Nevada Part VI: Gambling, Gold and Government Projects
July – August 2014
After struggling to maintain momentum through the Great Depression, Nevadans are aided by the sinful schemes that supported the infamy of the Silver State.
BY RON SOODALTER
When the Great Depression struck an unprepared nation in 1929, Nevada took its share of blows. As Governor Fred Balzar was assuring constituents that Nevada’s economy was healthy and there was no need for concern, the state’s banks—including the impressive 12-bank chain run by the Wingfield Corporation—were falling further and further into insolvency. By mid-1932, four major financial institutions had failed, and others were in serious trouble. A number of hearings by a joint legislative committee revealed serious irregularities in the way the banks were being run, and despite a loan of nearly $5 million from the new Reconstruction Finance Corporation, the Wingfield banks were soon put in receivership. Suddenly, the Depression became personal to thousands of Nevadans, as they realized neither they nor their savings were immune to the woes of the nation.
THE DEPRESSION HITS NEVADA
The state’s farmers and stock growers suffered as well. In 1932 alone, Nevada’s gross revenue from livestock and crops plummeted from $22.1 million to $6.4 million. A newly appointed State Agricultural Relief Committee worked to obtain lower feed costs and shipping rates, but it was not enough to bail out the stockmen. At this juncture, a desperate Governor Balzar appealed for federal aid.
Although many growers went bankrupt—their lands and stock taken over by East and West Coast moneyed interests— some did benefit from federal relief. When a crippling drought struck in 1934, the federal government poured huge sums of money into such projects as well-drilling, installation of windmills, cultivation of springs, and the purchase of undernourished sheep and cattle from stockmen impacted by the drought.
And while farmers saw their annual income hit an all-time low in 1932, within three years income reached $12.4 million, thanks largely to help from federal programs.
More troubling was the decline in mineral production—the state’s leading industry. Things seemed bleakest in 1932, with a gross yield seven times lower than in 1929. Nevada Senator Key Pittman fought vigorously to restore the value of silver, both at home and internationally, and in 1933—largely due to Pittman’s machinations—the federal government committed to purchase approximately 99 percent of America’s silver over the next four years, with a starting price more than 21 cents above market value.
Copper, however—the mainstay of the state’s mineral production—presented a more pressing challenge than silver as market prices dropped and jobs became less available. Despite predictions by “experts” that the industry would not be significantly affected by the Depression, as early as January 1930, Ruth and McGill suffered a massive production cut by the Nevada Consolidated Copper Company and the subsequent layoffs of some 400 men. Within months, those who managed to hold onto jobs saw their salaries cut by 10 percent. By 1932, the plant was running at only 17 percent capacity with an operating loss of more than $2 million for the year. Within months, the copper metal price at the refinery fell to an all-time low of less than 5 cents per pound.
Things could have been worse. From 1930 to 1933, company officials initiated improvements that saved at least some jobs and kept the company from outright ruin. The conversion from steam to electric shovels in the mines, as well as improvements to the crushing, smelting, and refining systems, dramatically modernized the system for extracting and processing ore. Nonetheless, economic conditions in the copper industry were in a depressed state.
Again, the federal government attempted to raise the value of copper and stabilize the market. This was addressed through the National Industrial Recovery Act (NIRA), signed into law in June 1933 by President Franklin Delano Roosevelt. The new law—which Roosevelt called “the most important and far-reaching legislation ever enacted by the American Congress”—was structured specifically to do away with cut-throat competition, raise the value of copper, and ensure workers a decent work week with commensurate pay. This was to be achieved through the development of specific codes, written by committees composed of workers, management, government representatives, and members of the public. The Copper Code was officially adopted in April the following year.
Copper did, in fact, make a slight comeback in 1934, both in the number of workdays and an increase in market value. By 1937, production had jumped to a
10-year high of $15.3 million, while overall mineral production in the state reached an impressive $34 million. This seeming return to prosperity did not last, however. Copper production dropped radically within the year, causing more cutbacks and closures.
