Memphis is a city in western Tennessee, the county seat of Shelby County, in the most southwestern part of the state, along the Mississippi River, with a population of 633,104, the largest city bordering the Mississippi River, and third largest metropolitan area behind St. Louis and the Twin Cities on the Mississippi River. Memphis is one of the most historic and culturally significant cities of the Southern USA. Today, this city has a majority African-American population (61%), with white (24%), Hispanic (10%), and Asians (2%), while fifty years ago, Memphis’s population was 61% white and 39% black. Memphis is a center for entertainment with a historic music scene with founders and pioneers of various American music genres, including soul, blues, gospel, rock n’ roll, rockabilly, rap, and sharecropper country music. Occupying a substantial bluff rising from the Mississippi River, the site of Memphis has been a natural location for human settlement by various indigenous cultures over thousands of years. In the Treaty of Tuscaloosa in 1818, the Chickasaw ceded their territory in Western Tennessee to the USA. John Overton, James Winchester, and Andrew Jackson founded Memphis less than five months after the USA takeover of the territory, in 1819, naming it after the ancient capital of Egypt on the Nile River. Based on the wealth of the cotton plantations and river traffic along the Mississippi, Memphis grew into one of the largest cities of the antebellum South, as the world’s largest spot cotton market, where it was known as King Cotton. From the city’s foundation onwards, African American slaves formed a large proportion of Memphis’ population. The city’s demographics changed dramatically in the 1850s and 1860s, due to waves of immigration and domestic migration, especially Irish people who made up 23% of Memphis by 1860. A race war, between the city’s ethnic Irish policemen and black Union soldiers after the Civil war, led to three days of rioting in early May 1866, as 48 blacks died. Memphis played a prominent role in the twentieth century American Civil Rights Movement. Dr. Martin Luther King Jr. was assassinated at the Lorraine Motel on April 4, 1968, the day after giving his “I’ve Been to the Mountaintop” speech for the garbage union African-Americans. Thus, the National Civil Rights Museum has been established there. Today, the largest employer in Memphis is FedEx, which maintains its global air hub at Memphis International Airport, first or second among the world’s busiest cargo airports. A major professional NBA sports team, the Memphis Grizzlies, play at the FedEx Forum. Many famous musicians and well-known writers were from Memphis. Several songs have Memphis in their titles and lyrics. In recent years, Memphis has appeared in many movies, as it also sponsors several film festivals. The St. Jude Children’s Research Hospital, focused on children’s catastrophic diseases, was conceived and built by entertainer Danny Thomas in 1962. Memphis is also home to Memphis-style barbecue and fried chicken. What do you know about Memphis?
The state of Tennessee
Tennessee is a landlocked state in the Southeastern region of the USA. It borders Kentucky to the north, Virginia to the northeast, North Carolina to the east, Georgia, Alabama, and Mississippi to the south, Arkansas to the southwest, and Missouri to the northwest. On top of that, the western border of Tennessee is the Mississippi River itself. Tennessee is the 36th state by area, but the 15th-most populous state in the USA, with a population of a little over 7 million people. Tennessee is geographically, culturally, and legally divided into three grand divisions of East, Middle, and West Tennessee, with 95 counties. Nashville is the state’s capital and largest city, and anchors its largest metropolitan area. Tennessee contains a mix of cultural features characteristic of Appalachia, the Upland South, and the Deep South. The Great Smoky Mountains National Park, the nation’s most visited national park, is in eastern Tennessee, Nashville in the center, and Memphis in the west. We were going west to east. Tennessee was initially part of North Carolina, and later the Southwest Territory, before its admission to the Union as the 16th state on June 1, 1796. It earned the nickname “The Volunteer State” due to a strong tradition of military service, starting in the War of 1812. A slave state until the American Civil War, Tennessee was politically divided, with most of its western and middle parts supporting the Confederacy, while most of the eastern region harbored pro-Union sentiment. As a result, Tennessee was the last state to officially secede from the Union and the first former Confederate state readmitted to the Union after the civil war. During the 20th century, Tennessee was aided by massive federal investment in the Tennessee Valley Authority (TVA) and the city of Oak Ridge. During World War II, the Manhattan Project’s uranium enrichment facilities for the construction of the world’s first atomic bombs was established at Oak Ridge. Tennessee had played a major role in the development of many forms of popular music, including country, blues, rock and roll, soul, and gospel. Tennessee derives its name from the Cherokee town of Tanasi in present-day Monroe County, Tennessee, on the Tanasi River, now known as the Little