Wednesday, May 22, 2013

May 22 (1918) National Banks Authorized to Subscribe to Red Cross; "necessary for the continued prosperity of the enterprise"

Poster showing a young woman clutching an American flag as she calls out, with Red Cross symbol and U.S. Capitol in background. c1918


On this day in 1918, the US Congress amended the National Bank Act to authorize national banks to give a portion of their net earnings to the American Red Cross.  It was part of President Woodrow Wilson's "Red Cross Week" which ran May 20-27.  

The campaign was very successful, well exceeding campaign goals, and today is a case study in effective advertising. The campaign not only inspired people to give to a very unpopular war, it created intense amounts of pressure to do so.  So much, in fact, that Albert S. Gilbet, Esq. argued to the Internal Revenue Service that contributions to the Red Cross were a "necessary" expense and therefore should be deductible. His argument was reprinted in the New York Times in March 1919.

"It must be borne in mind that practically every business trade and profession was organized for the purposes of these drives. It must be borne in mind too that tags, report cards, and other evidentiary matter was distributed indicating the concern or concerns that did not contribute to these drives. 

In what position would a concern find itself if it became know that it had refused to contribute? How long would a retail establishment survive a public statement that it had refused to contribute to the Red Cross or for the relief of soldiers' families, and how far do you suppose an explanation would go with the public if the Directors had no power to make those contributions? 

Whether in fact the contributions were made because of the patriotic interest of the Directors and officers of the corporations or whether they were made because of the conditions as I have described them, the fact remains that they were absolutely necessary for the life and continued prosperity of the enterprise."


Image from the Library of Congress


References:
National Bank Act
http://fraser.stlouisfed.org/docs/historical/congressional/192002sen_nbact.pdf

Wikipedia Entry defining National Bank Act
http://en.wikipedia.org/wiki/National_Bank_Act

Advertising Educational Foundation "Red Cross Week" Case Study, http://www.aef.com/on_campus/classroom/case_histories/3002

Mr. Gilbert's Letter in the New York Times
http://query.nytimes.com/mem/archive-free/pdf?res=F30F13F8355D147A93C4A81788D85F4D8185F9

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Flannery O'Connor

You shall know the truth and the truth shall make you odd.