History and Traditions

"All things should be laid bare so that the buyer may not be in any way ignorant of anything the seller knows." - Cicero

The Ancient Problem of Truth

The major concern of Better Business Bureaus from their inception until today has been an ongoing problem of ethics which was clearly stated by Cicero more than 2000 years ago when he wrote to his son, Marcus:

"All things should be laid bare so that the buyer may not be in any way ignorant of anything the seller knows."

Apparently, even then there was a recognition of "truth in advertising." However, advertising as a formal activity first appeared in the United States in 1704 with an offer for patent medicine in the Boston Newsletter.

From that date until 1880, no restraints on advertisers existed except as individual personal ethics dictated. However, the media did feel the effects of nonbelievability of advertising, and the first public acknowledgment of media responsibility in the public interest appeared in the Farm Journal for October, 1880. The publishers declared:

"We believe, through careful inquiry, that an advertisements in this paper are signed by trustworthy persons, and to prove our faith by works we will make good to subscribers any loss sustained by trusting advertisers who prove to be deliberate swindlers. Rogues shall not ply their trade at the expense of our readers, who are our friends, through the medium of these columns. Let this be understood by everybody now and henceforth."

Responsible business sensed the tremendous value of advertising in the movement of goods and services, but so did hordes of fly-by-night operators. Activities of those who used the mail to perpetrate their frauds upon the public were so numerous and so blatant that in 1872 Congress empowered the Post Office Department to take action against them.

Self-Regulation and the Establishment of BBBs

Honest advertisers faced a dilemma similar to the one honest advertisers face today. How could they protect this important tool of their trade without destroying it? How could it be made clear to the public that the poor ethics of few did not to represent policies and practices of the majority of advertisers?

Hence, the budding advertising industry found itself faced with a problem that might have taxed the statesmanship of industries far larger and better established. Its response to that challenge was to create a self-policing force known as "Vigilance Committees" , later to become known as Better Business Bureaus.

The challenge of creating high ethical standards in advertising and selling is probably best remembered through the activities of one man. He was Samuel C. Dobbs, sales manager at the time and later president of The Coca-Cola Company.

By 1906, the Federal Pure Food and Drug Act had been passed and, with more missionary zeal than care, the government had lodged charges against a number of firms, including the Coca-Cola Company. Dobbs' company found itself in court on charges which the trial subsequently showed to be unfounded. But during the court proceedings, Dobbs listened to the U.S. Attorney charge Coca-Cola with false advertising of its product. Much as that bothered Dobbs, he was even more shocked at the response of his company's own attorney: "Why all advertising is exaggerated. Nobody really believes it." Although that attorney didn't realize it, his remarks marked the start of the Better Business Bureau movement!

Dobbs couldn't forget what he heard and began a serious examination of advertising of the time. He found much he could admire and even more he could strongly criticize. He talked with other advertising men and found how widely his concerns and apprehensions were shared. He began making public addresses on the subject and became, in 1909, president of the Associated Advertising Clubs of America (now AAF). In his expanded fervor and with support from many friends in the advertising industry, he called for complete truth in advertising. His efforts resulted in the adoption, in August 1911, of the "Ten Commandments of Advertising."

The next step toward a formal, organized effort was taken in November 1911, by John Irving Romer, for many years publisher of Printer’s InkRomer suggested that "Vigilance Committeesbe set up throughout the country, sponsored by local ad clubs, to devote full time to eliminating abuses and creating advertising codes and standards.

The Advertising Men's Leaguepredecessor of today's Advertising Club of New York - was the first to set up such a committee. In March 1912, this committee, consisting of 33 businessmen, civic leaders, and university professors, published a pamphlet, "A War With Dishonest Advertising," and began to sift individual cases of alleged abuseWithin six months, nearly 100 cases had been investigated. In most of them, satisfactory conclusions had been reached and advertising copy changed through conferences with the advertisers.

From the very beginning, the Vigilance Committees set the pattern of public education and the curbing of abuses through voluntary efforts that have formed the twin foundation stones of the Better Business Bureau movement.

