O rg an i z at i o n

an d

Me n
f
E A !L C S A M S .

!res i de nt J C !e n n ey Co mp any
. .

33

A d d ress d e liv ere d at th e St . Lo uis,

St.!au l !or tl an d an d S al t L ak e City
,

Co n v e n tio n s o f th e J C !E N N E Y. .

C OM !A NY , S e p te m ber an d O c tober ,
1 92 1 .

Ne w Y or k
!rin te d by M a diso n S !u are !ress
1 92 1
 To
!O GE ! ! . BA B S O N
in a
pp i
rec at on i
t!di rti n u zk ed
f
o a g
i
re r v e er a
.

:a rtu ae n t
.
'

f
!

!u n damen tal

$ u rz n eu
C on di ti o n e .
 O rgan i z ati o n an d Me n

I .

Ou r Organ i z at i o n

E NTLE M E N with you r permission I ! ill

G
, ,
:
4 spend a f ew minutes in telling you about the
! beginning of ou r business Th at is I ! ill try .
,
Y
A
M to tell you about some of the earlier experiences of
ou r Comp any showing how ou r business has
,

p rogressed f rom its inception to the time when we

5!

were inco rporated .

m
J
The !emmerer store as you know was opened , ,

!: by the Founder of this Organiz ation in 1 9 0 2 You

3
.

!
h
J
ave heard him tell many times of those early years
E11; You have read m any o fthe interesting articles he
.

4
h as written about the s acrices he made in order
' 9 -1

that you and I might be a p art of this Organization

today .

Th e story of my own personal experiences does

not go back quite so f ar as the beginning But I .

vivi d l y reca l l the autumn of 1 90 7 when I took u p

my duti es at the !emmerer sto re At that time .

M r Penney was a one thi rd owner with M r John

.
-

,
.

son and M r Callahan in the !emmerer store H e

.
, .

7
als was a one thi rd owner in a store at Cumber
o -

l and and p art owner in a store at Rock S prings .

This was the e x tent of M r Penney s interest in

!
.

October 1 90 7 , .

S hortly after that time h e sold his interest in the

,

R o ck S p r i ngs sto re to his p artner at the s ame time ,

secu ring full ownershi p of the !emmerer and

Cumberl and stores .

The mo rning of October 1 1 90 7 was cold and , ,

cri sp That was the morning when I entered u pon

.

my activities in the !emmerer store and I noticed , ,

as I walked to the store that one c o uld write his ,

name in the f rost on the broad sidewalks I need .

not dwell on the impressions I received at that

time bec au se I fee l that every one of you has gone
,

through a similar experience and therefore you , ,

know the feeling of antici pation that I experi enced .

I was met as I entered the store by a young man

, ,

with bl ack eyes and black h ai r who though he has ,

been able to retain the black eyes has since that ,

time lost most of the h ai r H e directed me to go .

to wo rk and I did I t was not long befo re the re.

were plenty of customers to wait on and I found

much to do .

Time passed qu ickly and in the sp ring of 1 9 0 8 , ,

we went to Cumberland Wyoming Our little ,

.

store there as most of you know was about a mile

, ,

from town The town itself was controlled by the

.

co al comp any and no outsi de interests were p ermit

ted to enter It was necessary therefore that we
.
, ,

go outside of the corporate limits in o rder to do

business Ou r little store was about twen ty v e
.
-

by forty feet but h ad rooms at the back I n these

,
.

8
we lived Modern conveniences were enti r e ly
.

wanting ; indeed we h ad to h aul ou r water f rom a

,

creek abou t half a mile away Most o fthe time it .

was so muddy that we h ad to let the water stand i n

the barrel u ntil it became clear enough for us to
drink .

Prior to my coming to Cumberl and M r N eigh .

bors who was my predecesso r there h ad been sent

, ,

to Preston and M r Mudd who is the man with the

.
,

black eyes and hai r I h ave just referred to h ad ,

been sent to B ingh am C anyon H ere they received .

th ei r rst interest in stores .

We spent a year in Cumberland S ome of you .

may think f rom my description of th e t o wn th at it

was a great sacrice for us to live there Gentlemen .
,

I want to tell you th at we never thought of it as a

sacrice ; and when we went there to begin business
and to make ou r h o me we had no i dea how long
,

we were going to stay Nor would i t h ave made

.

any difference if we h ad known This business was .

then in the process of making We h ad no prom .

i s e s and no intimation as to how long it might take

us to wo rk ou t ou r futu re o r rather to help work , ,

it out We lived in two l ittle rooms and my wife

.

h as sai d to me many many times s ince th at the

, , ,

y ear we spent in Cumberl and was one of the h ap

piest of ou r lives Th e old s aying There is mo re
.
,

pleasu re to travel hopefully than to arrive is as ,

tru e as Gospel We were living i n antici pation of

.

the future We h ad Faith We hoped fo r better

. .

things I might tell you th at ou r sal ary for th at

.

year was that means for ou r combined ser

vices Out of the
. which rep resented ou r
9
 !
year s p ay we s aved just a little unde r
,
We
were trying to s ave for ou r futu re Therefore we .
,

denied ou rselves a good many things that we

wanted And we did it hoping th at some time we
.
,

shoul d be better able to a fford wh at ou r desi res

called for .

At the end of ou r year in Cumberland we were ,

sent to Eu reka !tah where we received o u r rst

, ,

i nterest in a store At th at time the rm names

.
,

were J C Penney in !emmerer and Cumberland ;

. .

Neighbors and Penney in Preston ; Mudd and Pen

n e y in B ingham Canyon ; and S ams and Penney in

Eu reka The sto res were in f act a grou p of p art

.
, ,

n e rh i p s.Others came into the business and f rom ,

time to time new sto res were started thus creating

,

other partnerships And so we grew f rom year to

.

year.

10
 II .

!h y !e C h an ge d f
ro m a !art n e rs h i p to a
C o r p o ra t i o n

During the year 1 9 1 2 it bec ame app arent that ,

i f we wished to take advantage of the c o ns o lidated

credit to which ou r business entitled u s it would be ,

n ecessary fo r us to formulate a pl an that wou ld

p ermit of ou r pooling ou r interests so th at the com

b i n e d assets of all would support any obligation
which we might make as a wh o le I n other words .
,

we thought i t well to incorp o rate ou r Organi zation

and to h ave one governing body over all ou r indi
vi du al interests We hesitated to do this fo r a l o ng
.

time becaus e it s eemed almost impossible to work

,

out a pl an that would permit of o u r retaining the

p artnership idea and yet enjoying the advantages
of incorp o ration H owever after careful thought
.
, ,

the plan was wo rked ou t and we incorp o rated in

the s pring of 1 9 1 3 u nder the name o fthe J C Pen . .

ney Comp any .

Now I h ave expl ained to you why it was n e c e s

,

s ary fo r u s to inco rporate and I want as best I c an , ,

to explain to you the kind of corpo ration we are .

I want every one of you to u nderstand exactly the

kind of proposition you h ave entered into so that ,

you may know all about this Organiz ation both ,

how it is constructed and how it is conducted ; in

f act all there is to know There is nothing about
.

this business known to the D i rect o rs th at may n o t

, ,

be revealed to its every stockh o lder There are .

absolutely no secrets and i f after I h ave explained

,

ou r corp o rate fo rmation as best I can any questions ,

occu r to you I want you to f eel f ree to ask them

, .

11
Fo r my p art I will do the best I can to answe r
,

them satisfactorily Therefore note the following

f acts :
.
,

1 This Corpo ration is known as the J C Pen

. . .

ney Comp any .

2 The names of th o se who n o w h o ld stock in

.

this Organization are too numerous to mention but ,

every man who h as a stock certicate is a stock

holder .

3 We are incorpo rated under the l aws of the

.

S tate of !tah and ou r main of ce is at S alt Lake

Ci ty .

4 Th e Corpo ration is c reate d to exist for a

.

period of one hundred years u nless sooner dis ,

solved by l aw .

5 The private p roperty of the stockholders of

.

this Corporation is not li able for any obligati o ns

o r bad debts of the Corporation in any manner o r ,

to any extent wh atever .

