Friday, June 8, 2012

Jesus H. Jones Behind the Scenes

"The speed of communications is wondrous to behold. It is also true that speed can multiply the distribution of information that we know to be untrue.--Edward R. Murrow

Musings about Media and Politics

During some of the scandals which erupted a few years ago I spent some time musing about how little has changed since the days of Plato's Republic in Greece when the Sophists helped to destroy their democratic government. I compared the Greek Sophists to the likes of Scooter Libby and explored the rise of political strategists such as Karl Rove and Jack Abramoff, tracing the roots back to the development of propaganda techniques during World War II by members of the newspaper, magazine, radio and television media and their adjunct advertising staffs.

Further musings along this line have taken me back into political management of the Democrats s as well, decades earlier. When businessmen and bankers are put in control of our government, they tend to see the national interest from their own slanted perspective--believing "what's good for General Motors is good for America," et cetera. As James Carville used to remind Bill Clinton ad nauseum, "It's the economy, stupid," and those in charge tend to have the most impact on the economy when working through the corporations over which they, or those who are backing them, have the most control.

In the late 20's and early 30's, not only was radio one of the biggest investment opportunities of that day, but its technology promised an ability to influence a wide-ranging audience of voters, as well as buyers of consumer goods. Retailers of goods and services were beginning to understand that radio could have a broader impact than newspapers and magazines. Politicians, and those who financed them, were eager to get aboard this new technology. Demographics, like democracy, is all about numbers.

President Roosevelt, a savvy politician, make great use of the new phenomenon in his "Fireside Chats."
Elliott's network would have made a third one, competing with CBS and NBC.

Lyndon Johnson's opportunity to rise in radio came simultaneously with Elliott Roosevelt's decline in that field, which may or may not be a mere coincidence, each resulting from the influence of Jesse Jones' network of Texans. In Jones' book, Fifty Billion Dollars, published by Macmillan in 1951, he disingenuously described the maneuvers of the Texas state Democratic convention of 1944:
the Regulars captured the convention from the pro-Roosevelt delegates, who then bolted to hold their own convention. Soon after these meetings certain troublemakers in Washington tried to make it appear to the President and others close to him that I had encouraged the action taken by the Regulars. This was due to the fact that George A. Butler, the husband of one of my several nieces, took a prominent part in the Regulars movement. In discussing this with the President, I told him that I had a good many in-laws, including several men who had married my nieces, and that I did not control them in their politics any more than he controlled his own family. I reminded him that his son Elliott, over my protest, had persisted in his purpose to second my nomination for the Vice Presidency at the 1940 Chicago Convention, after the President had chosen Henry Wallace, and of Elliott telling me that his father did not know what he was doing in wanting Wallace. Subsequent developments proved that Elliott was right about Wallace.

Being a member of the President's Cabinet, I was, of course, embarrassed by Mr. Butler's activities in the Regulars movement, but there was nothing I could do about it. [page 274]
Background of the "Texas Regulars" Movement

Spearheading the publicity for the "Regulars" was the eminent E.E. Townes, who had been closely connected to Jesse's financial network since at least 1917, if not much earlier, through Houston oil men made wealthy after the Spindletop boom in 1901.

Click to enlarge

Included among these businessmen were the founders of Humble Oil, which had been chartered in 1917 by none other than Houston attorney Edgar E. Townes on behalf of William S. Farish, Ross and Frank Sterling, Harry C. Wiess, Robert L. Blaffer, and W.W. Fondren. Jesse Jones, who was never an oil man, was strangely included in the original list of incorporators (possibly as a mere trustee who represented the financial interest of others who wished to remain unnamed, most likely Col. E. M. House, who had previously introduced Jones to President Woodrow Wilson).[1]

A few months after Humble Oil's corporate papers were filed, President Wilson appointed Jesse to head the American Red Cross, then active in World War I as a sort of "unofficial intelligence agency," before any official civilian intelligence service existed. Jones sold his stake in Humble Oil in 1918, after first introducing W.S. Farish to his "personal friend," Harvey Gibson, president of Liberty National Bank in New York City, which loaned Humble a much needed $250,000.[2]

