Montgomery Ward

American merchant

• Born: February 17, 1843
• Birthplace: Chatham, New Jersey
• Died: December 7, 1913
• Place of death: Highland Park, Illinois

Combining extraordinary business foresight with innovative technical methods and a genuine concern for his fellow citizens, Ward revolutionized the commercial trade by founding the first mail-order business and introduced the concept of environmental protection by beautifying the Chicago lakefront.

Early Life

Aaron Montgomery Ward was the son of Sylvester A. Ward and Julia Laura (Green) Ward. His great-grandfather, Israel Ward, served as a captain in the French and Indian War under George Washington at Springfield, New York, in 1772. His great-grandfather on his mother’s side, Zeptha Squire, was an officer in the Revolutionary War. There were seven children in the Ward family, Aaron Montgomery being the third born. To his family and friends, he was known as Monty.

In 1853, when Ward was eight years old, his family was beset by financial difficulties and moved to Niles, Michigan. There, Ward attended public school until he was fourteen years old; at that time, he decided to abandon his studies in order to help his father support the family. His first job was that of an apprentice cobbler. After that, he did odd jobs for one year at a barrel factory. Next, he worked in a brickyard, where he loaded bricks on scows for shipment down the river; yet Ward had ambition, and he was unwilling to remain in an unskilled position such as that one for long. After two years, he was offered employment as a clerk in a general store in the port city of St. Joseph by the man who owned the scows that carried the bricks.

At the age of nineteen, Ward left Niles to begin his business training in St. Joseph. Within three years, Ward rose to head clerk and then general manager of the store. In 1861, the Civil War broke out. Ward decided to stay at the job, and he continued to send money home to help his family, thus abandoning any dreams of carrying on the family tradition of military service and glory. He learned about small-town retailing, became a first-rate bookkeeper, and improved his writing of business letters and the grammatical accuracy of his everyday speech.

It was at this general store that Ward first became aware of the plight of the farmers and the discrimination they faced in the marketplace. The farm trade had always been an outlet for damaged or unfit stock. Through Ward’s efforts, however, there was a notable change in the merchandise offered to the farmer. Ward insisted on receiving the perfect merchandise he ordered and was willing to pay for. The quality of merchandise did indeed improve, and the farmers grew to depend on it. Although the exchange of goods was done by barter, Ward instituted the price tag system, whereby each farmer was given a due bill that stated the amount of money his goods were worth and with which he was, for the first time, given a choice of articles he could purchase from the store. The farmers were gratified to see a cash value equated with their hard labor.

Even at this young age, Ward always thought of his customers’ convenience. For example, he made a picnic grove complete with tables and benches on the land adjacent to the store so that the farm families could eat lunch and their children could play safely.

In 1865, at the age of twenty-one, Ward left the general store and Michigan to work as a clerk for two years in a wholesale house in Chicago called Field, Palmer and Leiter, the forerunner of Marshall Field and Company. Because there was no possibility for advancement, he took another job for another wholesale dry-goods house in Chicago. However, this firm failed, and he became a traveling salesperson for a similar firm based in St. Louis. Traveling and selling to the rural market, he acquired a deeper knowledge of the problems of the farmers and thus conceived the idea with which he would make his distinctive contribution to America.

The farmers had to pay extremely high prices for a small selection of inferior goods at retail prices compared with the money they earned in crop production at wholesale prices. Rural consumers wanted to enjoy the same comforts as city dwellers but were often the victims of monopolists and the numerous middlemen required to bring manufactured commodities to rural locations. Ward conceived a solution to the problem that revolutionized the business world: He envisioned a mail-order business to serve the rural trade, buying in large quantities for cash direct from the manufacturers and selling for cash directly to the farmer at low markups. Eliminating the middlemen, Ward reasoned, would allow him to market merchandise directly to the farmers at reduced prices. Prices could be reduced even further by offering customers additional savings accumulated through bulk orders from suppliers.

To execute his idea, Ward needed more experience in merchandising. Consequently, he found employment as a buyer for a wholesale dry-goods house in Chicago. This position introduced him to a new dimension of merchandising, for he was required to buy merchandise from the manufacturers for his firm to resell.

With his savings, Ward began to accumulate a small inventory with which he planned to launch his business. In 1871, he lost everything in the Great Chicago Fire, but this proved to be only a temporary setback, for he had ambition, tenacity, and a strong will to succeed. He lowered his standard of living in order to begin saving again. Even during these times of personal misfortune, he was always sympathetic to the problems of the less fortunate and gave whatever he could to them. Also during this time, Ward—tall, slim and square-shouldered, with thick brown hair and a well-kept mustache—married Elizabeth Cobb of Kalamazoo, Michigan, with whom he later had a daughter, Marjorie. In August of 1872, with the full support of the National Grange, he and his brother-in-law, George R. Thorne, founded Montgomery Ward and Company.

