Part 13

Salesmanship is the thing that really made R. H. Macy & Company and it therefore is patent that they should consider the actual sellers of their goods as the very backbone of their organization. In another place it is related how, in the department of training, employees are taught to sell, and in another something of the working out of the psychology of the customer and the salesclerk. Education counts. It helps to make the salesclerk a vital factor of the store organization.

Macy policy sees to it that the clerk is, in so far as it is possible, kept interested in his or her work. There are, as we have already begun to understand, as few rules governing their conduct, dress and liberties as are consistent with the smooth, economical operation of the business. On the other hand, there is all possible encouragement for them to become familiar and even expert with the things that they sell. In many of the departments special booklets have been prepared as aids in selling the particular line of merchandise carried. That for the stationery department, for instance, covers: Paper, with its history from the earliest times, its manufacture, sizes and characteristics; engraving, with a full description of the processes connected therewith; fountain-pens and their manufacture; desk accessories, commercial stationery and the like. Ambition to excel in salesmanship is further stimulated by taking clerks through factories where their lines are made, and by exhibiting motion pictures of the manufacturing of these goods.

Here, then, is the store's most direct contact with its patrons. There are others, however, to be classed as at least fairly direct. Take that big and comfortable restaurant up on the eighth floor. It is one of the real landmark's among eating-places of New York, a world city of good eating.

Its own magnitude may easily be guessed from the fact that in a single business day it feeds more people than almost if not any other in the town. Translated into cold figures this means that there is an average of twenty-five hundred lunches bought by customers each day that the store is open; with a maximum on extremely busy days reaching as high as five thousand. Figures are impressive. Yet these do not include either afternoon teas or late breakfasts for both of which there is a considerable clientele.

To serve these hungry folk who come to Macy's there are two hundred waitresses, buss-boys and other employees upon the floor, besides fifty in the general kitchen, twenty in the bakery and eight in the ice cream factory. And if you still try to doubt that this restaurant is not of itself a real business and one to be reckoned with, consider that in the course of an average year its patrons consume--among other things--two thousand barrels of flour, fifty-two tons of sugar, seven hundred and fifty thousand eggs, ninety-three thousand six hundred pounds of butter, two thousand bags of potatoes, and nearly half a million quarts of ice cream. This latter item, however, covers the ice cream used at the soda fountain and in the employees' and men's club restaurants.

The employees' lunchroom--conducted on the cafeteria plan--serves four thousand men and women each working day. It provides tasty and wholesome food at a cost that makes it entirely possible to eat to repletion for twenty cents or less. Soups, for instance, are three cents a portion, and meat dishes six, while other items, such as sandwiches, vegetables, desserts and the like are correspondingly low.

Nor is this luncheon the sole restaurant resource of the employees within this institution. In the men's club nearly a thousand more of the Macy family eat their midday meal each day; and eat very well indeed. Here the meal is served at a flat rate: at the uniform and moderate cost of thirty cents.

Under the same general management direction (the third assistant general manager) as the restaurant is the store's supply department--not different very much from the supply department of a big railroad or manufacturing unit--which supplies everything for its consumption, from coal to string; the manufacturing departments in which are produced glass, mattresses, printing, engraving, custom-made shirts, millinery, picture frames and paper novelties; the candy factory over near Tenth Avenue and Thirty-fifth Street, which completely fills a big modern six-story building; the telephone service; and the so-called public service department.

These last facilities command our attention for a passing moment. The telephone is, of course, the nerve-system of the Macy organization; nothing else. Its chief ganglion is a far-reaching switchboard on which little lights twinkle on and off and at which at a single relay sit nine competent operators in addition to a corps of inspectors and supervisors. The big board, from which run fifty-nine trunk-wires to the neighboring Fitzroy exchange, is none too large. Year in and year out it handles an average of nine thousand calls a day. And in the Christmas season this number easily is doubled and trebled.

The public service department means exactly what it is called. It is at the service of the public. In concrete form it is a free information bureau, where theater seats and railroad and Pullman tickets may be purchased at face value--and not one cent beyond, not even the usual moderate fifty-cent advance of the hotel agencies--where astute and marvelously informed young men and women, with a miniature library of reference books at their immediate command, stand ready and willing to answer all the reasonable questions that may be thrust at them. To it is added a postal office, a telegraph office and public telephones for both local and long distance service.

