The Golden Rule

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Cover art: J. C. Penney, undated photograph; and J. C. Penney inside his Golden Rule Store in Kemmerer, WY, ca. 1902; both courtesy of J. C. Penney Museum, Hamilton, MO.

Cover design: Teresa Wheeler

Library of Congress Cataloging-in-Publication Data

Names: Offutt, Jason, 1965- author. Title: J. C. Penney : the man with a thousand partners / by Jason Offutt. Description: Kirksville, Missouri : Truman State University Press, [2017] | Series: Notable Missourians | Includes bibliographical references and index. Identifiers: LCCN 2017010545 (print) | LCCN 2017021102 (ebook) | ISBN 9781612482095 | ISBN 9781612482088 (library binding : alk. paper) Subjects: LCSH: Penney, J. C. (James Cash), 1875-1971--Juvenile literature. | J.C. Penney Co.—History—Juvenile literature. | Businesspeople—United States—Biography— Juvenile literature. | Stores, Retail—United States—History—Juvenile literature. Classification: LCC HF5465.U6 (ebook) | LCC HF5465.U6 P456 2017 (print) | DDC 381/.141092 [B] —dc23

LC record available at https://lccn.loc.gov/2017010545No part of this work may be reproduced or transmitted in any format by any means without written permission from the publisher.

The paper in this publication meets or exceeds the minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48–1992. Contents

Introduction...... 4 Chapter 1: Early Years in Hamilton. 6 Chapter 2: The Golden Rule . . . 12 Chapter 3: Tragedy and Success and Tragedy...... 22 Chapter 4: The Great Depression. 29 Chapter 5: Penney Returns to Hamilton...... 37 Legacy: The Man with a Thousand Partners...... 43 Timeline...... 44 For Further Reading...... 46 Index...... 48 Image Credits...... 48 Introduction

James Cash Penney, the son of a small-town farmer and minister, grew from poverty to become one of the most successful, well-known businessmen in America. Jim (as he was called) was born in 1875 in Hamilton, Missouri, a town in Caldwell County. His father, a farmer who was also a preacher for the local Primitive Baptist Church, didn’t have much money, so Jim had to learn how to earn his own money. 4 This led him to accept a job as a store clerk that would teach him the world of business. Jim worked in stores from Missouri to Wyoming before he bought his own store, selling dry goods such as household goods, sewing supplies, and clothing. He learned that working hard and treating his employees well were keys to success. Jim opened more stores, and by the 1920s he had thousands of stores across the United States. He built his success on hiring good, smart people to manage his stores, and rewarding them by sharing their store’s profits with them. Because of this, many people called Jim “the Man with a Thousand Partners.” Unfortunately, Jim Penney’s retail store business was hurt by the Great Depression, as were most businesses in America. Although in debt and in danger of losing everything, Jim used his financial sense and religious faith to save his business, and to grow it again over the next decades. James Cash Penney died in 1971, but he left a legacy of success and honesty in business. Today there are about a thousand J. C. Penney stores in the United States and Puerto Rico, more than one hundred years after Jim opened his first store.

5 Chapter 1 Early Years in Hamilton

In the late 1800s, the gentle hills of northwest Missouri, much like today, were covered with trees and lush green farmland. Dirt roads grooved by wagon wheels connected farms, and the budding railroad industry was busy laying tracks across the countryside. Small towns dotted the landscape wherever settlers decided to put down roots, and many towns grew up near railroad stations. James Cash Penney, a farmer from the tiny township of Mirabile in Caldwell County, Missouri, 6 married Mary Frances Paxton of Anderson County, Kentucky. They settled on a farm near Hamilton, Missouri, where they worked hard and raised their family. Hamilton was one of many towns that grew because of the railroad. The Hannibal & St. Joseph Railroad had a station in Hamilton, which helped farmers get their products to the market. The Penneys had twelve children. Their seventh child, James Cash Penney Jr., was born September 16, 1875. When Jim (as he was called) was born, Hamilton’s population was about two thousand.