Jones revealing model of San Jacinto Monument
E.E. Townes took Jones' place in 1918 on the board of directors of Humble Oil and thereafter devoted full time to the corporation's business.[4] Townes' brother, John C. Townes, Jr., was general counsel for the company for a ten-year period before going into partnership with E.E. Townes and his son.[5] For a number of years their law firm was located in the same building--Houston's San Jacinto Building--as Herman and George Brown's "Brown Foundation," not surprisingly since, according to Jesse Jones' own newspaper [Ralph Bivins, Houston Chronicle, Section Business, Page 6, 08/17/2003], principals of Brown and Root bought the building in 1940 from principals of Humble Oil:
In 1940, an investment group led by George Brown of Brown and Root bought the property for $1.35 million. The seller was a holding company led by R.L. Blaffer, former chairman of the old Humble Oil and Refining Co. In 1950, a redevelopment of the hotel became major news in Houston. The interior and exterior of the hotel were stripped away, architect Kenneth Franzheim [a New York and Houston architect who was awarded contracts from Jesse Jones' RFC subsidiary Defense Homes Corporation] redesigned it, and the hotel was transformed into an office building.
The Townes brothers also were assisted by attorney Frank Andrews, senior partner of Andrews, Kurth, the Houston firm which represented Standard Oil of New Jersey, which had a hidden 50% interest in "the Humble." Andrews, incidentally, was another very close friend of Edward M. House (the "Colonel," as he was called).[6] In fact, Andrews and House were partners in an unsuccessful venture in Spindletop with investors from Boston.[7]

The year FDR was first elected, 1932, Elliott was sales manager of the Southwest Broadcasting company, based within the Hotel Texas in Fort Worth, which handled the exclusive advertising rights of some of Texas' biggest corporations--Humble Oil and Duncan Coffee in Houston and Magnolia Petroleum of Dallas.

Those corporations' executives all had strong ties to the government's biggest banker of that day, Jesse Holman Jones, sometimes called "Mr. Houston." Jones not only headed the Reconstruction Finance Corporation, but he also owned the Lamar Hotel where the "Suite 8-F Crowd" would meet in Herman Brown's 8th floor suite. Originally appointed to the RFC by Herbert Hoover, Jones would remain in his important post throughout FDR's terms of office until frustration with the New Deal forced him out. Jones' arrogance jokingly earned him the nickname, Jesus H. Jones, among some of his detractors.

In January 1938, Elliott became president of Hearst Radio, Inc. after Southwest Broadcasting sold three of the companies it owned to Hearst. One of those stations--Station KUT (1300 kilocycles)--had been created in Austin, Texas in 1922 by the University of Texas which sold it in 1927 to Jesse Jones, under the corporate umbrella through which he owned Houston Station KTRH. Sold to the Hearst empire in 1932, the call letters were changed to KNOW while the station employed then-student Walter Cronkite. Intriguingly, KNOW would later broadcast from the Norwood Building, now owned by an LBJ subsidiary controlled by Lyndon's daughter, Luci JohnsonTurpin.

Elliott Fades Out

The national network Elliott formed possibly with an eye toward helping FDR with the upcoming 1944 election had been financed by a group of men from Harry Truman's stronghold in Missouri, including Lester E. Cox, who established KGBX radio in Springfield, Mo. in 1931. Like the Fort Worth clique which favored the vice presidency of John Nance Garner, these Missouri Democrats likely hoped to influence Elliott's father's choice of a running mate by investing in the son's career. As Jesse Jones revealed also in his book, however, FDR welcomed the financial assistance but felt no obligation to those who showered Elliott with money. Cox sold KGBX to a newspaper company in 1944, just before FDR finally dumped Vice President Henry E. Wallace, replacing what the Regulars called the "Communist" candidate with Missouri U.S. Senator Harry Truman.

By 1944, however, Elliott Roosevelt, in addition to losing interest in the radio network bought in the name of his second wife, Ruth Googins, but he had also dumped Ruth, having left curmudgeonly Jesse Jones to clean up the radio mess abandoned by him shortly after Pearl Harbor. In a section of Jones' book, entitled "Bailing out Elliott Roosevelt," Jesse relates in great detail how he fixed the situation after receiving a call from FDR while Sid Richard and Charlie Roeser were in his office railing about their tanked investment in Elliott's radio network:
They told me that Elliott's radio company had lost its entire capital of $500,000, and that to buy his stock in the company Elliott had personally borrowed $200,000 from John A. Hartford, president of the Great Atlantic and Pacific Tea Company, $50,000 from David G. Baird, an insurance official of New York, and $25,000 from Judge Charles Harwood of New York, who subsequently, in the early part of 1941, had been appointed Governor of the Virgin Islands by the President. As collateral to these loans, Mr. Hartford had received $200,000 par value of Elliott's radio stock and Mr. Baird, I think, $50,000 of the same....The [financial] statement showed the company to be insolvent. Operating losses had exhausted all of its capital stock.... These debts did not include what Elliott personally owed for the money he had borrowed to put into the stock of the company. Messrs Roeser and Richardson advised me in writing that they regarded their stock in the company as then of no value....

