One of the powerful Texans with whom Clark would be associated for years was Howard E. Butt, of Corpus Christi, owner of the statewide H.E.B. chain of grocery stores. “I knew Mr. Butt’s interest in politics,” Clark says, and, he recalls, he knew Butt needed someone to help with problems he was having with federal agencies in Washington—particularly, during those wartime years, with the Office of Price Administration. So, Clark says, he advised Mr. Butt to advertise on KTBC. Because the station’s records have not been released, it is difficult to learn any details about Butt’s advertising, but it may have been done through companies whose products were sold in H.E.B. stores and who would advertise on KTBC and mention H.E.B. in their ads. In a letter written on October 27, 1943, Clark told Johnson, “I am today writing to Corpus so that Howard Butt will contact the advertisers whose products he sells at his stores in Austin so that he will have an opportunity to get coverage here.” Butt soon found out how wise Clark’s advice could be. In 1944, when the OPA was limiting each distributor’s number of cases of grapefruit that could be harvested and packed in the Rio Grande Valley, Johnson intervened and persuaded the agency to allocate Butt 150,000 extra cases. “I was happy to be able to call Mr. Howard Butt after our conversation [about the grapefruit] today,” Clark wrote Johnson on February 3, 1944, and, indeed, everyone involved got something out of this arrangement: Butt got 150,000 extra cases of grapefruit, and the profits from selling them; Clark got recognition as an attorney with influence in Washington; KTBC got advertising revenues.
Butt’s was not the only company that Ed Clark advised to advertise on KTBC. Clark already had a connection with the General Electric Company, and on October 27, 1943, he was able to write Johnson that General Electric’s popular “World News Today” program would be going on KTBC. “Thanks for the wonderful job on GE,” Johnson replied. “That’s the most important thing that has been accomplished lately.” Among Clark’s contacts were major oil companies, who worked together to exert political influence in Washington; one was Gulf Oil—Gulf wasn’t a client of Looney & Clark, Clark says, “but I had friends there. I spoke to them about it [advertising on KTBC], and they understood. This wasn’t a Sunday-school proposition. This was business.”
Not all the advertisers came through Clark. Wirtz was on a retainer from Humble Oil, a subsidiary of Standard Oil. Humble sponsored football games on the CBS network, under an arrangement in which the giant oil company selected the stations which carried the games. KTBC was selected. Wirtz had other clients that wanted things from the federal government, and they, too, began to advertise on KTBC.
Local businessmen who wanted to obtain—or keep—contracts with the Army camps near Austin, or with the huge Bergstrom Air Force Base, got the idea, which was soon being openly discussed in the Austin business community. As one businessman puts it: “Everybody knew that a good way to get Lyndon to help you with government contracts was to advertise over his radio station.” One example was the Jaques Power Saw Company. For one period, the only period for which records are available, the Jaques Company sponsored a six-day-a-week half-hour program. The purpose of the ads was not, says one Jaques associate, to attract business from listeners; Jaques did little business in Austin, the associate says. Rather, the purpose was to enable Jaques to sell power saws to the Army and Navy for use all over the country. In 1948, moreover, the company wanted to expand and needed a $1,250,000 loan from the Reconstruction Finance Corporation. When the application was filed, Johnson quietly spoke to at least one member of the RFC board, Vice Chairman Harley Hise, about it, and instructed Walter Jenkins to make subtle follow-up calls to remind the RFC that the Congressman wanted the loan approved. Jenkins did so, and as soon as the next meeting of the RFC board had ended, Hise hurried to a telephone and called Jenkins to tell him that the loan had gone through. (Jenkins communicated the good news to Jaques through its attorney, Everett Looney of Looney & Clark.) Other businessmen observed the pattern and followed it. Although they were ostensibly buying airtime, what they were really buying was political influence. They were buying—and Lyndon Johnson was selling.
