by Paul R. Spitzzeri
From 1868 to 1875, as Los Angeles and its environs underwent the first significant and sustained period of growth in regional history, among those at the forefront of local development projects was F.P.F. Temple. With his varied endeavors, from banking to railroads to oil to real estate, and others, he was largely joined in the providing of capital by his father-in-law William Workman, who gave Temple his power of attorney for handling these affairs, though there were other important partners, including Isaias W. Hellman, manager of the bank of Hellman, Temple and Company (1868-1871), and Henry S. Ledyard, manager of the Temple and Workman bank (1871-1876).
The difference between these two men was night and day with respect to their modes of operating the financial institutions and the consequences that resulted. Hellman, possessed with a brilliant business mind and acumen, had a conservative approach and a steady, strategic vision that led him to become one of western America’s wealthiest persons, running Farmers’ and Merchants’ Bank in Los Angeles, as well as the Bank of Nevada and Wells Fargo in San Francisco. By the time he died in 1920, Hellman was a highly respected and eminently powerful figure in California financial and business circles.
Ledyard, on the other hand, may have projected confidence and capability when he was hired to run the day-to-day operations at Temple and Workman, but as he and F.P.F. Temple plunged headlong into an array of development opportunities, there was a demonstrated looseness and lack of discipline that was kept under wraps as, on the surface, the bank seemed popular and prosperous. What did not come out publicly until later was that Ledyard simply abandoned the most basic of accounting principles after the first several months or so of the bank’s opening and the result was an unmitigated disaster.
When a financial panic burst forth in late August 1875, after a stock bubble emanating from Virginia City, Nevada silver mines burst, hordes of nervous depositors descended upon the Farmers’ and Merchants’ and Temple and Workman seeking to withdraw funds. Hellman was on a European vacation but rushed home to assert control and project calmness amid the furor and stabilized his bank’s situation. Ledyard and Temple, however, were boxed into a corner due to low cash reserves as depositor funds were invested in development projects.
While a loan, “on rather hard terms,” was secured for the stricken institution from Elias J. “Lucky” Baldwin, it simply could not stanch the bleeding and depositors rushed to close their accounts dooming the bank to failure in mid-January 1876. The disaster led William Workman, a true “silent partner,” to take his life four months later, while Temple, who took office as county treasurer after the bank’s collapse, suffered a series of strokes from the stress, and died four years later. Ledyard, who left the area and then returned years later, ended up committing suicide at Redondo Beach in 1890.
Fast forward roughly a half-century later and the story of Walter P. Temple is eerily reminiscent of that of his father. In 1917, on land in the Montebello Hills formerly owned by F.P.F. and purchased “on time” (that is, by payments) from the Baldwin estate, the 48-year old became the beneficiary of a stunning windfall as the first of many oil wells began yielding crude, discovered by his 9-year old son, Thomas, a few years prior, and generating large royalties, peaking at some $40,000 monthly.
In addition to buying a large Craftsman house in Alhambra and the 75-acre Workman Homestead, last owned by the family about two decades prior, Temple dove into the oil business with his own prospecting firm and became a real estate developer to boot. For about roughly the same number of years that his father speculated as a capitalist, Temple, from 1919 to 1927, poured large sums into these business endeavors, engendering the risks any such enterprises entail.
His real estate work was initially undertaken in a sole proprietor format, though he’d had a long-time friend, Milton Kauffman, as business manager and Los Angeles attorney and Pasadena-area resident George H. Woodruff, as legal adviser. Temple’s first major property purchase for development was in Alhambra in 1919 and the land became the Temple Theatre, which opened on Christmas Eve two years later.
His work in this arena accelerated significantly during the first half of the Twenties, as greater Los Angeles was in the heady atmosphere of yet another of its growth booms. In 1922-1923, which is when the real estate market peaked, he took on projects in Alhambra, El Monte, Los Angeles and San Gabriel, as well as his own Town of Temple. These included post offices, stores, a second movie theater at El Monte, and, in the Angel City, investment in syndicates that constructed two height-limit (11-story) commercial buildings.
As this extensive expansion into real estate ramped up, it was decided to formalize the operation by establishing the Temple Estate Company, which embraced all of Temple’s land holdings and construction projects in the San Gabriel Valley (Alhambra, El Monte, and San Gabriel) except for the Town of Temple, for which the Temple Townsite Company was established, while the many oil projects undertaken in Huntington Beach, Signal Hill, Whittier, Ventura and out of the area were under the auspices of the Walter P. Temple Oil Company.
Just as F.P.F. Temple did during the heady days of the 1870s, his son moved aggressively into speculative capital development during the Roaring Twenties, though he had his two main partners, Kauffman and Woodruff, increasingly contribute more financially, which leads to the highlighted artifact from the Museum’s collection for this post: a 2 June 1924 legal instrument concerning the Temple Estate Company.
The agreement was executed by the law firm Woodruff operated with Clyde Shoemaker (later an assistant district attorney for Los Angeles County) and which had its office in a suite on the top floor of the Great Republic Life Building, erected by a holding company of which Kauffman, Temple and Woodruff were members and which still stands at Spring, Main and 8th streets, not far south of the historic Temple Block (constructed between 1857 and 1871 by F.P.F. and his brother Jonathan.)