At the time Mr. Hartford loaned the money his company was being sued by the Federal Trade Commission under the antimonopoly laws. This was of course known to the President but not to me. [pp. 294-295]
After FDR was elected to his third term, someone spilled the beans on the mess Elliott had made and an investigation ensued. Columnist Westbrook Pegler described part of that public airing as follows:
Hartford was asked why, when he went to see Jesse Jones, then secretary of commerce and chairman of the Reconstruction Finance corporation, at Jones' suggestion, he expected that he was going to get back his $200,000, with interest.

"I thought the President would pay his son's debts, just as any father would," Hartford answered.

At the time of the settlement, Sid Richardson and Charles Roeser, Ft. Worth oil men and friends of Elliott, who had been dined several times at the White House, wrote their opinion that the stock of Elliott's Texas state network, which Hartford had taken as collateral, was worthless. Richardson and Roeser were large stockholders and friends of Elliott and his wife at that time, a Ft. Worth girl. Jones was appearing in the deal as agent for clients, the President and Elliott. All concerned in the representations by which Hartford was led to believe that his collateral was worthless and that he was well rid of it at two cents on the dollar, had an interest in the company or, in the President's case, a paternal interest in his son's fortunes.

There were reasons at that very time, however, had Hartford taken the pains to inform himself thoroughly, instead of relying on his faith in the President and Jones, which might have persuaded him to hold his stock for a rise. The company's affairs were improving. 

"Jones," he said, "assured me that Elliott was broke and insolvent and the stock was worthless and, being a member of the cabinet and head of the largest bank in the world (the RFC), that was all the assurance I wanted."

He added that Jones told him Mrs. Elliott Roosevelt, too, was broke. The stock is now worth more than $100 a share. Hartford's 2,000 shares, bought back for $4,000 of Jones' money, by President Roosevelt's suggestion, now are worth more than $200,000 at that rate.
Apparently Jesse, whose own Station KTRH was part of Elliott's network, had no idea what the network was worth.

Elliott's marriage to rising movie starlet, Faye Emerson in December gave evidence of his new focus on creating a transcontinental airline company, if one can rely on the fact that witnesses at the wedding were Jack Frye, president of Transcontinental and Western Air, Inc. (TWA), and Johnny Meyer, a close friend of TWA's Howard Hughes from Texas (nephew and one-time son-in-law of two of W.S. Farish's in-laws). Meyer had allegedly introduced Elliott and Faye only a few months earlier. News stories of their wedding revealed that "Ralph Waldo Emerson, the poet, was her [Faye Emerson's] great-uncle," which, if true, made her a relative of Ruth Forbes Paine Young--daughter of William Hathaway and Edith Emerson Forbes--mother-in-law of future Oswald "friend" Ruth Hyde Paine.
Newlyweds Elliott and Faye (center) with M/M Jack Frye, Janet Thomas, Johnny Meyer, and Mrs. Joseph B Livengood, Faye's friend. Press Photo 1944

British Intelligence Planned Dump Wallace Campaign?

Instrumental in the campaign to dump Wallace was British Intelligence, which then had a very active role in spying on Vice President Henry Wallace--according to Jennet Conant, author of a most fascinating book The Irregulars: Roald Dahl and the British Spy Ring in Wartime Washington--with unwitting help from Lyndon Johnson's financial angel, Charles Marsh, a friend of Roald Dahl, the undercover spy:
It was a dirty convention and made for a lot of hard feelings all around. Roosevelt tried to be conciliatory and asked Wallace to remain part of his administration, telling him he could have his pick of jobs with the exception of secretary of state. That job was reserved for his dear friend Cordell Hull, his secretary of state for the past ten years, who was in his last stint of public service. Roosevelt hastened to assure Wallace that he wanted him to take an active role in postwar planning and to sit on "some international conferences." Wallace felt that as one of the strongest leaders in the Democratic Party, he should by rights have the State Department, the most important cabinet post. Out of deference to the president's wishes, however, he settled for secretary of commerce, the seat currently occupied by his bitter adversary Jesse Jones. The president had already indicated that after the election one of the first people he wanted to boot from his administration was the arrogant "Jesus H. Jones." The ambitious commerce secretary had been a thorn in Roosevelt's side as well, and it suited him to allow Wallace to replace him, thereby exacting a measure of revenge on both their behalfs. [pp. 267-268]

