Charles Jones

Duration: 1hr 5mins
Please read and accept the disclaimer below to continue.

DISCLAIMER

I have read and accept the terms of the disclaimer.

The Houston Oral History Project is a repository for the stories, accounts, and memories of those who have chosen to share their experiences. The viewpoints expressed in the Houston Oral History Project do not necessarily represent the viewpoints of the City of Houston, the Houston Public Library or any of its officers, agents, employees, or volunteers. The City of Houston and the Houston Public Library make no warranty as to the accuracy or completeness of any information contained in the interviews and expressly disclaim any liability therefore.

The Houston Oral History Project provides unedited versions of all interviews. Some parents may find material objectionable for minors. Parents are encouraged to interact with their children as they use the Houston Oral History Project Web site to complete research and homework activities.

The Houston Public Library retains the literary and publishing rights of its oral histories. No part of the interviews or transcripts may be published without the written permission of the Houston Oral History Project.

Requests for permission to quote for publication should be addressed to:

The Houston Oral History Project.
Houston Public Library
500 McKinney
Houston, Texas 77002


The Houston Oral History Project reserves the right, in its sole discretion, to decline to post any account received herein and specifically disclaims any liability for the failure to post an account or for errors or omissions that may occur in posting accounts to the Virtual Archive.

For more information email the Houston Oral History Project at information@houstonoralhistory.org.

I have read and accept the terms of the disclaimer.



Interview with: Dr. Charles F. Jones
Interviewed by:
Dates: 1976
Archive Number: OH 085

M: Mr. Jones, where were you born?

CJ: I was born in Bartlett, Texas. That’s up in central Texas, about 50 miles north of Austin, in the year of 1911.

M: What brought you to Houston?

CJ: After finishing my formal education at the University of Texas in 1937, I accepted a job with the then Humble Oil and Refining Company at its Baytown refinery, and subsequently, worked for that company and affiliated companies for some 35 years before retiring in 1972.

M: What led you to work with an oil company?

CJ: I was trained as a chemical engineer. Chemical engineering was and is an area of training that’s widely used throughout the oil industry, so I had been pointing towards this really during my educational process. The more specific answer to your question is 1933 was the year that I got my bachelor’s degree in chemical engineering, and 1933 was not a vintage year for engineers. As a matter of fact, I was unable to be interviewed for a job that year, but I did get a job back at the University of Texas as a part-time instructor, which allowed me to continue going to school and doing graduate work.

02:08 In 1934, I took a masters degree in chemical engineering and still was unable to get a job, so I stayed on and worked on a doctorate in physical chemistry, and in 1937 when I finished that, I was able to get a job. That’s really the reason I went to work for an oil company, because that’s where I got work.

M: In retrospect, are you glad you stayed on and finished up your degrees?

CJ: On a balance, yes, it was an interesting period, and it did give me a breath that—I think—I at least broke even on over the course of the years. You appreciate that the graduate work was not nearly as widespread as it is today, and so it was a little unusual to stay on for the doctorate. Industry wasn’t quite sure how to handle such individuals, but it worked out all right.

M: Did some of the old hands at Humble regard your degree with amusement?

CJ: Well, with amusement and with some feeling that perhaps you couldn’t be a so-called practical man and a highly educated man at the same time. You had to prove a few things before you were accepted by the average worker in the refinery.

M: What position did you hold when you started out?

CJ: I started out as a junior engineer, and actually I started gathering samples up and operating plants in the refinery. I went up through the technical route for the first 10 years of my experience. Then I moved into general administration, staff work, planning, supervision in areas other than refining and so on over the years, winding up as president of Humble in 1964.

M: Is that a typical route for a man to take to the top?

CJ: During my career it was, yes. This is typical of practically all the people who are today running oil companies.

M: In researching this interview, I couldn’t help but note all of the different jobs you held and steady promotions. I wanted to ask, mostly out of curiosity, how a man succeeds in an oil company. How do you achieve rapid and continual promotion?

CJ: 05:00 Of course, books have been written on this subject, and it’s very easy to give a simplistic answer, but I’m inclined to think that the answer is rather simplistic. In order to do well, of course, you have to be adequately trained, and you have to have a moderate amount of intelligence to apply. You have to like what you’re doing. With all of these as given, then I’d say the key to moving ahead is don’t worry too much about the future, but do an outstanding job on the job you’re in without worrying about what you’re going to do next week. This is a way to achieve recognition and be considered consistently for higher jobs.

