The Dickinson press., 1916-06-03

nave 10 pay Cnem IN salary any more
than I would pay for mediocre help.
ut is true that I shall have to
sacrifice something in the way Of
prospective profits in a chain of
stores by sharing them with a series
of partners, but on the other hand
it is plain that such a system as I
propose will supply me with an in
exhaustible number of capable men
whom I could get in no other way,
and who will make my fortune in re-
turn for my promotion of theirs.
Moreover, the sacrifice that I
imagine myself as making is after
all only apparent. Who knows if I
shall really be able to succeed on
large scale by my own efforts? l do
not perceive any other clothing mer-
chants in the small towns growing
wealthy in that way. The only hope
of expansion lies in organization and
cooperation. The leaders of the fu-
ture in this field are young men now,
still on salary, and scattered through
a hundred towns. We shall gain
more by making common cause than
by competing against n another"
But there was still another idea.
When Mr.. Penney's first partner, D.
H. Mudd, had put the second store
on a successful basis, he was n
couraged by MI. Penney to open
third store, in 1908, and put in one
of the men he had trained as a
ger. This manager became a third
partner with Mr.. Penney and Mr..
Mudd, Mr.. Penney furnishing the
capital and taking notes for it.
In the course of time the third
manager-partner opened a store and
put one of his own men into it as
manager and partner. He also took
a third interest and Mr.. Mudd a third.
AS it had been decided to limit the
number Of partners in any n store
to three, Mr.. Penney stayed out of
the arrangement altogether, though,
as before, he furnished the capital
and took his associates notes.
While this was going on Mr.. Pen
ney himself was taking an interest
in other stores being opened by other
managers he had trained. His first
partner was doing the anne with his
trained men. In each case, Mr.. Pen
ney became a partner In the first
store of Mr.. Mudd's new chain, and
gave way to a new man in the next
store. And in the same way in due
time Mr.. Mudd gave way and
dropped out of that particular sub
chain, but continued to start other
stores with other manager-partners,
Mr.. Penney as before becoming part
ner in each of these and dropping out
when these manager-partners devel-
oped new managers.
|, The plan was for each store to
have only three partners, the earliest
partner or highest man to drop out
when a new one came in with the
new store. Each partner in this
way was supposed to be always start
ing new chains or ~sub-chains of his
own, though the earlier partners have
been longer at it and been perhaps
more energetic and are therefore in
terested in more stores. Mr.. Penney
thus has an interest, generally a
minority interest, in 100 of the 1875
stores; his associates in ten, fifteen,
twenty stores, and so on.
All Hunting Partners.
Mr.. Penney, you thus see, was not
the only one interested in finding
partners. Every other partner, too,
was looking for promising partner
material. They went after the ex-
ceptional men everywhere and laid
the Golden Rule proposition before
them. The salary was low, but at the
end of from one to four or five years,
depending on the ability of the man,
he would be taken into partnership,
and be loaned $4,000 or $4,000, which
he would be able to pay back in two
years or less for his share Of the
profits of the store, and then find
himself in a position to take on other
stores.
Every one of the young men asso-
ciated with MI. Penney for any time
is a partner in several stores and is
drawing his share Of the. $4,000 or
$4,000 or more cash store nets an
nually. Many of the men gave up
salaries of $4,000 a year to go into
the chain as retail clerks and take a
salary Of less than $100 a month.
And one man at least abandoned
$4,000 a year. These men. r now
making from $4,000 to $4,000 and
UlOTO d year dpASCS, dSSOAuAA6 w CAS
number of stores in which they have
an interest, and are always pyramid
ing their earnings in new partner
ships.
''That is the real driving power Of
the Golden Rule chain," Mr.. Penney
told me the other day at the New
York office. every man in it has
the most powerful of incentives to
give the enterprise his every waking
thought. The results Of his labors
are not diffused over a large organi-
cation without his getting a direct
proportional benefit, IS in so many
other cases, even under many profit
sharing plans. The general organi-
cation and the local partner profit
together, step by step. :
"That was one of the principles !
laid down at the very outset. Our
later progress has been in no little
degree due to the fact that we have
been successful in filling the higher
positions with men suited to them. In
each case they have been men who
have served their apprenticeship in
&bo c+oroo onI know them thor