this wa s A Century of James Penney’s Main Street Department Stores in the Rocky Mountain West BY DAVID DELBERT KRUGER DAVID DELBERT KRUGER | AUTUMN 2012 3 J. C. Penney Historic Store Photograph Collection, DeGolyer Library, Southern Methodist University, Dallas, Texas When the Penney brothers, West. In Idaho, German brothers David and Nathan James and Herbert, opened their Golden Rule mer- Falk opened their first department store on the streets cantile in Great Falls, Montana, one hundred years of Boise in 1868, while Mormon pioneer Brigham ago, they received no press beyond the small grand Young established the Zions Cooperative Mercantile opening ad they took out in the Great Falls Tribune.1 Institution (ZCMI) in Utah that same year. Five years This wasn’t really a slight on the part of the news- before Penney was born, Thomas C. Power opened paper: the Great Falls store was the first in Montana his first department store in Fort Benton, Montana.3 for the Penneys. Even the Penney name held little At the time of Penney’s birth, Edward L. Bonner had significance to customers since the roughly thirty already established stores in Missoula, Deer Lodge, stores James Penney owned in Wyoming, Idaho, and and Butte and hired a sales clerk named Andrew B. Utah all operated in association with the Golden Rule Hammond, who would eventually overshadow Bon- syndicate that had given him his start and supplied ner as manager of the Missoula Mercantile. During his merchandise. the 1890s, Romanian immigrant Herbert Fligelman For James Penney, having his own name on stores unveiled his New York Dry Goods Store in Helena, was secondary to conveying the values—literal and and copper king Marcus Daly laid the financial foun- figurative—he wanted them to represent: dations for Daniel J. Hennessy’s elegant department store in Butte.4 There were many golden-rule stores, doing many Born in Hamilton, Missouri, Penney grew up as a types of business throughout the West. But the poor farm boy before moving west in 1897. Penney’s name was a poignant link for me with my father’s retail career formally began in 1899, at the Golden and mother’s ideals and injunctions. For me it had Rule store in Evanston, Wyoming, where Penney’s the creative meaning of one of the most fundamen- older mentors, William “Guy” Johnson and Thomas tal laws that can be expressed in words. [W]hile Callahan, owned that location and a small chain of Christ was not the first to give it expression, His others throughout the region. Several other propri- was the perfect pronouncement.2 etors also operated affiliated, or “cousin,” Golden Rule stores, with some outlets under autonomous James Penney’s philosophy of doing business by ownership while others featured joint partnerships. the “Golden Rule” of “doing unto others” led to his Many of these Golden Rule businessmen had known incredible success and the creation of what was, argu- one another since boyhood, and the majority of them ably, America’s first national department store chain had emigrated from Missouri.5 and certainly the first of its kind to originate in the Thomas Callahan was perhaps the West. Within twenty years of the Great Falls most innovative of these Golden Rule xas Te opening, Penney oversaw a retail empire s, proprietors. In many ways, he pio- lla a D headquartered in New York City with y, it rs e stores on more than fourteen hundred iv n U t s Main Streets, forty-three of them in i d o h t Montana. J.C.Penney stores ulti- e Evanston businessmen William M n r “Guy” Johnson and Thomas mately played a crucial role in e h t u Callahan owned a small chain defining and serving trade centers o S , of Golden Rule stores among y r a throughout the region. Remark- r “cousin” Golden Rule stores b i L ably, a large majority of these r throughout the region. Working e y l as a sales clerk, James o department stores remained com- G e Penney impressed Johnson D , mercial and cultural icons of their n and Callahan, who proposed o i t c e a three-way profit-sharing l downtown business districts well l o C partnership called “Johnson h into the latter half of the twentieth p a Callahan Penney.” Financed by r g o t o Johnson and Callahan, Penney century. h P e r opened his own Golden Rule store in o t S Born in 1875, James Cash Penney c i Kemmerer, Wyoming, in 1901. Penney r o t s i H y J . e n C n . e was a relatively late arrival to retailing in the P is pictured here in 1901. 