How D.H. Byrd's Uncle and Cousins Met G.H. Walker

Abraham (Abe) Ruddell Byrd (born 1851) operated Stephen  Byrd's farm in Jackson County, Mo., at least until 1878, when he began to engage in other business pursuits, particularly flour milling. He and his wife Sallie Hunter Byrd lived in Cape Girardeau in the "bootheel" of Missouri, described as follows:

gum and bald cypress

Before a series of large levees were constructed by the federal government to harness the Mississippi River, its flood waters regularly spilled across much of southeast Missouri. The Missouri Bootheel once was a natural basin to catch all of this water, a swamp unsuitable for any kind of habitation.

Abe Byrd had four sons, the two eldest of whom entered business with their father in 1904. The next eldest, Carlisle Oliver (likely named for the head of Carlisle Training School in Jackson where the older boys received their preparatory education), was almost six years younger than A.R. Jr. and the youngest, Edward Russell, was not born until 1897. By 1910 A.R. had relocated his wife and younger children to San Antonio.

Joseph Hunter Byrd, was at the University of Texas by 1900, where he was elected to the Cactus staff. The second son, A.R. Byrd, Jr., began in 1899, graduating from U.T. in 1903. The brothers then left Austin to take up ranching and mining near El Paso, Texas--on lands in both Old and New Mexico. Returning to Missouri after only a year, the brothers became serious about assisting their father in his two businesses: (1) flour milling; and (2) the sawmill or lumber road business. The mining business in which these elder sons and their younger brothers were involved in is more mysterious and will be dealt with later.

As early as 1900 Abe Byrd had owned Cape County Milling Co. along with a nephew, Ruddell Monroe McCombs, son of his sister, Elizabeth "Betty" Byrd McCombs, who died when her son was only a boy. In 1905 Cape Co. Milling was said to have "luxurious offices" located "near the [Gould-owned] St. Louis, Iron Mountain and Southern Railway station in the eastern part of Jackson," less than ten miles northwest of Cape Girardeau. After the college-educated sons went into business with him, A.R. Byrd organized the Alsop Process Co. of St. Louis, Inc. to acquire from James N. Alsop flour patents the inventor had obtained from Great Britain in 1904, and subsequently from the United States, covering machinery to bleach flour.

A.R. Jr. worked as sales agent for Alsop, but quickly became an officer within the St. Louis Alsop Process Company. While they began manufacturing the patented machines, they also sold franchises to other flour mills to use the Alsop Process. The company's first St. Louis office in 1904 was on S. 7th Street near railroad loading docks and warehouses, but by 1912, the company had moved its headquarters to the heart of St. Louis' financial district--506 Olive Street, today within the block called Metropolitan Square. Although still associated with the Alsop Process at that time, A.R. Jr. had joined his brother in their own brokerage company at 420 Olive, a block east of the Alsop office. Today the Federal Reserve Bank of St. Louis takes up the entire block at N. 4th and Locust, only a block to the north. Near their offices was another notable St. Louis stockbroker, G.H. Walker & Co. at 307 N. 7th Street.[1] We will hear more about him below.

Under the corporate name of American Forest Co., Abe Byrd, also owned timber in the swampy area around Cape Girardeau, employing his son J. Hunter Byrd as president. Working in 1911, Byrd met with promoters who wished to construct the "sawmill and lumber" infrastructure of the Portland & Southeastern railway from a point on Gould's St. Louis, Iron Mountain & Southern railroad in southeastern Arkansas to link with the old Vicksburg, Shreveport & Pacific, as shown in the Engineering and Contracting magazine, Vol. XXXV, No. 15 (at page 32). One court case indicated that American Forest had been incorporated in New York, and that certain financing came from the St. Louis Union Trust Co. Intriguingly, QJ revealed previously that the original builder of the Vicksburg line had been Charles G. Young, ancestor of David Atlee Phillips! [2]

Read full article.

