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Samuel Walton grew up on a farm and, while in eighth grade, became the youngest Eagle Scout in Oklahoma.Born March 29, 1918, Sam held many jobs growing up during The Great Depression, including newspaper carrier and milking cows. His assistance with making ends meet at home earned him the title “Most Versatile Boy” by his classmates.He attended the University of Missouri where he majored in economics, was a ROTC officer, and was named "Permanent President," by his class.After college, he worked many jobs until joining the United States Army Intelligence Corps, where he supervised the security of aircraft plants and POW camps.Walton began his retail career in 1945, opening a Butler Brothers franchise, from the $20,000 borrowed from Thomas Gibson, his father, and $5,000 of his own money. There he pioneered the concepts of keeping the shelves stocked and staying open late, especially on Christmas.His next big breakthrough was buying in bulk to bring down prices charged to the customer, and in turn, purchased more from manufacturers.Again with the help of his father and brother-in-law, they opened the first Wal-Mart store in 1962.Wal-Mart has become the world's largest retailer and if Walton were alive, he would be the wealthiest person in the world — twice as wealthy as Microsoft's Bill Gates, who has been listed number one on Forbe's magazine's "The World's Richest People" in 1996, and from 1998 through 2005.
The three most prominent living members (Jim, Rob, and Alice Walton) have consistently been in the top twenty of the Forbes 400 list since 2001, as were John (d. 2005) and Helen (d. 2007) prior to their deaths. Christy Walton took her husband John's place in the ranking after his death. The majority of the family's wealth derives from the heritage of Bud and Sam Walton, who were the co-founders of Walmart. Walmart is the world's largest retailer, one of the world's largest business enterprises in terms of annual revenue, and, with just over 2.2 million employees, the world's largest private employer.
As of December 2014 [update] , the Waltons collectively owned 50.8 percent of Walmart.  In 2018, the family sold some of their company's stock and now owns just under 50%.  In July 2020, the annual Sunday Times Rich List reported that the Walton family's net worth was $US215 billion. 
In 1987, Sam Walton endowed a charitable foundation. The Walton Family Foundation was primarily focused on charter schools, but it later extended its program to include environmental issues, particularly those related to water. 
In 2016, Alice and Jim Walton put a $250 million grant towards building charter school facilities. The Walton Family Foundation created the Building Equity Initiative to provide charter schools with access to capital to create and expand their facilities.  This initiative was established after the foundation announced in 2016 that it would spend $1 billion over the next five years to expand "educational opportunity" by partnering with charter school operators, researchers, and education reformers. 
Biography: Sam Walton
Although many have applauded his business mind and the Walton Family’s philanthropic endeavors, Wal-Mart has also been criticized for enforcing bad labor practices and driving out mom-and-pop shops and wreaking environmental havoc due to the size of the stores. But the retail giant it was to become got its start in Walton’s humble goal of making goods more affordable to rural America.
History and Growth of Wal-Mart
Walton was born in Kingfisher, Okla. on March 29, 1918. While attending the University of Missouri at Columbia, Walton delivered papers, waited tables and worked at a five-and-dime store.
In 1945 with a $25,000 loan from his father-in-law, Walton opened his first store — a Ben Franklin arts and craft store in Newport, Ark. Walton and his brother, James, owned 15 Ben Franklin franchises by the early s.
Walton thought he could bring lower prices to rural towns and proposed to open bigger stores in those areas, but his suggestion was turned down by Ben Franklin executives.
Acting on his vision of providing inexpensive goods to small-town markets, Walton soon opened his first Wal-Mart in 1962 in Rogers, Ark.
By 1977, Illinois became the tenth state to have a Wal-Mart. By 1991, a year before Walton’s death, Wal-Mart first opened an international store in Mexico City.
As of July 2004, Wal-Mart had 1,409 stores in the United States, 1,562 Supercenters (a Wal-Mart and grocery store combined), 539 Sam’s Clubs (a warehouse discount store) and 1,506 international Wal-Mart stores. It was also the largest private employer in the United States.
No stranger to hard work, Walton took a hands-on approach to management.
“This is a man who was at work at 4:30 in the morning, had warmth and charm throughout the day, an interest in his customers, and who treated his associates well as persons, not just as clerks and salespeople,” said Walter Loeb, a retailing consultant, according to The New York Times.
Walton, known as an enthusiastic leader, was constantly looking for new locations for his revolutionary discount store. The tycoon would sometimes fly over small towns looking for new locations — landing and buying a slab of land when he found the perfect spot. After his company grew much larger, Walton would fly to his stores to check on them.
Part of Walton’s enthusiasm could be recognized with the cheer that he started and that is repeated at the beginning of every workday by the employees at each store —
Give me a W!
Give me an A!
Give me an L!
Give me a Squiggly!
Give me an M!
Give me an A!
Give me an R!
Give me a T!
What’s that spell?
Whose Wal-Mart is it?
Who’s number one?
The Customer! Always!
Walton had visited a tennis ball factory in Korea where the employees did calisthenics and a company cheer together, Walton liked the idea so much he encouraged his employees to do the same.
“My feeling is that just because we work so hard, we don’t have to go around with long faces all the time — while we’re doing all of this work, we like to have a good time. It’s sort of a ‘whistle while you work’ philosophy, and we not only have a heck of a good time with it, we work better because of it,” Walton said, according to the company.
What Sam Walton developed was a complete philosophy of business, one he outlined in his autobiography, “Made in America: My Story.”
One of them in particular, value your associates, was something that would revolutionize retail. Ironically in the years following Walton’s death the treatment of Wal-Mart employees was scrutinized. Accusations of forcing employees to work overtime without pay, locking them in the store and discrimination have brought law suits and media attention.