This time, it would take a veritable arsenal of President Roosevelt’s new federal programs to help restore Nevada’s mineral industry. Through the Works Progress Administration (WPA) and the Public Works Administration (PWA), money was transfused into the mining industry, while the newly passed Fair Labor Standards Act provided additional jobs, with fixed hours and a minimum wage. By the following year, things were looking up and by 1939— thanks largely to the federal government’s multifaceted work and relief programs— the Depression was effectively over for Nevada’s mining industry.
NEVADA AND THE NEW DEAL
These programs and agencies created to cope with the Great Depression were, in large measure, the brainchild of Franklin Roosevelt. As soon as he was sworn in, Roosevelt set plans in motion for a number of federally funded programs aimed at putting Americans back to work, setting businesses back on a stable footing, and aiding the individual states in fiscal recovery. The “New Deal,” as his system of social improvements was dubbed, provided not only money and jobs, but hope to millions of Americans whose lives had been devastated. Within a short time, agencies and organizations were in place dispensing not only aid, but also work opportunities.
Perhaps because of its sparse population, combined with a strong, vocal representation in Congress, Nevada was singularly blessed. According to Nevada state historian Russell R. Elliott, “Per capita expenditures of selected New Deal agencies from 1933 to 1939 were greater for Nevada than for any other state. Not only was Nevada first in total per capita expenditures, but first, also, per capita in loans, Civil Works Administration (CWA) and Civilian Conservation Corps (CCC) funds, and funds for public roads.”
Twenty-four CCC camps were set up across Nevada, from the post at Westgate to the camp in Reno. In six years, the CCC put some 4,000 Nevadans to work building roads, planting trees, and digging irrigation ditches and canals. Their labor would have a long-term beneficial effect on the state.
The CWA, established in late 1933 and designed to run only a few months, provided emergency relief by giving checks to the jobless and finding people work wherever possible. In its brief existence, it employed thousands of Nevadans at such short-term jobs as painting road signs, refurbishing schools, digging wells, enhancing road surfaces, and putting up historical markers. When the CWA program ended in early 1934, the responsibility for assigning relief fell first to the Federal Emergency Relief Act, and a year later, to the Relief Appropriation Act.
One of the most effective New Deal programs—for the nation, as well as Nevada—was the Works Progress Administration (WPA). In addition to providing a paycheck for more workers than any other employer in the state, it was also aimed at instilling civic pride at a time when such niceties might have seemed irrelevant in the daily fight for survival. Local artists were hired to design and paint murals on the walls of public buildings; musicians were paid to form bands and stage concerts and recitals in their respective cities and towns; writers were paid to refine and catalog county archives and to create a historical state guide, the first of its kind in Nevada. Again, the benefits would be far-reaching.
The federal government’s exhaustive efforts yielded an unanticipated effect for Nevada in the impetus it provided the labor movement. Unions in the state had taken a beating as a result of unsuccessful strike attempts in 1919. Union status was much reduced, made worse by the advent of the new company towns. Starting in the 1920s, the “bosses” began providing clean, respectable housing, schools, libraries, and generally wholesome environments for the workers and their families. Without a guaranteed right of assembly and collective bargaining, unions had little to offer the workers.
However, in addition to setting up codes that ensured reasonable workweeks and paychecks, NIRA also guaranteed union members the right to organize and engage in collective bargaining. Suddenly, the door to organized labor opened wide, and the union reemerged stronger than before. The Western Federation of Miners was reborn as the International Union of Mine, Mill and Smelter Workers, and workers in such mining towns as McGill and Ruth soon set up local affiliates. Although the NIRA was deemed unconstitutional in 1935, its provisions relating to labor rights were taken up and perpetuated by other forms of legislation.
