Old Wine, New Bottle

For 75 years, Chicago's plush-and-horsehair Palmer House has been a gradually fading symbol of baroque elegance. It has also been a prime financial asset of Chicago's elegant Potter Palmer family. Last week, the Palmer House passed from the Palmers to Hotelman Conrad Nicholson Hilton, the latest addition to his $100,000,000 hotel chain.* In payment, Honore Palmer, son of the "titan of State Street" who grubbed up the family fortune, got $20,000,000 from Hotelman Hilton. The old hotel was the biggest item in the Potter Palmer estate.

In 1865, Potter Palmer, a bearded, heavy-spending man who ran the biggest drygoods store in the Middle West, sold out to two of his partners--Marshall Field and Levi Z. Leiter. With the cash he decided to turn narrow, muddy State Street into Chicago's glittering main stem. He bought and rebuilt buildings right & left, and, as a final glory, erected the Palmer House. It shone for only 13 days, then burned to the ground, with 32 other Palmer properties, in the Chicago fire.

Undaunted, Potter Palmer built a new hotel (the first fireproof one in the U.S.), worked under calcium lights at night to have it open before the rival Grand Pacific Hotel. When Palmer lost, he grimly built a board-and-shingled shack in the lobby of his $2,500,000 hotel, labeled it: "This is what the Grand Pacific is made of." In time, Architect Frank Lloyd Wright ridiculed the gingerbready Palmer House as "an ugly old man whose wrinkles were all in the wrong place."

But the hotel drew a wide and wealthy following. General Phil Sheridan lived there, delighted by the splendor of its huge Corinthian rotunda, Italian marble staircase, ornate sparkling chandeliers and a barbershop floor inlaid with silver dollars. Potter Palmer was almost as proud of his House as he was of his wife--of whom he once said fondly: "There she stands, with $200,000 [in jewels] on her." Only once did his hotel fail him. The Infanta Eulalia of Spain cut short a visit with Mrs. Palmer, then the queen of Chicago society, because she was "the wife of an innkeeper."

The Palmer House, as well behaved as it was beautiful, was among the first U.S. hotels to give its guests electric lights, telephone and elevator service.

But by 1925, it had become so shabby that it was torn down and replaced by the present Palmer House III. Usually a money-maker (except in 1930 and 1931), the Palmer House has lately roused complaints among Chicagoans that it suffers from the pains of age, a crochety management and decrepit service. (One resident used to wire his wife from his office because he said he could not reach her by phone through the hotel switchboard.)

New Owner Hilton planned to rejuvenate the old gaffer. As in his other purchases (TIME, Feb. 19), the cash for the Palmer deal was not all Hilton's. First National Bank of Chicago put up $11,000,000. A syndicate composed of Atlas Corp., City Investing Co., Los Angeles friends Frank Freeman and Willard Keith, and other friends in Chicago and Texas put up another $8,000,000. But brisk Mr. Hilton will run things, expects to do well. Said he with satisfaction: "At the price, we got a very good buy."

* Others: Manhattan's Plaza; Hiltons in Texas -- El Paso, Lubbock, Plainview, Longview; Hiltons in Albuquerque; Long Beach, Calif. Also the Biltmore, Dayton; the Ambassador and Town House, Los Angeles; Palacio Hilton, Chihuahua, Mexico.

This file is automatically generated by a robot program, so reader's discretion is required.