INTRODUCTION: Sam's World...........................................ix
1. 129 Billion Reasons to Live.......................................3
2. The Storekeeper on the Square....................................16
3. Making the Turns.................................................33
4. We Sell for Less.................................................49
5. The Organization Men.............................................72
6. The Men Who Would Be King........................................84
7. The Rivals......................................................102
8. The Edge........................................................128
9. Something Borrowed, Something New...............................140
10. Sometimes a Pretty Good Notion.................................151
11. Darkness on the Edge of Town...................................166
12. So Help Me Sam.................................................188
13. They Call Me Mr. Sam...........................................209
14. Little Hands, Big Money........................................223
15. Breaking the Code..............................................247
16. Say It Ain't So, Joe...........................................260
17. Bambi Beats Godzilla...........................................284
18. The Land of Milk and Honey.....................................304
19. Live with Charlie and Kathie Lee...............................318
20. Bleak House....................................................346
Conclusion.........................................................368
AUTHOR'S NOTE......................................................374
RESOURCE LIST......................................................377
ACKNOWLEDGMENTS....................................................381
NOTES..............................................................386
BIBLIOGRAPHY.......................................................396
INDEX..............................................................399

In Sam We Trust
The Untold Story of Sam Walton and How Wal-Mart Is Devouring America

Read BW's Review of This Book

CHAPTER ONE

129 Billion
Reasons to Live

Imminent death has a way of clarifying one's thoughts.

    So it was with Sam Walton, who discovered how short his thread was running thanks to a seemingly minor screwup on a fine November day in 1989, on a remote stretch of the Rio Grande Valley, in Texas.

    Walton had come back from a full day of tromping through the prairie grass and mesquite, hunting for quail, only to find that he'd locked himself out of the ice house at one end of his hunting camp.

    Walton's Campo Chapote was not the sort of place likely to be featured on Lifestyles of the Rich and Famous--just several battered trailers ringing a barbecue pit, with a few water wells, a dog kennel, a barn where he kept his truck and supplies, and the ice house, which was more of a shed, really. The camp moldered away on a 31-square-mile tract of land about 80 miles southwest of Corpus Christi. One indication of how crazy Walton was about the place was the fact that this otherwise frugal billionaire had happily dished out about $120,000 a year to lease the tract from a local rancher since 1983, when he'd hunted in Texas for the first time. It was the hunting he cared about, not the ambiance. By contrast, his brother Bud's digs, on another nearby ranch, included a stone mansion with a swimming pool.

    The land in that part of Texas is wide open and flat enough that, usually, the hunters would climb up onto a bench mounted on the bed of a four-wheel-drive pickup truck and roll slowly along the prairie, watching for the dogs to point quail. Walton would walk for stretches too. At seventy-one--even after having fought leukemia into remission a few years earlier--he was still athletic, fit, able to set a strong pace, though in recent months he'd felt some odd aches and pains.

    A slender, balding man with white hair, a sharp nose, and a sun-beaten, wrinkled face, Walton loved to hunt quail. He had, ever since his father-in-law had introduced him to the sport more than forty years earlier, around the time Walton opened his first business, a little five-and-dime store in Newport, Arkansas. Hunting was the one passion that could tear him away from work, though, typically, he found ways to combine the two. It would have been inconceivable for him to go hunting without stopping off at a Wal-Mart store or two along the way.

    These days, he often used the camp for business. A few times a year, he'd fly down Wal-Mart managers, two dozen at a time, for a weekend. He'd say he wanted to let his managers get to know each other outside of the usual business setting--though some of his executives suspected it was just an excuse to squeeze in a few more weekends of working and hunting, for the talk around the campfire at dusk revolved around Wal-Mart business as invariably as if the men were sitting in a boardroom back at headquarters in Bentonville, Arkansas. Even after a day of hunting, Walton just didn't make idle chatter.

    Often, though, he would fly down with just a friend or two for company, or hunt on his own. Walton could be surprisingly absent-minded. One of the chores of Walter Schiel, a former rodeo cowboy from Waller, Texas, who now worked as the ranch's hunting guide and dog handler, was to retrieve shotguns Walton left behind. After seeing Walton get lost or run out of gas a few times on the vast prairie, Dick Jones, the ranch owner, had talked him into putting in a two-way radio; and it had proved its worth time and again.

    On this late November afternoon, Walton stood outside the ice shed with Schiel. Noticing a small window was open, the slim Walton clambered up onto the cowboy's shoulders and tried to squeeze through. He made it, but the dog whistle around his neck caught on the window and jammed painfully into his sternum.