Tennessee River. The modern spelling, “Tennessee,” was attributed to Governor James Glen of South Carolina, who used this spelling in his official correspondence during the 1750s. Two people associated with Tennessee became USA presidents. Andrew Jackson (1767-1845) had a Nashville Hermitage plantation before he became the seventh president of the USA (1829-1837). Jackson made the Cherokee and Chickasaw move to Oklahoma in the famous Trail of Tears. Vice President Andrew Johnson (1808-1875), who became President (1865-1869) after the death of Lincoln, had been governor of Tennessee (1853-1857) before becoming Vice President. The population of Tennessee is about 70% white, 17% African American, and 7% Hispanic. The four most common self-reported ethnic groups in the state are English (8%), Irish (7%), German (5%), and Scotch-Irish (3%). About 81% of the population identifies as Christian in this Bible Belt religious state, with Protestants making up 73% of the population, Evangelical Christians represent 52% of the Protestants, while Roman Catholics make up only 6%. Have you ever been to Tennessee?
A trip to Tennessee in 1985
In the summer of 1983, we went west to California. In 1984, we went to the East Coast. Guess what? In 1985, we were heading south to spend nine days in Tennessee. We were going country! As soon as school was out in June of 1985, we headed south on I-57 to Memphis, Tennessee. Although the sign coming out of Chicago always said this way to Memphis on I-57, off the Dan Ryan highway, it really was not that close. It was an 8 and-half hour car ride, 534 miles from Chicago to Memphis, like going to Sioux Falls, South Dakota, a full day’s ride including potty stops, food stops, and gas stops, sometimes all at once. Thus, we spent practically all day, Monday, June 10, 1985, on the road, on I-57. We were going to spend three nights at the Regal Inn in Memphis, that is still there today, at 4063 S. 3rd Street. Of course, we were going to see Graceland and the King Elvis, then to Beale Street, and finally to Mud Island, on the Mississippi. Once again, I had crammed a lot of stuff into a short period of time. There were no relatives down in Tennessee, it was pure entertainment. Then, we were going to head east to Jackson, the home of the Casey Jones Museum. Then it was on to Nashville, Country Music City USA, for three days, where we were going to Opryland and the Grand Ole Opry. Further east was Chattanooga, Gatlinburg, and Pigeon Forge with Silver Dollar City, before it became Dollywood the following year in 1986, the year after we were there. We planned to stay three days in Gatlinburg, and take the Blue Ridge Parkway from the Smoky Mountains in North Carolina to the Shenandoah Valley in Virginia, including Asheville, NC. Then we were headed to southern Pennsylvania, to visit Gettysburg and Hershey Park, and then back home again going west on the Pennsylvania Turnpike. This was going to be a packed two weeks, but we were ready for it. Have you ever traveled in the south?
Lincoln’s Home Town
The most famous historical resident of Springfield, Illinois, was Abraham Lincoln, who lived in Springfield from 1837 until 1861. Back then in 1985, all the brochures called it “Mr. Lincoln’s Hometown.” We went to many of the Lincoln tourist attractions, the Lincoln Home, the Old State Capitol, the Lincoln-Herndon Law Offices, and the Lincoln Tomb. Springfield has a new Abraham Lincoln Presidential Library and Museum that opened in 2005. Obviously, we did not go to that back in 1985. However, Springfield is dotted with sites associated with USA President Abraham Lincoln, who started his political career there. Margaret, Joy, and I saw the Lincoln Home National Historic Site, a National Historical Park and the Lincoln Depot, from which Abraham Lincoln departed Springfield to be inaugurated in Washington, D.C. The Lincoln family belonged to the First Presbyterian Church, so that it still has the original Lincoln family pew. Near the village of Petersburg, is the New Salem State Park, a restored hamlet of log cabins. This was a reconstruction of the town where Lincoln lived as a young man. I have a brochure and fifteen postcards from Springfield, and about six postcards from New Salem. The brochure divided Lincoln’s live into the formative years, early political career, and the war years. Lincoln’s house and neighborhood was very impressive. You got a sense of what life was like back in the 1850s at 426 S. 7th Avenue. The law offices were neat on the corner of 6th and Adams. I liked the old State Capitol at the downtown mall. I also liked the new Capitol Complex between Cook and Mason streets. We went in to see the empty chambers and the small Supreme Court of Illinois. The Governor’s Mansion looked very nice from the outside at 5th and Jackson, the third oldest Governor’s Mansion still in use. There even was an Illinois State Museum at Spring and Edwards streets. Lincoln was buried in Springfield, so that his tomb with a monument is there. Then it was on to Lincoln’s New Salem State Park with all those reconstructed log cabin houses. This gave you a feel for the simple lives that they had back in the 1840s. Many of the cabins had the names of the people who had lived in them. It was neat. I enjoyed myself, and I think Joy and Margaret did also. Have you ever been to New Salem?
