by Paul R. Spitzzeri
As prior posts on this blog have discussed, Walter P. Temple parlayed much of his substantial income from royalties on oil wells drilled on his Montebello-area ranch by Standard Oil Company (California) from 1917 onward into further petroleum prospects throughout greater Los Angeles, as well as Alaska, México and Texas through his own company while also moving aggressively into real estate development with projects in Los Angeles, Alhambra, El Monte, San Gabriel and his own Town of Temple (renamed Temple City in 1928).
Both the oil and real estate enterprises were highly speculative, requiring a great deal of upfront costs with the expectation in the first example that black gold was of sufficient quantity to be profitable while in the second instance the long-term income from rents or a future sale at a higher price yielding equity was the operating factor.
In boom times, such as occurred in the region during the early 1920s, capitalists move to strike while the iron is hot, but if the fire goes out, either because the boom goes bust or individuals become over-leveraged, that iron can become far too hot to handle. As with so many speculators, this is what happened to Temple in the last half of the Roaring Twenties.
It wasn’t just, however, that the oil and real estate projects absorbed so much of his capital, but Temple, as many nouveau riche are wont to do, spent lavishly almost from the time his first royalty checks arrived in summer 1917. A substantial Craftsman house in Alhambra, the purchase of the 75-acre Homestead, fine cars, tailored clothes, lengthy out-of-state vacations, private schools for his children, expensive jewelry for his wife—the list goes on and could have applied to any number of wealthy Americans at the time.
So long as the good times continued and income outpaced expenses, then there was nothing to worry about and surviving financial statements from 1919 onward demonstrate the solid economic status of the family. The local real estate market peaked in 1923, the year the Town of Temple, which celebrates its centennial next year, was founded, while the output of the wells on the Temple lease were already in decline by then, as the field was fairly shallow.
Then, a hundred years ago this summer, after returning from México filled with inspiration, Walter and his wife Laura González decided to build La Casa Nueva, a Spanish Colonial Revival mansion, mostly constructed of hand-formed adobe bricks, and which wound up taking five years to build at a cost that was surely many times greater than initially anticipated. This expense, added to the mounting expenditures incurred with the Town of Temple and ongoing and oil development projects, led to an increasingly untenable situation.
By spring 1926, it was a decided to issue bonds for both the Temple Townsite Company as well as the Temple Estate Company, which managed the rest of Walter’s holdings outside of the Town of Temple. While this raised funds to complete existing projects, there was still the matter of dealing with declining revenue and ascending expenses, so a proposal was devised in May 1927, not long after the last major building project by the estate company, the Edison Building, which still stands, in Alhambra was finished, by Temple’s attorney and business partner (the other major partner was business manager Milton Kauffman) George H. Woodruff.
This plan, however, did not come to fruition, which leads to tonight’s post and Woodruff’s letters from 9 September to Walter and his eldest child Thomas, and which were stark admonitions, just as La Casa Nueva was finally nearing completion, about the financial situation of the family. In his letter to Walter, Woodruff began by reporting:
I have had Mr. [Charles W.] Tandy make out a very carefully prepared anaylsis [sic] of the financial requirements of the Temple Estate Company under conditions as they now exist, and showing the income of the Estate Company, and I have asked him to send a copy of this statement to you in order that you may carefully consider the same and be in position to advise as to retrenchments that may be put into effect in order that the monthly expenditures from now on may not exceed the monthly income.
In fact, Tandy’s report also survives and is part of the Homestead’s collection, along with these missives, and a previous post on this blog details the contents of the analysis.
There was debt of some $750,000, roughly half in bonds payable and nearly that much in notes that were due, with one of these latter a $200,000 loan, while another tallied $90,000, with more than half of the latter due on 29 October 1929—that was a particularly bad time to have any kind of major debt due for payment because the stock market crashed that week and ushered in the Great Depression!
