ADVERTISING FOR "SUCKER LIST"

D has more than once advertised in newspapers offering to send free to inquirers, maps and data regarding the Texas oil fields. These advertisements do not mention his oil companies but they are merely inserted to get additional names for his "sucker list."

We suggest that copy received from D be weighed in the light of facts set out above..

12. Promotes state and municipal legislation for the better protection of legitimate business and the public from abuses of advertising. But only flagrant misuses of advertising are prosecuted, and then only as a last resort.

Examination of X, said to have been the organizer of four Suit Clubs, will take place in Police Court according to information given out by the Prosecuting Attorney.

The warrant was issued after investigation by the Better Business Bureau in conjunction with the Prosecuting Attorney's office. Men who joined the clubs, it is charged, paid $1 a week until a certain amount had been placed to their credit. Then they were supposed to have the privilege of selecting a tailored suit. Once a week, it was advertised, a drawing would be held and suit given free.

Investigators working for the Better Business Bureau have been informed by local detectives that no one has received a suit free as far as they have been able to ascertain. A foreman in the Plant told detectives he was notified that he had won a $38 suit, but when he went to claim it he was informed that all suits at this price had been disposed of, but he could obtain a $55 suit by paying the difference.

According to the Prosecutor few men ever got suits for the amount they agreed to pay. After paying in the required sum, it was charged, the club members were informed that cloth had gone up and the suit would cost $70 or more. There are approximately 300 complaints in the Prosecutor's office, the police say, of persons who have paid their money and never have drawn a suit of clothes. Four shops were maintained in P―.

13. Secures adjustments for customers dissatisfied by reason of unfortunate experiences with advertised goods or service, at the same time taking advantage of the opportunity to educate the advertiser in error to better methods and to impress on the individual customer the integrity of most business.

This practice of deceptive cuts or illustrations is causing much dissatisfaction because, and is greatly decreasing reader-confidence

1. The reader always assumes, and rightfully so, that cuts are samples of the merchandise offered for sale (the only exception being announcement advertisements and others of general nature).

2. When it is found the style represented by a cut is not to be had, and, perhaps, never was included, there is a great big loss of good will.

Is it worth it? If you have experienced some of the reactions of the buying public as the author has experienced them, you would say NO. Besides, some advertisers seem to use such cuts with intent to mislead.

14. Takes the necessary steps to protect investment bankers from the unfair competition of fraudulent stock promotions, conserving money in legitimate business channels in the interest of banks and business generally, and maintaining the confidence of the public in the advertising of worthy investment securities.

The Minneapolis Business Bureau reports its experience as follows: The Bureau has consistently extended and received coöperation from the State Securities Commission in the realm of speculative financial advertising. The investigation of "Fraudulent Financial Advertising" is directed against those who seek to reach investors, big and little, with promises of handsome and impossible returns. Considerable research is required. This is especially true here because an amendment to the Blue Sky Law in 1919 prevents the newspaper advertising of any security not approved by the Securities Commission.

So to a very large extent, promoters of alluring but undesirable investments, securities, oil stocks and get-rich-quick schemers have resorted to sucker lists and direct-by-mail-advertising.

Again quoting Mr. Lee in Printers' Ink of June 16, 1921, the following summary is suggestive of the strides made by the Truth-in-Advertising Movement:

There was a need for the Model Statute. It reaches the fraudulent advertiser. Its validity has been upheld whenever attacked. It is used and not misused. It has helped adIt has helped advertising. It is the background of this association.

The year that ended on May 1, 1921, has been the greatest year in the history of the Vigilance Committee, speaking in terms of definite accomplishments. During that year approximately 1,000 cases were investigated, 650 of which have led to definite, successful results. Approximately 1,655 inquiries have been handled.

Figures reported by local bureaus for the year show that 6,815 cases have been investigated and that there have been but 51 prosecutions.

We no longer find it necessary to explain or defend the movement. Our mail is intelligent. The letters we receive show that the movement is understood.

We have gone safely in order that we may go far.

Now we have come to the point where we must expand. We are to stop theorizing that we are covering the entire country and actually cover it.

