The Dickinson press., 1916-06-03
lieved to be generally capable of I'M
western conditions and
working capably with western retail

The best recommendation any man
in the organization al give himself
in the eyes of Mr.. Penney and his
other associates is to live modestly,
save his money and reinvest in the
chain. The founder of the business
set the example, and it has been fol-
lowed by practically every one in it.
In fourteen years there have been
only six manager-partners who could
not stand prosperity and had to be
bought out and dropped.
There is such an intermixture of
sentiment and science in the personal
makeup of this founder who takes
his own medicine that it is a little
difficult to know whether to set him
down as essentially a captain of COM
mcrce OF a lucky dreamer. If we call
him first and foremost a business
man, it might be replied that there
are men, even in the clothing field
and in a chain, who are probably
making much more than he is making
on his investmcnt-now.
But on the other hand Mr.. Penney
was a poor maj IA years ago. And
the system which looked so wholly
philanthropic in the beginning is only
just beginning to reach full CONNER
cial efficiency. Unlike most other
chains, it does not face a prospect of
diminishing returns. Its difficulties
do not multiply with the number Of
stores. 1t is not preparing compe-
tition for itself by training men and
then forcing them out. 1t is, in fact,
an extraordinary combination Of the
best features of individual and chain
store proprietorship.
Let us, before we get on to the
merchandising details, have a little
more light on this partnership ar
rangement which lies at the root of
the stores success. Up to three years
ago the business was, as explained,
not really a partnership at all, but a
confederation of partnerships united
by Mr.. Penney's personality and by
advantages of centralized buying and
the exchange Of ideas.
But by the end of 1912 a need for
stronger organization was felt. There
were already thirty-four stores and
plans were made to open fourteen
more. The business was therefore in
corporated in Salt Lake City. The
capital was fixed at $1,100,000, the
81, 900 being common stock held
by Mr.. Penney as trustee and the bal
ance being special classes of pre-
ferred stock, of which only $635,70O
has thus far been issued from time
to time to managers who become
"partners," and to whom Mr.. Penney
in the beginning lent the means to
acquire the interest. The surplus
and undivided profits, it may be prop
er to say at this point, nov amount
to nearly $1,000, 900, or a little more
than half of the cash in stores and
banks and the merchandise in stock.
Nearly all stores r rented and the
value of the fixtures of the eighty
three stores accounted for amounts to
less than $4,000, or an average of
$940 for each store, a very low fig
ure.
The type of organization and op-
Grafton was left unchanged by incor-
poration. 1t continued as close a cor
poration as it has been a close part
nership, with nobody financially in
terested who was not active. 1t
simply gave the stores one name, a
greater and more comprehensive good
will and a definite management.
Directors Pass on Managers.
This management consists of the
officers and two additional directors
who are associate buyers. The di-
rectors now located in New York,
pass on every new store and every
manager-partner. AS no time is to
be wasted on unpromising personnel,
but every man is selected with a view
to his later availability as a partner,
his qualifications are always consid-
cred by some one or other Of the dl-
rectors. Some stores carry fifteen
people, two-thirds of them being men;
other stores only two or three per-
sons. The average is about seven
persons, four or five being men. So
when forty-one stores were added
this year there were that many men
to be advanced to managing partner
| ships, and about five times as many
new men, all partnership timber,
taken in.
The selection of these men is one
of the most important things Mr.
Penny does. He is not the only one
concerned in doing it, but he inter
views most of the men and the other
"partners" are only too glad to have
him so employed-it is a guarantee
of more opportunity and more profits.
Mr.. Penney does not consider himself
actively in the business now, but he
nevertheless spends most of his time
in the chains interest, travelling from
store to store and studying the retail
situation everywhere. Whenever he
stays more than a day or two in a
western city, he puts a want adver-
tisement in the local papers, reading
in part somewhat like this:
Attention !
A concern operating yer 100 stores
has several openings for several
Christian men from rs to IS years of
age, who have had well-trained, retail
experience in selling dry goods, shoes
clothing and furnishings. Men with
fair executive position only will be
considered. Must be cleancut. Drink
ing, gambling, cigarette smoking pos:
itively not allowed. Well-disciplined
mind. pood health and ambition and