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O n Tuesday, October 29, 1929, stockholders dumped a record 16.4
million shares on the trading floor, opening the floodgates for $50
billion in stock losses and sparking the Great Depression. A few months
later, workers finished the Empire State Building; but the world™s tallest
structure remained almost completely empty until after World War II be-
cause no one could pay the rent.1
When a reporter asked Babe Ruth, who signed a contract for $80,000 in
1930, if he felt it was unseemly to make more money than President

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Herbert Hoover, he replied, “Why not? I had a better year than he did.”
Few argued.2
It is not surprising that the American people voted to oust Herbert
Hoover in the 1932 election in favor of an unheralded”and underesti-
mated”presidential candidate named Franklin Delano Roosevelt.
By the time he took office in 1933, FDR had his work cut out for him.
Five thousand banks had failed”and this, in the days before the Federal
Deposit Insurance Corporation (FDIC) protected investors from losing
everything”and unemployment had quadrupled to some 16 million peo-
ple, roughly a third of the nation™s workers.
In Chicago, from 1929 to 1933, employment had been cut in half, and
payroll was one-quarter of its pre-Depression levels. Foreclosures quintu-
pled, from 3,148 in 1929 to 15,201 in 1933. Land values plummeted from
$5 billion in 1928 to $2 billion in 1933.
“Chicago in the thirties was a place which few people of the twenties
could recognize, and a city hard to imagine even now.”3 In an Amos and
Andy radio skit, a man walks up to a hotel desk and asks for a room. The
clerk replies, “For sleeping or jumping?”4
FDR™s first job was to calm his people, restore their confidence, and re-
mind them that they had “nothing to fear but fear itself.” Then he went to
work to get the country moving again.

bet ter days are coming

If Walgreens™ Roarin™ Twenties™ salad days closely mirror those of the
1990s”both characterized by heady success coupled with the discipline to
avoid getting dizzy with it”the company™s performance in the Great
Depression parallels Walgreens™ resilience in the new millennium: a deter-
mination not only to press on but also to grow in the face of difficult times
while reinforcing the virtues the company has always extolled.
After Black Tuesday, Charles Walgreen™s job was essentially the same as
FDR™s: to reassure his employees that their company was equipped to

nothing to f ear 97

weather the storm and to urge them to remain resolute because “better
days were coming.”
In an internal Pepper Pod worthy of one of FDR™s fireside chats, Charles

We are passing through the most unusual Depression in the history
of our country. It is further emphasized by the fact that it closely fol-
lows our greatest peak of prosperity. General conditions have been,
and still are, serious. Nearly everyone has a feeling of concern. Every
person, every group, every class of society is affected.
We, as individuals and as a group, can keep ourselves in a happier
and healthier state of mind by adjusting ourselves to conditions as
they are. Self-pity, pride, and vanity will not lighten our burden.
More than ever, we need to be hopeful, energetic, and ambitious for,
after all, present conditions are going to improve.
It is my impression that we will”just how soon, I cannot say, but
we will”enter into one of the longest eras of prosperity that we have
ever enjoyed. So be courageous and be patient. Be your best! Do your
best! Pass this spirit on to your customers. Give them cheer; encour-
age them. They like it; we all do! A smile is like a ray of sunshine on
a dark day. It is even more helpful than the medicine you sell, and
what is more, its benefits are contagious.
And whatever you do, do not acknowledge defeat, for remember:
as surely as the sun rises”BETTER DAYS ARE COMING.”5

It helped Walgreen that his case was much easier to make than FDR™s.
In 1930, the first full year of the Depression, Walgreens™ sales actually
jumped $5 million to a record $52 million. Though the chain™s profits had
been cut in half from the previous year™s high of $4 million, during the
Depression, any profit was a good profit.
In another internal edition of the Pepper Pod, Walgreen stated his
belief that the chain™s remarkable resilience was not because of “one
dominating idea” but because of the disciplined application of 10 simple