These efforts attracted the attention of George W. Coleman, a Boston advertising executive, who in 1912 decided to form a National Vigilance Committee to extend the effort to regional and national advertising. This group became a fully independent corporate entity in 1926 and remained in continuous existence, changing its name in 1921 to the National Better Business Bureau of the Associated Advertising Clubs of the World (later simply National Better Business Bureau). This organization was merged into the Council of Better Business Bureaus in 1970.

The activities by Vigilance Committees of Ad Clubs became so widespread so quickly after they began their work on a volunteer basis, that the need for a fulltime professional to handle their activities became readily apparent. First to recognize this need was the Vigilance Committee of the Minneapolis Advertising Club which, in 1914, hired the man who was to become the first Better Business Bureau manager. His name was H. J. Kenner.

A year after his appointment as the first fulltime executive, he was appointed secretary of the National Vigilance Committee. He was a pioneer in many fields of Better Business Bureau endeavors, his expertise and leadership culminating with the publication of his book in 1936, "The Fight for Truth in Advertising" - still regarded as a classic in its field.

Many people wonder how the Better Business Bureaus got their name. As Vigilance Committees formed and reformed, local groups tested various names. For example, in 1915, the Chicago vigilance group called itself the Better Advertising Bureau. The next year, Arthur F. Sheldon, founder of a well-known school of salesmanship, was addressing the Indianapolis Ad Club. After his speech Merle Sidener, who was then chairman of the National Vigilance Committee, approached Mr. Sheldon and told him he was seeking a better name for the vigilance movement.

Sheldon replied, "I suggest you use this name." He turned and wrote on a blackboard the words, "Better Business Bureau." The name caught on rapidly. Within, a decade, it came into universal use and some tentative moves were made toward a federation of the vigilance committees and BBBs.

Incorporated in 1921 with headquarters in Cleveland, the federal organization evolved through several name changes - such as the National Better Business Commission, Inc. of the Associated Advertising Clubs of the World (1921), and the National Association of Better Business Bureaus, Inc. (1933) to become in 1946 the Association of Better Business Bureaus, IncHeadquartered in New York City, as a fulltime organization with an executive staff, the Association functioned until 1970 when it too, was merged into the Council of Better Business Bureaus, Inc.

The BBB movement became international in 1928 with the founding of the first Canadian bureau. Not until 1959 did another foreign country establish a BBB, that one being in Mexico City. Muriel Tsvetkoff, for 23 years manager of the San Francisco Better Business Bureau, was chosen to represent the Association of Better Business Bureaus to make the initial presentation to the Mexico City Rotary Club, convincing them of the need to form a local Bureau. The name presented a problem there. When first translated into Spanish, Better Business Bureau came out with a meaning identified with a chest of drawers. After several attempts, the name Etica Comerical was chosen as being the most fitting. Later, Venezuela and Israel established BBBs.

Truth in Advertising

The first call to a BBB for help in the preparation of advertising copy to comply with the widely held concept of truth in advertising came in 1914. The Minneapolis BBB was consulted by a hardware merchant who had a fire and wanted to advertise a sale of damaged merchandise. Thus began a practice, continued to this day, of consultations between advertisers and Better Business Bureaus to work out accurate claims before advertising appears.

Perhaps the earliest large scale effort along this line was in 1928 when the periodical publishers, in a trade practice conference with the Federal Trade Commission, designated the National Better Business Bureau as their agency of assistance in determining the acceptability of advertising copy.

Recognition of the Better Business Bureau role in helping to set the rules was forcefully brought to the public's attention in 1941 when a Senate committee headed by the then Senator Harry S. Truman investigated the question of whether advertising should be controlled and regulated as part of the mobilization of the U.S. wartime economy. After hearing testimony on the effective self-regulatory work being done by the advertising industry and the Bureaus, the committee recommended that no emergency regulation of advertising be undertaken. That recommendation was followed by Congress.

Another milestone in the cooperation between the Better Business Bureau and the advertising industry was a "Declaration of Responsibilities for Improving Public Confidence in Advertising", which launched a program for advertising improvement. This was a joint undertaking by advertisers, advertising agencies, media, ad clubs and Better Business Bureaus.

Then the "Advertising Code of American Business" was adopted in 1964, sponsored jointly by the Bureaus and the Advertising Federation of America.

