T

HE further a bank or trust company reaches out in the effort to extend its range of business, the more necessary it will be to rely upon interdependence among its selling forces. Perhaps I may illustrate the point by the Bank of Italy's campaigns among the sailors of the Pacific Fleet. The campaign is started by a series of homely direct advertisements in navy publications showing results of continuous saving on a small scale. Then, by permission of the commanding officer, the new business man addresses gatherings of marines and sailors in the Navy Yards and on the vessels of the fleet. Enlarging on the themes already developed in the advertisements, he points out to the men how they can prepare now for the business or trade which they wish to follow after leaving the service. Similar campaigns worked up in the same way are carried on in the department stores and industrial plants. For out of these young people working in humble and subordinate capacities will come not a few of the stable citizens and business men and women of the future if they are trained now in the habit of thrift and wise saving.

But it will be readily seen that programs like these cannot be carried out by an advertising department or a new business department acting independently. They must be developed by a department embracing all of the selling forces of the bank acting together as a department of business extension. It must be further evident that there should be one person who can act as a clearing house; who is, first, in a position to control the advertising and see that it is expressing the real personality and purposes of the bank; and, second, in a position to influence effectively the working organization and see that the promises of the publicity department are carried out.

Our own solution for this is simple. The head of the business extension department is ex-officio chairman of an Efficiency Com

ployees themselves. That, as I have said before, is the crux of the problem. That is often the weak link in an otherwise wellforged chain.

Undoubtedly the numerous and generous efforts of modern banks to help their employees have arisen largely out of the realization of the advertising man that he was powerless without a loyal and enthusiastic corps of workers. The chatty house organ, the ball teams, the monthly dinners, the pension plans to provide for the clerk's old age, the group insurance to take care of his family, the bonus systems and purchasing clubs, have probably all had their first inspiration in the advertiser's demand for a force inspired to back up his efforts. They are all good ideas in themselves, too, and every progressive bank is already adopting a certain number of them as part of its internal policy. But considered as an aid to advertising, they do not have magic results.

No amount of loyalty in the abstract, for instance, seems to make a bank teller read his bank's advertisements. You may publish an ad that will bring in a tidal wave of favorable and interested comment from the public; you may publish another that will bring down a storm of criticism on your head-also from the public. And in both cases your entire bank force may present a front of serene unconsciousness that either ad has been published.

Weekly Business Extension Meetings

The result of this has been that ingenious advertising managers all over the country have laid awake nights to devise methods of awakening the force in spite of itself to the purposes of the bank's publicity. They have set up bulletin boards, inaugurated morning lectures, evening lectures, afternoon gettogether meetings, and employees' contests. And these are also excellent devices. But don't try them all at one time.

In reading some of the enthusiastic accounts of this work in financial journals, I sometimes wonder where the bank teller is going to find time to balance his cash or eat his dinner. Our own method at the present time and I regard all methods as temporary and subject to change the moment they cease to get results-is both more informal and more direct. We regularly invite not more than three or four men from other departments to our weekly business extension meetings. We talk over the latest plans of our work and point out the way in which we give credit on the central file for every new account brought into the bank.

We also regularly, but quite informally, visit the heads of departments and ask their advice about specific pieces of advertising copy. Often we get some constructive criticism. More often, perhaps, we do not. But in any case we get the men to focus on the advertisements.

My final suggestion has to do with the relationship of advertising copy to the "tie-up" problem. If the advertising man wants the bank clerk and the bank's solicitor to "tieup" to his publicity, he must give them copy they can tie up to.

The "Tie-Up" Problem

Except perhaps in the small country bank, the man in charge of the advertising is rarely the creator of his bank's policy. He cannot fashion according to his desires a 100 per cent. institution, and then introduce his model to the public. He must take his bank as he finds it. And a bank at best has none of the immediately tempting and inviting qualities of a department store, let us say, or an automobile establishment. Its traditions of stability and sound financial judgment, which should be its best selling arguments, appeal only to a financially educated minority. And the advertiser must make his appeal also to a financially "illiterate" majority, who, at the present time, are largely spenders and not savers.

Many of the recent booklets on trust service and the thrift idea have met this situation amazingly well by dramatic human interest appeals. But a large part of the newspaper and magazine copy still does not. Instead, it makes lavish and superlative promises of a general nature that no set of human beings this side of the millennium could tie up to.

Our own effort has been increasing in two directions. In the first place we make definite promises of certain practical services to which we know our force can be trained; and second, we are specializing in what I might call character advertising-which aims to delineate those qualities of the bank that are particularly true of our institution and make the Bank of Italy stand out as a distinct personality in the public mind.

The whole problem of "tieing up" the imaginative conceptions of the advertiser to the actual working operation of the bank, is, after all, one of the most inspiring problems in the publicity game. Many a bank seeing itself through its advertiser's eyes, as it could be and should be, has found u new conception of its own possibilities and of its duty to itself and to the public.

BUSINESS

T

HERE is no magic in the word "Budget." That the mere passage of the Budget and Accounting Act should, in a night overthrow systems of Government appropriations and expenditures, eliminate waste and extravagance, both intentional and inadvertent, make an appropriation the maximum instead of the minimum basis of expenditures in a given year, and return money forthwith to the pockets of the taxpayer, is the iridescent dream of an abandoned idealist. The satisfactory working of a budget system must come through a process of evolution, not revolution; it involves not only the creation of the budget machinery, but the establishing of an effective working and completely harmonious relation between the spending departments on the one hand, and the Appropriation Committees of Congress on the other.