The document stipulated that Temple was owner of 998 of the 1,000 shares of the Temple Estate Company and Kauffman and Woodruff held a single share each and that the trio were the board of directors. Yet, it continued
WHEREAS the second and third parties have heretofore for a number of years last past rendered to the first party valuable services of an executive and business nature in relation to the acquisition, development, management and control of the property and business of the first party;
AND WHEREAS the first party has recently incorporated and organized said company and turned over to it all of his property, business and affairs, and has requested the second and third parties to act as members of the board of directors and as officials of said company, and is desirous of having them personally interested in said corporation with him as owners and holders of stock in order that they may have a more substantial interest in the operations of said company and become more closely associated with him in the management, control and direction of the business and affairs of said company:
THEREFORE . . . in consideration of the personal regard and friendship that he bears . . and as a recognition of the extraordinary services an attention . . . given to his business and affairs during past years, and as an expression of appreciation of the faithfulness and loyalty . . . in all of their relations to an with him and his family . . . does by these presents give, assign, transfer an deliver unto them and each of them, shares of stock in said corporation, Temple Estate Company, . . .
Kauffman and Woodruff were each given 40 shares in the firm with two certificates of stock issued as well as to continue to serve as company directors. For the latter, it was stated that the two men were to “give and devote his best skill and attention to the management and direction of the business and affairs” of the firm, with allowance for compensation for any work done other than that of director.
It was also stipulated that if either Kauffman or Woodruff should predecease Temple, their shares would revert to him, whereas if Temple was to die first, those shares would pass to their heirs. It turned out that both of the former survived the latter, who passed away in late 1938, with Woodruff living a half-dozen more years and Kauffman surviving until 1956. But, as far as the Temple Estate Company stock was concerned, these provisions proved to be moot.
In spring 1926, given the growing complexity of the work done under the names of the three Temple companies and the amounts of money involved growing larger, it was decided to issue bonds for the townsite and estate firms, the latter, involving $350,000, in denominations of $500 and $1,000, for a four-story building in Alhambra issued by the Los Angeles companies of John M.C. Marble and William R. Staats.
Advertisements in newspapers soliciting for investors observed that the value of company-held lands and buildings was about $736,000, more than double the issue while adding that net annual earnings were just shy of $50,000, about two-and-a-quarter times the peak interest required by the issue, while it was expected earnings, primarily from rental payments, would grow.
It was added that funds for construction expenses for what was soon called the Edison Building, built with part of the funds generated by the issue, could only be released as work moved along and with certificates from Estate Company officials and the supervising architects, Albert H. Walker and Percy Eisen, who worked on most of Temple’s buildings as well as the early stages of his house La Casa Nueva at the Homestead. A surety bond was also to be executed “guaranteeing completion of the building free and clear of all liens except current taxes and the lien of this issue.” Amounts and maturities rose from $10,000 to $24,000 over the 15-year term with $150,000 due at the end on 1 May 1941, while investors were promised a 6.5% return.
Among the problems that ensued, however, was that Temple’s main income, royalties from the Montebello oil lease, was gradually diminishing during the decade and not enough was generated from other projects to match, much less exceed, the rapidly rising outlays for the development projects, the much-extended construction of La Casa Nueva, personal expenses and more. The Edison Building, the largest in Alhambra, was completed in April 1927, but it proved to be the Estate Company’s swan song.
The January 1928 hiring of the Davis-Baker real estate firm, headquartered in Pasadena, to manage the estate and townsite properties, was intended to reboot the fortunes of both, but there was also a decline in the real estate market and major problems with the Town of Temple, renamed Temple City later that year. These included a state law that required the neighbors of a defaulting property owner in unincorporated areas to pay his/her assessments for community improvements and which looks to have severely restricted sales.
Kauffman, meanwhile, parlayed a relationship Temple had with the Dodson family, heirs of the Sepúlveda clan which formerly owned Rancho San Pedro (the north end of which F.P.F. Temple and a partner subdivided into what became Compton), and, in 1927, announced ambitious plans for a 530-acre tract on the border of San Pedro (City of Los Angeles) and Rancho Palos Verdes, but this never materialized into what was anticipated and likely cost Kauffman a pretty penny.
While Woodruff floated schemes to try and pull the Estate Company out of the morass that was engulfing the firm, the financial situation worsened and, in July 1929, the company sold the Edison Building and nearby Utter and Sons Mortuary to Horace L. Averill, who’d sold the Dodson Ranch at San Pedro to Kauffman and his associates in the Western View Land Company. The Estate Company owned lots on the ranch, but sold those, as well as other holdings as the Great Depression loomed and then descended.
By the early 1930s, there simply was nothing to be done to halt the inevitable and the last landholding in Temple’s portfolio, the 92-acre Workman Homestead, was lost to a bank foreclosure in 1932, when the Depression reached its nadir. Documents like this agreement are part of a story that was all-too-common during the boom of the Twenties and the others before and since. Speculation in oil, land and other endeavors can bring substantial financial rewards, but also poses enormous exposure to risk and Walter P. Temple’s economic downfall reflects this, though Kauffman and Woodruff also suffered severe financial losses (though, outliving his friends and partners, Kauffman finally found his long sought-after fortune in the post-World War II housing boom.)