by Paul R. Spitzzeri
It is City of Los Angeles Historic-Cultural Landmark #899, earning that designation at the end of 2007, but, remarkably, the history what has been called the Charles C. Chapman Building, located at the northeast corner of Broadway and 8th Street, for all but the first few years of its history leaves out its most interesting element: the main story of the principal figure in its construction, Charles Abbott Elder (1864-1954).
As with so many historic structures in what people nowadays call DTLA (that would be “Downtown Los Angeles” for the tragically unhip,) this 1912 Beaux Arts building is comprised of lofts and the history page for “The Chapman Flats” does reference Elder in some detail. It notes that he established the Los Angeles Investment Company (LAIC) with a couple of associates in 1899, while adding that his bank was purportedly “competing with the largest in the country.”
The page went on to suggest that, after the structure was finished, “over the next few years, Charles Elder and his company had a tremendous influence on real estate development in the city” and cites a Los Angeles Times article from 1913 calling him “one of the best-known men in Los Angeles.” Some of what the page says about Elder is true, others are incorrect and a whole lot is left out, especially his sudden and striking descent from the upper echelons of real estate development in the Angel City during the early 20th century.
Charles J. Fisher wrote in a brief summary online only that the Charles C. Chapman Building was “built by the Los Angeles Investment Company, a major landowner and housing developer in the early 20th century Los Angeles area” and then only adding that “a financial problem in the mid-teens forced the sale of the building” to Chapman, who was a major figure in the development of the Orange County town of Fullerton.
Fisher then went into a brief summary of Chapman’s migration from Chicago, where he was a success in printing and construction (not mentioned is that a fairly well-known) 1901 history of greater Los Angeles by James M. Guinn was published by the firm, which issued many county histories from all over the country) and that he came to California, as so many did, for health reasons, namely that of his wife.
Highlighted was Chapman’s importance in the development of the Valencia orange, the development of Fullerton, the creation of his namesake college (now a university) in the City of Orange, and his founding of the Bank of America, which later merged with the Bank of Italy while retaining the former name and is now one of the largest banks in the nation and world.
What Fisher, however, did state in some detail in the “Historical Significance” section of the Historic-Cultural Monument Application gets to the most interesting part of the building’s early history, several years before Chapman bought the structure in 1920, when the LAIC, taken over by former United States Senator from California Frank P. Flint, sold the building to him for $1.6 million to put the company on a solid financial footing. Moreover, Fisher provided the important details about what happened to Elder and the LAIC, but more on that in part two of this post tomorrow!
So, let’s go back and establish some of the history of Elder and the LAIC, including the construction of the remarkable building, before getting to the juicy part of the story. Elder was born in Kinmundy, Illinois, which now has fewer than 800 residents and is about an hour-and-a-half drive from St. Louis. His father Abram was a doctor and druggist and the family lived in Mattoon, Illinois, northeast from Kinmundy before relocating to Topeka, Kansas, where Charles graduated from his school in 1882.
Elder later stated that his father established the precursor to the LAIC in 1866 and there was what he called the “Elder Syndicate” in Topeka “containing some of the ideas which the son later developed and expanded.” Presumably, this had to do with real estate and banking and Elder said that he worked for his father from about the age of 9 and was general manager of the operation from age 19 or so.
In 1890, Elder enrolled at the University of Illinois and studied architecture there for four years, following this with a period of study in Paris, France, while still retaining, apparently, his managerial role with the syndicate. He explained, however, that he merely wanted a college education along with his business background. Shortly after his return from Europe, however, Elder made his way to Los Angeles, arriving in 1896.
It was at this point, Elder continued, that he established a branch of the syndicate in the Angel City, while simultaneously organizing, with two unnamed associates, the Pacific Investment Company, though the latter had but $25 in capital, “but to this was added some credit and an unlimited supply of confidence.”
Not mentioned in these autobiographical utterances was that Elder was also a musician and played clarinet well enough that he was briefly in the Los Angeles Symphony Orchestra under conductor Harley Hamilton and a member of the Gamut Club for music lovers. He was also a baseball enthusiastic and, in the first years of the 20th century, was an investor in a short-lived semi-pro club.