The third assistant general manager of the store also has within his bailiwick the important department of mail orders and adjustments. Although in the technical sense of the word Macy's today has no mail order department--having been forced to abandon its once promising beginning along this line because of a sheer lack of room in which to handle it--the store each year actually receives thousands of orders for its goods by mail, from folk who, for one reason or another, find it inconvenient to visit it. These are received and systematically handled in this very department. Under its adjustment division comes the extremely interesting bureau of investigation, which concerns itself with all complaints, and the correspondence bureau, which handles more than ninety-five per cent. of the mail of the house.

It requires no particular keenness of imagination to see that, even with complaints reduced to a minimum and letter-writing and handling to a fine science, there is an infinite amount of detail in these two departments alone--detail that reaches into every part of the store and that necessitates a clever combination of system and diplomacy.

The exposition of the workings of the Macy organization is yet to lead us into other chapters in which various separate subjects of interest will be treated at greater length than here; but now is the time and place to focus our attention upon one of the small, but extremely important, departments that works unseen--but not unfelt--behind the scenes. It is known as the comparison department and the work that it does is of vast importance in the operation of the store. Its functions are unending--and continuous. Macy's policy of underselling its competitors is an unhalting one.

I have before me a Macy advertisement from a New York newspaper of recent date. In a conspicuous place in it there is a card which says: "For sixty-two years we have sold dependable merchandise at lowest in the city prices. We are doing so now and shall continue to do so." This was published at a time when the recent reaction from the extremely high prices of the war period already had begun to set in; and yet this was the big store's sole acknowledgment of the deflation sentiment--to say nothing of hysteria--which was sweeping the town. Its competitors had been offering their wares at reductions of from twenty to fifty per cent. from their topmost prices, but, serene and secure in the knowledge that its policy in selling had been consistently adhered to, Macy's only reiterated that its prices would continue to be the lowest in the city--quality for quality.

To hold fast to this policy, through thick and thin, has not always been easy. Macy's has fought some royal battles in its behalf--yet not so much because it was a policy as because with the big store in Herald Square it has become a principle of the most fundamental sort.

More than twenty years ago the principle became extremely difficult to maintain, because of the growing tendency of the proprietors of articles, so patented or copyrighted as to make their imitation practically impossible, to attempt to fix their final retail sales price. It no longer became the mere question of whether Macy's or any other store would have the right to undersell its competitors; it became the fundamental question of whether the great centuries-old open market of the world could continue to remain an open market, in the interest of the consumer; and not a closed market, in the interest of the producer. To maintain the first of these positions, in behalf of its patrons, Macy's entered upon and won, almost single-handed, one of the notable legal battles in the history of this country.

As far back as 1901--if you are a stickler for exact dates--this whole question of price maintenance became an acute issue with Macy's. It came to pass that when the prominent publishers of America formed an association, one prime purpose of which was to fix the prices at which their books would sell at retail, the store quickly saw that if this trust agreement was permitted to stand unchallenged, its cardinal principle of underselling its competitors, would have to be sacrificed. Macy's did not propose to make such a sacrifice--to permit its customers to be sacrificed--without a protest. And such a protest it prepared to make.

Isidor Straus, then the head of the business, sat in the office of his friend and counsel, Edmond E. Wise, in a downtown office. Mr. Wise put the thing frankly and without equivocation before his client. He said that it would be a hard legal fight, no doubt of that, but that a great principle was at stake; the keen mind of the lawyer was convinced of the economic fallacy of the position of the publishers' association.

Quietly Mr. Straus told his attorney to go ahead. He said that he would fight the fight, to the last ditch. No expense was to be spared. The case would be carried, if necessary, in every instance to the highest court of appeal.

Accordingly, Mr. Wise prepared a suit against the American Publishers' Association which holds the record for appeal in the history of jurisprudence in this country. Three times it went up to the Court of Appeals of the State of New York; finally, after nine years of legal battle, it was carried to the United States Supreme Court, which, after due deliberation, decided every point in favor of R. H. Macy & Company.

That was in December, 1913. Early in the following May the firm had the satisfaction of having the publishers hand over a check on the Park National Bank for $140,000. This sum represented a settlement for the difficulties that Macy's had had to undergo for more than a dozen years past in getting stock for its book department. Ofttimes it was necessary to follow devious paths indeed to gain this end--and still hold fast to the fundamental underselling policy of the store. Sometimes the store had to go so far as to send to other retail stores to buy a certain volume, at the full retail price, and then resell it to its patrons, at its customary ten per cent. off the price of the store at which it had just purchased it. So much if you please for the expense of standing by a principle!

