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                                                                    EXHIBIT 4(c)

                                   GUARANTY
                                   --------



     This Guaranty is executed as of this 7th day of February, 1997 by J. C.
Penney Company, Inc., a Delaware corporation ("Guarantor"), in favor of J. C.
Penney Funding Corporation, a Delaware corporation ("Borrower"), and the holders
("Holders") from time to time of Borrower's Commercial Paper (as defined below).

                                   RECITALS:
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     WHEREAS, Borrower is a wholly-owned subsidiary of Guarantor;

     WHEREAS, Borrower from time to time has issued its short-term commercial
paper, at least eighty-five percent of such proceeds having been loaned to
Guarantor pursuant to that certain Loan Agreement dated as of January 28, 1986
between Borrower and Guarantor (as amended from time to time, the "Loan
Agreement");

     WHEREAS, Borrower at any time may terminate its obligation to make loans to
Guarantor, pursuant to the terms of the Loan Agreement;

     WHEREAS, Borrower is willing to continue to make loans to Guarantor
pursuant to the Loan Agreement on the condition that Guarantor guarantee
Borrower's outstanding commercial paper (the "Outstanding Paper") and all
commercial paper hereafter issued by
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Borrower pursuant to its dealer placement commercial paper program entered into
with Credit Suisse First Boston Corporation, J. P. Morgan Securities Inc.,
Merrill Lynch Money Markets Inc., Morgan Stanley & Co. Incorporated, or any such
other brokers or dealers which Borrower may from time to time select to assist
in the placement of its commercial paper or otherwise (collectively with the
Outstanding Paper, the "Commercial Paper"); and

     WHEREAS, Guarantor is willing to guarantee the Commercial Paper on the
terms set forth herein.

     NOW, THEREFORE, in consideration of the premises, Guarantor hereby agrees
as follows:

     1.  Subject to the terms and conditions of subordination set forth in this
Guaranty, Guarantor hereby unconditionally guarantees in favor of the Holders,
the prompt payment when due of all interest, principal, and other amounts owing
under the Commercial Paper (collectively, the "Guaranteed Debt").  This is an
unconditional guaranty of payment, and in the event of default by Borrower in
the payment of interest, principal, or any other amounts payable under the
Guaranteed Debt, the Holders may institute legal proceedings directly against
Guarantor to enforce this Guaranty without first proceeding against Borrower.

     2.  Guarantor acknowledges that it has received and will receive direct or
indirect benefit from the making of this Guaranty, the issuance of the
Commercial Paper, and the creation of the Guaranteed Debt.

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     3.  (a) The Guaranteed Debt shall be subordinated and subject in right of
payment to the prior payment in full of any and all other indebtedness for
borrowed money incurred, created, assumed, or otherwise guaranteed by Guarantor
(collectively referred to as the Guarantor's "Senior Debt").

     (b) In the event of (i) any dissolution or winding-up or total or partial
liquidation or reorganization of Guarantor, whether voluntary or involuntary, or
any bankruptcy, insolvency, receivership or similar proceeding relative to
Guarantor, or (ii) any default in the payment of principal (including any
acceleration or required prepayments or amortization) of or interest on any
Senior Debt of Guarantor, then, subject to the provisions of subsection (d)
below, the Holders shall not be entitled to receive any payment under this
Guaranty on account of the Guaranteed Debt unless and until all Senior Debt
shall have been paid in full or otherwise discharged.

     (c) In the event that the Guaranteed Debt, or any part thereof, is declared
due and payable prior to its stated maturity, then all principal of and interest
and any other amounts due on all Senior Debt outstanding at the time of such
declaration as to the Guaranteed Debt shall first be paid in full, before any
payment is made by Guarantor upon the Guaranteed Debt.

     (d) In no event shall any Holder be required by this subordination to
refund any amounts paid to it pursuant to this Guaranty on account of the
Guaranteed Debt prior to the events specified in subsections (b) and (c) above,
and prior to such

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events the Holder shall be entitled to be paid hereunder as agreed and to
collect any sums due such Holder hereunder by any lawful means.

     (e) The provisions of this Section are for the purpose of defining the
relative rights of the holders of any Senior Debt, on the one hand, and the
Holders, on the other hand, against Guarantor, and nothing herein shall impair,
as between the Guarantor and the Holders, the obligation of Guarantor, which is
unconditional and absolute, to guarantee the prompt payment when due of the
Guaranteed Debt in accordance with the terms and provisions thereof; nor shall
anything herein prevent the Holders from exercising all remedies otherwise
permitted by applicable law upon default hereunder, subject to the rights, if
any, under this Section of any Senior Debt holder.

     4.  The substantive laws of the state of New York shall govern the
validity, construction, enforcement, and interpretation of this Guaranty.

     IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as
of the date first written above.

                                        J. C. PENNEY COMPANY, INC.,
                                        a Delaware corporation

                                        By: /s/ Robert B. Cavanaugh
                                           ----------------------------------

                                        Name:   Robert B. Cavanaugh
                                             --------------------------------

                                        Title:  Vice President and Treasurer
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