M: Now you also hold a number of positions outside the oil company, specifically you are an officer of the Federal Reserve bank in Dallas.

CJ: I have been. My term there is over.

M: What were your duties there?

CJ: The Federal Reserve system has 12 districts. One of these districts is the Dallas district, which covers generally the Southwest. The Federal Reserve bank itself, of course, has statutory responsibilities for a large number of banking functions in this area. Among other things, it has a board of directors who are not members of the Fed system. They’re outsiders such as myself. Now as a director, you exercise the usual authority and have the usual responsibilities for operating a corporation, seeing to it that the president of the bank is doing a good job, evaluating his requirements, participating in wage and salary recommendations, participating in the operating policies of the bank itself.

Then in this case, there’s an additional responsibility, and that is to render counsel and advice, which in turn is passed on to the central bank in Washington where the information from the district banks is collated and entered into the total recommendation coming before the board of governors, and finally into the decisions that they make. It’s more than an honorary job, but you don’t have any responsibility actually for the final monetary policy as a nation. You have in input into the recommendations, but no decision making in that area. It’s an interesting exercise for a person who is not spending slides in the bank in that area.

M: I’d like, if I might, to discuss some issues now that are current in the oil industry. I suppose I will start with the control. What has been the net effect of regulations on the oil and gas market?

CJ: Well, let’s look at the gas first. A strong effort was made to decontrol natural gas, and that is, take it out from under the jurisdiction of the Federal Power Commission back in 1963. This effort failed, and as a result, gas has been very closely controlled by the Federal Power Commission for the past 22 years now. The Federal Power Commission has held the price of gas at abnormally and synthetically low values, below its parody with other forms of fuel. The obvious and the usual and the expected thing has happened. On the one hand, having gas priced below parody with other fuels has encouraged the use of gas to the exclusion of other fuels and hence, increased the demand, as you would expect where you get a bargain in terms of cost.

10:09 At the same time, with the low value on the material, you have suppressed the incentive for people to get out and look for gas, because they can make more money deploring their capital in other ways. Now, when I talk about prices, let’s go back before the embargo of crude, and at that time domestic crude was selling for like $3.25 a barrel. Gas was selling in the field in Texas for, say, 20, or 25 cents per million Btu’s. There’s about 6 million Btu’s in an equivalent barrel, so on a comparative basis, you would have a barrel of liquid selling for $3.25 and the same amount of heat in gas selling, say, for $1.50 or about 40 percent. Obviously, people had a choice of burning gas and not liquid for heat.

The end result has been a tremendous growth in demand for gas, a lack of expiration activity to bring new gas into the market with the shortage that exists today. This is a classic example of an effort to maintain price control on part of the market. The only way that you can maintain price control effectively is you have to control everything, not just a piece of it, because something always gets away from you if you control a piece of it.

Now on the price controls on liquids are much younger, of course. This really started after the embargo. The net effect here mostly has been to confuse the oil companies in their operations. The FEA, the Federal Energy Administration, headed up by Mr. Zarb, has done an abysmally unremarkable job in the administration. It’s been terrible. On the other hand, they’ve probably done about as well as anybody could’ve done to give the view. They were given an impossible task. The net result has been that they generate rules and regulations almost daily. The application of the rules is not clear.

13:15 When an oil company goes back for verification, frequently they’re told by the FEA that, “Well, that’s not what we really meant. What we really meant was something different than what we said in words.” Then they make this ruling retroactive, which means that you may be going along doing your best to obey the FEA regulations, and you find out 6 months later that they’ve changed them on you and made them retroactive, and you owe somebody a gob of money that you haven’t provided for.

Now this energy bill that’s just been passed has extended this miserable situation for another 40 months. The net effect here is, to me a little clear cut, perhaps because we’re looking into the future where we don’t have any facts, and so you can project easily. The net effect of this is to interfere with the marketplace and with ongoing market presses. It has cut down the price that we pay for domestic crude. It’s controlled this back. This is going to depress the effort to generate more domestic crude. Obviously, it’s a less attractive provocation than it was at a higher price. At the same time, with the lower price, it’s going to encourage the use of more fuel than if you had a higher price, the same thing as we talked about on gas a minute ago. Low price suppresses effort to get more material, encourages the additional use of fuel.