A short time after this signal victory of Macy's, certain large manufacturers of patented articles, who for a time had sustained in the lower courts their claim to a fixed retail price standard, sought definitely to control Macy retail prices upon their products. Macy's, however, defied them, and the Victor Talking Machine Company, one of the leading adherents of price maintenance, brought an action in the United States courts to compel Macy's adherence to the rules for resale at a certain price. Again there was a royal battle and again Macy's triumphed signally, for on final appeal, the United States Supreme Court again decided in favor of the store in Herald Square, on every one of its contentions. Macy's then retaliated and brought suit against the Victor Company, under the Sherman Law. In a bitterly contested action, which culminated in one of the longest trials before a jury on record--consuming more than ten weeks--Macy's recovered a judgment of $150,000, and a counsel fee of $35,000; after which no paths apparently were left open to the manufacturers who sought to maintain the retail prices that suited them best. Court decisions seemingly blocked all possible pathways.

One path did remain, however--legislation. Effort was made to pass a measure down at Washington to permit and sustain retail price maintenance, which in reality meant the emasculation of the Supreme Court's decisions. When that measure came to a hearing before the Interstate Commerce Committee of the House one of the Macy partners, accompanied by Mr. Wise, the store's counsel, and Mr. E. A. Filene, the well-known Boston merchant, came before it in opposition. Up almost to that hour, Macy's had gone it alone. Now the attention of the country was focussed upon its fight and the National Retail Dry Goods Association came in with both its sympathy and its active co-operation--hence the appearance of Mr. Filene, who made a most excellent argument in support of the Macy contention.

It was shown definitely to the members of this House committee that many, if not all, branded and patented articles took a retail profit of from fifty to seventy-five per cent. The member of the Macy firm took a watch nationally advertised at $2.50 and duplicated it with a watch which his store sold at sixty-five cents, going so far as to take the two watches apart so as to show conclusively that the one was quite as good as the other. Certain other commodities went under similarly critical analyses. When the hearing was completed, the committee laughed the bill out of court. Since then the question of price maintenance by the original producer has been permitted to drop. Macy's had won its hard-fought fight; won it cleanly and honestly. By performance it had made good its statements that it proposed wherever it was humanly possible to undersell its competitors. That was no idle phrase.

It is indeed one thing to make a statement--whether in print or by word of mouth--and another and ofttimes a far more difficult thing to make good that statement by performance. No one knows this better than Macy's. Having set down such a definite and distinct statement it must be prepared to make good. It must be so covered and protected at every possible point that if challenged it can give a good account of itself. In fact, challenges come in every day--they have been coming in every day for a good many years now--and the house continues to make good its statement willingly--even joyfully. Here it is, then, that the comparison department functions; here it is that the original fundamental policy of Rowland H. Macy--to buy and sell only for cash--strictly adhered to during the sixty-four years' life of the business--makes it possible for the house to make good.

How, then, is it done?

The answer is easy.

Suppose, if you will, that Smith, Brown & Jones are having a special sale of Mother Hubbard wrappers. There are advertised as their regular $4.97 stock, marked down (at a heartbreaking sacrifice) to $3.79. Manifestly, it is up to R. H. Macy & Company to sell the same quality of Mother Hubbard for less than $3.79, if they are to live up to their oft-stated policy. It is quite as patent that Macy's must know just what kind of wrappers Smith, Brown & Jones are selling, if it is to compete on an exact basis. Nothing simpler. One of the Macy staff of shoppers is hurried forthwith to the scene of the bargain and, purchasing one of the garments, brings it back post-haste to the Macy comparison department. Furthermore, it is in this department by ten o'clock of the morning of the sale. It is then matched as closely as possible with a Mother Hubbard from the Macy stock, and the two garments compared, point by point. If, after careful examination, it is found that Macy's is charging more, or even the same price, for equal quality, then its prices are immediately marked down to a figure at least six per cent. lower than that advertised by the other store. And this, mind you, is not an exceptional performance but a daily procedure in the carrying out of which an exceptionally alert woman manager and twenty expert shoppers are constantly kept busy.