Lyndon Johnson was always to maintain that his “wife’s” radio interests were totally divorced from politics, and that, indeed, he, the politician in the family, had absolutely nothing to do either with acquiring KTBC’s license, or, once it was licensed, with its operations. And Mrs. Johnson was indeed an integral part of the business. David Benjamin, who had been a salesman for KTBC under the previous ownership and stayed on, was impressed with the speed with which Mrs. Johnson brought order to the previously chaotic activities of the station’s salesmen. “Mrs. Johnson knew who I had called on” and the results of the call, Benjamin says, “and she complimented me” or urged him on to greater efforts. Elizabeth Goldschmidt was not the only member of the Johnson circle who expressed admiration for Lady Bird’s diligence, energy and business acumen. Leonard Marks says (after emphasizing that “It was her station—don’t let anybody tell you to the contrary”), “Over the years, as the station prospered, I would go up to visit them at their home on Thirtieth Place on a Sunday.… She would have the reports of the week’s sales, the list of expenses, and we’d go over them. She could read a balance sheet the way a truck driver reads a road map.” In later years, moreover, Mrs. Johnson’s role in the station’s management greatly expanded, and her husband, in making major business decisions, began to rely more on her judgment, to a point at which Walter Jenkins, who was active in KTBC’s affairs, said, in words echoed by members of the Austin business community, “I believe he came to trust her judgment almost as much as his own.” Ed Clark himself says, “He trusted her judgment because she was never emotional, always calm. He would get angry.… He would get mad, cuss. She never got emotional. She—This is too small to get mad over.’ … She was always cool. Weighing things just on the basis of what made sense in business.” Nevertheless, Mrs. Johnson’s ability as a businesswoman was not the crucial factor in the acquisition of the station, or, once it was acquired, in its early growth. It was not Mrs. Johnson who negotiated with E. G. Kingsbery for his option to purchase the station. “I’m not sure I even knew there was a Mrs. Johnson,” Kingsbery was to say. It wasn’t Mrs. Johnson who negotiated with the West brothers. It wasn’t Mrs. Johnson who telephoned James Barr at the FCC Standard Broadcast Division and “wouldn’t take no for an answer.” It wasn’t Mrs. Johnson who saw William Paley and Frank Stanton in New York. It wasn’t Mrs. Johnson who dealt with Ed Clark, and who procured an extra 150,000 cases of grapefruit for H. E. Butt, and who similarly worked within the government on behalf of other businesses which purchased advertising time on KTBC. It wasn’t Mrs. but Mr. Johnson. Lyndon Johnson had worked at politics for years to achieve power; now he was working at politics to make money.
AND HE MADE IT.
Under its former owners, KTBC’s income from the sale of advertising had been about $2,600 per month. During the first few months that Mrs. Johnson owned it, the income rose only to a little over $3,000 per month. But in December of 1943, the first substantial revenues from the CBS affiliation began coming in, the support of Herman Brown, Alvin Wirtz and Ed Clark was beginning to be felt, and advertising income rose to $5,645 for the month.
It rose more, rose faster and faster. In 1944, KTBC’s average income from advertisers was $13,500 a month; in 1945, it was $15,300 a month; in 1946, it was $22,700 a month—more than the total amount Mrs. Johnson had paid for the station. In 1946 alone, the revenues from the property she had bought three years before for $17,500 totalled $272,500. Profits after expenses were also impressive. Mrs. Johnson soon began taking an annual salary (it was $21,500 by 1948), and the ownership also may have been withdrawing funds from the business by other methods; since sufficiently detailed KTBC records are not open, it has not been possible to determine the total amount of such disbursements, but one, in 1947, was apparently $80,000. Despite such withdrawals, however, KTBC’s assets mounted rapidly. The end of the first era of the Johnson fin
ancial empire—the era in which his principal holding was Station KTBC, Austin—may be dated as 1952, because in that year it expanded into television, and its size and wealth soared to dramatically higher levels. But even before it entered that new era the station’s assets—on December 31, 1951—were $439,000.
Until the end of his life, whenever the subject of the vast growth of the LBJ Company and associated business enterprises was raised, Lyndon Johnson would emphasize that he owned none of it (“All that is owned by Mrs. Johnson.… I don’t have any interest in government-regulated industries of any kind and never have had”).