The BBBs inaugurated a number of popular slogans over the years to focus public attention on problems in the marketplace. "Before You Invest - Investigate", the most familiar, is attributed to Cleveland merchant Salmon P. Halle in 1923. Others have suggested it was Ed Greene, then president of the National BBB, who coined the phrase in 1920.

The need for truth in advertising applies to different types of goods and services at different times:

  • In 1912 the great concern of the Bureaus was questionable advertising of stocks and other investment offers.
  • Later, fake automobile companies, oil promoters and financial swindles were paramount.
  • In 1920, Florida land speculations were robbing people of millions of dollars. The then National Vigilance Committee (NBBB) even established an office in Florida to investigate and report those promotions, saving millions of dollars for businesses and public investors.

A most important person in the area of truth in advertising was John Irving Romer. Mr. Romer was critical of the first "Truth Conferencein Boston in 1911, because, as he put it, many ideas were presented but no action was taken. His dissatisfaction was translated into positive action when he asked a young New York City attorney to draft his now famous "Printer's Ink Statute," the first proposed false advertising law.

Ad Clubs and BBBs testified favorably on the adoption of this model statute before many state legislatures. Several states and the District of Columbia have false advertising laws patterned after the original "Printer's Ink Statute."

Probably no one single individual had more impact on the drive for more truth in advertising than H.J. Kenner, the first BBB manager. His awareness of the problem was crystallized in his book, "The Fight for Truth in Advertising," published in 1936 by Round Table Press, Inc. of New York City.

In a review published in “Editor & Publisher” for November 14, 1936, is the following appraisal:

"All through the book, like a live electric wire, runs the recognition that the fight for truth in advertising goes on. It is not by any means a finished fight. It is a fight to the finish, however remote that end might be- perhaps never, so long as human selfishness persists."

The accuracy of this statement is indicated by the fact that review and monitoring of local and national advertising is still a vital function of both member Bureaus and the Council of Better Business Bureaus.

Also as valid as the day it was written is this portion of a National Vigilance Commission report dated May 25, 1915:

"There is a threefold responsibility for eliminating objectionable advertising. First, the advertiser; second, the writer of the advertising (especially the agencies); and third, the medium which disseminates the advertising. There must be cooperation between the three. The media are rapidly realizing that it is to their own selfish interest to have public confidence in their advertising pages."

One feature of advertising which has traditionally caused trouble, and still does, is the use of comparative prices. In the early 20s the Associated Advertising Clubs of the World published the first book devoted to the establishment and support of Better Business Bureaus around the country as the one answer to the solving of advertising problems of the day. It was entitled "Truth in Advertising - The Better Business Bureau Movement to Protect Reader Confidence.” At the time of publication there were 32 Better Business Bureaus in operation. They were Akron, Baltimore, Boston, Chicago, Cleveland, Columbus, Dallas, Des Moines, Detroit, Fort Wayne, Indianapolis, Kansas City, Los Angeles, Louisville, Milwaukee, Minneapolis, Oakland, Peoria, Philadelphia, Portland, Richmond, Sacramento, San Diego, San Francisco, Seattle, Spokane, St. Louis, St. Paul, Tacoma, Toledo, Tulsa and Washington, D.C.

Standardizing Bureau Practices

In order to maintain "truth," some ground rules had to be established for segments of the industries which were then advertising. In 1912 the National Vigilance Committee first established Standards of Practice and BBBs continue to do so today. Patent medicine was one of the most widely criticized areas of advertising in 1912. So the Committee began to work with individual drug advertisers to evolve accurate copy claims. The companies and the Committee soon realized that the problem required industry wide action, so the American Pharmaceutical Association took the first step to create a set of voluntary advertising standards which were distributed to media nationally in 1917.

It was not until 1926, however, that the present day concept of voluntary trade practice conferences was initiated with a conference in New York City of manufacturers and retailers with the New York City Bureau. In the next few years, the National Better Business Bureau further developed the trade practice conference concept, bringing out codes and standards for such diverse products as batteries, hosiery, shirts and insulation material.

Outstanding examples of standards initiated and promoted by Better Business Bureaus since that time are the National Automobile Dealers Association, and other programs with commercial banks, savings banks and federal saving and loan associations. Especially significant was the Central Registry program launched in 1948 with the support of leading magazine subscription agencies. A parallel program was launched in the subscription book industry in 1950.

