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AMERICAN ADVERTIZING

HE American consumer pays annually from six hundred million to one billion dollars for advertizing. This astounding fact was pointed out by Paul T. Cherington, of the Harvard School of Business Administration, at the convention of the Associated Advertizing Clubs held a month in Toronto. ago Advertizing has thus become in American society a great economic force, involving two responsibilities, according to this expert for the advertizer, and for the consumer himself. "If he is to retain his position as a free agent in purchase," declared Mr. Cherington, “it is not only desirable but entirely necessary for the consumer to sift all claims, to make every feasible test of quality, and to watch carefully all price statements for the purpose of punishing any misrepresenter by turning his own. weapon upon him. The consumer holds the future of advertizing in the hollow of his hand and he is beginning to realize it." Pointing out that it is the consumer who pays such an enormous price for advertizing, Mr. Cherington went on to point out the necessity for a new standard of advertizing, and the new responsibilities it entails. He concluded:

"It carries with it new responsibilities for the advertizer and the seller, and it also carries with it new responsibilities The consumer is

for the consumer.

learning that if he is to preserve his

ability to spend his money wisely, he is obliged to use advertizing as a weapon for himself instead of allowing it to be used as a weapon against himself. The day of continued success of dishonest advertizing is past. But more important still is the fact that the consumer is rising and will continue to rise to smite the advertizer who induces him to buy to his own hurt.

"Truth in advertizing has come. "Before the advertizer, now, looms the need for being sure that his advertizing is not merely true. His next need is to be sure that it is of real service."

and codify advertizing ethics. These standards, it is claimed, represent the vital development of advertizing during recent years, and are a true contribution to better business from the advertizing clubs. Even tho they may not be literally followed by American newspapers, we learn, they are a set of practical workable ideals. mously passed by the newspaper advertizing men, these standards are the following:

As unani

lution of all commercial history." This revolution, we are informed, has been brought about by "branded goods," which are displacing unbranded goods in every corner of the globe. "Branding cuts both ways, and successful branding can only be carried out with a good name and with good goods." Mere naming of a commodity, says the London Review of Reviews, is not sufficient. A standard quality is essential. "It is necessary to persuade the public, the ultimate consumers, to make a trial of the special commodity, by inducing them to ask for it under its branded name. Thus the advertizement is

form card.

(4) To accept no advertizing which is antagonistic to the public welfare.

(5) To affect the largest possible cooperation with other newspapers in the same field for the establishment and maintenance of these standards.

"It is this function in the marketing tizing. of branded goods which is called adverIt is one of the tragedies of human existence that, whenever any really powerful factor is introduced into society, its power is usually first recognized and utilized by the sharks and unscrupulous swindlers who are characterized by their sharpness of vision, and who, in fact, live on their wits. This is just what happened to advertizing. Ever since the growth of the Press made advertizing, as we understand it to-day, a social force, it has had to suffer the abuses consequent upon its power being recognized by the wrong kind of people. For a long time, in fact, advertizing was almost a monopoly of the sharks, and it is perhaps the greatest tribute which can be paid to the late Mr. T. J. Barratt that he was one of the very first to realize the immense value of advertizing used in a thoroly honest and legitimate way for

the sale of a satisfactory branded article. Pears' represents the type of branded name which is the outcome of the name of the founder of a business; while 'Sunlight' is an outstanding instance of a 'coined' name which is intended to convey a characteristic of the product."

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European Views on Advertizing. UDGING from the symposium on the social value of advertizing published recently by the London Review of Reviews, England has not made the advance that we have in realizing the importance of this force toward facilitating sound business and increasing social economy. Bernard Shaw, for instance, says that advertizing "claims a privilege to lie which is neither justified by expediency nor sanctioned by ethics." Frederic Harrison declares that the "present practice of advertizing is to me personally an odious pest, and in my opinion is on social and economic grounds a public evil. I shun every tradesman who ad

vertizes, and I am preparing to form a league to boycott all such practices. Maarten Maartens confessed himself a victim of the advertizement, tho he was convinced that advertized goods are generally the worst. On the other hand, Max Nordau points out that advertizing is the unavoidable outcome of democracy "its obligatory corollary." He wrote:

"In an autocratic and even an aristocratic society you only need to impose yourself to the attention of one man, or of a few men whose authority enforces its rules on the whole community. The eye of Louis XIV. engenders masterworks,' as the French flatterer said. There, advertizing would be of no use. It is necessary and sufficient to please the King. His patronage carries with it that of the nation. But, in a democracy, a single, however exalted, person, or a small circle's favor, would do very little for you. You must impress direct the mind of the million. And to effect this there is only one means, advertizing.

"Of course, those who indulge in the mad theory of the superman may condemn advertizing as vulgar. But, then, let them be consistent. Then they must condemn also the chiming of church bells, which is the advertizement of divine service. They must condemn the Paris salons and all art exhibitions, for they are the advertizement of artists and their works. It would be much more aristocratic not to ring bells, but to wait nobly that the faithful arrive on their own impulse; not to exhibit creations of genius to the crowd, but to reveal them in the artist's studio to some individual connoisseur. But who dares to recommend that haughty method nowadays?"

