Abstract

"The 1960s: 'When the House of Labor Moved Quietly into the Investment Business'"

Natalia Shevin, New York University (nds408@nyu.edu)

On December 28, 1960, journalist Victor Riesel reported, “In a decade or two, the House of Morgan and others on the ‘Street’ will remember that it was the first year of the Sixties when the House of Labor moved quietly into the investment business.” Riesel had already reported on labor’s finances for years and speculated about the potential ways that organized labor could bend capital to their advantage as they amassed funds not seen in union treasuries since the 1920s. This paper, “The 1960s: ‘When the House of Labor Moved Quietly into the Investment Business,’” examines how labor leaders of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) coordinated investment practices of their affiliated unions beginning in 1960 under the direction of their first Investment Department director, Alexander Bookstaver. With his experience as a banker at the Amalgamated Clothing Workers of America’s Amalgamated Bank and comptroller of the International Ladies’ Garment Workers’ Union, Bookstaver aimed to protect organized labor’s growing welfare funds against future depreciation, while directing funds toward a socially useful purpose. Guided by these two intentions, the AFL-CIO created the Mortgage Investment Trust (MIT)—which continues to operate today with the name Housing Investment Trust—to encourage labor unions to earmark part of their welfare funds for low- and moderate-income housing. While previous scholarship locates the emergence of socially responsible investment in the 1970s and shareholder activism in the 1980s, the AFL-CIO’s MIT indicates that organized labor tested the legal limits of their financial strength, as they negotiated their commitments to social unionism with the demands of prudent investment.