The marginal fuel will come from the Middle East, and it will be high priced, so we will be paying our own producers a low price. We’ll be encouraging the use of more fuel, which has to come from the Middle East, which will come at a higher price, so everything is just backwards.

If they had indeed turned it lose this time, instead of imposing this last control bill, the price on domestic crude would automatically have risen to the world price. That’s just the way it works, and that would have suppressed the use of fuel. It would’ve put a true value on it, so when you make a decision, you would’ve been making an intelligent decision. It would’ve encouraged the development of domestic crude and would’ve minimized the drain on balance of payment through the importation of Middle East crude. We’re getting again all of the classical fallout associated with partial price control.

M: Let me ask you an obvious question. You might have an obvious answer, but I’ll ask anyway. In the face of these self-evident economic propositions, why do we still have these controls?

CJ: They make good politics. You hear of people who obviously know better get up in the Senate of the United States and say that we’ve got to keep the prices down on fuel. The poor people can’t afford to pay that much. Poor people can’t afford to buy a prime sirloin steak either. The so-called poor people, there’s always been things they can’t buy. There are things I can’t buy, because I don’t have enough money. There are things you can’t buy. Anytime the government undertakes to furnish all of my needs, regardless of my ability to pay, it’s going to be just as stupid as this one example here of trying to get gasoline to the poor people at a lower price.

17:27 It’s spacious reasoning, and the people that are saying these things know better. They’re too smart to believe what they’re saying.

M: But they say it anyway.

CJ: They get fooled.

M: Along these lines, do you feel that the oil companies have been used as political scapegoats?

CJ: Oh, to some extent—they’ve been maligned and kicked around and finger pointed at them and so on, but within the total framework of the system, why I don’t think they’ve been particularly done in.

M: The allegation usually takes the form that the oil companies have earned inordinately high profits.

CJ: There are two kinds of people that say this. They’re uninformed people that don’t really understand how to read a balance sheet, don’t know what it means, or they’re the demigods that are using it to excite people and to get the votes, because it’s not the total profit in dollars that a company made, and, obviously, it’s the return on investment that counts.

19:03 All of these people that have been making speeches about the company like my old company Exxon make $2.5 billion profit, and they say that’s too much. Well, obviously see, this is either stupid or it’s dishonest, because what is too much? What return is that on investment? If it turns out to be about 12 percent on investment, which it does, then it’s about like the average of manufacturing, and so the return on the invested capital is about the same for my old company as it is for a typical manufacturing machine shop down here that makes $50,000 a year, but has much less capital employed.

Actually, I think the average person in this country is probably smart enough to see through these things, and I’m not too concerned about these speeches by the politicians that put out part of the facts.

M: Would you care to be more specific and name these demigods or the men that you regarded?

CJ: I’d just a soon not, because everybody that reads the newspapers knows who’s been saying this.

M: All right.

CJ: [laughing]

M: I’d like to go back to an interesting point you raised earlier, and that is confusion resulting from government regulations. Now you are currently a consultant, is that correct?

CJ: Right.

M: How do you get word of these new federal regulations? In other words, how does the information disseminate through the industry?

CJ: Well, of course, these regulations are all published in the Federal register, and it’s easy enough to get the copies of the laws like the law that’s just been passed. This is an area where you don’t have a clean cut set of regulations that’s laid down by the law. The law says that the President shall cause certain things to happen or shall issue certain regulations, and FEA does this, and so what you have to do is you just have to wait until the FEA puts out these enabling regulations or explanatory regulations, and you have to read them. Your primary source of information is the Federal registry. Secondary sources are—

M: The Wall Street Journal?

CJ: —areas like The Wall Street Journal which does an excellent job of taking things like this once in awhile, putting it together and summarizing the salient features. Publications like Oil and Gas Journal does this. There’s no substitute for spending a lot of time reading what those people are doing and saying, because what they are doing, so far as the industry is concerned, is almost daily. They’re generating new regulations that you have to live by. Frequently, you find yourself at an impasse where if you do one, why you violate something else, and then you have to go for resolution of this.

M: Do you consider clarification of these regulations your prime task now?

CJ: No. I keep up with this primarily, but my interests today with the companies that I’m working with is primarily in the area of overall management techniques and overall management organizational development and the like, as contrasted to details of operation.

M: Again, personnel?