When Missouri was being settled, many towns grew up along railroad lines that connected major cities. The Hannibal & St. Joseph Railroad went from Hannibal to St. Joseph, and stopped at many smaller towns in between. Both Hannibal and St. Joseph had access to river transportation as well as to other railroad lines. 7 Chapter 2 The Golden Rule

In 1897, when Jim was twenty-two years old, his doctor told him that he had a risk of getting tuberculosis. Jim’s doctor told him he should move from Missouri out west where the air was dryer and easier on his lungs. So that same year, Jim moved to Denver, Colorado. Although Jim started his life in Colorado as a store clerk, by 1898 he had saved enough money to buy a butcher shop and bakery in nearby Longmont, Colorado. However, Jim’s upbringing as the son of a Baptist preacher ended his first step into business as

12 quickly as it began. One of his shop’s biggest customers was a local hotel with a restaurant. Jim lost the hotel’s business when he refused to provide the cook with whiskey along with the hotel’s food order. Without his biggest customer, Jim could not keep his shop open. Out of work and in need of money, Jim took a job he knew how to do—as a clerk in a dry goods store. His work ethic and salesmanship quickly impressed the store owners, Guy Johnson and Thomas Callahan. Their store was part of a dry goods chain called Golden Rule. Working at a Golden Rule Store was appropriate for Jim because his devoutly religious parents had raised their children to follow the golden rule from the Bible: “Do so in everything, do to others what you would have them do to you” (Matthew 7:12).

In the early twentieth century, tuberculosis was one of the leading causes of death in the country. The disease is caused by a bacteria that affects the lungs. Today tuberculosis can be treated with antibiotics, but before vaccines and antibiotics, the disease killed about 10,000 Americans every year.

13 Chapter 3 Tragedy and Success and Tragedy

Jim Penney’s Golden Rule Stores were flourishing in 1910, but tragedy struck him when his wife, Berta, died of pneumonia. This left him raising their two sons alone. Although Jim was overcome by grief at the loss of his wife, his businesses didn’t show it. By 1912 his Golden Rule Stores were bringing in sales of more than $2 million a year. Jim’s Golden Rule Stores became J. C. Penney Inc. in 1913, when he turned his business into a corporation.

22 During discussions on how the company must be run—not just how it should be run—Jim and his partners decided on a set of principles known as The Penney Idea. The Penney Idea started with five rules, and was later expanded to seven. These rules worked. In 1914, J. C. Penney moved the company headquarters from Salt Lake City, Utah, to New York City so he would be closer to the suppliers of his company’s merchandise. By 1915, the number of stores had grown to eighty-three. In 1916, the company opened stores in Wisconsin, their first stores east of the Mississippi River. That was a bold step because that area was not as densely populated, which meant there would be fewer customers.

23 Legacy The Man with a Thousand Partners

James Cash Penney Jr. was not born into greatness; he made it himself. From the life of a poor farm child in the 1800s, Jim Penney rose to create one of the largest department store chains in the world. During its best years, the company had 2,053 stores. The J. C. Penney Company currently has more than a thousand stores in forty-nine states. Jim’s original store in Kemmerer, Wyoming, was made a U.S. National Historic Landmark. The high school in his hometown is named for him. Hamilton also hosts the J. C. Penney Library and Museum. Jim Penney attributed his success to his business philosophy. Raised with a firm grasp on the golden rule (“Do to others what you would have them do to you”) and an appreciation for education, Jim formed a business philosophy that was unheard of in his time—to treat customers and employees with fairness and respect. Although James Cash Penney died in 1971, his contributions to education, farming, and communities across the United States are still felt today. 43 Timeline

