Shortfall

by Alice Echols

  Even if the City’s assets received an infusion of his insurance money, the authorities were still looking at a terrible wreck. Efforts to locate assets in four more of my grandfather’s safety deposit boxes yielded so little one wonders if Walter was engaged in some elaborate tease or taunt. At one bank, three of the four boxes were entirely empty, and the fourth held two silver dollars, a Grant half dollar, and a one-dollar gold coin. The City had so many depositors, many of them with multiple accounts, and they were now clamoring for their money or at least some evidence that any of it still existed. Fertig made it clear that he would not fold in the face of obstacles, and that he would not tolerate any “pussyfooting” in the case. Whatever his investigation uncovered, he promised to make it public. To prove his seriousness he asked for and obtained a court order allowing him to search all the records of the Mountain States Telephone and Telegraph Company pertaining to Walter and Lula Davis. Eventually the receiver had access to every telegram that passed between my grandparents and an accounting of at least some of their phone calls.

  In fact, the authorities had carte blanche when it came to investigating the Davises, who were not in town and had no lawyer protecting them from prosecutorial overreach. After searching the office of the City, Fertig conducted what he described as a thorough search for assets at the Davis home on June 24. There is no indication that he obtained a court order for any of these searches. What Fertig turned up at their house, whose address the newspapers always printed, were some telegrams, which turned out to be regular banking transactions, and some canceled checks, drawn by my grandfather between 1927 and 1928 for amounts ranging from $5 to $32,000. The FBI file suggests that Fertig also got his hands on some family correspondence. The only other person in the North Tejon house that Wednesday was the family’s African American housekeeper, who, when questioned by the press the previous day, had refused to give up any information about her employers. Perhaps she called Dorothy after her encounter with reporters or after Fertig departed, because later that evening my mother reportedly stopped by the house briefly.20

  With Walter on the lam, the authorities and the press might have turned their attention to the officers and employees of the City. Yet they showed no interest in the vice president of the association despite the fact that Vertal Eugene Blake, a former salesman at the local J.C. Penney store, had worked for the City for nearly a decade. The same was true of Howard Claus and Jim Fleming, but officials’ indifference to them makes more sense because Claus was a clerk and Fleming a handyman. Instead the authorities and the press focused their attention on the women in Walter Davis’s life.

  By 1932 the idea of female innocence was pretty tattered. For one, suffragists and flappers had done in the notion that women were an entirely different species who always deserved a pass. In the weeks ahead both Lula and Eva’s actions would confirm this more realistic view of women. Lula should have had the advantage over Eva of being all the way across the country, but then Lula had the disadvantage of having Roy Davis as her brother-in-law. Roy counted among his many friends the men who ran the local police force, whom he helpfully tipped off as to Lula’s whereabouts.21 They then gladly passed on Lula’s address at the Waldorf Astoria to the New York City reporters who were harassing them for information. Lula did herself no favors in her first phone interview with the press. She admitted that she was from Colorado Springs, but claimed that to the best of her knowledge her husband was not the head of the City Savings Building & Loan. Yes, he had departed for D.C., but not because he was in any financial trouble. She gave the impression she hadn’t seen him for several days, although bank records subsequently showed that she and Walter had withdrawn the contents of a safety deposit box on June 23, and in a way that had aroused that attention of one bank employee. As for Eva Terry, whose name was by this point all over the newspapers back home, Lula claimed to have never heard of her.22

  By this juncture Eva Terry must have wished that she could disappear just as Walter had. It was much too late for that, though. Eva had to have known something was amiss almost two weeks before the story of the crash broke. She was accustomed to having two checks land in her checking account each month, one on the first and another on the tenth of the month. That June, when she discovered that the second check had not been deposited, she called Walter’s office in Colorado Springs. She reached an employee who presumably told her that Walter was out of town on business. Walter, who had visited her at the hospital just days before, had shared with her neither his travel plans nor his shortfall and what it would mean for her. Nearly two weeks later, on June 23, when the Denver Post reported that the police wanted to question the thirty-one-year-old former employee of the City Savings, she understood the seriousness of her situation. When an enterprising journalist, eager to beat the police to her fashionable apartment building, knocked on Eva’s door, there was no response, just the sound of her chirping pet canary. The journalist spoke with her neighbors, who observed that Eva rarely went out except for outings in her expensive car. They also noted that Walter Davis was a frequent visitor to her apartment, but that he usually stayed at the Brown Palace hotel. As for Eva, she was hiding out at the home of a friend whose husband worked as a journalist at the Rocky Mountain News. It was this reporter who set up a meeting between Eva and the Denver police.23

  The meeting between Eva and the police did not go well. Sassy and belligerent was how the police characterized her. Eva freely admitted that Walter had showered her with gifts and had been supporting her. When a detective asked her point blank if there was another woman in Walter Davis’s life, she replied, “I suppose that would be me.” After the Denver police had quizzed Eva for more than two hours, Colorado Springs detective Irving Bruce took over. He told her to get ready for a car ride to the Springs, at which point Eva tried to summon a doctor to verify that she should not be forced to travel because of her recent abdominal surgeries. (The newspapers mentioned these surgeries more than once, perhaps because in this period they could signal something unseemly.)24 The detective was in a hurry, and in any case promised Eva that he would see to it that she was put up in a hotel, albeit one with a guard posted at her door. However, during the trip she proved so “sullen and sarcastic” and so uncooperative he decided she could do with a night in jail.25