FIGHTING THE DEPRESSION ON THEIR OWN TERMS
While New Deal agencies scrambled to provide jobs and relief to a stricken American public, the propaganda machine worked overtime to promote the federal government’s agenda. Equating support of the new programs with good ol’ fashioned patriotism, it encouraged such public events as Blue Eagle and Labor Day parades. A typical event was the parade held in Ely in August 1933, sponsored by the local branch of the Patriotic Volunteers of America. And as they had at the beginning of World War I, speakers known as “four-minute men” honeycombed the country and the state, staging talks and rallies.
Meanwhile, forward-thinking Nevadans put forth their own unique, innovative and far-reaching efforts to combat the Depression. Nowhere was this more evident
than with the builders of the monumental Hoover Dam. Once work on the dam commenced in 1931, the monthly payroll of the thousands of laborers exceeded
$750,000, and the workers—deprived of the “luxuries” upon which to spend their pay in the morally upright company town of Boulder City—needed a place to blow off steam. As it happened, relief was just a short train ride away. They rode the specially constructed railroad spur 20 miles to the wide-open community of Las Vegas. There—with liquor, gambling, and prostitution—the small town that had begun life as a whistle stop along the Union Pacific tracks catered to the leisure-time requirements of the hard-living crews. By the time the dam was completed in 1935, the river was harnessed and its impounded waters created a huge lake. Soon, the little “center of sin” that flourished a short train ride away had perfected its own methods for fighting the fiscal downtrend.
THE RETURN OF LEGALIZED GAMBLING
In 1931, state legislators enacted two laws designed to enhance the financial status of such towns as Reno and Las Vegas, and to increase Nevada’s revenue flow, both from licensing fees and consumer-spent dollars. These laws were the re-legalization of gambling and the six-week divorce bill. While the results of the first were disappointing, in the beginning, the second quickly became a gold mine.
Gambling had been outlawed 21 years earlier, but enforcement was spotty, and many in the state were clamoring for the law’s repeal. When the gambling bill was introduced into the state legislature, it received widespread support—both officially and unofficially—with only a small, vocal opposition from religious groups and women’s organizations. The bill passed easily, and certain towns prepared for the bonanza.
Las Vegas was not the only gambling-and-girls mecca in Nevada; Reno prepared for its fair share of sinful revenues as well. In fact, anticipating the passage of the law to legalize gambling, Reno got the jump on Las Vegas. The city fathers authorized the expansion of the Bank Club, Reno’s largest casino, as well as other gambling emporia. City officials were well aware of the gambling activities going on in the back rooms of Reno’s speakeasies; many benefited financially by looking the other way. Now, it was all out in the open, and the casinos burgeoned with new customers, many from California. On Easter weekend 1931, some 5,000 out-of-towners entered Reno to take advantage of the new law.
During the two decades gambling was prohibited, licensing had not been an issue; now, it became a requisite to conducting business. Many houses continued to operate without a license, but the state legislature was quick to amend the problem. They placed the responsibility for levying and collecting licensing fees with the counties, with a quarter of the resultant revenues given to the state, and three-quarters to the respective counties, out of which a significant share would go to the towns and cities. While state revenues from the licensing of gambling houses were far from huge, the individual towns and counties did relatively well. In 1933, Reno netted $50,000 from licensing fees alone. The overall national response to Nevada’s re-legalization of gambling might have been negative, but in Nevada, gambling was here to stay.
Inevitably, organized crime saw opportunity in the new law and established a presence in Nevada’s gambling centers. In fact, there was a rumor at one point that Al Capone himself was considering moving to Nevada, to which the Reno sheriff naively responded,
“Al Capone is welcome in Reno as long as he behaves himself.”
One of the most significant contributors to the rise and longevity of gambling in the state was a device that is irreversibly linked to Nevada: the slot machine. Known euphemistically—and for good reason—as the “one-armed bandit,” it began life in the early 1890s. The game paid two nickels if the spinning wheel landed on one of 10 illustrated horseshoes. The device was known, predictably, as Horseshoes. Over time, the principal would be applied to ever-fancier consoles and games, such as the Golden Gate and California Bear. A number of California novelty companies turned out their own variations. Shortly after the slot machine’s invention, however, California law banned cash payouts. For a brief period, winners were paid in redeemable trade checks, chewing gum, and sometimes cigars.
