The Log of “Jason” Glasscock
of His Voyage of Search
for the Golden Fleece
part 9

by Wilmer Newton Glasscock

Jan 1878 - May 1966

 

MONDAY, May 7, 1934

  It is now 12:10, noon.

  It happened that yesterday morning I rode down to breakfast in the elevator with Paul Shoup, and later in the day met him in the lobby and exchanged a comment or two with him. I said nothing further about my RFC business because I did not want to rush matters, and he had told me he would be here through today. Further, I had not yet exactly in mind what I considered would be a “sure fire” next step to take with him.

  However, at eight o’clock in the evening I got it, and sent him a note reading as follows:

Sunday evening    

My dear Mr. Shoup:

  Getting real estate loan money for San Bernardino is one part of my business with the RFC. This would be of such benefit to the community I have concluded you would feel justified in furthering the plan if you conclude you can.

  I shall be glad to explain fully tonight or tomorrow morning.

W. N. Glasscock    

Within ten minutes my phone rang, and I was invited to breakfast with him this morning at eight.

    Jesse H. Jones, from Houston, Texas, was appointed head of the Reconstruction Finance Corporation (RFC). He is credited by some as having “saved the nation’s economic system.” Check out the Jesse Jones Park & Nature Center, a beautiful park in Houston

  This morning when he came down he was rubbing his eyes and explained that he had worked until midnight poring over sheets and sheets of closely written figures, and, in addition, they were carbon copies, and he felt half blind. We scanned the headlines, and started our breakfast. Then he inquired, “What is your program?” I outlined the main features, possibly more clearly than I did on Saturday night, for on that occasion we were just “conversing.” I emphasized the need for real estate loans and the good that could be done with the money we were applying for. For that reason, assuming the RFC found our company to be qualified in all other respects, I thought he might be glad to speak some word for our application where he thought it might be best. Again he said he thought I would better keep away from supposed backing from Capitol Hill. He said Jesse Jones on Saturday had asked him to run in and see him, and he would do so, and take me along for introduction and a little explanation without trying to go over anybody’s head. He said while he might get hold of Mr. Jones at his room in the hotel here, he thought it best to telephone to his secretary, and would do so when he went up to his room. When we came out into the lobby from the grill we met RFC Director Mr. Henderson. Mr. Shoup introduced me as “my friend, Mr. Glasscock, from California.” Mr. Henderson remembered me. Mr. Shoup remarked that our company, the Pioneer Title Insurance and Trust, were making an application to the RFC for $200,000, but if he were making an application it would be for $20,000,000. They both laughed. Shoup remarked to me, “We did borrow about $13,000,000 and did some maintenance work we had not intended to do.” They exchanged some rapid-fire comment-jokes, and Henderson wound up by saying that the Board was much reduced now by the fact that Mr. ______ had died, Mr. Merriam was in Texas, Mr. Couch somewhere else, and Mr. Jones was quite occupied on outside work. They walked away a few steps and conversed confidentially for a moment or two. When Mr. Shoup came back he said, “You stand all right over there. It is a question of the set-up of your company, and that is being studied. I think it is going to be all right.” Shoup said he would telephone to Jones from his room, and I said I would go to my room and remain until I heard from him. An hour later he telephoned he had arranged to meet Mr. Jones at four o’clock this afternoon, and would I be at Mr. Henderson’s office at 3:45 so we could chat a moment with him before see Mr. Jones.

  Then I hurried over to the RFC to see Mr. Rochelle. He was working on our case with our papers spread out. At first he said there was nothing I could do, but changed his mind and asked questions which would help him to see our picture better, concerning sundry real estate owned, real value of bank and building and loan stocks owned, etc. When the Pacific States was mentioned I remarked, “I suppose you know about the situation of the Pacific States?” He replied with nods and a knowing look, “Yes, I do know about the Pacific States.” Then we went on talking about the dual character of our corporation, and he asked whether we could not form a separate corporation for our title business. I told him it could be done, of course, but I saw no good reason why it should be done. Well, he was thinking of this -- what if they put the title department in good shape and the Banking Department should get heady and declare the trust department was in unsatisfactory condition? Then the RFC would have the trouble. I stated my observations of the banking Department men as being good men and not subject to the same political conditions that seem to surround the Insurance Department, and that I felt sure a thoroughly satisfactory understanding could be had all around.