In response to an obvious need for better compilation of advertising standards, the Association of BBBs published in 1930, the first "Guide to Retail Advertising and Selling" (original title: "Book of Accuracy"). Another ABBB Committee, this one on Bait and Comparative Price Advertising, evolved numerous standards and recommendations over the years and helped draft a suggested amendment to state advertising laws outlawing bait advertising, subsequently adopted by more than 17 states.

ABBB's Committee on Installment Contracts helped to ferret out, publicize and stop overcharges for automobile collision insurance, which at the time was being written into the sales contracts for automobiles without the owner's knowledge or consent, and which may have cost unsuspecting buyers as much as $25 million.

In collaboration with insurance authorities in several states, the Committee helped bring about refunds to policy holders amounting to more than $11 million. Chairman of the Committee at the time was Ken Barnard, then president of the Chicago BBB.

The Federal Trade Commission was later to adopt as its own many of these standards of advertising practice developed by Bureaus.

The Advent of Consumerism

The consumer movement, which was to come into such prominence in the late 1960s, was also very much in the public eye in the 1930s.

Marshall Mott, former manager of the Hartford BBB and retired president of the Cleveland BBB, wrote in 1939:

"The consumer movement has been growing by leaps and bounds in recent years and is here to stay. Business does not want to hear from us about consumer movements but we still go at it and I think some day it will react to our benefit because while business will be late on the trigger, they nevertheless stand a good chance of not being too late."

And Toner Overley, the manager of the Indianapolis BBB, published this statement the same year:

"There was an attempt last year to organize a Consumer Council and I am also advised that there was an approach made to the Governor to set up some kind of consumer's division of the state. Both attempts, of course, failed."

Indianapolis did recognize the necessity for beating the consumerists to the punch and immediately set about organizing a "Consumer Institute." This institute comprised of a 10 week course, meeting from 10 AM to 11:30 AM at a local department store auditorium. Registration fee for consumers was $1 for the entire course. The Bureau used guest lecturers representing big firms, manufacturers, home economists and the like, to give those consumers some basic buying facts- with excellent result.

Prophetically, Muriel Tsvetkoff, manager of the San Francisco BBB, wrote in 1940:

"No government agency will ever seriously curtail our work...The reason: consumers will come to the Bureau to complain, or for information in preference to consulting government or prosecuting agencies."

This continues to be true today, despite the proliferating number of government agencies.

In a long article appearing in a BBB publication called "Bureau Managementin April, 1940, written by C. Victor Werne, then of the Virginia BBB, a list of contemporary consumer organizations appeared including: League of Women Shoppers, American Consumers, National Consumers League, Cooperative Democracy, Consumers Union, Cooperative League of America, Consumers Defenders, and Southern States Cooperative, Inc. Werne wrote:

"The businessmen of today who have failed to be impressed with the expansion of the consumer movement are scheduled for a rude and very unpleasant awakening, and unless they are made to realize the ultimate consequences of their lethargic attitude they may suddenly learn that their business has slipped away from them. The consumer movement, if conducted along educational lines alone, can be of inestimable value to business and to the general public. When it goes further than education, it becomes a menace to the American system of free and private enterprise and initiative and has the capacity to nullify our representative form of government.

One has only to consider the existence of the numerous organizations to appreciate the efforts that are being made to socialize, and possibly communize, consumers. It is the writer's view that the consumer movement in many respects is a well conceived plan to wean the public away from American institutions."

Mr. Werne's remarks were prompted primarily at that time by the rise of consumer cooperatives. They have endured and operated in many states today, bigger and better than ever.

Better Business Bureaus reacted to the consumerism movement of the 1930s by trying to persuade business to recognize the critical consequences it faced. In 1939 and 1940 the Association of Better Business Bureaus sponsored business consumer conferences, bringing together representatives of business, education, government and the public in a pioneering program for building a better understanding of and greater public confidence in advertising. Ken Bachman, for many years manager of the Boston BBB, is credited with originating the idea. The first such conference was held in Buffalo in 1939; the second in New York City in 1940.