In 1911, the California state legislature banned slot machines altogether, and most were converted to product dispensers. For a time, it appeared the slot machine’s time had come and gone.
When Prohibition led to the establishment of speakeasies, slot machines made a comeback. But it was not until the 1930s that “slots” truly began to come into their own. Varying in size from table-mounted to standing units, many were things of beauty, with hand-carved wooden consoles and illuminated panels. Some were built in the shape of Art Deco skyscrapers. But it was the efficiency more than the beauty of the slot machines that earned money for their owners. A company named Bally was founded in 1931 as a manufacturer of such amusement games as Pinball and Horserace, but in 1938 it developed and marketed the sophisticated “Double Bell” slot machine, which enabled a gambler to play either a nickel or quarter. By the mid-1940s, slot machines were regular fixtures in virtually every gambling house in Nevada.
Despite legalization, improved technology, and predictions of an unprecedented boom, the bonanza was slow in coming. The Las Vegas Evening Review-Journal had been accurate—at least for the foreseeable future—when it warned, “Nevada should not become unduly excited over the prospects of luminaries from all over the world coming to the state to establish…gambling casinos made possible under the new law… People should not get overly excited over the effects of the new gambling bill – conditions will be little different than they are at the present time, except that some things will be done openly…”
Various factors contributed to the surprisingly modest gaming revenues in the 1930s. For one, fearful of the lawlessness legal gambling might prompt, the local governments of such prospective “resort” towns as Reno and Las Vegas were initially slow to issue licenses and insisted on keeping the number of gambling parlors deliberately low. “Any more than that number,” predicted the Las Vegas Evening Review-Journal in March, 1931, “means crooked games, [and] cheating the law at every turn…[T]he sentiment of a great majority of residents is in absolute accord.” Apparently, the city fathers of Reno and Las Vegas were also concerned that unrestrained access to gambling halls would trigger alarms among the populace and lead to rapid repeal of the new law.
In addition to Las Vegas and Reno’s cautious approach, there were some communities that belatedly decided gambling was simply wrong. Elko banned slot machines from grocery and drug stores, while Sparks sought to restrict gambling by levying outlandish fees on the use of all gambling devices, capping at $100 per month for each slot machine. For its part, the Carson City Daily Mirror lamented, “The passing of the six-weeks divorce law and the gambling law is nothing to be proud of. Both measures could have been forgotten and the state would have been better off from a moral standpoint.” Gambling in Nevada would not truly become a cash cow until well into the 1940s.
THE LAND OF THE QUICKIE DIVORCE
The same day Governor Balzar signed the gambling bill into law, he also made the six-weeks divorce bill legal. The gambling proceeds that found their way into state and local coffers paled in comparison to the revenues garnered by the new divorce law.
By the mid-1920s, most states required a waiting period of at least a year for divorces. The Nevada state legislature had gotten a jump on the rest of the nation in 1927 by reducing the residency requirement for divorce to three months. When other states followed suit, Nevada dropped the requirement to a new low of six weeks.
Nevada state revenues benefited immensely from neighboring California’s insistence on maintaining a one-year waiting period. Californians, as well as thousands of people from other states, descended upon Nevada—Reno in particular—in order to take the “Reno cure,” as it was called, and extricate themselves from their marriages.
Soon, Reno acquired a dual reputation, enjoying praise from some for its forward thinking, while others condemned it as an assault upon the sacred institution of marriage. Various movies featured Reno as one of the central characters—rarely in a positive light. Ignoring criticism, Reno flourished. In 1929, locals voted on a motto, which was emblazoned on a huge illuminated arch in the heart of town, proclaiming Reno “The Biggest Little City in the World,” and it did all it could to live up to its reputation.
