Douglas was the son of James Douglas, Jr., a mining executive employed by the Phelps Dodge Company, and his wife Josephine "Josalee" Williams Douglas. Growing up in Bisbee and Nacozari de García, at the age of 11 he was sent east at the insistence of his grandfather, James Douglas to attend school. He spent two years at Hackley School before transferring to Montclair Academy, where he won awards for both academic success and character development, graduating in the class of 1912.