There were several times as I was driving in Houston when I used to wonder about the references made to Jesse H.Jones (1874-1956). I got used to seeing his name associated with the Houston's Central Public Library and of course Jones Hall and countless schools, but I wasn't inquisitive enough to find out why. I would still be wondering if it wasn't for yesterday's Houston Chronicle article titled "A Man with a Vision." Mr. Jesse H. Jones will be the subject of a new biography of a man with an eighth-grade education who sold his crop in Tennessee, and came to Texas, where he was instrumental in building the skyline of Houston, Texas.
A young 19-year-old Jesse H. Jones was determined to figure out a way to finance his trip to the Chicago World's Fair while keeping his tobacco fields tendered. He mortgaged his crops for $60 spending $10 on the roundtrip rail ticket from Tennessee and kept $10 sewed into his pants for emergencies. He promised his farm hands that he would share of the adventures of his trip if they tended to his field. That Chicago trip planted new ideas into his head but at his young age, he already had a knack for making money.
In those days, everything was locally owned so communities and businesses worked simultaneously to build their business and community.
Was Jones a socialist as his harshest critics claimed? Not hardly, he was a true capitalist using every tool available to him. He wanted the government to provide the catalyst for development and then let the private sector come in and sink or swim. He used this method for the Houston Ship Channel, the making of synthetic rubber and helping GIs start a business. He saw a positive role for government, but he knew it had its limits. He wasn't much on handouts but more of a “let’s invest in someone and get our money back."
Jesse H. Jones formed his first business in Houston, South Texas Lumber, where he built houses, south of downtown, offering installment loans and later started building commercial buildings such as the Rice Hotel, Texaco and Gulf buildings and several department stores. In exchange for a partnership with the Houston Chronicle, he built a 10 story office building on the corner Travis Street and Texas Avenue. In 1912 and as president of Houston's National Bank of Commerce he raised part of the money to widen the Houston Ship Channel in a joint project with the Federal government.
After failing on relying on two years of business charity in public confidence to reverse that economic down word spiral President Herbert Hoover created the Reconstruction Finance Corporation(RFC) in 1932 to make loans to banks insurance companies and railroads in a last-ditch effort to save the economy. Hoover appointed Jones, a Democrat to the bipartisan board. Jesse Jones thought that Hoover's RFC was too timid and slow.
It wasn't long for one after his inaugural address, one of the greatest presidents ever, Franklin D. Roosevelt, made Jesse Jones, RFC chairman. Mr. Jones immediately began buying preferred stock in banks, intent on recapitalizing them, so they could lend again. Putting a solid foundation under our banking system was the first step in rebuilding our economy. That sounds familiar. The banks eventually repurchased all of their stock, no institution was permanently nationalized, and the government made money out of the rescue.
After rescuing the banks the RFC's Electrical Home and Farm Authority (EHFA) helped poor farmers buy appliances once the government brought electricity to their areas. The plan was simple: RFC reimbursed merchants after a consumer made a purchase, and then the local utility included a small monthly charge for the appliance, including a little interest, which it forwarded to the RFC. This plan boosted sales for Main Street merchants with the increased demand for durable goods. When the agency was liquidated, the U.S. Treasury received a tidy profit. Jesse Jones was the most conservative force of FDR's New Deal, but he realized that government must intervene when private initiative and partisan politics are unwilling or unable to do so. In addition, the RFC constructed gigantic factories to manufacture airplanes, tanks and other implements of war and accumulating materials from around the world the RFC bought synthetic rubber from the lab to mass production in less than two years. They had to do this because Japan conquered Malaya and Java, who had most of the world's rubber supply. The government continued to buy enormous plants and lease them to corporations for operation and management. When the government finally sold the plants to private industry after the Korean War, the New York Times noted that the synthetic rubber initiative was "exceeded in magnitude only by the atomic energy program."
During the 1940s, the plants that government bought were located primarily along the upper Texas Gulf Coast for security and their proximity to oil. Employment in the local Chemical Industries went from 200 to 20,000 and helped propel Houston's population from 410,000 to 726,000.
As the author, Steven Fenburg, correctly stated, a nonpartisan RFC could rebuild our infrastructure, increase employment, preserve the environment, reduce the debt and enhance national security. All it takes is a renewed trust in government and a person in command like Jesse Jones, who always kept his eye on both the bottom line and the common good.
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