CJ: 23:12 Yeah, there is an area where, particularly the smaller companies need some help in the interpretation of regulations, but that’s really a fulltime job to just do that and nothing else. I’ve devoted my time primarily to this other area of what you said, personnel. That’s really the key, the appropriate deployment of people and the actual organization for flow of authority and the definition of responsibilities to insure maximization of profit. This is the area that I enjoy working in the most. As a retired executive and as a consultant who can choose what he wants to do, that’s what I chose to work on.

M: Why have so many oil corporations moved to Houston?

CJ: This is, of course, an area where a large part—I mean—Texas is an area, southwestern area, where a large part of the domestic production actually exists, Louisiana and Texas. That’s just primarily based and attracted a pretty fair segment of the total industry. Then as transportation has changed, and particularly as the jets came into operation, Houston became about as good a place to get anywhere in the world as the coastal areas like New York or San Francisco or Los Angeles. I guess the things that have given the impetus to the most recent move like the last 5 years, have been living and working, particularly in New York, has become increasingly less desirable. It’s hard to get people to stay with the organization.

25:42 Houston provides a better market to lure people, a better place to live. All of those things add and, of course, there’s one other thing. There used to be a popular saying, “Well, you had to have your headquarters in New York to be close to the money markets,” but you’re never more than 3 hours from anything in the United States, so whether you got your office up the 50s, you got to down to Wall Street. Whether you got your offices down here at the Exxon building, you got to go to Wall Street, 2 or 3 hours difference, that’s about all.

M: Of course, Houston has a growing capital market too.

CJ: This is all synergistic as another company moves in and more supply people come in, more capital comes in. Then it becomes a better place to attract the next oil company. We gripe a lot about our weather down here but, by and large, it’s a fairly kind climate. You have a little trouble staying cool in the summer, but you don’t freeze to death very often here.

M: True.

CJ: The east and north is a tougher world to live in, to raise a family in, so I’ve tried them both ways. It’s a lot easier here than it is in the cold country. Are you a native of this area?

M: No, I’m a native Kansas Cityan, and I quite agree with you about the winters.

CJ: Of course, Kansas City gets a little rugged too, don’t they?

M: Yeah.

CJ: You don’t have much between you and the North Pole, but a few strands of barbed wire. Now in the East—you know—I never lived in Kansas City. I lived in Tulsa, which is pretty cold, and then New York. That’s a lot of trouble to live up there. It snows and raising kids particularly, snow suits, heavy clothes. They’re out for 15 or 20 minutes and they get chilled, and you got to bring them back in. It’s quite a task raising kids in the north.

M: Have former New York executives who have moved to Houston, spoken favorably of the city to you?

CJ: Of Houston?

M: Uh-hunh (affirmative).

CJ: I’ve heard lots of comments from people who were transplanted from the East and the North. I’m thinking primarily of my own company, which merged in 1959 all of the domestic interests of the Standard Oil Company in New Jersey. This blew SO Standard Oil Company which blew the Baron Rouge branch of Standard Oil Company of Louisiana to Humble Oil and Carter out of the Midwest. This brought an awful lot of people. You said executives, and I’m broadening this, because this brought people at all levels from New York down here. Practically all of them resisted coming, and yet were horrified at the idea of leaving their native area and coming out here to the frontier.

29:17 I’d say on the average, after about 6 months, there were the most devoted Texans that we had down here. You know—some of them were wearing boots and big hats and all that sort of thing. A few of them never proved to like it, but by and large, you couldn’t route them out, and they wouldn’t transfer back when you wanted them to, except under duress. They’ve retired and stayed here, so the answer is that I think that it was natural that very few people want to rush from the known to the unknown.

In the case of coming to Houston, once they’ve come out of the east, north, heavily populated areas, and become acclimatized that they have preferred this style of living to what they were used to up there. Again, it’s an easier way to live. It is more relaxed, less structured, and it’s particularly easier for the women and what their duties are in home and in the schools and the like.

M: Earlier you used the word synergistic. Do you sometimes worry that the influx of people and corporations into Houston might make the city too big to work?

CJ: You used the term worry there. I’m going to change that a little bit. I think they’ve already done it. We’ve got a lot more here right now than I would personally like to see just from the standpoint of the city that I live in, but that’s neither here nor there. With the kind of momentum that we’ve got, and with the things that are going for the ongoing development of Houston, I can’t see much of anything short of a worldwide catastrophic or some cataclysmic event that’s going to slow down the growth of Houston much in the next decade. It’s just going to go.