All of the Better Business Bureaus of the country are to be joined in an association. That association and the National Vigilance Committee are to be welded into one body. This plan was discussed at the convention of the

Associated Clubs and will be acted upon in a short time.

In order to make our work national in scope and in order to handle every case that comes up we must have contact in every county in every state in the Union.

I have said that we have relied upon We the Postal Law in certain cases. want the Model Statute to be the whole force so far as law is concerned. Through the new contacts which are to be created we intend to have the Model Statute enacted into law in every state in the Union. It has been asked why we do not endeavor to have the Model Statute made a federal law. This we do not want. There are several reasons. The most important one is that it is possible to obtain action more readily in the state courts than it is in the federal courts. There are generally not so many other cases ahead in the state courts.

At Atlanta a campaign for the purpose of putting the Model Statute on the legislative records of those states which do not now have it was discussed. It is now planned to publish a brief on "The Law and Misleading Advertising," which will contain a discussion of existing laws affecting advertising and the prevention of fraud and which will show why the Model Statute should be enacted into law exactly as it was first proposed by Printers' Ink. This brief will be given wide publicity as an educational force.

Unless we can put the law on the books of every state this movement cannot advance as it should. The Model Statute has been the ounce of prevention that has made it unnecessary for the advertising business to look for the pound of cure that surely would have been necessary had the Model Statute not been enacted into law in an increasing number of states since 1913.

LTHOUGH there is full knowl

edge of good and evil among business men, nevertheless, business ethics have always lacked the class consciousness of professional ethics and as a result, the ethical forces of business have not been well organized. Despite the Clayton Act and the Sherman Law, "fair and honest dealing" is as yet ill-defined; in many industries "trade custom" is still the only ethical code; what is condoned in one industry as a business necessity is condemned in another as business dishonesty. This confused and complicated situation has been hurt, rather than helped, during the past five years.

The mad scramble for the extra profits scattered broadcast before all industries by the War; the wholesale cancellations of contracts at the signing of the Armistice; the demoralization of both buyer and seller during the deflation period, are all reflected in business tendencies, commonly noted in many directions. And there is danger lest these tendencies develop and become fixed during the years of bitter competition that are before us. It is, therefore, significant that just at this time a national organization, composed of members drawn from every business field, should be formed with this avowed object: "To develop the highest commercial standards and to eliminate harmful business practices." This first cooperative association of the ethical forces of American business is known as the Commercial Standards Council.

The organization was born at a meeting in New York City in January of 1922. A group of men composed

largely of the officers of national business associations, called together by the author, met to discuss ways and means of assisting in the passage of the Judiciary Committee Bill (H. R. Bill 10159) "to further protect interstate and foreign commerce against bribery and other corrupt trade practices."

OBJECTS AND ORGANIZATION

For the purpose of fostering higher business standards and eliminating business malpractices, the Commercial Standards Council binds together commercial organizations of many types in many fields, and also firms and individuals interested in better business ethics. Its president, very fittingly, is a purchasing agent; its secretary, an advertising man. On its Executive Board serve a well known sales manager, the publisher of a business paper, representatives of the shipping and the paint and varnish industries, and a college professor. Affiliated with it are many business organizations representing credit men, purchasing agents, advertisers, sales managers, and manufacturers of such varied products as chemicals, printing inks, coal-tar dyes, office appliances, celluloid, disinfectants, hardwood lumber, paper, machinery, etc.

Its organization is informal. Membership is open to any association, firm, or individual interested in furthering the objects of the Council, and its funds are raised not by dues, but by the voluntary contributions of members. Headquarters are maintained at 19 Park Place, New York, where literature and membership applications may be obtained.

The work of the Council, administered by an Executive Board of seven, is to crystallize the best sentiment of American business, to inform business men and the public on questions of business ethics and to stimulate and direct efforts tending to the elimination of unfair and dishonest dealings. In the main, its work is being done indirectly through the direct efforts of the organizations affiliated with it. The Commercial Standards Council has set before it, as its first task, the elimination of commercial bribery, and to this end is conducting an educational campaign and working to secure the passage of federal legislation.

