This Day in Jewish History

Founder of Filene’s Department Stores Is Born

Edward Filene not only pioneered the bargain basement: he recognized that a happy worker is a productive one.

September 3, 1860 is the birthday of Edward Filene, who is best known for making the eponymous Boston-area department-store chain founded by his father into one of America’s great retail emporiums, together with his brother.

But his more enduring contribution to society — especially now that Filene’s has gone the way of all living things — may have been the innovations he introduced to employer-employee relations, including workmen’s compensation and credit unions.

Edward Albert Filene was born in Salem, Massachusetts, one of five children of William Filene and the former Clara Ballin. William, who was born Wilhelm Katz in Posen, Prussia, came to the United States in 1848, where he began as a dry-goods peddler and eventually founded a small chain of department stores in the Boston area. (A possibly apocryphal story says that when he arrived in the United States he tried to anglicize his last name to “Feline,” so as to retain its German meaning, but that was beyond the ken of the immigration official who registered him.) Clara was from Segnitz-am-Main, in Bavaria; the two met when she was visiting relatives in Connecticut.

As a young child, Edward Albert, whose parents had named him for the Prince of Wales, fell down some stairs, which left him with a lifelong limp. At the age of 12 he was sent to a military academy in his mother’s hometown in Germany, before returning to the United States to attend high school in Lynn, Massachusetts.

His plan was to attend Harvard University, whose entrance exam he had passed, but when his father became seriously ill in 1890, Edward was compelled to take over the business, together with his brother Abraham Lincoln Filene. They inherited it when William died, in 1901.

Under the brothers’ management, Filene’s became best known for its bargain basement, where unsold items were moved and sold at a discount that increased according to a set schedule. Anything that was not sold after a month was donated to charity. The basement was actually the most profitable division of the store. Filene’s also introduced a “money back if not satisfied” policy and various consumer-education programs.

But Filene’s wasn’t only customer-friendly, Edward also believed that when workers were treated fairly they were more productive. Under his management, the store introduced a 40-hour work week, profit-sharing, health clinics and paid vacations. It also had a minimum wage for women and encouraged employees to establish a company union, the Filene Cooperative Association, with which Edward negotiated collectively.

Filene was instrumental in working with Massachusetts legislators to enact the first workmen’s compensation law in the United States, and the savings-and-loan association he established for Filene’s employees, which later became the Filene Employee’s Credit Union, became a model for employee credit unions throughout the country.

Perhaps he was a little too progressive for the company’s fellow stockholders. In 1928 they made Filene “president for life” of the store, but removed him from direct involvement in management.

Edward Filene’s belief that people could and would improve their own situations, if they possessed “good information and the discipline to use it effectively,” also led him in 1919 to endow the Twentieth Century Fund, a nonpartisan public-policy think tank that was meant to advance the causes of democracy and peace. Today it is called the Century Foundation.

Filene, who never married, died of pneumonia while attending a meeting of the International Chamber of Commerce, in Paris, on September 26, 1937. He was 77.

President Franklin D. Roosevelt eulogized him as “an analyst who was able, by mathematical calculations, to make plain to us that our modern mechanism of abundance cannot be kept in operation unless the masses of our people are enabled to live abundantly ... He believed in learning and searching out the ways of human progress.”

As for Filene’s the store, its last outlet closed in 2006. Filene’s Basement, by then a separately owned national chain, closed in 2011.