Jones, Jesse

views updated

JONES, JESSE

Jesse Holman Jones (April 22, 1874–June 1, 1956) was born to a farming family in Robertson County, Tennessee. Like so many Tennesseans seeking economic opportunity in the nineteenth century, the Jones family headed for Texas, settling in Dallas. Blessed with a keen eye for good business deals, Jesse Jones attended Hill's Business College in order to secure at least a rudimentary knowledge of accounting and marketing, and he graduated there in 1891. He accepted a job in his uncle's local lumber business, learning all he could about construction and real-estate development. But Jones wanted to be his own boss. Deciding that Houston offered a more fertile business climate, he invested in real estate and oil and gas properties there. Within a decade he had become one of the city's most influential developers, responsible for founding Texas Commerce Bank, what later became Exxon, and the Houston Chronicle. As chairman of the Houston Harbor Board, Jones built the Houston Ship Channel, which eventually made the city one of the country's busiest ports.

Jesse Jones also became the most powerful man in the state's Democratic Party. During World War I, he moved to Washington, D.C., to work for the American Red Cross, and there he became a close friend of President Woodrow Wilson. In 1928, Jones managed to bring the Democratic national convention to Houston. When the nation's banking system disintegrated in 1932, President Herbert Hoover needed a Democrat on the board of the newly-created Reconstruction Finance Corporation (RFC), and Jones accepted the appointment. The RFC made loans to troubled financial institutions, and in 1933 newly-elected President Franklin D. Roosevelt selected Jones to chair the RFC.

During the next twelve years, the RFC became the most powerful agency in the federal government, dispensing tens of thousands of loans to banks, railroads, savings and loan associations, insurance companies, and private businesses. Because Jones was so well connected with the Texas congressional delegation and such influential Texans as Sam Rayburn, Tom Connally, John Nance Garner, and Marvin Jones, and because he could deliver so many perquisites to their constituents, he became one of the most powerful men in the country. And because the RFC operated on a revolving loan basis, it always had hundreds of millions of dollars in its accounts, money that could be used to fund other federal agencies. Between 1932 and 1940, the RFC dispensed more than $10 billion in federal assistance to tens of thousands of businesses, prompting one historian to label its work as "saving capitalism." At one point during the Great Depression years, Jesse Jones, by presiding over the RFC and the money it funneled to other agencies, had substantial influence on numerous federal agencies, including the Federal Relief Administration, the Public Works Administration, the Works Progress Administration, the Federal Deposit Insurance Corporation, the Tennessee Valley Authority, and the Rural Electrification Administration.

When World War II erupted, and the federal budget grew geometrically, Jones, as the man who headed the RFC, the so-called "Fourth Branch of Government," virtually presided over the economy's shift to wartime production. Congress created and placed under RFC control the Rubber Reserve Company, the Metals Reserve Company, the United States Commercial Company, the Petroleum Reserve Company, the Defense Plant Corporation, the Defense Supplies Corporation, and the Smaller War Plants Corporation. More than $40 billion passed through Jones's hands during World War II. It's no wonder that journalists often referred to Roosevelt as "Mr. President" and Jesse Jones as "The Czar." When the war ended, Jones retired to Houston to manage his real-estate empire and to engage in philanthropic activities. He died there in 1956.