    The next morning, he still felt sore, but shrugged it off to go hunting anyway. By the end of the day, though, he was still in pain, and the ache had spread to his upper arm. This was worse than any of the other inexplicable aches he'd felt in recent months. Reluctantly, Walton decided he'd better check in with his doctors. He hopped in the twin-engine Cessna he'd picked up a few years earlier (used, of course) and flew to Houston.

* * *

Walton had been commuting to Houston for medical care regularly since 1982, when he was diagnosed with hairy cell leukemia, a type of blood cancer that destroys the body's white blood cells. Walton had always been an active and energetic man, usually up and working long before dawn, but that year he had been feeling increasingly tired and run down. At first, he had thought that maybe, as his wife Helen kept claiming, he was just working too hard; so, though it cut against his grain, he began delegating more work, cutting back on his busy travel schedule, and trying to relax more by hunting and playing tennis.

    But that hadn't helped. So, reluctantly--Walton had always hated seeing doctors--he'd gone in for an extensive physical checkup. His doctors in Arkansas discovered he had a disturbingly low white-cell count. They told him that he had a chronic type of leukemia that had been developing for at least six or seven years. What caused it? They didn't know. Could it be cured? They couldn't say. But Walton, of course, could afford the best treatment money could buy, so they referred him to Houston's M.D. Anderson Hospital, one of the country's leading cancer research centers. There, an oncologist named Jorge Quesada was testing an experimental treatment for hairy cell leukemia using interferon, an astonishingly expensive substance painstakingly extracted from white blood cells. At the time, it took 300 donors to provide enough interferon to treat one patient for three months, at a cost of about $10,000 a month.

    Quesada wasn't the type to sugarcoat matters. The standard treatment, he said, would be removal of Walton's spleen, followed by chemotherapy. But, he told his unhappy patient, this procedure only had about a 25 percent success rate (with "success" meaning the patient was still alive five years down the road). Walton had loathed the idea of going under the knife, and he had been almost combative. Surgery, he said flatly, was absolutely out of the question. Any other options?

    There was really only one alternative, Quesada said: He could become an interferon research patient. There would he risks, such as the possibility of hemorrhage and of opportunistic infections; there were potential side effects, including flulike symptoms and fatigue. But even though Quesada had given interferon to fewer than ten hairy cell leukemia patients up until then, he was obviously very enthusiastic about the initial results. It seemed to help these patients maintain their white-cell counts, and to bolster their immune systems, he told Walton. Still, he added, it was an experimental treatment, and the results so far, while encouraging, had to be considered preliminary. Anyhow, he shrugged, at worst, if it didn't work, they could fall back on surgery and chemotherapy.

    Become an experimental subject? Walton didn't care much for that idea either. He'd need to think about it, he said. "Predominantly, he wanted to be sure the treatment wouldn't interfere with his extraordinarily busy schedule," Quesada recalled. Walton had flown home to Bentonville, discussed the situation with Helen, and, in October 1982, even published a letter in his company's internal newsletter, Wal-Mart World, telling all 41,000 company employees, or associates, about the diagnosis. With his usual mix of businesslike purpose and folksy manner, he tried to downplay the significance of the illness. Noting that he was otherwise in good health, he had written:

    I've got lots of odds going to have successful treatment.

    So, my friends, I hope you'll excuse my referring to a personal matter of this type, but we've always believed in communicating with one another for better or for worse, and in being up front and open about everything that affects our Company and our Wal-Mart family.

    If I'm to have a health problem, I'm really fortunate to have this type of disorder. I'm completely confident, too, that with the right treatment I'll be able to continue doing the things I enjoy most for at least another 20 or 25 years. I'll be coming around--maybe more infrequently--but I'll be trying and wanting to see you. You know how much I love to visit with you all on how you're doing and how we can further improve our Wal-Mart Company, so I'll he stopping by. Let's put this subject to rest.

    I am, and have been, so blessed to have enjoyed the support, affection and loyalty of you wonderful Wal-Mart associates through the years. Together, we can be more than a little proud of our accomplishments. You know we are, and will continue to be, partners. I've just been lucky in so many ways, and feel that this is certainly the case now. The last thing I need or want would be undue sympathy or undue conversation concerning my health. I just wanted to clear the air and not let there be a lot of untrue rumors floating around as many of you knew of the recent tests I have been undergoing.

    He closed the letter by talking about a couple of puppies he planned to train.