The earliest mention found in newspapers of Elder’s real estate work was late 1898 and on a decidedly modest scale, but, with the onset of yet another one of the greater Los Angeles’ development booms a few years later, he and his partners in the LAIC began to purchase larger tracts of land, mainly south of downtown and develop them into residential communities.
By early 1905, what was known as the Los Angeles Investment and Trust Company received some substantial coverage in the Los Angeles Times when the firm filed articles with the county clerk to increase its stock five-fold to a half million dollars—it having incorporated in 1899 with a modest $100,000 in stock. The paper observed that
Commencing with a few hundred dollars as capital, the company has by careful and conservative management been brought to its present point of unexampled prosperity. In its nine years of existence it has paid to its stockholders 473 per cent in cash dividends, and at the present time has over 30 per cent of undivided profits in its treasury . . .
From the very start Mr. Elder determined upon the soundest and most conservative principles as the rules of his business.
The article went on to note that for every dollar of stock issued, one or more was paid back into the firm’s treasury, while there was never stock sold by a promoter, commissions paid for stock sales and no promises or offers made “other than the assurance of a square deal and statements as to the past record of the company.” Astoundingly, the piece continued, no officer was paid a salary and they earned their compensation from sales, commissions and stock dividends.
Writing that “the company has had a growth in financial standing and public esteem which can be compared to only a few similar institutions,” the Times added that the LAIC operated in modest quarters until just a few weeks prior when it took over space on Hill Street between 3rd and 4th, where the Angels Flight railway is today.
The offices remained there until the new skyscraper was completed in 1912, though the Trust portion of the business was spun off into the Globe Savings Bank by fall 1906. The piece ended with the claim that the company’s track record was such that it “will meet with a large measure of prosperity in the coming years.”
In June 1905, the paper ran another feature, focusing on the “Elder Modernized Bungalow,” the type of modest housing for which the LAIC became best-known at a time when such structures proliferated profusely on the regional landscape. At the corner of Long Beach Avenue and 21st Street, in what is now an industrial area, “another characteristic type of local architecture is the combined modified or modernized mission bungalow . . . one of a hundred houses erected by Charles A. Elder in Elder Place.”
Discussing the amenities in the seven-room dwelling including a cellar, several bathrooms, antique oak floors in the kitchen, and three pressed-brick mantels, the piece proclaimed that “the bungalow represents the maximum of results in building in this semi-tropic climate, where comforts and ornamentations can be employed, as against the necessities in construction in the blizzard swept East.”
At a cost of just $3,000, the article ended with a note about “building a home, on some plan, that will prevent the first cost, or interest account, from eating the life out of the bread winners.” This appears to mean purchasing on an installment plan, for which the firm became widely recognized.
In 1906, the Elder Building Material Company was founded as a subsidiary of sorts to the LAIC, from which it bought thirty lots for workshops for the use of building materials like stone, wood, brick, plaster, glass, hardware for making house components, such as doors, for use in structures built and sold by the LAIC.
After several years of substantial success and hundreds of dwellings built, the LAIC decided it was time to leave its Hill Street headquarters and build one of the largest and most luxurious office buildings in the Angel City at a time when another building boom was underway, including on Broadway and in the region south of Seventh Street.
The 13-story, 150-foot height limit structure was designed by Ernest H. McConnell, the architect of most of the LAIC’s residential structures and excavation of the site began in summer 1911. Company officials broadcast that leases to the tune of $1 million, the stated cost of the structure, were already confirmed with the major tenants being Elder’s Globe Savings Bank as well as the Sierra Madre Club, one of many executive clubs in the Angel City.
The steel-frame and reinforced concrete skyscraper, with 100-foot frontage on Broadway and 150 feet on 8th, was to boast a granite base, an abundance of decorative tiles, terra cotta and glazed brick exteriors and some unusual features, such as ornamental columns rising on the last three floors and the use of 6,000 lights to illuminate the exterior. There were 90 carloads of cement brought in from Riverside, 200,000 feet of lumber for forms and scaffolds, and 2,000 tons of steel for the inner structure.