But Walton, who referred to his employees as associates to increase their stake in the company, worked to make some workers eligible for a share of the profits and stock options in the company. Associates also manage their own departments, keeping a watchful eye on stock and profits.
Because Walton strived to drive prices as low as he could, he would cut as much overhead as he could, driving prices even lower.
This practice, which brought his customers the lowest prices, however, led to complaints against the company for driving out smaller factories that couldn’t produce goods at the lower prices Wal-Mart, the United States’ largest private employer, demanded.
When Sam Walton died in 1992 he was the richest man in America, holding 38 percent in his company now worth more than $20 billion. Sam Walton’s widow, Alice, and their four children hold the sixth through tenth spot on Forbes’ list of the world’s richest, each worth an estimated $20 billion.
The family, the nation’s wealthiest, has also become the top philanthropist in the United States, especially in the area of education. They have contributed at least $701 million to education charities since 1998, according to USA Today.
But even their philanthropic efforts have become controversial. Critics argue the money the family puts toward voucher programs may push more tax money to charter schools, which are less regulated than public schools and would also take money from the public schools.
Nonetheless, John Walton, one of Sam Walton’s children, told USA Today that the family expects to donate as much as 20 percent of their $100 billion in Wal-Mart stock.
History Timeline: Sam Walton and Wal-Mart
Regardless of whether you love or hate Wal-Mart, you have to agree that their growth has been spectacular.
It all started back in the 1960s. Here's the timeline that chronicles this amazing entrepreneurial success story.
- 1921 - Sam Walton opened the first Wal-Mart store in Rogers, Arkansas.
- 1967 - Sam opened 24 Wal-Mart stores in Arkansas.
- 1968 - The first Wal-Mart store opened outside of Arkansas, in Sikeston, Missouri, and Claremore, Oklahoma.
- October 31, 1969 - Wal-Mart was incorporated as Wal-Mart Stores, Inc.
- 1970 - The first Wal-Mart distribution center and home office opened in Bentonville, Arkansas. 15,000 employees working at 38 stores. Annual sales of $44.2 million. Wal-Mart went public and began trading in the over the counter market.
- 1972 - Wal-Mart shares began trading in the New York Stock Exchange.
- 1975 - Wal-Mart employed over 7,500 employees to operate 125 stores. Sales reached over $340 million. Wal-Mart made its first acquisition by acquiring 16 Mohr-Values
- 1978 - Wal-Mart acquired Hutcheson Shoe Company and expanded its operations to include pharmacy, auto service, and jewelry retailing.
- 1979 - Wal-Mart became the first company with sales of over $1 billion dollars a year. Wal-Mart operated in 11 states with 21,000 employees and 276 stores.
- 1983 - The first Sams's Club opened in Midwest City, Oklahoma.
- 1984 - Sam Walton did the Hula on Wall Street after promising employees that he would do so if Wal-Mart reached a pre-tax profit of 8%.
- 1987 - Wal-Mart sales reached $15.9 billion and employees reached 200,000.
- 1988 - The first Supercenter opened in Washington, Missouri
- 1992 - Sam Walton received the Medal of Freedom, the highest civilian honor given by the United States.
- April 5, 1992 - Sam Walton passed away.
Walmart is today's largest company by revenue and the largest private employer in the world. Its market capitalization is at over $225 billion. Wal-mart's annual net sales for the fiscal year 2007 was $374 billion.
Cheng Ming (Bobby) Jan is an Economics major at the University of Chicago who has a strong interest in entrepreneurship and investing.
MEET THE WALTONS: A Guide To America's Wealthiest Family
The descendants of Wal-Mart founder Sam Walton, the family controls more than 50% of the Wal-Mart Corporation, according to Bloomberg, and combined are worth at least $150 billion based on Forbes' wealth estimates.
Four Walton family members are currently in the top 10 on Forbes' list of the richest Americans. They have spent some of their money amassing huge collections of art, real estate, and expensive cars.
They also invest a portion of their fortune into charity, mainly through the Walton Family Foundation. But unlike some of today's millionaires who plan to donate most of their vast wealth to charity, the Waltons have used tax loopholes to keep getting richer.
Bloomberg's Zachary Mider recently wrote about how the Waltons have used estate tax loopholes to maintain their fortune. Specifically, they have done so by setting up so-called "Jackie O." trusts, which are ostensibly for charity, but can also be used to pass on money tax-free to heirs after a period of time.
Mider explains: " With a big enough spread between the actual performance and the IRS rate, a Jackie O. trust can theoretically save so much tax that it leaves a family richer than if it hadn’t given a dime to charity."
But despite the backlash, lawsuits, and the occasional scandal, Wal-Mart's first family isn't going anywhere — especially when 90% of Americans live within 15 miles of one of the gigantic chain's stores.
Samuel Moore Walton (1918–1992)
Samuel Moore Walton was founder and chairman of Walmart Inc., the world’s largest retailer. At one time, he was the richest man in the United States.
Sam Walton was born on March 29, 1918, in Kingfisher, Oklahoma, the first of two children to Thomas Gibson Walton, a banker, farmer, farm loan appraiser, and real estate and insurance agent, and Nancy Lee Lawrence Walton.
Walton showed signs of an entrepreneurial gift early on, selling magazine subscriptions, starting at about age seven or eight. He worked his way through college with newspaper routes. After adding routes and hiring helpers, he was earning $4,000 to $5,000 a year. He attended the University of Missouri at Columbia, earning a business degree in 1940.