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practices, including greeting every customer with a smile; always keeping
“the customer™s interest at heart”; being “honest with your customers, the
company, and yourself ”; and always remembering to say “Thank you.”6
(That this philosophy closely mirrors the company™s philosophy today
is no accident. “We have an expression,” former chairman and chief exec-
utive officer Dan Jorndt explained. “˜We™re not looking for the silver bul-
let, the answer to all our prayers.™”7 When faced with tough times,
Walgreens historically has not gone looking for easy answers, instead fo-
cusing on the same simple traits that allowed it to succeed when times
were better.)
Walgreen even laid it all out in a 118-page hardcover book for salespeo-
ple, Set Your Sales for Bigger Earnings. “Success is doing a thousand little
things the right way”doing many of them over and over again,” he wrote.
Employees were expected not only to educate the customers about
Walgreens™ tremendous selection”“People should know by this time that
we carry everything from Peau Doux golf balls to a native Algerian
pickle””but also to master the simplest elements of positive human inter-
action. “Avoid the artificial, forced smile, and do not stare,” Walgreen
advised. “Don™t rush forward as though you were going to pounce upon her.
. . . Stand erect, chest up and shoulders back.”8
Optimism aside, the era™s economic realities could not be ignored.
Walgreens had to institute countless cost-cutting measures, from installing
lower-wattage light bulbs in storage rooms to using both sides of the paper
rolls in the adding machines. To avoid laying employees off, Walgreens cut
workers™ wages by 10 percent; Charles Sr. also cut his own salary by more
than a third, from $60,000 to $39,000.
Although Charles was a staunch Republican who, like most successful
businessmen of the time, opposed many of FDR™s “New Deal” policies, he
knew the company had to take care of its own. So he put aside over
$30,000 as an emergency fund for Walgreens employees, retirees, and oth-
ers the company felt could use a hand and sponsored raffle parties to raise
money for food baskets to the needy.
Naturally enough, the harsh consequences of the Depression often hit

nothing to f ear 99

very close to home. When Charlie Morris thought to write Charles
Walgreen Sr. in 1930, it had been more than three decades since the two
had worked together at William Valentine™s store on 39th and Cottage
Grove. After Walgreen had returned from the Spanish-American War
weakened by yellow fever and malaria, it was Morris who took in his friend
to bring him back to health. In the following years, however, as Walgreen
began building his empire, the two old friends lost track of each other.
In 1930, a year into the Great Depression and before the days of the
Occupational Safety and Health Administration (OSHA), workmen™s
compensation, the National Labor Relations Board, and the growth of the
personal injury industry, Morris severely injured his hand at his job. He
was flat out of luck, out of work, and”soon enough”out of money.
Desperate, he decided to see if the “rich drugstore merchant” he had been
reading about in the papers was his old friend from Valentine™s store, and
he sent him a letter. Walgreen answered promptly, inviting his former col-
league to visit him at Walgreens™ headquarters.
“The rich man grabbed the aged Morris and hugged him like a long-lost
brother,” one paper reported. “The two old pals had the time of their lives
renewing their friendship.” Walgreen covered Morris™s medical care and
gave him “a job for life.”9
The most important thing Walgreen did for his employees, however,
was not rescue them from disaster but direct a company that, incredibly,
continued to grow throughout the Depression. In the long run, it™s far
more helpful to keep everyone fishing than to hand out fish.
Fresh from the success of the previous decade™s unprecedented growth,
Walgreen posted a sign outside his office that said, “Don™t rest on your lau-
rels.” He followed the simple maxim religiously. Instead of backing off or
being content to tread water until the trouble passed, the company™s di-
rectors kept pushing ahead. “We expect to continue moderately to in-
crease the number of our stores,” Walgreen wrote to his employees, “as
well as to develop new products . . . and all the facts within my knowledge
justify a feeling of cautious but firm confidence in the immediate as well as
in the long-range future of our company.”10