  Eva Terry would spend more than one night at the county jail. In fact, at one point that summer Eva Terry, Ed Sharer, and Fred Bentall were all incarcerated there. Throughout, Eva maintained she knew nothing about the missing money. She acknowledged that she enjoyed a “strong friendship” with her former boss, but she also claimed that their affair had ended in 1929. Their feelings for each other had “softened,” she said. They had stopped corresponding with each other and had restricted themselves to visits, as though this was somehow less incriminating.

  From left to right, attorney for the receiver T.C. Turner, the receiver Charles T. Fertig, Eva Terry, and District Attorney John Meikle. Eva is smiling here, but she does not yet know that the police will insist on keeping her in jail, where she will spend a full week before her uncle meets the $10,000 bond required for her release. (Gazette)

  What Eva seems not to have bargained on was that for many people, including her interrogators, her complete lack of shame (her pride, even) about being the “other woman” suggested that her moral compass was disastrously misaligned. Convinced that she knew more about the business affairs of her “warm friend” than she was letting on, investigators searched her apartment for incriminating evidence. A small clock with the initials “WCD” engraved on it was all they turned up. During the weeks ahead, the authorities tried (and failed) to get the IRS to prosecute her for tax evasion on the grounds that she had not claimed as income Walter’s many gifts to her. They opened up her Denver safety deposit box and seized its contents. And they fed information to the press, including scandalous snippets from the “mass of papers” they had seized from Walter’s office and home. Readers learned, for example, that the couple had rhapsodi
zed about the house-hunting pleasures that awaited them once Walter divorced Lula.26

  The Evening Telegraph observed that as she languished behind bars, Eva had to “imagine the hum of avid comment about her as the latest details of the case are eagerly devoured.” The hum certainly got to her family. Her brother defended her as a “thrifty girl,” who he had believed was socking away money from her real estate job in Denver. Her aunt begged the press to stop playing up Eva’s affair with Walter, but her efforts to support her niece went somewhat awry when she said that Eva was living “as clean and decent a life as anyone could expect.”27

  After almost a week in jail Eva grew even more defiant and demanded her release. But it was one thing to be Ed Sharer and assume a posture of defiance. This played well in the press, which seemed to take it as proof of his innocence. By contrast, Eva’s defiance only made her seem more culpable to the reporters covering the scandal. As for the police, their response to her demand was to file formal charges against her. She and Walter were jointly charged with having conspired on June 4, 1932, to maliciously and feloniously defraud the depositors of the City. Bond was set at $10,000. Eva continued to stick to her guns, claiming she knew nothing about the money. She restated her conviction that Walter Davis was a fine man. Even if she did know his whereabouts, she made it clear that she would be keeping that information to herself.28

  Eva was still cooling her heels in the county jail on Sunday, June 26, when Lula’s train pulled into the station at nearby Falcon. Waiting for her as she disembarked were receiver Charles Fertig, police chief Hugh Harper, and Mr. and Mrs. Roy Davis. The story of her husband’s million-dollar-plus shortfall had been in the news only four days, and yet everything had changed—for the depositors, the authorities, Eva, the Davis family, and, of course, Lula. Along with thousands of newspaper readers, she now knew that her husband had deceived her yet again. She discovered that in the wake of Sims’s suicide, while she was out of town, he had spent many weekends in Denver with Eva.

  The humiliation was so awful that one wonders why she didn’t betray her husband. And now she had to contend with Roy, who assumed a stance even more insufferable than usual. Roy, who had long distrusted his older brother, knew what Walter’s shortfall meant for him. In late March, just two and a half weeks before the Sharers left the Springs, he informed the press that he had no intention of running again for the state senate. Perhaps he meant to signal his interest in running for the governorship, not his permanent exit from politics. He did hold on to newspaper clippings suggesting that the Republican Party groom him for that position.29 But now, three months later, he knew his political career was finished, and he must have worried about whether even his typewriter shop would survive. As rumors of his collusion with his brother spread, Roy did everything to dispel them, mostly by very publicly cooperating with the authorities. Lula shared her husband’s view of Roy—that he was a pompous, self-regarding know-it-all. Years later, it took Roy well over a month of visiting Lula in the hospital when she was close to death to talk about anything other than himself. “I guess Roy realizes I’m sick at last” was how Lula put it to my mother the day before she died.