6 Th e p rincipal place of business of the Com

.

p any is S alt Lake City Th e Board of D i recto rs

.

m ay establish branch offices and places of business

anywhere in the !nited S tates .

7 We are incorporated to deal in all kinds of

.

merch andise ; to lease let deed and acqu ire prop

, ,

e t ty ; to pu rch as e and dispose of notes bonds and ,

mortgages ; to own stock in other corporati o ns and

to conduct business in as many branches as we see
t I n f act ou r p rivileges are so many that we
.
,

may carry on almost any kind of business we de

s rre .

12
 8 . The amount of ou r capitalization h as been
ch anged f rom time to time as need demanded
, ,
.

At the p resent time we h ave an autho rized Com

mon stock of of which there h as been
issu ed and sold and we h ave an author
i z e d Preferred stock of of which there
h as been issued and sol d S o ou r issued
Capital stock as you see is the tota l of the out
, ,

standing Common stock plus the outstanding Pre

ferred stock o r
Th e Preferred stock h as as the name indicates
, ,

p reference over the Common stock That is to s ay .

,

in cas e of liquid ation those holding the Preferred

,

stock are to be p ai d rst ; then the Common stock

holders follow .

The Preferred stock is seven per cent cumul a .

tive And cumul ative means th at if we should

.
,

pass a divi dend on th e Preferred stock we are obli ,

gated to p ay i t at some future time out of the earn

, ,

ings of th e Company set aside for that purpose .

I n short no Preferred dividends may be perma

,

u ently p assed ,
for they are an obligation of the
Comp any to be p aid when earned and ahead of any
other stock dividend .

Preferred stock is non assessable for the obliga

-

tions of the Comp any Th e assets of all c l ass i c a

.

tions of Common stock are assessable for the obli

g a ti o n s of the Comp any and as you know ,
the D i ,

rectors h ave levied a certain assessment annu ally

fo r the maintenance of the di fferent operating
offi ces .

13
 Now at the time this Preferred stock was issued
,

and sold certain agreements were entere d into

,

between the Company and those who pu rchased

the Preferred stock As those agreements may not
.

be enti rely clear to the Common stockholders I ,

will expl ain them One of the m o st important

.

agreements we made with ou r Preferred stock

purchasers was th at we would not declare divi
d e n d s o n the outstanding Common stock u nless the
earnings of the p revious year were at least th ree
times the amount of the interest on the outstanding
Preferred stock That means simply this :We
.

h ave outstanding Preferred stock and

the interest on i t at s even per cent is
,
a .

year Th ree times

. is Th at is
th e amount we must earn in any year befo re we , ,

c an declare a Common stock dividend We h ave .

fu rther agreed with ou r Preferred stockholders to

reti re every year three per cent o fthe t o tal amount .

o f P referred stock o r This h as been

d one I t is also specied between u s and ou r Pre
.

ferred stockholders th at when we wish to buy in ,

o r reti re the Preferred stock we shall be privileged ,

to do so at the lowest possible rates but not to ex

c e e d $1 0 5 per sh are S o you see at any time we
.
,

desi re to do so we are privileged to o f

,
fer ou r Pre
f erred stockholders $1 0 5fo r every $1 0 0 worth of
sto c k they hold and by agreement they must sell
, ,

to u s .

9 We also agreed with those who bought this

.
,

of ou r Preferred stock that we would ,

issu e no more of the authorized unless

the earnings for the p receding year amount to at
14
least th ree times the annu a l dividend on the Pre
ferred stock outstanding plus th at p roposed to be
issued .

1 0 Now we come to Articl e 1 0 which species

.
,

the manner in which we sh all dispose of ou r Com

mon stock should we so desire Subscriptions fo r
,
.

the ownershi p of J C Penney Company Common

. .

stock are taken u pon the condition th at if the pu r ,

ch aser and holder thereof desi res to sell the s ame ,

h e shall rst deliver his stock to th e Board of D i

recto rs The Bo ard of D i rectors sh all x the s ell
.

ing p rice of s aid stock by computing its value with

reference to the books of the Company I n other .

words th e valu e of the stock is just what the books

,

of ou r Comp any indic ate it to be In no c ase i s .

Good Will taken into account After the value of

.

the stock h as been computed the Bo ard of D i rect

,

ors must then o ffer this stock fo r s ale to the co

owners of this same cl ass of stock They are al .

lowed th i rty days in which to exercise thei r o ption .

I n case the co owners of this class of stock !

-
th at is ,

Common stock ) do not desi re to pu rch ase it then ,

the B oard of D i rectors may o ffer it to anyone els e .

I f it is not sold within thi r ty d ays the holder of the

,

stock sha l l be f ree to o ffer i t fo r sale to anyone that

he may desi re .

I trust th e reasons for this particu l ar manner of

making disposition of ou r Common stock are clear
to you We h ave a splendi d Organi zation Every
. .

one i n it i s active and anxious to prom o te i t And .

w e hope to see ou r stock remain in the hands of

those who are active rather th an to h ave it become
,

the property of th o se who are inactive .

15
 III .

Th e Ne w M an tu n i t i e s
!
s Op p o r

At this point I want to say s o mething about the

o pportunities a man h as who comes into ou r O r
g a n i z ati o n
. I want to emph asize as best I know
,

how th e advantages th at a man begins immediately

,

to enjoy who becomes a p art of this O rganization .

I n my judgment a man is remunerated many

,

times over for any s acrices he may make or ,

think he makes i n coming to u s I do not

,
.

believe that any man coming int o ou r Organiz a

,

tion no matter how much knowledge and e x p e

,

ri e n c e he may h ave can hop e to bring into th e O r

,

a n i z ati o n anywhere nearly the degree of value

g
an d worth th at h e receives f rom the Organiz ation
after he becomes a p art of it .

H ave you ever stopped to think wh at enormous

benets we confer u pon the man who comes to us
and advances into a M anager s position ! I f you
!

will stop a moment to consider wh at active p artner

ship i n this Organization means you will see that ,

we confer u pon the new man an unusu al benet .

The new man who comes into ou r C o mpany now ,

nearly twenty years old joins an Organization th at

,

h as accumul ated the benets of wi de experience ,

that h as built itself u pon a soli d nanci al basis th at ,

h as established lines of commerci al associ ation

with the best ty pes of business houses th at h as ex ,

tended its chain from the North to the S outh of ou r

country and from the West to the E ast th at h as ,

grown f rom a gr o ss annu al business of less than

fo r the rst year to today I .

want to tell you th at the new man who comes wi th

16
us today i s the reci pient of great p rivileges H is .

own experience may h ave been considerable and

he may h ave been in business long enough to learn
retail merch andising well ; but it woul d be i m p o s
sible for any man to bring into this Organiz ation
anything whatsoever that is commensu rate with
the rights benets p rivileges and O pportuniti es
, ,

th at we bestow upon him the moment he joins o u r ,

forces Therefore I want to emphasize the f act

.
,

that we are right to demand the nest type of men

o n whom to bestow the p rivileges of associ ation

with u s .

Organization o f fers a man innitely more th an

he can command f rom within himself I t multi .

plies h is arms and hands and ngers so to speak ,

.

Certainly it augments th e mental a rea of his work

,
.

Not all men are equ ally endowed S ome men are .

natu ra l nanciers others are born buyers still

, ,

others are o rganizers and some h ave the gift fo r

,

accounting .

Now all of thes e operations are absolutely e s

,

se n ti al in the conduct of business I t is impossible .

for any one man to h ave all these attributes and ,

therefore a one man business must necess arily be

,

weak in some one of these p articulars But in an .

Organization i t is possible to include the natu ral

nancier the gifted buyer the skilled organizer
, , ,

the expert accountant and all other men of creative

genius whos e purpose and power fo resee and plan
for the fu tu re .

Th erefo re a man who has the privilege of join

,

ing a comp any like ou rs connects himself i m

medi ately with a highly ef cient and closely arti c u
17
l ated grou p o f men everyone gifted i n his own
,

line.

As I s ai d in the beginning these skillful and

,

gifted men augment the man himself for the ,

Organization pl aces at every man s dispos al the

!

benets of the expert knowledge and service of

every other m an in i t
.

