Houston's Shackled Press

A cautionary tale about journalistic conflicts of interest

It was typical of the new role of the paper that on September 2, 1965, Steven and his counterpart on the Post, William Hobby, Jr., spent much of the day conferring with Houston Mayor Louie Welch over an alarming local development. It was during the Watts rebellion in Los Angeles, and though Houston Negroes showed no sign of hostility, hysterical whites had bought out all the guns in a number of stores and were mounting armed patrols of neighborhoods. Steven put in continual calls for his boss, John Jones, and for his managing editor, Everett Collier, but, oddly, could not reach either one.

Steven arrived home tired and worried, but his wife, Lucy, an alert and articulate blonde, insisted that he shake his concern and join a family celebration. It was a gay evening. But by eleven thirty Bill and Lucy were in bed reading when John Jones called and said that he was coming right up. Bill assumed that Jones wanted to talk about the racial tension.

Just before midnight, Mr. and Mrs. Jones arrived at the Steven home in the fashionable southwest of Houston. Bill and Lucy were in bathrobes and over an initial drink made friendly small talk. Then Jones blurted out: "This is the hardest thing I ever had to do. Bill, they had a meeting today, and they got you."

As Bill and Lucy Steven reconstruct it, the conversation went like this:

Steven: Who is "they"? And what do you mean, they got me?

Jones: You know. The Endowment.

l.ucy: Who?

Jones: The trustees.

Lucy: What do you mean, they got Bill?

Jones: You're all through, Bill.

Lucy: Why? Why?

There was no direct answer. Much later that night Jones said: "Bill, you had a vision. They don't want a vision; they want a voice."

The Endowment is The Houston Endowment, Incorporated, a tax-free charitable foundation started by Jesse Jones in 1937 with a gift of $1,050,000. Jesse Jones, banking, lumber, and real estate millionaire and a government administrator under Herbert Hoover and Franklin Roosevelt, died in 1956. Today his Endowment calculates its assets 168 million. Others think it is $400 million, but no outside audit has ever been made.

Under the law, the Endowment exists solely to support charities. But its primary impact on the community is as a powerful, tightly held corporate force. It has an important interest in thirty-two corporations, a majority interest in twenty-five, including half a dozen banks, three hotels, several downtown office buildings, real estate, and the Mayfair House hotel on Park Avenue, New York. Through its communications properties it has been the major controller of political and social intelligence in the city of Houston. At the start of the counterrevolution that swept Bill Steven out of his job, the tax-free foundation owned 100 percent of KTRH Broadcasting Company, a major station in the city, 31 percent of a local television station, and 100 percent of the Houston Chronicle.

From 1951 to 1964 the Endowment had an income of $97 million and gave $19 million in charity. When Representative Wright Patman of Texas began investigating abuses by some tax-free foundations, the Internal Revenue Service momentarily revoked the Endowment's foundation status but later restored it.

Four men and one woman controlled probably the largest single corporate force in the city. John Jones used to be a sixth trustee and chairman of the board, but he resigned last August, in order, he said, to buy $3 million worth of broadcasting properties from the Endowment without conflict of interest. The remaining five trustees are all related to Jesse Jones by blood, marriage, or former business association. They are J. Howard Creekmore, president, a former bank employee of Jones's; Mrs. Audrey Jones Beck, granddaughter of Jesse; John Beck, her husband; J. Hurt Garrett, a former employee of Jones's and now senior vice president of the Texas National Bank of Commerce, second largest bank in the city, controlled by the Endowment; and W. W. Moore, former associate of Jesse Jones's, now president of Bankers Mortgage Company, a holding company owned 97 percent by the Endowment.

There is special irony in the episode. Reformers of newspapers have long dreamed of ownership by a foundation that would be immune to commercial attitudes and pressures. But as it unfolded in Houston, foundation ownership produced a list of almost every pitfall in business domination. This does not necessarily negate the idea of foundation support, but it would seem to for foundations run by men who are essentially corporate administrators with control of operating businesses. For example, the Chronicle represented only one twentieth of the Endowment's total assets. Even if the newspaper never showed a profit, this would be tolerable to the total economy of the foundation. It served the trustees instead to have the paper protect the property and politics of its owners and do it more effectively by overwhelming its competing papers, which it did by consistently cutting its advertising rates secretly for big advertisers, keeping its monthly subscription rate abnormally low, running exorbitant editions to help put one competitor out of business and dominate another. The owners of the Chronicle had another convenience: they held notes for some time on the owners of the Post.

The chief evil of the Endowment's ownership is the same as that of any business conglomerate possessing a newspaper: the paper is always in danger of becoming a means to the parent corporation’s nonjournalistic ends, a handmaiden rather than a detached reporter. 

A second danger is that such ownership is ideological. A man who controls a dozen nonjournalistic businesses usually has nothing in his experience telling him he is obliged to make his property available to the ideas of others. The owners of the Chronicle seemed to find any such notion of obligation intolerable, and Steven insists he was fired because of that intolerance. "The conservatives won," he says.

As he cleaned out his desk, Steven got a call from President Johnson, who wanted to know what was going on. "Mr. President," Steven said, "we carried every precinct but the right one." He meant that the paper had support from the community but not from the boardroom of the Houston Endowment in the Bankers Mortgage Building. It was from here that the counterrevolution was mounted. First the foundation trustees dissolved the board of the Chronicle, which had included Steven, replacing him with their new editor, Collier, who had been a columnist during the paper's reactionary period in the 1950s. Then they loaded the paper's board with members of the foundation board Creekmore, Garrett, Moore, and John Beck.

Jones seems to have been a powerless witness to the wreckage of his paper. He has said that he was told to take it or leave it.

There was almost unanimous indignation among the new hierarchy of the paper at reports that politics of the paper had anything to do with the firing. I tried to ask all the trustees, but most of them were unapproachable. The receptionist for Mr. Moore at Bankers Mortgage brought back the message "He knows what you want, and he won't see you." But I found the number two man on the board less bashful. J. Hurt Garrett has his office on the executive third floor of the Endowment's Texas National Bank of Commerce (the biggest bank it controls). He is an elderly jowl-faced man reminiscent of veteran overseers of New England textile mills.

"We didn't like their editorial policy, that's all," he said. "They had everyone up in arms. Nobody liked it. I never heard anything but complaints about it . . . . It was all this racial desegregation business. Things were all right in Houston before they came down. But all this racial business--nobody liked it. And I don't like all this Johnson stuff, and all his civil rights, too. I know that Jones and Steven are friends of Johnson, but all we got was complaints about the paper's policy on that."

Mr. Garrett sounded quite credible. When he said of the paper's policy, "Nobody liked it," presumably he meant nobody on the third floor of the Texas National Bank of Commerce. Two thirds of Harris County voted for Lyndon Johnson in 1964. And when he said he heard nothing but complaints, this, too, sounded plausible. My guess is that he does not subscribe to a Houston weekly called The Forward Times, which goes mostly to the Negro community, and which ran almost a full-page editorial on the firing of Bill Steven, saying:

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