In 1933 BJC was insisting that enrollment was just fine and the economy was just fine and their leadership was just fine and their finances were all paid on a completely cash basis. The historians documenting the events, however — even those on the payroll — document the real problems. And it wasn’t Pastor Hall.
First, a little explanation of the politics of the Southern Archives. As you read published secondary sources on the history of BJU, a trend quickly comes to the forefront. If an historian consults the BJU archives, his conclusions will inevitably be tainted with a pro-BJU spin. It happens every time. So as we peruse those secondary sources, the conclusions must be thoroughly tested against multiple primary sources.
When it comes to BJC’s early financial crisis, two books cover it thoroughly: Mark Dalhouse’s dissertation-turned-book, Island in the Lake of Fire, and BJU music professor Dan Turner’s official history, Standing Without Apology. BJU’s Carl Abrams covers the issue as well, but his focus is more macroscopic as he discusses fundamentalists’ “selling of the old-time religion.”
Dalhouse is the first historian to lay it all out (45-46).
[Bob Sr.] financed the school through three principal means: student fees, bonds, and real estate mortgages—plus whatever incidental contributions he could solicit as he traveled. Most of the money came from bonds. They covered the initial expenses of the school, and more were sold periodically as the need arose.
But in the spring of 1929 a worsening local economy exacerbated by poor crops and heavy floods forced Jones to ask the bondholders for an additional ten thousand dollars.
Now wait. In the Spring of 1929? Remember that the stock market crash was in October of ’29. Looking at the newspapers from Bay County in the Spring of 1929, no such stories of a “worsening local economy” exist. In fact, Satsuma Fruit Growers were reporting a record crop that required a significant increase in hires, and the county was nearing completion of the Gulf Coast Highway. Is this typical Southern boosterism that overlooks the bad news? Possibly.
There was, however, a very bad flood in Elba and Geneva, Alabama in March 1929. Considered the worst disaster on record up to that time, with people stranded on their roofs waiting for help, the flood was devastating for Elba, Alabama, so the town built a levee by the next year. Bay County, Florida delivered boats and supplies to the flood victims. In other words, they were offering financial help, not feeling financial hardship. Thus, the flood’s impact was not felt in Florida per se. And Bob Jones College had only one student from Elba, Alabama in 1930, Kathleen Talbot.
This local flood probably did not cause the financial devastation for Bob Jones College 100 miles to its South that Dalhouse concludes from Bob’s begging to the Board in ’29.
Now that’s a very small point. He continues:
In this same appeal [to the Board] Jones informed them that increasing numbers of students were unable to pay for tuition and board. Then, as the northwestern Florida land boom finally collapsed, Minor Keith told Bob Jones that he was withdrawing his real estate development company from Florida. In a settlement worked out between the two, Keith purchased bonds to help Jones finish construction of the campus, and the college assumed $500,000 in mortgages belonging to individuals who purchased land in the same area as Bob Jones College.
Dalhouse cites a letter to the BJC board in November 1929 for this information, and contemporaneous sources are best. However, BJU Music Professor Dan Turner puts the land bust and Keith’s subsequent withdrawal from Florida three years prior in 1926 (47):
But the financial bubble in Florida had actually burst in 1926. Unable to sell lots, the Keith Corporation abandoned its Florida projects in December 1926, gave the College $500,000 worth of mortgages, and purchased $80,000 of Bob Jones College Development Bonds with the understanding that the bonds would not be called due if the mortgages were uncollected (The College Development Bonds were secured by a note on the campus land, buildings, and furnishings. The agreement was apparently verbal, since several years later Dr. Jones could not find any written record of it.).
I am being overly tedious with this because the devil is in the details. Did BJC’s financial troubles begin in 1929, a few months before the Crash, or in 1926, months before Bob Jones College had even begun? Turner cites no documents whatsoever, only calling on memories from seventy years prior. When you drill down to the sources each historian uses and compare it to other contemporaneous sources, Dalhouse’s 1929 is more likely the accurate date. Perhaps Turner is trying to mythologize Jones’ tenacity in the face of financial hardship by mis-citing the beginning date.
Fast forward to June. Minor Cooper Keith, the corrupt railroad tycoon and destroyer of thousands of acres of Costa Rica wilderness, died on June 14, 1929. He was the person who promised Bob Jones Sr. the land on College Point in exchange for Senior “holding meeting” to sell swamp-land-turned-into-vacation-homes. Panama City was supposed to be the coastal port Keith would use to get his bananas to Atlanta. In the months before he died, however, Keith had changed his mind about Bay County’s potential and had moved his attention to Tampa. This, I contend, based on the outside sources too numerous to list in this post, was the financially devastating event for Bob Jones College. And Keith didn’t move out of Florida; he moved out of Panama City. Both Dalhouse and Turner got that wrong too.
What happened following Jones’ November 1929 plea seems to be consistent between Dalhouse and Turner. First Dalhouse:
As the depression worsened in 1929-30, many of these individuals could not keep up their mortgage payments. By the fall of 1929 the amount from these mortgages due to Bob Jones exceeded $200,000. Jones now found it increasingly difficult to pay interest to his bondholders. In November 1929 he asked those who felt they could to return their bonds to the college. Despite such budget cutting measures as a faculty pay-cut, Jones informed his bondholders late in 1930 that the college could no longer pay interest on its bonds. Payments from the mortgages would more than cover the school’s bonded indebtedness, but Jones was unable to collect, forcing him to default on his interest payments.
Compare this to music faculty member Dan Turner’s official account:
As the national depression deepened, most of the property owners forfeited, and by 1930 the cash amount due the College from the mortgages exceeded $200,000 (citing Dalhouse). By the end of 1932, this amount had swelled to $352,000. One source of operational income for the College was completely gone. . . .
[Bob] cashed in his $500,000 life insurance policy with New York Life for its cash value of $20,000 and sold the land on which his boyhood home sat in order to pay the debts of the College. . . .
Sensing the danger of the situation, Dr. Jones Sr. wrote all the bondholders in November 1929, asking them to return their bonds to the College for a refund of their investment if they felt they could do so (the bonded indebtedness represented about 20 percent of the total investment at BJC). On January 1, 1930, he discussed the financial condition of the school with the faculty, requested them to look for ‘paying students,’ and for the first time asked ‘those faculty who could, [to] wait for their January checks.’ In February of 1931, the First National Bank of Panama City closed its doors, causing more loss and hardship for the College. By March 1932 the financial condition of the College had deteriorated to the point in which he suggested that the faculty members voluntarily take a 10 percent cut in salary. . . . He stated that in any event, if the money is available, full salaries will be paid. . . .
On May 28, 1932, Dr. Jones Sr. spoke to the faculty about the financial condition of the College and explained that the salary structure of the school would have to change so that the College could survive. . . .
I am laying these published accounts side-by-side to show where both outsider historian Dalhouse and insider faculty member Turner agree — the Depression took a bite out of BJC’s income from the start of the second year. That is a legitimate and well-proven conclusion. However, Turner’s employer can only admit that hardship seventy years after the fact. In the middle of the financial crisis from 1929-1933, Bob Jones Inc. totally denies it. Instead Jones doubles-down with the duplicitous and superficial hype. Mortgages, begging the board for money, imposing harsh pay cuts, pleading with the bond holders for more time — that doesn’t sound the same as Senior’s claim to the board in January 1933:
Nor is it as upbeat at Jones’ 1932 propaganda in the local paper.
This is Bob Jones’ habit. In the face of the worst crisis, they deny, skew, whitewash, and project blame onto individual former employees. In sum, they lie. That is their “heritage.”
Sound familiar yet? Oh, there’s more.