Business & Finance: Professor's Purge

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In January 1935 Marshall Field & Co. had the largest drygoods business in the world, the largest building in the world (Chicago's Merchandise Mart for trade exhibitions), the second biggest department store in the world and one of the biggest drygoods wholesale businesses in the U. S. It also had a reputation sacrosanct in Chicago and gilt-edged the world around. Nonetheless, in the previous four years it had lost $13,200,000 and the directors were so worried that they hired a business analyst named James O. Mc-Kinsey to study the matter. Hulking, robust J. O. McKinsey was born a poor boy, became a professor, had never held a corporate job. But when he made his report after four months work, the directors were so impressed that they took a step drastic in any business and completely unprecedented in Field's 70-year-history of rooted conservatism—they made J. O. McKinsey chairman of the board and absolute dictator of company policy (TIME, Oct. 21, 1935).

In the two years since then, Field's has been completely reforged in the crucible of McKinsey theory. It is once more substantially in the black. But the process involved as ruthless a purge as anyone short of Stalin has ever produced and Field's employes have found their jobs both less serene and less secure. Last week, however, it appeared that the quiet days of yore have returned. For after the sudden death of Chairman McKinsey, Marshall Field directors decided not to appoint another rude outsider as chairman but to return to the time when the company was run by a man who "knew how to wrap a package."

That man is to be dapper, 55-year-old Frederick Dexter Corley, who began as a Field's stockboy 37 years ago, rose in the best Field's tradition to be president last year. As long as James McKinsey was chairman the presidency was an empty job. Now it is to resume its onetime importance. While President Corley last week pondered his future policies, certain hitherto unpublished details of the McKinsey management came to light.

It has long been known that the Marshall Field retail business lost money only once, in 1932, that what had dragged the company deeply into the red was its huge wholesale business. Chairman McKinsey's first reform was to lop off the wholesale business entirely, along with 1,600 employes. This was an eminently smart move, as was also his reorganization of Chicago's Merchandise Mart, each of whose first 19 floors contains six acres of floor space. The Mart has still to make money but McKinsey management rented

87% of it, and it may soon show a profit as a Field investment.

Where McKinsey met something less than complete success vas in his handling of Marshall Field's manufacturing division of 24 textile mills. These he consolidated into one closely-co-ordinated unit, reducing the number of products to 18, all sold under the brand name Fieldcrest. Moving the manufacturing division to Manhattan, he marked out a program for it and commanded, in effect, "Now, boys, go ahead and don't ask me for money."