Emperor Jones

(See Cover)

Jesse Jones is Biblically big. One day last week the U. S. had a reminder of his size. Brooding over the immensity of 1941's coming boom. Federal Reserve Boarders recommended a program of legislation to curb inflation (see p. 15). Its fears were put into a lot of fiscal words that added up to: Look out. That afternoon, reporters found Jesse Jones between trains at St. Louis. As usual, the big man declined to make a direct comment; as usual, dropped an indirect one: he saw no danger of inflation.

Most people who read his words felt reassured at once. There was no need of higher authority; not J. P. Morgan, not even Franklin Roosevelt could be of as much comfort to the public. To many a U. S. citizen, great or small, if Jesse Jones says O.K., O.K.

Long before last week, Jesse Jones had become something enormous, fabulous, towering; had imperceptibly been transfigured into a symbol and an influence.

Whatever the wave of the future might be, he was on the crest of the present. To some he was a monstrous symbol--he was State Socialism, or Governmental paternalism incarnate, a man with powers too great for any man to wield. To others he was a figure of awful benevolence: the far-off giant in Washington who had saved their farms or banks or railroads or mines; who had rehabilitated stores, factories, schools, shops and homes after earthquakes, floods and tornadoes, or after financial disasters just as catastrophic.

Like a green bay tree his powers had spread.

Like the Biblical ancients, they had increased and multiplied; old powers begat new powers in marvelous profusion. Through the years of the New Deal he had become a patriarchal emperor, and his empire stretched beyond all fences.

Little men and great peoples were beholden to him, from China to Argentina, to the far corners of the British Empire. Had he not said: "Britain is a good risk for a loan"? The statement might be highly debatable as to fact; editors might inveigh against it for reducing to crass financial terms a cause immeasurable in money.

But just the same his solid, simple phrase had brought assurance of a kind; it was an old-fashioned Yankee yardstick. Franklin Roosevelt might be morally right in saying that the silly, foolish dollar sign must be taken off aid-to-Britain, but Jesse Jones touched an old American feeling that there is righteousness in sound business.

Open & Shut. Nearly all appraisals of Jesse Jones sound like the baldest kind of hokum success stories, 1929 model. The pattern of his career seems as simple as Boy Makes Good, except that the caption should probably be: Boy Makes Perfect.

Actually, Emperor Jones's life is an open book of closed deals. Some of those deals were sharp. But they are all closed. He made those closed deals in one city, and incidentally made the city. Houston, Tex. was a desolate prairie hamlet when young Jesse Jones, up-&-coming lumberyard owner, took it apart and put it together again.

Son of a Tennessee farmer, he went to Dallas to work for his well-to-do uncle, M. T. Jones; then went to Houston in stead of college. In nine years he ran one lumberyard into 65, branched out into real estate, banking, other investments.

(In his private career he never trifled with enterprises that promised either big quick profits or big quick losses, or that depended on luck or the weather -- oil or cotton.)

In the 1907 depression, when Houston was stagnant, Jesse Jones began building up ten-story buildings smack downtown. He organized a bank, became an officer of two others, chairman of a fourth. He built hotels. He bought the Houston Chronicle. He headed the board which dug a ship canal that made inland Houston a seaport. He spread out, changed the sky lines of Fort Worth, Dallas, Eastland; of Memphis and Nashville, Tenn. At 43, in World War I, he was big enough to be a dollar-a-year man. In 1928 he brought the Democratic convention to Houston with a blank check (the Democrats filled it in for $200,000).

No Jesse, No Houston. Such was the simple graph of Jesse Jones's rise. Jealous men -- and some who were not jealous --called him "Jesse James," or "Ten Per Cent Jones." For Jesse left casualties along his march to power. His friends and his enemies differ in estimating their number. But long before he went to Washington as John Garner's nominee for RFC, /- he had become a kind of generalization, operating behind a foggy corporate barrier, with little property in his own name.

Nearly all his friends, many of his relatives, hold managerial jobs, running rail roads, banks, insurance companies, hotels, newspapers, radio stations, lumber companies.

