evolution of mortgage finance as a way to understand larger dynamics in the nation's political economy. It is another part urban history, since the extraordinary success of the savings and loan business in Los Angeles reflects the cultural and economic history of Southern California. Finally, it is a personal story, a biography of one of the nation's most successful entrepreneurs of the managed economy—Howard Fieldstad Ahmanson.
Unlike tycoons of an earlier era, Ahmanson evidenced neither inventive genius nor the ability or desire to oversee a great technological enterprise. He did not control some vast infrastructure like a railroad or an electrical utility. Nor did he build his wealth by pulling the financial levers that made possible these great corporate endeavors. Instead, he made a fortune by financing the middle-class American dream.
Perceived as a risk taker by outside observers, Ahmanson was actually extremely careful. He studied problems—in business and on the high seas—and devoted himself to limiting risk. In his initial field of endeavor, insurance, he found the safest of all markets and profited by minimizing losses. In lending, he focused exclusively on single-family homes, believing that the American dream of home ownership was so powerful that it offered the lender an extra margin of safety. In a racist era when even the federal government officially countenanced segregation, he avoided neighborhoods of color, preferring to lend to the aspiring white, middle-class home buyers that he knew and understood.27 He succeeded by sticking to the basics as he understood them: sound lending, low-cost operations, and economies of scope and scale.
In an era famous for faceless corporate control and organization men, Ahmanson evidenced numerous contradictions. He refused to sell stock in his various companies, maintaining total personal control. Yet he was also a delegator—assembling a close circle of lieutenants who managed the company's day-to-day operations according to his vision so that he could work from home and take a dip in the pool whenever he felt like it. Though he clearly wanted the limelight, he was reluctant to be inconvenienced by public attention. Despite owning the largest and most successful savings and loan in the country, he had little to do with his industry's trade associations. With his great wealth, he contributed substantially to the expansion of the cultural institutions in Los Angeles and was pleased to have galleries, theaters, and research facilities named for him and his family. But after a brief flirtation with politics in the mid-1950s, he let others manage his company's lobbying and political deal making and deemed party politics a waste of time.
Yet Ahmanson was hardly a recluse. From the 1930s on, he and Dottie appeared regularly in the society pages of the Los Angeles Times. With a drink and a cigarette in front of him, he played the piano or the organ for his fellow revelers. After he and Dottie separated in 1961, his friend Art Linkletter, the television show host, introduced him to Caroline Leonetti, a charm school entrepreneur and TV personality. Smitten by her energy, intelligence, and good looks, Ahmanson married her. Together they hosted the power elite and helped to build cultural and educational institutions that he hoped would begin a new era in the history of Los Angeles and Southern California.
On his boats and in his business, Ahmanson brooked no dead weight and demanded loyalty, integrity, intelligence, and hard work. He also was ferociously competitive. He and his crews won most of the major West Coast yachting races in the late 1950s and early 1960s. Some of his closest friends were business rivals. He could enjoy their companionship and yet take great pleasure in beating them on the ocean or in the marketplace.
Despite his high standing among the nation's wealthiest citizens and the headlines that he and his yachting crews made in the Los Angeles Times’s sports section, most Americans and even Southern Californians knew little about Howard Ahmanson. In the infrequent profiles that appeared in the press during his lifetime, Ahmanson mythologized his childhood, repeating the same stories from one interview to the next. The uneven paper trail he left survives because others, particularly his first wife, Dottie, kept some of his personal correspondence. Only a few of his close relatives, friends, competitors, and business associates remain to tell his story. Yet when the fragments of his life are fitted into the context of his times, his biography sheds light on an important era in America.
ONE
Father as Mentor
THE MINISTER OF THE NORTH PRESBYTERIAN CHURCH in Omaha undoubtedly reminded the worshippers on Easter Sunday morning in 1913 that they were in the house of the Lord—and what a house it was. Inspired by the neoclassical architecture of the 1898 Trans-Mississippi and International Exposition, which celebrated Omaha's heroic role in the opening of the American West, the new church reflected both the hope of the Resurrection and the republican ideals of ancient Greece and Rome.1 Despite the glory of the space, the reverend often cautioned his congregation against hubris. God's will would be done despite all worldly precautions.
These sermons touched the faith of one man in the congregation who came frequently with his wife and two sons. William “Will” Ahmanson understood that ultimately the world and the afterlife were in God's hands, but he believed that in this world men should not tempt their maker. For the sake of their families, business partners, and creditors, men had a responsibility to insure their property and persons against the risks of fire, flood, and sudden death.
Ahmanson thought he knew how to manage those risks. An insurance man since he was a teenager, he had studied the laws of statistics and probability. He learned to pay attention to the details of circumstances and conditions. Like all actuaries, he had developed a godlike ability to know in the aggregate what would be lost and who would be saved in the event of a fire. Yet like all insurance men, he lived in fear of a great disaster that would overwhelm the predictable cycle of fires and minor floods.
After the service on Easter morning in 1913, the overcast skies began to clear. The dry brown front lawns and shrubs just beginning to bud after the winter smelled of earth and rain. Within the eight blocks between the church and the Ahmansons’ modest home at 2516 North Nineteenth Street a diversity of architectural styles reflected the heritage of Omaha's first streetcar suburb. Most of the neighborhood's residents were native born, but there were also Scandinavian, Scottish, German, and English immigrants. The men had white-collar jobs. They were shop owners, postal and city clerks, a streetcar conductor, an orchestra musician, and a pharmacist.2 Like Will Ahmanson, they were all hoping to get ahead in the world.
Like most of these middle-class proprietors and salary men, Will and his wife Florence had great hopes for their two sons, Hayden and Howard. At age fifteen, Hayden was away from home that Sunday attending the Kemper Military School in Missouri. So Will doted on Howard. At six years old, the boy exhibited a confidence and intellect that ignited Will's pride. He often brought the boy along when he went to meetings or to see customers.
By late afternoon, the day was bright and warm. Then shortly before six o'clock, the wind began to blow. At the Diamond Moving Picture Theater, in a neighborhood not far away that had become home to Omaha's growing African American population, a crowd of sixty people gathered to see the black-and-white silent film Twister. Those who were still outside noticed the sky to the southwest turn luminous, “a lurid brass-yellow” color.3 A black funnel cloud appeared. As it swirled and twisted toward the city, the tornado slammed to earth and then bounced back into the air. One man said, “It came like a rushing and roaring torrent of water.”4 As the sound increased and the air pressure dropped, the Ahmansons’ dog grew nervous and bolted from the house. Howard wanted to run after him, but his parents hurried him into the cellar.
Then suddenly the tornado was on them. The swirling dust and debris blocked the waning daylight. The fierce wind ripped homes from their foundations and lifted them into the air. It tore roofs off homes and trees from the earth and smashed brick buildings. As the walls of the Diamond Motion Picture Theater crumbled, the roof fell in.5 Then the tornado roared east, crossing the Missouri River and slashing its way toward Council Bluffs.
In the eerie silence that greeted them when they emerged