Houck's consolidated system was owned by a syndicate of investors from southeastern Missouri, who sold the St. Louis & Gulf Railroad to the St. Louis & San Francisco Railway (the Frisco) in 1905. As one of Houck's large investors, A. R. Byrd got a tiny Missouri town named for him:

At the urging of Abe R. Byrd, who owned a sizable tract of land south of Senath, Missouri, and in part with Byrd's financial backing, Louis incorporated the Kennett and Osceola Railroad to extend south from Kennett toward Osceola, Arkansas, running roughly parallel to the St. Francis River in the Bootheel's most remote corner. Inside of a year, crews painstakingly carved out a line nearly fifteen miles long through Senath to a junction point with the Paragould and Eastern Railroad that Louis simply called Arbyrd.[3]

Click map to enlarge. See original at website.

       

American Forest Co.

Houck had therefore managed to build a series of railway lines connecting Cape Girardeau to St. Louis, as one part of a dream that envisioned a railroad which would span from St. Louis directly south to the Gulf of Mexico. Perhaps Abe convinced his eldest son to take over construction where Houck left off, partly we assume because such a project would provide a constant market for railroad ties milled by the American Forest Co.

J. Hunter Byrd, as president of the lumber mill, had become ever more involved in the securities business. Even before 1913, when, according to Louis Houck's biographer, Byrd "stepped forward to help facilitate the sale" of his father's friend's railroad interests. J. Hunter first approached the Goulds' Missouri Pacific without success.

Jay Gould of MoPac had died in 1892, leaving control of his railroad interests in the hands of an inept son, George J. Gould and his crew of advisers, including three directors and numerous executives who lived in St. Louis (E.B. Pryor, Sam F. Pryor, and Charles S. Clarke). When Pryor left St. Louis for the New York area, he rose quickly in the business world, according to Karin Crooks:

(Sam) Frazier Pryor (1865-1934), arrived in Greenwich to start a new career, uprooting his family from their life near St. Louis, Missouri. At 48, Sam Pryor was a self-made man who, after high school, had worked his way up through the railroad supply business to become president of Southern Wheel Company. Sam’s new employer, the family of William Rockefeller (1841-1922), was already established in Greenwich and famous worldwide for its wealth. In his new position as General Manager and Vice President of Remington Arms-Union Metallic Cartridges Co. (Remington), Sam would report to two bosses: William’s second son, Percy A. Rockefeller (1878-1934), the young head of the family business; and William’s son-in-law, Marcellus (Marcy) Hartley Dodge (1888-1963), the sole stockholder of Remington.

Hunter Byrd then approached the Frisco and, according to biographer, Joel P. Rhodes, he had the following results:

By deftly maneuvering himself into the Frisco camp [composed of B.F. Yoakum, B.L. Winchell and Thomas West], the young entrepreneur ultimately acted as the big railroad's proxy in the execution of a familiar contract with Louis in February 1913. Immediately after consolidating the Gape Girardeau and Thebes Bridge Terminal Railroad, the Chester, Perryville and Ste. Genevieve, and the Saline Valley Railroads into one Cape Girardeau Northern, Houck sold this entire new corporation and all his interest in it to a syndicate headed by J. H. Byrd.[4]

A. R. Byrd, Jr., Secretary

A bond issued by the Cape Giardeau Northern, shown here, contains the signature of A.R. Byrd, Jr. as the secretary. Louis Houck clearly believed that J. Hunter Byrd was acting on behalf of the Frisco Railroad at the time Byrd formed the corporation and merged Houck's lines into it. When, in 1913 the Frisco went into receivership and the receiver refused to take over maintenance of Houck's former railroads, Houck sued on behalf of the bondholders.

The Texas & Pacific at first had leased its existing lines to Jay Gould's Missouri Pacific network, but, after Gould acquired a majority of stock in the T&P in 1885, the two roads simply continued to work together as a system through Gould holdings in both companies.

