now, and in all probability, can never be true again.” It was said about Filene in a 1934 profile that he established the TCF to understand the facts of today. Filene once told a State University of New York-Albany audience that “America was now old enough to be told the facts of life” – and that TCF worked to “make these facts work for the greater prosperity and happiness of all our people.”
Some things never change.
-Beverly Goldberg, Senior Fellow