Life’s Work

Ward and Thorne began their operations in the loft of a livery stable in Chicago. Ward chose the city of Chicago as the place to establish his business because he believed that it was the real capital of the United States, a country of farmers and ranchers who saw themselves as excluded from the commercial life and comforts of the prosperous and sophisticated East. There was a single desk among the stock, which was piled to the ceiling. The only employee was a teenage boy who wrapped packages and carried them to the post office.

The partners sent the first Montgomery Ward and Company catalog out to National Grange members in the spring of 1872. It was a single eight-by-twelve-inch printed sheet, with no pictures and little descriptive matter. It listed 163 articles, the most expensive of which was a lady’s gold-plated watch selling for eight dollars. Nothing was priced below one dollar.

Ward was a keen judge of merchandise and bought at prices that enabled him to sell to the rural consumer at prices he could afford. He believed that his first duty was to his customers, and he sincerely wanted to meet the needs of the farmers. Thus, he often enclosed a friendly handwritten letter along with his catalog asking the farmer what his wishes and wants were. If their replies indicated that there was a large demand for an item, he would negotiate with the manufacturer; such was the case with the sewing machines. He concluded a deal with a sewing-machine manufacturer that enabled him to offer it at thirty dollars, twenty dollars under the retail price. If he received requests for isolated items, he bought them and sent them at only 5 percent over what it cost him, thus becoming the purchasing agent for rural America.

Ward’s wife Elizabeth was invaluable in his endeavor. She suggested that he offer more variety in his catalog and that he expand to include gift items and other amenities. She also selected articles that were of interest to women and saw to it that only the most current fashions were listed in the catalog. As a result, the farm women were offered a selection of merchandise as stylish and modern as that of Marshall Field and Company.

In 1873-1874, the purchasing agencies of the National Grange bought merchandise through the Montgomery Ward and Company catalog to stock their cooperative retail stores, thus reinforcing the goodwill of the farmers and causing the line of merchandise to expand greatly. Because the business was conducted on a cash basis, it survived the Panic of 1873. By 1874, the firm had made several moves. The catalog was now a twenty-four-page booklet. In 1875, the catalog contained seventy-two pages and the first pictures of the articles. During that year, Ward adopted the first consumer protection policy: satisfaction guaranteed or your money back. This was a powerful inducement for distant customers. By 1876, the catalog had 150 pages with illustrations.

In 1878, the catalog created a sensation by offering ready-to-wear dresses for women. Previously, ready-to-wear merchandise was confined to men’s suits and men’s and women’s overcoats. Orders from the National Grange ladies began to pour in.

During the first few years, Montgomery Ward and Company served only National Grange families. As more requests came in from outsiders, Ward consulted with Grange officials and, with their full approval, opened his field to the general public.

By 1888, annual sales had reached one million dollars. Local retail merchants felt threatened and reacted with hostile anti-Ward slogans and organized campaigns to burn Ward catalogs. The local newspapers, dependent upon the advertising of these town merchants, joined in attacking the mail-order houses. Ward and his company were often the butt of journalistic jokes, but Ward persevered and his firm expanded and flourished under his guidance and leadership, rooted in the conviction that business should be conducted for the benefit of the consumer. Ward believed that he was offering a service to farmers that local stores had failed to render; he left freedom of choice to the farmer.

The year 1899 was a peak for Montgomery Ward and Company. The catalog contained more than one thousand pages and featured a cover illustration of the new Ward Tower, the final headquarters of the company and the showplace of Michigan Avenue in Chicago. It had twenty-five stories, which made it the tallest commercial building in the world. It contained six steam elevators and a marble lobby. Sightseers were encouraged to visit and were given a tour of the warehouse, with its assortment of twenty-five thousand items, and the mailroom, where thirty clerks did nothing but open letters all day long.

Ward retired from active management of the company in 1901, although he still retained the title of president. At that time, it was the largest company in its field; it would eventually expand to include six hundred retail stores and enjoy many years of billion-dollar sales. Because Ward had no sons, the management of the business passed into the hands of his five nephews, the sons of his partner, Thorne. All became vice presidents in charge of various departments. At the time of Ward’s death in 1913, annual sales amounted to forty billion dollars, customers were served in all parts of the world, and the staff of employees numbered six thousand.

