Jesse Holman Jones

Watching Henry Paulson and Ben Bernanke try to bail out the foundering US economy has me thinking about Jesse Jones, the man who did the same job seventy years ago. I’m no longer surprised when people ask “who’s that?” I thought I knew, but the more I learn the more I’m astounded at the career of the man who was known as “Mr. Houston.”

Jones grew up raising tobacco and cotton on farms in Tennessee and Texas, and came of age managing lumberyards for his father and uncle. He moved to Houston in 1898 and within ten years had become one of the young city’s movers and shakers. He became a builder by choice and a banker by necessity. Jones built a new building in Houston every year for fifty years; high rise office buildings, hotels, including the venerable Rice Hotel, and a 25,000 seat convention hall, built in four months to host the 1928 Democratic National Convention he brought to Houston.

As the US entered World War I, President Woodrow Wilson appointed Jones Director General of Military relief for the American Red Cross. He set out preparing for the care and rehabilitation of wounded and disabled soldiers even before the first American battlefield casualty. Soon he had ninety five hospitals up and running. No Walter Reed- type scandal here. After the war he was sent to Paris where he worked to make the Red Cross an international organization.

Jones was born in 1874, as the country suffered from the panic of 1873. He saw the depression of 1894, and the panic of 1907. (Are you seeing a theme here?) When the depression hit Houston in 1931, Jones called the city’s bankers and business leaders to meet secretly in his oversized penthouse office for an all night meeting where they identified the two banks that were about to fail, and arranged a cash infusion from the others to keep them afloat, preventing a run on all the banks. Thousands of banks failed across the country in the great depression, but none in Houston.

President Herbert Hoover appointed Jones to the Reconstruction Finance Corporation, newly created by Congress to keep the economy afloat, and President Franklin Roosevelt appointed him Director of the same RFC. He stayed there thirteen years, becoming the most powerful figure in the financial world. Now “Mr. Houston” was referred to as “the fourth branch of government."

Jones was appointed to the RFC because he had the connections and the knowhow to bang banker’s heads together until they could see the common good. He played a big part in saving capitalism from itself. As I learn more about how he did all this, I’ll see how today’s players stack up against his example. Stay tuned..