It’s just like Jim Thorp running with that football. You just better get out of the way, because he’s going to go through. I guess that I would prefer a smaller city if I had my druthers, but I haven’t got my druthers. Houston is an exciting place to live in. It’s maybe too big, but on the other hand, I only live about 13 minutes from here, so from that standpoint it’s a small city.

M: I’d like now to talk a little bit about pollution. In a 1970 speech, you were quoted as saying, “We must seek a better understanding of the covert way we are affecting ecology. Industry can complete these jobs, meaning pollution control, with a reasonable outlay of capital, or it can delay and allow the government to say how or when these tasks must be accomplished.” Has the oil industry in Houston put its own house in order in terms of pollution?

CJ: I would say they’ve done, overall, a pretty fair—better than that—a reasonably good job, I’d say. Now this varies over the map from the best performers to the worse performers. You realize that a bad performer can put more pollution in the air and water than the good performer has taken out. It’s real easy to louse something up. It’s real hard to clean it up—you know. You take a cup of pure water, and you put one drop of pollutant in it and the whole cup is polluted. It’s a lot of trouble to clean it up.

33:36 Actually, I believe that I’m correct in saying that the oil people up and down the channel—and this is where the oil plants are. They’re on the channel—has done a pretty fair job of cleaning their pollution up, particularly the air pollution; a less impressive job on water pollution. That’s the driving force. You’re on the channel. You’re on the upper reaches of the channel, say around the turning basins, and suppose you clean your water up, say I’m impure. Then you chuck it out there into that sewer. You haven’t really accomplished much, and so you’re not going to really get the upper reaches of the channel cleaned up until everybody cleans it up at once.

It has to start with the city of Houston. That’s the biggest polluter of the ship channel, is the raw sewage, and Houston puts it in. Everybody else would clean up where they’re putting drinking water in there, and you still couldn’t tell the difference because of the sewage outfall from the city of Houston.

There are some other industries, and I just wanted to throw in one thing here on this pollution, and particularly air pollution which is the one that is the most noticeable. There’s been a real progress in the air pollution in the past few years. Those of us that have watched it over the years, seen it go up, and now seeing it coming back down, it’s very encouraging.

I think that the average citizen doesn’t appreciate where all this pollution comes from, all these little incinerators over town. You look at the hospitals, and one with incinerators, that black plume of smoke coming out. You’re getting terrific amount of your air pollution from these small incinerators that are not properly operated, or cannot be properly operated. The homes row dump garbage brand which was shutdown 2 years ago was a major contributor to pollution in the city. It shutdown, and they’re altering the disposition of the garbage now. They’ve done a great job of cleaning up the pollution.

36:13 By and large, I think we can be fairly optimistic here in Houston when we look at the continued rapid growth, and we that are making a little headway on cleaning up the pollution. I think the oil people have been fairly good citizens on that.

M: What is your opinion of the work Dr. Keybedill (??)?

CJ: Walter has rubbed a few people the wrong way, but then on the other hand, I don’t believe he’s going to make any progress in that area with somebody that’s consistently nice to all the violators. One can argue with Dr. Keybedill on some of his techniques and methods, but on the balance—I guess—I feel that Walter’s done a service to the community. If he suddenly got popular with everybody criticizing him, I think it might be because he’s backing off and ceasing to do his work. I’ve known him ever since school days, back when we were both 20 years old. We went to school together at the University of Texas, so I’ve kind of watched him go through this with a little more than passing interest.

M: I noticed in some other speeches you gave that one of the recurring themes was society’s interest that the corporation ought not simply to maximize profits, but also to display an interest in society. In what ways are the oil companies filing their profits back into society?

CJ: Let me come back to one other point on pollution first. You were referring to this ‘70s speech. One of the things on pollution, one of the things I was trying to get at there was there some of the oil companies, some of the non-oil companies were really fighting the imposition of reasonable controls on pollution. Our company was taking a position that this is not good. It’s not good for the economy. It’s not good for the companies. It’s not good for anybody to fight the imposition of reasonable controls on pollution.

