Laura Wilkerson

Laura Wilkerson
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Salon.com
OCTOBER 14, 2011 12:26PM

The Legacy of the Stevens Hotel, Chicago

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            When Jake Lingle was murdered in 1930 he had been living in a suite of rooms at the Stevens Hotel which had opened to great fanfare just three years before.
            The Stevens was to be the crowning achievement of James W. “JW” Stevens. Stevens had been born in the coal mining town of Colchester, Illinois. He became a merchant there and in 1886 he moved to Chicago where he founded the Illinois Life insurance company with his elder son, Raymond. The insurance company was a success, eventually growing to include 80,000 policy holders, and in 1909 JW purchased the newly built LaSalle Hotel on the corner of LaSalle and Madison Streets, installing his younger son, Ernest, as the manager.
Under Ernest’s management the LaSalle became a huge success as well. So impressed by the performance of the LaSalle, and with the city of Chicago, that in 1925, against the objections of his son Raymond, JW formed the Stevens Hotel Company with the goal of constructing a magnificent, world-class, hotel.
JW predicted that such a hotel would clear $2.8 million a year in profit. To finance construction the Stevens Hotel Company began to sell bonds including $350,000 worth to close relatives and nearly $3 million to Illinois Life, to raise the estimated $30 million it took to build the place. On March 16th, 1926, the cornerstone of the Stevens Hotel, containing a Chicago Tribune editorial praising the venture, was laid at what was then 7th Street and Michigan Avenue. The Hotel would overlook Grant Park, the Field Museum of Natural History and Lake Michigan. In 1920, the Shedd Aquarium and the Adler Planetarium was added to the vista.
The Stevens Hotel opened May 2, 1927 with a gala featuring three thousand of the crème de la crème of Chicago Society. On May 4th, their reputation was further burnished when the Motion Picture Association Ball was held in the Hotel’s ballroom attracting 3,000 Hollywood luminaries including Victor McLaglen, Cecil B. DeMille and native Chicago fan favorite, Milton Sills, hot off his role in The Sea Tiger. The first guest to register was the Vice President of the United States, Charles G. Dawes. It’s second guest was the President of Cuba, Gerardo Machado.
The Stevens Hotel was the largest in the world, containing 3,000 guest rooms with a private bathroom attached to each one. It was hailed in the pres as a “New Versailles.” Besides the ballroom, it had convention centers, restaurants, shops, a hospital and pharmacy, a miniature golf course on the roof called the High-Ho Club, a bowling alley, a movie theater, barber shop and a special room just for pets. Their in-house ice cream parlor could produce one hundred and twenty gallons an hour. The Stevens Hotel was built according to the most modern, scientific, standards of hotel management as formulated by Ellsworth Statler and Company but JW Stevens couldn’t have picked a worse time to open a luxury hotel.
“There was crash after crash that we had not anticipated. No one did,” said a shell-shocked JW, echoing some of our dimmer and more gullible economic commentators of today.
The first two years the Stevens Hotel lost money. Lots of money. It lost a cool million in 1928 and another half a million in 1929. Believing prosperity was just around the corner, JW pledged over a half a million dollars of his own funds to shore up the Hotel and Ernest, who was drawing a salary of $72,000 a year for managing the Hotel, bought $39,000 worth of bonds. Still lacking the liquidity to operate the Hotel, JW and Ernest began borrowing from Illinois Life to the tune of several hundred thousand dollars. This kept them afloat until February of 1932 when father and son borrowed against Illinois Life’s dwindling reserves, this time in the form of $600,000 in Liberty Bonds. In all, Illinois Life had $13 million tied up in the Stevens Hotel.
As it turned out, prosperity was many miles away. Between February and June of 1932, fifty-three banks failed in Chicago alone. An encampment of the homeless and unemployed sprang up in Grant Park, spoiling the view. That summer a local dairy sued the Stevens Hotel alleging they were owed $8,000 by the Company. The Stevens family filed bankruptcy and Illinois Life collapsed shortly afterwards.    