However, in 1911 the Gould-owned Missouri Pacific made a high-dollar deal with B.F. Yoakum, of the St. Louis and San Francisco Railway (Frisco) Company. Yoakum had purchased a huge estate in Farmingdale, Long Island, New York two years earlier and used his profit to improve his farms. In 1913 the Frisco was placed in receivership by its major creditor, the St. Louis Union Trust, which selected an investment banker from St. Louis as receiver. George Herbert (Bert) Walker, whose bank had invested $60,000 in the syndicate which bought from Gould, had grown up in St. Louis among the other members of the syndicate whose secret hope was to sell out to the Frisco in short order. A U.S. Senate investigation revealed the insider trade in 1913. By 1920 Walker, too, had moved to Long Island--to Old Westbury--about twelve miles west of Yoakum's rustic farm, into the heart of horse breeders and bankers who had more money than St. Louisans could dream of. Doug Wead's biography of Bert's grandson, The Raising of a President, indicated the move may have begun as early as 1919.

The Byrds Fly to Texas

In 1907 A.R. Byrd, Jr. married Elise, a daughter of Hungarian-born engineer, Otto Kochtitzky, who had formed the Little River Drainage District in Southeastern Missouri to drain the wetlands where hardwood cypress proliferated.

Southern Merchant

As a member of the Alpha Tau Omega fraternity at the University of Texas, A.R. Jr. may have had contact with its sponsors, Walter Bremond and T.W. Gregory, who were close friends of Colonel Edward M. House, the man who had elected numerous governors in Texas before turning his sights toward electing U.S. President Woodrow Wilson. Alpha Tau Omega sponsor, Thomas Watt Gregory, became Attorney General in 1914 in President Woodrow Wilson's Cabinet, which was mostly hand-picked by Col House. One man selected to work with Wilson's Attorney General in gathering intelligence information was the banker, railroad receiver, G. H. Walker of St. Louis, who was Chief of the St. Louis division of the American Protective League, which reported directly to the Department of Justice.[5] We only mention this fact in passing to show Walker's powerful political and intelligence connections to the Democratic establishment of that era.

Louis Houck "constructed a network of five hundred miles of track through the wilderness of wetlands known as 'Swampeast Missouri'." The first railroad Houck built connected Cape Girardeau to the Iron Mountain Railroad, and by 1902 many of Houck's lines had been sold to the Frisco. Access into the rail network was of great importance to the Byrds, who sought an affordable distribution medium for their processed flour.

As a consequence the value of the lands within the district, including not only Abe Byrd's timber land, but Houck's railroad land as well, increased dramatically, as did the taxes assessed on the land by the drainage district. Louis Houck's railroad sued Kochtitzky's district, contesting its taxing authority. Houck lost in the Missouri Supreme Court in 1911, forcing him to either pay his ever-rising taxes or lose his lands. In desperation Houck sought a buyer for his railroads. Houck was approached by Abe Byrd's eldest son, J. Hunter Byrd, mentioned earlier, who was a financier as well as the brother-in-law of Otto Kochtitzky's daughter, Mrs. A.R. Byrd, Jr., nee Elise Westmore Kochtitzky. (Note: It is possible Houck did not know that Kochtitsky's daughter was in fact the sister-in-law of the man who sought to rescue him from this desperate situation. They did remain married until 1925, when they divorced without children.)

It was a somewhat intricate plan. They set up a new corporation Byrd had formed, Cape Girardeau & Northern Railroad Co., of which Hunter Byrd was president. The new corporation absorbed the five existing railroads through a purchase from Louis Houck, paying for them with proceeds of bonds issued by the new company and guaranteed by the St. Louis & San Francisco (Frisco) Railroad. At least $1,200,000 of the $2,500,000 in bonds were sold to innocent purchasers in reliance upon the guarantee, and it was that fact which influenced the Court in its final decision to hold the railroad liable in the amount of $1,200,000.