Elder was proud to note that all the construction work was to be done by LAIC employees and he told the Los Angeles Express for its 22 August edition that “the building construction will be commenced without any burden of debt” and “he hopes to have it free of debt when the workmen have completed their task and the structure is ready for occupancy.” An ad in the paper on 8 September related:
Los Angeles furnishes many strange tales—but the strangest one of all is the story of the Los Angeles Improvement Company building, a million dollar pile being built at Eighth and Broadway. This building is being built by the people, not by a few men of wealth, but by the ordinary Americans of the middle class. The man who has $100 or $200 or $300.
The capital is coming from small investors—from hundreds of them. It is coming in small amounts. They total enough to carry the work of construction through in about one year.
If the small investor ever had a monument to his credit, he will have one at Eighth and Broadway—a thirteen-story, steel, marble, concrete and tile business block.
The same theme was repeated in an early February 1912 ad, which included progressive construction photos as evidence of what the “gold notes” used for financing accomplished in a project “erected by those who are not wealthy.” Averring again that “the project stands unique in the annals of building enterprise” in that it was “controlled directly by nearly ten thousand people, most of them residents of Southern California.”
Investors were guaranteed returns on their investment within three months as the lowest amount and shortest term were $100 for 90 days with the principal and interest promised and investors could pay just a dollar at a time. The LAIC, proclaimed to be the biggest investment and financial company in the American Southwest, “is engaged in the safest business on earth, that of buying and selling real estate in a city of certain growth” and it was added that Los Angeles’ “future, measured by its past, is certain.”
While there was some heavy rainfall in the winter of 1911-1912, the Express of 6 March bragged that “almost every day of the year the music of the automatic riveter can be heard above the mighty roar of traffic in the mercantile district, while the huge steel beams and girders of the giant skyscrapers are being connected.”
Citing the LAIC and the impressive Van Nuys Building at Spring and 3rd, as major examples, the paper also mentioned other commercial buildings in various stages of construction, including one built by William May Garland, a major downtown developer, the E.P. Clark structure, the Union Oil building and the Title Insurance edifice. Plans for several more substantial structures were also mentioned.
An accompanying cartoon by Adolf C. Fera and titled “Postcards of a Tourist” included a message from “Skinny” to “Mr. and Mrs. East” in “Ohio City, Kansas,” in which he informed the folks that “many steel-framed structures are being built in Los Angeles at present” and “it’s interesting to stand around and hear them going up.”
Meanwhile, a portly gent in a black coat and top hat yells at a less-rotund companion, as the “tat-tat-tat” of construction work blares, “I say—it’s a good thing—it rained!!” while the other asked him to speak louder. Finally, the former leads the latter by the hand to the summit of Mt. Wilson (the sign reads 5,000 feet and it’s actually over 700 feet more than that!) to continue their conversation.
By April, the lower six floors had much of their cladding in place as the last of the steel supports were installed and the Express of the 20th featured a hoisting engine used to get steel from the first floor in place on the edifice’s roof with a gong utilized as a signal for different stages of the process of maneuvering the material up.
Construction labored on for another eight months until the structure was finally completed in mid-December with another LAIC ad proclaiming that it was owned by 25,000 investors, making the firm “the largest co-operative building company in the world.” The company was also proud that the $1.75 million project, including construction and the purchase price of the lot, was done “free of mortgage or direct lien.”
As proud as Elder and his company were at their manifold achievements, crowned by the completion of this commercial edifice, the near future would prove to be a stunning and stark undoing of everything he and the LAIC boasted of having achieved during the recent several years. That leads us to conclude part one and request that you come back tomorrow for the second and concluding part of this post!
I wonder if any of the 2,200 homes built by the LAIC (pictured) remain identifiable today? Good story – now anticipating part 2.
Hi John, part 2 goes into more of the LAIC’s plans for Southwest Los Angeles including lands held by “Lucky” Baldwin. There are definitely many LAIC houses still standing, some by Elder and his associated and many by the next iteration after his dramatic fall in 1913. Thanks for checking the post and blog out!