In January of 1933, a Cook County Grand Jury indicted JW and Ernest on charges that they had misappropriated funds from Illinois Life for their personal use. It had looked bad to the Jury when it came out that Ernest had recently acquired passports as another famous Chicago entrepreneur, Samuel Insull, founder of GE, had recently fled to Greece just ahead of similar charges only to be found innocent when extradited back to the USA in 1934.
Illinois Life, and its’ policy holders, were rescued by a company out of Des Moines, Iowa who stepped in to re-insure those affected. This same company bought the LaSalle Hotel from receivership for $337,000. The LaSalle operated until 1976 when it was torn down to make room for a pair of office towers.
The Stevens Hotel actually made money after going into receivership thanks to the World Fair of 1933, The Century of Progress Exposition, held along Chicago’s lakefront. After that it struggled along until 1942 when the United States Army purchased it for $6 million to use as a barracks and classroom, utilizing the grand ballroom as a mess hall. Over 10,000 air cadets made use of the Hotel until January, 1944 when the US government sold it for $4.9 million to a former bricklayer turned businessman who demonstrated his business acumen by turning around and selling the property the next year to Conrad Hilton who renamed the Stevens Hotel the Conrad Hilton in 1951. The miniature golf course was long gone, the high winds of Chicago had made it really impractical, but Conrad Hilton had an ice stage installed in the Boulevard Room Supper Club and used the Hollywood connections he made through his wife Zsa Zsa Gabor to entice a endless string of A Listers to the Conrad Hilton.
In 1962, the three story Hilton Center was added and in 1968 the violence that accompanied the Democratic Convention played itself out right outside its doors. In 1984 the structure underwent a $184 million facelift that consolidated the 3,000 rooms to 1,544 larger rooms, though the grand two-story entrance with the staircases flanking each side was kept, and renamed the Chicago Hilton and Towers. In 1998 the Chicago Hilton and Towers was rebranded to simply Hilton Chicago.  Today the most expensive suite at the Hilton Chicago, the Conrad Hilton, rents for $7,000 a night which includes a lakefront view and access to a baby grand piano and a billiards table in the rooms.    
            In March, 1933 the seventy-nine year old James W, Stevens suffered a devastating stroke that left him incapacitated until he died three years later. The receivers for Illinois Life sued James’s eldest son, Raymond, for $200,000. Raymond tried to work out a deal where he would give his 24-acre estate in Highland Park, The Meadows, to the Receivers in exchange for forgiveness of his debt. They refused and on March 23, 1933, Raymond Stevens retreated to his library at the Meadows and ended his life at age fifty-nine with a .38 caliber bullet to the head.
            That left Ernest Stevens to stand trial on his own.
            Ernest’s trial opened September 25, 1933 and on October 14, 1933, after deliberating for five hours, the jury found him guilty of embezzling $1.3 million from Illinois Life and a month later he was sentenced to ten years in prison by Judge Michael Feinberg.
            “A terrible injustice has been done to me,” Ernest declared before the Court after his sentence had been read.
            The Illinois State Supreme Court agreed with Ernest. The next rear they ruled that Ernest had been improperly convicted because to be found guilty of embezzlement Ernest would have had to have acted without the company’s knowledge but Ernest, his father and his brother were the company and they knew of the transactions.
            Now without the threat of a prison sentence hanging over his head Ernest Stevens was a free man. Though financially ruined, he managed to hold on to the Hyde Park home he shared with his wife Elizabeth, a high school English teacher, and their children. Ernest soon went to work as the manager of the Sherry Hotel located near the University of Chicago.
            Ernest and Elizabeth were the parents of three sons, all of whom managed to attend college through the GI Bill. Son Ernest S. Stevens became an expert on municipal finance and moved to Florida where he was elected to the Fort Myers City Council. Sons Richard and Bill both graduated from law school and became successful attorneys. Then there was the youngest son, John Paul Stevens, who was only seven years old when the Stevens Hotel opened and who, along with two of his brothers, modeled bronze statues that stood in its lobby.