However, when Houck had not received payment by February 1914, he sued the Frisco, which had guaranteed the bonds in 1913, which had almost immediately been placed in receivership by its creditors, chief among them being another St. Louis investment banker, George Herbert Walker. One lawsuit was filed in the U.S. District Court for the Eastern District of Missouri and heard in June 1918 (253 F. 123), in which the Frisco intervened to prevent plaintiff, J. M. McElvain, from pursuing a claim against for a debt he claimed predated the appointment of receivers.

Morton & Co., Inc. - 1920

Attorneys for the Frisco included Cravath & Henderson, the firm which a few years later would employ John J. McCloy. It is interesting to note that Carl A. DeGersdorff, a future partner in the firm, was a director of a subsidiary railroad at the same time as G.H. Walker, Benjamin Yoakum and Robert J. Kleberg. Another subsidiary of the Frisco had Walker on the board with lumbermen J. H. Kirby and J. F. Keith of Beaumont. Keith's daughter Olga married Houston oil tycoon Harry C. Wiess.

As early as March 1920 Walker was named as president of Morton and Company, Inc., a Guaranty Trust investment bank subsidiary, along with Averell Harriman, Sam Pryor and Percy Rockefeller.

We will end this segment at this point. Studying the Byrd family's deep roots has helped to reveal something we never dreamed we would find. In hoping to explain how D. Harold Byrd became such a close friend of Lyndon Johnson, instead we learned how closely tied his father's family was to the grandfather of George H.W. Bush. Small world!

END NOTES:

1. See also J. Hunter Byrd's biography in St. Louis, the Fourth City, published in 1909.

2. Young had moved to Texas and chartered the Houston and Great Northern railway before his tragic accidental death in 1871. The HGN would later continue to build north in Texas, connecting to the Shreveport line at Mineola, and in 1873 became part of the International & Great Northern Railroad, acquired by Jay Gould in 1880 for his Missouri Pacific Railroad. Gould would also acquire the Texas and Pacific and the St. Louis Southwestern (Cotton Belt) and owned "one-half of the mileage in the Southwest" by the time he died in 1892. Gould's biggest competitor in the region was the Frisco, which attempted to merge in 1922 but the purchase was refused by the ICC.

3. Joel P. Rhodes, A Missouri Railroad Pioneer: The Life of Louis Houck, p. 190.  University of Missouri Press: "In telling the story of his railroading enterprise, Rhodes chronicles Houck’s battle with the Jay Gould railroad empire and offers key insight into the development of America’s railway system, from the cutthroat practices of ruthless entrepreneurs to the often-comic ineptness of start-up rail lines."

4.  Joel P. Rhodes, A Missouri Railroad Pioneer: The Life of Louis Houck, p. 252.

5. Emerson Hough, The Web (Reilly & Lee Company, 1919), p. 293.]

Knights and Their Secret Orders

Conditional Allegiance to Power?

In another blog article, I borrowed a quote from famed economic historian Robert L. Heilbroner who was quoted by James Presley in his book, A Saga of Wealth as follows:

Vassal swearing allegiance to lord

“Throughout most of history,” wrote Robert L. Heilbroner, “wealth and power have gone hand in hand.” The alliance, an obvious one, has grown with but occasional public outcries. Working together, possessors of wealth and power may achieve a stability of their own. Over most of history, wealth has been a vassal to power, for as Heilbroner explained, “it was easier for the ruler to become a rich man than the rich man a ruler.” [Presley, page 303]

Elliott Roosevelt was ushered into the radio business initially by Fort Worth men associated in business with  the father of his second wife, Ruth Googins. They enticed him to move to  Texas -- undoubtedly promising him the moon in the hope of attracting his father's power for their own interests. Newly elected Franklin Roosevelt had a power to which these businessmen gravitated, but that expanding federal power could also make them shudder. Americans, since the days of the Federalist blockade against England, have fought tooth and nail against the Constitutional principle of majority rule, which effectively damns the business interests of the defeated minority. They swear their fealty and allegiance to the man in power only when he gives them what they want. Full stop.