Abraham Lincoln (1809-1865)
Abraham Lincoln was the 16th president of the USA, serving from 1861 until his assassination in 1865. He led the USA through the American Civil War, defeating the Confederate States of America, playing a major role in the abolition of slavery, expanding the power of the federal government, and modernizing the USA economy. Lincoln was born in Kentucky and raised on the frontier. He was self-educated, but became a lawyer, Illinois state legislator, and USA representative. Angered by the Kansas–Nebraska Act of 1854, which opened the territories to slavery, he became a leader of the new Republican Party. He reached a national audience in the 1858 Senate campaign debates against Stephen A. Douglas. Lincoln won the 1860 presidential election, but the South viewed his election as a threat to slavery. Southern states began seceding to form the Confederate States of America. A month after Lincoln assumed the presidency, Confederate forces attacked Fort Sumter, starting the Civil War. Lincoln, a moderate Republican, had to navigate a contentious array of factions in managing the war effort. He suspended the writ of habeas corpus in April 1861, leading to Chief Justice Roger Taney’s opinion in Ex parte Merryman. He also averted war with Britain by defusing the Trent Affair. On January 1, 1863, he issued the Emancipation Proclamation, which declared the slaves in the states “in rebellion” to be free. On November 19, 1863, he delivered the Gettysburg Address, which became one of the most famous speeches in American history. Lincoln closely supervised the strategy and tactics in the war effort, including the selection of generals, and implemented a naval blockade of Southern ports. He promoted the Thirteenth Amendment to the U.S. Constitution, which, in 1865, abolished slavery, except as punishment for a crime. Lincoln managed his own successful 1864 presidential re-election campaign. He sought to heal the war-torn nation through reconciliation, calling for “malice toward none but with charity for all” in his second inaugural address. On April 14, 1865, five days after the Confederate surrender at Appomattox, he was attending a play at Ford’s Theatre in Washington, D.C., when he was fatally shot by Confederate sympathizer John Wilkes Booth. Lincoln is remembered as a martyr and a national hero for his wartime leadership and for his efforts to preserve the Union and abolish slavery. He is often ranked in both popular and scholarly polls as the greatest president in American history. Much has been written about Lincoln, as this has become a cottage industry in itself. What do you know about Abraham Lincoln?