What you want is for everybody to have to obey the same rules. Then you’re not at a competitive disadvantage. Now if you make me obey certain rules and you let my competitor over here not do it, you’ve given him a competitive advantage, but as you treat us the same, we ought not really to care how much money we have to spend to clean up our air and water. This was the point we were trying to make there that this business of fighting against pollution controls is one you can’t win. It’s one that you haven’t won anything if you do.

39:32 The end result, we said then—I hadn’t read this speech in years, and I don’t remember what you’re talking about, but you said there had happened. Fault it and the government takes over and makes arbitrary rules, puts in things that don’t make sense, and it costs the economy a lot. If the industry would go ahead and do it reasonably to start with, they’d do it intelligently and not have the government come in and force rules on you that really are not best for everybody. They’re not best for the economy.

Now I’ll jump back to the needs, to some companies that are responding to societal needs. First of all, I’m more of really a freedman than I am anything else on what I personally think that the corporations ought to do. That is I think corporations ought to get out there and make a profit for our shareholders, but now what I was saying in there wasn’t quite consistent with the question you asked, but let me get at it this way.

If society expects certain things from you as a corporation, then you have to bow to that mass wisdom of society. If they tell you, no matter what I think as an individual—I think you ought to be out there making profits, see—but if the total society says, “Look, sure you got to make a profit for your shareholder and so on, but you got to do some other things here.” Then as the president of the company, I’ve got to understand this, and I’ve got to do it because there’s no point in debating what is absolutely right or wrong in an area like this.

There is no absolute right or wrong, but an institution that doesn’t respond to the stimuli that its supporting society puts to it, is not going to last long, whether it’s a corporation or a school or a church or whatever it is. The society as a whole tells you what it wants from you, and you damn well better provide that, or they’ll find somebody else that will. In the case of business, well, a lot of things can happen to you, and finally you go broke if you don’t respond to societal pressures.

Now, and within that context, you said how much profit or what profit should be devoted to societal needs and so on. Again, the short answer to that is very little of the profit ought to go into societal needs. There are other ways that a corporation can help very effectively. Although I do think that corporations ought to contribute to the United Fund. It ought to support the things in its city that are necessary to the city’s growth, museums, other cultural affairs. It needs corporations to support education, and all of these things are typical of the giving of corporations and of individuals. This is fine, but this doesn’t amount to much money actually, as compared with the total profit that a corporation makes.

43:22 A good corporation has just almost a destination, a lot of good leadership in it, capable people in all areas of activity. I think that the good corporate citizen that contributes an awful lot to his community, our communities, when it encourages its people to participate in community affairs. Bring their expertise into these community affairs and help apply in running the schools and running the cultural affairs and whatever goes on in the community, bring to bear the same kind of expertise in these areas as we have in the company affairs.

You go beyond this in some areas, and you take people with special talents and put on a leave of absence to work with cities or to work in Washington on specific areas where they can bring something that is unusual and something that’s needed. My company has done this in both the Federal government area and in the city government area, on the basis of making a man available. He works, say, for the city for a year or two years. The city pays him the going price for his level of job. The company makes up the difference, so he doesn’t suffer by virtue of taking the assignment.

This way you can pump into, say the city’s administration, talent that they could never afford to go out and hire. You can put a $30,000 man in a $15,000 job, for example. The company is paying the difference. It’s this and again, maybe over in the planning area, you take an awful lot of thought to going into mass transient now, which covers a multitude of possible solutions to the people moving problem. It’s a very complex area. The major corporations have people who are very adept at programming and planning, at doing exactly the kind of work that the city needs here to do its long range thinking. Corporations can be a big help in this area.

M: I have often heard it remarked that the real leaders of the nation are in the corporation and not in political office. Do you agree with that?

CJ: I wouldn’t disagree with it. Actually, I’m sure that it’s a combination of both, because not everybody in public office is ineffectual or stupid. There are some very capable people, very dedicated people. I think it’s more of a team effort. I think an awful lot of the fine leadership comes out of the corporations all right, which gets reflected by implementation in our national lawmaking operations. I wouldn’t sell either side short. It’s a combination.

M: Earlier you described yourself as a disciple of freedman. Would you estimate that most of your peers regard themselves as disciples of freedman?

CJ: They would lean in that direction, yeah. I think primarily because there are so many pressures all the time to divvy up the company’s profits and do something with them besides giving them to the shareholders. All of us that have spent our lives in corporations must have a keen appreciation of the fact that you’ve got to provide a reasonable return on capital or your sources of capital are going to dry up. You can’t be a good guy but 1 year—you know—and give all your money away, and the next year you’re not there anymore.