In 1930 Texas had quite a number of men, like Elliott's radio investors Sid Richardson and Charles Roeser, who had recently become rich in the oil fields of Corsicana and East Texas. Over the preceding decades these wealthy men had witnessed what they viewed as the usurpation of state law by the federal government. The federal government had obtained the power to tax their incomes in 1913 and to prohibit the sale of liquor within the state in 1920. Both laws could now be enforced through the expanding powers of the Bureau of Investigation, linked to the Treasury Department's Bureau of Prohibition, as opposed to Texas' own police force, the Texas Rangers.

With this feeling of a need to reach out and grab control of federal authority--much as Colonel Edward M. House of Texas had done when he went in search of a candidate for the Presidency in 1912--the newly wealthy oilmen in Texas thought that, by buying Elliott a place within Fort Worth society, they would thus gain the power of the executive office for themselves. Like the du Pont family of Delaware who would attempt to buy Franklin Roosevelt, Jr. in 1937, the Texans soon discovered things did not quite go as planned under the new President.

FDR was happy to accept his minions' pledge of fealty but, as the rich Texans soon learned, he rarely protected their interests if it was inconsistent with his concept of the overall good for America. Two of these wealthy "vassals," as we have seen, Sid Richardson and Charles Roeser, saw their investment in Elliott's radio network tank. At the same time, their primary interest--oil--was also in dire straits. Where was the protection they expected?

Hot Oil in East Texas

FDR was elected in 1932 by a plethora of groups disenchanted with Republican Herbert Hoover's nonaction in overcoming the effects of the stock market crash in 1929 and the depression that seemed to be unending. The Democrats' pledge to repeal the Volstead Act brought several otherwise divergent groups of voters into the Party, including Franklin Jr.'s in-laws, the du Ponts of the famous chemical conglomerate.

Over-drilling in East Texas

A wealthy group of Texas Democrats consisted of oil men made wealthy in the East Texas Oil Fields, who saw their profits being drained by fly-by-night opportunists tapping wells into the massive pools of oil underneath their own oil wells. They believed they had the right to regulate production through the Texas Railroad Commission, originated in the days when Colonel Edward M. House was building his own railroad and electing governors in Texas to appoint men to the Commission judicially recognized as the agency in charge of regulating oil and gas.

The Texas Oil and Gas Conservation Act of 1919 prohibited production of crude oil “in such manner and under such conditions as to constitute waste” and the Texas Railroad Commission was charged with doing “all things necessary for the conservation of oil” and with establishment of “such rules and regulations as will be necessary to conserve the oil and gas resources in the state.”

Believing the 1919 Act gave Texas complete power to regulate oil well production within Texas, the commissioners attempted to quell the flow from cheap "teakettle" refineries set up by independent oilmen who came to the Texas boom field from all parts of the nation, threatening to drain the pools underneath the wells of the "big oil" interests like Humble Oil. In the summer of 1931, more than a year before FDR's election, a federal appeals court had struck down the power of the Railroad Commission to do more than to "conserve" oil, disallowing a quota system, and thus upholding the rule of capture announced many years earlier in Pennsylvania.

Big Oil vs. Independents

Sterling Mansion portico

The governor of Texas at this time, Ross Sterling, was one of the founders of Humble Oil (now Exxon), who had resigned from the Humble board in 1925 when his sale of stock to Standard Oil of New Jersey made him a wealthy man and gave Jersey Standard half of Humble's stock. Sterling had seen his fortune diminish with the 1929 stock crash, which came on the heels of his sinking a hefty $1.4 million of his new-found wealth into the construction of a 21,000-square- foot mansion in La Porte, Texas.