Typical such chum is Stewart McDonald, Federal Housing Administrator from September 1935 to November 1940. Crony McDonald, who has a nice eye in such matters, filled FHA with lovely redheaded stenographers and efficiency; made it a profitable organization and much more attractive. Two years ago Jones gave Mc Donald the chairmanship of Maryland Casualty Co. Few weeks ago he gave him an RFC office next his own as a $1-a-year special assistant, membership on the board of the Baltimore & Ohio railroad.

By the time he took over RFC, Jones had so perfected this technique of delegation that he had only to expand his horizons to include the nation. If he wants Mr. Fuddyduddy removed from a directorate -- bank, railroad or whatever -- he has only to drop a light hint. Jones-trained employes are skilled hint-interpreters; the men he puts in office are expert hint-takers. For such reasons, underneath the success-story fragrance that surrounds the saga of Jesse Jones, there is still a whiff of old rancors, the skeletons of unforgiven deals, the shadows of shadowy doings. But in Houston, men say: "Well, we'd rather have Houston the way it is today, with all of Jesse's sharp goings-on, than no Jesse and no Houston." Jesse Jones operates now in a higher, brighter sphere. Power is his passion, but now he is equally passionate over the benevolent use of that power. If he drives a hard bargain, as he did last week over Chicago & Eastern Illinois Railway Co., it's in the interest of the Government--which is supposedly all the people. He is tough, shrewd, tricky as ever. And the list of Jones-directors, Jones-managers, Jones-chairmen, Jones-presidents grows & grows. All this he is forgiven, because the men he picks make good, i.e., make profits. He tests every problem with his same old rabbit's foot touchstone; the million questions he has faced are always the same question: Is it a good risk? In all the U. S. today there is only one man whose power is greater: Franklin Roosevelt. The President can force Jones to resign at any moment. But many men say that public opinion would never let the President jettison Jesse, that Sinbad Roosevelt is fated always to carry Old-Man-of-the-Sea-Jones.

Man for Man. Jesse Jones js huge--6 ft. 3 in. high, with great pale hands, small, blue-greenish eyes that are all green when he is ready to say "No," and a thick thatch of white hair still sprinkled with iron-color. His face can be kind, as he can be; but most times it is the kind of face a man gets who asks himself one practical question through all the hours of his life --a rigid, stern, rocklike face. Sometimes he looks like the Ten Commandments.

He seems diffident. His only sign of taut nerves is the tearing up of paper into innumerable little bits. He plays superb poker and bridge, evaluating his cards, his opponents' faces, the stakes, in lightning decision, without seeming to watch.

He stopped smoking years ago--it wasn't worth the risk. When he stopped, he stopped. For a time he kept an open tin of cigarets on his desk, never touched them.

Now he cannot abide smoke near him.

"No Smoking" signs plaster all the offices near his.

He awakes at 6:30 a.m., reads newspapers for several hours, checks over a brief case of papers on his night table. After breakfast, he arrives at 9 o'clock at the vast, gloomy, dark-paneled cave which is his Secretarial office in the Commerce Department. There he works until 4 p.m. From 4 to 8 he works in his tailored-to-order light pickled-pine office in Washington's brand-new Lafayette Building, home of RFC. Then he dines, usually with only his wife--he married Mary Gibbs of Mexia, Tex. in 1920--and is ready for the evening's poker, bridge or work. Usually it is work. His weekly work schedule is reven days. He likes whiskey, but not to the point of risk.

Man for man. he gets along better than anyone else with everyone in Washington.

One of the most ardent admirers of this man of one idea is a man of many--Tommy (''the Cork") Corcoran, whose one real Washington title has always been special counsel to RFC.