COMMERCIAL BRIBERY

The secret giving of commissions, money and other things of value to employes of customers for the purpose of influencing their buying powers, is an evil more widespread than is acknowledged. It is a peculiarly insidious and dangerous tendency since it blinds a man of character to his sincere, good convictions and forces him to yield to competitive pressure in the belief that to resist would be to court disaster. Commercial bribery, if allowed to proceed unchecked, will destroy legitimate competition, for it easily defeats honest advertising or efficient salesmanship and always frustrates efficient purchasing on the basis of quality and value. It affects vitally, therefore, both sellers and buyers, and is of direct concern to advertisers, salesmen, and purchasing agents; manufacturers, jobbers, and retailers. It adds tremendously to the cost of distributing all goods, and this unnecessary selling expense is naturally passed on to be paid ultimately by the American public. Unfortunately, the evil is spreading. From its very nature, if it is not checked, it will honeycomb all American business, because the most sincere

and honest seller of goods is powerless, no matter what the quality or price of his product may be, to sell to a buyer whose purchases are controlled by graft. It takes many forms; not only the direct payment of a cash bribe, but special rebates, double invoices, coupons redeemable in goods, elaborate presents, extra commissions for quantity orders or quantity sales. It is found most commonly in connection with the sale of basic commodities used in manufacturing and in foodstuffs; but it is reaching throughout the manufacturing industries and even into the retail trades. Some industries, notably the paint and varnish manufacturers and the shipping interests, have had the high moral courage to admit the evil, but many industries, where it is common, do not acknowledge the fault.

PROPOSED FEDERAL LEGISLATION

The work of the Federal Trade Commission, the passage of various state laws against commercial bribery, the cases which have come into state courts under these acts, have all called attention to the spreading evil. Publicity is the only weapon of the Federal Trade Commission, and the state laws, since American business has largely wiped out state boundaries, are enforceable only in a single commonwealth. Neither can adequately cope with the national situation. On January 27, 1922, a federal bill was reported in the House of Representatives, by the direction of the House Committee on the Judiciary, to eliminate commercial bribery. This proposed bill is a model based on the experience of state laws and the laws of Great Britain and her colonies. It contains several significant features, without which no commercial bribery legislation can be effective:

1. Its scope covers not only direct bribe giving, but the falsification of

documents and the solicitation of bribes.

2. It provides that "trade custom" shall not be admissible or constitute a defense.

3. It provides immunity under the law to the person who shall first report the fact, under oath, to a federal district attorney. Thus it breaks up the conspiracy of silence between bribe giver and bribe taker that other commercial bribery laws enforce on both parties, and makes the law, through fear of exposure, a preventative meas

ure.

4. It provides for a fine or imprisonment for proven breaches of the act.

AROUSED BUSINESS SENTIMENT Excellent and practical as are the provisions of this proposed federal law, the Commercial Standards Council appreciates fully that American business must clean its own house. The law is a broom for this purpose, but the broom must be wielded by the force of public opinion. The Council is, therefore, collecting facts and figures about commercial bribery. It is showing American business men the commercial shortsightedness and the dishonesty of the practice. It is rousing the better

business sentiment of the country.

American business today faces a hard task. Economic readjustment has brought tremendous competition. In many industries there must be great curtailment of production unless export trade is developed, and this must be developed in spite of a war-won, undeserved reputation for sharp dealing. American business is freer from dishonesty and malpractice than most national commerce. An American business man, A. T. Stewart, gave to the world a fixed price in retail stores, abolishing haggling barter and discouraging completely the age old proverb: "Let the buyer beware." Known prices are the rule-not the exception-in most branches of American trade. American business has abolished the giving of secret rebates against transportation charges. American business has established advertising and salesmanship upon an honest basis of efficiency not known elsewhere in the world. Through the Commercial Standards Council, the right consciousness for fair dealing, inherent in the average American business man, has the opportunity for expression and for organized effort to establish higher business ethics.

portant assets of any business. It is dependent basically on the confidence of the public. Public confidence, in turn, depends upon the real service to the community that the business performs.

Because of the recognition of this fact, many sets of "business principles," often unwritten, have grown up.

There has developed, also, a code of business ethics that, though unformulated, has perhaps obtained somewhat general recognition. There seems to be need of a simple written code. I propose the following:

1. A business, in order to have the right to succeed, must be of real service to the community.

2. Real service in business consists