Not really...
1-2 Position starts in 1st, and maxes out in 2nd.
3rd Position starts in 1st and maxes out in 3rd. Used for towing.
"D" Position, or Drive, starts in 1st, and maxes out in OD.
If you tow, you must use 3rd and not "D" or the engine will not stay in the powerband, and the transmission will hunt. You will also get awesomely poor gas mileage and an overheated Jeep from all the power you dump into the tranny to keep up a desired speed.
Also, if your XJ has a transmission power setting switch on the dash, when towing, it should be in "Power" to maximize RPMs between shifts, otherwise it will short shift and be a bit doggy.
This should help a lot, though OS tires don't help either. Did you figure out what gear you have? Well, let's put it another way... Did you ever change them from stock? If not, they are likely 3.55. An older XJ with 3.55 gears and 31's can be a real pooch when towing.