Illinois Hall of Fame: Montgomery Ward

By Mark Rhoads

Aaron Montgomery Ward was the founder of Montgomery Ward and Company that started out as the nation's first mail order catalog business in Chicago in 1872.

Ward was born in Chatham, New Jersey on Feb. 17, 1844 and he grew up in Niles and St. Joseph, Michigan where he first learned to be a successful salesman. A few months after the end of the Civil War, Ward moved to Chicago in the fall of 1865 at age 21.

Ward worked as a clerk for the next two years at the Field, Palmer & Leiter store. The first partner, Marshall Field, formed Marshall Field & Company a few years later. The second partner, Potter Palmer, became one of the wealthiest investors in Chicago in downtown real estate both before and after the Great Chicago Fire of Oct. 1871.

Ward was based in St. Louis for a while as he travelled to the small towns of Illinois, Missouri, and Kansas as a salesman in the late 1860s. He came to believe that general store owners in rural areas gave poor service and products at high prices to farmers because of their geographic local monopolies in the retail trade business.

Ward also became convinced that he could launch a new kind of business using the railroads to sell to customers direct through the mail for cheap prices by making bulk purchases of merchandise and cutting out retail stores and other middle-men. He was ready to start his new business when he lost his personal inventory in the Chicago fire. But only ten months after the fire, with two friends and capital of $1,600, Ward founded Montgomery Ward and Company in August 1872.

Montogomery, or "Monty" to his friends and family, rented a shipping room on North Clark Street and published the world's first mail-order catalog that listed 163 items for sale.  Monty personally wrote all the copy. For more than 20 years until the early 1890s, Montgomery Ward was the dominant retailer in Chicago because of the huge mail-order catalog business that he invented. His sales to rural areas far exceeded store sales in the city because of his national reach. Moreover, a far greater percentage of Americans lived in rural areas in the late 19th Century than just thirty years later when cities became the major population centers.  Montgomery Ward & Company was the first national retail business in America to operate exclusively by mail order and not from stores.

But in 1893, Richard Sears, a former telegrapher and watch salesman from Minnesota, teamed up with Alvah Roebuck, a watchmaker from Indiana, to form Sears, Roebuck & Company in Chicago. Once again, the railroad hub of Chicago and access to markets was a major attraction for locating in the Windy City.  As pointed out in a previous post on Sears and Roebuck, the company still has the same name today and is headqurtered in Hoffman Estates, Illinois with nearly 5,000 retail stores under different brands but most are just called Sears stores.  Sears, Roebuck started to publish their own mail-order catalog in 1897 and unlike the Ward's all-text version, the Sears Catalog was illustrated with artist drawings and later photographs of what the items looked like.

Now Americans had two "Wish Books" or "Dream Books" to choose from produced by the two Chicago-based retail rivals and the books were mailed to customers everywhere, not just in rural areas or small towns.  Even though both Montgomery Ward and Sears, Roebuck companies would eventually start stores in the 1920s, the mail-order catalog business continued to grow in the first six decades of the Twentieth Century. An unexpected benefit of the catalog business was to introduce entirely new products to a national audience and to educate consumers about what types of products were available.  The general merchandise catalogs were copied by retailers with more specialized products for specific categories of customers.  Modern examples would include Lands End in Wisconsin or L.L. Bean in Maine and their Internet catalogs as well.

The story of the retail rivals of Chicago is a fascinating one.  Sears Tower has dominated the skyline of Chicago for thirty years and remains the tallest building in America and for a long time was tallest in the world.  But 107 years ago in 1899, the 25-story Montgomery Ward Tower at the corner of Michigan Avenue and Madison Street was actually the tourist attraction of its day because it was the tallest building then standing west of the Allegheny Mountains.

The mail-order catalog business reached a zenith in the 1970s with postage paid of about $250 million.  Both Sears and Ward benefitted from the U.S. Post Office policy of rural free delilvery in the 1890s.

But while Sears improved in many ways on the catalog business, Ward was the pioneer. Ward worked with the Grange movement among farmers and got Grange officials to endorse his catalog as he built a reputation for honesty and fair dealing among farmers.  He basicallly invented COD or "Cash on Delivery" for the farm customer and a promise that they could get a full refund if they returned an item in ten days.  That Ward policy expanded the farm customer concept for all customers of "satisfaction guaranteed--or your money back." None of this business would have been possible without the active cooperation of the U.S. Post Office and its agents who also benefited from all the postage money that mail catalog companies paid.

After the Columbian Exposition of 1893, Montgomery Ward appointed himself as guardian of the lakefront.  He worked to make Grant Park open to all people and opposed those element of the Burnham Plan that he thought might limit the access of poor people to the prime lakefront areas.  By the end of the 19th Century, Montgomery Ward was semi-retired and had turned over the management of the company to the oldest of his five nephews, William C. Thorne.

Montgomery Ward died on Dec. 7, 1913 at his estate in Highland Park, Illinois.  He was 70 years old. His estate of $15 million went to his widow and $1.5 million went to their adopted daughter Elizabeth. Ward gave secretly to many charities in his later years.

Elizabeth Ward gave $8.5 millions some years later to Northwestern University Medical School. The Montgomery Ward Building of the Feinberg School of Medicine, pictured at right, is located on the Chicago campus of Northwestern University at 303 East Chicago Avenue. It was America's first academic skyscraper. The building was completed in 1926 and is the oldest building in the Northwestern University Medical School complex.

At the time that Montgomery Ward died in 1913, the company he founded had annual sales of $40 million and 6,000 employees. Those numbers would be dwarfed in the 1970s and 1980s before competition from discounting stores cut into the Montgomery Ward retail store customer base.

Thousands of Montgomery Ward stores once were found all over America but they disappeared in about 1999 as the prime locations were sold off to other retailers.  Montgomery Ward & Company still exists today but now as an Internet retail company with no physical stores, a return to the earliest concept for the company that offered 163 items in 1872.  Click here to see the web site of Montgomery Ward, a company that has returned to "virtual mail order" roots and now offers 40,000 products for the home. The Ward corporate headquarters stayed in Chicago until about 2000 but has since moved to Cedar Rapids, Iowa.

But one important thing about Montgomery Ward and Company has not changed since 1872 when Mr. Ward started the business in Chicago.  If you visit the Ward web site today, you can still sign up to have a catalog mailed to your home.  In addition, Mr. Ward would likely be pleased to know that the Ward.com web site still promises a full refund unless the customer is completely satisfied. The only difference now is that customers have 60 days, not just 10, to return the merchandise.