BROTHER CAN YOU SPARE A BILLION
The Jesse H. Jones Story
"Success is measured by the service you render and the character of citizen you make rather than by the amount of money you amass." -- Jesse H. Jones (1874-1956)
With only an eighth grade education and natural business acumen, Jesse Holman Jones set off for Houston, Texas in 1894 on a journey that would take him to the heights of wealth and power. Jones made his mark in real estate and banking, and transformed the city of Houston into a hub of international commerce for the South.
Along the way, he never forgot the importance of helping others. In World War I, he headed battlefront aid for the American Red Cross. As head of the RFC and Secretary of Commerce, he wielded an unprecedented amount of power over the fiscal affairs of the federal government.
During the Great Depression he bailed out the banks, railroads and the farms. He also prepared the country for World War II, enabling industry to build the "arsenal of democracy." The nation has much reason to thank Jesse Jones for his service during some of its most perilous times.
A Young Entrepreneur
Jesse Holman Jones was born in Robertson County, Tennessee on April 5, 1874. Young Jesse's father was a tobacco farmer, and he spent his early years on the family farm near Springfield, Tennessee. Jones' mother died when he was six years old, leaving his father's sister, Nancy Hurt, to act as surrogate mother. "My father was a tobacco merchant as well as farmer.
He bought and prized tobacco for shipment abroad. I worked in the factory. When I was 14 he started a branch factory some distance from home and put me in charge of it. I asked father if he thought I could do the job. He said, 'You can do it as well as I can.' When he told me that, I believed I could," said Jones. Despite only an elementary education, Jesse proved early on in his life that he had a knack for business. He moved to Dallas, Texas at the age of 19 to manage his uncle M.T. Jones' lumberyards.
After his uncle's death in 1898, he went to Houston to manage his estate. Soon, Jesse Jones started his own lumber business, the South Texas Lumber Company, purchased his own lumberyard and quickly expanded it to 65 across the region. He began building small houses, making them affordable for working families by offering 20-year mortgages, which at the time was a new concept. From this point on, Jones identified himself as a builder.
During the nationwide economic panic of 1907, Jesse H. Jones shocked Houston with the news that he would construct the city's three tallest buildings. The ten-story Texas Company Building helped make Texaco and the petroleum industry a permanent part of the city's business community; the ten-story Chronicle Building provided Jones with a half-interest in the thriving Houston Chronicle newspaper; and the nine-story Bristol Hotel elevated Houston's stature by offering visitors luxurious accommodations.
At the same time, Jones began his banking career by investing in local banks and becoming chairman of the National Bank of Commerce, known today as the Chase Bank of Texas. However, Jones and his fellow business leaders realized that without access to the sea, Houston's growth was limited. City leaders went to Washington and convinced Congress to pay half the cost of building the Houston Ship Channel. Jones rallied his friends and raised the other half.
The Houston Ship Channel internationalized the city almost overnight, provided jobs and elevated the economy of the whole region. Jones had built three ten-floor office buildings on Main Street and the Rice Hotel, which was one of the largest and most luxurious hotels in the South, in anticipation of the Channel's opening. A shrewd businessman, he knew he would prosper if his community thrived. Jones' many contributions to the city's growth earned him the name "Mr. Houston." However, Houstonions were not the only ones impressed. Jones had grabbed the attention of President Woodrow Wilson.
World War I And The Red Cross
President Wilson had offered Jones two ambassadorships and a post in his cabinet as Secretary of Commerce, but Jones turned him down so he could continue to build his businesses and his city. When Wilson approached him again at the start of World War I, he felt compelled to help the nation. Jones became Director General of Military Relief for the American Red Cross. He recruited nurses and doctors for the battlefields, organized hospitals, canteens and ambulance networks throughout Europe and established rehabilitation centers for the wounded. The Red Cross called him "Big Brother to four million men in khaki."
At the end of the war, Jones was a delegate to the Red Cross meetings in Paris, Cannes and Geneva, helping to establish the organization as a permanent worldwide relief association. After the war, Jones went back to his many business interests in Houston and married the love of his life, Mary Gibbs Jones. During the 1920's, he continued to build his financial empire and began to construct office buildings and hotels in Dallas, Fort Worth and New York.
He also became director of finance for the Democratic National Committee. In 1928, Jesse set out to shake the shackles of the post-Civil war image off of Houston for good. He offered up the city as host of the 1928 Democratic national convention and secured the event with a $200,000 check and a promise to build a new convention hall within a matter of months. Houston was now on the map and so was Jesse Jones. A 1940 Fortune magazine article noted, "He built Houston up from a one-night stand on Buffalo Bayou into the second-largest and fastest growing metropolis in the South."
The Great Depression
In 1929, the country began its steep slide into the depths of the Great Depression. In 1931, when it became apparent that two failing Houston banks were about to bring down all the others, Jones called the city's leading businessmen to his office to work out a plan that would allow the stable banks and several local companies to rescue the two faltering banks.
As a result of Jones' leadership, no banks in Houston failed during the Great Depression. His work did not go unnoticed. President Herbert Hoover appointed Jones to the Reconstruction Finance Corporation (RFC), which was created to provide relief to the nation's banks and get the economy back on track. Unfortunately, the economy continued to collapse.
When Franklin D. Roosevelt became president, he expanded the RFC's powers and elevated Jones to chairman. Quickly, the Reconstruction Finance Corporation became a central pillar of Roosevelt's New Deal. As chairman, Jones directed billions of dollars toward needy banks, industries, farmers and citizens. He had almost complete autonomy in deciding where the government's money should go and he parceled it out not as charity, but as an investment by America in its people.
Under Jones, the RFC did not just make grants or loans, it bought stock in struggling enterprises, giving the government a voice in how those enterprises were run. During the bleakest years of the Depression, Jones was arguably the most powerful man in the world financial community. He was, in the words of observers at the time, nothing less than a "fourth branch of government."
World War II And Mobilizing Industry
Besides helping to save the economy during the Depression, Jones led the country's move into wartime. In 1940, Roosevelt appointed Jones to his cabinet as Secretary of Commerce. Jones refused to take the job unless he could also retain his position as Federal Loan Adminstrator, overseeing all lending, including the activities of the RFC. Using his dual positions as Secretary of Commerce and Federal Loan Adminstrator, Jones mobilized industry to make the United States' "arsenal of democracy" a reality.
In June 1940, Congress gave Jones and the RFC practically limitless power to do anything the defense and war-making authorities needed to protect the safety of citizens and prepare for war. Subsidiaries, such as the Defense Plant Corporation and Defense Supplies Corporation, were set up first to strengthen the country's defense and finally to wage war.
Only upon Jones' request and the approval of the President could any of these activities take place. More than 20 billion dollars was disbursed for the war effort, which included establishing new synthetic rubber and magnesium industries in the U.S. By the time he left federal service in 1945, forced out by a bitter rivalry with Roosevelt's vice president, Henry Wallace, he had forever altered the way business and government dealt with each other.
After fourteen years of public service in Washington, D.C., Jones returned to Houston in 1947 and began to focus on philanthropy. In 1937, Jones and his wife Mary, founded Houston Endowment. Jones had always felt handicapped by his lack of formal education. He began supporting scholarship programs, including programs for women and minority students. Jones was eager to assist young men and women of all races obtain a college education and improve their stations in life. By the time he died on June 1, 1956, he had helped more than 4,000 students through scholarship programs in 57 colleges and universities.