(page 2 of 3)
Photography: courtesy of Hilton Chicago.
The Stevens family presides over the hotel’s grand opening
The Stevens opened on May 2, 1927. That night, 3,000 guests drawn from the Supper strata of Chicago society dined and danced to the strains of the Stevens Hotel orchestra. Two days later, some 3,000 Hollywood personalities, including Cecil B. DeMille and Victor McLaglen, attended the Motion Picture Association Ball in the hotel’s ballroom. Star-struck flappers nearly rioted when they caught sight of the Chicago-born leading man Milton Sills. On August 13th, the City of Chicago hosted a dinner at the Stevens in honor of Lindbergh. Seven-year-old John got to shake the Lone Eagle’s hand-and to take home a pet dove, “Lindy,” presented to the family by the aviator.
Though almost fully booked at first, the hotel operated in the red, losing $1 million in 1928 and another half million in 1929. This was, perhaps, predictable for a hotel start-up, and there was enough cash flow to cover interest on the bonds. But the highly leveraged, high-maintenance behemoth was vulnerable to the business cycle-not to mention the Great Depression, which began in October 1929 and eventually drove 81 percent of the hotels in the United States into bankruptcy.
Soon beds at the Stevens lay unoccupied, and a hush fell over the ballrooms. But J. W. and Ernest refused to let their baby die. In 1931, J. W. loaned the hotel $522,000 of his own money, and Ernest paid $39,000 in cash for more hotel bonds. Finally, J. W. and his sons turned to Illinois Life, the family insurance company, which had 80,000 policyholders. The Stevenses authorized hundreds of thousands of dollars in loans from the company to the hotel, secured only by the hotel’s increasingly dubious paper assets. This covered interest payments through January 1932, when the insurance company loaned the hotel its last reserves: $600,000 in World War I Liberty Bonds.
But the economy only worsened. Between February and May 1932, 13 banks failed in Chicago; in June, 40 more collapsed. The whole city was running out of cash. Across Michigan Avenue from the Stevens, the homeless unemployed camped out in Grant Park. That summer, a local dairy asked a court to order the LaSalle and the Stevens into receivership, claiming that the two hotels owed it $8,000 in unpaid bills. Instead, the family filed for receivership itself. Illinois Life crashed soon thereafter. When federal agents and a court-appointed administrator inspected J. W.’s books, they found that the insurance company had $13 million tied up in the distressed hotels.
Photography: courtesy of Hilton Chicago.
|Ernest’s son James enchants four young socialites in 1929|
On January 31, 1933, a Cook County grand jury indicted J. W., Raymond, and Ernest for allegedly illegally looting Illinois Life. State’s Attorney Thomas B. Courtney sought the indictments when he learned that Ernest had acquired passports for himself and his family. Perhaps Courtney thought Ernest was planning to imitate Samuel Insull, the much-reviled utilities magnate who had decamped to Greece after his business’s collapse in 1932. Ernest later denied under oath that he had intended to flee, and today Bill Stevens says “there was no talk at home about going abroad.” But, he adds, getting passports was “a dumb thing to do.”
The family’s luck turned worse. In the early evening of February 11th, armed men invaded Ernest’s house on 58th Street, near the University of Chicago, demanding that he hand over the hidden millions they had read about in the papers. John and Bill were home at the time, and the men threatened to take the boys hostage-then left with about $1,300. Ernest moved his family into the hotel for their safety. Meanwhile, the court-appointed receiver of Illinois Life demanded $200,000 from Raymond.
J. W. lapsed into a “state of constant worry and distress,” as his wife, Alice, later told the Chicago Tribune. On March 18th, the 79-year-old patriarch suffered a massive stroke. Intermittently comatose, J. W. would never fully recover-though that didn’t stop creditors from seizing his Lincoln, his Cadillac, and his two Rolls-Royces. He died in 1936.
For Raymond, 59, the emotional stress must have been excruciating. He had been skeptical of the hotel venture. Now he faced disgrace, financial ruin, and prison after his doubts had proved valid. On a Sunday in late February, he appeared at the South Side mansion of his 76-year-old mother, Jessie Smith Stevens, who had lived there since her divorce from J. W. in 1903. Raymond wept and told her he wanted to go away and never be seen again. “I said, ‘Son, you couldn’t do a thing like that,’” Jessie Smith Stevens later told the Tribune. “But he just cried some more.”
After his father’s stroke, Raymond retreated to The Meadows, his 24-acre estate in Highland Park. He made the Illinois Life receiver a last-ditch offer: The Meadows in exchange for debt relief. On March 23rd, the receiver’s answer came: no deal. After lunch, Raymond said he was tired and went up to the library. An encyclopedia lay open to an article on ornithology, his hobby. Raymond sat in a chair before the fireplace, put a .38 caliber revolver to his temple, and pulled the trigger. His wife and son, hearing the shot, rushed to his side. It was too late. Twenty carloads of mourners, led by Ernest and Elizabeth, attended Raymond’s funeral in Highland Park. It took a truck to carry all the flowers. No one told J. W. the news for fear that it would kill him.
Jessie Smith Stevens skipped the funeral, pleading frailty. But, in the Tribune, she sounded a mordant note about her older son’s death. She had agreed with Raymond that the hotel was too risky, “but Ernie and his father were set for it,” she told the paper. “They wanted to see their name up in the sky. Well, they saw it. Now maybe they see that I was not so foolish.”
1 week ago