Many readers of the mystic Neville Goddard have heard a very vivid and dramatic story from his lectures that left them wondering: Who was he referring to?

This story took place in Los Angeles in 1945. Neville shows up at a packed auditorium to give a graduation day address when, mere moments before stepping onto the stage, the “Director of the Organization” pulls him offstage to a private room.

In this private meeting, the head of the organization orders Neville to silence his teachings and chastises him for charging $40. Neville refuses and ultimately walks away from his contract, becomes independent, and develops an informal peer-to-peer “gentleman’s agreement” with a man named “Fred.”

Because of a recent discovery of original lecture transcripts and 1930s federal indictment records; we now know who “the Head” and “Fred” were. “The Head” was Ernest Holmes, creator of the Institute of Religious Science. “Fred” was Dr. Frederick Bailes, a leading teacher at the Institute of Religious Science.

The Anecdote: Neville’s Collision with the Institution

In these two lectures Neville gave detailed descriptions of the events that took place. (see Appendix 1 below for full quotes)

From Neville’s early 1970s lecture: “When I first came to this city back in 1945… I was almost at the time to start talking, but the head of the organization called me aside into his private office and said, ‘I’ve heard some very distressing things about you… From my platform, you cannot say, anything that I heard you were saying up in San Francisco.’ […] I was addressing his alumni, and there were about, I would say, five hundred present, all graduates of his institution. […] He said, ‘You’re charging $40 for five talks, and I am the head of the institution and I don’t charge more than $25 for my talk.’ […] And so, from then on, I started coming on my own and not under the auspices of anyone else—just a gentleman’s agreement between Fred and myself for a few years I was with Fred.”

From Neville’s 1966: “The head of the organization—I won’t mention his name and you know the organization, there are maybe 100 across the country now. […] The very first night that I arrived I’m going to address all of his graduates, and there were about, I dare say, four to five hundred of them. […] I was taken to a late dinner party, and so I couldn’t arrive there until about five minutes before eight… He takes me aside and in that little short interval of time he tells me I must not speak on the non-historicity of the Bible to his people… Even though you call yourself the dean of this institute, not in my eyes are you any dean concerning the Word of God…”

Proof 1: The “Dean” and the Corner Office

Neville names the title of his antagonist: “the dean of this institute.” In 1945, there was only one man in Los Angeles New Thought who held this supreme title of “Dean”. It was Ernest Holmes.

As documented by Reginald C. Armor in his historical account That Was Ernest, this was his active, formal title, with Armor specifically recalling “Dean Holmes’ opening speech” at the Institute in late 1944. Official 1944 and 1945 calendars and newspaper clippings also list him as “Dean Ernest Holmes”.

In her insider history Chronicles of Religious Science, author Marilyn Leo gives details of the opulent (Holtzclaw Building), three-story layout of the Institute’s 3251 West 6th Street headquarters. She notes that “upstairs, there was a large auditorium”.

Neville noted he was pulled into a “private office” just minutes before taking the stage, and the physical layout of the building corroborates this memory. Leo explains that past the grand lobby and practitioner rooms, “at the end of the hall was a large office that Holmes chose as an appropriate space”. Holmes was the only executive with the supreme authority and the secluded, end-of-the-hall corner office to pull a guest speaker aside five minutes before showtime.

Proof 2: The Motive Behind the $25 Paranoia

Why was Ernest Holmes so dictatorial about Neville charging $40 and teaching radical ideas about the non-historicity of the Bible?

Possibly, the first part of the answer appears in Martin A. Larson’s New Thought: Or a Modern Religious Approach, 1965:

“Beginning in 1920, the brothers teamed up in lecture tours in various cities, especially in the East, where they held free meetings in large theaters, filled to capacity. These were followed by classes, often attended by a thousand students who paid $25.00 each for a series of lessons.”

But behind that specific number of $25 lies a dark family secret as well.

In the late 1920s, Ernest’s brothers, Fenwicke and William Holmes, used their New York Divine Science ministry as a front for a massive financial grift. According to a March 19, 1930, New York Times indictment:

“Fenwicke L. Holmes, pastor of the First Church of Divine Science… was one of six men indicted yesterday by the Federal grand jury on charges of using the mails to defraud in sales of mining stock. […] Assistant United States Attorney Lowell Wadmond said that the defendants had obtained between $100,000 and $150,000 through sales of stock…”

Ernest fled his brothers’ operation in 1925, close to the year the scam began. This federal scandal must have left Ernest terrified that his Los Angeles Institute would be viewed as a grift.