  Mr. Rochelle asked me what my ideas were in regard to allocation of the preferred stock to the two departments, and what idea we had as to the rate of redemption -- that is, what percentage of our net earnings should be applied to repayment. I told him my tentative idea was $150,000 to the title and $50,000 to the trust department, but I presumed my supposition was correct that any approval given now was preliminary and subject to a final determination and final approval by supervisory authorities. He said that was correct. Then I reviewed our viewpoint -- that is, we must rehabilitate our deposits; this is a first and controlling need. Second, we would like to set our whole house in order by paying our current creditors. However, if the Board wanted to hold the allowance down to the minimum, we would be agreeable to that, and would be glad in such case to let the amount be determined later after consultation with the State Departments; but it was our view that more good could be done with the money be adopting our plan, which would release more money for local lending. Again I explained the need of real estate loan money for a class of citizens who are not eligible under the H.O.L.C. and Federal Land Banks.

  Home Owners' Loan Corporation (HOLC), a government agency created in 1933 by the Home Owners' Loan Act to help stabilize real estate that had depreciated during the depression and to refinance the urban mortgage debt. It granted long-term mortgage loans to some one million homeowners facing loss of their property. The HOLC was deactivated three years later.
  Federal Land Banks were a “quasi-public corporation and member of the Farm Credit System.” They were established in 1916 to provide loans to farmers for acquiring farm land. They also made rural housing loans.

  Mr. Rochelle’s whole attitude was friendly and helpful. He supposed I was getting a good rest here in Washington. Oh my, oh my, no one knows the nervous strain I have been under. What I want is a rest.

  I see I failed to mention at the proper place above that Mr. Shoup said he held one of the old Pioneer Abstract certificates covering a home he and his mother built. He made mention of this to Mr. Henderson.

  I did not tell above what I told Rochelle in answer to his query about rate of redemption. Of course, I referred to the provisions of the law, that is, 40% of the annual net income, but I said if we could get money to pay all our current indebtedness, we, as any good debtor would do, would be desirous of paying them back at a faster rate. But if we were only allowed a minimum amount we would have to use our net income over the minimum of 40% to keep paying on our indebtedness.

  Then I went down to the Washington Loan & Trust Company to cash a check so I would not get put into jail for defrauding an innkeeper, and wired to Stidham to deposit my April salary check so I would not be met by the sheriff when I get back to San Bernardino.


  5:45 PM. There is much to jot down now. I got into Senator Henderson’s office a little after 3:30 so as to be in good time for my engagement with Mr. Shoup, should he be early. But he came in a little before four, and we had to wait a time for the Senator. Mr. Shoup asked me for two of my business cards, and borrowing my pencil, he wrote on them over my name “Paul Shoup and.” One he sent in to Senator Henderson. When we got in I needed no introduction, but Shoup said, “You know my friend, Mr. Glasscock.” Mr. Shoup remarked that my Company’s application would come before him, but we did not come to talk about that, as it would be dealt with on its merits, but we came to visit a moment. Senator Henderson did most of the talking in telling about his special work in relation to levee, drainage and irrigation districts. Henderson is a Nevada man, as I have mentioned before in these notes. I asked him if he knew Ed Clark of the First State Bank, Las Vegas. “Of course,” he replied. I said our company deposits in his bank for our Las Vegas business. I think I was able to join in the conversation in an appropriate way and sufficiently. The other two were really acquainted with each other. When we arose to leave Mr. Shoup raised his hand in a slight gesture toward me and again said that San Bernardino was his home town, and that the Pioneer was the leading title and trust company in Southern California outside of Los Angeles, and San Bernardino County raises more oranges than any other county in the country. As we shook hands upon leaving Senator Henderson said, “Well, I presume I’ll see you again.” I replied, “Yes, I think so. I’m about through with Mr. Rochelle.”