An Easter trip to Springfield, IL
In Easter Week of 1985, Joy, Margaret, and I made a trip to Springfield, IL. Thirty-five states in the USA have a town or city with the name Springfield, that was to become the future home town of Homer Simpson, a few years later in 1989. Thus, it could be anywhere. We stayed at the Holiday Inn East in Springfield, that now goes by the name of Holiday Garden Inn at 3100 S. Dirksen Parkway. Springfield is the capital city of Illinois with a population of 114,394, the state’s seventh-most populous city, but the most populous in Central Illinoi. It is the county seat of Sangamon County, near the Sangamon River, north of Lake Springfield, along historic Route 66, and now Route 55. Largely on the efforts of Abraham Lincoln, as well as its central location, Springfield was made the state capital in 1839. Both Kaskaskia and Vandalia were the state capitals before 1839. Thus, Springfield’s economy is dominated by government agencies and adjacent firms that work with state and county governance, in addition to healthcare and medicine. The University of Illinois Springfield has its campus near Lake Springfield. Settlers originally named this community as “Calhoun,” after Senator John C. Calhoun of South Carolina, expressing their cultural ties. In 1821, Calhoun was designated as the county seat of Sangamon County due to its location, fertile soil, and trading opportunities. Settlers from Kentucky, Virginia, and North Carolina came to the developing settlement. By 1832, Senator Calhoun had fallen out of favor with the public and the town renamed itself as Springfield. Abraham Lincoln arrived in the Springfield area in 1831 when he was a young man, as he spent the ensuing six years in New Salem, where he began his legal studies, joined the state militia, and was elected to the Illinois General Assembly. In 1837, Lincoln moved to Springfield, where he lived and worked for the next 24 years as a lawyer and politician. Springfield became a major center of activity during the American Civil War. After the war ended in 1865, Springfield became a major hub in the Illinois railroad system. In the most recent census, Springfield was about 80% white and 20% black. Springfield is known for some popular food items, such as the corn dog or Cozy dog, “chilli”, as it is known in many chili shops throughout Sangamon County, and the Maid-Rite Sandwich Shop in Springfield that still operates what it claims as the first USA drive-thru window. Springfield’s Dana–Thomas House is among the best preserved and most complete of Frank Lloyd Wright’s early “Prairie” houses, built in 1902–1904. In August, the Illinois State Fair is held at the Illinois State Fairgrounds. Springfield has the area’s largest amusement park, Knight’s Action Park, and the Caribbean Water Park, which is open from May to September. There still is a drive-in theater, the Route 66 Twin Drive-In. Interstate 55 runs from north to south past Springfield, while I-72, which is concurrent with U.S. Route 36 from the Missouri state line to Decatur, runs from east to west. Amtrak serves Springfield daily with its Lincoln Service and Texas Eagle routes. In many ways, it is typical of a state capital town in many other states. Have you ever been to a town named Springfield?
The origins of Walmart
After this discussion with the Teamsters rep, I tried to find out more about Walmart. In 1945, businessman and former J. C. Penney employee, Sam Walton (1918-1992) bought a Ben Franklin store branch from the Butler Brothers. His primary focus was selling products at low prices to get higher-volume sales at a lower profit margin, portraying it as a crusade for the consumer. He experienced setbacks because the lease price and branch purchase were unusually high, but he was able to find lower-cost suppliers than those used by other stores and was consequently able to undercut his competitors on pricing. Within five years, the store was generating $250,000 in revenue. The lease then expired for that location and Walton was unable to reach an agreement for renewal, so he opened a new store at 105 N. Main Street in Bentonville, Arkansas, naming it “Walton’s Five and Dime,” the current Walmart Museum. On July 2, 1962, Walton opened the first Wal-Mart Discount City store at 719 W. Walnut Street in Rogers, Arkansas. Walton stated that he liked the idea of calling his discount chain “Wal-Mart,” because he really liked Sol Price’s FedMart name. Within its first five years, the company expanded to 18 stores in Arkansas and reached $9 million in sales. In 1968, it opened its first stores outside Arkansas in Sikeston, Missouri, and Claremore, Oklahoma. The company was incorporated as Wal-Mart, Inc. on October 31, 1969, and changed its name to Wal-Mart Stores, Inc. in 1970. That same year, the company opened a home office and its first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly held company on October 1, 1970, and was soon listed on the New York Stock Exchange. In May 1971, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma. They entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As the company moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of $340.3 million. In the 1980s, Wal-Mart briefly experimented with a precursor to the Supercenter, the Hyper-Mart. Four stores combined features of discount stores, supermarkets, pharmacies, video arcades, and other amenities. Wal-Mart continued to grow rapidly, and by the company’s 25th anniversary in 1987, there were 1,198 Wal-Mart stores with sales of $15.9 billion and 200,000 associates. One reason for Wal-Mart’s success between 1980 and 2000 was its contiguous pattern of expansion over time, building new distribution centers in a hub and spoke framework within driving distance of existing Supercenters. The company’s satellite network was also completed in 1987, a $24 million investment linking all stores with two-way voice and data transmissions and one-way video communications with the Bentonville office. At that time, the company was the largest private satellite network, allowing the corporate office to track inventory and sales and to instantly communicate with stores. By 1984, Sam Walton had begun to source between 6% and 40% of his company’s products from China. In 1988, Walton stepped down as CEO, but remained as chairman of the board. During that year, the first Wal-Mart Supercenter opened in Washington, Missouri. Did you know that Wal-Mart was originally a southern store?
