A waiter hurries a tray of tall drinks toward a café table. A dapper trio sits there: A young man wearing a straw boater, a suit in candy-colored stripes, and a silk cravat is entertaining two beauties resplendent in crinoline, swathed bodices, and elaborate millinery. The dandy leans forward to finish the story that holds his two young companions in rapt attention.
On a Roof Garden, by W.A. Rogers, hangs at the Minneapolis Institute of Arts. Reminiscent of works from the heyday of French Impressionism, it expertly captures the swankiness and energy of the Gilded Age, that fabled moment late in the nineteenth century when America was emerging as an industrial power and nascent empire.
This painting, however, depicts an actual Minneapolis location, or one that existed once. The rooftop garden is part of a pavilion atop the Guaranty Loan Building, which was one of the city’s great Victorian landmarks. But the building, which sat at the corner of Third Street and Second Avenue South, and the ambitious young millionaire who built it have vanished from history.
Today the Gateway District is experiencing a kind of resurgence. Once again it is dominated by monumental corporate and institutional architecture, but through much of the twentieth century, it was Minneapolis’s skid row, teeming with flophouses and dingy saloons, peopled by panhandlers, hoboes, winos, and prostitutes.
Long before its debasement, it had been the most elegant and vital precinct of the city, a district thriving with the brio and new wealth of America’s Gilded Age. No edifice symbolized the era better than the Guaranty Loan Building. When it opened in 1890, it was the first skyscraper west of Chicago—twelve stories of red granite and lacy wrought iron, with an interior atrium that was one of the marvels of the design world. Its greatest glory was its twelfth floor, which contained a public as well as several private dining rooms, separate cafés for ladies and gents, billiards and smoking rooms, and a rooftop pavilion filled with potted palms, planting beds, and floral bowers. The skyscraper proclaimed that Minneapolis had arrived as a world-class metropolis. It also cemented the status of Louis Menage as one of the true founders of the city, a man equal to the Pillsburys and the Lowrys for his role in putting Minneapolis on the map.
The Gilded Age married public sanctimony with rampant corruption, and lionized those who made their mark wheeling and dealing in a business climate that amounted to a laissez-faire paradise. It is usually defined as the period between the scandals of the Grant administration and the election of trust-busting Teddy Roosevelt. This was the era of John D. Rockefeller and Andrew Carnegie, J.P. Morgan and James J. Hill, and hundreds of other lesser-known industry barons; they made their fortunes in the freewheeling, boom-and-bust decades following the Civil War, before there were such things as income or inheritance taxes. Until the great Panic of 1893—the stock market crash that was a forerunner of the Great Depression and triggered more than a decade of economic decline—these men were celebrated publicly as paragons of business acumen and personal rectitude, even while their private code of business conduct was based on the Law of the Jungle, not the Sermon on the Mount.
No one better embodied the contradictions of that gaudy era, nor followed them more closely to their fateful conclusion, than Louis Menage. He was a real-estate tycoon, financier, mortgage banker, patron of the arts and sciences, and civic visionary. He built not only the Guaranty Loan Building, but also Minneapolis’s first world-class resort. He was man of deep faith and lax ethics, author of one of the period’s largest and most damaging bankruptcies, and, finally, a fugitive from the law who sought asylum in a Central American banana republic.
In his 1893 History of the City of Minneapolis, Isaac Atwater portrayed Menage on the eve of his utter disgrace, employing a reverential, breathless style that anticipated business-magazine profiles of titans like Jack Welch one hundred years later. “In his private offices sits Mr. Menage, the most unpretentious and modest of all the thronging multitude, the animating spirit and directing head of all.” In another passage Atwater lauded Menage’s career as “illustrious among the numerous ones of our country … achieving success without adventitious aid, with none to envy or malign, esteemed for probity, honor, and enterprise.”