M en let u s make it ou r personal ambition to

,

measu re u p to th e typ e worthy of associ ation with

this great Organiz ation Let us in training men
.
, ,

train them into this worthiness Let u s in looking

.
,

to the future see not only a greater Organi zation

,

and a greater business but ou rs elves correspond

i n g l y greater in ability to h ave vision to do the
d ay s job to train men and nally to represent
!
, , ,

adequ ately this N ation wide Instituti o n which b e

-

stows richly its benets and opportu nities u pon its

associ ates .

18
amount which is Preferred capital Therefore .
,

before you c an start a new store you must h ave

,

accumul ated Common stock capital enough to

c apitalize the p roposed new store .

Of cou rs e you know th at before we can start a

branch sto re with the earnings of any particul ar
store we must h ave money in excess of the needs
,

o fth at particul ar store . In other words we c an ,

n o t reduce ou r invento ry in the last f ew months of

the year and take out all th e cash on h and We .

must gu re that there must be capital and su rplus ,

that there must be enough o perating capital in a

store to do a volume of business of s ay ve times
th e amount of this operating c apital I n other .

wo rds we gu re that it would not be conservative

,

fo r u s to try to operate a business with l ess c apital

than one fth of the amount of the volume o fbusi
-

n ess we expect to do annu ally Another way to

gu re it is this :A tu rnover of ve is a big tu rn
.

over We h ave sto res it is true th at do better than

.
, ,

this and we h ave some th at do not do so well And

,
.

while ou r average tu rnover is not so great as this ,

I think we are f ai r in calcul ating on the basis of a

tu rnover of ve .

20
 !
!u t u re !l an s
Now I know you are al l interested in learn i ng
something of the pros pects fo r the immedi ate fu
tu re I know th at you are all anxious to start new
.

stores just as soon as you can and I assu re you th at

,

n o one i s more an x ious than the members of the

Bo ard of Di rectors to see started every new store

which we h ave the money to open and the men to
manage .

In the rst place we o pened app roxim ately one

,

hundred new sto res in the s pring of 1 92 0 I need .

not tell you in detail for I am su re th at most of you

k now th at these hundred new stores did not prove
to be very successful I n other words we opened
.

them at an inoppo rtune time with th e result that

,

some of these hundred new stores are going to t e

tard the progress of thei r mother stores u ntil such
time as they get in position to nance themse l ves .

Let me illustrate wh at I mean .

I will take a store in which I am nanci ally i n

te re ste d
. This particul ar store has on hand today
something like in cash After deducting
.

f rom this its Preferred stock quota it will h ave on ,

h and app roximately This store is the

mother store of one of those started in 1 92 0 The .

! !
child store is so to speak in bad and at the end
, , ,

of this year so we h ave every reason to believe

, ,

wil l be u sing practically all of the available cash

the mother store has on h and This being the case
.
,

we gu re th at this mother sto re cannot start an o ther

branch u ntil its l atest child i s able to keep itself .

21
 Now to get back again to ou r plans for th e i m
medi ate future I am su re that it is the wish of
,

every man who is a p art of this Organization to go

ahead and e x pand the business as f ast as it can be
exp anded and still be operated along conservative
and consistent lines I n other wo rds the slogan is
.

!
LET S GO .

We are pl anning to open just as many new stores

this next year as we can get money together to
nance I t is a wise p rocedu re I am sure and
.
, ,

one th at every p rospective M anager will endo rse ,

to wai t until after ou r next invento ry and then i n ,

stead o festimating ou r p rots and available cash ,

we sh all h ave in h and the concrete thing .

S o immedi ately following ou r ne x t inventory

, ,

we are hoping to see a goodly number of ou r stores

in position to start branch stores I assu re you th at
.

those who are ready with men and money will be

permitted and encou raged to go ahead .

You see then th at ou r pl ans h ave not ch anged

, ,

one iota Ou r desi re and determination to build

.

this business to stores doing an annu al bus i

ness of hundreds of millions is stronger today
th an ever before I t is tru e we are going thr o ugh
.
,

a p eriod where th e sledding is h ard We are still .

in the midst of th at period and to say the least it

tends toward discou ragement But men the pendu.
, ,

lum swings f rom one side to the other I f we .

th row a ball u p it comes down I f we eat mo re .

th an ou r sh are at dinner we must expect to go a

l ittle sho rt at su pper time .

Du ring the p eriod of the war and the year o r

two following we enjoyed an unusu al degree of
,

22
p rosp erity Rel atively speaking business came
.
,

easy Without unusu al e ffort on ou r p art we ac

.
,

complished the things we were after Now the .

dam th at held the reservoi r has broken We nd .

ou rselves in the stream By concerted action we

.

must begin piling the stones to rebuild the dam so

that we sh all again h ave power fo r the degree of
momentum ou r pu rposes c all for .

I beli eve that th e p endulum h as now about

reached the e x treme end of its swing I t will soon .

start back the other way Good times are ahead

. .

Let us c apitali ze ou r e x peri ence now while the ,

going is hard and be re ady fo r that period of pros

,

p e ri ty th at is just as su re to follow as day is su re to

follow night .

P rosperous times are ahead of us men that s !

, ,

su re Let u s not be discou raged Let u s try to live

. .

the lif e of the child who when one Christmas h as

,

p assed begins to l o ok forward with great antici p a

,

tion to the next and gets pleasu re much more out

of th e antici p ation than th e realization .

There i s another thing th at I want to ta l k about

just for a minute i n connection with new stores ,

and that is the kind of towns we select .

I h ave never f avo red citi es I do not believe

.

th at we are organized to do business in the l arger

cities I do not believe that we as individuals
.
, ,

h ave been trained to do business in the l arger cities .

I do not believe th at when we get into the l arger

,

citi es we can train ou r men p roperly to manage

,

the kind of stores th at we sh o uld h ave there The .

medium si zed towns are the towns th at h ave m ade

23
money fo r us and they a re the kind of towns that
,

will continu e to make us successful .

There is another thing men to which we must

, ,

give careful attention I t is the tting of squ are

.

pegs into squ are holes and round pegs into r o und
holes I mean by this th at one man bec au se of his
.
,

peculi ar and particular experience is tted to do

,

business in a certain kind of a town while an o ther

,

man with another kind of e x perience is not We .

want to weigh this thing well because it is to the

,

advantage not of any one man bu t of every one con

cerned to weigh it I f my experience h as come to
.

me f rom a small town f rom a community where I

,

h ave been dealing with the f armers I am best ,

tted when I arrive at the point of starting a new

,

sto re to go into that kind of town And the s ame

,
.

rule applies everywhere This is a matter th at

.

shou ld be given the m o st careful consideration b e ,

c ause i t h as a great deal to do with the p rogress and

success of this Organization .

24
 !I .

!ro m i s e s to a Ne w M an
At this point I want to make c l ear if I can just , ,

wh at the opportunity is fo r the young man w h o

comes into this O rganiz ation There h as been .

some misunderstanding and I suspect that we s o me

times are to some extent to blame for this misun
d e rstan d i n g. But i f there was eve r a p romise
made to any man who came i nto this Organiz ation ,

it was m ade in vi o l ation o fthe fundamental p rin

c i p l e of the Founder No man h as ever been
.

promised anything denite Now the opportuni ty.

that a man h as who comes into one of ou r stores is

in as bri ef a way as I can put it simply this :I t is
,

an opportunity to aid th at branch to which he may ,

be assigned in the making of money with the u n

, ,

d e rstan d i n g that the avail able p rots o f the said

branch are to be u sed in the c apitalization of an
other store in which this new man sh a l l be afforded
an opportunity to demonstrate his manageri al
ability o r to become a stockholde r .

We h ave some men i n ou r Organi zation who ,

for the p ast year h ave been a little dis turbed b e

,

cause such and such a thing h as not h appened We .

are indeed sorry th at we cou ld not go ahead with

the expansion p roposed a year ago We wish that .

we could open st o res mu ch f aster but we cannot ,

do the impossible We o ffer to a young man the

.

best opportunity th at I know of anywhere in the

!nited S tates ; but we h ave got to produce we h ave ,

got to put in befo re ! e can take out .

