Call it poetic justice.
The United Mine Workers of America bought controlling interest in the National Bank of Washington in 1949 because the union could not depend on other banks to fund its battles against big business.
The UMW was fighting the Southern Coal Producers Association back then and taking on all other comers in the struggle for better wages and benefits for the people who dug and hauled the nation's coal.
"You couldn't exactly go running to the 'capitalist establishment' and say: 'Hey, loan me some money so that I can stage a little strike against your coal company,'" said Joseph A. (Chip) Yablonski, a former NBW board member.
Today, however, the union is embracing the monied establishment it once shunned. It is pushing for a better return on investment for its members than the $1 a share in dividend payments it collected last year from its more than 1 million shares of NBW.
The union is pulling out, dumping its 76 percent interest in the bank for $70 million, or $66 a share. Not bad. At the end of 1984, the book value of Washington Bancorp, NBW's holding company, was $51.54.
"They're taking their money somewhere else," an NBW official said yesterday, commenting on the mine workers union's flight toward capital.
It is the end of an era, said Yablonski, whose father, Joseph A. Yablonski, was murdered in 1970 by UMW operatives at another turning point in the union's history. Yablonski's mother and sister also were killed in the incident.
Selling the bank is "a significant event, because it marks a maturing of the union leadership," Yablonski said. "In the past, that leadership was wedded to ownership of the bank" as a matter of pride. "But now, they can make a significant investment" in stocks or other instruments that would put more money in the union's coffers, Yablonski said.
Some people think pride is what motivated John L. Lewis to buy the bank in the first place. Lewis presided over the UMW from 1919 to 1959, during which time he built the union up from a scuffling labor group to a 500,000-member organization that commanded the attention of Congress and U.S. presidents. Since then the membership has declined to 157,700 in the United States and Canada along with the fortunes of the coal industries in both countries.
"I always thought that the bank should be sold," said Washington attorney Joseph L. Rauh Jr., a Washington civil rights and labor lawyer who was intimately involved in a battle to reshape the union during the 1970s.
"Buying the bank was an ego trip for Lewis in the first place," Rauh said. "Lewis did not want to be beholden to any other bank or institution for money. But the union had no experience in running the bank."
Events in the late 1960s and the 1970s seemed to support that charge. UMW President W.A. (Tony) Boyle, who later was convicted on three counts of first-degree homicide in the Yablonski murders, used the bank as a conduit to finance his 1970 reelection effort. "The bank was always available for loans for people who were faithful to Boyle," Rauh said.
The bank was hit by more charges of insider loans in 1980, bad loans that cost NBW millions of dollars and that shook investor confidence. The bank has recovered since then under the guidance of Luther H. Hodges Jr., its current chairman and chief executive officer.
Hodges last week announced the agreement in principle to sell the union's share to a group of New York and Washington investors which includes Hodges and other senior officers of the bank.
That sale will leave only a few unions in the banking business, according to Howard D. Samuel, president of the Industrial Union Department of the American Federation of Labor. "There were dozens of labor banks before the Great Depression wiped them out" in the 1930s, Samuel said yesterday. "They existed because most other banks simply didn't serve the needs of working people.
"If you were a working peron and you walked into a regular bank to get a loan, you'd leave empty-handed. But the labor banks specialized in making small loans, helping working people to buy houses and that sort of thing. A lot of people couldn't even have checking accounts unless they went to a labor bank," Samuel said.
He said that the most notable survivor of that era is the Amalgamated Bank of New York, founded in 1924 and owned by the Amagamated Clothing and Textile Workers Union.
The Amalgamated has assets of $2 billion. The bank has strict stock ownership rules, which keep nearly all of the shares within control of the union, said Samuel, a former director of the bank.