“Jesse Jones … is more powerful than the Chief of Staff, the Commander of the Fleet, the War Production Board, and the Secretaries of War and Navy—in fact everyone in Washington save the President of the United States.”
Drew Pearson and Robert Allen, Washington Merry-Go-Round, March 6, 1942
“I get all my money information from Jesse Jones, head of Reconstruction Finance.”
Will Rogers, May 26, 1935
The most powerful person in the nation during the Great Depression and World War II—next to Franklin Roosevelt—was not a member of the president’s Brain Trust; he was not a Wall Street figure, a military man, or a college graduate.
He was Jesse Jones, an entrepreneur from Texas with an eighth-grade education who built the bulk of Houston’s downtown during the first half of the twentieth century and who became such a uniquely powerful appointed official that he was rightly known by many as the “fourth branch of government.” Roosevelt even called him “Jesus Jones.” Although now largely forgotten, Jones’s remarkable accomplishments as related in Unprecedented Power redefine Franklin Roosevelt’s presidency by contradicting common notions about the New Deal, shedding new light on World War II mobilization, and offering perspective on, and possible solutions for, some of today’s intractable problems.
In 1931 Jones spent three days and nights cajoling fellow Main Street bankers into rescuing and stabilizing all of Houston’s tottering banks. This feat caught the attention of President Herbert Hoover, who then appointed him to the bipartisan board of the Reconstruction Finance Corporation (RFC), the agency that was the president’s last-ditch effort to save the nation’s drowning economy. Jones thought Hoover’s RFC did not go far enough, complaining that it was “entirely too timid and slow.” In a stunning observation with compelling relevance for today, he lamented, “A few billion dollars boldly but judiciously lent and invested by such a government agency as the RFC in 1931 and 1932 would have prevented the failure of thousands of banks and averted the complete breakdown in business, agriculture, and industry.”
After assuming office, President Roosevelt quickly made the wily and talented Texan the RFC’s chairman, and Jones and the RFC began buying stock in the nation’s banks, intent on recapitalizing them so they could lend again. When the banks hoarded the cash instead, Jones used the RFC to make government loans as a last resort, understanding that flowing credit was essential to turn the frozen wheels of the economy. The banks eventually repurchased all of their stock, no institution was permanently nationalized, and notably the federal government made money on the rescue. Just as Jones had hoped and planned, capitalism and democracy prevailed.
During the Great Depression, Jones and the RFC saved thousands of homes, farms, and businesses, and transformed the nation with new aqueducts, bridges, and other consequential infrastructure. Like the bank rescue, these Depression-era RFC programs also made a substantial profit for the United States government while they helped millions of citizens and thousands of businesses.
At the end of the 1930s, as countries in Europe and the Pacific fell to aggressors, and while Congress and the public dithered over intervention, Jones turned his attention, power, and non-ideological, common sense management style from domestic economics to global defense. Fully a year and a half before the attack on Pearl Harbor, he unleashed the unlimited RFC bank account to construct gigantic factories, and accumulate vital materials necessary to wage world war and overcome dependence on other nations for essential resources. In 1941, as the rattled nation emerged from the Great Depression and began to prepare for war, Time magazine reassured its readers: “To many a U.S. citizen great or small, if Jesse Jones says O.K., O.K.”
Jones first stepped onto the national stage during President Woodrow Wilson’s administration when he organized battlefield and home-front medical aid through the American Red Cross during World War I, becoming “big brother to four million men in khaki.”
A step ahead of Wilson, Jones was also an early advocate for women. In 1918 he beseeched the president to grant Army nurses military rank in order “to attract the very best class of women who go in for professional careers, such as teaching, medicine and law.” Jones was one of Woodrow and Edith Wilson’s most ardent supporters and created a pension for the financially strapped president after he left office.
As chairman of the finance committee in 1924, Jones went on to erase the Democratic Party’s persistent debt, changed the scope and length of political campaigns with his colleague “Frank” Roosevelt, and brought the 1928 Democratic National Convention to Houston, the first held in the South since before the Civil War and one of the first to be widely followed over radio.
After thirteen years of arduous public service in Washington, D.C., during the Great Depression and World War II, Jones returned to Houston in 1947, where he focused on philanthropy, added to the city’s skyline and its sprawl, and lived long enough to see his adopted hometown grow from 40,000 to over one million inhabitants by 1956.
Jones inserted government into the private sector to an unprecedented degree to save the economy during the Great Depression and to defend nations during World War II, but he also wanted government out as fast as possible. Even so, he might wonder why people now look askance when government offers help or intervenes to improve matters. Jones would wonder because he knew firsthand that government can help people and make money at the same time.back to top