I know of a man i n ou r Organization and the ,

chances are you men know o fothers w h o s ays th at ,

25
h e has not been treated f ai rly I am going to re
.

l ate this man s experi ence in o rder to illustrate the

!

point th at I am trying to make .

H e came into this Organization about fou r years

ag o with the s ame u nderstanding with which every
other yo ung man h as entered H e was told that
.
,

if he wou ld go to a certain store h e would nd

,

there the opportuni ty to dem o nstrate to u s his

ability We hoped he would be able some time in
.
,

the not f a r distant futu re to manage that sto re and

,

l ater to sh are in the new stores that would be

opened f rom the p rots H e went to this p ar
.

ti c u l ar st o re ; he w o rked at a slightly less s alary

than h e might h ave been able to c o mmand else
where H is s al ary was increased f rom time to
.

time to an amount th at I beli eve was equ al to

, ,

wh at he could have earned anywhere I n th at .

p eriod of a year o r so he thought th at the M anage r

,
! !
o fthe store was n o t treating him just right was ,

not giving him so much info rmati o n about the gen

eral operations of the business as he thought h e
shoul d receive ; he felt th at his e fforts were not
app reci ated in sho rt th at he was not getting along
, ,

so well as he should H e asked to be transferred

. .

Th e M anager of th e rst store s ai d th at the

young m an was f ai rly good but that he personally , ,

was not able to get along with th e young man b e

c ause h e was not putting into the business wh at he
shou ld We thought it might be a case of i n c o m
.

p a ti b i l i ty ; so a transfer was arranged and the

young man was sent to o n e of the new stores where
another type of man was M anager This arrange
.

ment went on fo r a couple of years and the second

26
 !I I .

t
B u s in e s s Co n d i io n s

S o much for conditions in general Now l et .

me take u p the matter of business as it is today .

Business in some localities is f alling o ff Con .

d i ti o n s over which we h ave no control cause this .

To s ay the l east this is not a s atisfying situ ation I

,
.

am su re there is no M anager who doing less busi ,

ness this yea r than he did l ast year is satised with ,

the result.

With the f alling o f f of business the rst thing ,

w e want to think about is operating expenses It .

seems th at when business is on th e increase the

, ,

operating expense automatically takes c are of i t

self As ou r business gets bigger it seems th at over
.

h ead just comes along gradu ally with i t But with .

decreased business I want to tell you it takes e ffort

, ,

and judgment to make a rel ative reduction in

operating expenses .

I realize that we are paying l arger s al aries than

we paid a few years ago I realize th at the M anag
.

ers of today h ave many demands u pon their time

th at di d not obtain some years ago You h ave bul .

l e ti n s to re ad qu estionnai res to answer and a hun

,

d red other things to cl aim you r time You M anag .

ers h ave mo re to do than ever though in most cases ,

where volume of business will justify it you are

supplied with cashi ers who in tu rn with p roper ,

su pervision c an do much of the detai l that you

,

would otherwise be called u pon to do .

Our M anagers today are bigger men than the

M anagers of yesterday and ou r M anagers of to
,

28
morrow must be still bigger men than the M anag
ers o ftoday The o lder the M anager is in ex p e ri
.

ence the m o re easily he shoul d be able to h andle

,

the a ffai rs of h is store .

The point I want to make is that we are now

going th rough unusu al times times of business de ,

pression and that successfully to cope with times

,

like these takes unusual e ffort and perseverance .

These are times that demand ou r u ndivided atten

tion Everyone of u s should be on h is job
. .

M any of ou r M anagers h ave met this situ ation

this f alling o ff
of business and h ave adjusted thei r
a ffai rs s atisf actorily Thei r business is now on a
.

money making basis But some of ou r M anagers

-
.

h ave not met the situ ation .

I know some M anagers and some of you men ,

know these same men who in spite of the f alling

, ,

of fin business who in s pite of the need of more

, ,

enthusi asm in thei r stores absent themselves fre ,

quently f rom thei r stores for p arts of d ays and

ey en fo r a number of d ays at a time I t seems to .

me th at this is getting to be a too common practice

among some of ou r M anagers .

As I s ai d before we are going through a period

,

of business dep ression We are in the midst of a.

p eriod w h e n th e b es t a m an h as i s n o t e n o u g h I .

realize th at we must h ave a rest now and then .

Every man needs a certain amount of rest I think .

a vacation should be a p art of ou r annu al p rogram .

But when we take a vacation let us go away and ,

recreate ; and when we come back let us go to work ,

and stay on the job .

29
 M anagers you rs is a great responsibility You
,
.

should take you r job seriously I t is u p to you not .

just to push this business ahead but to get u p in ,

f ront and pull I f you take you r job lightly and

.

can always nd time to get away fo r this reason and

that then just as su rely as we are living men you r
, ,

l ack of self disci pline will show itself in the lack

-

of discipline of you r store force .

I h ave noted in looking over some of the sales

,

reports of the stores th at there are some M anagers,

who sell little or no merch andise I also notice in .

,

cases where the M anager sells little o r nothing that ,

his rst m an usu ally sells very much less than

others in the store I cl aim that a M anager no .
,

m atter wh at the volume of h is business shoul d sell ,

some merchandise and I also claim that the rst

,

man should be mighty close to the top of the list of

s alesp eople I realize that a M anager cannot al
.

ways top the list although we h ave some who do it

,

occasionally But I claim th at a man cannot buy

.

i ntelligently for th e needs and requi rements of his

p atrons unless h e is down on the oo r meeting his
,

trade and s elling merch andis e over the counter .

I n th at way h e learns wh at his customers want

, .

Now men don t get me wrong You s ay :I t is

,
!
,
.

easy fo r S ams to stand u p there and tell u s how to

do i t I tell you again that every man should sell
.
,

some merchandise H e should be listed on th e .

s ales rep o rt and his p ercentage should be gured

!
the s ame as others
Ou r game is a game of Come On and not a game
of Go On .

30
 I base my contention when I s ay that a M anager
,

c an and should sell goods u pon the f act th at most ,

of the M anagers of ou r bigger stores are doing so .

The M anager of ou r l argest store sells ab o ut

worth of goods a month .

M en to cut ou r operating e x penses to wh at they

,

must be every man must h elp A M anager who is

,
.

developing th e other man sh o uld delegate some of

the manageri al duties to him and many of these
duties can be attended to outside of regular busi
ness hou rs By working in this way the M anager
.
,

i s afforded time to lead his s ales f o rce to be down -

on the oor and to radi ate th at selling enthusi asm

,

which is indispens able nowadays .

There is only one way to cut operating expenses ,

and th at i s to cut them There is just so much that

.

h as to be done and if you reduce you r force with

which you h ave to do i t everybody l eft will h ave
,
!
to do a little bit more Now don t misu nderstand
.
,

me I know th at most of you men are doing every

.

thing that you h ave power to do but there are some ,

exceptions to this and th e exceptions are th e ones

,

to whom I am talking .

Again I say we are in the midst of a period

,

when the best a man has is not enough I t is going .

to take extraordinary e ffort to keep ou r business u p

to i ts maximum and to maintain ou r p rots where
we want them to be Are we g o ing to do this ! Or
.

are we going to watch them sli p ! I t is u p to u s .

Times like these are not times to choos e for visit

ing ou r neighbo rs M ore than ever I u rge you
.
,

although some of you do not need this u rging to ,

stay with you r job Live with it ; go over every

.

31
part of yo u r business carefully and often as though ,

it needed a doctor ; and if it needs medicine pre ,

scribe fo r it .

Now is the time for us to make things happen .

We have got to create something rather th an to ,

follow what h as al ready been done .

I am reminded right now of a litt l e story of a

milkman who was preparing his milk on a certain
mo rning for his customers I n o rder to be su re .

th at his qu antity was suffi cient he thought th at he ,

would add a l ittle water to each can of milk S o he .

took a di pper and he went to the s pring nearby and

got a di pper full of water which h e put into th e
-

rst can H e went back and got another d i pper

.

ful l of water and pou red it into the othe r can H e .

adjusted the to p s o fhis c ans and went away In .

each di p per of water th at h e carried f rom the

Spring there was though h e di d not know it a
, , ,

f rog When he pou red the rst dip per into the
.

rst can one f rog went down to the bottom of the

,

milk and came u p to the top just as the milkman

was adjusting the top of th e can The f rog s aid
to its elf :I am su rely going to perish I will never
.

get ou t of this I am going to di e,

.

