Daddy

The walls of the 17-acre, air-conditioned clothing factory of Richman Bros. Co. on Cleveland's East 55th Street bloomed last week with signs: "Remember Dad." Each of 2,500 Richman Bros, employes (all but some 25 of whom are stockholders in the company, none of whom is a union member) gave 1-c- to buy a gift that "daddy" would like. At week's end, beaming through his bifocals, 70-year-old "daddy" got his Father's Day present: two pairs of pajamas.

From the soles of his high-laced shoes to the top of his balding pate, Nathan Gedaliah Richman is the kind of executive that Richman workers think is tops. They like the way he sheds the coat of his $22.50 suit on hot days and goes into the cafeteria (lunch 18-c- to 22-c-) with his gold watch chain gleaming across his comfortable paunch. They like their 36-hour, five-day week, which they have had for six years. They like the immemorial company custom by which an officer of the firm stands at the front door of the plant to say good morning to them individually each day and to wave to them when they go home at 4:00.

Daddy N. G. Richman always turns up at factory dances and celebrations, has the walls of his office lined with autographed bridal photos of Richman "fellow workers," has a huge album with autographed pictures of every man and woman who ever worked for Richman Bros. But "Daddy" Richman's friends never mention "paternalism" to him more than once. Says he: "That stuff's all right, but it's the pay envelope that counts."

Old Henry Richman started the business in Portsmouth, Ohio in 1853--25 years before it moved to Cleveland--often wholesaled his suits and overcoats in trade for pig iron and salt. After his three sons got into the company it really grew. Son Charles Lehman (who died in 1936), "the merry one," became president. Son Henry Centennial (who died in 1934), "the quiet one," became secretary-treasurer. "Mr. N. G."--"the grave one"--became chairman of the board. "Mr. N. G." in 1903 hit on the profitable idea of selling Richman Bros. $22.50 suits direct to wearer. Today the company operates 62 stores in 57 cities, keeps a mailing list of 1,000,000 purchasers of Richman suits.

In 1921 the Richman brothers began to sell stock to employes, usually at one-half the market price. Best of these melon-cuttings was the first. Employes were offered shares at $16.67 (market price $42) and, before workers had finished paying for it, it paid dividends of $16.50.

The biggest turnover in Richman employes is due to retirements. A woman cook in the cafeteria retired recently, after 13 years of service, with $30,000 worth of Richman stock, a savings account of $3,500. About the same time a tailor with a larger block of stock, a house fully paid for, retired after 25 years of service, to make room for someone else. Today the market value of stock held by Richman employes is about $9,000,000.

The Richman Foundation lends without interest to the solvent employes, makes outright gifts to the financially distressed. From it $10 a week is paid to employes on sick leave. Women employes get ten weeks off at $10 a week to have their babies.

From the returns of a business dedicated to volume sales at low prices, all three Richman brothers became millionaires, but after 1931 they drew not a cent of salary. In that year Richman Bros, had to retrench somewhere. "Daddy" Richman had the decision. He decided that Charley, Henry and he would cut themselves off the payroll. They were never put back on, but through Depression other Richman workers had no salary cut.

Today the company's gross business ranges from $15,000,000 to $20,000,000 annually. Last year net profits (off 31.6% from 1937) were only $1.77 per share on 619,080 shares of stock outstanding, but Richman Bros, dipped into its fat surplus ($14,558,808 on last January 1), paid $3 in dividends. And everybody was happy.

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