            As a child John Paul Stevens had met many celebrities through the Stevens Hotel. Charles Lindbergh, who was feted at the Hotel after his headline capturing trans-Atlantic flight, had given the boy a caged dove in a as a present. John Paul graduated from the private University of Chicago Laboratory School and then earned a BA in English from the University of Chicago.
            His work towards a Master’s Degree in English was interrupted when he joined the Navy one day before Pearl Harbor was bombed. He served in the Pacific Theater as an intelligence officer, earning a Bronze Star for his efforts as part of the code breaking team that led to the 1943 downing of the airplane that carried the man responsible for planning the attack on Pearl Harbor, Japanese Admiral Isokuru Yamomoto.
            After the war, John Paul’s brother, Richard, persuaded him to abandon English and pursue a law degree instead. John Paul took his brother’s advice, graduating magna cum laude from Northwestern School of Law, earning the highest GPA in that school’s history. After graduation, John Paul Stevens clerked for Supreme Court Justice Wiley Rutledge during the 1947-48 term. He worked for a while for a Chicago law firm before moving to Washington, DC in 1951 to serve as Associate Counsel for the Judiciary Committee on the Subcommittee investigating monopolies, particularly in Major League Baseball.      
            In 1952 he returned to Chicago where he formed a firm with two other attorneys and where he began specializing in anti-trust law. In 1969 John Paul Stevens was appointed counsel to the Illinois Supreme Court charged with investigating allegations of corruption within the Illinois court system, doing his job so that in 1969 President Richard M. Nixon appointed him to 7th Circuit Court of Appeals and in 1975 Nixon’s successor, Gerald Ford, Appointed John Paul Stevens to the United States Supreme Court where he would serve 36 ½ years before retiring from the Bench in April of 2010.
            Although Justice Stevens was considered a Moderate Conservative when first appoint to the Supreme Court, by the time he retired he was ranged as the Court’s most Liberal member, highlighting the radical turn the Supreme Court has taken since the days of the Warren Court. His brother Bill credits Justice Steven’s judicial temperament to their father’s oft-repeated childhood advice that they strive, “to always try to brighten our own little corner.”    

Colchester, Illinois. He became a merchant there and in 1886 he moved to Chicago where he founded the Illinois Life insurance company with his elder son, Raymond. The insurance company was a success, eventually growing to include 80,000 policy holders, and in 1909 JW purchased the newly built LaSalle Hotel on the corner of LaSalle and Madison Streets, installing his younger son, Ernest, as the manager.

Under Ernest’s management the LaSalle became a huge success as well. So impressed by the performance of the LaSalle, and with the city of Chicago, that in 1925, against the objections of his son Raymond, JW formed the Stevens Hotel Company with the goal of constructing a magnificent, world-class, hotel.
JW predicted that such a hotel would clear $2.8 million a year in profit. To finance construction the Stevens Hotel Company began to sell bonds including $350,000 worth to close relatives and nearly $3 million to Illinois Life, to raise the estimated $30 million it took to build the place. On March 16th, 1926, the cornerstone of the Stevens Hotel, containing a Chicago Tribune editorial praising the venture, was laid at what was then 7th Street and Michigan Avenue. The Hotel would overlook Grant Park, the Field Museum of Natural History and Lake Michigan. In 1920, the Shedd Aquarium and the Adler Planetarium was added to the vista.
The Stevens Hotel opened May 2, 1927 with a gala featuring three thousand of the crème de la crème of Chicago Society. On May 4th, their reputation was further burnished when the Motion Picture Association Ball was held in the Hotel’s ballroom attracting 3,000 Hollywood luminaries including Victor McLaglen, Cecil B. DeMille and native Chicago fan favorite, Milton Sills, hot off his role in The Sea Tiger. The first guest to register was the Vice President of the United States, Charles G. Dawes. It’s second guest was the President of Cuba, Gerardo Machado.