His first job was with J. C. Penney. In January 1942, he returned to Oklahoma, where he worked for a DuPont gunpowder plant in Claremore. There, he met his future wife Helen Robson, daughter of a prominent local attorney, rancher, and politician. Walton was inducted into the U.S. Army on July 16, 1942, and was married on February 14, 1943. The couple was transferred to Salt Lake City, Utah, where he served with Company A, 777 th Military Police Battalion. During the family’s military experience, Walton’s wife decided that she would never again move to a town with a population larger than 10,000.
Their first child was born in 1944, and Walton was discharged from the military in 1945. Three more children followed, including philanthropist Alice Louise Walton.
The couple bought a Ben Franklin five-and-dime franchise in Newport (Jackson County) and opened it for business on September 1, 1945. There, Walton began to develop the discount marketing concept that would make him the richest man in the country. In his autobiography, Sam Walton: Made in America (1992), Walton described an early discount promotion: “Here’s the simple lesson we learned….By cutting your price, you can boost your sales to a point where you earn far more at the cheaper retail price than you would have by selling the item at the higher price. In retailer language, you can lower your markup but earn more because of the increased volume.”
Growing from a sales volume of $80,000 to $225,000 in three years, the Newport store was so successful that the landlord did not renew Walton’s lease, giving the location instead to his own son. The Waltons moved to Bentonville (Benton County) on May 1, 1950. By May 9, with his father-in-law’s help, Walton had bought the Harrison Variety store and opened for business with a one-day remodeling sale. Although a Ben Franklin store, it was named Walton’s 5 & 10 and was the third self-service variety store in the nation and the first in the state. Quite new in its concept, a self-service store was one wherein the clerk did not bring goods to the customer, but rather the customer was free to examine the goods on the shelves and then bring them to the clerk for purchase.
Discount marketing requires a large customer base, problematic in a town of 3,000 people. Walton’s answer was to open stores in other small towns. In 1952, Walton opened a Ben Franklin franchise in Fayetteville (Washington County), twenty-five miles south of Bentonville. Soon, he opened another. By then, his brother Bud was on board, helping Walton launch and manage the stores. By the early 1960s, the Waltons owned sixteen Ben Franklin stores in Arkansas, Missouri, and Kansas. It was the nation’s largest chain of independently owned variety stores.
To service his multiple stores in isolated small towns, Walton learned to fly an airplane. He wrote, “We never could have maintained the operating controls of communications without having the ability to get into our stores on a consistent basis.” He also scouted for store locations from the air. The first of his stores chosen from an aerial scouting was outside Fort Leonard Wood, Missouri, and it grossed two million dollars in its first year.
Discounting was gaining popularity throughout the United States, adopted by such stores as Kmart, Woolco, Gibson’s, and Zayre’s. Walton asked Ben Franklin to cut its margins by fifty percent to maximize discount marketing. The franchiser declined. Walton’s response was to push forward with his own discount chain, opening the first Wal-Mart in Rogers (Benton County) in July 2, 1962. Continuing expansion and the success of the marketing idea created a need for fresh capital. In 1969, Walmart was incorporated. By January 31, 1970, Walton and his brother owned eighteen Walmart Inc. stores and fourteen Ben Franklins. In 1970, the company offered 300,000 shares of public stock. By 1976, Walton had closed all his Ben Franklin stores, and, by the end of 1980, 330 Walmart Inc. stores were in operation. By 1990, there were 1,573 stores, and annual sales were $25.8 billion.
In 1991, Walmart Inc. became the nation’s largest retailer, with 1,700 stores. On January 12, 1997, the company surpassed $100 billion in sales. Walmart Inc. associates, as the employees are called, were offered stock options as part of their employment package. Anecdotes of longtime hourly workers with six-figure retirement accounts are common. Walton became a management leader, his autobiography ranking fourth in 1992 on Publishers Weekly’s Hardcover Nonfiction Bestseller List. At his death, Walton’s net worth was estimated at $21 billion to $23 billion.
The story that made Walton a national figure was the hula down Wall Street. It began with Walmart Inc. executive David Glass, in a Hawaiian shirt and grass skirt, doing the hula before howling employees at Walmart Inc. headquarters to celebrate the company’s stock hitting a record high. Walton made a wager with Glass that if 1983’s pre-tax profits reached eight percent, he would hula down Wall Street at high noon. The profits exceeded that goal, and Walton donned the shirt and the skirt and did as he promised.
Though he was generally admired, Walton’s success was not without its critics. A 1995 article published in Economic Development Review revealed that, in thirty-four small communities studied, small businesses in towns with a Walmart Inc. store suffered cumulative sales declines of 25.4 percent after five years, while towns lacking a Walmart Inc. store lost 12.9 percent of their general merchandise sales in the first year a Walmart Inc. store opened in a neighboring town. Other studies suggest that the increased cost of roads, water, sewage, telephone, and other services installed in Walmart Inc. locations exceeds the sales and property tax revenues collected from new stores. In efforts to protect their home-grown businesses and cultures, dozens of municipalities have lobbied hard to keep Walmart Inc. out of their towns. While many consumers, particularly in the South, were grateful to Walmart Inc. for serving small rural markets, others feared for the survival of their local merchants and economies. The editor of the Jackson, Mississippi, Clarion-Ledger wrote on June 3, 1990, “Is it really worth saving a few bucks to virtually destroy the heart and soul of our small town business community?”
In an effort to keep labor costs low, Walmart Inc. pioneered the use of part-time and temporary help, thus eliminating such overhead as employee health benefits and overtime. Some employees have accused Walmart Inc. of demanding “off-the-clock” work. Too, Walmart Inc. has been sued for gender discrimination and accused of profiting from the use of third-world sweatshops.