Governor Sterling

As the Depression deepened without help in sight from President Herbert Hoover, Sterling took action on the state level, calling a special session of the Texas Legislature in August 1931 to address the oil crisis. Federal courts were being requested to grant injunctions in favor of small independent oil men who had contracted to sell more oil than the Railroad Commission permitted them to drill under new proration orders, issued in the hope of stopping the price of oil from plummeting further.

Since June, "the price of oil throughout the Mid-Continent Field had fallen from one dollar and seven cents for high gravity oil, similar to that produced in East Texas, to an average of twenty-two cents a barrel." [Master's thesis of Lucile Silvey Beard, citing L. G. Bignell, “East Texas Must Not Pass 160,000 Barrels of Oil,” Oil and Gas Journal, August 20, 1931, p. 23.]

While appealing one such injunction to the U.S. Supreme Court, Sterling then declared a state of war in East Texas and put the Texas National Guard's Brig. Gen. Jacob F. Wolters in charge of enforcing the new Texas law. Wolters, a graduate of the Fort Worth college that later became Texas Christian University (TCU), was not only a partner in a Houston law firm which acted as general counsel for the Texas Company (later Texaco), but, since 1918, as a general in the Texas National Guard had been the "troubleshooter for many Texas governors. They called on him to establish martial law in areas where even the Texas Rangers could not reassert civil law and order." [1]

In December 1932, a month after FDR was elected but not yet inaugurated, the U.S. Supreme Court upheld the federal district court's contempt order against Governor Sterling "on the ground that a governor can declare martial law only in case of actual insurrection or menacing threats of insurrection."

In Sterling v. Constantin, 287 U.S. 378 (1932), Chief Justice Charles Evans Hughes, who wrote the stinging opinion, addressed the governor's "attempt to regulate by executive order the lawful use of complainants' properties in the production of oil" by interjecting himself in the place of civil judicial process, delegating the authority to the

Humble Oil

Not only did Governor Sterling lose this case, so did former-governor Dan Moody, who had preceded Sterling as governor. Moody, given the credit for ending the reign of the Ku Klux Klan prominent once again during Prohibition, by fighting against the localized corruption of Pa and Ma Ferguson, had made it possible for the federal government to increase its power in areas formerly left to state control.

According to Nicholas G. Malavis in Bless the Pure and Humble: Texas Lawyers and Oil Regulation, 1919-1936, Moody--who had returned to private practice when succeeded by Sterling (elected apparently in an effort to protect Standard Oil's stock value)--was hired as attorney for a plethora of independent East Texas oil operators (filling 13 Pullman train cars) when Dan represented their interest before proration hearings at the Railroad Commission in March 1931. The orders came and went but, without any inherent enforcement mechanism, Governor Sterling was impotent without the national guard.

Rise of the "Federal Authority"

What is important for these purposes, however, is how this battle in the oil fields affected what was later to occur in Texas politics during the 1960's. Having been slapped down for using state action to regulate what they thought should have been within the state's power, certain influential Texans sought to buy their way into federal power. And if that wouldn't work, ... well, it would work. Texans knew how to handle such matters. They had being doing it since 1836.

Pre-1931 photo of Gov. Moody showing Oveta Culp as parliamentarian; she was later wife of Gov. Hobby

Remember San Jacinto!