September 16, 1875: James Cash Penney is born near Hamilton, Missouri. 1880: The Penney family moves into Hamilton, but keeps their farm. 1883: Jim earns money to buy his own clothes. 1893: Jim graduates from Hamilton Public High School, but doesn’t have the money to attend law school. 1895: Jim becomes a clerk at J. M. Hale and Brothers dry goods store. June 1897: Jim moves to Denver, Colorado. 1898: Jim’s butcher shop and bakery fails; he takes a job with the Golden Rule Store. 1899: Jim marries Berta Alva Hess of Denver. They have a son, Roswell Kemper Penney. 1899: Jim becomes branch manager at a Golden Rule Store in Evanston, Wyoming. 1900: Jim becomes a partner in a new Golden Rule Store in Kemmerer, Wyoming. It is a success; he opens up two more. 1903: Jim’s and Berta’s second son is born, James Cash Penney III. 1907: Jim purchases the three stores he was managing; begins calling employees his “associates.” 1908: Jim opens Golden Rule Stores in Utah and Idaho. 1909: Jim headquarters his company in Salt Lake City, Utah. 1910: Berta Penney dies of pneumonia. 1912: Jim Penney’s Golden Rule Stores bring in sales of more than $2 million. 1913: Golden Rule becomes the J. C. Penney Company Inc. 1914: Jim Penney moves the company headquarters to New York City. 1915: J. C. Penney Company grows to eighty-three stores. 1916: The company opens its first stores east of the Mississippi River. 1917: Jim Penney is named chairman of the board of the J. C. Penney Company.

44 Timeline

1918: Jim opens his first store in Missouri. 1919: Jim Penney marries Mary Hortense Kimball. 1920: Jim’s and Mary’s son Kimball Penney is born in New York City. 1921: Jim raises dairy cattle on farms in New York and Missouri. 1923: Mary Penney dies. 1924: Jim Penney opens his 500th store in his hometown of Hamilton. 1926: Jim Penney marries Caroline Autenrieth. 1927: Jim builds model farm and retirement home at Penney Farms in Florida. 1929: The J. C. Penney Company has one thousand stores; the stock market crashes, and over the next years Jim loses $40 million. 1930: Jim becomes ill and goes to the Battle Creek Sanitarium; he recovers his health and finds new strength to bring his company back from its financial problems. 1941: The company has 1,600 stores in all forty-eight states. 1954: Jim starts the James C. Penney Foundation to promote peace and human rights. 1958: Jim Penney steps down as chairman of the board of his company. February 12, 1971: James Cash Penney dies at the age of ninety-five.

45 For Further Reading

For Young Readers Albus, Harry J. Mr. Penney: The Life of J. C. Penney. Grand Rap- ids, MI: William Eerdmans, 1963. Colonna, Phyllis, The Power of Integrity: Featuring the Story of J. C. Penney. Antioch, CA: Eagle Systems International, 1981. Freedman, Russell. Children of the Great Depression. New York: Clarion Books, 2005. Hudson, Wilma J. J. C. Penney: Golden Rule Boy. Indianapolis, IN: Bobbs-Merrill, 1972. Steele, Christy. Pioneer Life in the American West. Milwaukee, WI: World Almanac Library, 2005. Tycoons and Entrepreneurs. New York: Macmillan Reference USA, 1998.

Websites “History Brief: Daily Life in the 1930s.” https://www.youtube. com/watch?v=gkAfjRolNCI. History Channel. “The Great Depression.” https://www.youtube.com/watch?v=f8k0jJdqKP0. “I Am Angus: Harold Henry on J. C. Penney and Homeplace Farm.” https://www.youtube.com/ watch?v=Ct2ZemBgMog. J. C. Penney Dynamo Newsletters. [company newsletters, 1917 to 1932.] http://digitalcollections.smu.edu/all/cul/ dyn/. The J. C. Penney Museum, Hamilton, Missouri. “The J. C. Penney Library and Museum.” http://www.cityofhamil- tonmo.com/jcpenney/museum.htm.

46 McInnis, Doug. “James Cash Penney: From Clerk to Chain-store Tycoon.” WyoHistory.org, http://www.wyohistory.org/ encyclopedia/james-cash-penney-clerk-chain-store-tycoon. Missouri House of Representatives–Hall of Famous Missouri- ans. “James Cash Penney.” http://www.house.mo.gov/ famous.aspx?fm=16.