On the other hand, Walmart Inc., under Sam Walton, was a most innovative retailer. His company was the first to use the UPC bar code to automate the inventory process. In 1983, the company set up a private satellite system to track delivery trucks, process credit card transactions, and transmit sales data. This last process led to Walton’s pioneering “just-in-time” inventory. This method eliminates the need for storage at each store. Instead, the local distribution center can know, via satellite, when a given store is nearly out of a product and can truck more in immediately. These products are simply stored in the semi trailer until the night crew can offload the truck and restock the shelves.
Sam Walton was not an introspective man. When reporters and biographers asked him about his life, he usually answered with anecdotes about Walmart Inc. Walmart Inc. was his life, and he expected it to be equally important to everyone associated with the company. He would hold pep rallies at his stores, exhorting employees to perform Walmart Inc. cheers and “squigglies,” little dances that went along with those cheers. He had them repeat a little mantra: “I solemnly promise and declare that every customer that comes within ten feet of me, I will smile, look them in the eye, and greet them, so help me Sam.”
In 1992, Walton was awarded the Medal of Freedom by President George H. W. Bush. During the 1970s, he went quail hunting with President Carter. But he drove an old pickup, now on display at the Wal-Mart Museum in Bentonville, and he wore the clothes he purchased for his stores, bragging at least once about the fine shoes he had bought from Walmart Inc. He strove to maintain an image of commonality.
Walton died of cancer on April 5, 1992, in Little Rock (Pulaski County) and is buried in the Bentonville Cemetery directly behind Walmart Inc. headquarters, within sight of the satellite dishes that helped make him the richest man in America.
For additional information:
Blumenthal, Karen. Mr. Sam: How Sam Walton Built Wal-Mart and Became America’s Richest Man. New York: Viking, 2011.
Ortega, Bob. In Sam We Trust: The Untold Story of Sam Walton and How Wal-Mart Is Devouring America. New York: Times Business, 1998.
Trimble, Vance. Sam Walton: The Inside Story of America’s Richest Man. New York: Dutton, 1990.
Vance, Sandra, and Roy V. Scott. Wal-Mart: A History of Sam Walton’s Retail Phenomenon. New York: Twayne Publishers, 1994.
Walton, Sam, with John Huey. Sam Walton: Made in America. New York: Bantam, 1993.
Kim I. Martin
University of Arkansas
This entry, originally published in Arkansas Biography: A Collection of Notable Lives, appears in the CALS Encyclopedia of Arkansas in an altered form. Arkansas Biography is available from the University of Arkansas Press.
Together, Sam and Bud Walton borrowed money to build a new store in Rogers, Arkansas, which they named Wal-Mart. The store opened in 1962. Like Walton’s Five and Dime, Wal-Mart was a self-service discount store that sold clothes, makeup, housewares, appliances, jewelry, and home furnishings. The store flourished.
Within a few years, Sam Walton opened Wal-Mart stores in other small towns across Arkansas and Missouri. Bud Walton was an integral part of Wal-Mart’s success as the chain of stores continued to grow. Two of the company’s key slogans were “We Sell for Less” and “Satisfaction Guaranteed.” Together these two guiding principles helped build Wal-Mart into a nationwide chain.
The Incredible True Story of How the Heir to Walmart Served in MACV-SOG in Vietnam
The next time you are browsing the aisles at Walmart, just think to yourself that the son of Sam Walton, the founder of the retail giant, was involved in special operations during the Vietnam War. Military Assistance Command Vietnam-Studies and Observation Group — or MACV-SOG — is a name so bland that it shielded the true nature of their top-secret work into deniable areas like Laos, Cambodia, and North Vietnam. How did the 11th richest man in the world intertwine his legacy into one of the most notorious special operations units in U.S. military history?
John Thomas Walton was born in Newport, Arkansas, the second of three sons, and excelled at athletics. He was a standout football star on their public high school football team and was more of a student of life than academics. His father, Sam, opened Walton’s 5&10 in Bentonville, a small business in a small town known for its variety of hunting seasons. Walton had a modest upbringing and after only two years of college he dropped out to enlist in the U.S. Army. “When I was at Wooster [The College of Wooster in Ohio], there were a lot of people talking about the war in the dorm rooms, but I didn’t think they understood it,” Walton said.
Walton enlisted in the Army and became a Green Beret (Army Special Forces). “I figured if you’re going to do something, you should do it the best you can,” he said during an interview with Andy Serwer for Fortune magazine. Assigned to MACV-SOG after the Tet Offensive in 1968, Walton was stationed at FOB 1 in Phu Bai where members of Strike Team Louisiana conducted deep penetration reconnaissance missions. John Stryker Meyer, a teammate and friend of Walton’s, wrote , “In August of , on one such mission, Walton’s six-man recon team was surrounded and overrun by enemy soldiers.” The firefight became so intense that the team leader, William “Pete” Boggs, called an airstrike (napalm) directly on their own position to break contact.
“That strike killed one team member, wounded the team leader and severed the right leg of the Green Beret radio operator Tom Cunningham Jr., of Durham, N.H. Another team member was wounded four times by AK-47 gunfire by an enemy soldier whom Walton killed,” Meyer wrote. As the team’s medic, Walton was responsible in setting up a triage point to tend to the casualties. He applied a tourniquet to Cunningham’s leg that had begun to hemorrhage. The tourniquet ultimately saved his life, but he later lost his leg. Facing hundreds of North Vietnamese soldiers (NVA) and completely surrounded, Walton called in two extraction helicopters.
The first helicopter, piloted by South Vietnamese Captain Thinh Dinh, touched down and picked up members of the team, some of whom Walton personally carried. The enemy soldiers were now sprinting to prevent their escape. Bullets clanged off the chopper and whizzed by their bodies. A second helicopter was needed to get them all out, but realizing how dire the situation had turned, the first helicopter sat back down and picked up the entire team. Their weight was too much, and they barely managed to climb over the treetops. Walton’s determination to get his teammates out of harm’s way earned him the Silver Star , the nation’s third highest award for valor.