M: Mr. Jones, I’d like to ask a touchy question now, which was inspired by news events of this morning. I got up watching the Today show, and I learned that Gulf Oil had a $12 million slush fund, and that there had a big shakeup in that company as a result of that. To your knowledge, have any of the companies you have worked for maintained a political slush fund?

CJ: They have not. There are 2 kinds of monies that have been talked about here, and I’m sure you’re clear on this, but let’s be sure. One of them is corporate money. It comes right out of corporate intake, and one way or another you put all of it into political action activities. Now that’s illegal. That’s the $12.3 million. That’s what caused Gulf all the trouble.

49:33 There is in nearly all these companies, big companies, have encouraged their employees to participate in the good government clubs or political action committees or something like this. The name is not important, but now the way these are operating, the employees contributed their own money. You appreciate this can be a relatively small amount of money into the kitty here which then is used for political action. That’s illegal too, but you can’t put corporate money into it. It’s personal money. That’s hard money, is what it’s called, and you can do anything you want to with it. You can give it to a politician just through the contributions, create expenses. A corporation can’t do that.

Now there are some states in the United States where it’s legal for corporations to give money on state races like governor, senator, and representative states. I’ve been talking about federal. This is strictly illegal in all the states, but federal is important. Now in these states where this is legal, all the corporations do put money into politics, on the state offices. It’s illegal in Texas, so you don’t do it here. There are countries around the world where it’s legal. Canada is one to put money into politics, for the corporations to. There are reasons why it’s illegal.

51:36 Now as I’m sure you know if you’ve read the papers, why the parent company of my former company did put a lot of money into Italy. There was some that was put in there that apparently the company didn’t know about too, but there was a lot put in, but it was legal, maybe bad judgment, maybe shouldn’t have been done. Now this is a long winded thing, but to come back, to the best of my knowledge the companies that I worked for and the companies that I’ve associated with maintained this on a very, very clean basis, absolutely no deviation from the law.

I guess—you may know that there’s a study going on now, being carried out, making a widespread investigation of this very thing. I just completed a questionnaire for the year of ’72.

M: What was the nature of the questionnaire?

CJ: Asked me about the same question you did in about 15 different ways of really getting at did any corporate money flow illegally, was basically what they were asking.

M: Well, I’ll just come out and put it on the table. There’s only one other question I have concerning this, and that is in places where it is legal to do so, is there a pressure for escalation? In other words, company X donates so much money to a candidate, and therefore company Y feels obliged to match it or do better?

CJ: I can’t really give you an intelligent answer to that, I can only speculate. I would assume that there would be. We sure use that technique right here in Houston when we’re trying to collect money for the symphony. You know—you go to one company, whoever is going to give the most. You try to get to them first. You use that gift then back here when you talk to company B. You say, “These people gave us X dollars. You ought to give us at least 9/10 of that.

M: Do you figure that on the basis on their income, as a percentage? Company X gave us such a percentage. You can at least do that.

CJ: Well mostly in this collection of money here, no matter what it’s for, whether it’s United Fund or for the symphony or whatever, the most reasonable kind of a criterion is a number of people in a community. You’re really servicing that segment of the population.

M: I’m glad you brought up the subject, because I did want to ask you some questions about the symphony. How long have you been active with the symphony?

CJ: About 6 years I’ve been very active with it.

M: Mostly in a fundraising capacity?

CJ: 55:13 Well, you’re always in a fundraising capacity when you’re working with any of the cultural affairs. I came on the board of the symphony about 6 or 7 years ago, and was elected president of the symphony in 1970—I believe it was—and then became chairman of the board last year and currently serving in that capacity.

M: You were elected president in December of 1969.

CJ: Well I was pretty close.

M: Succeeding Maurice Hirsch.

CJ: Right.

M: We have interviewed a number of people in the area of the performing arts, and one common complaint we have had is the rising costs and the financial plight of the performing arts. Do you find this true of the symphony?

CJ: Oh yes, this is particularly true of the symphony, because nearly all of our expenses are manpower related. There’s no way to really cut down unit cost. You can’t play a piece of music twice as fast for half the money. It still takes 2 hours to play a 2-hour piece. It takes 90 musicians, and the only way to do it is to have these musicians and have them put in the time. As inflation goes on, as salaries go up, this comes back on us pretty hard.

