"Damned Report"

Last week in a big, bright room on the eighth floor of its Chicago administration building was held a corporation's annual meeting for which the build-up had been long & loud. The horrid-sounding charges which Joseph I. Zook, as head of a self-appointed stockholders protective "association," had been hurling at Montgomery Ward's management insured good attendance. Even the Armour brothers, Philip and Lester, dropped in to pick up a few pointers from Ward's quick-witted President-Chairman Sewell Lee Avery.

Having dispensed with routine matters, President Avery picked up a copy of the annual report showing a $2,207,000 profit--first since 1930. "I assume all of you have received a copy of this report," said he. "But I don't assume all of you have read it. I don't always read the damned things myself when they come from some other source. It might be a good idea to read the report at this meeting." Mr. Avery's good idea was voted down.

Mr. Avery: I think we'll not read the damned report.

Tall, handsome, faultlessly dressed, President Avery, who is also head of U. S. Gypsum Co. (building materials), then declared the meeting open for general heckling. "There has been violent appraisal of my own personal value in my position here. In this little proxy contention we are now going through there has been great objection to my part-time job. Therefore, I invite the freest expression and condemnation. No questions need be set aside as embarrassing."

A stockholder named Charles E. MacDonald asked why the company was building a $100,000 store "at some place which I think is Sioux Falls."

Vice President Raymond Fogler: We are building one at Sioux City.

Mr. MacDonald (cupping his ear) : Why are we building plants in two cities?

Mr. Fogler: We are building one at Sioux City. That's so we can sell more goods to make more money for the stockholders.

Mr. MacDonald: Did U. S. Gypsum supply all the materials?

Mr. Avery: I wish it had.

One stockholder moved that Mr. Avery's $100,000 salary be halved. Some of Mr. Zook's friends cheered loudly. "There is evidently quite a little enthusiasm for cutting my salary," Mr. Avery remarked cheerily, pointing out that only the directors could do that. He declared that he paid out 56 1/2% of his salary in income taxes.

Stockholder: If you were getting only $50,000 you wouldn't have to pay so much tax.

Mr. Avery: Words cannot express my indignation over a sentiment so unpatriotic.

When his option on 100,000 shares of Ward stock at $11 per share was criticized, he explained that a ''committee" had offered it to him and he had merely said: "Satisfactory." With Ward selling last week at $28 per share Mr. Avery already has a $1,700,000 paper reward for hoisting the company out of the red.

Mr. Avery: I was reluctant to accept this job. But after I did, with the understanding that it would be only part-time, the public response to its belief in my great brilliance was evidenced by Montgomery Ward stock sinking gradually to 3 1/2

Mr. Zook's attack enlarged in cartoons on the idea that Mr. Avery's Gypsum was dumping building materials on Ward. In one cartoon never mailed, Mr. Avery explained, "there were three central figures: a cow, a milk pail and myself. The cow represented Montgomery Ward, the pail U. S. Gypsum, and I was put in the nattering position of doing something about which I know nothing."

Asked how much time he spent on Ward affairs, the president-chairman replied: "I spend the day here, frequently staying until 7 p. m. I make practically no social engagements. Sometimes I spend two hours or more reading letters before I get up. . . . My wife, who is present, will testify -- perhaps angrily -- as to the amount of time I give to company affairs. It is really 'Gyp' that should be complaining but they are strangely silent."

Amid prolonged applause the management slate of directors was overwhelmingly elected. Returned to the board after 14 years' absence was James Ward Thorne, onetime Ward vice president, son of the late George R. Thorne, co-founder (with Brother-in-law Montgomery Ward) of the company.

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