Change of Policy

In 1935 that epitome of capitalism, Marshall Field & Co., was hard-pressed enough to give a New Deal idea a try. Having lost $13,200,000 in the four previous years, the worried directors hired an ex-professor named James O. McKinsey to diagnose the case. Business Analyst McKinsey so impressed the directors that they soon made him chairman and absolute dictator of company policy (TIME, Oct. 21, 1935, et seq.).

Indefatigable Chairman McKinsey, who had never before held a corporate job, was nothing if not drastic. He lopped off the losing wholesale business entirely, along with 1,600 employes. He reorganized the management of Chicago's Merchandise Mart, each of whose first 19 floors contains six acres of floor space, much of it vacant. He consolidated the manufacturing division's 24 mills, marked out a sweeping program for it. About all he did not alter appreciably was Marshall Field's retail division, which had lost money only once in 50 years (in 1932).

Chairman McKinsey's success was magnificent but brief. In 1935 and 1936 Marshall Field was back in the black; in 1937 things went to pot all over again. For one thing, Professor McKinsey had anticipated a small cotton crop. When it turned out huge, the manufacturing division lost heavily on its large cotton orders. Even worse, Professor McKinsey never saw Depression II coming at all and the manufacturing division's top-heavy inventories perfectly exemplified U. S. business' 1937 sin. By year's end the manufacturing division had lost some $5,000,000, Marshall Field & Co. itself $1,654,451--and Mr. McKinsey himself was dead.

This time the directors put President Frederick Dexter Corley, an up-from-the-ranks conservative, in charge. And James Simpson, onetime president and a power on the board, began taking time out from his job running the Commonwealth Edison utilities to make regular visits to the Field office. Vice-President James P. Margeson

Jr., who headed the manufacturing division, was forced out in a squabble that made headlines (TIME, Feb. 14, 1938) and Hughston Maynard McBain took over.

Vice President McBain is a small, chunky man who went to the University of Michigan with New York's Tom

Dewey, joined Marshall Field at the bottom in 1922. That his rise in Marshall Field is likely to continue appeared last week as President Corley released the company's annual report. Though the retail division's profit was down from $5,029,090 in 1937 to $3,940,099, Mr. McBain's manufacturing division came back from 1937's $5,679,209 loss to net a cozy $138,165. Even the real-estate division, only one still headed by a McKinsey man, showed a profit of $209,968.

Marshall Field & Co. had a total 1938 net of $3,492,238, which President Corley happily declared was "entirely the result of a change of policy." It was only a coincidence that the report was issued for publication on Hughston McBain's 37th birthday.

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