Shortfall
Page 11
As these thumbnail sketches show, the culture of building and loan associations in Colorado Springs was not one of selfless operators committed to helping ordinary working people. Yet the assumption that the B&L industry was just that is rarely challenged. Take one reliable book about the catastrophic savings and loan crisis of the 1980s, which notes that if Hollywood did a remake of Capra’s movie, George Bailey’s speech during the bank run would require a complete overhaul. “The money’s not here,” Bailey would have to say. “Why, your money’s in racehorses, a bordello in Nevada, a share in the Dallas Cowboys . . . vacant shopping malls, unneeded condominiums, Rolls-Royces, golf courses, prostitutes to pay off regulators, credit cards.”50 It’s an amusing passage, but it reinforces the same naive view of thrifts that informs Capra’s movie.
Whether depositors’ money was in racehorses or cattle, unneeded condos or deluxe auto lodges, it wasn’t where it was meant to be. The point is that this is what capitalism sometimes looked like on the ground on Main Street, and it flies in the face of long-standing, nearly baked-in assumptions that when capitalism goes awry, distance is the culprit. What existed in Colorado Springs was face-to-face contact, with those crucial “social checks of personal obligation” in place, and yet they provided absolutely no protection from financial dubiousness, even embezzlement.51
Embezzlement, in contrast to other forms of larceny, is characterized by what the economist John Kenneth Galbraith called a “time parameter.” Years may pass between the time the embezzlement occurred and its discovery. During this period, the person whose funds have been embezzled not only feels no sense of loss, he or she experiences a “net increase in psychic wealth.” And that psychic wealth makes a discovery of defalcation much less likely. So it is that in flush times the frequency of embezzlement increases and during lean times it falls off, as surpluses disappear and auditing becomes more exacting.52
Well in advance of the Depression, many building and loans were headed toward insolvency. Several years later when B&Ls began “crashing,” journalists and the authorities spoke of their “shortfalls.” What they meant was that these businesses had come up short—they were in the red and unable to meet their financial obligations. They could no longer pay their depositors or, for that matter, cover the taxes and insurance on mortgages now in default. There are shortfalls and shortfalls. Some are temporary and can be solved with short-term loans. Businesses and organizations can develop shortfalls for reasons beyond their control.53 However, what was happening in the twenties in the building and loan industry in Colorado Springs and elsewhere were shortfalls that stemmed from a variety of causes, including mismanagement, high interest rates on deposits, real estate speculation, lax regulation, poor accounting, financial irregularities, and embezzlement.
I cannot say with any certainty what led these three men to steal from their neighbors, to rip off their fellow parishioners, lodge brothers, or klavern members. Had they internalized what historian Scott Sandage claims was a key cultural imperative for white-collar men by the turn of the last century: the avoidance of averageness? If so, they would have shared with Walter Davis the determination to avoid a “plodding, listless life.”54 In my grandfather’s case, however, the existence of a substantial family archive allows me to know something more about the personal circumstances driving his embezzlement.
This ad from March 2, 1924, is the most lavish of the newspaper ads for Davis’s City Savings Building and Loan. (Gazette)
During the early years of the twenties the Davis family lived well, but their lifestyle was not extravagant. By 1921 my grandfather had started paying out more in interest—up to 6 percent—to depositors than he could afford. However disastrous this pyramid scheme would prove in the long term, what it meant in the shorter term was that he began to attract more middle-class people, most of whom owned their own homes. Should they default, well, there would be property to go after. At this juncture the City was not in jeopardy, but in 1923 things started to shift as he began to take bigger risks. Perhaps he was fearful of losing ground to his new competitors, Ed Sharer and Fred Bentall. Then there was his brother’s growing prominence as a Republican politician and a civic leader.55 In 1923 Roy Davis’s election as the president of the local Rotary Club was the lead article one day in the dailies.