These statements were, with rare exceptions, accepted by the press. Listing the holdings of the LBJ Company when he became President, the Washington Star agreed that “These holdings are not the President’s.” Presumably the journalists who looked into the Johnson finances did not examine the implication of Texas law, particularly the state’s community property law, and most particularly the rights, under that law, of the spouse of a person who purchases a property with her own “separate” funds, such as an inheritance. Under that law, the spouse of that person—such as Lyndon Johnson, spouse of Lady Bird Johnson, who purchased KTBC with her own inheritance—has indeed no interest in that property. He owns none of it. The spouse does, however, have an interest in the income from that property. He owns half of that.
James H. Rowe, Jr., recalls that “one day” after the radio station had been purchased, “he [Johnson] and I were walking the streets and talking, and he pulled a piece of paper out of his pocket, and said, ‘I want to show you what this station made last year.’ ” Soon he was showing those papers—year-end figures for KTBC—to many friends. While the figures were small at first, these men recall that they got bigger—much bigger—each year, and were joined by figures for other investments. Soon, Johnson began pulling out columns of figures that, together, added up to his net financial worth. By 1948, the bottom line had seven figures on it. In that year, Lyndon Johnson began telling friends that he was a millionaire.
IN RUNNING KTBC, Lyndon Johnson was displaying the same intense involvement with every aspect of its affairs that was characteristic of his political career. Here is a letter to KTBC sales manager Willard Deason—one of many similar letters he wrote—from the man who said he was “unfamiliar” with the affairs of the radio station:
Now, Bill, I am convinced that we can put some permanent business on the books this week and next week if we will plan and concentrate on a specific few. Last week none of our sales were really permanent, and the total sales for each person was very little more than his pay-check for the week. When this happens, we slip back and have trouble coming up.
Show Jesse the attached letter I have written Jacob Schmidt and suggest to him that you or he, or both of you, go with Sam and see Mr. Schmidt personally. I had hoped you would present the deal you showed to Buttrey’s to Yaring’s after you had reduced it in half and would make some transcriptions of eight or ten word spots taken from Yaring’s advertisements for them to listen to. I note instead you have pitched a Sunday program. I think Schmidt should be approached by asking him to give radio a fair test. In order to do this, he should give us a percentage of what he is now spending on the paper. We could do a better job for him, and we should contend to him that we can and will if he will give us a long-term opportunity. My idea would be that you and Jesse and Sam ought to get some Uncle Ezra transcriptions and some spot transcriptions taken from Yaring’s newspaper ads and ask for a thirty-minute meeting with Joel Simon, Leon, and Mr. Schmidt. You could do this because I requested you to if you think it would be easier.
I think we can and should sew up Ben Greig, Lawler, Prewitt, Schmidt, Yaring’s, Red Arrow, Reynolds-Penland, and Swearingen-Armstrong in the next few days. Is there any chance of getting any Steck business?
Sincerely,
LYNDON B. JOHNSON
P.S. Bill, I don’t know who Jim can help us with, but I should say Levine’s, Louie, Lave’s, and Ginsberg’s if he is still on the other station.
IN RECRUITING A STAFF for KTBC, Johnson was using the same methods he had used in recruiting his political staff. There were, in Austin as in Washington, the charm and the promises deployed to persuade a man to leave his job and go to work for him.
When handsome, ambitious Harfield Weedin—already, at twenty-seven, program director of WFAA, a prestigious station in Dallas, and a well-known radio personality throughout Texas—arrived in Austin, the Johnsons showed him KTBC’s offices and equipment. “I have seen rundown radio stations in my day, but never anything to compare with KTBC,” Weedin was to recall. “The studio was a shambles, and the equipment … was third- and fourth-, maybe even fifth-hand.… My initial reaction was so awful I wanted to turn and go back to Dallas.” But then, he was to recall, Johnson began to talk. “She was there, but he did most of the talking.” And, he says, “he did quite a sales job on me.”
The Congressman assured Weedin that the station would have unlimited hours (“very shortly they would go full time”) and unlimited funds: “no money would be spared to make it Austin’s leading station.” He promised Weedin an employment contract which would give him not only security but ten percent of the station’s profits, a promise which appealed to the young man since it would mean he was no longer merely a salaried employee. And Johnson promised Weedin something that meant even more to him than money: a title—general manager—and the authority that went with it; “They would turn it over to me to operate as I saw fit.… I could do anything I wanted in order to make it the station of their dreams.”