How could a man of such acumen and rectitude fall so far, so fast? The question is a perennial one; how could Kenneth Lay go from being George W. Bush’s “Kenny Boy” to White House pariah in only a few short years? How could Martha Stewart transform from Queen of the Canapé into Convicted Felon? The easy answer is greed, of course. Greed coupled with a legal environment that encouraged ever more daring transgressions by overlooking a dozen smaller, prefatory lapses.
Louis Menage was born in Rhode Island in 1850, the son of a French immigrant and a mother who was a direct descendent of John Howland, one of the passengers on the Mayflower. A few years later, his father, a confectioner, moved the family to New Bedford, Massachusetts. When his father died from tuberculosis, Louis and his brother took over the family business and ran it for three years. But in 1871, he was advised by a physician that he had “weak lungs”—a precursor to full-blown tuberculosis. Menage therefore headed west to Minnesota, where the “bracing climate” was then considered to be a good course of treatment.
During his first winter in his new home state, Menage taught shorthand at a local business school, then spent a couple of years as a clerk and timekeeper in a Northern Minnesota timber camp. Neither position was sufficient to satisfy his ambition. In 1874, he returned to Minneapolis and opened a real estate office on Washington Avenue. It was here that he began his rise to the top of Minnesota society.
At the time, Minneapolis was bursting at the seams. With keen foresight, Menage gobbled up farmland and meadows along the city’s southern boundaries, platting the land, laying out streets and water and sewer hookups, constructing houses. He convinced his good friend and fellow entrepreneur Thomas Lowry to lay in a streetcar line to provide transit to the hordes of new residents he expected to move into the newly developed areas. To help finance it all, he started his own mortgage banking firm, the Northwestern Guaranty Loan Company.
In less than twenty years, Menage developed most of the Lakes District in southwest Minneapolis, as well as Prospect Park and portions of other neighborhoods. Check the abstract of almost any home in south Minneapolis and you’ll find that it’s part of a “Menage Addition” or a “Menage Rearrangement.” (Subsequent history erased all but these most discreet references to the man.) With his uncanny sense of where the market was moving, he also bought and developed prime real estate in other parts of the country as well, like a large tract of marshland along the southern end of Lake Michigan—the future site of Gary, Indiana’s steelyards.
In the decade following the establishment of his first business, Menage began to acquire a reputation as a moral as well as financial leader of the community. Not only did he donate the bell that still hangs in the belfry of First Baptist Church at Tenth and Hennepin in downtown Minneapolis, he also wrote what came to be known as the “Menage forfeiture clause” into almost every title on land he sold in Minneapolis. Under this clause, any purchaser who knowingly or unknowingly allowed the sale of liquor to occur on his property would automatically forfeit title back to Menage or his descendents—a covenant that continued to vex city residents until an exasperated Legislature passed a law in 1937 specifically voiding the clause. While inspired in part by the newly revived temperance movement, there was also a clear economic incentive behind the covenant—how fortuitous the prospect of being able to reacquire property he’d already sold without having to go through the inconvenience of buying it back! But Menage was not a prig, at least when his moral scruples might interfere with a sale; he did not always write the clause into his contracts. It was not included, for example, in the title to the property he sold to the developers planning to build the Minikahda Club.
In 1883, only twelve years after arriving in Minnesota, Menage firmly established himself as one of the leading citizens of Minneapolis by opening the Lyndale Hotel on the high ground along the eastern shore of Lake Calhoun—a wilderness recently made accessible by a new railway line. The design of the resort reflected Menage’s vaulting ambitions for himself and his adopted city. Guests stayed in suites of two to four sleeping rooms, trimmed with mahogany and furnished with Belgian carpets, steam heat, gas lighting, spring mattresses, an electric bell for summoning the staff, and baths and “closets” (toilets) “filled with the most approved appliances made,” according to a contemporary account.