The f rog in the other can went down to th e bot

tom ju st as the rst f rog h ad gone and also came
to th e top about th e time the milkman was adjust
ing the top of the can But he s aid to himself :My
.

goodness I h ave got to keep busy o r I am g o ing to

,

die. I h ave got to get ou t of here in s o me way or

other .

32
 In the morning the milkman took the top o ffthe
rst can and everything was qu iet The poor f rog .

h ad fallen to the bottom and died H e op ened the .

other can and there right in the middle was the

, ,

other f r o g sitting on a little lump of butter th at h e

,

h ad chu rned during the night feeling s atised th at ,

he h ad created for himself a way ou t of his p re

d i c am e n t .

Gent l emen we mu st apply ou rse l ves like f rog

,

number two and not play the p art of f rog number

one These are times as I s ai d befo re when we
.
, ,

have got to create a way out of any predicament in

which we may nd ou rselves .

Now I h ave reviewed fo r you the condition of

,

business th at h as obtained fo r th e last two o r three

years and I h ave tol d you wh at economic au th o ri
ties agree is the p revailing business c o ndition to
day I t would of cou rse be beneci al to u s all if
.
, , ,

we could know denitely i n wh at condition busi

ness will be for the next few months or for a year .

With th at knowledge we could trim ou r s ails and

weather s afely all storms on the commerci a l sea .

!nfortunately however no man can actu ally see

, ,

wh at the futu re h as in sto re But experience h as .

taught us to deduce f rom p resent conditions the

general trend of the future S o we may by keep .
,

ing clearly before us the f acts of business as they

are antici pate somewh at the conditions into which
,

we are moving .

S tatistical or g ani zations assu re business men that

the period of readjustment will be tedious They .

33
point out that it i s important fo r u s to take ad v an t
age o fevery f avorable condition th at we can nd
in business Fo r the next f ew months we sh all
.
,

h ave to ght ou r way along overcoming u nf avo r

,

able trends by th e fo rce of industry optimism and

,

economy .

What then are the conditions o r the facts to

, ,

which we must give ou r closest attention !

34
!s e d by p e rm i s si o n
!
o f
B abs o n s
Organ i z ati o n

i ncreasing commodity p rices Th e su rplus s av .

ings which o rdinarily would be or might be p l aced

,

in bond investments are necessary to p ay expenses

,

incu rred at the high commodi ty p rices H ence .

bond investors seek so high a yield for thei r funds

that bond p rices are dep ressed in propo rtion to
commodity p rices .

3 Cycl e three is the period of declining stock

.

p rices and lower commodi ty p rices These bring .

36
in thei r wake wh at ec o nomists classify as dis

honesty a tendency to cancel contracts for goods ,

resulting in business stagnation .

4 This brings in cycle f o ur in which commodity

.

prices further decline and which i s often ch arac

,

te ri z e d by an increase in crime This always fol .

lows when people who h ave been accustomed to

,

h igh wages and plenty of money nd themselves ,

denied the luxu ries to which they h ave begun to

accustom themselves .

5 I n the fth cycl e unemployment is general

. .

H esitation and fear tend to st o p all expansion and

materi ally to lessen p roducti o n .

6 In the sixth cycle men nd i t necess ary to

.

move from place to pl ace in search of work This .

breaks u p the home and brings in a period of real

estate dep ression
.

Let me stop here and point out that ou r present

business condition seems to li e between cycles ve
and six but the hopefulness of the situation is that
we are moving forward to the s eventh cycle which ,

is the fi rst of a group of conservative cycles .

There lie before u s then as evidences of c o m

m e rc i al readjustment these f actors :
,

.1 Lower Money Rates .

.2 Increasing Bond Prices .

.3 Increasing S tock Prices .

4 Increasing Commodity P rices

. .

.5 Full Labo r Employment .

.6 Increasing Money Rates .

37
 Accomp anying every one of these commerci a l
readjustment factors is its associ ate moral o r
Golden Rule f acto r :
1 I nc reasing Th rift
. .

2 G reater Eff
. i ciency
.

3 Honesty and Fai r Prices

. .

4 Religious Interest or Increased Ph ilan

.

th ro p i c an d B e n e c i e n t Movements
.

5 B roader S oci a l Activities

. .

6 Normal and H ealthy Prosperity

. .

38
 I! .

!as t e
I t is not beneath ou r dignity to adopt the p rac
tice of any economy that will contribute its mite to
ou r general well being We must never get away
-
.

f rom the conviction th at waste even in small things

, ,

is a business leak and th at a lot of waste means a

,

lot of business leaks which in tu rn m ay sink the

ship .

You know it used to be the custom when I rst ,

went to !emmerer to s ave and u se again every

,

little piece of wrapping paper every small piece ,

of twine There was absolutely no waste permit

.

ted I am wondering i f we are p racticing such

.

thrift today I t is not so much the value of the

.

things th at are s aved in this way as it is the dis

c i p l i n e and training that yo u give you rself and

you r associ ates in eliminating every possible sou rce

of leaks and waste .

We must not waste anything not even ou r time ,

.

S ome of us waste ou r time in ways th at we do not

think about many of u s with i dle talk .

Men experi ence h as taught me th at a successfu l

man has two simpl e but important ch aracteristics :
,

One is !ision which shows him the go al and the

way ; the other i s the homely p ractice of f aithfully
and thoroughly doing the job in h and .

There will come to every one of us the gossi ping

message of Rumo r I t is forever in the ai r I t
. .

tricks u s into the h abits of forming perhaps u n ,

39
consciously impressions of other men and worse
, ,

th an that of acting u pon these impressions I

,
.

tho roughly beli eve that at heart all men are h o nest .

I believe th at the average man whom we meet in

d aily interc o u rse would rather act honestly than
otherwise But we all make mistakes if we make
.

anything and we would best assume a man s !

,

honesty when he does m ake a mistake and tell h i m

about it rather than the o th e r f ellow
,
.

I t is more o ver a good rule if a man does well

, ,

to tell him of that in ap preci ation Tell the other

,
.

man also fo r all three people will feel the in uence

,

of the boost and the praise Such a practice sti m u

.

lates and strengthens condence among men and

so in turn strengthens ou r Organiz ation .

H ere I beli eve we nd the essenti al f actor of

ou r business conduct :To help one another in such
, ,

a way th at not only we indivi du ally are helped but

ou r Org aniz ation benets at the same time .

Much is being s aid by writers these days about

business ethics ab o u t ou r way of living outside of
,

business for p roper atmosph ere in business I b e .

li eve that a real man l ives one life not two l ives ,
.

And in conjunction with wh at I h ave s ai d above

concerning the h arm of trusting Rumo r and con ,

cerning the benets of bestowing praise f reely let ,

me add that I think the w h o l e man must go into

business and business must receive f rom him all
th at h e has to give Wh en a man withholds any
.

p art of himself ! his ethics morals religion i n

, , ,

d u stry condence judgment ) f rom his business

, , ,

4
0
his business su f fers in just the p roportion that he
fails to apply these f actors
.

Therefo re I u rge a high standard of life and liv

,

ing fo r home community and business not merely

, ,

bec ause this is a benet to business itself but b e

,

cause i t is also a benet to the man who later in

,

l ife must necessarily look back on his career and

,

ask himself i f wh at he h as done h as been worth

whi l e M en fo r two good reasons I want to u rge
.
, ,

u pon you worth while living I t gets the most

.

out of and puts the most into every day s work and
!
,

it creates a ty p e o f lif e which will give you joy as

you retrospect it in l ater days .

41
 ! .

E co n o m y o f Ov e rh e ad

I am going to make some p retty broad assertions

and I ask th at you follow me closely .

