Shortfall by Alice Echols: A Hidden History of American Banking
You know George Bailey, right? Jimmy Stewart in It’s a Wonderful Life. The small-town banker who gives away his honeymoon money to save his neighbors from financial ruin. The guy who runs a building and loan association and is basically the most decent person alive.
Great movie. Heartwarming stuff.
But here’s the thing. The real world of building and loans looked nothing like Bedford Falls.
What Even Is a Building and Loan?
Before there were savings and loan associations, before the modern mortgage industry existed, there were building and loans. They started as community cooperatives after the Civil War. The idea was simple: regular people pool their money together, and the group lends to members so they can buy homes.
They were called “poor men’s banks.” And for a while, they actually worked that way.
But by the early 1900s, the model changed. Sharp businessmen saw an opportunity. They turned cooperative nonprofits into for-profit corporations. They promised high interest rates on deposits. They made risky loans. And they ran these things like personal piggy banks.
When the Great Depression hit, the whole system collapsed.
Why This Book Matters
Shortfall by Alice Echols tells the story of one of these building and loan men. His name was Walter Clyde Davis. He ran the biggest B&L in central Colorado. He had 3,600 depositors, a luxury car, a house in a fancy neighborhood, and a mistress.
And here’s where it gets personal. Walter Davis was Alice Echols’s grandfather.
She didn’t even know about him growing up. Her family scrubbed his existence so thoroughly that she had no idea she had this whole hidden history until a dinnertime conversation went sideways and her dad let the truth slip.
What she found when she started digging was bigger than one family scandal. The building and loan industry’s collapse during the Depression was massive, widespread, and largely forgotten. In Colorado alone, 60 percent of all B&Ls closed. In Colorado Springs, where Davis operated, all four associations failed. Between five and six thousand depositors lost their money in a city with only ten thousand households.
And nobody really talks about it.
What This Series Covers
I’m going to walk through the whole book, chapter by chapter. Here’s what to expect:
- Prologue: Captain Nothing - The George Bailey vs. Walter Davis contrast, and how Echols discovered the scandal
- Chapter 1: Advertisements for Himself - Walter Davis arrives in Colorado Springs
- Chapter 2: The Loan Man - How Davis built his empire
- Chapter 3: Racketeers and Suckers - The shady side of the B&L industry
- Chapter 4: Slipping Through Your Fingers - When things start falling apart
- Chapter 5: Sowing Grief - The fallout for depositors
- Chapter 6: The Port of Missing Men - Davis goes on the run
- Chapter 7: Orphans in the Storm - What happened to the families left behind
- Epilogue - Where it all ended up
- Series Closing - Final thoughts
Book Details
- Title: Shortfall: Family Secrets, Financial Collapse, and a Hidden History of American Banking
- Author: Alice Echols
- Publisher: The New Press, 2017
- ISBN: 978-1-62097-304-2
This is a story about money, trust, and what happens when the people you believe are looking out for you are actually looking out for themselves. It’s about the American dream of homeownership and how it can become a trap. And it’s about how we choose to forget the parts of our financial history that make us uncomfortable.
Let’s get into it.
Next: Captain Nothing - The Real Story Behind It’s a Wonderful Life