His $25 fee ceiling was a historical baseline he established in the 1920s. It made his classes appear legitimate and accessible. Neville’s $40 fee and rogue biblical interpretations must have triggered one of Holmes’s deeper institutional traumas.

Proof 3: The Resignation of “Fred”

Neville noted that after leaving Holmes’s “auspices,” he formed a “gentleman’s agreement” with “Fred.”

Historical records confirm his exact title: “He served as Assistant Dean of the Institute in Los Angeles…”. While Bailes and Holmes were once close enough that Bailes even listed Holmes as a “Friend” on his 1942 WWII Draft Card, Holmes’s authoritarian control eventually destroyed the relationship.

Dr. Frederick Bailes was the Institute’s star teacher, but his massive popularity threatened the founder. According to Neal Vahle’s history, Open at the Top, Holmes’s demand for total authority actively drove away his best talent:

“Holmes reportedly had difficulty working with strong leaders… people like Stanley Bartlett, Joseph Murphy, Fredrick Bailes, Dan Custer and J. Lowry Fendrich, capable individuals who could have succeeded him as head of the Institute, never stayed long. [Fletcher] Harding believed that Holmes was uncomfortable with them.”

This discomfort reached its breaking point on June 11, 1946. According to the official Board minutes published in Marilyn Leo’s Chronicles of Religious Science, Bailes gave the Board an ultimatum regarding a charter for a downtown Los Angeles chapter. Holmes’s Board shut him down:

“After thorough discussion, it was decided that the Board ‘could not grant such a charter to Dr. Bailes or to anyone else at this time.’… Dr. Bailes resigned. He had a very large following that met at the Ebell Theater for many years.”

Charles S. Braden’s definitive academic history, Spirits in Rebellion, summarizes the fracture perfectly. He notes that Bailes built the largest church in the movement, but ultimately:

“…he could not go along with what he believed to be the authoritarian trend in the leadership of the movement, and withdrew. His church went with him, and has continued since to be an independent Science of Mind church.”

Now fully independent of Holmes’s “authoritarian” control, Bailes and Neville Goddard operated as respected peers. Having both survived their collisions with the “Head,” the two rebels formed their gentleman’s agreement and ultimately shared the main stage at the massive 1948 International New Thought Alliance congress in front of 500 delegates.

Proof 4: The Math

In his late 1960s/1970 lecture, Neville dropped a highly specific mathematical coordinate about Holmes’s organization: “you know the organization, there are maybe 100 across the country now.”

Was he exaggerating? Not at all. Braden’s Spirits in Rebellion tracked the exact growth of the Religious Science churches (both the main branch and the breakaway factions) following a 1954 organizational split:

“The growth of Religious Science churches registered in the combined churches was, by years, from 1954 through March, 1961, as follows: 65, 80, 90, 95, 95, 93, 99, 102…”.

By the time Neville was speaking, the organization had crossed the +100 church milestone. This validates Neville’s memory.

This Neville Goddard 1945 anecdote is more than just a little squabble over a speaker’s fees. We see a revealing moment when a rigid, fearful institution (haunted by federal indictments) and ruled by an authoritarian “Dean” faced the independent, unrestricted future of the New Thought movement.

Neville walked away from the machine, and a year later, “Fred” followed him out the door.

References & Historical Sources

Primary Documents & Archival Records

Leo, Marilyn. Chronicles of Religious Science Volume I: The Early Years, 1926 through 1959. (Kindle Edition). (Author’s Note: This text serves as the definitive primary source for this article, providing direct access to the Institute’s 1945–1946 Board minutes, the physical layout of the Holtzclaw building, and the official June 11, 1946 record of Dr. Frederick Bailes’s resignation.)

The New York Times. “Six Men Indicted on Charges of Using the Mails to Defraud.” March 19, 1930. (Details the federal grand jury indictment of Fenwicke L. Holmes regarding the mining stock grift).

Los Angeles Conservancy. “Founder’s Church of Religious Science.” Archival architectural history. Available Online

Historical Texts & Biographies

Armor, Reginald C. (as told to Robin Llast). That Was Ernest: The Story of Ernest Holmes and the Religious Science Movement. DeVorss & Company. (Provides insider accounts of Holmes’s leadership style, the 1944 Alumni Hall speeches, and his documented discomfort with strong subordinate leaders).

Braden, Charles S. Spirits in Rebellion: The Rise and Development of New Thought. Southern Methodist University Press, 1963. (Provides the exact mathematical growth statistics of the Religious Science churches used to verify Neville Goddard’s claims).