In the conduct of their programs, Better Business Bureaus recognized early that publicity was a vital working tool. The chairman of the National Association of Better Business Bureaus in 1939 gave vent to his feeling on the matter of publicity by grousing, "A lack of national publicity has resulted in lack of financing and somebody else is getting all the credit for the work of the Bureaus". But many avenues of publicity were explored and used: national magazine articles, appearances on national network radio shows, and radio programs based on BBB experiences.

Dan Bell was appointed publicity chairman for the conference of BBBs in 1936 held at the Grand Hotel on Mackinac Island. Dan called Life magazine and suggested that a reporter be assigned for the week of the conference. A reporter and photographer were assigned and spent the week taking hundreds of pictures.

Only one appeared, showing Dan on the lawn of the hotel unrolling a 60foot long scroll containing the names of "suckers" who had purchased worthless stock certificates. The caption read:

"Delegates to the national convention of the Better Business Bureaus of Mackinac Island, Michigan, on August 2326, beheld an impressive exhibit of up-to-date business frauds. Designed to prove that shapers and suckers flourish under the New Deal as they did under the Old, the exhibit offered hair growers, dimple developers, frog farm projects, diabetes cures, and stock swindlers. Prize exhibit was the 'million dollar sucker list' displayed by William Dan Bell, promotion manager of the Cleveland Better Business Bureau. The list contains names of 1,000 people who foolishly invested $5,000,000 in the Hayden Gold Mining Company of Toronto."

The ABBB made its first motion picture in 1958: "The Better Business Bureau Story.” This was followed in close order by "To Serve the Living," "Too Good To Be Trueand "A House Is A Living Thing".

During the War Years

A unique experience for BBBs came during World War II. Business firms dropped their memberships and new ones were impossible to enroll. Business was concerned with war, not improvement of the marketplace. During the war, business income was "frozen" - and so was Bureau income.

The greatest demands upon Bureaus came from business and government investigating charitable appeals made in behalf of servicemen. The War Charities Act was passed, requiring all appeals in behalf of service men to be cleared by the government. Because it was unable to cope, the government asked the BBBs to help in view of their experience in the field.

In 1947, for example, BBB messages were aimed at Western Germany through "Voice of America" broadcasts directing Germans to contact reputable relief organizations rather than flourishing groups out to fleece a crippled citizenry. The messages pointed to the futility of making personal solicitations to firms and individuals in the U.S. for help, suggesting instead application be made to recognized agencies operating in the United States.

After peace was announced, the BBBs began their widely heralded War Savings Protection Program aimed at keeping the millions of dollars earned by servicemen and war industry workers out of the hands of waiting shysters.

United Business Service, a weekly forecast service for business, announced in 1945 that "social conditions at the end of this war are likely to be such as to encourage that the large amount of liquid funds in the hands of file public (estimated at over $25 billion in Series E bonds alone) will present tempting get-rich-quick opportunities."

Crediting the Bureaus with alertness to the problem, the publication announced that the Bureaus "in various parts of the country are sending out warning signals. Under the slogan, 'Before you Invest, Investigate,' these organizations are trying to impress upon the holders of War Savings Bonds that they possess an excellent investment which should not be converted to other forms without most careful consideration."

Accolades to the BBBs have come from, among others, America's Presidents.

In 1916 President Woodrow Wilson addressing a Philadelphia gathering of the advertising men who had taken leadership in launching the Vigilance committee movement, said:

"The only thing that ever set any man free is the truth. It is one thing to entertain fine principles and another to make them work. It is one thing to entertain them in the form of words, but is another to make those words live. I understand that you have associated yourselves together in order to promote candor and truth in the advertisement of your lousiness. I wish very much that truth and candor might always be the standard politics as well as the standard of business."

In 1925 President Hooverthen Secretary of Commerce; praised the evolution of the truth in advertising movement and the growth of the Better Business Bureaus:

"The first step in progress was when the medium, recognizing its responsibility to the readers, exercised censorship over extravagant, distasteful and misleading copy. The next great step was the organized action of advertising managers, advertisers and advertising mediums through moral session of the National and local Better Business Bureaus...Such associations as yours in the erection of ideals of a profession, in the determination of methods and definitions of standards for the elimination of abuse, is self-government and it is self-government in the greatest form of which democracy has yet given conception - that is, self-government outside of government."

