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genius as well as an exceptional judgment in selecting men of ability to




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assist in the company™s management.” The report concluded that the
company™s secret, such as it was, boiled down to “30 years of aggressive
yet conservative management””in other words, bedrock values coupled
with bold ventures, the very same equation Walgreens has relied on for
over a century.
No sooner had the analysts from Davis and Company departed than the
reporters from Fortune magazine arrived to produce the lead story for the
September 1934 issue on the chain.35 Titled, “500 Corner Drugstores,” the
piece extolled Walgreens™ merchandising prowess. “A druggist™s technique
nowadays is to put before you everything that you can conceivably need in
your home, at a price calculated to attract you.” Walgreens™ decision to sell
much more than drugs, which began when Charles first put together his
display of pots and pans years earlier, had caught on.
“Across the fountain [of the average Walgreens store] each year flow
455 gallons of chocolate [and] 45 gallons of vanilla syrup,” the author said.
Tables for food service alone, the magazine reported, accounted for half the
floor space in many stores. Although the pharmacy department brought in
a paltry 3 percent of profits, Charles remained committed to staffing a full-
service pharmacy in every store.
The Fortune staffers were smart enough to look beyond the soda foun-
tains that hooked readers and customers alike. Walgreens™ success, they
said, was due in part to some very smart financial decisions that cus-
tomers never see. The once powerful Liggett chain and the United Drug
network were in trouble, Fortune explained, because they had locked
themselves into long-term leases in the 1920s that had become oppres-
sive in the 1930s. Walgreens executives, in contrast, signed much more
favorable leases and only leased what they needed without taking on
extra space they would then have to sublease to others, putting the onus
on the chain.
Fortune gave particular credit to Robert Knight, whom it called the “fi-
nancial brain” of the outfit, who had “analyzed, trimmed, and coordinated
Walgreens financial methods to weather the storm that broke in 1929.” In




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other words, Mr. Knight had done exactly what he™d promised to do 10
years earlier after he finished his master™s thesis.
For all these reasons, Fortune concluded, during the darkest days of the
Depression, Walgreens “sits at the top of the retail drug business.”



finding time for fun

It is a Walgreen family trait to find time for fun, even in the toughest
times. During the Depression, the family enjoyed some of its happiest days
at their Hazelwood estate in Dixon.
Having purchased a run-down Shangri-la, the Walgreens threw them-
selves into the project wholeheartedly, restoring and expanding the cen-
tral home (which grew from a cabin to something more closely resembling
a castle), building an in-ground swimming pool, and planting elaborate
gardens, which Myrtle cultivated the rest of her life, thereby transforming
the once decrepit estate into an Illinois showplace.
The town of Dixon, as depressed as any of the era, especially with its
centerpiece in ruins, was thrilled. “To have strolled over Hazelwood and
to have noted the physical destruction,” wrote an anonymous person, in
“Hazelwood: Its Masters,” in 1937, “would have forced one to agree that
nothing but sordid revenge of some unnatural character could have caused
such cruel wreckage.” But, “Anonymous” continued in the breathless style
of the day, “When it had become known that [Charles] had made the pur-
chase of Hazelwood, what a feeling of relief and pleasure pervaded every
avenue of business and social life in Dixon! The Dixon boy had returned
to save Dixon and Hazelwood! No one but the resident of the old home
town and the lover of Hazelwood, even to this day, can appreciate the feel-
ing of relief and gratitude that followed.”36
The Walgreens often invited the “Walgreens girls””office secretaries,
numbering over a hundred”out to Hazelwood for relaxing summer week-
ends as a reward for their hard work. And, when Charles decided to play a




