In 1932, during the worst of the Great Depression, Colorado Springs had its very own financial collapse. It all began Dec. 29, 1931, when Willis V. Sims, president of Assurance Savings and Loan, committed suicide at the back of his bank.
Sims was born in Kansas and moved with his family to Colorado Springs in 1897 when he was just 1 year old.
A man on the rise, Sims graduated from high school in Colorado Springs and then from a local business college. He worked in the advertising department of The Gazette for two years and was then appointed to a clerk position in the Colorado Legislature. In 1911, he partnered with his brother, Robert, to form a credit reporting company.
In 1916, Sims won political office as a Republican representing El Paso County in the state Legislature. At the end of his first and only term, he purchased the controlling interest of the Assurance Savings and Loan Association (with $200,000 in deposits), becoming its secretary and treasurer. In early 1918, he became president.
By July, he was also a director of The State Savings Bank of Colorado Springs.
Sims was active in civic affairs, attended the Episcopal Church and was a member of every lodge and fraternal order in the area.
Local newspapers were reticent on the reason for Sims’ suicide, but The Denver Post immediately reported that Sims was troubled by the state of his personal finances.
On New Year’s Eve, the state bank commissioner announced that Sims’ suicide had so eroded public confidence in his bank that liquidation was the only reasonable option.
Six months after Sims’ death, The Gazette finally reported that Sims had caused a $23,158 loss to The State Savings Bank of Colorado Springs and was personally overdrawn on his own banking account by $34.
When Sims took his life, Assurance Savings and Loan was one of several building and loan associations in Colorado Springs. Others were Dollar B&L (run by Edward Sharer and marketed as being “as solid as Pikes Peak”), City Savings B&L (run by Walter Davis) and Home B&L (run by Fred Bentall). The associations served working class people, while the wealthy kept their money in “real” banks.
Readers were shocked when The Denver Post reported on Sunday, May 8, 1932, that another financial scandal would erupt in Colorado Springs the following day. The front page headline read: “State impounds cash of Springs man’s company.”
According to The Denver Post, business at Dollar B&L had not been conducted in accordance with state law. Eli Gross, state commissioner of building and loan associations, would declare the Dollar B&L insolvent the next day.
Further, The Denver Post reported that Edward Sharer, Dollar’s president, had been given a deadline three weeks earlier: post a $3,000 bond or go to jail on fraud charges. Instead, Sharer fled Colorado Springs for Raton, NM.
While readers of The Gazette were treated to a sanitized version of Dollar’s problems, The Denver Post’s front page article reported that a just-completed audit had turned up numerous irregularities. The audit alleged that proper credits and debits were not entered in the company’s books, the association’s assets were impaired by $140,000 and Dollar appeared to have no legal officers, directors or any records showing who owned company stock.
From Raton, Sharer sent Commissioner Gross a letter resigning as president of Dollar B&L.
Like Sims, Sharer was a pillar of the community – prominent in lodges, civic clubs, Republican politics, the chamber of commerce and church affairs.
Sharer got his start working as a private secretary for Cripple Creek millionaire, J.R. McKinney. Through his association with McKinney, he became involved in a number of mining, land and sugar beet deals, some of them with Colorado’s soon to be governor, Oliver Shoup.
Those “in the know” knew that Dollar had been insolvent for four years.
Instead of accusing Sharer of embezzlement or even cowardice, Colorado Springs papers presented Sharer as the victim of a five-year-old shortfall that left Dollar undercapitalized, leaving him no alternative other than paying 7 percent interest on deposits (compared with the 4 percent paid to depositors at Sims’ B&L). Eventually, Sharer used deposits to “pay” interest – a classic Ponzi scheme.
The second failure of a B&L in six months caused desperate depositors to withdraw their money – or at least try – from the remaining two B&Ls.
On June 21, the Colorado Springs Evening Telegraph ran a front page story with a headline declaring that City B&L had been placed in receivership.
One fifth of the city’s residents had their money in City B&L, run by Walter Davis (who was now missing), brother of Roy Davis, a Republican state senator.
With 6,000 depositors, City B&L was the biggest in central Colorado and reputed to have $2 million in deposits and a half-million in government bonds.
The authorities expected to find a fortune when they opened up Davis’ personal safety deposit boxes. Instead, they found $3,700 in Liberty bonds.
With this discovery, The Gazette ran a banner headline: Walter Davis and $1,000 are missing.
There was one ray of hope, The Gazette reported. For more than two decades, Davis had been amassing life insurance. By 1930, he had purchased so many policies that a Denver paper named him the second most insured man in Colorado.
From his undisclosed location, Davis directed his lawyer to make City B&L the beneficiary of $440,000 worth of his life insurance policies, reserving $100,000 in benefits for his wife.
While Davis remained missing, Fred Bentall, who headed up Home B&L, and Sharer were arrested.
Bentall, 51, was charged with embezzlement. He immediately confessed and pleaded guilty. When Home B&L’s records were examined, they were found to be notes on slips of paper that Bentall kept in the pigeon holes of his desk.
In court, Bentall apologized but insisted his embezzlement was unintentional. He was sentenced to 16 to 35 years in state prison.
Sharer maintained his innocence and claimed he was just a hired man of Walter Davis, whom Sharer characterized as “the power behind the throne;” and, in fact, the true owner of all the failed B&Ls.
Walter Davis was arrested in New York City in October 1932, by two detectives who recognized his picture from a True Detective Mysteries magazine. He was allowed to wear his necktie into his cell, and he used it to hang himself that night.
After Davis’ death, it was learned he had a mistress with a $350 month allowance and he and his wife had been living in luxury in the Waldorf Astoria Hotel for the past three months.
More than a year after his arrest, Sharer was still in the county jail, using appeal after appeal to keep out of state prison. One Colorado Supreme Court justice always voted in his favor, and there is no record indicating he ever served prison time.
By 1937, Sharer had moved to Los Angeles, where his name appeared in a city directory. An obituary notice indicated he died there.
Note: This article is based on a presentation by Alice Echols, granddaughter of Walter Davis, at the Pikes Peak Regional History Symposium held at the East Library in June. She has spent 10 years researching the story of the financial crisis.