  Then we went over to Jesse Jones’ office. There were three men waiting who looked like they had been there a long time. Mr. Shoup handed my other card to the Assistant, and said a few words to him. He disappeared through a door, and came back within a moment or two. He gave Mr. Shoup the high sign, and Mr. Shoup passed it on to me. We were taken to the Director’s room, next to Mr. Jones’ private office. After about five minutes we were invited to come in, just as two other men were going out. Mr. Jones was manifestly concerned about something. In a moment the telephone rang, and he carried on a long conversation with some one, evidently at the Capitol, for they were talking about the Glass bill and the other bill, and $140,000,000, and so on. Jones was firmly but quite politely giving the other person suggestions as to what should be done just now. Also, he asked about the bank deposit guaranty bill. (Jones is a banker.) After listening to what the other person said he stated, “I think you had better fix the guaranty at $5,000.00 and put it through and get the matter settled.”

  Mr. Jones told a story apropos of Mr. Shoup’s boast about San Bernardino County’s orange growing ability. A number of years ago a party of prospective Land buyers came to Houston from Iowa. On the morning they arrived a “norther” also arrived, and the thermometer did not stop going down until it got to 12 above. The Iowa man who was the central figure in the story wore a fur cap with flaps down over his ears. The landlady at the rooming house where they were putting up said, “Well, this won’t freeze ’em.” The Iowan blurted out, “Well, if this won’t freeze ’em, I will take some home and plant ‘em in my front yard.” I neglected to say in the first place that these prospective land buyers came down to look at orange land.

  Mr. Shoup said to Mr. Jones, also, that my Company had an application which would come before him later, on its merits, but he wanted him to meet me and to know that he was interested in San Bernardino.

  As we went away Mr. Shoup remarked, “Now, these little social calls will not hurt you any, and we have not gone over anybody’s head either.” I responded that I did not have words at my command just then to express my appreciation for what he had done for me today. When I clasped his hand in good-bye, I hope he felt my sincere appreciation. “Just tell the folks in San Bernardino that you saw me,” he said, as I got off at the sixth floor to see Mr. Rochelle.

  It was now seven minutes until 5:00 PM. Mr. Rochelle came in soon, and said that he had completed his work and the report was being typed. If it is completed in time, and he thought it would, it would be circulated among the Directors tomorrow. If I desired, I could now interview the Directors and answer their questions. I queried him as to the best method of approaching Mr. Taber, for instance, whose specialty is Industry loans. His suggestion, however, was that I now collaborate with Senator Henderson and Mr. Bowen and follow their suggestions.

  Mr. Rochelle was in a talkative mood, and we talked banks, and railroads, both generally and specifically. As I came away I registered the conclusion that either he had made a good report and recommendation, or was merely being kind like people are kind to those who are about to be hung. But I pinned my faith to the former.

  I feel better.

  While Mr. Shoup and I were waiting to get in to see Mr. Jones, I mentioned to him our old problem of the right of way at Ontario, and that the same problem existed in different forms, I understood, in a number of other places in California. I reviewed briefly the whole thing, and told of the ready cooperation of his brother Guy Shoup and others, but the working out of the plan had been balked by Franklin K. Lane, when he was Secretary of the Interior, by his insistence that a group of persons who should be called squatters, be benefited by the proposed legislation. I continued that for some time past the matter had been a “sleeping dog,” but now that I had been here, particularly since meeting him, I had concluded that we perhaps ought to get busy again and follow right through to a finish. When I return to San Bernardino it now seems to me Mr. Landels should be asked to make a study of the problem throughout the State, analyze the facts found, and determine upon a course of either action or inaction, and know the reason why.


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