Economist John Kenneth Galbraith said of Houston entrepreneur Jesse H. Jones, “If he hadn’t existed he would have had to be invented, and that would have been some job.” Steven Fenberg’s recent book, Unprecented Power: Jesse Jones, Capitalism, and the Common Good, reads something like a grand invention: a boy with an eighth- grade education becomes the most powerful man in the nation (next to President Franklin D. Roosevelt), and helps the federal government, using social programs, rescue millions of people and generate revenue.
Jones’s socially minded business practices in Houston caught the eye of Presidents Wilson, Hoover and, later, Roosevelt, who appointed Jones chairman of the Reconstruction Finance Corporation (RFC). In short time, the agency became a cornerstone of Roosevelt’s New Deal programs, lending billions of dollars to revitalize the nation’s economy and militarize industry 18 months before the attack on Pearl Harbor.
Jones’s imprint on Houston is almost equally grand; it’s difficult to name a landmark in the city that was not touched by Jones. He arrived in Houston in 1898 and, in his lifetime, sculpted the city’s industry and skyline and enlivened its arts institutions, universities and health care centers.
Fenberg discusses Jones’s impact on the city he loved best.
Observer: Jesse Jones saw a deep connection between the health of Houston and his own success. As a result, he developed his businesses while cultivating the city’s resources. The Houston Ship Channel—one of the first instances in which federal and local government partnered on a public project—is a great example of this. Jones raised Houston’s share of the funds to complete the project, and the ship channel became a lucrative addition to Houston, both for Jones and the larger economy.
Fenberg: Jones was instrumental in financing the Houston Ship Channel, and he was responsible for building the wharves and piers that welcomed ships from around the world. The ship channel elevated Houston’s stature and economy and filled up Jones’s buildings, including the headquarters for Texaco and Gulf Oil and the Rice Hotel. Jones was an avowed capitalist—that’s what he listed as his occupation on his poll tax receipts—and he knew he would not prosper if people were not educated, gainfully employed and able to participate in the local economy.
Observer: Part of the RFC’s work to expand the industrial landscape prior to World War II included the development of synthetic rubber to ensure the U.S. would no longer have to rely on natural rubber produced in the Pacific. This proved to be a big moment for Houston.
Fenberg: The RFC under Jesse Jones orchestrated the development of synthetic rubber from the lab to mass production in less than two years—a great model today as we cultivate alternative energy to reduce reliance on other nations for oil. The rubber factories were primarily located along the Texas coast for security—so they wouldn’t be on the Atlantic or Pacific coasts—and for their proximity to oil. The rubber factories, enormous steel factories, and the only tin smelter in North America were all built along the Texas Gulf Coast during the war. From 1940 to 1950, because of the industrial buildup and the huge demand for these products, industrial payrolls in Houston went from around $200,000 to $60 million, and the population soared from 410,000 to 726,000.
Observer: The 1928 Democratic National Convention was yet another example of Jones bringing good fortune to the city. Houston was selected to host the convention when Jones, who was finance chairman of the Democratic National Committee, offered $200,000 of his own money ($2.5 million today); he beat out Detroit and San Francisco for the bid. The result was a huge boon for Houston and the South.
Fenberg: The convention put Houston on the map because it was one of the first to be widely heard over radio, and it was featured in newspapers around the world. The convention brought 25,000 people to town just when Jones was building his tallest building—the 35-floor Gulf Oil building, Houston’s tallest building from 1929 to 1963. It opened just months before the onset of the Great Depression.
Observer: Jones had his hand in so many elements of Houston—banking, building, ownership of the Houston Chronicle, and the city’s largest radio stations. At first glance, it looks as though Jones was something of a tycoon, but really he was viewed more like a grandfather to the city.
Fenberg: In their book But Also Good Business, historians Walter L. Buenger and Joe Pratt said Jones knew how all the pieces fit together into one effective whole— his bank, insurance company, the newspaper and the office buildings. He knew how they worked well together.
Observer: After Jones left the Reconstruction Finance Corporation in 1945, he devoted much of his time and energy to philanthropy. Today, Houston Endowment, the philanthropic foundation he and his wife established more than 70 years ago, continues to support the city in countless ways.
Fenberg: Houston Endowment is another example of how Jones used capitalism to improve the common good. He transferred basically all of his wealth—the Houston Chronicle, the Rice Hotel, the famous Mayfair House in New York City, the National Bank of Commerce—he gave almost everything to Houston Endowment. Today, the foundation has assets of more than $1.5 billion. In 2011, it will donate more than $75 million to help improve life for the people of greater Houston.