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round of golf at the nearby course, another Dixon boy named Ronald
Reagan frequently caddied for him. (He and Nancy would return to
Hazelwood at Chuck™s invitation in 1978, during Reagan™s presidential
campaign.)
Hazelwood™s guest list over the years has been studded with celebrities,
including, in the early days, Carl Sandburg and explorer Rear Admiral
Richard E. Byrd. Charles had long been an admirer of the famous pilot; he
donated a ton of Walgreens powdered milk for Byrd™s 1933 expedition to
Antarctica. He could appreciate the Admiral™s efforts more than most, per-
haps, because he, too, was a pilot. Charles bought the nation™s first corpo-
rate “aero plane” and earned his pilots™ license. (Even Myrtle learned to
execute loop-de-loops.) But he had never met the explorer until 1938,
after Myrtle attended one of Byrd™s lectures in Chicago and invited him to
Hazelwood for the night.
By the next morning™s breakfast, Myrtle recalled in her autobiography,
her husband and the Admiral were “deep in a friendship that was like pick-
ing up in the middle of years of common interests.”37 They remained in
close touch until Charles™s death.
Most Walgreens employees derived their greatest satisfaction from hav-
ing a good job in a good store working for good people”none of which
were to be taken for granted in the 1930s”and the simple pleasures that
arose during the day. Delbert Adkins, for example, recalled years later:

I was in the big city of Dallas in 1940, fresh off the farm. The Texas
Employment Commission sent me to Walgreens, said they needed a
busboy. I had no idea what a busboy was; I thought maybe I™d go out
to the curb and take orders from people on a bus. I got the job: ten
hours a day, $10 a week, seven days a week.
Just before I got married they promoted me to soda dispenser. The
first day I worked at the fountain, a gentleman came in and said,
“Cherry Coke fizz.” I had no idea what that was. So the manager
showed me”cherry syrup, Coke syrup, and a fine stream of carbon-
ated water. The man said, “Boy, they™re sure hiring ™em dumb these




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days.” Next day I saw him come in, I had his cherry Coke fizz wait-
ing. He said it was still fizzing and tipped me 50 cents [big money in
those days].38



the son also rises

In hindsight, it seems a given that Charles and Myrtle™s son, Chuck, would
lead the company one day; but as he was growing up, it looked like any-
thing but a sure thing.
Chuck helped his parents from early on, doing everything from deliver-
ing his mom™s apple pies on his bike as an eight-year-old to working on the
store-opening crews that christened a new outlet almost every week as a
college student.
Chuck and his younger sister, Ruth, attended the University of Chicago
(U-C) laboratory school just down the street from the Walgreens™ home.
The U-C lab school was among the first of its kind, led by pioneering ped-
agogue John Dewey. During Chuck™s senior year, headmaster Dr. Revis,
who later served as president of the university, asked each student where
he or she planned to go to college. Chuck had no idea. “Some families live
and die about where their kids go to college,” he said, “but that didn™t
mean too much in our family.”39
For graduation, Chuck™s parents presented him with a brand new Model
T Ford. Chuck took the shiny car and a tattered old tent and hopped on
the back roads (there were no other kind in the 1920s) to tour college
campuses around the country, stopping at Harvard, Dartmouth, and
Middlebury, among others. On the way back to Chicago, Chuck remem-
bered one of his favorite lab school teachers, Dr. Virgil Lohr, telling him
to stop by the University of Michigan in Ann Arbor, if his travels took
him that way, and look up a woman named Miss Buntin.
Chuck did just that. “And that™s the first time I ever gave a thought to
the University of Michigan,” he said. After Miss Buntin examined the
young man™s transcript, she politely pointed out that he lacked the two