If jobs were wives, he would be the patriarch of polygamists. He is as busy as the classic one-armed paperhanger. Primarily, he is Secretary of Commerce and Federal Loan Administrator. As such, among other duties, he has charge of and ultimate responsibility for strategic war materials, loans to industry, financing the purchase of electrical and gas equipment, Federal housing mortgages, disaster loans, the Census, weights & measures, patents, steamboat inspection, the Export-Import Bank; he is a director of the Textile Foundation, member of the Council of National Defense, the Federal Board for Vocational Education, the Smithsonian Institution, Migratory Bird Conservation Commission, Foreign Service Buildings Commission, National Munitions Control Board, National Archives Council, Commodity Exchange Commission. He is ex officio a member of so many boards that there is no accurate count.

Everywhere he has moved in his men.

Emil Schram manages RFC; in November Jones delegated active administration of his Commerce Department to big, spectacled Wayne Chatfield-Taylor, Under Secretary. Jones, as part-author and part organizer of the national defense program has even greater responsibilities, even wider problems. He works as a team-member with the Defense Commission, with the State Department, the other Cabinet offices. Primarily he works with Franklin Roosevelt. And they work well. The President knows Congress will give more to Jones without debate than he can get after a fight. The Texas titan suits Roosevelt's needs. Jones's knack of making profits while lending money to people and countries who can't borrow anywhere else suits Congress--and the whole situation suits Jones.

The shoe he thus plants on the national economy is a size n shoe. He is one of the steadiest users of the telephone in the country; often, for hours at a stretch, he picks up and puts down the telephone in ten-second conversations, in which he says only "yes" or "no." He is not an intellectual, not a theorist. He writes all his own speeches, painfully and awkwardly, draft after draft. He would like to be President. John Garner (once it was Will Rogers) has been his nearest crony for years.

Emperor Jones is the greatest lender of all time. Since inception RFC has loaned $9.146,735.055. Its balance sheet records repayments totaling $6.149,351,-222 for a "profit." These repayments do not include $2,720.000,000 of "cats & dogs," loans for relief, etc. which Jones never wanted to make and which in 1938 he had Congress cancel. Jones thinks borrowers are the salt of the earth, the optimists, the builders, the men who take chances and thus make the U.S.

Last month he addressed the nation's life insurance executives in Manhattan. In his speech he came as near to stating his beliefs as he ever has. Said Jesse Jones: "You are, in effect, trustees for approximately one-half of the people of the United States, and I, as a public official, am a trustee for all of the people. . . .

"I believe it would be possible for me to express the substance of what I have to say merely by asking you to remember that it is late in 1940, and not the 19205 or the early '30s.

"We are living through an era of change at home and abroad to which we must adjust ourselves, like it or not. . . . The thinking of some of us lacks breadth. We have been worrying too much about the New Deal, and the changes it is bringing about. . . .

"We might as well realize that we are not going to turn the pages of progress backwards and repeal social laws that increase the Government's budget. . . . The record shows no evidence of any open advocacy that we retrace our steps or undo any of the things which have been done for the common good. ... No level of society or business is strong enough to sweep back the tides of advancement or to prevent changes in our national affairs that have the support of the majority of the people. We are still what we want always to be, a democracy, a free people. . . . We have no boom, and I hope we never have another. Prosperity is hard to stand. . . .

"In my own view, interest rates have always been high. ... I think our loans have been made on a sound basis, and that barring complete disorganization in world affairs, they will be paid. . . . Everything ... is being done by the Government to aid the democracies that are in trouble, that is, everything short of war." So spoke Jesse Jones, 66, 220 Ib. of hard Texas sense powered by an electric mind, emperor of all he surveyed as 1941 got under way.

He was banker to the world--on his terms, but for reasons that concerned every person now alive. And people of all sizes could take comfort, in grain or large dose, from what Jesse Jones seemed to mean: Democracy is a good risk.

/- Herbert Hoover, forced to trade Garner a post for political aid, let him choose one man. There are two versions of the story: 1) Garner submitted but one name -- Jones -- saying: "Mr. President, there's my complete list." 2) Hoover showed Garner a list of five names, Jones's last. Said Cac tus Jack: "Mr. President, that's a kangaroo list -- all its strength is in its hindquarters."

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