So you'd pronounce "I have James' pen" as "I have James pen"?
I do. It's rare to be confusing.
And if it were, I would not do Jameses, I would go traditional and say James his pen (since 's is a contraction of his)
It's not a contraction. It's a possessive, and specifically not a contraction of "James his".
As I had read that it was, I went searching for more authority and it looks like it was and it wasn't as best I can try to figure out from this article