While revenue included an average, over the prior four months, of well over $8,000 monthly from oil royalties and north of $4,000 from rentals in the various Temple Estate Company buildings along with $1,800 in interest paid on loans, though most of this was to his own townsite and oil companies, Walter had a rapidly accumulating portfolio of liabilities that were clearly outpacing income.
This led Woodruff to his next statement, one of warning:
It is very apparent to me that we must operate upon a most economical basis during the coming year if we [are to] save the company from serious embarrassment. It is going to be necessary to sell some of the properties of the company during the coming winter season, but we must not allow ourselves to get into a position where we will have to make unwarranted sacrifices.
He alluded to a scheme to sell the remaining assets at the Town of Temple, “which will greatly relieve the situation,” but he noted it would take several months to make the proper arrangements. Again, the lawyer cautioned “that we not be required to slash present prices any more than is absolutely necessary.”
Not mentioned was the fact that the Town of Temple, like other unincorporated communities in the region, were under the terms of the Mattoon Act, a well-intended mechanism for raising taxes through assessment districts to pay for infrastructure like roads, sidewalks, lighting and others. The problem was that the law required that, if a property owner defaulted on this tax, the neighbors on either side were required to pay in their stead. An obvious unintended consequence was that people generally stopped buying property in these areas to avoid this obligation.
So, the effort by Temple and his partners, which also included Alhambra business figure Sylvester Dupuy, owner of an imposing hilltop “castle” that has become infamous due to the murder that occurred there by its owner, the late record producer Phil Spector, to dispose of Town of Temple property was going to be affected by the situation involving the Mattoon Act, as well as general real estate conditions.
Woodruff continued by telling Temple that he was going on a two week vacation and, when he got back, would meet with Temple and Kauffman to discuss “the matter of working out a budget system for the Temple Estate Company and its allied interests, which will enable us to bring about a better situation in the affairs of the company.”
The missive ended with the lawyer telling Temple he was sorry not to have seen him before leaving on a trip to Modoc County in the northeastern corner of California, where he was going “on a hunting and fishing trip” with Godfrey Heslop, a friend of Temple from their youth, with Woodruff adding that he was anticipating “a most delightful and restful time.”
As for Heslop (1863-1934), he had some ancestral ties to the San Gabriel Valley dating back to this great-grandmother Eulalia Pérez de Guillen, the well-known llavelera, or keeper of the keys at Mission San Gabriel, responsible for securing indigenous female neophytes from predator males and who was purportedly 143 years old when she died in 1878, though she was almost certainly four decades or more younger.
One of Eulalia’s daughters, María del Rosario Guillen, married Michael C. White, a native of England who was one of the first Anglos to live in greater Los Angeles. White also spent a few years in Taos, New Mexico where he worked in the store owned by William Workman. In 1845, when Pío Pico unseated Governor Manuel Micheltorena at the Battle of Cahuenga and assumed the chief executive office of the Mexican Department of Alta California and became its last governor, White was part of an extranjero company led by Workman—we’ll share White’s remarkable reminiscences from his 1877 interview with Hubert Howe Bancroft of the well-known library at the University of California at Berkeley in a post here next February.
One of the daughters of Michael White and Rosario Guillen was Francisca who married Joseph, or José, Heslop (1835-1899), whose English father wound up in Valparaiso, Chile and married a woman from that South American country. When news of the California Gold Rush reached that nation, José Heslop joined the many from Chile who went north in 1849 to try their luck. Within several years he was in Los Angeles, married Francisca White and, for some two decades was the ranch foreman for Leonard J. Rose’s Sunny Slope estate in the San Gabriel Valley.
Godfrey was born in the family’s adobe house at what is now the intersection of Huntington Drive and San Gabriel Boulevard in San Marino on land Eulalia Pérez de Guillen secured for her family and which the Whites gave to their daughter and Heslop. A graduate, as was Walter Temple, of the high school section of St. Vincent’s College, now Loyola Marymount University, Godfrey was long interested in the horticulture and nursery businesses, having worked for Rose as manager of Lamanda Park in what became east Pasadena and which came from another White daughter and also owned his own nursery for some years in the early 20th century.