The public areas were no less impressive. The Lyndale’s city-side entrance opened into a gracious reception area also finished in mahogany. The dining room and adjoining “ladies’ ordinary” looked out on Lake Calhoun and the hotel’s seventy-five bath houses. (These were not just changing rooms, but could also be moved out into the shallows for those who wished to swim without the immodest display of whatever flesh might be visible, notwithstanding the bulky swimwear of the day.) There were verandahs on both stories of the hotel, a conservatory, a billiards room, two parlors, and a massive music hall with a twenty-five-foot coffered ceiling and frescoed walls. The livery, meanwhile, was equipped with phaetons, glass landaus, coupes, and buggies, and, for the more adventurous guests, eight riding horses for hire.
The Lyndale opened for business on a June evening with a gala “Testimonial Ball,” graced by some three hundred members of the city’s elite. At midnight, dancers moved into the dining hall, where, to orchestral accompaniment, they were feted with a lavish meal that did not conclude until the early hours of the morning, at which time a special train returned to Minneapolis those who had not taken rooms.
Two of the guests that night were William King and Robert Innes, businessmen who were already fatefully intertwined with Menage’s fortunes. In the end, they would help him fashion his own downfall.
Col. William S. King was a former congressman from New York who saw himself as a high-stakes real-estate speculator, a man as savvy as Menage. He appears to have lacked, however, the younger man’s shrewdness, which made him the perfect mark in a swindle.
What is certain is that several years prior to the Lyndale’s gala opening, King and his wife Caroline had found themselves in deep financial distress. The couple, who then lived in New York, were in hock for the money they’d borrowed to buy large tracts of land in Minnesota. Some of the land was in Meeker County, but one of the biggest and most expensive parcels was a twelve-hundred-acre tract called Lyndale Farm, located just outside what was then the boundary of Minneapolis, which is now the residential neighborhood east and north of Lake Harriet.
With creditors hounding them, the Kings convinced a New York financier named Philo Remington to advance them the money to pay off their debts in return for turning over management of their properties, including Lyndale Farm, as well as some shares in the Pioneer Press that Caroline King owned. In total, the couple were to receive about $120,000 from Remington, in two payments.
Their contract with Remington was signed in June 1875. A few months later, when Remington became too ill to carry out his obligations, he hired another New York resident, Robert Innes, to act as his representative, informing him that the Kings’ real property and equities were to be managed in trust. In other words, after subtracting a commission for their management, Remington and Innes would eventually return all proceeds and accrued equities to the Kings.
In 1877, Col. King filed for bankruptcy, listing his real estate holdings as part of his assets. At this point, King’s own slippery side made itself known. Instead of arranging an outright sale of his assets and using the proceeds to pay off his creditors, he struck a deal with Remington and Innes to buy the assets of his estate for a nominal sum with the understanding that they would go on managing them in trust. In the end, Innes bid twenty-five dollars for everything, including the twelve hundred acres of Lyndale Farm.
Over the next several years, Remington and Innes strung King along as the pair went about trying to separate him from his assets. The Colonel and his wife traveled to Minneapolis several times to try to determine why their agents seemed to be having such a hard time disposing of the couple’s real estate in a profitable manner. It may very well have been during one of these trips that King attended the Lyndale Hotel opening, invited by Menage—who, by this time, had entered into his own dubious pact with Innes and Remington.
Six months before the resort opened, the trio had drawn up two contracts. In one, Remington agreed to sell the Lyndale Farm property to Menage, with Innes acting as Remington’s agent, for just under $500,000—about $27 million in today’s terms. In the second contract, Menage agreed to pay Innes one-third of the proceeds from the sale of the Lyndale land after Menage had platted and subdivided it into lots, brought in utilities, and either built homes or financed their construction. If the deal had gone through as planned, Innes stood to earn a substantial finder’s fee. Clearly, Menage expected to make a killing.
