( Originally Published 1902 )
Advertising Stocks.—Nowadays there is a tremendous lot of financial advertising spread broadcast. It looks at you from the columns of your morning paper-it is in evidence in your favorite weekly and it is also carried by about every magazine. Persuasive prospectuses, carefully constructed circulars, and well-worded letters travel in large quantities through the mail.
This branch of advertising has developed into a great business by itself, and will see still greater development. The wealth and restless energy of this country are constantly projecting new enterprises in the form of stock companies. In order to sell stock in these enterprises, advertising must be done —the only exception is where the stock is taken in blocks by persons rich enough to do so and sufficiently familiar with the situation to make advertising unnecessary.
The advertiser of stocks apportions a certain amount of money for advertising in publications—for prospectuses-for circulars or booklets and for correspondence. He selects the papers that he thinks will reach the most desirable people who may be induced to invest. In preparing the advertisements he is guided altogether by the nature of the investment—whether ultra-conservative or otherwise. He mentally dwells upon the promising profits of the enterprise, and substantiates this with facts and figures. He speaks of the ability and personnel of the officers and directors. He tells the amount of the capitalization under which the company is incorporated, the par value of stock (whether common or preferred), and its selling price. In fact, he gives in a well-written summary the ideas that are detailed more fully in the prospectus, which will be sent to who-ever responds to the advertisement. His advertising campaign is usually well considered and executed—generally with the assistance of an experienced advertising man.
Advertising Bonds.—There is a form of advertising much more conservative than advertising stocks. Bonds are sup-posed to be gilt-edged investments that do not require any great urging to sell. The value of a stock may be doubtful, but the value of a bond is always something—backed by securities to make it so. In advertising bonds, adjectives are at a discount, and, as a rule, but the bare facts are given. This applies to the prospectus, circulars and letters that may be sent out regarding the bonds.
Prospectuses.—To write a good prospectus requires such a high order of capacity that few writers are competent for the task. It must be ample in information, yet concise in construction-enthusiastic in its tone, yet conservative in its utterances and suggestive of profitable possibilities beyond the actual statements made, yet never at any time stepping beyond the boundaries of actual facts.
Usually the writer first mentions the company, then its capitalization, the state under which it is incorporated, the par value of shares, the price 'at which these shares are offered, and the nature of these securities. Then he gives the names of the officers and directors, and whatever remarks he thinks advisable regarding the standing and ability of these men. Then he tells where the enterprise is located—its nearness to railroads or ocean ports and bases of supplies. He gives some history and geography regarding the proposition, then proceeds to give some facts as to the profits. After which he recapitulates in a paragraph or two the arguments before given, which, together with the price, makes the prospectus a whole and convincing plea for the proposition.
Frequently with a prospectus are gotten up a number of circulars for the use of various sub-agents or "fiscal agents," who agree to push the sale of the stock for a certain considerstion. And a " follow-up system "—consisting usually of three strong letters—is generally put in operation to clinch the results of the advertising, prospectus, circularizing and letter writing.
Bankers and Brokers' Advertising.—The advertising of bankers, brokers, fiscal agents and those who sell bonds, stocks and securities generally varies to a great degree. There is no question that advertising is valuable to them and appreciated by the great mass of people ready to enter in upon financial and speculative enterprises. There is also no question but that dignity must be a feature of such advertising and extreme judgment used in the construction and placing of advertising. Some of the world's highest intellects are engaged in financial enterprises, and as advertising now is a most important factor in such operations, it stands to reason that the advertising put out by Wall Street; New York; State Street, Boston, and other financial centres must be a product carefully considered and eminently qualified to fit financial needs.
Advertising Banks and Trust Companies.—The growth of this form of advertising within the past few years has been most marked. Appeals for business are now made by advertisements in newspapers, weeklies and magazines, as well as by circulars and booklets, to the world at large, by banks and trust companies. They solicit savings accounts, check accounts, issue letters of credit, and some say that they are ready to look after properties as administrators, executors, guardians or receivers. Some advertise to offer advice on investments, and others speak of the importance of having safe deposit boxes. Every form of banking business is receiving an advertising impetus—an impetus quite in harmony with twentieth century conditions.
Banks and trust companies have something to offer the community, and this something can be advertised as well as anything else. Great care, however, should be taken to see that the advertising is dignified and clean-cut. Familiarism and sensationalism are as far removed from banking business methods as they can possibly be from any business or profession.
Banking by Mail.—Under this caption, in Advertising Schemes, elsewhere in this volume, is a well defined plan of banking by mail. There is no question but that this idea will meet with favor by many banks and investors.