JC Penney's Midas Touch: the "Golden Rule"

If you ever find yourself driving through Kemmerer, Wyoming (pop. 2,651 in 2000), you can visit the site of James Cash Penney's first "Golden Rule Store." Opening on April 14, 1902, the one-room building was to become the flagship JC Penney store. The first day's sales totaled $466 in coins.

Penney, an assistant manager at another dry goods store, went into partnership with his employers Guy Johnson and Thomas Callahan, investing $500 cash and a $1,500 I.O.U. note. Buying a one-way train ticket, he traveled to Kemmerer sight unseen to open the store. Kemmerer, a coal mining town, is about 130 miles northeast of Salt Lake City, Utah. The first US Census for Kemmerer notes a population of 843 in 1910. Penney arrived there eight years earlier.

In Penney's own words on the City of Kemmerer's website, "When we locked the store at midnight and went upstairs to our attic room after the first day's business to figure out how we stood, there wasn't a great deal of paper money or for that matter, so many silver dollars; but there was an

astonishing - to us - wealth in pennies, nickels, dimes, quarters, and half-dollars. Our first day's sales amounted actually to only $33.41 shy of the $500 savings we had put with the note for $1500 to pay for the partnership." American Heritage Center reports that the first year's sales were $28,898.11.

Penney and his family lived in the attic, opened the store at 7am daily, and closed around midnight when no more customers were in the streets, according to Kemmerer. "When he and his partners opened the Golden Rule Store ... it was a one-room building located between a laundry facility and a boarding house. Packing crates were used for makeshift counters and shelves," Made in Wyoming describes.

Penney was born in Missouri in 1875 to a farmer and Baptist minister whose Golden Rule philosophy, "do unto others as you would have them do unto you," greatly influenced Penney in his business and personal dealings. The "Golden Rule Store" was run on a cash-only basis with a "one price for all" no-haggling policy. In 1907, five years after the first store's opening and after adding two more stores, Penney bought out his partners, according to NNDB.

His retail acumen started early. "At age 8, when he needed a new pair of shoes, he invested $2.50 in pigs, turning a profit," explains NNDB. Money was in such short supply in the Penney household that he started buying his own clothes by raising livestock until neighbors complained of the smell. He wanted to be a lawyer, but could not afford tuition. Instead, Penney started working as a sales clerk at JM Hale and Brothers in Hamilton, Missouri on February 4, 1895, at 20 years old, a few days before his father died, according to the State Historical Society of Missouri.

Not everything was golden for Penney, however. In 1897, he moved to Colorado and started a butcher shop which failed, according to American Heritage Center, "largely due to the loss of the local hotel's business when he refused the cook's demand of a pay-off in the form of whiskey." In 1898, he started working for his future partners, Callahan and Johnson. In 1902, they offered him the partnership to open the Kemmerer store.

Olga Kirkwood, a sales associate of the Kemmerer store for 25 years, says of Penney, "He was very nice to customers and didn't pressure them. He made you feel like you were the most important person in that store," she said, adding, "If you treat your neighbors good and you treat your customers good, that's what'll keep people coming back."

The Golden Rule worked. Penney said "there are no secrets," maintaining that the principles of business were easily explained: "In retailing the formula happens to be a basic liking for human beings, plus integrity, plus industry, plus the ability to see the other fellow's point of view." His philosophy was applied to employees as well.

"Give me a stock clerk with a goal and I'll give you a man who will make history. Give me a man with no goals and I'll give you a stock clerk," was Penney's opening to new employees. He offered profit sharing to all his managers,

and eventually expanded profit sharing to all his employees.

In 1913, with 22 stores, he formed the JC Penney Stores Company and kept the "Golden Rule" philosophy, if not the name. In 1927, when the dry-goods store owner in his hometown of Hamilton, Missouri retired, Penney purchased the JM Hale and Brothers store, the same one he had worked for in his youth. It became the 500^th JC Penney store. The same store Penney had worked at in his youth.

He practiced what he preached, riding city buses to work where the New York Headquarters was located, and even in his 70's still went behind store counters and helped customers. "He called his employees 'associates' because they actually were associates -- by his death in 1971, the company's profit-sharing program included all of its 50,000 store workers, and Penney's was America's second largest non-grocery retailer behind Sears Roebuck," according to NNDB.

Penney had two sons with his first wife who died in 1910, and one son with his second wife who died in 1923. He had two daughters with his third wife, and that marriage endured until his death in 1971, according to NNDB. In Kemmerer today, a six room cottage stands as a museum of Penney's first home.

Penney wrote four books, listed on NNDB as:

J. C. Penney: The Man with a Thousand Partners (1931, memoirs, with Robert W. Bruere)
Fifty Years with the Golden Rule (1950)
Main Street Merchant (1952)
View from the Ninth Decade (1960)

Sources

Beaver, Robin. "Living the Golden Rule: Simple Principle Guides JCPenney Stores." Made in Wyoming.

"Historical Decennial Census Population for Wyoming Counties, Cities, and Towns." Wyoming Economic Analysis Division. 5 Apr. 2001.

"J.C. Penney." NNDB: tracking the entire world.

"JC Penney Store/Home." The City of Kemmerer, Wyoming.

"Wyoming Citizen of the Century Nominee James C. "J.C." Penney." American Heritage Center. University of Wyoming.