M: You’re on a 52-week salary basis?

CJ: Yeah, we’re on a 52-week basis.

M: Was that true when you became president?

CJ: No, I believe it was on a 50-week basis at that time.

M: In retrospect, do you regret being on a 52-week salary?

CJ: No, actually this doesn’t have much to do with here. What you told them as a total dollars per year that you have to pay the musicians, because whether it’s 50 weeks, or 52 weeks, it’s the dollars a year per man that counts.

M: Are you worried about another strike as in 1973?

CJ: 57:49 A strike never worries me. It didn’t worry me, the one in ’73.

M: I was just thinking the Kansas City symphony, the philharmonic there has been out on strike. I don’t know how long. It’s something I noticed, and it’s disrupted the entire season.

CJ: Strikes are unfortunate generally, but it’s the right of organized labor to strike, and if you can’t reach agreement with them and they elect to strike, why they just got to strike. Like I say, it’s unfortunate, but there’s no use in being concerned about it.

M: Did you have anything to do with the selection of Mr. Foster as the conductor?

CJ: Oh yeah.

M: Would you detail that?

CJ: Well first of all, I was president of the society at the time the selection was made, and as such I appointed the search committee to come in with the recommendations on a replacement on a new conductor. This group included General Hirsch, Miss Hogg, and a number of others, Tom Fletcher, deceased now, a lawyer with Vinson & Elkins, and 1 or 2 others. I worked with this group, and they came in with recommendations on a replacement, and I joined in the recommendation and took it to the executive committee, and we decided to offer the job to Larry Foster. He took it. Yeah, I had a hand in it from the beginning.

M: Do you know who the other possibilities were?

CJ: I can’t give you the names, not because I’m being coy, but because I can’t remember them. We invited—it was the year that Foster was selected—we invited several conductors to come on a guest basis. It was understood by us and by them that we were looking at them for the job here. Of course, we took advantage of these opportunities to get feedback from the people that came to the symphony that came to the performances, what they thought about these other conductors. We had social functions to introduce them, let a lot of people see them. We went at it in a very deliberate way and a pretty open way where everybody knew who was being considered at the time. Everybody had a chance to get their vote in, including the critics on the papers.

M: Well Mr. Jones, I have exhausted my prepared questions, but at the end of every interview, I make it habit of asking the interviewee if I’ve skipped anything, if there’s anything concerning either your career as an oil executive or concerning the symphony which I’ve missed that you’d like to put down on tape?

CJ: Well I should say that obviously any of these questions you’ve raised, we could talk about them for the rest of the day. I imagine as a casual listener to this conversation would draw the conclusion, and appropriately so, that you’ve been talking to a typical corporate executive of my generation that is much influenced in his thinking by Adam Smith’s inquiry into the wealth of nations, which happens to be the same age as our republic, 200 years old this year, with some appreciation. I hope it came through with the pragmatic requirements of an emerging civilization.

62:48 We can’t quite go back to Adam Smith, but my generation would like to keep as much of that on the status as we possibly can, feeling that if you had to subtract from it, only when you just have to that fundamentally classical concepts of the economics are correct. When you start fiddling with the market system, sooner or later, you’re get yourself in deep water, and we’re in deep water right now, fiddling with trying to manage a part of the economy. We find out again, as I said earlier here, that although you can manage an economy, to do it effective, you’ve got to do it the way it’s been done in a few other places like Nazi, Germany. You’ve got to manage all of it, every single facet of it.

You can’t just manage a part of it, because you find it’s like pushing in on a balloon. It just pushes out in another place and equalizes the pressure, and you run around and push it in there, and it will push out in another place. You have a perfect example of this in the Federal Energy Administration with its patchwork rules and regulations. Every time they put out a regulation, it just leads to the requirement for another one. This is inevitable and is the end result of a partially controlled economy. I hope those points came out in our discussion, regardless of what we were talking about.

M: It is clear that you don’t want the Federal government the stay the invisible hand, as it were. On behalf of the Houston Metropolitan Archives and Research Center, I’d like to thank you very much for your time. It’s been a very enjoyable interview.

CJ: I appreciate you putting me on the list, and perhaps 100 years from now somebody might find this of interest.

M: Well I hope so.

[Tape ends]