In 1881, when Edward was 21 years old, his father William founded a department store in Boston. Edward began traveling in the 1880s, purchasing merchandise, studying business practices, and increasingly examining how different societies were organized and the problems they faced. Edward had passed his entrance exams for
Harvard University when in 1890 his father became seriously ill. Thirty years old at that time, Edward gave up his educational ambitions to take over the family business. One of his great disappointments in his life was being unable to attend Harvard. 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. 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. He wrote numerous speeches, pamphlets and several books.
Filene's Store management policies Edward Filene drew inspiration from the
scientific management ideas of
Frederick Winslow Taylor and adapted these ideas for use in the retail environment. 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 in some cases novel retailing techniques. For example, Filene's Department Store offered complete and honest descriptions of its merchandise and offered to give customers their "money back if not satisfied". 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. 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. 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
loan sharks 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.
Credit Union National Extension Bureau, 1921–1934 In 1921, Filene founded the Extension Bureau, to which he donated nearly $1 million during its 14-year history. It had four goals: to bring about the laws needed for credit union development in the various states, subsequently, to organize some credit unions in each state that could serve as examples to others, to expand the number of credit unions to the point that they could create self-sustaining state federations, and to combine the federations into a self-sustaining national association. 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. 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, 1934 With the work of the Bureau essentially completed, a national meeting of credit union leaders was called at
Estes Park,
Colorado. On August 11, 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 recognized Filene's contributions with the following words: ==Philanthropy==