    The offhand manner he adopted in his letter didn't come close to reflecting Walton's real feelings. In business, he could snap out decisions on the fly, relying on instincts keenly honed by decades of experience. But this was different. He was utterly at sea. His mother had died of cancer when she was fifty-two, far younger than he was now. He spent an entire month mulling over what to do, then winged down to Houston to ask more questions about the treatment. Quesada greeted him with the news that doctors now had discovered how to make synthetic interferon using genetic engineering, making the substance more readily available--not that, for Walton, this would have been an issue anyway. Walton grilled Quesada and other doctors about the [Illegible] and benefits. Again, Quesada [Illegible] told him that because the drug was so new, much about it remained unknown. Walton went back home and thought about the treatment for another long month, and finally decided he would try it.

    He learned how to give himself injections and how to have someone else give them to him. His regimen called for interferon injections daily for six months, then three times a week for another six months. Less than halfway through the treatment, the disease's progression stopped; the leukemia went into partial remission and stayed there. It turned out, after all, to be that easy.

    That had been almost seven years ago, and the leukemia hadn't really troubled him since, though he continued to visit Quesada for checkups several times a year. He'd last seen the doctor about three months before this hunting trip; Quesada had fretted about a slight change in Walton's blood count, but he hadn't been able to pin down the cause because Walton wouldn't stick around for the three days Quesada needed to run the tests he had in mind.

    Now, when Walton showed up with this odd pain in his sternum and arm, doctors removed and analyzed some bone marrow from his hip--and discovered he had a malignant cancer of the bone marrow, multiple myeloma.

    This time, Quesada's prognosis was bleaker. There was no cure. This, he said, was a much more aggressive disease. Chemotherapy and radiation treatments might put it into remission, he said, but keeping it in remission would be difficult.

    The treatments, too, would he harder. Walton hadn't suffered any serious side effects from the interferon; but he should expect the radiation and chemotherapy to be draining, Quesada warned. The disease itself, unless they were very lucky, would be painful, at times severely so. His bones were already laced with lesions, and were soft; and he could expect to become more frail and to tire more easily.

    Walton trusted Quesada more than he had the first time around, but he still interrogated him closely. Wasn't there some other treatment, something more natural they could try? On top of everything else, chemotherapy and radiation sounded so time-consuming. With the help of his family, particularly his son John, whose daughter had had cancer, he researched alternatives, peppering his doctors with questions about natural treatments, unconventional therapies, vitamins, anything that might replace or reduce the need for chemotherapy and radiation.

    He contacted People Against Cancer, a nonprofit group in Iowa that acts as a clearinghouse to give cancer patients information about cancer research and therapies, including treatments outside the medical mainstream. Walton was nothing if not methodical. But it was soon clear to him that the myeloma almost certainly would prove fatal. In the end, Walton reluctantly decided to accept the conventional chemotherapy and radiation.

    How did Walton react to the prospect that he might be dead soon? It's hard to say. For all his glad-handing, for the evident delight he took in rousing up his workers, at turning his store visits into pep rallies, Walton was an exceptionally private man. He just never talked about himself, except perhaps with Helen, who was as closemouthed as he was. "I'm probably as close to Helen, as an individual, and probably was as close to Sam as anybody around here," said William H. Enfield, a friend of the Waltons for more than forty years, "but a lot about them I've never known and I've never tried to."

    It would be tempting to assume that Walton felt driven to reexamine his life, to wonder whether, say, he should have slowed down sooner and spent more time with Helen and their children and grandchildren, or whether he should have been gentler with the many men he'd burned out in building his retailing empire.

    It would be tempting--but probably wrong. Walton did admit--eventually, as death drew even closer--to having flickerings of late-night existential doubt, though, in the end, they seem to have been just that: flickerings, quickly extinguished.

    But that was later. Just after his diagnosis, he had bigger quail to bag.

As one might expect, Walton had long since arranged both who would succeed him at the company and what would become of his fortune, which is to say, how he would keep it out of the clutches of Uncle Sam. The succession he'd taken care of a year and a half earlier. In March 1988, the Wal-Mart chairman had made things official by handing his post as chief executive to David Glass, Wal-Mart's president. In some ways, the fifty-four-year-old Glass seemed out of place at Wal-Mart; he was, as would be pointed out abundantly to him in his first years at the helm, no Sam Walton. Poker-faced, soft-spoken, and deliberate in manner, he gave the impression of being game but vaguely ill at ease carrying out the kinds of crowd-pleasing stunts that Walton had put at the heart of the corporate culture. Take the time Glass, decked out in leis and a grass skirt, had to dance the hula in front of howling employees at company headquarters to celebrate Wal-Mart's stock price hitting a record high. It was a performance memorable enough that Walton himself promised to hula on Wall Street if the company hit his aggressive earnings goal for the year.

