THE CHICAGO 'BAJVK.E'R
Founded in 1898
Volume xxvii	CHICAGO, JULY 10, 1909	Number 2
was proven conclusively by careful analysis of the results of a special canvass in Virginia that the bankers who made the worst failures in 1907 and 1908 were bad advertisers, or did not advertise at all. You hear bankers say that advertising attracts undesirable business, the kind that will leave you in a pinch. Of course this is wrong, and any one who is familiar with advertising knows it is wrong. The fact is that proper advertising creates confidence in the minds of the public, which is one of the essential elements in any successful endeavor to prevent panics.
In fact I do not fear successful contradiction from any man in this audience when I tell him that panics spring more from the fear born in ignorance than the lack of confidence which comes of perfect knowledge. I tell you further that if the great bulk of business men were more familiar with the methods of banking, with the principles of sound finance, there would be greater difficulty in creating that degree of fear which finds its expression in a run.
This brings me to the whole subject of education, which is a synonym for advertising.
The bankers are realizing that as a class they have been grossly misunderstood. The tendency is for bankers to get in closer touch, closer personal relationship with the general public, with business men as a class, and there is an endeavor to impress upon the average man that a banker is not alone a money man, but he is a friend and counseler. That I do not overdraw this in any particular, we have but to refer to the funny papers of two or three years ago where the banker is always illustrated as a cold blooded man of fabulous cupidity and cunning.
As your president, Mr. Reynolds of the American Bankers Association recently said at the meeting of the Iowa bankers:
“We are frequently told by public speakers that there is a prejudice in the minds of many people against bankers. I think it is the duty of the banker to take an active interest in politics, to the extent of wielding an influence in all legislation. He can best do this through helping to create public sentiment on the subject, for if he can get any considerable number of the constituents of a representative in congress to petition him on any subject it will have more influence than for one man, no matter how prominent he may be. to make a similar request.”
President Lacy of the St. Joe, Missouri Tootle-Lemon National Bank voices the sentiments of many bankers when he says:
“There is no reason why the public should not know that a bank is well run and sound to the core, any more than there is reason why it should not know that any other corporation is properly conducted.”
To-day the banker understands the public demands there shall be but one code of business morals, and one law for man, whether he is a part of a corporation or stands alone.
(Continued on page 21)
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Bank Advertising from the Standpoint

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A whirlwind talk, by E. St. Elmo Lewis, to the Wisconsin bankers, on board the Steamer Virginia

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on a demand for money, and on the ready money of his territory, is working along the same logical lines as the manufacturer or the retailer.
It is a pressing necessity for him to settle what his attitude toward this question of advertising shall be for he cannot escape the result of an expenditure of close to one billion dollars which is being made for printer’s ink every 12 months.
It is not necessary for me to defend the practice of advertising among bankers when such concerns as the Cleveland Trust Company, of Cleveland, Ohio, the Peoples Trust Company of Pittsburg, and the DeKalb Exchange Bank of Texas, and others scattered through the east and the far west, are through printer’s ink bringing money to their territories that otherwise would stay in the localities where it originated.
I was told the other day by a banker of Pittsburg, that the large sums of money which the advertising Pittsburg bankers had spent in advertising during the last three or four years, had been a material assistance in reducing the difficulties during the recent panic. There is hardly any doubt but what Cleveland and Pittsburg have obtained the large amount of money which they use in the development of their iron and steel business through advertising 4 per cent deposits, and the 70,000 depositors who have helped make the Cleveland Trust Company a great institution were made in the majority by advertising.
Let us see how advertising operates. In 1907 I visited a small town in Missouri, in which three banks had made an agreement among themselves not to advertise in any manner, shape, or form. I took occasion to procure a list of the property holders in that town and a radius of fifty miles. I made an investigation by mail and I found there had been over $100,000 invested in securities as advertised by Chicago and New York houses, taken from that territory. This money could just as well have been handled by the local banker, but the local bankers thought they were doing a very smart thing when they made the agreement among themselves not to spend any money in educating their own people to do business with them. I don’t know what they call that in Wisconsin.
No banking business or any other business, can build a Chinese wall about his territory. There has been nothing discovered so far in the history of the world that can overcome good advertising except better advertising.
There is no bank or financial institution in this United States that cannot have its profitable business increased by advertising. It
I appreciate very much indeed the honor expressed in the invitation to address you on a subject which has for so long been considered lacking in essential dignity when applied to banking. In point of fact, a reference to the old papers of the 18th century will show that banking was among the very first businesses to be advertised, and the money changers of Rome were frequently the patrons of the town crier and the poster.
I have not come here this afternoon with any cut and dried recipe for the writing of advertisements, or for the conduct of an advertising campaign. After 18 years in the practice of advertising I believe I have convinced many business men that certain rules and principles as applied to advertising may be safely followed when applied to any line of business dependent on public confidence for its patronage.
It is probable that we shall have to proceed by a series of negations, and that we shall suggest what we think it advisable to do by criticising what we think is badly done. I do this because it is generally admitted that about 75 per cent of the things done by general advertisers is wrong, and about 90 per cent of the advertising done by bankers is wrong.
This is not a glittering generality—statistics prove it. This is a tremendous loss, so it is; but it is accepted as a matter of course, and advertising is charged off as an expense, and therefore the amount is too often limited to what you can afford to lose.
That is based on a fallacy however. This attitude is part and parcel of the mental equipment of the man to whom a new system of handling transit items is red-tape, getting new customers through advertising and educational work is theoretical and cumbersome when you can take them away from the other fellow by some special accommodations. They resent, in scorn and sometimes with contumely the idea that any outsider can give them ideas. To all suggestions there comes the one bland answer—“banking is different.” I haven’t the time nor you the patience to waste with that man, more prevalent in old communities where men have a chance to become petrified in an attitude of self-adoration.
The best bankers are realizing that advertising is a commercial necessity, and among English accountants I believe it is the custom in determining the good will of a going business, to base it on the amount spent on advertising. I understand this was practiced by Mr. Morgan in a recent consolidation, when he rated a concern’s stock at 20 per cent from par, because it had never done any advertising.
That is one of the practical effects of advertising, that a concern with a well advertised trademark is accepted to be a better risk than a concern making goods for other houses, as Havemeyer once said he would rather have a well known trademark than a million dollar plant. The banker who places his trademark