Holmes, Ernest. The Science of Mind. Los Angeles: Institute of Religious Science, 1926.

Holmes, Fenwicke Lindsay. Ernest Holmes: His Life and Times. Dodd, Mead, 1970.

Larson, Martin A. New Thought: Or a Modern Religious Approach—The Philosophy of Health, Happiness and Prosperity. New York: Philosophical Library, 1965. (Source of the 1920s $25 lecture fee historical baseline).

Leo, Marilyn. In His Company: Ernest Holmes Remembered. Camarillo, CA: M Leo Presents, 2006.

Simmons, John K. Competing Visions of Paradise: The California Experience of 19th-Century American Sectarianism. Berkeley: University of California Press, 1984.

Vahle, Neal. Open at the Top: The Life of Ernest Holmes. Open View Press, 1993. (Corroborates the internal friction between Holmes and his top teachers, including Dr. Bailes).

Additional Reading & Digital References

Research Starters (EBSCO). “Religious Science.” Available Online

Wikipedia. “Ernest Holmes.” Available Online

Fenwicke Holmes – from website “A Practioner’s Path”

Appendix 1:

Full quotes

From God’s Purpose (11/22/71):

When I first came to this city back in 1945, the lady who met me at the airport and brought me over to the hotel. And she didn’t quite notice the time. When I came to the meeting, I was almost at the time to start talking, but the head of the organization called me aside into his private office and said, “I’ve heard some very distressing things about you.” I said, “Like what?” He said, “I have heard that you do not treat the Bible as secular history.” I said, “No, I do not.”

I had not yet received the vision of the Son of God, but I knew the Bible could be interpreted psychologically, for I had proven it day in and day out—not only to my own satisfaction, but those who heard and believed what I told them, they too changed their lives based upon my interpretation of scripture. So he said to me, “From my platform, you cannot say, anything that I heard you were saying up in San Francisco.” I thanked him and, “I will abide by your decision tonight. I’m your guest tonight.” I was addressing his alumni, and there were about, I would say, five hundred present, all graduates of his institution. And so I spoke to the crowds who were there.

But I told him after the meeting, “I did what you asked me to do as of tonight. I was your guest to address those you graduated as teachers, but beginning tomorrow night, I am on my own. Whether I speak in this place or that place, or any place.” And then he said to me, “Well, you’re not going to give your Bible class outsideof here?” I said, “No, I came to give everything under your auspices. It was my agreement—a verbal agreement between gentlemen. If you want to break it, it’s perfectly all right with me.” He said, “No.” I asked, “Where is the room where I’m going to speak?” He said, “That room there.” I said, “Well, that room seats about forty people, doesn’t it?” He said, “Yes, that’s big enough.” He said, “You’re charging $40 for five talks, and I am the head of the institution and I don’t charge more than $25 for my talk.”

I thought, “Well, we are different people.” I am teaching the Bible as I know it, not as others taught me to believe it, and I am not going to speak in this place that seats forty people. I came three thousand miles under my own steam; and I brought my wife, and my daughter, and I brought my niece at my own expense. And I don’t live in a hubble, I am living in an excellent hotel, paying my own way. As I paid my own way out, I’ll pay my own way back. But I am not speaking here. So he said to me, “If you don’t speak here, you can’t speak for me at any place.” That was perfectly all right.

I said to the lady who met me—one of his students—”Go out and rent me a place. I promised that man I’d give him 40% of every penny that comes in, and I will take 60%. I pay my own personal expenses and he simply furnishes the hall.” That’s all. And for that he gets 40. But I was charging $40 for my five talks to be given in one week, Monday through Friday. So he went out and rented a place. He only paid, I think, $90 for the five nights.

And 208 attended that class. He said to me, “What must I do with the money?” I said, “Throw it in the ash can, give me 60% of that money and that’s all that I want, and I don’t care what you do with it.” He did nothing, for me; he tried to rub me out, he tried to stop me at the bloody door. And so you can take the money, 40%, which was a considerable sum of money. You don’t have to be a great genius to multiply 208 by 40 and then take off 40%. And her investment was $90! So she kept it, and he went through the ceiling. He wanted it, yet he did everything to stop me from doing it and now you want it. “No, we have had our day together, and that’s it.”

And so, from then on, I started coming on my own and not under the auspices of anyone else—just a gentleman’s agreement between Fred and myself for a few years I was with Fred. And that’s the story here. Paul did the same thing. And Paul made the confession that what he is talking about, he did not get from a man. He didn’t hear it; he wasn’t taught it. It came through a revelation. And the revelation was the true meaning of Jesus Christ. Then he understood who Christ really was.