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years of foreign language Michigan required, but she was so impressed by
his grades”and his new-found passion for attending the school”that she
made an exception and admitted him for the fall term.
Miss Buntin could never know that her simple decision would eventu-
ally reap the university millions in gifts from the Walgreen family, which
would send three generations (and counting) to the campus. The dona-
tions have helped Michigan™s College of Pharmacy retain its place among
the nation™s elite. In fairness, there was no way Miss Buntin could have
guessed, because Chuck decided to enroll in the school™s college of
architecture.
“˜So,™ she told me, ˜be sure to study well,™” Chuck recalled. “My first blue
book exam, I thought the whole thing was a big mistake, because the pro-
fessors asked questions about the beginning of the subject, which I™d never
learned, and I didn™t think that was a very nice thing to do. All I did was
play poker, instead of review. I didn™t do so well on the final exams”two
As and two Bs.”40 Not bad, of course, but not nearly as impressive as the A-
pluses Chuck had earned at U-C high.
“After I got the grades and my dad saw them, he said he knew I could do
better,” Chuck recalled. “˜Chuck, we have to talk seriously,™ he said. ˜If you
think you™d like to get into the drug business, there are a couple things you
have to do, and one is pass the state board exam for pharmacology.™”41
Thanks to Prohibition, the rules had changed since Charles Sr. worked
as a clerk when he first arrived in Chicago. To prevent pharmacies from
selling alcohol under the guise of “medicinal purposes,” the State of Illinois
mandated that all drugstores be run by state-licensed pharmacists, who
risked losing their licenses if they made any backdoor prescriptions.
Chuck decided to take the year off school, work for his dad™s company,
and see if he liked it. Despite being assigned to the rigorous store-opening
team, Chuck liked the work just fine and decided to follow in his father™s
footsteps. He returned to Michigan in the fall of 1926, this time as a stu-
dent in the College of Pharmacy. After graduating in 1928, he returned to
Walgreens™ Chicago headquarters, where he met his future wife, Mary Ann
Leslie.




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Miss Leslie had started at Walgreens a few years earlier as a three-week
temp in the purchasing department, but she had managed to turn that into
a permanent job as Charles Walgreen Sr.™s personal receptionist, earning
accolades for her ability to handle all comers with aplomb.
A good example: One day in 1933 a man carrying a revolver walked up
to her desk and asked to see her boss. Leslie assessed the situation, then
calmly replied, “Sir, Mr. Walgreen is busy now, so you™ll have to take a seat
on the waiting room bench with the other gentlemen who are waiting and
take your turn.”42
Perhaps soothed by Leslie™s smooth demeanor, the troubled man, in-
credibly, did as instructed, affording Leslie the opportunity to tell Mr.
Walgreen about his unscheduled visitor. Walgreen was as cool as his re-
ceptionist. He picked up the phone and called for a security officer, who
kindly escorted the man downstairs, where the police were waiting. At
Walgreen™s request, no charges were filed.
Back when company headquarters was still a pretty compact space, it
was inevitable that Chuck would meet the poised young receptionist. The
two hit it off and married in 1933. Two years later they gave birth to
Charles III. When Charles Sr. laid eyes on his grandson for the first time,
he exclaimed, “That™s my little corker!”43 A nickname was coined, and
former CEO Cork Walgreen has carried it ever since.
Chuck worked his way up from opening stores to leasing real estate,
working on the front lines of the company™s never-ending quest to find a
good corner. He proved especially effective at renegotiating store leases, a
vital skill during the Depression, as the Fortune story mentioned earlier
had attested. Chuck plied his craft mainly out West, in Utah, California,
and Oregon, with a simple but effective approach: He persuaded the land-
lords to set the rent lower than the pre-Depression rates so the store could
stay above water, but higher than the current market price so the landlord
could keep making a profit. Walgreen almost always got what he wanted,
partly because the deal made sense for both parties, partly because he
sought only “a fair arrangement,” and partly because of his engaging “mil-
lion dollar smile,” as his dad put it.




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As one California landlord recalled, “Walgreen came in with that smile
of his and put the books on the table and kept smiling [until] I took off
$40,000.”44 (that™s more than $500,000 today). Such deals covered a lot of
workers™ wages.
When asked to name the highlight of his 51 years at Walgreens, Chuck
quickly cited the day in December 1933 that he was named a company
vice president, “because,” he explained, “you get so many privileges”in-
cluding an office next to my father™s.”45
While Chuck was working his way up the company ladder, Charles was
weaning himself from Walgreens to allow more time for flying, refurbish-
ing Hazelwood, and giving away his money. Charles had always been gen-
erous with his employees, his pay plans, and his charitable giving, but one
of his biggest gifts started out with an argument.



the accidental benefactor

An investigation of Walgreen™s highly public conflict with the University
of Chicago may seem, at first blush, to be of only incidental importance
to a history of the Walgreen corporation. But the values at stake in this
debate were of the utmost importance to him”and his company. What

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