    But Walton had spotted Glass as someone with his own rare predatory instinct for retailing. He had spent a dozen years trying to land him before hauling Glass on board as an executive vice president back in 1976. By the time he had outflanked or outlasted his rivals to become chief executive, Glass had put in another dozen years at Wal-Mart, spearheading the creation of much of what would become the most sophisticated and efficient system in retailing for getting goods from factories to store shelves.

    The annals of Wal-Mart are filled with stories of frazzled executives who quit, retired young, or were canned after burning out under the strain of the enormous workloads, endless road trips, and relentless pressure to perform that came with working for Sam Walton. The stress almost certainly contributed to the heart attack that struck Glass one evening after an all-day meeting in February 1985, when he was fifty. But it barely seemed to faze him. He dived back into his work after the briefest possible rest. By then, there had really been no doubt that he would one day run the show.

As for Walton's then $20-billion fortune, he had set up trusts and mechanisms to leave it in his wife's and children's hands long before the fortune--or Wal-Mart itself--had even existed. He had taken care of that little matter more than thirty-five years earlier, under the prodding and guidance of his father-in-law, Leland Stanford Robson, a banker, lawyer, and rancher in tiny Claremore, Oklahoma.

    Robson may have been the most important of Walton's early mentors: He put up the money to get his son-in-law started in business--and, later, he in effect determined what would become of Walton's fortune.

    Robson had made his own bundle. Raised in Georgia, he first made his way to Oklahoma in 1909, as a twenty-five-year-old itinerant peddler of pots, pans, Bibles, and picture frames. He raised enough money to put himself through law school back in Georgia; then he headed again to Oklahoma, planning to hang out his shingle in the booming oil town of Tulsa. But he soon moved about 20 miles northwest to a smaller pond, the more sedate town of Claremore. There, in 1916, he married a local girl, Hazel Corrine Carr, who bore three sons and a daughter--Helen--in less than four years.

    He was what folks called "country"--a man who loved to hunt and fish and train dogs. He wasn't refined or effete, but a horse trader, smart, clever, always with his ear to the ground. Robson's law practice had flourished, and as prominent citizens often do in small towns, he soon had his fingers in a passel of pies. He served as city attorney for twelve years. During the Great Depression, he snapped up 18,500 acres of land on the cheap and began ranching. In 1936 he became a founder of the Rogers County Bank in Claremore, which he ran as a director, president, and chairman over the following three decades. During World War II, he angled successfully for a seat on the Oklahoma Highway Commission. He wound up with interests in coal-mining, farming, and other industries, as well.

    But it's what Robson did with all these holdings that would become important for Sam Walton. Early on, Robson organized his ranch and family businesses as a partnership, with Helen and her brothers as equal partners. From the day his daughter married Walton in 1943, Robson actively involved himself in their financial affairs. By 1952, when Walton's five-and-dime store in Bentonville had done well enough to allow him to open a second store in Fayetteville, 24 miles away, Robson convinced his ambitious young son-in-law that he should organize his own business as a family partnership, too. So, in early 1953, under Robson's watchful eye, Bentonville attorney William H. Enfield drew up legal documents establishing Walton Enterprises, in which Sam, Helen, and their four children--Rob, then eight years old; John, six; Jim, four; and Alice, three--were all partners.

    "Over the years," Walton wrote in his memoirs, "our Wal-Mart stock has gone into that partnership. Then the board of Walton Enterprises, which is us, the family, makes decisions on a consensus basis. Sometimes we argue, and sometimes we don't. But we control the amount we pay out to each of us, and everybody gets the same. The kids got as much over the years as Helen and I did, except that I got a salary, which my son, Jim, now draws as head of Walton Enterprises. That way, we accumulated funds in Enterprises rather than throwing it all over the place to live high."

    By 1989, besides holding 218 million Wal-Mart common shares, the partnership also had acquired extensive real estate holdings, four banks and half of a fifth bank, and other assorted businesses. As it was organized, Sam and Helen Walton together owned a 20 percent stake in the partnership, and each of the children owned 20 percent.