One way white-collar men such as my grandfather could claim “manly success” when more conventional measures of professional achievement eluded them was through sex, often with female subordinates in their workplace. I can’t prove that my grandfather’s relationship with his twenty-three-year-old stenographer had anything to do with shoring up his masculinity. However, Walter’s relationship with Eva Terry seems to have started in 1923, when he had reason to feel anxious about being overtaken by his competitors and overshadowed by his brother. What I do know is that in becoming her lover as well as her boss Walter Davis became a cliché. In the world of white-collar work, relationships between female stenographers and their bosses were so common as to be the stuff of cartoons.56
Whether or not he had affairs with other women, there’s no doubt that Walter found the pretty redhead in his employ compelling, perhaps because she reminded him of a younger version of his wife. Both women were resourceful and high-maintenance, pragmatic and fiery, and their personal histories were also uncannily similar. Eva, who was born in a small town on the other side of the San Juan National Forest from Durango, was orphaned soon after she was born. She and her six siblings were farmed out to relatives of both parents. In the shuffle, Eva landed in Costilla County with her uncle Warren, a struggling real estate agent, his second wife, Harriet, and three children. About 1912 the Terry family moved to Colorado Springs, where Warren continued to work in real estate. They ended up settling in the working-class neighborhood of Ivywild. By 1924 he became the proprietor of Tent City Pikes Peak, an automobile campground on the same grounds as the once-famous and lavish zoo. It may have been a “First Class Ground for First Class People,” as it was advertised, but its facilities were minimal, offering only tents. By 1925 Eva’s uncle had moved his business to the outskirts of town, and although it now featured actual cottages (and a so-called free zoo), it was too close to a poultry yard and a dairy to be the most desirable of such outfits.57
Walter’s infatuation with Eva gave the Terry family its best chance for upward mobility. Warren Terry’s eldest son had married and relocated to Denver, where he drove a taxi while his wife worked as a waitress. Their daughter Pearl also moved to Denver, where she worked as a nurse. Their youngest son was killed in 1913 during southern Colorado’s bloody coal wars, in which miners went out against the Colorado Fuel & Iron Company, which was largely a Rockefeller concern. Luke Terry was behind the wheel in an open-topped motor wagon when striking miners ambushed and murdered him and three mine guards he was transporting. Their deaths were part of the run-up to the infamous massacre in nearby Ludlow six months later when the Colorado National Guard executed several miners and set fire to the striking miners’ tent city. (Among those killed during the Ludlow massacre were 11 children and 2 women who suffocated to death during the fire in a dirt bunker built for safety.) In the pages of the anti-union Gazette, Luke Terry became a symbol of the miners’ murderous lawlessness.58 But it would take more than twenty years for the socially negligible Terry family to register once again in the local press.
In 1941 the newspaper published photographs of a stretch of buildings along South Nevada slated for demolition. Among the businesses affected by the widening of the road was the auto camp owned by Eva’s uncle. This photo gives some sense of working-class Ivywild, where Eva lived with her family. (Gazette)
My grandfather was preoccupied with social rank, but he seems to have been untroubled by Eva’s lack of standing. Whatever it was about Eva—her good looks, style, smarts—it seems to have largely nullified her working-class background for him. Of course, there was also Eva’s youth, which was perhaps the decisive factor given that it was a quality forty-one-year-old
Lula did not possess. It is possible that Lula had not enjoyed Walter’s undivided attention during their seventeen years of marriage, but she was used to being admired for her looks and her charm. My mother was not infrequently in the awkward position of looking on as fathers of her friends fell over themselves to win Lula’s attention. She remained a looker well into middle age.
Other men’s continued interest in her did nothing to blunt Lula’s disappointment at being supplanted by Eva. Walter’s affair tormented her. On more than one occasion she gathered up her daughter—who at the start of all this was no more than fourteen—hurried her into the Packard, and drove downtown to a spot across the street from the hotel where Walter and Eva often liaised. There Lula and Dorothy would sit in the car and wait for a glimpse of each one. These stakeouts did more than confirm Lula’s worst suspicions about her husband. They permitted her to practice her own unique method of retaliation. Lula knew that Walter was picking out Eva’s outfits on shopping trips. Once upon a time he had chosen her clothes, too. Every time she spotted Eva in a new outfit Lula would hunt down its duplicate, purchase it, and make a point of wearing it in his presence. In my mother’s telling, this was not a desperate effort to win Walter back. Eva was nearly twenty years Lula’s junior and had a fashionably boylike build—a flapper’s shape. Instead, Lula was letting her husband know that there was no pulling the wool over her eyes. She wasn’t having any of it—his excuses, deflections, lies, or blandishments.