Sources Curry, Mary Elizabeth. Creating an American Institution: The Merchandising Genius of J. C. Penney. New York: Garland Publishing, 1993. Howell, Donna. “J. C. Penney Had Value in Store Build: His stress on thrift and quality turned a Wyoming outlet into a huge chain.” Investor’s Business Daily, January 27, 2011. “J. C. Penney Company, Inc.” In International Directory of Com- pany Histories, vol. 18, edited by Jay P. Pederson, 269–74. Detroit: St. James Press, 1997, 2006. “James Cash Penney.” In Thomas Carson and Mary Bonk, Gale Encyclopedia of U.S. Economic History. Detroit: Gale Group, 1999. Kruger, David Delbert. “James Cash Penney: The Impact of a Main Street Merchant on Oklahoma.” Chronicles of Okla- homa 89, no. 3 (2011): 260–87. Parachin, Victor M. “The Hymn that Brought J. C. Penney to Salvation.” Mature Living Magazine, October 14, 2005. Penney, J. C. Fifty Years With the Golden Rule. New York: Harper, 1950. Plumb, Beatrice. J. C. Penney Merchant Prince. Minneapolis, MN: T. S. Denison, 1963.

47 Index business philosophy of J. C. mining, 14, 15, 16 Penney, 17–18, 19–21, 37, 40–41, 42 parents of J. C. Penney, influence of, 8–9, 10, 13, 26, 27 family of J. C. Penney, 15, 16, 22, 25, 27, 32–33, 34, 42 philanthropy, 26–27. 38–39, 40 financial problems, 13, 32–33, 36 Penney Idea, 23, 25 Golden Rule Stores, 13, 15–16, railroads, 6, 7, 16–17 17–19, 22, 24 tuberculosis, 11, 12, 13 Great Depression, 28, 29–32 Hamilton, Missouri, 7, 10, 25, 38–39, 43,

Image Credits

Original art by John Hare: pgs. 6, 12, 22, 29, and 37.

J. C. Penney Museum, Hamilton, MO: cover and p. 4, James Cash Penney, undated photograph; cover (background), J. C. Penney inside his Golden Rule Store in Kemmerer, WY, ca. 1902; p. 14, J. C. Penney’s first Golden Rule Store, 1902; p. 15, J. C. Penney working at a Golden Rule Store in Rock Springs, Wyoming, ca. 1906; p. 23, The Penney Idea; p. 25, J. C. Penney with associates; p. 38, J. C. Penney Co. opens 500th store in Hamilton, MO, detail of newspaper ad; p. 40, J. C. Penney at Masonic Hall dedication; p. 41, J. C. Penney with customers in store Wikimedia Commons: p. 7, Map of Northern Missouri showing the Hannibal & St. Joseph Railroad Lands…, 1860; p. 9, Pigs enjoying themselves, photo by Narek75, 2016; p. 17, cash register, photo © Traumrune; p. 24, JC Penney mother store, Kemmerer, WY, photo by Bernd00, 2007; p. 33, Ratatouille in a glass jar, photo by Kotivalo, 2015; p. 34, Battle Creek Sanitarium, Breathing Exercises, postcard ca. 1900 DeGoyler Library, Southern Methodist University, J. C. Penney Archives: p. 8, Penney family portrait, ca. 1888; p. 41, J. C. Penney assisting customers in store Library of Congress, Prints & Photographs Division: p. 11, General store interior, Moundville, AL, summer 1936 (LC-DIG-fsa-8c52415); p. 16, Miner working in a coal mine (LC-USZ6-1904); p. 27, Guernsey cow or calf lying on the ground, 1941/42 (Farm Security Administration, fsac.1a34444); p. 31, Crowd of depositors gather in the rain outside Bank of United States after its failure / NY World-Telegram staff photo, 1931 (LC- USZ62-117261) PIXNIO: p. 13, gram positive mycobacteria, tuberculosis National Archives and Records Administration, College Park, MD: p. 30, Unemployed men queued outside a Depression soup kitchen in Chicago, 1931 (ARC ID 541927) State Historical Society of Missouri: p. 38, J. C. Penney Farms brochure (C0384) Flickr: p. 34, Gymnasium Drill, Sanitarium Battle Creek Michigan, postcard ca. 1900 (posted by Winston) Public domain images: p. 18, vintage price tags (Old Design Shop, free clip art); p. 35, 1906 ad for Kellogg’s Corn Flakes Find a Grave: p. 42, J. C. Penney grave marker, photo by Neil Funkhouser (#47892-68) 48 JCPenney-CompleteCVR-OL-PRINT.pdf 1 5/23/17 3:19 PM

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