Shortfall: Family Secrets, Financial Collapse, and a Hidden History of American Banking

Bankruptcy and fraud run through the ostensibly wholesome business culture of small-town America in this intimate study of a Depression-era building-and-loan failure. Echols (Hot Stuff), professor of history at the University of Southern California, recounts the 1932 bankruptcy of the City Savings Building and Loan Association of Colorado Springs, Colo., a thrift run by her grandfather Walter Davis. The failure wiped out thousands of depositors and sparked scandal when Davis fled and some of his victims plotted to kidnap his daughter (Echols’s mother, Dorothy) to compel his return; he hanged himself in jail after his capture. Drawing on family archives, Echols combines lucid exposition of the rickety economics of the building-and-loan industry with a rich social history of its decline from cooperative nonprofit institutions that financed working-class home buyers to laxly regulated, for-profit venues for predatory lending and Ponzi schemes. She styles Davis as a darker—in her telling, truer—version of building-and-loan icon George Bailey in It’s a Wonderful Life: not a populist hero, but a greedy social climber seeking wealth and status through reckless—then fraudulent—gambles with other people’s money, enabled by the anticollectivist ethos of his conservative community. Echols’s absorbing portrait makes Main Street the rival of Wall Street for callous corruption. Photos. (Oct.)