The Stevens Hotel was the largest in the world, containing 3,000 guest rooms with a private bathroom attached to each one. It was hailed in the pres as a “New Versailles.” Besides the ballroom, it had convention centers, restaurants, shops, a hospital and pharmacy, a miniature golf course on the roof called the High-Ho Club, a bowling alley, a movie theater, barber shop and a special room just for pets. Their in-house ice cream parlor could produce one hundred and twenty gallons an hour. The Stevens Hotel was built according to the most modern, scientific, standards of hotel management as formulated by Ellsworth Statler and Company but JW Stevens couldn’t have picked a worse time to open a luxury hotel.
“There was crash after crash that we had not anticipated. No one did,” said a shell-shocked JW, echoing some of our dimmer and more gullible economic commentators of today.
The first two years the Stevens Hotel lost money. Lots of money. It lost a cool million in 1928 and another half a million in 1929. Believing prosperity was just around the corner, JW pledged over a half a million dollars of his own funds to shore up the Hotel and Ernest, who was drawing a salary of $72,000 a year for managing the Hotel, bought $39,000 worth of bonds. Still lacking the liquidity to operate the Hotel, JW and Ernest began borrowing from Illinois Life to the tune of several hundred thousand dollars. This kept them afloat until February of 1932 when father and son borrowed against Illinois Life’s dwindling reserves, this time in the form of $600,000 in Liberty Bonds. In all, Illinois Life had $13 million tied up in the Stevens Hotel.
As it turned out, prosperity was many miles away. Between February and June of 1932, fifty-three banks failed in Chicago alone. An encampment of the homeless and unemployed sprang up in Grant Park, spoiling the view. That summer a local dairy sued the Stevens Hotel alleging they were owed $8,000 by the Company. The Stevens family filed bankruptcy and Illinois Life collapsed shortly afterwards.    
In January of 1933, a Cook County Grand Jury indicted JW and Ernest on charges that they had misappropriated funds from Illinois Life for their personal use. It had looked bad to the Jury when it came out that Ernest had recently acquired passports as another famous Chicago entrepreneur, Samuel Insull, founder of GE, had recently fled to Greece just ahead of similar charges only to be found innocent when extradited back to the USA in 1934.
Illinois Life, and its’ policy holders, were rescued by a company out of Des Moines, Iowa who stepped in to re-insure those affected. This same company bought the LaSalle Hotel from receivership for $337,000. The LaSalle operated until 1976 when it was torn down to make room for a pair of office towers.
The Stevens Hotel actually made money after going into receivership thanks to the World Fair of 1933, The Century of Progress Exposition, held along Chicago’s lakefront. After that it struggled along until 1942 when the United States Army purchased it for $6 million to use as a barracks and classroom, utilizing the grand ballroom as a mess hall. Over 10,000 air cadets made use of the Hotel until January, 1944 when the US government sold it for $4.9 million to a former bricklayer turned businessman who demonstrated his business acumen by turning around and selling the property the next year to Conrad Hilton who renamed the Stevens Hotel the Conrad Hilton in 1951. The miniature golf course was long gone, the high winds of Chicago had made it really impractical, but Conrad Hilton had an ice stage installed in the Boulevard Room Supper Club and used the Hollywood connections he made through his wife Zsa Zsa Gabor to entice a endless string of A Listers to the Conrad Hilton.
In 1962, the three story Hilton Center was added and in 1968 the violence that accompanied the Democratic Convention played itself out right outside its doors. In 1984 the structure underwent a $184 million facelift that consolidated the 3,000 rooms to 1,544 larger rooms, though the grand two-story entrance with the staircases flanking each side was kept, and renamed the Chicago Hilton and Towers. In 1998 the Chicago Hilton and Towers was rebranded to simply Hilton Chicago.  Today the most expensive suite at the Hilton Chicago, the Conrad Hilton, rents for $7,000 a night which includes a lakefront view and access to a baby grand piano and a billiards table in the rooms.    