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Walgreen wanted to make this point with his top managers more force-
fully, face to face. So he summoned the directors of Walgreens™ 18 territo-
ries”representing zone offices from New York in the East to Salt Lake
City in the West, from Minnesota in the North to Houston in the South”
their top assistants, and Walgreens™ executives for the first company-wide
meeting at Chicago™s Stock Yard Inn (an irony Upton Sinclair would have
appreciated) on April 6 and 7, 1931.
The speakers”most of them well-known Walgreens executives”of-
fered advice, support, and motivation to surmount the obstacles that
the Great Depression presented, covering everything from merchan-
dising to hiring to advertising nationwide. In his lecture on the impor-
tance of window displays, vice president Harry Goldstine maintained,
“Precedent should not stand in the way of progress,” giving the managers
a free hand to try new approaches representing “the outgrowth of pro-
gressive ideas.”
Robert Knight weighed in on economizing. “Fine results have been at-
tained,” he said, “by eliminating unnecessary things and unnecessary peo-
ple, by giving the honey makers more scope and letting the drones loaf
elsewhere.” It is not clear if he was advocating layoffs, but the Walgreens™
workforce grew substantially during the Depression.
Robert H. Riemenschneider, the company™s director of promotion and
advertising, ended the two-day meeting with a crescendo by announcing
that the company was less than two weeks away from launching a nation-
wide, five-day sale, running from April 16 to 20, and would generate
publicity for the first-time event by spending over $75,000 for ads in
122 newspapers, blanketing every one of Walgreens™ 98 markets.11 The
managers were understandably thrilled to get such overwhelming backing
and returned to their towns with great anticipation for the upcoming
event. The sale™s success encouraged similarly aggressive efforts through-
out the decade.
At the end of the next fiscal year, at the very nadir of the Depression,
Charles Walgreen Sr. received a personal letter from Arthur Andersen, fa-
ther of the eponymous Big Five accounting firm, who felt compelled to

nothing to f ear 101

write him with that rarest of things: good news from an accountant. Dated
November 7, 1932, Andersen wrote:

My Dear Mr. Walgreen:
I have had the pleasure of reviewing the Walgreen Company state-
ments for the fiscal year ended September 30, 1932.
In view of the fact that I have seen so much red ink this year, the
performance of your Company is clearly an outstanding one. I won-
der sometimes how you have been able to do it. I think it is all
summed up in a statement of one of our managers who remarked to
me that he thinks that the Walgreen organization is one of the best
chain store set-ups he has ever seen and that everybody on the job is
working for the best interest of the Company. No finer tribute than
this could have been paid.
With kindest regards, Very truly yours, (signed) Arthur

Walgreens faced the Great Depression with the same simple philosophy
with which it has approached every era in its 103-year history: an uncanny
combination of timeless values and cutting-edge innovations. In the na-
tion™s toughest decade, that meant creating a mutually beneficial network
of affiliated stores, creating a bold advertising campaign, increasing food
service to previously unthinkable levels, and entering new markets while
other chains shrank. In other words, while everyone else was playing de-
fense, just trying to survive, Walgreens confidently went on the offensive,
working toward a bright future few others dared imagine.

helping the mom-and-pop shops

Although Charles Walgreen was an unabashed capitalist, he occasionally
backed positions and policies that had a certain collectivist bent. In 1911,
just two years after he had opened his second store, Walgreen organized

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the Velvet Club (eventually called Federated Drug Company) to help in-
dependent drugstores buy in bulk in order to compete with Louis Kroh
Liggett™s omnipotent United Drug Company. The alliance was an effective
way to increase small stores™ variety while decreasing costs, and it held to-
gether for over two decades. Walgreens enjoyed an unexpected by-product
in the bargain, because the association introduced the growing chain to
new stores, markets, and managers”many of which joined Walgreens in
the expansions that followed.13
In the wake of the antichain movement, Walgreens was understandably
sensitive to being perceived as a steamroller, but Charles and his assistants
helped a step farther than necessary for public relations purposes alone.
John D. Rockefeller and other “Robber Barons” had grown fat partly by
dropping their prices to unsustainable levels, undercutting the competi-


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