Lula surveilled, she harangued, and day in and day out she “gave him hell.” Walter responded by becoming scarcer and scarcer. There were the missed dinners—always unavoidable—and then there were weekend trips to Denver. When he had more money at his disposal, he hired a driver to take him to Denver’s finest hotel, the Brown Palace, where he would stay the full weekend. He claimed that opening a branch office of the City required he be there. Even when Lula wasn’t on the lookout for Walter and his mistress, there was no escaping their affair. In Colorado Springs, a town that was both claustrophobically small and obsessed with propriety, it’s very likely that a good number of people did know about his affair. Even if waiters and salesclerks were not exchanging knowing looks when Lula entered the restaurants and stores where they worked, one can imagine how easy it would have been, given the circumstances, to think they were.
My mother’s memory of life with her parents was that there was no escaping their drama. That could be true even here, that is, several years before Eva entered the picture. (Author’s archive)
Over time Lula became convinced that Walter intended to leave her for Eva. Maybe Lula believed that he would ditch everything—family and business—just as George Hurstwood, the saloon manager in Sister Carrie, left behind everything in pursuit of the desirable Carrie Meeber. Or maybe she imagined that he would divorce her and the alimony would prove inadequate.59 If she fretted over divorce, he apparently did as well.60 Divorce was still semi-disreputable, especially for a family that was not part of Springs society, and the stigma that attached to it is very likely part of my grandparents’ story.61
Feeling her husband’s distractibility and her own vulnerability, Lula resolved to do whatever she could to avoid landing in the poverty she had known as a child. Over the course of nearly a decade, she took $100 bills and stashed them inside hatboxes and stuffed them inside socks and gloves. From her time working at the Indianapolis tailor, she had a good working knowledge of the way fur coats were put together. Eventually she took to sewing money into the lining of her own fur coats. My mother never told me if Lula squirreled away part of her allowance from Walter or how she came by this money, but the house on North Tejon Street became my grandmother’s bank.
Lula did more than stockpile money. A couple of years into Walter’s affair, she decided that if her husband could make himself scarce, she could as well. In the summer of 1925 she and Dorothy traveled by train to Los Angeles, where they lived for a month just a few blocks from the beach in Santa Monica. The distance between Colorado and California briefly rekindled Walter’s interest in his wife, but it also cost him $350 or nearly $5,000 in 2016 dollars. I know the figures, roughly speaking, because my grandparents conducted their relationship in this period through telegrams, which sometimes detailed the cost of lodging and travel.
The trip to California was just the beginning of Lula’s attempt to renegotiate her marriage and construct a life of semi-independence. The telegraphic record of their communication suggests that she never stopped loving him. Years later from Florida she telegraphed, “Baked in sun all day. Blistered neck. Real summer. Florida moon. Band and everything but you.” Lula remained in love with Walter, but as long as her husband continued his affair with Eva, she stayed away, usually with her daughter in tow. For her part, my mother was never able to occupy neutral territory with her feuding parents.62 Lula was “very morose about the situation” and just went on and on about it. “When life was a tragedy with her,” my mother recalled, “it was a tragedy.” As she developed into a teenager Dorothy grew convinced that her father’s reputation as a philanderer was causing friends to keep their distance from her. As a consequence, she developed what she called, in the jargon of the day, “an inferiority complex.” One solution was to go away to school, and beginning in the fall of 1926 Dorothy enrolled in a boarding school in upstate New York. Walter tried to keep his daughter in the Springs, with promises of a fur coat and her very own roadster, but she chose the Knox School for Girls in Cooperstown, about seventy-five miles from Albany. Quite possibly Lula played a role in her daughter’s decision to attend Knox because it gave Lula an excuse for prolonged stays in Manhattan.
