Penney Suit

James Cash Penney has done a lot for Florida. His chainstore millions built a limestone palace near Miami which Herbert Hoover used as his pre-inaugural White House. More millions went into Penney Farms where an Institute of Applied Agriculture teaches Florida farming to Florida farmers. And at least three Penney millions went into a yawning Florida hole—Miami’s City National Bank. In 1928 when City National was still teetering from the collapse of the land boom and the damage of the Great Hurricane, James Cash Penney and his associates bought control, injected $2,000,000 of fresh capital. When the winds of Depression began to howl, another $1,000,000 was put in. Early in 1930 Boardchairman Penney wrote an open letter to depositors urging faith in a “greater Miami.” Before the year-end City National closed its doors forever. Last week James Cash Penney had reason to think Floridans ingrates. Fifty-three unhappy City National depositors, who had received only 32¢ on the dollar, sued Mr. Penney for $132,000. They charged that Boardchairman Penney “did fraudulently and unlawfully acquire to himself or transfer to others” an amount precisely equal to what Mr. Penney had put in—$3,000,000. Furthermore, said the depositors, Mr. Penney had known all along that his bank was insolvent, had seen to it that the bulk of Penney deposits was withdrawn before the bank went under. Young Jim Penney went to Wyoming for his health and while clerking in a store got the idea of building a chain. His original “Golden Rule Stores” grew into J. C. Penney Co. with 1,471 units in 48 States and an annual business of $155,000,000. Last week from his home in White Plains, N. Y. James Cash Penney dismissed the depositors’ charges as “un-true.” His attorney stated that in addition to the $3,000,000 invested in the bank. James Cash Penney had $700,000 on deposit when the bank failed.