Authority of the Budget Bureau

The law creating the Budget Bureau is very short as short and simple as the Annals of the Poo, consisting of seventeen short paragraphs comprised in less than four pages of the printed law. It is, and must be, only an outline of the various activities. A budget system in its entirety consists of three steps:

1. The preparation and presentation to Congress by the executive of the budget, as made up by the director and approved by the president. The law is specific in its statement of what this budget shall contain, namely (a) Information to Congress regard

ing the financial status of the Government; its expenditures and receipts for the current year, the preceding year and the next ensuing fiscal year for which appropriations are asked, and (b) the recommendations of the President for new taxes, loans on other appropriate action to meet any apparent deficiency between the estimated receipts and the estimated expenditures, It is in short, the financial program of the Executive for the fiscal year.

2. Consideration of the Executive recommendations, appropriations of money by Congress to meet the expenses of the several departments; this is a necessary step under our form of Government, since the power of Congress as respects appropriations is defined in the Constitution itself. Time and a more complete co-operation between the Budget Bureau and Congress will gradually reduce any gaps between the hudget estimates and appropriations actually made pursuant thereto.

3. Supervision by the Executive, through some chosen agency, of the expenditure of funds by the spending departments after the appropriations have been made by Congress.

Economies in Initial Budget

The savings, or if you please, the economies, which have been shown to result in the expenditures of 1922, should be considered in a threefold aspect. First, those traceable directly to the fact that the President has for the first time assumed his proper place and duties as the head of the business

organization, and as such, by continuous Executive pressure for economy, has compelled the department heads to produce results.

Second, those economies which have resulted from better business methods and the establishment of co-operation between the departments through the various co-ordinating agencies, and

Third, those savings which are the result of that natural competitive zeal, under which the department heads have, themselves, by greater forethought, more skillful advice and judgment, the finding of more favorable markets and securing better prices, and you may add, if you insist, some measure of good-luck, put themselves in accord with the principle that "extravagance has become dangerous and economy fashionable."

Reforms Effected in Government Business Control

The remedy sought through the Budget Bureau was found in a system of co-ordinated control for which the director cheerfully acknowledges his debt to his experience in France. There were established in turn by Executive order, through the budget director, as his agent, the following:

A purchasing board, for a unified purchasing policy, with a complementary liquidation board for disposing of the large surplus material stocks now in possession of the Government; enormous losses have been incurred by the actions of department officers who unintentionally bid against each other in buying and by uncorrelated disposals of surplus, goods left on hand when the war ended. An organization of "corps area coordinators" has been created; the territory of the United States is divided into nine areas, corresponding to those of the nine army corps, the purpose being to locate and report surplus accumulated stocks, and to determine the field needs of the separate departments and establishments.

A surveyor-general of real estate is to determine the occupying of premises outside the District of Columbia by Federal employees, thereby cutting off waste through leasing of private premises when the Government has in its own buildings space that might be used. There is also a motor transport agent, to stop the waste arising by absolutely fixed assignments of motor vehicles to executive departments and independent Government establishments. The traffic business of the Government has involved heavy overlapping of service and duplicating of effort; therefore a Federal Traffic Board will

aim to reduce the Government transportation bill, estimated at approximately 200 millions a year; "the savings to be effected through proper handling of the Government's traffic, including reclassification, the proper routing of its business, and a reduction in number of the various rate groups and departmental traffic departments, is difficult to compute, but should be very large."

A Federal Board of Hospitalization is intended to co-ordinate and thereby make more effective a half-dozen instrumentalities whose 1921 appropriations called for about 746 millions. These bureaus now engage 47,512 persons, with a salary cost of about 851⁄2 millions, and control properties representing hundreds of millions; it is necessary that co-ordination and method be introduced, to save overlapping of service, over-employment, needless rentals, and many other items of waste. A Federal Specifications Board is to "compile and adopt standard specifications for materials and service and to bring specifications into harmony with the best commercial practice." Finally, an Interdepartmental Board of Contracts and Adjustments whose duties are to standardize the forms and methods of contract letting to the end that a uniform policy may control the making of such contracts.

The savings thus accomplished and traceable to the causes I have given, out of the appropriations for the fiscal year 1922, are summarized in the Report of May 8th as follows:

The estimated expenditures for 1922, as thus revised, show a total, including interest and principal of public debt, and investment of trust funds, of $3,922,372,030, as against a total actual expenditure in 1921 of $5,538,040,689.30, or a reduction of $1,615,668,659.30, a decrease of 30 per cent. But these figures mean little unless the ordinary expenditures for the operation of the routine business of the Government, generally subject to Executive control, are segregated and considered entirely apart from the others, as respects which, (a) those fixed by Congress and not subject to modification by Executive control, (b) reduction in principal of the public debt, and (c) the investment of trust funds, no reduction could be made by Executive authority alone. Deducting all these, and also what are really operations in capital funds through the medium of war corporations, then for the ordinary expenses of the routine business of the Government we have in March estimates $1,765,875,672 as against actual expenditures in 1921 of $2,673,435,079, or a total reduction of $907,559,407.77, a decrease of over 36 per cent.