The Silver Employees Death Benefit Association and its Beginnings

In the image depositors to the first credit union on the Canal Zone, The Cristobal Federal Credit Union, are served. Image thanks to Mr. Anthony McLean.

by Lydia M. Reid

The large West Indian workforce that came to Panama to work on the construction, maintenance, and administration of the Panama Canal once it was open to the world probably never imagined that their dreams of “making good” in the economic sense would, more often than not, turn to visions of penury- a dream turned into a painful reality.  Paid on the basis of the minimum “Silver” or “Local” rate many of the Silvermen and their families lived under extremely limited and precarious conditions.

As we’ve seen in our previous article describing the intricacies of the Gold/Silver Roll system, the horizons of the Silvermen and women and their families were institutionally and painfully circumscribed by the dual pay system.  They were destined to be born, live and die under impoverished conditions were it not for their organizational genius and their determination to “turn lemons into lemonade.”

The conditions we refer to were underscored by the array of hurdles placed in their way on both sides of the dividing fence.  None of the banks established within the American Canal Zone or within the jurisdiction of the Republic of Panama, for example, considered the Westindians worthy subjects of credit.  That immediately placed the banking system out of reach to the Westindians.  The possibility of retiring with a pension whether through any form of old age benefit or by disability was also virtually impossible.  As one can imagine, the implacable financial squeeze in which they were placed resulted in a proliferation of lenders with its accompanying set of abuses.

Among these new enemies to the already stretched pockets of the Silver people were the unethical and usurious practices of the many “financieras” or lending companies that sprang up like spores on the Panamanian scene.  This situation further shrank the low purchasing power of the Silver Roll which, in turn, crippled their social welfare network.  The white American workers- the Gold Roll- on the other hand, had basically all their social welfare needs met by the Panama Canal Company.

In January 1933 the Silver workers founded “The Silver Employee Death Benefit Association” organized with the express purpose of raising funds through the savings accounts of individual workers to assist their families upon the death of the worker.  Although it accumulated a substantial fund, this initiative was not welcome at all levels of employees because it had no further utility after the death of the depositors.

It was Mr. Foster Bournes, a Jamaican by birth and a militant spokesman for the workers, who supported the idea of organizing a cooperative credit union for the non- American workers, in its majority the black Silver Roll, although there were Asian and European members of the Silver Roll.  The concept of the cooperative was new in Europe and was being spread throughout the world.

In 1934 the United States adopted a federal law regarding cooperatives and two years later the Americans on the isthmus, organized a cooperative for exclusive use by them, the Gold Roll, barring membership to any non-American worker including the Silver Roll workers. Due to the rigid adherence to this type of sectarianism and exclusion they were not recognized by the American federal government through the Federal Credit Union Act and so the white Canal Zone workers adopted the regulations of the State of Delaware which did protect their charter.

Foster Bournes, knowing of this new banking entity contacted an American co-worker who worked in the same printing press where he labored and fully informed him of the details of this new credit union.  He, in turn, transmitted the news to his fellow members of the newly organized Union Local 713 UPW-CIO, who understood the situation and got to work.

Finally, in 1947, supported by the UPW-CIO’s main office, this group obtained the support of Canal Zone Administration and, in the absence of any legal basis or law in Panama or any experience in cooperative law, they managed to get an amendment passed to the Federal Credit Union Act in the U.S. to include the non-Americans in the Canal Zone area with favorable results.

In our next post, we will see how the credit union as well as the basis of the cooperative movement in Panama unfolded directly from the Silver townships of the Panama Canal.

**We are indebted to Mr. Anthony McLean, historian and owner of Etnia Negra de Panama for the background article outlining the history of the cooperative movement in Panama.