Woodruff’s letter to Thomas Temple noted that he was unaware that “when I was at your home [La Casa Nueva] last night that I would not see you again before you leave for Harvard,” where Thomas was beginning his second year of study at the prestigious law school (where his uncle William graduated in 1874.) The lawyer told the young Temple that he was leaving in a few days for his vacation and could not visit again before doing so, though he added “I have enjoyed seeing so much of you and the other boys [Walter, Jr. and Edgar] and Agnes this summer.”
The attorney reflected further on this and wrote:
The home place never seems quite natural with you and the rest of the family [children] away. We have had some most delightful gatherings this summer and I hope you feel greatly refreshed and restored in preparation for the tasks ahead of you this coming year. I feel very proud of what you accomplished last year and you should be greatly encouraged to undertake the work for another year with the reasonable assurance that you will be able to handle it even more successfully than you did last year.
Woodruff continued that Thomas knew how to study the law and the second year should have been far easier than the first, especially if he buckled down and applied himself. Moreover, he noted, “you have a splendid future ahead of you if you make the most of the opportunities which you are now enjoying,” observing that thoroughness was crucial to success in the legal field. The lawyer offered his advice at any time about the law and then turned to business.
Specifically, Woodruff assured Thomas “I will personally devote myself most conscientiously to the business and affairs of the Estate Company with the view of helping to pull it out of the embarrassing condition which it is now in.” Yet, he went on, if this was going to be possible, there was the same essential requirement he mentioned in his missive to Walter Temple:
It is going to be necessary for the company and everybody connected with it to practice the most rigid economy during the coming year in order to avoid the necessity of making some very costly sacrifices in the sale of some of the assets of the company, and I hope we may have your fullest cooperation in this respect.
While Thomas was asked to keep expenses to a bare minimum, without affecting his comfort or “good standing among your class associates,” but Woodruff impressed the importance of avoiding spending money which might be understandable under better circumstances, if not necessary.
Having implored Thomas’ cooperation, the lawyer ended by stating that assistance “in working out the financial problems with which we are confronted” during the student’s time at Harvard “will be a source of encouragement to the rest of us to adopt measures of the strictest economy in the management of the affairs of the estate.”
Work on La Casa Nueva wrapped up by the end of the year, while landscaping was undertaken afterward. With the new name of Temple City (a citizen contest to select a new name after the postal service required it led to the selection of Santa Rita, but a protest spearheaded by Temple family biographer J. Perry Worden led to a compromise), an arrangement was made in early 1928 to have a Pasadena firm, the Davis-Baker Company, conduct the development of the town.
Yet, the financial situation continued to deteriorate so much that Woodruff forwarded Walter Temple a letter he’d written to Kauffman outlining proposals for dealing with the Temple Estate Company and which called for “immediate drastic action” as “we are now approaching the precipice” because Temple did not agree to forming a holding company to manage company affairs and the firm was facing “a complete financial wreck.”
While efforts were undertaken to sell major assets, such as the disposition of properties at Alhambra in July 1929, it was too late to stem the tide of ever-mounting debt. By spring 1930, all Temple interests in Temple City were also sold and the family leased the Homestead to the Golden State Military Academy, with Walter moving to Ensenada in Baja California, México to save expenses (something many Americans do these days), while Thomas, having earned his degree from Harvard and forsaking the practice of the law, moved in with his aunt Luz González de Vigare down the street from Mission San Gabriel and became a historian and genealogist of some note.
Our understanding of the Temple family’s financial misfortunes, reflective of so much of what was happening in late 1920s America as it headed toward the Great Depression, is greatly enhanced by surviving original documents and letters such as these, donated by descendants entrusting these materials to the Homestead for preservation and the interpretation of the Workman and Temple family’s fascinating century-long story from 1830-1930.