  That afternoon as they drove to Colorado Springs, Roy pushed Lula to tell the truth about her husband. What came out instead were uncontrollable sobs and unstoppable tears. When she did take a stab at answering questions, she was hopelessly, frustratingly, and worryingly vague. After three to four hours of fairly unproductive questioning at Roy’s house, the authorities decided that being in her own home might have a calming influence upon Lula. But as she walked into the foyer of her home the first thing that caught her eye was a large photograph of Walter, and she once again burst into “hysterical sobbing.” Finally her doctor was called in. I imagine he administered a tranquilizer. “Hysterical during police quiz” was how the newspaper characterized Lula the following day. The paper noted that Roy promised the authorities they would have the “hearty cooperation” of the entire Davis family.30

  In the days ahead Lula seems to have satisfied her interrogators that she was truly doing her best to aid them. She reportedly told Chief Harper that she thought her husband would either return to the Springs voluntarily or surrender to authorities, wherever he might be. “She cannot believe,” declared Harper, “that he would desert his wife and daughter and his business.” Believing that Lula was cooperating, the authorities began to roll back their original story. They now claimed that there was no evidence that Walter Davis had deposited $70,000 in his wife’s account. As for the mountain of Liberty Bonds he was supposed to have made off with, they now doubted that, too. They reasoned that he would have needed to cash in the bonds periodically to meet his extraordinary personal expenses. They also revealed that it had been two or three years since the association had reported any interest on its bonds. And soon it came out that no one had actually seen the Liberty Bonds, just the records that had been submitted, which included the numbers of the bonds.

  Within just a few days the authorities’ efforts to reverse themselves took on a new urgency when the police determined that the plot to kidnap Dorothy Davis was a serious one. My mother had already gone into hiding once out of fear she might be kidnapped, but this was a week later. Kidnapping in America had become sufficiently common that just that March the Gazette had called it a “vicious racket.” The 1930s witnessed an epidemic of “ransom kidnapping” of wealthy businessmen or their relatives, often by crime gangs. This sort of extortion-for-profit scheme characterized the recent kidnapping and murder of the Lindbergh baby, whose body had been discovered in mid-May 1932. Many Coloradans also knew about the recent near kidnapping of “millionaire capitalist” Verner Z. Reed Jr., the grown son of the onetime mining magnate. Of course, the effort to kidnap my mother was not a ransom kidnapping per se, but the police took the threat seriously. By June 30 there was a twenty-four-hour police detail on the Davises’ home. The police also did a strategic about-face on the “Davis women,” declaring them practically destitute. Harper emphasized that kidnapping Dorothy Davis would accomplish nothing if the looted money had been spent, which he said he now believed to be the case. Irrespective of what Harper put out to the press, “rabid talk” about the Davis family continued unabated.31

  Depositors figured that kidnapping his daughter was a surefire way of forcing Walter Davis back to Colorado Springs. Had they succeeded, he might well have returned. But as things now stood it was all but certain that he would remain a fugitive, no matter what his wife told the police. Why would Walter, a man who insisted on his own innocence, return to a place where sentiment ran in favor of throwing him in jail or worse? Judging from one letter to Lula later seized by the authorities, he believed that the townspeople of Colorado Springs had lost their bearings, perhaps even gone mad. As long as his daughter’s life wasn’t on the line he was staying away until someone else’s lawyer had proven in a court of law that most, if not all, of the charges leveled against building and loan heads were invalid. I suspect that this is what he at first imagined would happen. That conviction then turned to hope, which grew wobblier over time. One depositor expressed the feelings of many when he proclaimed that “fire or flood, tornado or earthquake” would have been less awful than what Walter Davis had done to the people of Colorado Springs.32

  The press in the Springs and in Denver grew relentless in their criticism of him. A prominent handwriting expert maintained that his signature revealed a man who was a “bold, eccentric swindler.”33 A Sunday feature article on him claimed he had a “money complex.” As evidence it cited the observations of people who had spied him alone in his office. There, with piles of bills on the table in front of him, he could be seen lifting the big bills and kissing them.34 As if all of this wasn’t bad enough, the press declared that his womanizing was so out of control he was a “polygamist.”35

  Critical to the hardening of public opinion against Walter were the depositors themselves, who wasted no time in getting organized. Between five thous
and and six thousand residents were depositors in the town’s four B&Ls. On July 1, only a little more than a week after news of the City’s failure hit the headlines, two thousand of them showed up at a mass meeting to vent their anger about the looting of their B&Ls and the inadequacy of the official response to it. By meeting’s end the group was calling itself the Depositors’ Committee. They chose J. Herbert Pratt of Common Sense Weekly as the group’s chair and Judge John E. Little as its attorney. The group immediately called for the arrest of state B&L commissioner Eli Gross, and threatened to go after district attorney John Meikle if he failed to file charges against Gross.36

  Within weeks the Depositors’ Committee filed a petition in district court demanding that B&L commissioner Gross be charged with conspiracy to defraud. Gross, a onetime official of the cigar makers union in Arkansas, had remained active in union politics after moving to Denver. A Democrat, he was appointed by Democratic governor Billy Adams to serve as a state factory inspector, a civil service position typically used as a form of political patronage. Gross had served on the state commission investigating the 1914 Ludlow massacre, and his pro-union stance likely made him a target of the Republican establishment. Moreover, Gross, whom the Denver Post derided as a “cigar maker,” was not well qualified for the job.37 Several years earlier he had held the position of deputy inspector of B&Ls; however, the new position of commissioner required passing an exam, which he had failed.