“I figured if you’re going to do something, you should do it the best you can.”
During a poker game on the night they returned to base, one of his teammates noticed that the skin on Walton’s wrist was burnt. It was evidence of just how accurate the NVA gunfire was. Walton, Meyer, and his teammates enjoyed poker, Scrabble, and other games that require thought. They spoke about their goals and the dreams they hoped to accomplish when they returned home. Walton’s was a life of adventure.
Meyer shares how Walton had inspirations to travel domestically on a motorcycle and to Mexico, Central, and South America by plane. He earned his pilot’s license and started his own business crop-dusting cotton fields in Texas and Arizona. Crop-dusting provided Walton a new challenge that helped his transition after Vietnam. His aerial theatrics featured ingenuity, too — Walton co-founded the company Satloc in 1999, which pioneered the use of GPS applications in agricultural crop-dusting. He also served as a company pilot for his family business.
It seemed Walton was always searching for his next greatest thrill. He briefly owned a sailing company called Marine Corsair in San Diego, and he regularly traveled to Durango, Colorado, for outdoor activities such as mountain biking, skiing, and skydiving. As Walmart’s success climbed, so too did Walton’s wealth. At one point, he was the 11th richest man in the world, with an estimated $18.2 billion net worth. However, despite the amount of money he made, he always stayed true to his modest roots. Meyer recalled a breakfast the pair had in Oceanside, California, and Walton arrived in a small Toyota hybrid.
Walton was also a strong proponent of education and school vouchers, helping establish the Children’s Scholarship Fund with the goal of sending low-income children to private schools. The Walton family as a whole has donated an estimated $700 million, largely due to John’s advocacy. The William E. Simon Prize for Philanthropic Leadership recognized his contributions in 2001.
John T. Walton died on June 27, 2005, when his custom-built CGS Aviation Hawk Arrow plane crashed in Grand Teton National Park in Wyoming. He was 58 years old. An investigation determined that loose flight control components were the cause of the fatal accident. Walton left behind a wife, Christy, and son, Lukas.
Though Walton’s name will always be immediately recognized as the heir to the Walmart empire, his legacy is also inextricably tied to MACV-SOG. Two years before his untimely death, Walton chartered his private jet to pick up the family of Thinh Dinh, the South Vietnamese pilot with whom he served decades prior. They reunited in Las Vegas, never forgetting the lasting bonds forged in war.
Sam Walton - History
[Note: Figures in this article are available to paying subscribers to Electronic Intelligence Weekly.]
The Walton family, which founded and today controls Wal-Mart, lives on blood money. Operating jointly with the City of London-Wall Street bankers, it became the world's wealthiest family by decimating the U.S. and world physical economies, and by applying ferocious austerity, driving wages and living standards beneath the level needed for existence. Forbes magazine places the worth of the family at greater than $100 billion.
The threat posed by the Waltons is not merely in the size of their fortune. Older monied families such as the Mellons, Rockefellers, and the corrupted Ford family fortunes have been more powerful politically and financially, as have also been the much smaller family nest-eggs of George Soros and Michael Steinhardt. But the danger today is that the Waltons, with such a storehouse of wealth available to them, will use it, for one thing, to build even more Wal-Mart stores, with even more devastating effects on the world economy! But not only that:
- The Waltons are using their enormous leverage to carefully construct a banking empire, under tight family control.
Democratic Presidential pre-candidate Lyndon LaRouche has launched a national and international boycott of Wal-Mart, to expose and shut down the company. LaRouche has shown that under Wal-Mart's policy of demanding that its suppliers supply goods to Wal-Mart at ridiculously low prices, the only way the suppliers can accomplish this is to shut down production in the United States, and ship it to sweatshop facilities overseas, which has caused the exodus of 1.5 million U.S. manufacturing jobs. Wal-Mart pays its workers below subsistence wages, and destroys communities. This is applied as a leading edge of a Roman Imperial-type policy, in which the American physical economy, no longer able to reproduce its own existence, sucks in a huge volume of imported goods from around the world. The more the United States feeds its import addiction, the more that destroys the U.S. physical economy, while driving the current account deficit to new and dangerous heights.
The campaign of LaRouche and , is drawing blood. Wal-Mart's national spokesperson, Mona Williams, lashed out on Nov. 28, 2003, "There's definitely a negative buzz out there. A lot of folks have started taking shots at us." One magazine noted the shift: "Wal-Mart kicked off the year in the media as the nation's 'most-admired company,' but it looks like it will wrap up 2003 as the 'Beast of Bentonville' " (Bentonville, Arkansas is Wal-Mart's headquarters). Last Christmas, Wal-Mart registered very slim sales growth, partly due to the faltering economy, but partly due to what the media is now highlighting as a Wal-Mart "image problem." In the retail industry, if sales are not rising year on year, there is a problem.
To counterattack, Wal-Mart's officers, led by chairman Rob Walton, made a strategic decision to bring out their ultimate weapon—the Sam Walton myth—in the hope that this will dazzle and disarm people. The myth has two components. First, Wal-Mart founder Sam Walton (1918-92) is portrayed as a folksy, ol' country boy, concerned about the welfare of his workers. According to this myth, Sam drove around in a pick-up truck, when he could have been chauffeured in a limousine. Mr. Sam, as he liked his underlings to call him, didn't care a hoot about money, but only about following his dream.
The second part of the myth is that Mr. Sam disdained Wall Street, building his company through his own native genius and hard work.