The Supremacy of American Methods.

Na letter to the London Times, Frank Wise, president of the Macmillan Company of Canada, sounds a note of warning to British merchants and businessmen. American

vertizements, for instance, are very readable, very attractive, and so compelling that in grocery stores to-day it is becoming almost impossible to buy anything in bulk, thereby conducing very largely to the high cost of living.

“Breakfast oats are Somebody & Co.'s Famous in cartoons, bacon is So-and-So's in a bottle, sugar is that well-known brand that comes only in sealed paper bags; all, of course, as you will gather from the advertizement, to keep the wicked grocer from giving you sawdust instead of oats, poorly-cured pork instead of 'delicate bacon from dainty pigs,' to prevent his cheating you in weight of your sugar purchase, and to keep his careless assistants from filling everything with germs in the handling. Every now and then there are 'writeups' of some of the spotless' American factories, with pictures of the operatives in white caps and clean uniforms, all to prove how essential to your health it is that you should 'ask-for-and-see-that-you-get' Soand-So's particular product. There are offers of jewelry from the best New

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York shops, suits from Chicago, boots from St. Louis, furs, hats, automobiles from a hundred American cities.

"Now, to supply the Canadian demand for the most important of these articles advertized in American magazines circulating all over Canada, the American manufacturers have opened branches and factories in all the larger Canadian cities. The most extensively advertized safety razor has an enormous factory in Canada, while the same is true of the best advertized fountain pen, typewriters, several automobiles, prepared oats, plows, prepared foods, patent medicines, ink, packing house products, boots, watches,

electric conveniences of a hundred varieties, aluminium articles, candies, and, in fact, anything for which the demand offers an inducement."

"Beware of the Americans when

they come bearing newspapers," is the conclusion of this unconscious tribute to the supremacy of American advertizing methods.

NE of the leading causes of corporate mismanagement and corruption is the inertia of the stockholder, who is often the victim of his own diffidence. "Stockholder inertia" and the proxy system of voting at the annual meetings of corporations, according to a letter in the New York Times by Samuel Untermyer, lie at the root of the trouble. This has been demonstrated time and again, claims Mr. Untermyer. "Experience has shown that where the shares are widely scattered, there has not been an instance in which concert of action has been possible." Once in the saddle, the management of a corporation is enabled to perpetuate itself in reckless disregard

"1. That voting by proxy be abolished and that shareholders vote in person or by mail for specific measures and for directors, who must be nominated in advance of the meeting and their names submitted to the shareholders.

"2. That at least thirty days before the annual meeting there be mailed to every shareholder a detailed statement of the assets and liabilities and of the results of

ing Canada, writes Mr. Wise, and the American advertizement is creating an enormous demand for American commodities among the Canadians. The Canadians are furnished with a great Ideal of American news, but even more serious, notes Mr. Wise pessimistically, is the fact that they cannot withstand the appeal of the American advertize

ment. Times:

He informs the editor of the

"The Americans have made a close and successful study of advertizing. Their advertizing pages in the front and back of their magazines often vie very strongly with the reading matter in interest. Often the pictured part of the advertising page largely exceeds in space that part devoted to the description of the advertized article. Many of these pictures are in themselves artistic and undoubtedly attractive, and must certainly lead to the sale in Canada of enormous quantities of various articles. The prepared food ad

further elucidates the situation:

"If it were understood that the owners of the property were intelligently interesting themselves in the details of its operations independently of results, the managements would be alert to respond to the demands for information, and we would see the dawn of a new era in corporate affairs. The feeling of helplessness is doubtless largely responsible for this inertia in the case of the small stockholders, while the larger ones and the financial advisers on whom they rely are withheld from action and meekly respond to the request for their proxies and the exertion, of their influence in securing them, actuated by fear of reprisals or hope of favors at the hands of the powerful interests that dominate the management, generally with little or no pecuniary interest in the welfare of the corporation which they are thus enabled indefinitely to control. The shareholders seem strangely unable to realize how simple a matter it is for them to assert themselves."

other compensation paid to officers, and of every resolution that is proposed to be submitted at the meeting, that the stockholders may vote upon each such resolution by mail, and that no other business be transacted at such meeting.

"3. That the compensation of officers be fixed only by the shareholders, and that no contracts or arrangements in which any

of the officers are concerned shall be valid unless voted at a shareholders' meeting.

"4. That there shall be compulsory cumulative voting, which means that the minority shall be entitled to representation on the board of directors in the proportion of its interest, instead of the bare majority of the stock electing all the directors, as at present.

5. "That in every company having upward of 1,000 shareholders there shall be established a protective committee, to be selected by the shareholders, who shall forego office, and whose duty it shall be to suggest directors for election and advise the shareholders and watch over and safeguard their interests."

