A PROGRESSIVE BUSINESS CULTURE
Howard began his college career during a critical transition in the history of business-government relations in the United States. Through the end of the nineteenth century and into the early decades of the twentieth, myriad industries in the American economy became increasingly concentrated as entrepreneurs took advantage of the growing national transportation system to increase the scope and scale of manufacturing and to ship products throughout the country.78 This economic integration fed the growth of cities, as factories swelled with workers fresh off the farm or the boat from Europe. A loose coalition of social reformers and business leaders known as Progressives sought to rationalize government's management of the infrastructure of society and the economy.79 In cities like Omaha, Progressives campaigned to end machine politics and put decision making in the hands of nonpartisan “experts” and committees. At the national level, a series of Republican administrations focused on cooperation with big business rather than regulation.
Among the leaders of this Republican movement, none was more important than the Iowa-born Herbert Hoover. A mining engineer and successful businessman by World War I, he earned worldwide respect and admiration when he oversaw an international effort to provide food to Belgium's starving people during World War I. Appointed U.S. secretary of commerce in 1921, he made his philosophy clear: “The Department of Commerce should be in the widest sense a department of service to the commerce and industry of the country. It is not a department for the regulation of trade and industry. In order to do service to great advantage, I wish to establish a wider and better organized co-operation with the trades and commercial associations.”80
Hoover transformed his agency in an effort to establish a new model for the ways in which government could support private efforts to strengthen the economy and society.81 He created bureaus to deal with new industries, including aeronautics and radio. He restructured the Bureau of the Census to aid business by publishing more data. He expanded the government's role as convener and coordinator, urging business leaders to join trade associations to address public policy issues in a coordinated manner. “We are passing from a period of extreme individualistic action,” he said in 1924, “into a period of associational activities.”82 Hoover envisioned a system in which public policy would be made by experts, technicians, and professionals deeply immersed in their subjects, who would collaborate voluntarily for the greater good of society, leaving traditional patronage politics to the history books. Under this framework, the federal government would become more “elaborate and permissive,” serving as “a clearinghouse for business compromise” and widening the dialogue among communities of interest.83
As a business student at the state university in 1925, Howard was exposed to the ideology of Hoover-style Progressivism. He read Warren G. Harding's Our Common Country: Mutual Good Will in America, noting the late president's call for a better understanding between business and government. Ranked in the top ten in his class, Ahmanson seemed destined to become one of Hoover's professional managers, but the greatest loss of his life would lead to an entirely different future.84
A PERSONAL CRISIS
Will Ahmanson suffered from goiter, an enlargement of the thyroid. In many patients, the condition created a swelling in the throat that made it hard to talk or swallow. Sometimes it was associated with an increased heart rate or an irregular heartbeat and muscle weakness. Researchers suspected that goiter resulted from an iodine deficiency. In the 1920s, however, popular culture blamed a variety of factors ranging from the stresses of modern life to jazz music.85 In regions far from the ocean like the Great Lakes, the Missouri River valley, and the upper Midwest, the malady was so common that these areas were called “goiter belts.”
Will's health had already affected the lives of both of his children. Hayden had proposed to Aimee on the eve of his graduation from law school. They had planned to marry in the spring of 1924, but Will was so often bedridden that they postponed the ceremony. Instead of launching his career as a lawyer, Hayden returned to National American as an underwriter so he could monitor his father's interest in the business.86
In the fall of 1924, Will seemed to be getting better. Aimee and Hayden married in a simple ceremony at the house officiated by the minister from Dundee Presbyterian Church. Then Will and Florence left to spend the winter in California.87 In Los Angeles they visited many former Nebraskans who had moved to the Golden State. Under the California sun, and perhaps with more seafood in his diet, Will's health improved.
While his parents were gone, Howard spent his weekends and vacations with Hayden and Aimee.88 They talked about the situation at National American. In 1924, Will and a couple of partners had launched another business, making loans on automobiles.89 This new company, like National American, was growing as the economy in Omaha and around the country enjoyed good times. But with Will away, the company needed leadership. James Foster was well qualified for the job, but Will may have hoped that one of his sons would succeed him, and the brothers apparently expected this as well.
After Will and Florence returned to Omaha, a rare heat wave struck in the middle of May. Will lay in bed struggling to breathe, while Florence tried to keep him cool. When it was clear that there was no other option, he was admitted to the hospital to have his thyroid removed. The surgery was not successful. On the evening of May 22, Howard's father died.
LEGACY TAKEN AWAY
Will's death unraveled the family's control of the businesses that he had helped to build. “Everything he was into, somebody took a swipe at,” Howard told a reporter many years later.90 On the morning of the funeral, the directors of National American Fire Insurance met without the family and chose Foster to succeed Will as president.91 Meanwhile, the banks cut off credit to the auto loan company and forced the Ahmansons to sell their interest in the business to the surviving partners.92
The family was hardly destitute. The Omaha World Herald reported that Ahmanson's estate was worth $75,000 (nearly $961,660 in 2011 dollars). Florence was left with a substantial sum of money and fifteen hundred shares in National American Fire Insurance.93 Each of her sons received one hundred shares.94 Howard also had the investments in his own brokerage account, which were worth nearly $20,000 in 1925 (nearly $258,000 in 2011 dollars)—a fortune for a teenager.
Howard returned to the University of Nebraska to begin his junior year, but shortly after the term started Florence became ill. Howard raced back to Omaha. With memories of Southern California still fresh in her mind and the doctor's recommendation that she move to a gentler climate, Florence and Howard decided to move to California. Howard loaded his roadster with his belongings and left that night for Los Angeles to find a place for them to live and make arrangements for Florence to join him.95
Deeply affected by his father's death, Howard confessed that it “made me do funny things for a long time.”96 He swore that one day he would regain control of National American. “I am a worshipper of my father,” he told a reporter. “He used to tell me the world's your oyster. Nothing's impossible to you.”97 Witnessing his father's betrayal led him to “the crazy idea that anything I got into, I was going to control. . . . Having seen my father's dreams all shot to pieces because he was so trusting, I decided that the worst thing in the world was partners, and that being liquid was the best.”98
TWO
Among the Lotus Eaters
ARRIVING IN LOS ANGELES in the fall of 1925, Howard Ahmanson discovered a city like Omaha. It was full of progressive, middle-class midwesterners, who had come after selling their farms and businesses. In many ways they had recreated a community they knew and understood, with “state societies” like the Iowa and the Nebraska clubs. They called themselves “Hawkeyes” or “Cornhuskers.” They socialized with others from their home states and attended enormous annual picnics celebrating the history and culture of the Midwest.
Everyone seemed to be a recent transplant. Nine out of ten residents