By extension, this myth is stretched to cover the rest of the Walton clan. They are a chip off the block of ol' Mr. Sam. They use their money to help people. Their savage amassing of a $100 billion fortune hasn't changed them they're just like you and me.
No one should be dazzled by this myth. The truth is that Wal-Mart made its money by crushing its employees, its competitors, its suppliers, and foreign nations. It grew only through the aid and massive funding of Wall Street, which admires Wal-Mart as the paradigm of what it wants to achieve in a post-industrial society. Two examples of this—the 1970 financing when, Wal-Mart went public to pay off its debts and the "Wal-Mart decade" (actually 1990 to 2002), when Wal-Mart grew to unprecedented size—make the point.
Sam 'Hustler' Walton
Sam Walton was born in Kingfisher, Oklahoma in 1918, graduating from the University of Missouri with an economics degree in 1940. His college fraternity brothers gave him the nick-name "Hustler," which stuck.
During World War II, he served as a lieutenant and then captain in U.S. Army Intelligence, supervising security for aircraft plants and Prisoner of War camps in California, and other locations—an intelligence background far above what you would expect for the normal "country boy" soldier, although official and unofficial biographies shed no further light on his intelligence activities.
Walton's 1943 marriage to Helen Robson, the daughter of L.S. Robson, a prosperous banker and rancher of Claremore, Oklahoma, was more than fortuitous. L.S. Robson lent Walton $20,000, four-fifths of what Sam needed to buy his first store, a Ben Franklin variety store in Newport, Arkansas, in 1945. By 1962, Walton owned and operated 16 Ben Franklin franchise variety stores, mostly based in Arkansas (with a few in Missouri and Kansas).
On July 2, 1962, in Rogers, Arkansas, Walton opened his first discount store, under the Wal-Mart name. The idea of a discount store is to sell a lower line of goods than a regular department store, but also to sell many of the same goods as regular department stores, at a cheaper price. How would that be possible? It required cost-accounting "savings." The discount store could find some efficiencies of scale, and also operate at a lower profit margin per unit good than a regular department store. But primarily, Walton used two tactics, with regard to labor and suppliers.
First, he resolved to pay his workers less, ferociously resisted any unionization, and restricted most of his workers to working no more than 28 hours per week, which would mean they would not qualify for employee benefits—and would never be able to earn a living wage. He offered some of them health benefits, but most did not earn enough to purchase the health insurance. Though the myth arose that this policy became prevalent only after Walton's April 1992 death, the fact is that Mr. Sam enforced it from day one. Wal-Mart workers earn wage and benefit packages that are 12-30% below those paid to workers in comparable jobs at unionized companies, depending on the job classification. During most of Sam Walton's reign, Wal-Mart had a worker turnover rate of an incredible 35-45%.
Second, Walton instituted a policy that suppliers would have to sell goods to Wal-Mart at constantly lower prices, forcing them to cut expenses, which frequently meant cutting wages of their own workers and/or layoffs. Eventually, this led to these suppliers outsourcing their production to overseas sweatshops, a policy that started to gain steam in the 1980s under Sam Walton's direction.
By 1969, Wal-Mart had grown to $30.8 million in annual sales. It operated 32 stores, most within a 200 mile radius of Bentonville. But to grow this quickly, it had to borrow heavily, and soon had significant debt.
Wall Street Cash Infusion
Wal-Mart faced a financing crunch. We look at two examples from Wal-Mart's history, which crucially demonstrate that, contrary to its own public relations fairy tales, Wal-Mart would not exist without Wall Street's direction and ample financial backing.
After Sam Walton started Wal-Mart in 1962, he flew around the American Southeast, Southwest, and Midwest to line up loans for his company. Republic Bank, based in Dallas, Texas, and known for its smarmy dealings, was one of the first lenders to him in the 1960s. But Republic Bank and other banks that lent money to Wal-Mart, set a limit on how much they would lend. Walton revealed in his autobiography, Sam Walton: Made in America, that in 1969, "we weren't generating enough profits both to expand and pay off our debts. We really needed the money, pure and simple."
Walton and his eldest son, S. Robson (Rob) Walton (who is now chairman of Wal-Mart), figured that the only way they could come up with the money to pay their debts, was an Initial Public Offering (IPO), issuing shares of stock to the public.
But there was one catch: A commercial or industrial company cannot conduct an IPO by itself it must be done by a financial institution. To handle the job, Sam Walton hired two of the world's most criminally-connected, dirty-money investment banks.
The first was the Little Rock, Arkansas-based Stephens, Inc., which is the largest private investment bank west of the Mississippi. Its founder was Jackson Stephens, who had worked intensively with such dirty operations as the Bank of Credit and Commerce International (BCCI), an intelligence cut-out for the financier oligarchy, which financed illegal weapons and drug trade. In 1990, the BCCI was convicted in Miami, of money laundering for the Colombia cocaine cartels. Published reports have also linked Stephens to work with the U.S. National Security Agency.
The second firm Sam Walton selected to handle his IPO, was the investment bank White Weld. White Weld operates on Wall Street, but its headquarters are in Boston. Walton wrote in his autobiography, "I thought we needed a Wall Street underwriter." So much for his alleged independence from Wall Street. The founders of White Weld descended from Boston Brahmin families that had been involved in a treasonous plot, the Hartford Convention of 1814, to split apart the United States. Through a series of corporate marriages, White Weld would merge with both the Swiss banking giant Crédit Suisse, as well as the First National Bank of Boston, eventually becoming Crédit Suisse White Weld, one of the world's largest drug-money laundromats. On Feb. 7, 1985, Federal agents caught Crédit Suisse in a multi-billion-dollar money laundering scheme, for which they were convicted.