N 0 man op erates a business with complete suc

cess who h as not learned to conduct his individua l
expenses with wise economy Therefore when a .
,

man enters ou r employ h e should begin if h e h as , ,

not already done so to exercise watchful care over

,

his personal nances The home allows a man one

.

of the best training grounds for the p ractice of

business princi ples H ere he m ay study the budget
.

system distribution of income control of e x p e n d i

, ,

tu re overh ead u p keep of proper ty insu rance

, ,
-

, ,

the bu ilding of surplus I n f act most of th e funda

.
,

mental p roblems o fbusiness are fou nd in the home

and may be p ractised and mastered there .

This mastery of home economics is a splendid i n

tro d u c ti o n to business economics No m an is p re .

pared to m anage one of ou r stores until he h as

learned to get the u tmost value for eve ry dollar of
h is expendi tu re to live within his means to s ave
, ,

systemati cally i n short to m ake a true business ,

distribution of his resou rces And with increase .

of income there should never be a l ike increase of

,

e x p enditure but necessarily there should be a

greater increase of s avings .

The p ractice of keeping clos e scrutiny over pe r

sonal and domestic expense is the best prep aration
a man can h ave fo r the economic conduct of busi
ness After all is it not tru e th at business ec o nomy
.
,

is in a sense personal economy amplied ! In both

, ,

4
2
ou r business We pl ace the greatest stress and give
.

th e fo remost pl ace to the training of men and the

giving of service This you see is the business i n
.

su rance of producing producers Once a business .

is wise enough to do th at the nanci a l income is

,

assu red This makes clear wh at the essenti al duty

of the M anager is :H e becomes a M anager not
.

alone because he gives evi dence that we can trust

him to conduct the a ffai rs of one of our stores but
beyond th at becau se he has proved to u s that he
,

can build another man to take his pl ace H e must .

train th at man in every essenti al of this business and

m ake th at man in tu rn a cap able teacher of another
man This is the true J C Penney Company end

. . .

less ch ain the training of men down th e l ine

which makes every new man as cap able as his
trainer in the abi l ity to h andle the business and
to become the teacher o fthe men beside him .

This should make i t pl ain to you why I say that

money is not the p rime f acto r Once you grasp the .

signicance of th e highly developed executive

cap ab l e of training the man beside him yo u wi l l ,

comprehend the relative pl aces of man and money

in ou r enterp rise .

I am going to s ay something to you about you r

conduct as individu als I am going to be very
.

f rank because I beli eve we shou ld be frank with

,

one another for thus it is th at we arrive the sooner

at an understanding .

G entlemen I h ave not come here with the i n

,

tention of preaching to you I am su re I do not .

even need to disclaim any such intention But I .

want every word of this mess age to reach yo u to ,

4
4
reach every one of you individu ally Fu rthermo re .
,

I do not want you to receive it as a message for the

other man but as the most pertinent of all messages
for you rselves .

I n ou r Organiz ation there has developed to a ,

greater o r less degree a tendency toward c areless

,

methods of individual nances I n many instances .

,

I think this c areless nancing exp resses itself in

,

extravagant ways of indivi du al and f amily living .

I deplore this becaus e as I h ave already s ai d to

,

you no man becomes a business success who is not

,

already f amili ar with economic p ractices learned

f rom and applied to the f amily budget Let me
o rds of Ch arl es S chwab :
.

! uote you a few w

The sup reme vi rtue of the existing situ ation is
th at i t is necess ary for all business men in America ,

in f act fo r every individu al i n America to e x amine ,

tho roughly his cost o fdoing business and his cost

of living The result of it all is to force business and
.

to fo rce indivi du als to start to economi ze and to

s ave .

M en are you doing this ! Are you e c o n o m i z

,

ing ! Are you s aving ! Are you bu ilding that

reasonable but necess ary su rplus fo r the future !
As I h ave told you business h as its cycle of lean
,

and f at years now as truly as in the Old Testament

,

d ays .

N 0 one can afford to go on blindly exercising ,

the h abits that were formed du ring the H appy G o -

Lucky days of a year o r so ago The go o d o l d .

easy times of 1 9 1 9 are gone forever No man here .

will ever again e x perience them fo r they do not ,

45
come twice in a generation Often several genera
.

tions p ass and never know them at all .

There will come of cou rse greater business

, ,

volume ; this increase in volume wil l be ac c o m

p a n i e d by intense competition We sh.all h ave
! !
less and less of the usu al waiting on the customer ,

and more and more necessity fo r keen service for ,

constructive suggestive creative selling Compe

, ,
.

tition f rom now on i s either going to build a man

into a ner and more skillfu l s alesman or is going
to thrust h im aside .

These p resent conditions lead me to s ay to you

something that you must take just as much for you r
selves as you r own case makes necess ary I am .

n o t talking about indivi du als but about the methods

which individuals adopt often u nconsciously i n

, ,

good times and to which they cling when times

are more strenuous H ere is wh at I allude to :
.

Automobiles are a ne possession ; lon g shing

tri ps in the country are a ne form of entertain
ment ; ne houses with elaborate equi pment and
servants like those of M r Jones and M r S mith are
. .

wonderfully impressive to poorer neighbors ;

di amond rings and tailor made clothes are ne ;
an d so too are silk shirts and ten dollar h ats
, ,
.

B !T :
Can we really a fford these things !
I f we have formed a h abit of s pending for such
things must we therefore keep it u p !
,

Must we be so foolish as to make ou r demands

so great th at they require not only ou r cu rrent i n
come but the anticip ation of futu re p rots !
4
6
 Any man who spends i n excess of his income and
borrows f rom his fu tu re is in no sense a wise man
, ,

and in many senses a foolish man .

I am s aying to th at man now if he is sitting h ere :

,

Wake u p B e s ane enough and brave enough to

.

look you r a ffai rs straight in the f ace S quare you r .

needs with wh at you h ave and manage to h ave a

,

little margin over cu rrent income at the end of the

month .

There is just one end for the m an who h abitually

overspends M aybe you know him ! H is end can
.

no more be avoi ded than can death be avoided by

the man whose boat drifts nearer and nearer
Ni agara .

1 Get acqu ainted with the homely virtues

. .

2 Wh atever you r income is l ive within i t

.
,
.

!
3 Don t be ashamed if you r su rplus over ex
.

penses is smal l .

4 H ave a denite goa l fo r the fu tu re of you r

.

nanci al operations .

5 I t is impossible for the big s alaried man to be

.

rich if he spends more th an he earns

,
.

6 I t is impossible for the smal l s alaried m an to

.

be poo r i f he sp ends less than he earns

,
.

These simpl e tru ths about money have been

stated time and time again They are just as true
.

today fo r you and for me as they ever were ; and

,

more than that they are indispens able

,
.

4
7
 !I .

Co m m u n i ty S tu d y

I want to c all you r attention to a f acto r which

must continue to play a l arge part in the conduct
ing of ou r individu al stores I refe r to the i n te n
.

sive sci entic study of the pu rch asing c ap acity of

the towns in which ou r stores are located I t is of
.

no particul ar benet to us to open a grou p of new

stores if we are secu ring f rom the communities in
,

w hich ou r p resent stores are located l ess th an the

f ai r p roportion of business that shou ld be ou rs I .

p articularly u rge u pon you to devote c areful and

scientic thought to the stu dy of you r towns Every .

M anager should know the total p ayroll of his com

munity This should include the town itself and
.

its adj acent pu rch asing territory H e should know

.
,
!
as closely as possible the proportion of the town s
,

money that is spent in ou r kind of stores H e .

should determine f rom this total the p ro portion

th at should necess arily f all to us ; and then he
shou l d go after a good share of the bal ance as it is
,

right and f ai r fo r him to do because he offers his

community unusu al values qu ality and service
,
.

I regard this analysis of the communi ty as of

!
highest importance for it means on the M anager s
,

p art close observation accu rate study and careful

,

planning to bring to the store an increasing pro

portion o fthe total possible business in ou r line I .

earnestly u rge this study u pon ou r M anagers A .

M anager mu st necess arily study his trade H e .

must know th e kinds of customers th at come to his

store the n atu re of thei r wants the scop e of thei r
, ,

buying Without this intimate knowledge he

.
,

4
3
cannot buy intelligently I n short th e M anager
.
,

must know how to distinguish between what he

alone c an do fo r the u p building of his store and
-

wh at he can hi re done ; i f he himself never does

anything but wh at h e can h i re anothe r man to do ,

he is f ailing in the essenti al qu alications of a

M anager .