    When Sam Walton died, in 1992, Helen Walton immediately had his will sealed in state chancery court. But, from comments he made earlier, he seems to have arranged to have his interest in the partnership pass to a marital trust for Helen. That way, he deferred any estate tax. On her death, it apparently was to pass to various family charities, resulting in no estate tax for either the Walton children or the family businesses. The charities would get a minority interest in the family partnership, so that the vote of the bloc of stock would stay under the control of the family.

    By turning over ownership of 80 percent of his holdings to his children so early on, Walton avoided any substantial gift or inheritance taxes. He put it the way his father-in-law probably had put it to him: "The best way to reduce paying estate taxes is to give your assets away before they appreciate."

    Another benefit Robson had pointed out was that creating a family partnership established, early on, the children's responsibilities to the family business and to each other.

    Sam and Helen Walton involved their children in family decisions--large and small--from very early on. On one vacation to the Grand Tetons, recalled Rob, the oldest boy, "We had an opportunity to take what was a very expensive--for that time--pack trip up into the mountains to a fishing camp and stay there for a few days. But that was going to use up all our money, and we had to take a family vote to decide whether to do that or not. We decided to do it, and it was fun. But after we had spent all of our money on the big trip, we made a quick stop in the Black Hills and hiked it on home in a hurry."

    After the kids had grown up and moved away, Sam Walton would arrange family meetings several times a year to discuss Walton Enterprises business, in such places as the Ritz-Carlton in Naples, Florida, and the Del Coronado in San Diego. The family agreed to his decision to make his third son, Jim, the president of Walton Enterprises. Why Jim? He was, Walton thought approvingly, nearly as tight-fisted as his father.

    Rob Walton would take over the chairmanship of the company. That was a given. As the oldest son, he had long understood that eventually, it would fall to him to oversee the family's company. Bright but quiet, he looked a bit like Sam Walton--he had his father's sharp features--but he sure didn't act like him. He would dutifully come along to Campo Chapote for some of Sam's hunting trips with managers or folks from vendors such as Procter & Gamble. But Rob wasn't a hunter. While the other men drove off to hunt, he'd slip on his running shoes and jog away on his own. At Wal-Mart meetings and visits to stores, Rob Walton could be even more diffident in public, more reserved around the workers, than David Glass.

    But he had been well prepared to assume the throne. In one form or another, he had been involved in company business most of his life. Like his brothers and sister, Rob, as a child, had worked in the five-and-dime on the Bentonville town square. Sam had hauled him along on visits to other stores. Like Sam, he had been a high school football star; he made the All-State team as a senior. Helen had talked him into enrolling at a small Presbyterian college in Ohio, Wooster College; though, after two years, he transferred to the University of Arkansas, from which he graduated in 1966.

    Sam Walton had appointed him Wal-Mart's corporate secretary and general counsel as soon as Rob had received his law degree from Columbia University in New York, in 1969. But, to Sam's chagrin, Rob hadn't come back to Bentonville. Instead, he had joined a law firm in Tulsa, Oklahoma. Still, he had done much of the legal work for the company's initial public offering while juggling his role in Tulsa with his duties as Wal-Mart's general counsel. While in Tulsa, he left his first wife and their three children to marry his secretary, Carolyn Funk. After years of continuous pressure from Sam, Rob Walton reluctantly agreed to move back to Bentonville with his new bride and work for Wal-Mart full-time.

    Sam Walton had promoted him to senior vice president and put him on Wal-Mart's board of directors in 1978. In 1982, he appointed Rob Walton vice chairman. He had held that post ever since--even while taking a long leave of absence to train for and compete in the 1985 and 1986 Ironman Triathalons in Hawaii. (That race begins with a 2.4-mile swim, followed by a 112-mile bicycle ride, and ends with a 26-mile marathon.) He completed both races, finishing in the middle of the field each time. If one took the sabbatical as a sign that the heir presumptive was a reluctant draftee to head the company--and many did--one wouldn't be far off. Rob Walton, though, later explained himself by saying "what I saw happening was that I was going to work really, really hard for 20 years with Dad still around and then sometime he would be gone and then I'd really have the responsibility. So I decided that I would get a little bit different orientation for a while."

    Reluctant or not, Rob Walton was ready, his father knew, to assume the mantle.

    In all, then, at the time he got the bad news from Dr. Quesada, Sam Walton had no real worries about what to do with his fortune or his company. Helen and the children were taken care of and could manage their affairs. He felt confident--having drilled this into them--that the children would conserve the partnership's holdings in Wal-Mart rather than sell off stock and spend the money. He was confident, too, in Rob's ability to represent the family in Wal-Mart's dealings and felt certain that Glass, and the management team he had spent decades building around him, could come as close as anyone could to running Wal-Mart the Sam Walton way.