A well-laid-out program of options awaited the so-called “divorce seekers,” or “six-weekers,” all geared to separate them from their money. Many chose to spend six weeks in the casinos, while others took advantage of Nevada’s other tourist attractions. And while the average applicant might stay in a Reno hotel or boarding house, people of wealth and status—mostly women—could choose to spend the waiting period in the comfort of “divorce ranches”—private, exclusive dude ranches on an elegant scale. A number of distinctively upscale western outfits, such as Washoe Pines and Donner Trails, catered to the divorce trade, allowing women of means to pass their days in the company of Nevada’s young, appealing cowboys.
The most famous of the divorce ranches began in the late 1930s as the Tumbling DW, named for its founder, Eastern aristocrat Dore Wood, but was later dubbed the Flying M E, after Wood’s wife, Emmy. It sat in Washoe Valley between Reno and Carson City, and over the years such illustrious names as Astor, Rockefeller, Roosevelt, and Dupont appeared in the Flying M E register.
The wranglers were responsible for everything from leading trail rides and overnight camp-outs, to chaperoning their soon-to-be-liberated charges to Reno or Carson City for a wild time. Inevitably, despite house rules forbidding “fraternization” with the guests, some of the women found temporary comfort in the arms of these storybook cowboys. As one former wrangler commented, “If anybody says it didn’t happen, he’s a damn liar!” In the end, the divorce ranch experience was a positive one; the divorcees went home happy, while the money they left behind worked toward maintaining economic stability. Divorce ranches continued to thrive in Nevada well into the 1950s.
So popular was the “Reno cure” that it generated its own vocabulary. “Going to Reno,” became synonymous with getting a divorce. Famed columnist Walter Winchell coined the phrase “Reno-vation” to describe the divorce process, while the park across from the Washoe County Courthouse came to be known as Alimony Park, and the bridge across the Truckee River—from which, according to local lore, divorcees would throw their wedding rings—was called the Bridge of Sighs. The courthouse was referred to as the Women’s Exchange, and the Separator.
Down the street from the courthouse, the Corner Bar of the Riverside Hotel was called the Widow’s Corner, and served as the watering hole and gathering place for the cliques of locals and divorce seekers known as the Reno divorce colony. Nevada came to be referred to as the State of Easy Divorce, and Reno itself acknowledged internationally as the “Divorce Capital of the World” was informally called the Divorce Mill, the Divorce Mecca, the Separation Center of the West, the City of Broken Vows, or simply, Sin City. The trains that brought the divorce seeker to town were known as Divorcee Specials, and when he or she went out on the town, it was referred to as “going Reno.” Sometimes the man or woman seeking a divorce would arrive with a companion of the opposite sex in tow; this person was colloquially known as the “spare,” or the “cousin.” The day at the end of the waiting period, or “severance stay,” on which the six-weeker received the official document of divorce was called Graduation Day.
Perhaps the most unusual, yet somehow fitting, tribute was the concept for a brassiere, attributed to a local female publicist and appropriately called “the Reno,” that “both separates and supports.”
There are no accurate records tallying the amount spent in the 1930s on lawyers, accommodations, fees, and recreation owing to the six-weeks law, but estimates range from $1 million to $5 million annually. Ironically, Nevada awarded (and still awards) more marriages than divorces to those who came to take advantage of the state’s user-friendly marriage laws; but because there was no time requirement for marriage, the lovebirds had no need to stay the six-week waiting period required of those seeking divorce. The big money lay with those seeking to sunder, not join!
BOOZE IS BACK!
It took America 13 years to recognize the “Noble Experiment” prohibiting the manufacture, transport, and sale of alcoholic beverages was proven a cataclysmic failure; even then the federal government acted with caution. In early 1933, while the repeal amendment was making its way through the various state legislatures—a process that promised to take up to a year—Congress and the President gingerly tested the waters by passing a stopgap measure allowing the manufacture and sale of beer and wine with 3.2 percent alcohol content. The wine, by all reports, was terrible—described by one vintner as “insipid slop.” As for the beer, it was a far cry from the pre-Prohibition eight percent brews, but it was beer.