            In March, 1933 the seventy-nine year old James W, Stevens suffered a devastating stroke that left him incapacitated until he died three years later. The receivers for Illinois Life sued James’s eldest son, Raymond, for $200,000. Raymond tried to work out a deal where he would give his 24-acre estate in Highland Park, The Meadows, to the Receivers in exchange for forgiveness of his debt. They refused and on March 23, 1933, Raymond Stevens retreated to his library at the Meadows and ended his life at age fifty-nine with a .38 caliber bullet to the head.
            That left Ernest Stevens to stand trial on his own.
            Ernest’s trial opened September 25, 1933 and on October 14, 1933, after deliberating for five hours, the jury found him guilty of embezzling $1.3 million from Illinois Life and a month later he was sentenced to ten years in prison by Judge Michael Feinberg.
            “A terrible injustice has been done to me,” Ernest declared before the Court after his sentence had been read.
            The Illinois State Supreme Court agreed with Ernest. The next rear they ruled that Ernest had been improperly convicted because to be found guilty of embezzlement Ernest would have had to have acted without the company’s knowledge but Ernest, his father and his brother were the company and they knew of the transactions.
            Now without the threat of a prison sentence hanging over his head Ernest Stevens was a free man. Though financially ruined, he managed to hold on to the Hyde Park home he shared with his wife Elizabeth, a high school English teacher, and their children. Ernest soon went to work as the manager of the Sherry Hotel located near the University of Chicago.
            Ernest and Elizabeth were the parents of three sons, all of whom managed to attend college through the GI Bill. Son Ernest S. Stevens became an expert on municipal finance and moved to Florida where he was elected to the Fort Myers City Council. Sons Richard and Bill both graduated from law school and became successful attorneys. Then there was the youngest son, John Paul Stevens, who was only seven years old when the Stevens Hotel opened and who, along with two of his brothers, modeled bronze statues that stood in its lobby.
            As a child John Paul Stevens had met many celebrities through the Stevens Hotel. Charles Lindbergh, who was feted at the Hotel after his headline capturing trans-Atlantic flight, had given the boy a caged dove in a as a present. John Paul graduated from the private University of Chicago Laboratory School and then earned a BA in English from the University of Chicago.
            His work towards a Master’s Degree in English was interrupted when he joined the Navy one day before Pearl Harbor was bombed. He served in the Pacific Theater as an intelligence officer, earning a Bronze Star for his efforts as part of the code breaking team that led to the 1943 downing of the airplane that carried the man responsible for planning the attack on Pearl Harbor, Japanese Admiral Isokuru Yamomoto.
            After the war, John Paul’s brother, Richard, persuaded him to abandon English and pursue a law degree instead. John Paul took his brother’s advice, graduating magna cum laude from Northwestern School of Law, earning the highest GPA in that school’s history. After graduation, John Paul Stevens clerked for Supreme Court Justice Wiley Rutledge during the 1947-48 term. He worked for a while for a Chicago law firm before moving to Washington, DC in 1951 to serve as Associate Counsel for the Judiciary Committee on the Subcommittee investigating monopolies, particularly in Major League Baseball.      
            In 1952 he returned to Chicago where he formed a firm with two other attorneys and where he began specializing in anti-trust law. In 1969 John Paul Stevens was appointed counsel to the Illinois Supreme Court charged with investigating allegations of corruption within the Illinois court system, doing his job so that in 1969 President Richard M. Nixon appointed him to 7th Circuit Court of Appeals and in 1975 Nixon’s successor, Gerald Ford, Appointed John Paul Stevens to the United States Supreme Court where he would serve 36 ½ years before retiring from the Bench in April of 2010.
            Although Justice Stevens was considered a Moderate Conservative when first appoint to the Supreme Court, by the time he retired he was ranged as the Court’s most Liberal member, highlighting the radical turn the Supreme Court has taken since the days of the Warren Court. His brother Bill credits Justice Steven’s judicial temperament to their father’s oft-repeated childhood advice that they strive, “to always try to brighten our own little corner.”    

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Very interesting piece of history. Thanks for the nice read.