If the Government is to pay for the advertising, impartial recognition of merit, business principles, and political prudence will forbid discrimination. The proposed appropriation is $2,500,000. How far will that go in advertising the bonds in all the newspapers in the country?

"Publicity and appeal will sell the bonds even without any advertising. The press will give its powerful support to the cause, as it did for the Liberty Loan. But if there is to be any advertising, it should be ordered and paid for by private promoters of the bond subscription. The bankers, merchants, the multitude of organizations that will join in the work can again render service of 'immeasurable value' in making a market for the bonds. They can without fear and without proach 'select' their mediums, they can discriminate, and complaint will be heard. By these agencies and the loyal efforts of the newspapers in their editorial and news columns the bonds will be sold. But the attempt to employ Government money in any adequate amount for the buying of advertising space would be productive of heartburnings, grumbling, resentment, and, we fear, of much disagreeable scandal."

re

no

Mr.

[Following is the letter from Houston to the Times in reply to the newspaper's first editorial.]

MURRAY BAY, CANADA,
September 15, 1917.

To the Editor of the New York
Times:

There was more than a million dollars of paid advertising devoted to the sale of the first Liberty Loan, a fact which your editorial in the Times of the 13th overlooks. Every line of it was paid for-but not by the Government. In six great bound volumes examples of this advertising, from every one of the twelve Federal Reserve Districts, were brought together and presented to Secretary McAdoo in Washington by the National Advertising Advisory Board, which had been constituted by the Associated Adver

tising Clubs to serve the nation throughout the war without pay. In telegrams, in letters and in person Secretary McAdoo stated to the Advertising Board that this paid advertising had been of "immeasurable value in making a market for the Liberty Bonds"; he gave it as his judgment that it stood second in service only to the direct personal work of salesmen from banks and bond houses.

Many columns of this advertising appeared in the New York Times and in other leading papers throughout the country and the papers were paid their full rates for it. And the Government didn't pay for it. Patriotic bankers, merchants and other business men contributed space in the papers for which they had contracted or they bought and paid for additional space; the New York Stock Exchange carried through a notable campaign of paid advertising; the bill posters of the country, the street car and electric sign advertising interests, the foreign language newspapers generously contributed paid space-the total cost of space for the entire campaign was in excess of a million dollars. Advertising writers and illustrators, largely under the direction of the National Advertising Board, prepared the copy and designs-and all without a dollar's cost to the Government.

In fact, here is the distinction that was made: The Government bought the paper on which the Liberty bonds were printed (at least it has never been announced that paper manufacturers contributed it) but the Government did not buy the paper space on which the advertisements of the bonds were printed. As I have stated, that space was paid for by business men and by business organizations. In a word, a small part of the people did what all the people, through their Government, should have done; for we surely believe, in waging a war for democracy, that the people are the Government-not some of them but all of them.

There are two points strongly urged in your editorial which seem impressive, almost conclu

sive, but they appear far less formidable when looked at in the light of all the facts, some of which the Times could hardly have known. The first is your own point that "it is not going to be necessary to promote the sale of bonds by paid advertising." In the first Liberty Loan paid advertising was used and Secretary McAdoo bears vigorous witness to its great value. It certainly would not be of less value in the forthcoming loan. And it happens that the high degree of value which paid advertising rendered the first loan was fully demonstrated. In Rochester, Detroit and Cleveland, where the advertising was most efficiently done, the number of bond buyers secured, in proportion to population, was far beyond the normal ratio for the country. For example, over 60,000 individual buyers were obtained for the bonds in Rochester, equivalent to a buyer in every family. This remarkable result, far in excess of the average for a city of the size of Rochester, was clearly due to the advertising. The Rochester newspapers gave as much editorial and news support, on which the Times properly lays much stress, as did newspapers in any city, the Rochester bankers and business men were as generous of their time and as efficient in using it as men in other cities-but there was something in and through and behind all these efforts, the advertising, with its insistent and continuous call for action. That is the place and function of advertising on the broad background of news and editorial comment supplied by the press it focuses the mandatory appeal to act. Hoover found this out in his work for Belgium. News and editorial space gave information but the final spur to action was the advertising. This has been demonstrated again and again. The experiences of Rochester, Detroit, Cleveland, among larger cities, and of Joplin, Mo., and of Muncie, Ind., among smaller cities, on the Liberty Loan, are only fresh demonstrations. Mr.

Bonar Law made the same demonstration in England. The press of Great Britain was as patriotic as ours and gave as much attention in news and editorial columns to the various Government loans; but the Chancellor of the Exchequer, beholding the success of advertising in raising the Kitchener Army, made an experiment of advertising in floating loans. The result convinced him so completely of its efficiency and economy that he put advertising, in the eyes of all the world, to the greatest test, probably, that it has ever met. He gave it the supremely difficult task of making a direct public market among the people for the Victory loan of $5,000,000,000, and that at an interest rate of five per cent when the leading bankers in London gave it as their combined judgment that the rate should be six per cent. Everyone knows that the Victory loan was over-subscribed by more than five million people at the five per cent rate, thus saving the English Government fifty million dollars a year for the period of the loan. The exact cost of the advertising I have not been able to learn but the best available information is that it did not exceed two million dollars, a much smaller selling cost than had ever been known before on a bond issue. What has been done in England can be done here, with an effective, controlled campaign of paid advertising; probably even a greater result can be obtained, for the whole world has long done us the honor to say that our advertising is better done than elsewhere and that the American people read and are influenced by advertising as are no other people.

The second point on which your editorial lays stress is the statement of Secretary McAdoo, which he made to our Board, that the Government, if it advertised at all, would have to advertise in everything. That at first glance seems to be an irrefutable argument. But it assumes that the Government is unable to discriminate. In fact, as we all know, (Continued on page 100)