An intriguing detail about Henry Wallace's replacement on the Democratic ticket in 1944 harks back to the radio men from Missouri who financed Elliott's first move into national broadcasting. Lester E. Cox would move up the regional political ladder within Truman's political sphere. As the news article to the right attests, Cox was close to Sen. Prescott Bush's younger brother, James S. Bush, Prescott's best man at his 1921 wedding to Dorothy Walker of St. Louis.[8]

Both Cox and Bush were Democrats who were appointed in 1951 by Missouri's Democrat governor to the governing board of the University of Missouri as well as to its executive committee, which controlled the university's School of Mines and Metallurgy and its radio station. Bush would leave the governing board in 1957. In the meantime his nephew, George Herbert Walker Bush, Prescott's son, would have moved first to the West Texas oil fields and then to Houston, where he began hobnobbing with the same social set which had made up the Texas Regulars in 1944, and he would help them build the Republican Party in Texas, while always having nice things to say about his uncle's friend Harry Truman.

James Bush's Skull and Bones class, 1922
Like Prescott, Poppy and Dubya Bush, James, whom Kitty Kelley in The Family: The Real Story of the Bush Dynasty called "the black sheep of the Bush family," was a member of the Yale secret society, Skull and Bones. Kelley also stated he was an alcoholic who, when drunk, beat his wife Janet. That fact never made it into the headlines, however.

[1] Bascom N. Timmons, Jesse H. Jones, The Man and the Statesman (New York:  Henry Holt, 1956), p. 96.
[2] Henrietta M. Larson and Kenneth W. Porter, History of Humble Oil (New York:  Harper and Brothers, 1959), p. 72.
[4] Ibid., pp. 28, 55, 58.
[5] Committee on History and Tradition of the State Bar of Texas, Centennial History of the Texas Bar:  1882-1982, p. 94.  According to this account, Townes was a member of the Masonic Blue Lodge, Arabia Temple Shrine, and, after the death of his first wife, was married to Mrs. Browne Rice, Jr.
[6] Rupert Noval Richardson, Colonel Edward M. House: The Texas Years, 1858-1912 (Hardin-Simmons University Press, 1964), p. 201. 
[7] Ibid., p. 201.
[8] In 1948 James Bush made it into Walter Winchell's column with a one-sentence question: "Could James S. Bush (of St. Louis) be 'Mr. Next' for the lovely widder of Wm. Rhinelander Stewart?" The answer turned out to be yes. Bush married the beautiful Janet Newbold Ryan Stewart, whose son, Allan Ryan, Jr., was later in the same 1953 Yale/Skull and Bones class with Poppy Bush's brother, Jonathan J. Bush. James Bush had been a Lt. Colonel, U.S. Army Air Force in WWI. After working as an investment banker at Hayden, Miller in Dayton, Ohio, Bush moved to St. Louis to work for G.H. Walker and Co. (the investment bank set up by Prescott's father-in-law decades earlier), where his 503 Locust office was next to the Boatmen's Bank building. They lived at 36 Westmoreland Place in the city in 1939. Walker relative James H. Wear, Jr., also a banker, lived at 40 Westmoreland. Wear (Yale's class of 1934) was the son of Yale Alumni's one-time president of the St. Louis chapter, whose sister Loulie married George Herbert Walker. The Wears and Walkers all lived within walking distance of each other in the Central West End near Forest Park. By 1910 G.H. "Bert" Walker had bought a three-story Italian Renaissance home at 12 Hortense Place where the couple reared two daughters and four sons, with assistance from six live-in servants. George’s father, David Walker, lived nearby at 53 Vandeventer Place, and an elder brother, David Walker Jr. (a clerk in the Eli-Walker dry goods business), also lived at that address.

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