In supporting Prohibition’s repeal, newly elected President Roosevelt was looking to generate tax and licensing revenues and to put Americans back to work. The hesitancy displayed by some Nevada towns and cities over the re-legalization of gambling was all but absent from their response to the return of booze. In Las Vegas, 52 license applications for cabarets and saloons reached the city clerk’s office during the first week of the new 3.2 law. Other communities sprouted legal bars and taverns, and city fathers throughout the state were more than ready to grant licenses, with fees designed to fill the general coffers.
As soon as the 3.2 law went into effect, cases of Becker’s Beer, brewed in Ogden, Utah, were shipped across the state line to the Coca-Cola Bottling Company warehouse and the Southern Nevada Wholesale Corporation. Here, they were purchased right off the loading docks, and delivered to venues in the state. In Las Vegas, the actual purchase of the beer and wine had to briefly await the reissuing of city ordinances, but this was not the case in nearby Boulder City, since—as a federal reservation—it was not obligated to deal with the local red tape. A resident of Boulder City bought three cases of Becker’s at the Coca Cola loading dock and drove it back to Jack Lauback’s Tavern, while a fellow Boulderite drove another shipment to the Green Hut Café. The same scene played out across the state, as Nevadans drank legal alcohol for the first time since 1920.
When it came time for Nevada to ratify the actual repeal amendment on Sept. 23, 1933, delegates from the state’s 17 counties gathered in the state capital and cast a unanimous vote for its passage. The law was ratified on Dec. 5. Within two days, Reno took in $28,400 in licensing fees. Still, there were problems to be addressed. Police who once might have been paid or tempted to look the other way were now genuinely motivated to shut down unlicensed speakeasies and arrest bootleggers, some of whom were putting homemade hooch in legitimate bottles and marketing it as legitimate whiskey. Since alcohol was now readily available at consistent prices and quality, the makers of illegal whiskey became anachronisms overnight. On another note, there were stockpiles of untaxed, illegal beer and whiskey, and the owners rightly feared an IRS backlash if they tried to sell it. Also, there were thousands of gallons of confiscated bootleg liquor being held by the state as evidence to be used by U.S. Attorney Robert Douglas at trials that now seemed pointless.
There was also the issue of public drunkenness. On New Year’s Eve in Reno in 1933, there were eight auto accidents, resulting in three people being admitted to the hospital. There were also drunken fights and burglaries. For the most part, however, Nevadans responded to the return of legal liquor in a restrained, if exuberant, manner.
Almost immediately, the state began to realize the fiscal benefits of repeal: a steady flow of revenues from licenses, and new employment opportunities for its citizens in the areas of manufacture, sale, and distribution. It was never more welcomed.
By the end of the 1930s, Nevada had recovered from the most devastating fiscal calamity in U.S. history. However, as Nevada’s signature mining industry grew increasingly healthy, its profits and prosperity would derive largely from supplying yet another war. It was not a unique position for Nevada to be in; its very annexation during the Civil War was in large measure due to its ability to supply the Union with much-needed metals. And during the four years of World War I, the state saw productivity nearly double as a result of both federal and foreign demands for
silver and copper. The First World War had been touted as the conflict that would end all wars; now, it became apparent that this conceit had been born of pain, exhaustion and shock, and it was wrong. By 1939, a new conflict was spreading throughout Europe, and within two years it would jerk the nation from its isolationism, and engulf it in a global war. And it would impact the social and economic growth of Nevada for years to come.
Read the Entire 8-Part Series
Part I: The Unknown Territory
Part II: From Strikes to Statehood
Part III: Twain, Trains, & The Pony Express
Part IV: Into the New Century
Part V: War, Whiskey, and Wild Times!
Part VI: Gambling, Gold and Government Projects
Part VII: To War and Beyond
Part VIII: Looking Forward, Looking Back