4 MONTANA THE MAGAZINE OF WESTERN HISTORY J. C. Penney Historic Store Photograph Collection, DeGolyer Library, Southern Methodist University, Dallas, Texas Southern Methodist University, Historic Store Photograph Collection, DeGolyer Library, J. C. Penney Penney’s performance so pleased Johnson and Callahan that they gave him partnerships in their stores at Rock Springs, Wyoming, and Montpelier, Idaho. Penney persuaded them to open an additional store in the Wyoming mining town of Cumberland. In 1915, the Cumberland store (above) bore both the Golden Rule and the J.C.Penney names on its facade. neered not only the logistics of a department store suggested Penney’s new store be located in Ogden, chain but the modern practices of volume purchasing Utah, but when Johnson took him there for a site and discount retailing. Callahan knew he could maxi- visit, Penney backed away from the offer on account mize profits by selling merchandise to customers on of the city being “too big” for him. Penney felt most a cash-only basis while turning over store inventories comfortable in places where he could get to know at a high volume. Callahan also knew that he could his customers personally. He also felt he would over- sell quality merchandise at lower prices if he could extend himself on credit if he had to borrow his share combine the purchasing power of every Golden for a store large enough to serve a city that size. As Rule store. Although the rural West was his home, an alternative, Penney convinced Johnson and Cal- Callahan frequently made buying trips to New York lahan to locate a new store in the mining and sheep- City, Kansas City, and St. Louis to keep Golden Rule ranching town of Kemmerer, fifty miles north of stores stocked with inventories of family clothing, Evanston. Penney selected the site and secured a linens, notions, and other merchandise. fifteen- hundred-dollar loan for his share in the new Penney paid close attention to his mentors’ ideas store, which concurrently became the home for his and ultimately embraced them as his own. As a sales wife, Berta, and their infant son, Roswell.6 When the clerk, he quickly impressed Johnson and Callahan Kemmerer store opened in 1902, it generated enough with his youthful energy, work ethic, and salesman- profit for Penney to pay off the entire note within the ship. In 1901, the two older men agreed to set him up first year of operation. with his own Golden Rule store. The arrangement Johnson and Callahan were so pleased with would be a three-way profit-sharing partnership Penney’s performance over the next five years that called “Johnson Callahan Penney.” Guy Johnson they gave him partnerships in their stores at Rock DAVID DELBERT KRUGER | AUTUMN 2012 5 DeGolyer Library, Southern Methodist University, Dallas, Texas Southern Methodist University, DeGolyer Library, Historic Store Photograph Collection, J. C. Penney Although Callahan and Johnson split as partners and friends in 1907, Penney stayed on good terms with both men and bought out all of their stores during the 1920s. Above, the original members of the Colorado-Wyoming-Idaho Golden Rule syndicate are (left to right) James Penney, Thomas Callahan, John Hood, Drury G. Keirsey, and Guy Johnson. Springs, Wyoming, and Montpelier, Idaho, while associate partnerships like the ones Johnson and Cal- Penney persuaded them to open an additional store lahan had provided. For Penney, the word “associate” in the Wyoming mining town of Cumberland. Penney was not a synonym for “employee”: it held a deeper and his wife showed their gratitude to these men by meaning of mutual respect and shared opportunity. naming their second son Johnson Callahan Penney If a man decided to work for Penney, he could count after the business partnership. on long hours, but he could also count on the oppor- Unfortunately, in 1907 Johnson and Callahan’s tunity to partner with Penney and eventually open friendship came to a sudden and permanent end. and manage his own store. Typically, if an associate Both men remained on good terms with Penney but came up with enough money for a one-third share in a wished to dissolve business contact with each other. new store, Penney provided the remaining two-thirds Penney was able to buy the partnership’s Golden using the profits of his Kemmerer store. Rule stores simply by giving his word to repay each Penney’s first partners—Earl C. Sams, Dayton man on a personal note of thirty-four thousand dol- Mudd, and Edward Neighbors—were young sales lars. The fact that Johnson and Callahan agreed to clerks who worked their way up in Kemmerer and those terms is a testimony to Penney’s impeccable Cumberland before joining Penney in 1908 to open integrity. To pay down the debt, Penney sold off the new stores in northern Utah and southern Idaho.