Glittering Jewel

One year before the Century's turn a Chicago tea salesman named Frank Vernon Skiff who had saved $700 started a wagon route on his own, peddling dry groceries from door to door. He peddled for two years before he hit on a way of making his business different from any of the other hundreds of mobile stores weaving in & about Chicago. It was merely the hoary premium plan--with a twist. His brother-in-law thought it was a pretty good idea and they set up "Jewel Tea Co., Skiff & Ross, Proprietors." The idea: give housewives the premium first; let them collect the coupons later.

More than a good idea, the sales plan was a stroke of merchandising genius because: 1) most people are honest, would feel badly if they did not eventually buy enough goods to earn the premium; and 2) the promise of getting something, for what appears to be nothing has an almost irresistible appeal. Within ten years Jewel Tea, by now a corporation branching far afield from Chicago, was taking in $1,000,000 annually. Last year, still operating on the simple principle of presenting the housewife with a good coffee pot, a good toaster or some Haviland china with her first order, Jewel Tea rolled up sales of $14,000,000, retained nearly $1,000,000 as profit. In the first half of this year it sold $9,000,000 of merchandise, about $1,500,000 more than in the same period of 1933. And instead of a $300,000 profit for the period, it reported earnings of $700,000. Last week, "on the basis of unusual accomplishment by the Jewel organization" the directors declared not an extra dividend but a 5% wage bonus for each & every one of its 2,250 employes.

The Jewel of Messrs. Skiff & Ross, however, has not glittered unblemished for the past 33 years. During the War it went into debt. Deficits loomed bigger & bigger and preferred dividends accumulated. Messrs. Skiff & Ross retired, and Manhattan's banking house of Lehman Brothers, which had floated Jewel stock, took command. The late Harold Lehman, nephew of New York's Governor, asked a Wartime friend to take charge of rehabilitation as vice president & treasurer. Resigning from his post in the Bureau of Supplies & Accounts, Commander John Milton Hancock, U. S. N., went to work.

A tall, rugged, affable North Dakotan who spent no little part of his naval career installing accounting systems in Navy bases, John Hancock turned $2,000,000 deficits into profits, used profits to pay off $4,500,000 of debts, made up a capital deficit and generally provided a shining example of what a conscientious banking house can do for an industrial client. In 1924 he became a very active partner in Lehman Brothers, and has since been Jewel's board chairman and a mighty hunter of mountain goats. Several years before that, he picked another onetime Navy officer, Commander Maurice H. Karker, to follow in his wake. President Karker paid off the $36.75 accumulations on the preferred stock, put the common stock on a dividend basis where it has been ever since (now $3).

Today Jewel Tea sells more coffee than anything else but fundamental policies have not changed a whit. Its line has been broadened to include toilet articles, soap, spices, baking powder, rice, other packaged staples. But the Jewel Man in the Jewel Ford truck still makes his fortnightly calls on 800,000 housewives scattered up & down some 1,500 routes. Rural country is avoided because of the time wasted in bumping from one farm to the next. Villages and small cities where houses are close and people neighborly are Jewel's choice territories.

Almost wholly dependent on the morale of its truck salesman, Jewel goes in heavily for house organs, conventions, picnics and paternalism. Few years ago it moved its offices and main plant 40 miles out of Chicago to Barrington, Ill. chiefly to provide better living and working conditions for employes. The nautical influence of its top executives is evident in hotly competitive selling groups, organized as "pirate crews" with "captains," "buccaneers," "able seamen" and a mysterious figure at headquarters called "Peg Leg."

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