Something of this sort will have to be done, according to Mr. Untermyer, to protect those stockholders who under the present system cannot or will not protect themselves. The only alternative, an undesirable one, according to Mr. Untermyer, would be Government representation in the great interstate public service corporations. Mr. Untermyer especially emphasizes the importance of cumulative voting, a system under which, if there are nine directors, the holders of each one-ninth of the stock can, by combining, elect one director. Under this system four-ninths of the stock would have four of the directors. The minority would thus be fully represented, if not in control. "Such a system would stimulate the interest of the stockholders in the management, and would give to a substantial minority the opportunity to watch over their property and to share in the responsibilities of its operation." This method, by the way, is secured by the constitutions of some of the states, notably Missouri and Pennsylvania. It is permitted but not required by other

states.

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The Value of Honest Information.

HE small stockholder is the proletarian of finance. The surest and safest way to avoid exploitation, Arthur Prill warns him, in a series of practical points for the small investor, in The Magazine of Wall Street, is to steer clear of fraudulent stocks. Referring to mining stocks, Mr. Prill points out that since the mine in which market traders can safely deal must be a large one, reports on underground conditions by some of the foremost engineers will be available. "Become an insider. This is not so much a matter of money as of brains and work. Don't imagine that the big operators got their hold on bonanzas by sitting in a chair and dreaming about grass-root, milliondollar miracles. They studied the mining game until they knew all about the prominent men in it, as well as all that can be humanly known about the possibilities of our mining districts." Mr. Prill suggests subscription to reliable journals rather than any faith in the elegantly printed circulars of brokers.

"Honest information is the most valuable thing in the stock market. It (in regard to mining stocks) can be obtained in print only from a very few of the technical journals on whose pages the foremost engineers in the world are glad to see their names. This fact bears reiteration, for there are journals made up to look more or less like the good ones, but the imitation carries amid forty pages of honest, stolen copy, one or two pages of original lies, so cleverly arranged that only an expert can tell the difference. Yet from lack of advertizing pages we can see

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How to Avoid the Third
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EWARE of promoters!" is also one of Mr. Prill's warnings. This does not apply to the bona fide promoter of legitimate industries, he points out. But never buy into a venture whose profits are all in the future, unless personally acquainted with all the conditions and every person connected with the problem in hand, and then only when you are familiar with those who possess the controlling interest. Other trenchant advice offered by this writer is: (1) To know the fundamental factors of the commercial problem at hand, and the amount of risk involved; (2) to avoid correspondence courses in money-making, since education in finance can be

attained only by hard study reinforced

by experience; (3) to avail yourself of

the manuals of statistics that are on the

market; (4) to place yourself in a position to get what is practically inside information. How necessary this is, yet how uncommon, is shown by the characterization made by a Broad Street wizard whose magic power has been rudely chilled in Sing Sing. Mr. Prill quotes his description of the three classes of "suckers."

"Those who bite once and quit; those who don't quite understand what happened to them the first time and take a second shot, after which they throw up the game; third and last, but not least, thank hell, there's the sucker who was born with a green certificate in his mouth. When he has chewed up one, he isn't happy till he gets another. He pays five dollars a year for a safe deposit box in the biggest security vault in town and into the box he places, with something akin to religious veneration, share after share of embossed paper whose occasional great merit is that it is non-assessable. In other cases the box may fill, but the assessments, like the widow's oil, run on forever. This sucker never gets tired. Him we have always with us."

The first essential, Mr. Prill con-. cludes, is "to get off the sucker list." He concludes his advice as follows:

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CURRENT OPINION

143

veloped by much poring over balance sheets. If you will study the best financial literature until its interest captures you, it is certain that eventually you will sense fraudulent stocks the moment they approach you; you will learn to keep your money in a safe place until a safe security at an attractive price is offered. Then the pleasure of winning and doing it not by luck but by the conscious force of your own mentality, will be worth more than the coupons as you clip, clip, clip."

WALL STREET NEURASTHENICS

A

FTER examining the entire office forces of several of the largest New York banking institutions, the first report of the new Life Exension Institute, recently published in the Wall Street Journal, informs us that the financial career is one most dangerous to life and health, and that forty per cent. of the men and women employed in Wall Street instiutions who believe themselves perEectly healthy and efficient in business are in need of medical attention. The Life Extension society was founded by Harold A. Ley and Professor Irving Fisher of Yale University, and among he specialists interested and active in ts work are Colonel William C. Goras, the sanitation expert, Elmer E. Rittenhouse, Frank A. Vanderlip, Euene L. Fisk, Ex-President Taft, and thers. Among the findings of the ociety in Wall Street are the followng, according to Mr. Ley:

"Practically all the deadly diseases that arry business men off prematurely are urable in the early stages. Most men ave them for years, and they are usually n an advanced stage, often incurable, when the sufferer becomes aware of their xistence.

"Of the ten per cent. of Wall Street en who need immediate attention, most ave kidney or heart trouble. The others re mostly victims of unhygienic habits, uch as fast eating and overeating, negect of exercize, and improper postures Et desks. Many have adenoids and flatoot, and similar troubles that the averge man considers trifling, but which the rained scientist knows are detrimental to hysical or mental efficiency.

"Business efficiency is greatly increased y the selection of men physically fit for he work that will come to them in the nes along which they are started. It is so important to keep them physically fit fter they are employed. There is a emendous waste going on constantly om inefficiency, due to impaired health.

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