Chain store executive, pioneer in profit sharing, and philanthropist, J (ames) C (ash) Penney (1875-1971) built a corporate empire following business precepts based on the Golden Rule.
J. C. Penney
The seventh of 12 children, only six of whom grew to maturity, J. C. Penney was born on September 16, 1875, on his father's farm near Hamilton, Missouri. His father, the Reverend James Cash Penney, Sr., served as an unpaid preacher for a fundamentalist sect known as Primitive Baptists and farmed to earn a living. His mother, Mary Frances Paxton Penney, was a Kentuckian. Life was joyless and difficult for the family, and at the age of eight young Penney was told that he had to buy his own clothes. This was not primarily because of necessity, but rather to teach him the value of money and self-reliance. To earn money he purchased a pig, fattened it, and sold it for a profit, then bought others. Later his father ordered him to sell his pigs before they were ready for a top price because they were objectionable to the neighbors, so he turned to growing and selling watermelons.
Penney graduated from Hamilton High School in 1893 but did not have the money for higher education. With the aid of his father he secured a position as a clerk in a local dry goods and clothing store. Starting on February 4, 1895, he was paid $25 a month. Never athletic or physically robust, a little more than two years after he started working his health began to fail. On the advice of his physician he left in 1897 for Colorado to regain his health. He worked briefly at two stores and then bought a butcher shop but went bankrupt rather than donate whiskey to the cook of a local hotel in order to obtain business.
A promising new opportunity came when Penney was employed by a Longmont, Colorado, merchant, T. M. Callahan, to work in Callahan's first store in his small Golden Rule Mercantile Company chain. In March 1899 Callahan sent the young man to work at his Evanston, Wyoming, store at a salary of $50 a month. Soon thereafter, on August 24, 1899, he married Berta A. Hess who would bear two sons, Roswell Kemper and James Cash, Jr. Three years later, Penney was sent to the town of Kemmerer, Wyoming, to open a new Golden Rule Store there. The store was capitalized at $6, 000, of which one-third was Penney's, making him a junior partner. The chance to share in ownership increased his ambition, excited his imagination, and gave him the idea of someday having a chain of stores of his own based on the same principle of partner-owners who shared in the profits. He lived frugally in an attic room over the store at first. He opened the store at 7:00 a.m., closed at 9:00 or 10:00 p.m., and worked half a day on Sunday.
In 1903 he acquired one-third interest in another Golden Rule store, and a year later he supervised a third store in which he was sold a one-third interest. In 1907 Penney bought the other two-thirds interest in these three Golden Rule stores. He found, selected, and trained men, convinced that store managers had the duty to share their experience with their promising salesmen. He delegated responsibility, put his faith in his people, and eventually made them partners when new stores were opened. Individual store managers shared one-third of the profits, a motivating factor for success in business according to Penney. By 1909 he gave up personal management of the Kemmerer store and moved to Salt Lake City to establish a headquarters for all his stores.
In January 1913 Penney's chain was incorporated and the name was changed to J. C. Penney Company. The headquarters for the 48-store chain moved to New York City in 1914. Penney continued the expansion and in 1924 opened the 500th store in his hometown of Hamilton, Missouri. The company continued to operate as a partnership until 1927, when there were over 1, 000 stores, necessitating full incorporation. Managers had from 1907 been given stock in the chain, the amount determined by the profits of their individual stores. In 1927 they exchanged this stock for stock in the company as a whole.
Penney was president of the company until 1917, chairman of the board of directors from 1917 to 1946, and honorary chairman of the board from 1946 to 1958. By the time of his death on February 12, 1971, he had created a vast corporate empire. There were 1, 660 stores with annual sales of over $4 billion, making J. C. Penney second only to Sears, Roebuck and Co. in nonfood retailers in the country. All 50, 000 employees, or "associates" as Penney called them, shared in the profits.
Penney liked being called "The Man with a Thousand Partners, " a phrase he used in the title of an autobiography. He claimed that "the ethical means by which my business associates and I have made money is more important than the fact that we have achieved business success."
After leaving the presidency of the company in 1917, Penney spent more time on his outside interests. One was cattle breeding. He ran a 705-acre farm in New York state from 1922 to 1953 raising purebred Guernsey dairy cattle. He operated another farm in New York state and eight or nine farms in Missouri. Penney was also involved with many charitable and religious endeavors and was a prodigious speaker. He was active in the Young Men's Christian Association, Boy Scouts, National 4-H Club, Allied Youth Inc., and Laymen's Movement for a Christian World. He founded a home for retired religious workers in Florida in memory of his parents. Although he had only a limited education, he was the recipient of 17 honorary degrees and many other honors, awards, and citations.
During his 95 years, Penney was married three times and had five children and nine grandchildren. His first wife died in 1910, and in 1919 he married Mary Hortense Kimball. She died in 1923 after bearing a son, Kimball. Three years later, in 1926, he married Caroline B. Autenrieth, who bore two daughters, Mary Frances and Carol.
Penney's rise to fame and fortune was not an unmarred success story. A major financial disaster struck in the 1929 stock market crash. Penney lost $40 million when several banks from which he had borrowed foreclosed on loans secured by his personal holdings of stock. He let his servants go and wound up weakened in spirit and health and facing a $7 million debt at the age of 56. But Penney was able to start over again with borrowed money and soon regained control of his "empire." In his later years he reflected: "I believe in adherence to the Golden Rule, faith in God and the country. If I were a young man again, those would be my cardinal principles."
Further Reading on J. C. Penney
Penney was the author of several books about his life, including J. C. Penney: The Man With a Thousand Partners (1931), Fifty Years With The Golden Rule (1950), Lines of a Layman (1956), and View from the Ninth Decade (1960). Biographies include J. C. Penney, Merchant Prince by Beatrice Plumb (1963) and Norman Beasley's Main Street Merchant (1948). Webster's American Biographies (1974) also includes information on Penney. Articles appear in TIME (June 20, 1949), FORTUNE (September 1950), LIFE (May 14, 1951, and October 3, 1955), Newsweek (September 19, 1960), and the Rotarian (May 1953). His obituary appeared in the New York Times on February 13, 1971.
Additional Biography Sources
Curry, Mary E. (Mary Elizabeth), Creating an American institution: the merchandising genius of J.C. Penney, New York: Garland Pub., 1993.