The Presidency: The Multimillionaire

Lyndon Johnson was born hard-scrabbling poor in a ramshackle Texas farmhouse, but he soon learned the value of hard work, good luck, quick wits and bold maneuver. After 27 years of service in modestly paid public offices, he has managed to become one of the richest Presidents in U.S. history.

He himself would estimate the family fortune at about $4,000,000, but others put it a good deal higher. This week, LIFE puts the Johnson fortune at about $14 million, and tells a detailed story of how it grew.

The KTBC Story. The cornerstone of Johnson holdings is KTBC, an Austin radio-TV operation that was bought in 1943 with a $17,500 certified check from Lady Bird Johnson. At that time, KTBC was an unsuccessful 250-watt radio station that had been in trouble with the Federal Communications Commission over regulatory violations. As Johnson family lore has it, it is the President’s wife who has parlayed an inheritance of $67,000 and some Alabama land into the present family fortune by masterminding both purchase and management of KTBC. But other people recall it differently.

A syndicate of Texas businessmen had been trying to buy KTBC long before the Johnsons entered the scene, but the FCC refused to approve the sale. In December 1942, a member of the syndicate, Austin Businessman E. G. Kingsbery, met with Lyndon Johnson, then a 34-year-old Congressman. As Kingsbery remembered that meeting, Lyndon first reminded him that Kingsbery’s son had obtained an appointment to the Naval Academy through Johnson’s office. Said Lyndon: “Now, E.G., I’m not a lawyer or a newspaperman. I have no means of making a living. At one time I had a second-class teaching license, but it has long since expired. I understand you’ve bought the radio station. I’d like to go in with you or have the station myself.”

Kingsbery suggested to Johnson that he “make his peace” with heirs of the late Austin Publisher J. M. West, who had originally headed the syndicate. Recalled Kingsbery: “Lyndon told me he was going up to the West ranch to talk business, and he did, and he came away with KTBC.”

The Monopoly. By 1952, when Lyndon Johnson was a U.S. Senator, television arrived, and the FCC gave KTBC the only very high frequency (VHF) channel in Austin. The station quickly picked up highly profitable contracts to carry programs from all three major networks—CBS, NBC and ABC. Unlike most single-channel cities, there is no “overlap” from stations in nearby cities—which means that the Johnsons own a television advertising monopoly in the whole Austin area.

The KTBC operation was first named the Texas Broadcasting Corp., renamed the LBJ Co., then changed back to Texas Broadcasting after Johnson became President. It has expanded considerably, now includes real estate holdings and shares in other broadcasting companies. In 1954, when Lyndon was Senate minority leader, the Johnsons bought KANG, a foundering UHF (ultrahigh frequency) television station in Waco. The FCC had just given a VHF license to a proposed Waco TV outlet, KWTX. CBS, which had been negotiating with KWTX, quickly decided to award its contract to KANG instead. Shortly thereafter, so did ABC. Then, with FCC approval, the Johnsons increased the transmitting power of their Austin station and made a costly swath across KWTX’s viewing and advertising market. KWTX pushed an unsuccessful federal antitrust action against the Johnsons, finally gave up and agreed to sell them 29.05% of its stock in a trade for KANG—including the major network franchises that KANG had sewed up.

“An Obvious Pressure.” The FCC says that Johnson has never tried to intervene in the agency’s radio-TV rulings—in Texas or anywhere else. Said one FCC man recently: “I’ve never once had anybody pressure me on behalf of Lyndon Johnson. The pressure there is an obvious one, though. It simply stems from the position occupied, particularly when you have a company named the LBJ Co.” A longtime KTBC employee recalled a meeting of the station’s department heads in Austin. Said he: “Both the Johnsons were there. Mrs. Johnson asked a few questions and made observations. After about 30 minutes, Johnson began talking. It was all business about the station. He’s a powerful person. Whenever he came into the station, he set things buzzing. Frankly, he scared hell out of a lot of people.” And of the Waco deal, a director of KWTX says: “There is no questioning the fact that Johnson was in on the negotiations for the merger. And he was the only one in on them.”

Indirect Interest? Aside from the Johnsons’ broadcasting empire, there is the matter of the Brazos-Tenth Street Co. Originated in 1955 as a real estate developer’s device for holding an old building at Brazos and Tenth Streets in Austin, it is now a freewheeling, highly diversified outfit.

Land Baron A. W. Moursund, 45, longtime friend and now principal trustee of the President’s financial interests,* says that no Johnson family member has a direct interest in the company. Yet an example of Brazos-Tenth’s complicated intertwining with the Johnsons turned up in early 1962. On Feb. 1 the LBJ Co. sold some subdivided lots to Brazos-Tenth. The deed was signed by J. C. Kellam, president of the LBJ Co., and by Donald Thomas, the LBJ Co. secretary. Before the day was over, essentially the same real estate package was sold by Brazos-Tenth to Lyndon Johnson himself. Again Donald Thomas signed the deed—this time as president of Brazos-Tenth.

In recent years, Brazos-Tenth has acquired about $1,000,000 worth of stock in nine Texas banks. In one recent case, ownership of a thriving little bank, Moore State Bank in Llano, Texas, changed hands after two big blocks of stock were sold—749 shares to Moursund’s mother, 749 to Brazos-Tenth. Those shares constituted controlling interest in the bank, and one Moore State stockholder said later: “After the transaction was closed, Mr. Johnson spoke of it to me at a party and thanked me for selling.”

Bock to the Land. The Johnsons—as individuals, as corporate entities or through agents—have also acquired sizable amounts of Texas land, most of it since 1960. According to LIFE’S accounting, the family owns eight ranches estimated at a value of $1,250,000; resort and residential property (including 200 acres of prized Austin property, some selling as high as $30,000 an acre) worth about $2,250,800; Alabama land worth about $100,000.

An official accounting of the Johnson family’s full fortune, disclosed by Trustee Moursund, indicates that the President personally owns about $400,000 in municipal bonds, ranch land, lake property, livestock and cash. Mrs. Johnson’s holdings add up to $2,500,000—the great bulk of it ($2,030,000) in Texas Broadcasting Corp. stock. And the Johnson daughters, Lynda Bird, 20, and Luci Baines, 17, each hold $630,000 in Texas Broadcasting stock and real estate. That totals $4,160,000 for the family.

Those figures are based largely on book values. Full market value is something else. The broadcast properties, for example, could well fetch $8 or $9 million today; real estate, around $3.5 million; cash and municipal bonds, $500,000; miscellaneous personal property, $400,000—a presidential fortune, all told, of about $13 or $14 million.

* Lyndon and Lady Bird put all their holdings in trust when Johnson assumed the presidency; neither has any say in the operation of the trust.