No doubt my mother could have found a way to take classes in French, English-style horseback riding, and golf in the Springs. But there was no way she could have enacted “being somebody” in her hometown. It was one thing for her father to finance Knox, but quite another to gain the family entry into what Lula called the town’s “charmed inner circle.”63 These were the people who belonged to the Cheyenne Mountain Country Club, which accepted no more than one hundred local members and was in no hurry to fill those slots.64 The Gazette did publish two pictures of Dorothy while she was at Knox, but she was never asked to “come out” into society. This was not simply a question of wealth, because Roy’s daughter was a debutante. As long as she remained in the Springs Dorothy Davis would be the daughter of the man who tried to fool people into thinking he was a legitimate banker. By contrast, at Knox my mother was not only able to learn the etiquette, habits, and skills of the upper class but was also able to pass, so much so that when Lula met up with her daughter after her first term there, she telegraphed Walter, “Dorothy looks natural, but speaks a foreign language.”
Wealthy residents of the Springs had their comings and goings detailed in the local dailies, often accompanied by a picture. This picture of Dorothy is one of the few that appeared in the Gazette before her father’s scandal. (Author’s archive)
Lula may not have known Jazz Age slang, but she, too, was interested in refashioning herself as a member of the moneyed class, which the Knox School and its connections made possible. Before long, Lula and Dorothy were no longer staying at the Hotel Pennsylvania, choosing instead the more luxurious Savoy and the new Waldorf Astoria. And when Lula and Dorothy made their first trip to Europe, they didn’t travel like most Americans. They paid for Dorothy’s French teacher, an accomplished woman and White Russian émigré, to serve as their tour guide. They traveled first class, stayed in four-star hotels, and returned home with pricey clothes made by a Parisian dressmaker. Stateside, the Davis family chose models and brands that would most effectively signal their elevated class position. In the twenties, American mass culture threw up “virtually infinite distinctions” among commodities, which permitted Americans to situate (and differentiate) themselves from others on the class ladder. In his bestselling 1922 novel, Babbitt, Sinclair Lewis suggested that it was a family’s automobile that provided the definitive measure of its
social rank.65
What happened in this period, classwise, within families remains largely unexplored. What was the emotional fallout as some family members pulled ahead and others were left behind, as some drove Packards and others made do with Model T’s? The Davis family was certainly no stranger to such class cleavages. For my mother, the distance separating her from her uncle Willard, someone with whom she had played as a youngster but who now pumped gas at the local Conoco station, congealed into nothing less than a class difference. After a family dinner celebrating her twentieth birthday, my mother had this to say about her uncle: “Of course Willard had to intrude—greedy, sat and waited—enormous appetite.” His coarseness annoyed her, all the more because he was her kin and all of Colorado Springs knew it.
Walter and Lula’s marital arrangement—his philandering and her refusal to play the good wife—was something of a class marker as well, more typical of wealthy cosmopolitans than Rotary Club members and their wives. Taking a mistress may have originally been about disproving his averageness, but Walter’s inability to end the affair may suggest he was genuinely in love with both Lula and Eva. However, it’s worth considering some pragmatic reasons for his prevarication. Throughout this period there existed what were known as “heart balm” laws, whereby a woman could sue for breach of promise a man who had reneged on his promise to marry her.66 Perhaps Eva threatened him with such a suit, although she likely would not have succeeded given that she knew Walter was married. It’s also possible that Eva, who rose from the association’s stenographer to become its secretary-treasurer, threatened to expose his dodgy business practices. As for Lula, their home was in her name, and had she filed for divorce she would have sought substantial alimony. Divorce would have opened up Walter’s bank accounts and financial records to scrutiny. He may have figured that anything short of chronic equivocation would have revealed the state of his finances. Unwilling or unable to commit to one woman, Walter saw only one remedy for his emotional shortfalls: spending his way into their hearts.