“This was more like it,” Weedin was to say. The more Johnson talked, the more he felt that “here was my great opportunity—a challenge that could pay off in the realization of my one remaining ambition: to be the manager of a successful radio station.” Weedin asked for the Johnsons’ assurance that he would be in charge, explaining, as he recalls, that since neither of them knew anything about the radio business, he had to be able to make decisions on his own. And the assurance was given: “They gave me carte blanche to do whatever I wanted to do, because I explained to them, That’s part of the deal.… ‘Otherwise I won’t take the job.’ ”
And then, once the man had gone to work for Johnson, there came, in Austin as in Washington, the change. It wasn’t as abrupt at the radio station as it had been in the congressional office because Lyndon Johnson, initially less knowledgeable about radio, was forced to rely on the knowledge of those he hired. At first, therefore, Weedin found himself dealing primarily with Lady Bird, and Lady Bird (“She is the most wonderful person in the world,” he says) “was helpful mostly by giving me encouragement.” Weedin did the hiring—he persuaded a friend, John Hicks, another young ambitious announcer in Dallas, to come to KTBC as chief announcer and program director. The vision that had been given to Weedin of unlimited funds for equipment turned out to be an exaggeration; he quickly found out, he recalls, that “Lady Bird did not have the unlimited funds I thought she had.” There was not, in fact, enough to purchase even a new, urgently needed transmitter, but Weedin persuaded another friend, a crack engineer from Dallas, to come to Austin and repair the old one. Then they moved to new offices in the Brown Building. To save money, Hicks recalls, “we literally hand-carried that station from the business college; Lady Bird—she worked like a horse that day.” (Her husband? “The Congressman was never around when you had work like that.”) Weedin realized that “the most important thing was to get the station out of the red—but quick.” To do so—to make the most of his “great opportunity”—he poured his talent and youthful energy into every phase of the station’s operations. He hired two new salesmen but supplemented their efforts by going out as a salesman himself, although selling was not his field. The repaired transmitter, and the new 590 wavelength, gave KTBC a powerful, clear signal, and to make sure the station sounded professional Weedin himself delivered those newscasts that Hicks couldn’t, so that KTBC had “professional voices.” Establ
ishing new rates for advertising, he persuaded KNOW not to undercut them, so that both stations would get more revenue. He selected and purchased the records for the music shows. He designed new stationery and promotional material for mailings. To make contacts with the Austin businessmen to whom he was trying to sell time, he put on quiz shows at luncheons of the Rotary, Kiwanis, Lions and other clubs, even delivering a five-minute “newscast” at Rotary meetings. His days began at six, because at 7:15 the “Wake Up with Weedin” show went on the air, and by that time he had to have written a newscast from the incoming teletype. As soon as he signed off at 8:30, he discussed the day’s work with the salesmen, and dealt with the station’s correspondence. By 10:30, he was out on the streets, calling on prospective clients, rushing back to the station to handle any problems. At 5:15 p.m. and again at six and eight o’clock, to give a rest to Hicks, who had been doing the announcing and newscasts all day, he did fifteen-minute newscasts, and then, fourteen hours after he had left for the station, drove home—to handle more business. “This,” Weedin was to say, “was the toughest schedule I had ever had in my life.” But for a while, he says, “all of us had that wonderful feeling of accomplishment.… And also as we looked at the profit side of the ledger …”By August, 1943, KTBC showed its first profit—eighteen dollars. By October, the monthly profit was hundreds of dollars. And after the CBS programs began coming through that autumn, it was thousands.
Gradually, however, the “wonderful feeling” faded. For the vision of “unlimited funds” to improve KTBC was not the only promise that was not being honored. The promised written contract, with its ten percent of KTBC’s profits, did not materialize. During the first six months of the Johnson ownership, the Congressman himself did not come to Austin often, but when he did, Weedin would bring up the subject and the Congressman would stall. “Lyndon would never give me a contract because he could never decide if the ten percent was before or after taxes,” Weedin says. In 1944, despite the station’s substantial profits, Weedin was still receiving no money other than his salary—that inadequate salary, so much lower than his salary at his former station, that he had agreed to accept only because of the promise of a share of the profits.
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