These events occurred a relatively short time before Texas started to plan for the Centennial to commemorate its 100 years of independence from Mexico, declared on March 2, 1836, but not officially won until winning the battle at San Jacinto on April 21 that year. Ironically, Texans were only able to build a suitable monument to their glory days of independence by tapping into funds obtained from the federal government. And it just so happened they had powerful men in place who did the tapping for them--Vice President John Nance Garner and RFC chairman Jesse H. Jones.  The total monies for the memorial was set out in a special article in the San Antonio Light May 9, 1937:

The government, appropriated $3,000,000 for Centennial markers and buildings and other government agencies contributed enormous amounts of money toward various Centennial projects. The expenditure for San Jacinto is approximately this:

Vice President Garner's Centennial commission..................$ 385,000
WPA for landscaping...............................................................325,000
WPA Funds for terracing........................................................ 500,000
Extra fund approved by president........................................... 200,000

Total federal funds.............................................................. $1,320,000
State appropriation .............................................................$   250,000

Houstonians and Texas officials were embarrassed when Jesse Jones who, as chairman of RFC was instrumental in obtaining the WPA and PWA grants and originally inspired the San Jacinto monument, came to Houston to level the cornerstone which was to have borne his name. Additional embarrassment is in store for those who accompany President Roosevelt on his scheduled visit to San Jacinto at the end of his gulf fishing trip.

The reason the original fund set up in Texas was not used was that the constitutional amendment authorizing a centennial celebration and instructing the legislature to make adequate financial provision for resulted in competition among Dallas, Houston, and San Antonio to host the central exposition. Although it possessed the least historical background, the commission chose Dallas because it offered the largest cash commitment ($7,791,000), the existing State Fair of Texas facility with provisions for expansion, and unified urban leadership headed by bankers Robert L. Thornton, Fred F. Florence, and Nathan Adams. The Texas legislature and the United States Congress each appropriated $3,000,000 for the special 1936 centennial; however, it was determined these funds could not be used in this monument.

It was thus up to Houstonian Jesse Jones to ensure that those "Sons of the Republic of Texas" who fought at San Jacinto were properly memorialized. An editorial in the Kerrville Daily Times humorously recounted events surrounding San Jacinto Day celebrations of 1937:

It has been suggested that an enemy of Jesse Jones is responsible for the protest of the patriotic organization. This may or may not be true, but the whole fuss looks like a tempest in a teapot to us. Far too many squabbles have developed during the Texas Centennial period over the location bill u provision which would have of Centennial memorials, etc. Such foolishness should stop....Jesse Jones foremost citizen of Houston, and a National leader, was largely responsible for the Federal appropriation for the monument. We see no good reason why his name and the names of the President and Vice President might not have been cut into an inconspicuous cornerstone. The whole fuss is being humorously referred to as the "Second Battle of San Jacinto." A similar uproar about the Alamo which occurred several years ago, was designated as the "Second Battle of the Alamo," and just now a third battle seems to be possible over the location of the Alamo Museum.

Jesse H. Jones and Sam Houston's only surviving son, Andrew Jackson Houston - 1936

In a show of gratitude that the long-dreamt-of monument was finally a reality, the Sons of the Republic of Texas (Gen. Jacob F. Wolters had been a president of the fraternity before 1934) made Jesse an honorary member. He could not be a regular member, because of its bylaws:

The society of Sons of the Republic of Texas is composed of white male persons of good moral character who are more than 16 years old and who are descended from an ancestor who was a loyal resident citizen of Texas prior to its annexation to the United States of America in February of 1846.

Base of San Jacinto Monument

Then they took him into their small secret order, the Knights of San Jacinto, created by Texian President Sam Houston in 1843, and revived by the Sons of the Republic of Texas at the culmination of Centennial celebrations on San Jacinto Day 1939. San Jacinto Museum of History Association headed by George A. Hill, Jr., the man "primarily responsible for creating the San Jacinto Museum."

The secret order's major role in later history will be explored in other posts at this blog.

 __________________

Endnotes:

[1] Wolters, a partner in an eminent Houston firm--Lane, Wolters and Storey--with Judge James L. Storey and Jonathan Lane. When Storey died in 1925, his obituary stated he had recently withdrawn from the firm -- making it Wolters, Blanchard, Woodul and Wolters -- which then included former lieutenant governor Walter F. Woodul, with offices on the  eighth floor of Jesse Jones' Houston Chronicle Building.

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.