A meeting with a Teamsters union representative
Later that year, we had a meeting with the union representative from the Teamsters Union, since they represented all the workers in the Montgomery Ward Distribution building. Technically, the Outlet Store was part of that. Under Sewell Avery in the 1930s and 1940s, Montgomery Ward had been an anti-union company. That changed after he left. The Chicago Avenue warehouse became unionized, and every time Wards opened a new distribution center, the Teamsters were there to greet the new employees of Montgomery Ward. The Teamsters tried to unionize the retail stores, but were never successful, except for one Tire Center. That store manager was immediately fired. Hoffman got along with the Teamster union guy named Jackson, so that the Outlet Store, although unionized, never had a problem. However, Brennan was the new president, so that no one knew what to expect. The most surprising part of this meeting with the Teamsters union representative was his vehemence against Walmart. I had never heard of Walmart in 1985, and I thought at first that he was talking about Walgreens. He went on to explain that Walmart was going to run America. I thought how could one store run America? He explained that Walmart was anti-union and did not have any store in a major metropolitan area. They always set up their stores outside of towns. Then they would undercut the local downtown stores by just a couple of cents. Instead of using the traditional price of $1.99, everything was $1.97, therefore cheaper. They also had computers that checked their sales and replenished their stocks. They were ruining both the small local downtown stores and the regular mall stores. They were going to ruin America. Guess what! He was right. As of 2022, Walmart had 10,586 stores and clubs in 24 countries. Walmart is now the world’s largest company by revenue, according to the Fortune Global 500 list in October 2022. Walmart is also the largest private employer in the world, with 2.1 million employees. It is also the largest publicly traded family-owned business, as the company is controlled by the Walton family. Sam Walton’s heirs own over 50% of Walmart through both their holding company Walton Enterprises and their individual holdings. By 1988, it was the most profitable retailer in the USA, and the largest in revenue by October 1989. The company was originally geographically limited to the South and lower Midwest, but it now has stores from coast to coast from the early 1990s. Walmart’s investments outside the USA had mixed results. Walmart’s ruined small stores and many department store malls, but it certainly is number one today. Do you like shopping at Walmart?
The impact on our Montgomery Ward Outlet store
Also, in 1985, Montgomery Ward, under Bernie Brennan began an aggressive policy of renovating its remaining stores. He restructured many of the store layouts into boutique-like specialty stores. Electric Ave. had major appliances and electronics. Rooms & More had home furnishings and accessories. Auto Express had tires, batteries, parts, and service. The Apparel Store had men’s, women’s, and children’s apparel and accessories. The Signature Group subsidiary provided financial services, credit cards, and operated one of the largest auto clubs in the United States. He wanted to draw business from traditional department stores. While all these things were going on at the corporate offices, we had our own problems at the Franklin Park Outlet. First, Bill Kadlec, the Store Manager, and myself, had a meeting with the warehouse manager, Ed Thomas. The company was going to change the accounting way that we bought merchandise from the warehouse. We used to set the price we could sell it at and then figure the 30%-35% markup to determine the cost. That was not going to happen anymore. We were going to pay the regular cost price of an item, no matter what its condition. We would use the same paperwork and SKU numbers, but we would not determine the cost, just the sale price. We would pay the regular cost, just like any other store. This made Kadlec mad, because there would be no way that we could make a profit by paying the regular cost. Ed Thomas explained that they no longer wanted the warehouse or distribution center to take losses on merchandise. The loses should be sustained in the individual stores. I said that this would lead to a surplus of damaged or used goods in the stores. Is that what they want? Thomas told me that it was what they wanted. I did not see the real reason for this. This was simply passing the buck to the individual stores rather than to the regional distribution centers. The decision was made and it was final, so that there was no need for a discussion. That was not the only decision. A few days later, Ed Thomas introduced Kadlec and myself to our new Outlet Supervisor. The corporate headquarters had decided to put someone in charge of all the Montgomery Ward Outlet Stores. I was surprised to learn that we had over 15 Outlet stores throughout the USA. Our new boss was Greg Samovitz, but I never did get his last name correct. He was very tall, about 6’7” and young looking. However, he was very pleasant, and I never had an argument with him. He was going to operate out of the Chicago Corporate Offices for the whole country. We would report to him directly, not to the Chicago District Manager, as we had done under Dale Hoffman. Kadlec was more upset about it than me, but he easily got upset. He explained that it would be impossible to make a profit under these new accounting rules in place. Then Greg explained that we were not expected to make a profit, but to keep our loses as low as possible. Kadlec explained how the store’s union rules and union wages prevented any big cost savings. Greg said that he understood. He would help any way that he could. This was a tough meeting. I think that Kadlec did not want anybody else telling him what to do. Anyway, there was no option. This was the way it was going to be. For the time being, we would not have to do anything different. Obviously, our profit margin would be lower. How much was acceptable was not clear. Thus, we had a new boss, and a new accounting system. Have things have every changed at your work place?