King was slow on the uptake, but he finally figured out he was being swindled. In the first place, Remington had never paid him a dime from the promised $120,000 advance. King filed suit in Hennepin County Court, where the judge ruled that he and his wife retained ownership of all the assets entrusted to Remington. As rightful owners, they were entitled not only to regain control of whatever stocks and real estate remained in the estate, but also to claim the proceeds of anything of theirs that had been sold, like the lots developed by Menage.
After an unsuccessful appeal to the Minnesota Supreme Court, in 1886 Menage was ordered to remit two million dollars to William and Caroline King. All along, Menage claimed ignorance of the King’s prior claims on Lyndale Farm. It is unthinkable that Menage, by now an expert in real estate and mortgage financing, would have failed to notice this very big shadow to clear title on the land.
In today’s dollars, two million dollars is roughly equivalent to $110 million. According to Atwater’s History of the City of Minneapolis, Menage was able to make this repayment without any problem; indeed, the loss “scarcely ruff[led] his security.” But this could hardly have been true. Later, after his downfall, Menage wrote of the anguish the two million dollars had caused him and of the strain it placed on his resources.
“Coming as it did,” he wrote, “suddenly and unexpectedly, the lawsuit threatened bankruptcy and ruin. The history of the suit is well known … but not the embarrassment, headaches, sleepless nights of those two years of disastrous litigation when it seemed as if each week would bring the ruin which was generally predicted for me … ”
Today, a plutocrat who found himself in Menage’s predicament might make a virtue of necessity and attempt to garner sympathy by revealing his straightened circumstances with appearances on, say, Larry King or Paula Zahn’s TV shows. But the Gilded Age was ruled by a more rigorous form of conspicuous consumption, whereby personal virtue was demonstrated through the display of wealth. In addition, Menage was, to use a contemporary term, highly “leveraged,” using the projected profits of his real estate transactions as security to borrow the money needed to purchase and develop land. He could ill afford to let his creditors learn of how pinched the court settlement had left him. It was vital, sleepless nights aside, to maintain his public image. That, in turn, meant he couldn’t allow this setback to slow down the pace of his philanthropy or the tempo of his real estate and construction empire. To make up the difference, he turned to a device used even now by the occasional CEO looking to burnish the company’s bottom line—he floated a large collection of phony paper. In his case, it was millions of dollars’ worth of fraudulent mortgages sold into the secondary mortgage market.
Whatever pinch Menage was feeling over the King settlement, he went on buying and spending on a larger scale than ever. When the Guaranty Loan Building opened in 1890—to a rapturous June 1 story in the Pioneer Press titled “A Symbol of Pride”—its initial tenants included the Menage Realty Company, the Northwestern Guaranty Loan Company, and the Northwestern National Bank, all of them owned and operated by Louis Menage, as well as the headquarters of the Chicago, Milwaukee, and St. Paul Railroad Company, and the Pillsbury Milling Company.
That same year, Menage stunned the board of the Minnesota Academy of Science with a pledge of ten thousand dollars—more than half a million dollars in today’s currency—to underwrite a three-year collecting expedition to the Philippines, Borneo, and Malaysia that had been proposed to the academy by a pair of young naturalists at the University of Michigan. At the time he made the offer, Menage had been a member of the MAS for two months. Eventually, the two scientists, Frank Bourns and Dean Worcestor, did make their trek. At their benefactor’s request, it was chartered as “the Menage Expedition,” and it gathered and sent back to Minneapolis more than five thousand bird, animal, and insect specimens, many of them never identified before (numerous subspecies of birds from the region today bear “menage” as part of their scientific names).
Meanwhile, Menage was plotting—and platting—his next development venture. Out west, several thousand acres of land at the head of Puget Sound were going to soon house thousands of homes built to service the iron mine, steel mill, and railroad terminal that were also going to rise from this site. By early 1893, Menage had sold the lots and in turn sold four million dollars’ worth of mortgages—or more than two hundred million dollars in today’s terms—to investors in the secondary mortgage market. Most of these investors were located at a convenient distance, along the East Coast and in Europe, and much of the selling was done by Menage personally, face to face.