From The Nature Of God Is Revealed In Us (6/6/69):

I can’t tell anyone prior to the actual experience what a blow it is to one who has to give up, or at least struggle to give up, his belief in the historicity of scripture. When I first came here back in 1945, I was invited to come out and tell my story of the Bible. The head of the organization—I won’t mention his name and you know the organization, there are maybe 100 across the country now. They’ve grown quite rapidly and they’re quite successful in their numbers. The very first night that I arrived I’m going to address all of his graduates, and there were about, I dare say, four to five hundred of them. He didn’t give me one minute…I’m taking the platform right away because I’m late, the plane was late. But I was taken to a late dinner party, and so I couldn’t arrive there until about five minutes before eight, and I’m supposed to be on the platform at eight. He takes me aside and in that little short interval of time he tells me I must not speak on the non-historicity of the Bible to his people, because he believes in the historicity and teaches it and I must not in any way disturb his people. I thanked him. I said, I’m your guest tonight so I will abide by your decision, but beginning tomorrow when I’m speaking, don’t tell me what to say. No one can tell me what to say! Again, I’m quoting scripture, “Whether it is right in the sight of God to listen to you rather than to God, you must judge.” For I cannot but speak of what I have seen and heard, and I know it is not historically true—it is truer than that, it’s eternally true. And these records are forever, and one day you will experience it. Even though you call yourself the dean of this institute, not in my eyes are you any dean concerning the Word of God, because you do not know it.

Then I had to take the platform and go on, and naturally change what I had to say, and speak to them on an entirely different level. I couldn’t that night as his guest speak on the truth as I had experienced it. For at least I had experienced it based upon its law, but I was getting glimpses of it, that it was not historically sound, that this episode recorded in scripture was not a record of some historical fact; it was something entirely different. It was simply a revelation of truth, which would stun the man if he had the strength to stand it. But, may I tell you, when it happens to you, when you actually experience it, it’s perfectly all right and there is no uncertainty, none. There may be a little uncertainty up unto the moment of experiencing the truth, because you will hear it from one you trust and you would like to believe all that he tells you. Certain things seem a little bit too much and you take it under consideration. But when it happens to you everything goes out, because you know now it is the truth. So, you take all the stories, every one, and they are true…but not as they are recorded. They were not writing history as we understand history. It is not secular history; it is divine or sacred history and this is forever. So you can’t speak of it as something in the past or something to come…it is. The climax has been reached and it is always being reached in the moment of time.

Appendix 2

In his definitive biography of the movement, Open at the Top: The Life of Ernest Holmes, historian Neal Vahle documents the active friction between Holmes and the independent thinkers he initially brought in to teach.

Excerpt from Page 103:

“Holmes reportedly had difficulty working with strong leaders whom he brought into the Institute. Fletcher Harding observed that people like Stanley Bartlett, Joseph Murphy, Fredrick Bailes, Dan Custer and J. Lowry Fendrich, capable individuals who could have succeeded him as head of the Institute, never stayed long. Harding believed that Holmes was uncomfortable with them…”

Excerpt from Page 114:

“…like Frederick Bailes, Stanley Bartlett, J. Lowry Fendrich and Fletcher Harding, were all found wanting for one reason or another. By turning over management of the churches to the IARSC, primary responsibility for guiding the Movement in the future would rest with the new group and there would be no need to choose a successor.”

From Leo, Marilyn. Chronicles of Religious Science Volume I: The Early Years, 1926 through 1959. (Excerpts from the 1945–1946 Executive Board Meetings and architectural records).

“At the end of the hall was a large office that Holmes chose as an appropriate space, and just outside of the office was plenty of room for his secretary and other clerical help… Upstairs, there was a large auditorium where speakers, such as Holmes, Armor, and other ministers would give lessons to the young people.” (— From the 1970 physical description by Bill Lynn, Business Manager)

From the June 11, 1946 Board Meeting: “Dr. Frederick Bailes made a request to begin an Institute chapter in downtown Los Angeles. He presented his case and stated that if a chapter charter was not granted he would request that his resignation be accepted. He was excused from the meeting for further discussion by the Board. After thorough discussion, it was decided that the Board ‘could not grant such a charter to Dr. Bailes or to anyone else at this time.’ [Editor’s note: The chapter would have been only a few miles from the Institute. Dr. Bailes resigned. He had a very large following that met at the Ebell Theater for many years.]”