H.H. Holmes was recently in the news again, as reports circulated that Scorsese and DiCaprio will soon bring The Devil in the White City to the big screen. But the news has a few local historians cringing: Devil in the White City is a gripping book, but it's more of a novel than a work of nonfiction. If you read the endnotes, Erik Larson is very upfront about how much of the stuff about H.H. Holmes simply came out of his imagination.
Indeed, many of the stories that have become common about Holmes are based more on tabloids and pulps than on primary sources. Holmes is certainly known to have killed a number of people, but the 27 he confessed to were probably an exaggeration (a few of the people were still alive). The idea that he killed hundreds of people was first mentioned in a couple of 1930s pulps and wasn't taken seriously at the time.
His famous "murder castle" (which was often just called The Holmes Castle until the 1930s) did indeed have a number of secret rooms and secret passages, but the city knew all about them before the World's Fair even opened. In March 1893, there was a large article about them in the Tribune after Holmes was caught using hidden rooms to hide furniture he'd bought on credit and never paid for. Stories of medieval torture equipment in the basement come mainly from a game of "telephone." For about a week in 1895, when investigators were tearing the building up, papers would announce that he'd been hanging victims because they found a rope, that he'd been chopping them up because they found a worn-down table, and that he'd been cremating them because they'd found strange ashes in a wood burning stove. Most of this was quickly debunked (you simply can't cremate a body in a wood-burning stove), but the debunking didn't always circulate as well as the stories had in the first place.
And the "castle" building wasn't a hotel in the modern sense—there was no front desk, no lobby, no bellhops. The first floor was retail space built in 1887 (well before the World's Fair was even announced), the second floor was long-term apartments added later and the third floor was built later still to use as flats during the fair, but whether the rooms were ever used for that purpose, not just as an excuse to bilk investors out of money (and insurance companies out of more when Holmes tried to set fire to it in the middle of the fair), is up to debate.
The Mysterious Chicago blog explores these and other Holmes myths in great detail.