Ward’s conviction that business should be conducted for the benefit of the consumer was mirrored in his personal life. Court documents indicate that by 1890, long before pollution in lakes and parks was accorded any importance, Ward had begun a long legal battle that was to cost him a personal fortune and the friendship of some of Chicago’s most influential citizens. It was in this year that he sued the city of Chicago for littering the lakefront with street debris, refuse, livery stables, and squatters’ shacks. He fought against the erection of any human-made municipal structures on the lakefront, basing his suit on the original titles on maps of the area that prohibited buildings of any kind when it was acquired from the federal government.

Ward was severely criticized, accused of obstructing progress, and dubbed the Watchdog of the Water Front. He responded by saying that he was the one who was most concerned about Chicago’s progress and that he would continue his fight in the name of the poor people of Chicago. He envisioned a park that would not be the heritage of the elite but of the masses, about whom he genuinely cared. It would be a place where they could repose and refresh their spirits during the noon hour. It took four court trials and twenty years of waiting before Ward would win the battle. By the late twentieth century, Grant Park, as it came to be called, was the envy of every waterside city.

Significance

Aaron Montgomery Ward was single-handedly responsible for the most significant breakthrough in the history of trade. He made it possible for many people scattered over wide areas to buy a variety of high-quality goods at fixed and fair prices.

Ward’s great success was the combination of three factors. First, he persevered until his firm was named the official supply house for the National Grange. He started his company with the intention of eradicating the economic and social discrimination directed at farmers, and he worked hard to cater to their interests and wants. Second, he introduced the idea of a money-back guarantee, which was one of the earliest landmarks in consumerism. This policy set a standard of excellence in consumer relations and conditioned the American public to expect high-quality merchandise and service as well as fair play from every business enterprise. Ward adamantly abided by his policy that the sacrifice of quality to the point of not giving satisfaction made an article worthless, however low the price. Finally, he developed the homey style of writing that became a trademark of his catalogs, contributing significantly to his success.

However, Ward contributed more than techniques to American business. He contributed a philosophy as well, an attitude of commitment and devotion to customer service that was just as revolutionary in its time as the idea of selling goods by mail.

As a result of the success of the new concept of mail-order business and the subsequent war that followed between the mail-order houses and the retail merchants, the town stores were forced to change their attitudes. They had no choice but to offer a larger variety of stock, improve the quality of their merchandise, and establish fair prices. Competition with Montgomery Ward and Company put an end to the previously accepted notion that anything is good enough for the farmer. The shopkeepers found, much to their astonishment, that the farm market was worth cultivating.

The creation of this new industry and its subsequent success was only part of the impact made by Ward. Material, social, and cultural aspects of American life were altered by catalog merchandising. The change was so evident that in 1946 the Montgomery Ward and Company catalog was selected among one hundred American books chosen for their bearing on the life and culture of the people.

Ward’s interest in the American consumer was matched by his concern for the environment of his fellow citizens. For this reason, he undertook a lengthy battle with his personal resources so that the ordinary citizens of Chicago could one day enjoy the blue waters of Lake Michigan from a clean and beautiful park.

Ward had always been interested in the plight of the poor and the victimized. Even before he started his mail-order business, with which he sought to alleviate the problems of the farmers, he always gave of his time and whatever money he could to help the less fortunate. After he made his fortune, his philanthropic acts continued on a larger scale; he donated coal to heat homes and gave generously to hospitals. After his death, his wife carried on his spirit of generosity. Her largest donation was that of eight million dollars to Northwestern University to establish a medical and dental center in her husband’s name.

Bibliography

Baker, Nina Brown. Big Catalog: The Life of Aaron Montgomery Ward. New York: Harcourt, Brace, 1956. The story of the life and times of Aaron Montgomery Ward. Details the making of the company, Ward’s views concerning consumerism, environmentalism, and philanthropy, and his methods and accomplishments.

Herndon, Booton. Satisfaction Guaranteed: An Unconventional Report to Today’s Consumers. New York: McGraw-Hill, 1972. Presents the problem of how to maintain the guarantee of satisfaction, first offered to consumers by Ward, in today’s complex world.

Montgomery Ward and Company. Aaron Montgomery Ward, Entrepreneur, Environmentalist, Consumerist. Chicago: Author, 1971. A series of pamphlets and illustrations of the life of Aaron Montgomery Ward, pages of his catalog, and the Chicago lakefront.

Weil, Gordon L. Sears Roebuck, USA: The Great American Store and How It Grew. New York: Stein & Day, 1977. Discusses the American catalog business and how it grew. Some of the men most responsible for its success were former Montgomery Ward employees.