Personal Finance Class

A Man With Morals

It was on September 16, 1875 that James Cash Penney Jr. was born near Hamilton, Missouri on a farm. His parents were James Cash Penney Sr., a poor farmer and unpaid Baptist minister, and Mary Frances Penney. Penney’s upbringing was a poor one in material wealth, but his parents taught him moral principles that were worth much more than money. He worked at different stores before he finally opened his own butcher shop in Denver, Colorado. Unfortunately the business did not last long because he would not give special favors to an important customer. “I would never have amounted to anything were it not for adversity,” J.C. Penney once said. “I was forced to come up the hard way.”  

From there he started working with Thomas Callahan and Guy Johnson, the owners of the Golden Rule stores. Callahan and Johnson were considerably impressed with Penney’s great work ethic and honesty. So when they needed someone to take charge of their new store, Penney was made the third partner in it. The store was to be in Kemmerer, Wyoming, a mining town of 1,000 residents. Penney faced the opposition of a rival competitor that gave credit to its customers. Instead of doing what everyone else did, Penney was on a cash only basis. He also decided against making high price mark-ups. Another key principle that Penney had was to sell only high quality merchandise. Along with providing superior customer service, the store was a success. The first day his sales reached $466.59, and by the end of the year 1902, sales totaled to $28,898.11. Penney soon took charge of more Golden Rule stores. Because of some issues between Callahan and Johnson, their shares were sold to Penney. As the sole owner of 34 Golden Rule stores in 1912, Penney was bringing in sales over $2 million. 

James Cash Penney (Photo credit: Wikipedia)
James Cash Penney (Photo credit: Wikipedia)

Later the company’s name was changed to the  J. C. Penney Company. Throughout his life, his business motto was “Honor, Confidence, Service, and Cooperation.” Penney stated that “Courteous treatment will make a customer a walking advertisement.” One reason why his business was so successful was because, while other businessmen treated their customers rudely, Penney was respectful and fair with each customer. Not only did he treat his customers well but the employees he carefully picked were taken care of. He knew that if the business was to succeed he would need loyal employees who would run things right. The way he achieved this was to only hire worthy employees and treat them with respect. A lesson to learn from Penney would be that if you can cut costs you can save your business. He would not have expensive fixtures in the store or fancy buildings, rather it was a simple store. Penney realized that if he wasted money on unnecessary things he would have to raise the cost of his merchandise. This would eventually cause the customer to suffer. Penney knew when and where to use money, and would not withhold it from a good cause, but neither would he waste it. “Give me a stock clerk with a goal and I’ll give you a man who will make history,” said Penney. “Give me a man with no goals and I’ll give you a stock clerk.” Even though some goals might have been unreachable, Penney understood the value of setting goals. Some of his own goals seemed unreachable, but because he knew that they were right, he kept on pursuing them. Another important lesson from Penney is that business is not just about profits. Because he knew this he would give large sums of money to charity or would do many things for the poor. This was not only his personal belief, but it looked good for the company when people knew that Penney was not only interested in profits. 

Even while facing hard times, Penney stuck to the Golden Rule, and in the end it produced a very successful business. At the time of his death, sales for the company reached $5 billion dollars, in 1971 dollars. James Cash Penney was a great entrepreneur because he cared about his customers and employees, would do what was right, and had great morals. The way he approached the idea of becoming a successful businessman was what made him great. 

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