The Great Depression
In 1929, the country began its steep slide into the depths of
the Great Depression. In 1931, when it became apparent that two
failing Houston banks were about to bring down all the others,
Jones called the city's leading businessmen to his office to work
out a plan that would allow the stable banks and several local
companies to rescue the two faltering banks.
As a result of Jones' leadership, no banks in Houston failed during
the Great Depression. His work did not go unnoticed. President
Herbert Hoover appointed Jones to the Reconstruction Finance Corporation
(RFC), which was created to provide relief to the nation's banks
and get the economy back on track. Unfortunately, the economy
continued to collapse.
When Franklin D. Roosevelt became president, he expanded the RFC's
powers and elevated Jones to chairman. Quickly, the Reconstruction
Finance Corporation became a central pillar of Roosevelt's New
Deal. As chairman, Jones directed billions of dollars toward needy
banks, industries, farmers and citizens. He had almost complete
autonomy in deciding where the government's money should go and
he parceled it out not as charity, but as an investment by America
in its people.
Under Jones, the RFC did not just make grants or loans, it bought
stock in struggling enterprises, giving the government a voice
in how those enterprises were run. During the bleakest years of
the Depression, Jones was arguably the most powerful man in the
world financial community. He was, in the words of observers at
the time, nothing less than a "fourth branch of government."
War II And Mobilizing Industry
Besides helping to save the economy during the Depression, Jones
led the country's move into wartime. In 1940, Roosevelt appointed
Jones to his cabinet as Secretary of Commerce. Jones refused to
take the job unless he could also retain his position as Federal
Loan Adminstrator, overseeing all lending, including the activities
of the RFC. Using his dual positions as Secretary of Commerce
and Federal Loan Adminstrator, Jones mobilized industry to make
the United States' "arsenal of democracy" a reality.
In June 1940, Congress gave Jones and the RFC practically limitless
power to do anything the defense and war-making authorities needed
to protect the safety of citizens and prepare for war. Subsidiaries,
such as the Defense Plant Corporation and Defense Supplies Corporation,
were set up first to strengthen the country's defense and finally
to wage war.
Only upon Jones' request and the approval of the President could
any of these activities take place. More than 20 billion dollars
was disbursed for the war effort, which included establishing
new synthetic rubber and magnesium industries in the U.S. By the
time he left federal service in 1945, forced out by a bitter rivalry
with Roosevelt's vice president, Henry Wallace, he had forever
altered the way business and government dealt with each other.
After fourteen years of public service in Washington, D.C., Jones
returned to Houston in 1947 and began to focus on philanthropy.
In 1937, Jones and his wife Mary, founded Houston Endowment. Jones
had always felt handicapped by his lack of formal education. He
began supporting scholarship programs, including programs for
women and minority students. Jones was eager to assist young men
and women of all races obtain a college education and improve
their stations in life. By the time he died on June 1, 1956, he
had helped more than 4,000 students through scholarship programs
in 57 colleges and universities.