I t will p ay you M anagers constantly to study the

territory in which ou r stores are located and to
c reate ways and means of interesting the enti re
pu r c h asing public in wh at you o ffer H ere is a
.

camp aign of education u pon which the M anager

can afford to s pend some time I t means bringing
.

before the public all salient f acts regarding the

Company its Golden Rule policy toward the cus
tomer its qu ality of goods its enormous pu rchas
, ,

i n g power its pu rch asing advantages over compe

,

ti to rs and its consequent f avorable prices

,
An ac .

!
tive camp aign on a M anager s p art constantly ,

pu rsued will increase his p r o po rtion of the t o tal

,

business of the town and will repay many fold his

time spent in constructive study .

4
9
 !I I .

M axi m u m !e t u rn s to t h e S t o re f
ro m th e To w n

What I h ave just s ai d indicates how to bring to

the store the ma x imum return f rom the public .

There is a vast di fference between giving good

service to th e customers who voluntarily enter ou r
stores and on the other hand working out policies
, ,

th a t i n d u c e m o re an d m o re c u s to m e rs to e n te r o u r

s to r e s I need not tell you in detail wh at to do in

.
, ,

all o fou r 3 1 3 towns to bring this about for I h ave ,

already sketched in a general way the lines of ac

ti v i ty necessary for you to investigate and o perate .

I n vi ew of ou r large buying power our nanci al ,

standing th e unp aralleled work of ou r buying de

,

p artm e n t the qu ality of goods we handle and the

,

s ervice we render to the public there is every ,

reason why ou r M anagers can spend time p ro t

ably i n sp reading the f acts as prop aganda in thei r
territory The result will be an increasing number
.

of p ermanent customers who will give u s thei r con s

tin n ed p atronage .

M ake it a part of you r advertising camp aign to

tell tactfully th e sal ient f acts of ou r b u siness i n
such a way that customers believe it to be to thei r
best interest to buy from us This means that you .

convince them of ou r su periority of service t e ,

li abil ity o fmerchandise f ai rness and economy of ,

p rice u nf ailing cou rtesy and helpfulness i n

,

pu rch asing Aim to increase the number of people

.

who visit ou r stores ; improve the service you g i ve ;

o r nally take all steps to th e end th at we sh all
, ,

increase constantly the number of ou r s ati s e d an d

p e r m an e n t p a tro n s .

50
observe who has the p roper initi ative the skill and
,

talent th at will grow into salesmanshi p power We .

lo o k to ou r M anagers to devel o p these better types

of salesmen i n accordance with thei r talent and
to carry them fo rward thoroughly p repared fo r
,

positions of responsibil ity as the M anagers them

,

selves were once carried forward You see there

.
,

fore that ou r Business Training Cou rse plows the

,

ground and in a measure shows u s how to cul

, , ,
!
ti v ate it ; but it is the M anager s duty to pl ant the
ground and to make the most of those stu rdy
growths which h e nds in the garden .

5
2
 !I ! .

M an Trai n i n g an d I ts !u rp o s e
I t is a ch aracteristic of ou r business th at no man
may succeed in it who does not at the same time , ,

win success fo r others I t is a wise p rovision th at

.

ou r M anagers must train thei r successors I n the .

beginning of ou r business the personal training of

,

men by the Founder and the rst M anagers was i n

tensive We were a small Comp any We were
. .

compact We were di rect in ou r operations We

. .

d i d in those d ays substanti ally the s ame kind of

business we are doing today but the work we ,

did in ou r rst stores was intensive Every .

M anager gave to every man under him the f reest ,

most complete and most severe training in the

essenti als of merchandising We l earned at rst .

hand exactly how to carry ou t every ph ase of the

business becaus e we worked h and in h and every
, ,

man making the WH OLE business his personal

i ns piration .

There h as been exp ressed of l ate th e f ear that ,

with the growth of the Organization and the con

sequent increases in the number of stores there may ,

eventu ally be a weakening in ou r p roper gras p of

the o riginal body of doctrine I t h as been pointed .

o u t th at the rst M anagers trained thei r men more

di rectly intensively forcefu lly and completely

, , ,

th an M anagers are training thei r men today I .

th ink this need not be so There is no reason why

.

the original body of doctrine should not be p assed

o n just as pu rposefu lly t o day as it was p assed f rom

the Mother S tore nineteen years ago But I will .

go so f ar as to s ay to you th at in the early days , ,

5
3
 every M anager ! and in f act every man connected
with ou r business ) studied the fundamental prin
c i p l e s of the business in such a c o mplete and i n

tensive way th at he mastered every problem that

came before him We knew in the early days that
.

ou r futu re depended o n u s There was no o n e to

.

do our work fo r us ; we simply h ad to succeed And .

I pass this on to you as being just as tru e fo r you

n o w as it was for us then You r futu re depends
.

u pon you r own e f forts ; you must wo rk out y o u r

p roblems and master them ; and according to you r ,

e fforts you must look fo r success No one can d o

, .

this fo r you .

Now about the reward fo r all this intensive wo rk

on you r p art I am c o nvinced that ou r method of
.

training men and of doing business comes as near

as is humanly possible to a f ai r equitable d i stri b u
tion of nanci al p rots The conditi o ns surr o und
.

ing any one man must necessarily be different f rom

those su rrounding any other human being The .

consequenc e is th at no man can allow himself to

!
look u pon another man s domain and to be inspi red
by covetousness or j ealousy Th e main f act for
every one of u s to cling to is this :Every one of us
.

!
must stay on his job The other man s job is the
.

other man s respons ibility Our !

!
o b i s ou r re
.

s ponsibili ty Once a man gets the justice of this

.

f act x ed in his mind he will begin to nd pleasu re

,

and delight in his work H e will understand th at

.

the desi re to reti re i s illogical fo r h e will be con

,

v i n c e d that n o morning is so full of joy as th at one

when a man can s ay to h imself :

,

Well I must be my ttest t o day for I h ave a

,

man s wo rk to do I am eager to get at it and I am

!
.

54
going to nd h appiness in every task to which I
put my h ands .

Comp are this man and the joy of h is active life

with him who arises in the morning and asks him
s elf :
!o w can I put in the day ! How can I kill time
u ntil bedtime aga i n !

This to my mind is the most pitifu l type of

, ,

citizen the man with n o thing to do who every
morning wonders how he will mu rder God s most !

!
p recious gift to man namely the golden hours of
, ,
!
the day .

Therefore f riends let u s h ave f aith in this great

, ,

Organi zation in its aims pu rposes and service

, ,
.

Let u s h ave f aith in one another and beli eve that

no day is so h ap py no day so well spent as th at in
, ,

which a man exercises his thought and his strength

in building something fo r public good and public
s erv i ce
.

As to ou r futu re i fwe are able to carry fo r
ward this business at its p resent rate of develop
ment and to w i n the increased growth that it is f ai r
to e x pect we must realiz e that much more will be
,

demanded of u s in the years to come than was ever

demanded befo re While the Di rectors of this
.

Company wil l at all times f aithfully engage them

selves i n sh aping constructive policies fo r ou r con
ti n u e d development they depend u pon the M anag
,

ers enti rely to see to it that these policies are put

i nto operation ; fo r i t is only by applying ! in the
actu al d aily transactions in ou r sto re ) ou r con
structive policies that they come to thei r f ru ition .

55
 It is true that we h ave an exceptional Organiza
tion that ou r buying power is great and that ou r
,

advantages in the market are many ; but I want

to counsel you and to warn you to be ever on the
l o okout for inc reasing c o mpetition As we go into .

the futu re competition is bound to be more and

,

more keen Th e past does not p romise that the

.

path ahead i s to be easy and rosy B ecause that is .

true we need men of brains who can think clearly

, ,

who can see ahead who can meet situations and

,

emergencies such as we h ave never befo re ex p e ri

e n ce d .

M anage rs are you doing everything in you r

,

power to train the big men we must h ave ! Are

you doing all th at you know how to do to t you r
s elves to be the men who can be trusted to enlarge
an d p rotect this business !

