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What Credit Unions Can Learn from the Passage of the 19th Amendment Guaranteeing Women the Right to Vote

The progressive period of American history (roughly 1880-1920) was a time of reform at all levels of government. This exciting era saw the passage of civil service reform, national forest preservation, new bureaus for regulation of business and monopolies, limits on campaign finance, the establishment of the Federal reserve system, and the passage of four amendments to the constitution.

These four authorized the direct election of US Senators, the ability of Congress to levy an income tax, prohibition of the sale of intoxicating liquors, and universal women’s suffrage.

Credit unions also planted their roots in this period. The first credit union St Mary’s Bank was chartered in 1909. The follow-on efforts by Filene and others to build a cooperative credit system were a product of these progressive reform impulses.

There are two critical takeaways from the passage of the 19th amendment that are as vital today, as they were a century ago.

They are:

  1. One person can make a difference.
  2. States are the laboratory for change; Congressional legislation most often follows success from reforms proven at the state level.

Who is Harry Burns?

The final ratification of the 19th amendment required 36 states’ approval for it to be added to the constitution. The final success would rest on one person’s vote [1] in the Tennessee House of Representatives.

The amendment passed the Tennessee Senate in August of 1920 but was tabled in a 48-48 tie vote in the House. Harry Burns, at 24 years old, was the youngest House rep. He wore a red rose signifying his opposition to the amendment. When the vote came up for ratification it was expected to again tie and therefore fail.

Instead Harry changed his vote to Aye, and the 19th amendment was approved. What changed? The morning Harry’s mother, Phoebe, had sent a note reading:

“Hurrah, and vote for suffrage! Don’t keep them in doubt. I notice some of the speeches against. They were bitter. I have been watching to see how you stood but have not noticed anything yet.”

The next day Harry explained his vote for universal suffrage:

“I believe we had a moral and legal right to ratify. I know that a mother’s advice is always safest for her boy to follow and my mother wanted me to vote for ratification.”

Yes, one person can still make a difference. One mother, one son. The efforts of a generation are realized. A reminder for when we might be that one needed vote.

The States as Incubators for Change

A number of states gave women the right to vote before passage of the 19th amendment.

The first was the territorial legislature of the Wyoming Territory which granted women suffrage in 1869. On September 6, 1870, Louisa Ann Swain of Laramie, Wyoming became the first woman to cast a vote in a general election.

Other states included Utah, Colorado, Idaho, Washington, California, Oregon, Montana, Arizona, Kansas, Alaska, Illinois, North Dakota, Indiana, Nebraska, Michigan, Arkansas, New York, South Dakota, and Oklahoma.

The states were the proving ground for women’s political power to get legislatures to enact their suffrage rights.

Where Change Starts

One of the recurring themes in the 110 years of the cooperative system has been innovation implemented first in states, sometimes decades before adoption at the federal level. The 25-year head start in state credit union chartering gave Filene “facts on the ground” to convince Roosevelt and Treasury Secretary Morgenthau to support passage of the Federal Credit Union Act in 1934.

Other significant innovations begun in the state credit union system include:

The list goes on. Today, the importance of innovation in the state system is more vital than ever.

As NCUA seeks to dominate all credit union regulatory options via NCUSIF insurance, the one area pioneering new approaches are state licensed CUSOs. All CUSOs are organized under state law and, where applicable, regulation. Whether the firm’s structure is an Inc., a cooperative, an LLC, or even a non-profit, the “chartering’ is done by the state. While NCUA can limit investments in or loans to CUSOs, the state prescribes the organizational opportunity.

That is why in the current credit union system, the CUSO option, especially multi-owned CUSOs, are proving to be one of the most important arenas for startups, fintech initiatives, and third-party partnerships.

Cooperative history is filled with examples of industry leadership arising from the state system. In addition to the initial pioneering charters, other organizations include state associations and leagues, share insurance options, and the corporate network. As these onetime innovators lose momentum, new efforts provide renewed leadership.

Today it is CUSOs who capture the passion and entrepreneurial spirit every industry needs to continually reinvent itself. Going forward it may well be CUSO creativity that renews the cooperative charter so credit unions can again be seen as progressives known for leading in solving members’ most important needs.

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