These two sinister firms raised more than $4.5 million for Wal-Mart through the Oct. 1, 1970 IPO, and a grateful Mr. Sam placed Jackson Stephens on the board of directors of Wal-Mart.
The 'Wal-Mart Decade'
The second instance of Wall Street's massive financing and guiding of Wal-Mart, involves the company's spectacular growth during 1990-2002.
The bankers loved Wal-Mart because it fulfilled their policy of a post-industrial society, whereby America's productive capacities were ravaged the nation no longer produced quality goods at decent prices, with a well-paid productive labor force. Instead, it became a consumer society, purchasing goods, produced first at runaway sweatshops in the U.S. South, and eventually at overseas concentration-camp production facilities. Wal-Mart would be the prime seller of these goods. Soon its ferocious methods became the "norm" for America other retail firms, as well as manufacturers, either adopted the methods of Wal-Mart, or they were gone.
In the late 1980s, the Wall Street-City of London financiers needed greater volumes of loot to prop up the collapsing world speculative bubble. They gouged huge amounts of loot out of the developing sector, under the globalization typified by the North American Free Trade Agreement (NAFTA), which was rammed through the U.S. Congress in 1993, and implemented the following year. Wal-Mart became the ideal vehicle for free-trade and globalization: marketing the goods that developing countries had produced, but for which these countries were paid only a fraction of their real production costs.
Wal-Mart was pumped up to enormous size, accompanied by structural changes, with Wall Street pumping in the money by snapping up Wal-Mart's corporate bonds.
For most of its existence, Wal-Mart had built only one kind of store, an enormous facility occupying approximately 70,000 square feet in sales space (other department chains' stores averaged 40,000 square feet). But now, even these stores were no longer big enough. With globalization going through, the United States would receive a flood of imported goods. Both for this, and for advantage against its competitors, Wal-Mart, starting 1987, began to build supercenters, stores with an amazing 180,000 to 200,000 square feet, which sold everything from hard goods to fresh food.
Figure 1 documents the shift in policy. The number of Wal-Mart regular stores rose between 1985 and 1995, although after 1990, the rate of growth slowed. In 1995, the number of Wal-Mart regular stores peaked at 1,995 in the ensuing seven years, the number contracted by more than 400. There were no supercenters in 1985, only five in 1990, but by 2002, there were 1,268—a staggering growth of 25,000% since 1990.
As the second prong of the globalization strategy, Wal-Mart established stores abroad, regimenting foreign markets using the same methods as it did in the United States, thus destroying those countries' economies. Figure 2 shows that the number of stores that Wal-Mart has built in foreign countries has risen from 1 in 1990, to 1,288 in 2002. Wal-Mart is now the number one retailer in Mexico, Canada, and other countries. The trajectory of the curves of building Wal-Mart international stores, and of building domestic Wal-Mart supercenters are virtually the same, arising from a single policy.
The furious pace of expansion of Wal-Mart's operations—a combined total of 2,540 new domestic and international stores since 1990—directly comes from the bankers' mobilization to expand the process of globalization looting, and from the related policy of the Roman Imperial model. There was an immense cost to carry out the construction, in the tens of billions of dollars. Wal-Mart's cash flow could not have covered the cost.
Now we see the hand of Wall Street and the City of London, which both shaped the policy initially, and made it work. Figure 3 shows the level of Wal-Mart's long-term debt, most of which is in the form of bonds. In 1990, Wal-Mart had $740 million in long-term debt by 2002, it owed $16.6 billion in long-term debt. Notice that this debt curve directly mirrors that of the number of Wal-Mart supercenters, and Wal-Mart international stores. Wal-Mart could only issue this debt due to the fact that the largest Wall Street and London firms were willing to underwrite, market, and sell Wal-Mart's bonded debt, which ended up in the portfolios of several of these banks, as well as of mutual funds, insurance companies, etc. (Add to this several billion dollars of Wal-Mart's short-term debt, in the form of commercial paper. Wal-mart's annual reports do not provide sufficient data to construct a series.)
Contrary to Wal-Mart's assertions of its independence from Wall Street, reverse the process. It was the Wall Street-imposed paradigm-shift of the post-industrial society since 1963, pushed through Congress, pushed through credit policy administered by the Federal Reserve Board, pushed through the banks swallowing billions of Wal-Mart bonds, that made Wal-Mart what it is, conferring on the company its enormous leverage to loot.
The Family Fortune
Wal-Mart operated like a large funnel, sucking in the loot from the application of its genocidal austerity policies, both domestically and internationally. This loot has been siphoned off by the Walton family, which owns more than one-third of the company's stock. On Forbes magazine's 2002 list of America's ten richest people, numbers 5 through 9 are occupied by a member of the Walton family: Sam's widow Helen son Rob, who is chairman of Wal-Mart son John, who is chairman of the family's bank, Arvest son Jim and daughter Alice. The value of Wal-Mart stock had risen, so that Wal-Mart has the third largest market capitalization of any American company.
Figure 4 demonstrates that in 1992, the family was worth approximately $8 billion. Today, it is worth $102.5 billion. Upon these assets, the Waltons earn—mostly from stock dividends—half a billion dollars a year. This money was accumulated from the process of destroying the world economy and its labor force.
Having a bigger fortune than any family in the history of mankind, the Waltons are deploying it for evil purposes. First, of course, through their controlling share of stocks in Wal-Mart, the family plans to continue and enlarge upon Sam Walton's murderous policy for the comany itself. But there is more.