President Harry S. Truman addressing the 1950 Annual Conference for the Association of Better Business Bureaus in Washington, had this to say:

"Your Bureaus have not relied on propaganda extolling the virtues of business. They have gone to work to clean out the shady areas in the commercial world. They have set out to give real meaning to their slogan: Private enterprise in the public interest."

President Eisenhower sent a message to the Better Business Bureaus in 1953, praising them for their programs and goals:

"l am aware that thousands of business firms and millions of our people benefit from the diligent efforts of your association. They share with me, I am sure, a sense of real satisfaction that Better Business Bureaus were established four decades ago and have since maintained a remarkable vitality and growth over America and Canada.

That they have prospered and grown is very meaningful. It emphasizes the fact that fair play, decency, morality, and responsive service are deeply held principles that receive the active and eager support of the American and Canadian people. It demonstrates, too, that our business community has been and is self-reliant, that it is determined to meet and resolve its own problems in a public-spirited way that has received the approbation of all our people.

May the splendid work done through the Better Business Bureau movement continue for many years to come."

In a video tape message to attendees of the 1987 Annual Assembly of the Council of Better Business Bureaus, the 75th Anniversary, President Ronald Reagan voiced his support:

"...Few organizations have the rich heritage of service that distinguishes the history of the Better Business Bureaus. Fewer still can point with pride to years of selfless sacrifice, yet that is the hallmark of the Bureaus activities...Down through the years the Better Business Bureaus have resolutely stayed the course, showing themselves to be the best friend American consumers have ever had. During the 20s they squashed swindlers on Wall Street and restored American confidence in that vital institution. By World War II, war time savings were being protected by the Bureaus, and when the war ended the Bureau worked to protect the citizens of the war torn which had only recently been our enemies.

Today the Bureaus remain proud protectors of American consumers. As educators and mediators the men and women who serve the Better Business Bureaus continue to be champions of honesty and fairness. Businesses accept the Bureaus' informed impartiality. Consumers have confidence that the Bureaus will go the extra mile to get complaints resolved and see that justice is done. In some respects the Better Business Bureaus have come a long way. But in at least one respect you remain the same. Your name remains synonymous with integrity, honesty and reliability. Your legacy is as proud as your future is bright..."

In a message to delegates at the 1990 Annual Assembly of the Council of Better Business Bureaus, President George H. W. Bush stated:

"One of the greatest strengths of our free enterprise system lies in the willingness of American business men and women to respect the rights of consumers while advancing their companies' interest. Over the years, Better Business Bureaus have effectively promoted truth and fairness in the marketplace and, in so doing, have earned the confidence and gratitude of the American public. By encouraging high standards of quality in the goods and services offered by United States business and industry, you make ours a healthier, stronger economy. At the same time, you also demonstrate how effectively local, business supported, nonprofit organizations can serve the public without requiring the use of taxpayers' hard-earned dollars. On behalf of a grateful Nation, I salute you."

These messages from America's Chief Executives reflect their belief that BBBs throughout their history have done the kind of job that their founders wanted them to do. Along the way they have also become an outstanding example of the old American belief that free men will know how to use their freedom responsibly and well.

In whole areas of advertising and selling, business- through the Better Business Bureaus - has made self-regulation meaningful through voluntary cooperative means. Not only have greater results been achieved through the voluntary approach, all segments of society - government, business, labor, and the consumer - have found a rewarding way to work together to reach a worthwhile goal.

What is the Council of Better Business Bureaus?

The Council of Better Business Bureaus (CBBB), located in Arlington, Virginia, is the national headquarters for the bureau system. It coordinates the activities of Better Business Bureaus; monitors and investigates complaints on national advertising; issues reports on national charitable organizations; and administers the BBB dispute resolution programs.

The CBBB also works with government regulatory agencies, and trade associations, in areas that concern business and consumer activities.

The Council has a dual mission:

  1. To be an effective national self-regulatory force for business, and
  2. To demonstrate an active concern for consumers.

The office of the Council's National Advertising Division (NAD) is in New York City. NAD monitors and investigates complaints against national advertising.

Adapted from an address
by B. Charles Wansley
Former President
Better Business Bureau of Metropolitan Oakland, Inc.
Oakland, California
The address was presented in 1971 before the
Institutes for Organization Management
Washington University, St. Louis, Missouri.