    Walton had never been a particularly introspective man, as he readily admitted. His immediate inclination, as he brooded over the diagnosis of bone cancer, then, almost certainly was not to review his life, nor to wonder whether his time might have been better spent in other ways. What he does seem to have done--based on comments he made a few months later at a Wal-Mart gathering--was to contemplate what lay ahead for the enterprise that gave his life whatever meaning it had and to reassure himself that this most important of his progeny--Wal-Mart--could achieve what he had in mind.

    For several months he had been working, reluctantly and with extreme discomfort, with a reporter from the Wall Street Journal, Eric Morgenthaler, who was ghostwriting Walton's autobiography. Sam Walton had agreed to the project only grudgingly, under constant prodding from Helen, Rob, and Alice Walton, along with David Glass and several other senior Wal-Mart officers. They had set Morgenthaler up in an office down the hall, giving him the run of the officers. With that advantage, and the collusion of Walton's secretary, Becky Elliott, Morgenthaler even had managed to pin down the notoriously elusive Walton himself for several interviews.

    As an interview subject, Walton inevitably turned any question about his own life into a discussion about Wal-Mart. So much did he loathe having to talk about himself that several times he had threatened to kill the book. Now, on returning from Houston, Walton called Morgenthaler into his office.

    He matter-of-factly told him about the cancer and then said, "I have to simplify my life...so I have to get rid of things I don't want to do." In a manner that was friendly but brooked no argument, he added, simply, "I never wanted to do this book. I'm getting rid of it."

    By "simplifying," Walton evidently meant focusing even more than before on his one overriding ambition--the one that had led him to head to his office so many mornings at 4 A.M.; to spend so many Saturdays in meetings; to visit more stores across the country and around the world than, he was sure, any other person ever had: to leave his wife and children at camp-grounds or resorts while he checked out competitors' businesses; and to keep at his grinding schedule for years beyond the age at which anyone else might have retired. It was to create the biggest and most successful company he could--to be, as one of his early managers, Charlie Baum, had put it, the top of the heap.

    Walton had long said that the money, beyond a certain point, was incidental. Certainly, his personal habits--bragging about the cheap shoes he bought at Wal-Mart, borrowing change from other executives--sustained an image of sometimes comical frugality.

    His public image of nonchalance toward his wealth had been cemented for good by his widely reported response to the great stock market crash of October 19, 1987, when the Dow Jones Industrial Average plummeted 508 points in a day and Wal-Mart shares fell 23 percent from their price of a week earlier, wiping out $1.7 billion of Walton's net worth. Walton had gone to Little Rock to join other Arkansas corporate leaders for a press conference on higher education. As he arrived at Governor Bill Clinton's office, reporters asked for his reaction to the crash.

    "It's paper anyway," he had said, seemingly untroubled. "It was paper when we started and it's paper afterward."

    It wasn't the money. It was the scale of his business. His goals had always been audacious. In 1976, when Wal-Mart reported $340.3 million in sales for the year from its 125 stores, all within a day's drive of Bentonville, Walton had been confident enough to promise publicly that he would triple its size within five years. "Write it on the wall now if you want to," he told Jeannette Reddish, a writer profiling him for Financial World. "By January 31, 1981, we'll be a billion-dollar company." As it turned out, Wal-Mart's sales had reached $1.25 billion a year ahead of his schedule.

    By 1985, when Wal-Mart posted $6.4 billion in sales, still leagues behind Kmart's $22 billion and Sears's $25.3 billion, Walton and Glass were already talking openly about becoming the biggest retailer in the country--and that same year Herbert Fisher, the chairman of the New Jersey-based Jamesway Corp., another regional discount chain, said he too could foresee the day when Wal-Mart would pass Kmart to become the number-one discounter.

    Now, in 1990, in the weeks after dismissing Morgenthaler, Walton began calculating and recalculating, on the yellow pad he always carried, his projections for Wal-Mart over the next decade. Catching Sears and Kmart he took as a given. That would happen within the next two years, he felt certain, so he might live to see that. He was more interested as to Wal-Mart's potential further out.

    This was the calculation he confidently announced to cheering shareholders at the next annual meeting: With or without him, by the year 2000, Wal-Mart would boost its sales more than five-fold, to $129 billion a year--blowing far beyond Sears and Kmart to become the most dominant retailer the world had ever seen.

    There was, to Sam Walton, no doubt about it.