As I look into the future and perceive the de

mand th at will be made u pon u s by ou r developing
business I am imp ressed with the f act that men of
,

the average type will not be big enough to c arry

the bu rdens that are coming to us M en if you .
,

stop growing i f you cannot inc rease yourselves

,

mentally by stu dy and wise counsel i f you must ,

get soft and abby because you are receiving a fai r

income fo r you r p articip ation in o u r business you ,

are soon going to be found wanting in skill and

judgment to c arry this great enterprise into the
futu re .

I c annot imp ress u pon you too seriously the

reality of this pictu re The untrained man of to
.

day is unt fo r the responsibilities of tomorrow

And as someone h as s aid :The h alf trained man
.

56
i s even a greater tragedy than the untrained I see .

no way of ou r keeping abreast of ou r growing de

mands s ave to hold ever before ou rselves the
simple p ractices of the Founder of this business and
of other successful enterp rises Th e simple facts
a re these :
.

A man must work h is envi ronment to the ad v an t

age of himself and of his business operations .

H e must remain true f ai r and just in all he does

, .

H e must be a maker and developer of men the ,

rarest f actor i n every big co rpo ration today .

Y o u M anagers mu st p ass on to the men who are

working with you the simple and homely vi rtues
th at h ave ever been operative in successful enter
p r i ses .

Among other things you M anagers must p ass

,

on to ou r newer men th e signic ant f act which ex

presses th e di fference between ou r business and
p ractically every other of like si ze Th at f act is
.

t hat we do not dictate to ou r men but by pl acing

,

responsibility u pon them we allow them to de

,

v elo p .

This b rings to light another f act namely that

, ,

w e judge a M an ager not alone by the business he

produces but by the men he p roduces We value .

him as he gives evi dence of power to judge wisely ,

whether his judgment be exercised u pon merchan

dise u pon men o r u pon business development
,
.

S ometimes it h appens in ou r stores th at a new

man comes in who h as h ad considerable e x p e ri
ence !su ally his business experience though
.
,

57
good enough in itself is not of a kind that can e s
,

tab li sh a policy fo r ou r stores Such a man m ay

.

be a good s alesman h e may h ave the ability to sell

,

h i s idea of business to his own M anager he may ,

even be strong enough to tempt the M anager to de

sert the policy th at he h as learned f rom us and to
take u p the p o licies o fthe man he has just hi red .

Let me warn you against this situ ation .

The policies of ou r business h ave been forged

on the strong anvil of experi ence They h ave been .

wisely welded We h ave given them nearly twenty

.

years of the m o st careful cons i deration and close

scrutiny We know th at they tend in the right di
.

rection We know that they c annot be o verthrown

.

in a moment by the point of view of a new man .

Th erefore M anagers be str o ng defenders of the

, ,

faith ; keep pu re the body of doctrine you h ave

learned ; and by wise counsel kindly help and con
,

stant examples show you r new men th at ou r po l i

,

ci es h ave b een carefully thought out .

58
Nothing can take the place of the Spoken word b e
tween s alesman and customer This is the best pos .

sible form of advertising Nothing can ever take .

the pl ace of the long industrious hours spent in

developing ou r business I t was a pleasu re fo r me.

to read some days ago that John Wanamaker b e

gan the celebration of his eighty thi rd bi rthday by -

punching the time clock in his Philadelphi a store

-

at a m and apologizing fo r being l ate ve

. .
,

minutes .

B ut earnest as I fee l about all of these things and

p ersu aded as I am th at there is much of ou r garden
still uncultivated yet I must s ay to you th at I look
,

u pon ou r development thu s f ar in ou r history with

pleasu re and s atisfaction .

You men are in intention and action to be com

, ,

mended fo r th e ne work you are d o ing I know .

that you are earnest industrious and desi rous o f

,

i ncreasing business I know that you r min d s and

.

h earts are right I know that not one of you f ails

.
,

so f ar as in him lies to do the best th at can be done

,

in any situ ation But men here is a word of

warning :
.
, ,

A man cannot continue to wo rk i nto the futu re

with wh at h e knows today H e must constantly .

s tudy h imself his men his business H e must

, ,
.

study this Organization its h istory development , , ,

p resent condition and possibl e futu re H e must .

not let a day go by without doing something to i n

c rease hi s power over what it was the day befo re .

Th ere are better ways of doing everything th an the

ways we know for the simple reason that the best
,

way to do anything h as not yet been found Let us .

60
keep on working studying and investigating to
,

nd these better ways We shall discover that ou r .

p resent garden will yield u s a far l arger crop than

we are gathering as yet and at the s ame time we , ,

sh all learn how better to h andle any new gardens

we may start .

B ack of the Go l den Ru l e is the p ersonal obliga

tion of everyone of u s to build ch aracter for char ,

acter will c arry a man through good times and bad

times over easy pl aces and hard places Ch aracter
,
.

builds a man soli dly into the best there is in his

commu nity Ch aracter is the greatest training
.

force that you M anagers can employ to develop a

new man Remember that th e men who come to
.

you fo r training will re ect you Let them re ect .

a big earnest cap able and ch aracterful model

, , .

You can do al l these things fo r the possibility of ,

them all li es in you We h ave none of u s reached

.

the limit A broad highway stretches before us

.

along which we may travel c arrying ou r business ,

into new pl aces extending ou r unusu al service pos

,

si b i l i ti e s enlarging ou r great f amily of p atrons to

, ,

everyone of whom i t should be ou r constant care to

imp art the natu re and extent of the service we can
ten d er .

1 I can s ee in my imagination
. everyone of us
u l l y active , not p ar ti all y active , in
f the great round
of ou r duti es .

2 I can see us al l interested in the success of this

.

Organization making its development ou r aim and

,
pu rpose ou r one real interest in life knowing that
, ,

the success of all will take care of the well being of -

the indivi du al .

61
 3 I can see ou r chain stretching its length across
.

ou r country establ i shing itself as a service giver to

,
-

an ever i ncreasing number of people .

4 I can see ou r Organi z ation growing broadly

.
,

deeply and solidly bringing into its fold more and

,

more men to ai d in the carrying out of the i m

mense service p rogram that ou r growth involves .

5 I can see you M anagers multi plied to the

.

th o usand mark and beyond a veritable army of

,

able men cap able of conducting this great business

,

in s afety through the lean and th e fat years that are

to come .

6 I can see the army of M anagers developing

.

thems elves th rough exp eri ence persisting in the

,

pursuit of that educ ation which enlarges men and

thus makes them the abl e and capable trainers of
the ever increasing number of men who are
destined to come to us as p art of the working force
of this exp anding O rganiz ation .

7 I can see us all so increasing ou r f aith in the

.

ultimate high pu rpose of ou r Organiz ation th at we

become more and more unselsh in ou r rel ations to
i t more and mo re thoughtful and generous in ou r
,

rel ations to one another more and more inspi red by

,

the f act ! ,
for it is the fundamental fact of ou r O r
g an i z a ti o n ) that it is only in the growth of the O r

g an i z a ti o n as a whol e that the indivi dual nds his

well being and reward .

8 I can see all this as the beckoning goal that

.

draws u s onward by its promises But let us re .

member that we reach no distant goal except by ,

setting out from the pl ace where we are We must .

62
go thence to the place we want to reach The great
.

vision of the fu tu re must be realized in the actual

accomplishment of today and tomorrow .

Let me quote you some lines that to my mind

, ,

convey the rel ation of visi o n and of the d ay s work

!
.

You will not fail to note that thei r meaning is that

we sh all reach what we want to be by the solici tu de
with which we accomplish what falls to ou r h ands
to do every hou r of ou r lives :
We will do so much in the days to come .

But wh at h ave we done tod ay !

We will give o u r gold i n a p rincely sum .

But what did we give t o day !

We will lift the heart and dry the tear ,

We will plant a hope in th e place of fear

We will speak the words of love and cheer .

But wh at di d we speak today !

We wi l l reap such joys in the bye and bye .

But wh at h ave we sown today !

We will build u s mansions in the skies .

But wh at did we bu ild today !

!
Tis sweet in idle d reams to bask ;
But here and now do we do ou r task
Th at is the thing ou r soul must ask :
.
,

Wh at h ave we done today !

63