According to the Walton Family Foundation, Inc.'s annual tax returns (form 990-PF), it funds some of the leading forces of the neo-conservative movement, which are part and parcel of Vice President Dick Cheney's Synarchist apparatus: the Cato Institute, the Heritage Foundation, the Hudson Institute (a Cheney base of operations), the Manhattan Institute, the Landmark Legal Foundation, the National Right to Work Legal Defense & Education Foundation, and others. It also funds environmental groups, which, though identified as liberal, seek to tear down modern industrial society, such as the National Wildlife Foundation and the Nature Conservancy of Arkansas and of California.
Further, the Walton family, particularly John Walton, who runs the family's Arvest bank, has functioned as a money pump for neo-conservative causes. Exemplary is its backing of Jeb Bush, the Republican governor of Florida and brother of President George Bush, who is a cog in Attorney General John Ashcroft's domestic fascist program. Jeb also heavily interfaces with right-wing Cuban networks based in Florida, who are involved in the drug trade. In 2002, when Democrat Bill McBride made a stiff challenge to Bush in Florida's gubernatorial race, the California-domiciled John Walton sent $325,000 to the Florida Republican Party, which money was whisked into Jeb Bush's campaign account. Bush won the election. Though not a Floridian, Walton was the largest single individual contributor to Bush during the Florida election. Florida is also a key state for the Republicans in the 2004 Presidential election.
The Waltons are using their money to build up a banking empire, which apparently would give them one of the largest banks in the United States and the world. They have anchored this quest, which is two decades in the making, upon Arvest Bank, which is family owned, and secondarily, through Wal-Mart Stores, Inc.
The Walton family has carefully shepherded its Arvest Bank Holding Company—which owns its Arvest Bank—into a bank with $6.6 billion in assets, and $5.4 billion in deposits. It is already one of America's 75 biggest banks, but that is not good enough for the Waltons. The bank is chaired by John Walton, and has grown through gobbling up other banks. For example, on Dec. 11, 2003, Arvest put the finishing touches on its acquisition of Superior Financial Corp, which has 22 locations in the state of Arkansas. Arvest now operates more than 200 branches in four states, and has the second highest bank market share in Arkansas and the sixth largest bank market share in Oklahoma. It is building on the same rapacious principles by which it built Wal-Mart, starting in Arkansas and neighboring states, and spreading out from there.
In addition, the Waltons' Wal-Mart Stores, Inc. has made attempts to buy banks in its own name.
The Walton Family Foundation is also the largest funder for the school privatization movement in America, which would dismantle the public education system (more on this in a forthcoming EIR).
The Walton family is a predatory bunch the best way to eliminate their devastating effect on the United States and the world, would be to dismantle their Wal-Mart corporate empire, as LaRouche has demanded.
10 Rules for Building a Business
Sam Walton believed running a successful business boils down to 10 simple rules and they helped Walmart become the global leader it is today. We continue to apply them to every part of our business.
1. Commit to your business.
Believe in it more than anybody else. If you love your work, you'll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from you – like a fever.
2. Share your profits with all your associates, and treat them as partners.
In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations.
3. Motivate your partners.
Money and ownership alone aren't enough. Set high goals, encourage competition, and then keep score. Don't become too predictable.
4. Communicate everything you possibly can to your partners.
The more they know, the more they'll understand. The more they understand, the more they'll care. Once they care, there's no stopping them.
5. Appreciate everything your associates do for the business.
Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They're absolutely free – and worth a fortune.
6. Celebrate your success.
Don't take yourself so seriously. Loosen up, and everybody around you will loosen up. Have fun. Show enthusiasm – always. All of this is more important, and more fun, than you think, and it really fools competition.
7. Listen to everyone in your company.
And figure out ways to get them talking. To push responsibility down in your organization, and to force good ideas to bubble up within it, you must listen to what your associates are trying to tell you.
8. Exceed your customers’ expectations.
Give them what they want — and a little more. Make good on all your mistakes, and don't make excuses — apologize. Stand behind everything you do.
9. Control your expenses better than your competition.
This is where you can always find the competitive advantage. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you're too inefficient.
10. Swim upstream.
Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction.
You can read more about Sam's business rules in his book, Sam Walton, Made in America: My Story .
Founder and chair of Wal-Mart Stores, Samuel Moore "Sam" Walton was born at Kingfisher, Oklahoma, on March 29, 1918. The son of Thomas and Nancy Lee Walton, he grew up in Missouri and earned a business degree at the University of Missouri in 1940. After graduating, Walton was employed by J. C. Penney in Des Moines, Iowa. He left J. C. Penney in 1942 and worked at the Oklahoma Ordnance Works near Pryor. Walton married Claremore resident Helen Robson in 1943, and they became the parents of four children.
After his military discharge in 1945, Walton bought a Ben Franklin variety store franchise at Newport, Arkansas. Losing his lease, he opened a self-service Ben Franklin at Bentonville, Arkansas, in 1950 and named it "Walton's Five and Dime." He owned fifteen such stores by 1961. Operating on the principal of "buy low and sell cheap," Walton opened his first Wal-Mart Discount City at Rogers, Arkansas, on July 2, 1962, and began offering Wal-Mart stock in 1970. His Sam's Wholesale Clubs premiered at Midwest City, Oklahoma, in 1983.
In 1985 Walton became Forbes magazine's "richest man in America." By 2002 Wal-Mart had become the world's top retailer and Oklahoma's second-largest employer. Sam and Helen Robson Walton were inducted into the Oklahoma Hall of Fame in 1987 and 1992, respectively. He died at Little Rock, Arkansas, on April 5, 1992.
Larry Schweikart, "Samuel Moore Walton," in American National Biography, Vol. 22 (New York: Oxford University Press, 1999).
Roy V. Scott, "Sam Walton," in The Oxford Companion to United States History (New York: Oxford University Press, 2001).
Sam Walton with John Huey, Sam Walton, Made in America: My Story (New York: Doubleday, 1992).
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