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1 introduction The Most Powerful Person in the Nation 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 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 } introduction 2 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.”1 After assuming office, President Roosevelt quickly made the wily and talented Texan the RFC’s chairman, and Jones showed everyone what he meant as he began turning the agency into the world’s largest bank and biggest corporation to address the calamity of the Great Depression. Soon after Roosevelt’s first inauguration, 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. Many accused Jones, Roosevelt, the RFC, and other New Deal agencies of socialism, but their only aim was to save the capitalist system and help the desperate people of the United States. To be sure, Jones set limits on the salaries of executives whose banks had received government funds, restricted dividend payments to stockholders until government loans were repaid, and installed new management when necessary. In doing so, he helped salvage the country’s financial system from complete collapse. 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 his RFC colleagues established , financed, and managed many New Deal agencies. Their efforts 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. In 1936 Vice President John Nance Garner, a fellow Texan and Jones’s close friend, impressively declared in a national radio broadcast that Jones “has allocated and loaned more money to various institutions and enterprises than any other man in the history of the world.” Knowing that Jones had done so at a profit, the colorful vice president added, “Now, to 1. Jones, Fifty Billion Dollars, 46. The Most Powerful Person in the Nation 3 have done the biggest job, and to have done it well, is some accomplishment , and that is what your Texas man, Jesse Jones, has done.”2 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, accumulate vital materials necessary to wage world war...


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