Edward Albert Filene

Edward Albert Filene

[fi-leen, fahy-]
Filene, Edward Albert, 1860-1937, American merchant, b. Salem, Mass. As president of the Boston firm of William Filene's Sons he pioneered in scientific and ingenious methods of retail distribution—the "bargain basement" was one of his innovations. He planned and helped organize the Boston Chamber of Commerce and the Chamber of Commerce of the United States and served in World War I as chairman of the War Shipping Committee. He was active in civic reform movements and was the founder (1919) of the Cooperative League, which became the Twentieth Century Fund. He wrote several books on business methods and on economics. His liberal economic and political views made him a controversial figure.

See G. W. Johnson, Liberal's Progress (1948).

His brother, Lincoln Filene, 1865-1957, b. Boston, also directed William Filene's Sons and served as business counsel to the federal government after 1933. He played a prominent role in business associations and wrote a number of books and articles on economic problems.

Edward Albert Filene (September 3, 1860, Salem, Massachusetts - September 26, 1937, Paris, France) was an American businessman, social entrepreneur and philanthropist. He is best known for building the Filene's department store chain, and for his decisive role in pioneering credit unions across the United States.

Early life

Edward was one of 5 children of William Filene and Clara Ballin. William Filene was a German Jewish immigrant from Posen, Prussia, who immigrated to the US in 1848. “A peddler, chiefly of women’s apparel” he built up a company composed of several small retail shops and in 1881, founded a department store in Boston.

At the age of 5 Edward was injured in the fall that left him with a permanent limp. After attending high school in Lynn, Massachusetts, Edward passed his entrance exams for Harvard University but gave up his educational ambitions to take over the family business in 1890 when his father became seriously ill. Together with his younger brother Abraham Lincoln Filene, he built the Boston firm of William Filene's Sons, later known as Filene's into a great retail success story.

Social entrepreneurship

Edward Filene drew inspiration from the scientific management ideas of Frederick Taylor. While Taylor is best known for the use of scientific methods to increase workplace efficiency, he was also interested in how to improve the quality of work for employees. Filene is credited with refining a number of under-utilized and some cases novel retailing techniques. Filene’s Department Store offered complete and honest descriptions of its merchandise and offered to give customers their "money back if not satisfied".

Although Filene's Basement was not the first ‘bargain basement’ in the United States, the retail design and later the ‘automatic mark-downs’ generated excitement and proved very profitable. 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 also 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 formed a savings and loan association for employees which later became the Filene Employee’s Credit Union.


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.

Another 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.

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 to finance this expansion with their purchasing power, the result would be either reduced production or worse, increasing 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.

“What is needed is that the American masses shall learn the art of constructive self-government in this machine age – in this age in which life is no longer organized on a small community pattern but in which all Americans are more or less dependent upon what all other Americans are doing.”

Filene also 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).


Filene’s lifestyle and motivation for his philanthropic work was described by Bergengren, who knew him for much of his adult life.

“He had a great distaste for material things, lived very modestly, never owned an automobile and was scrupulously careful about small expenditures, all because he felt that he was a trustee for the money that he had earned and that the trustee-ship involved turning his accumulations into the greatest possible disinterested public service.”

Filene began traveling in the 1880s, purchasing merchandise, studying business practices, and increasingly examining how different societies were organized and the problems they faced. He corresponded with a wide range of leaders from Woodrow Wilson and Georges Clemenceau to Mahatma Gandhi and Vladimir Lenin.

Origins of US credit unions


In 1907 Filene traveled around the world, and by February reached Calcutta, India. There, he visited some rural cooperative banks that had been promoted and funded by the British colonial government. On his return, he contacted his associate Franklin D. Roosevelt and suggested that a similar type of organization be promoted by the US government in the Philippines..

He realized that credit unions could help ordinary American workers to access loans when they needed them without falling victim to usury. 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 Enabling Act in 1909 was the first 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.

Credit Union National Extension Bureau

The Extension Bureau, to which Filene donated nearly $1 million during its 14-year history, had four goals:

1. to bring about the laws needed for credit union development in the various states,
2. subsequently, to organize some credit unions in each state that could serve as examples to others,
3. to expand the number of credit unions to the point that they could create self-sustaining state federations, and
4. to combine the federations into a self-sustaining national association.

The collaboration between Filene and Bergengren, and the work of the Extension Bureau, proved very effective. It brought state laws to fruition in 26 states and substantially revising 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 however, the views of Filene and Bergengren 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 prevailed in this debate, maintaining 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.

Second, as the Great Depression set in the Reconstruction Finance Corporation under President 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.

Credit Union National Association

With the work of the Bureau essentially completed, a national meeting of credit union leaders was called at Estes Park, Colorado. On August 11th, 1934 the Credit Union National Association – a national federation funded by the nation’s credit unions -- was formed to replace the Bureau. The role of philanthropy in creating the US credit union system was over.

The founding By-Laws of CUNA recognize Filene’s contributions with the following words:

“In grateful recognition of the fact that Edward A. Filene is the Raiffeisen of America – that he first brought cooperative credit to the United States – that he created in 1921 and financed from 1921 to 1934 the Credit Union National Extension Bureau in order that there might be a sustained development of cooperative credit in our country – in free acknowledgement of the unique debt which we and succeeding generations of credit union members owe and will always owe him – we make a part of these our By-laws, not subject at any time to amendment, this acknowledgement – and we create the office of Founder of this Association and name Edward A. Filene to that office for life. Thereafter said office shall be abolished.

The Term '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 moneylenders and excessively costly consumer loans led to the choice of the word ‘credit’, while, his interest in working people made him want to cast unions in a more positive light.


Perhaps partly as a result of his childhood injury, and the eczema that plagued him throughout his life, Filene was shy as a youth, and never married. As several writers mention, this may be why “his family in a very real sense became society as a whole.”

The results of this dedication speak for themselves. By the end of 2006 US credit unions had 87 million members. This is the largest membership of any country in the world, and one of the highest levels of market penetration in the world.

A credit union think tank and research organization, the Filene Research Institute, is named in his honor as the father of the credit union movement. A building of the Hillman Housing Corporation, a housing cooperative in 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.


The Way Out: A Businessman Looks at the World. (1925)


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