The history of Montgomery Ward retail stores
The first Montgomery Ward retail Stores opened about fifty years after the catalog business began. By 1929, Ward’s profits reached $13 million, operating 531 retail stores. In 1930, Montgomery Ward received a merger proposal from Sears. To save Wards, J.P. Morgan recruited Sewell Avery (1874-1960), to turn around the failing Montgomery Ward. In 1936, Fortune magazine said that Avery was the Number 1 Chicago businessman. By 1937, Ward’s sales were 76% of Sears’s and well ahead of J.C. Penney’s. The company made a public relations coup in 1939, when an in-house copywriter wrote a booklet about a little red-nosed reindeer named Rudolph, which became a Christmas classic. In 1949, Gene Autry recorded the Johnny Marks song, “Rudolph, the Red-Nosed Reindeer” that became a number one hit and a staple of Christmas songs, based on the 1939 Wards story. However, from 1941 to 1957, Wards did not open a single new store. In the postwar years, Avery failed to take advantage of the demand for durable goods and did not expand Montgomery Ward, costing its prominence in the retail field. Its 600 stores were smaller and located in less populous areas than Sears’s 702 stores. Sales were one-third of Sears’s $3 billion, and profits were just $35.4 million. By 1960, sales only reached $1.2 billion, but profits were just $15 million. Ed Donnell (1919-2003), became president in 1966. To avoid a hostile takeover, Ward’s found a friendly acquirer, Container Corporation of America. Ward’s stockholders would own two-thirds of the newly formed corporation, Marcor, in 1968. New stores continued to open at the rate of 25 a year, while old ones closed one by one. By 1972, Ward’s 100th anniversary, the big retailer was adding a million square feet of store space a year, primarily in shopping centers. In 1975, Mobil Oil Corporation bought Marcor and separated Wards and Container Corporation. USA Senator Ted Kennedy said that this big oil company was trying to put its profits into retail stores to avoid paying taxes. As losses mounted, Mobil lent Wards another $100 million. By the end of 1980, Montgomery Ward had lost $233 million on sales of $5.92 billion. They made most of their meager profits on their credit cards, not from the sale of merchandise. Searching for another savior, Mobil recruited Stephen Pistner (1932-2024) with another $50 million loan from Mobil. In 1983, Wards finally hit the black again with profits of $56 million. In 1985, after three years of experimentation, Pistner left the company with 322 Montgomery Ward Stores, still the sixth-largest retailer in the USA. By then, Mobil wanted to sell Montgomery Wards. To make this more attractive it forgave $500 million in loans to Wards. In June 1985, Mobil persuaded Bernard Brennan (1939-) to return as president and CEO. Brennan then completely closed the unprofitable catalog business. In 1986, Mobil Oil divested from MARCOR, the Container Corporation of America, so that Montgomery Ward was a direct subsidiary of Mobil. In 1987, Brennan oversaw what was then the largest management-led leveraged buyout in USA history, with the management group in partnership with General Electric Co.’s GE Capital Corp. paying $3.8 billion for Wards in 1988. Subsequently, GE Capital owned 49% of Wards, Brennan 35%, and other company managers the remaining 16%. Wards became the tenth-largest privately held company in the United States. Did you realize that retail companies have a social and financial history?