When the worldwide market collapsed later that year, these investors did what investors have always done when the value of their holdings begins to crater; they called in their chits. What they discovered was that most of the mortgages were literally worthless, carrying the names of mortgagees culled by Menage and his associates from the Minneapolis and St. Paul telephone books. From local delivery boys and washerwomen to cops and cabbies, none of the mortgagees actually held title. None even knew their names had been purloined by this Victorian-era identity-theft ring. Each mortgage, however, was backed by a guaranty of payment by Menage’s Northwestern Guaranty Loan Company.
When this discrepancy between fact and fiction became known, Menage’s loan company was plunged into bankruptcy. Its shareholders, many of them members of the local elite, not only lost their investment in the company but also discovered that, under state law at that time, they were on the hook to pay off creditors out of their personal holdings. Altogether the value of the phony Puget Sound mortgages totaled $1.7 million in 1893 dollars. No wonder the city fathers expunged Menage’s name from local histories.
When a grand jury returned an indictment for embezzlement against Menage and his chief assistant, Menage suddenly remembered urgent business in Guatemala. By the time the Menage Expedition returned to the United States, Louis Menage had fled the country, just ahead of a bench warrant and a five-thousand-dollar reward posted on his head. Ultimately, at least a third of the specimens that Bourns, Worcestor, and their team collected was either lost or sold to defray academy expenses.
Over the next few years, Menage’s assistant, Donald Streeter, was tried twice, but each case ended with a hung jury. Menage stayed in Central America, managing some mining property he owned there and dodging attempts to bring him home. At one point, he may even have escaped into the central cordillera after receiving a tip that a band of bounty hunters was on the way to kidnap him and ship him back to Minneapolis for trial.
In 1895, Menage wrote a letter in which he offered to return voluntarily in exchange for having all charges against him dropped. If allowed back, he also promised to repay all the losses caused by the scandal. He also pointed out, not untruthfully, that selling mortgages signed with borrowed names was not an unheard of business practice at the time and not even specifically barred by any law then on the books. The D.A., however, was unmoved. The charges were not rescinded.
In the end, it’s unclear whether Menage ever did return to the city he did so much to develop. In 1889, citing lack of evidence and the demise of several key witnesses, the Hennepin County attorney finally recommended dropping charges against Menage. Some newspaper accounts place him in the courtroom when the judge announced his decision; others fail to mention what would have been, one assumes, a hard-to-ignore presence that day. All that is certain is that Menage eventually made his way to Texas, dealing with more mining properties, and later to New Jersey, where he went back into the real estate business, though with neither his earlier success nor scandal.
In 1924, after Menage died in New Brunswick of a heart attack, obituaries in the New Jersey papers mentioned nothing of his travails thirty years earlier. The scandal did, however, receive prominent attention in the Twin Cities. For the last time, the name of Louis Menage blazed across the front page of the Pioneer Press. And then, like the Guaranty Loan Building several decades later, it disappeared.
Most of the Gateway District, including the Guaranty Building, was demolished in 1962, victim to the postwar blight known as “urban renewal.” Urban renewal was a kind of preemptive war on anything that didn’t fit into America’s new image of itself as a place of affluent conformity. Like so many armed conflicts, it was conducted without an exit plan. For more than thirty years, the site where the Guaranty had risen so elegantly was occupied by a vacant lot.
Even at the time, architects and historians decried this wanton destruction of the collective past. As with Penn Station in New York City, it was the demolition of the Guaranty Building that sparked Minneapolis’ version of historical preservation. Sixty years earlier, Louis Menage had been as illustrious as any member of the Dayton, Bell, Walker, Pillsbury, or Lowry families. But just as it didn’t take long for the granite blocks of the Guaranty to fall under the wrecking ball, the name of the man who built it as a monument to his own success, and the city’s, vanished almost instantly from the community’s narrative.