by Paul R. Spitzzeri
Today’s entry in the “Read All About It” series of posts dealing with early greater Los Angeles newspapers is the 22 January 1876 edition of the Los Angeles Star, the oldest paper in the Angel City, dating back nearly a quarter century to its first incarnation in 1851. It was continuously published for a baker’s dozen of years until its editor of eight years, Henry Hamilton, a dedicated Confederate sympathizer was jailed in 1864 for anti-government sentiments during the latter days of the Civil War.
Hamilton revived the paper four years later as greater Los Angeles underwent its first growth boom, but sold the Star in 1872 to his partner George W. Barter. Barter, who’d previously operated the Anaheim Gazette, ran the paper for not quite a year and was then succeeded by Benjamin C. Truman, who, in 1874, wrote a series of promotional articles about Los Angeles County and southern California and collated these into Semi-Tropical California, a book which appeared the same year.
By early 1876, trouble loomed for the paper, Truman and the region generally, thanks to the collapse of the California economy the prior summer, as a Virginia City, Nevada silver mine stock bubble burst after figures like Elias J. “Lucky” Baldwin sold their shares as prices peaked beyond what was reasonable. The result was the failure of the state’s largest bank, the Bank of California in San Francisco and the sudden death of its president, William C. Ralston.
The telegraph soon transmitted the dire news south and the two commercial banks in Los Angeles, Farmers’ and Merchants’ and Temple and Workman, faced a run of jittery depositors wanting to withdraw their funds. The institutions agreed to close for September to try and calm the roiling waters, though, when Farmers’ and Merchants’ cashier, the brilliant Isaias W. Hellman learned that his partner, ex-governor John G. Downey, agreed to suspend operations, he rushed from a European vacation to reopen and assure depositors that all was well with his bank.
Downey’s offer to help F.P.F. Temple, president of Temple and Workman, could not hide the fact that the latter institution was poorly managed and so, while Farmers’ and Merchants’ was able to resume business without any major issues, its rival badly needed money. There was no one in the Angel City who could (or would) provide a loan large enough to help, so Temple and his managing cashier, Henry S. Ledyard, spent much time in the fall in San Francisco seeking capital from that city’s wealth elite—to, however, no avail.
That is, until a deal was struck with Baldwin, but, as Temple described it in a 20 November 1875 letter from San Francisco to his silent partner and father-in-law, William Workman, informing him that he’d arranged for money “on rather hard terms.” In fact, the loan was structured in such a way that made it challenging at best for the bank to comply with its terms, but, why Temple agreed, instead of declaring bankruptcy, selling assets to pay creditors and salvaging at least something substantial from his estate, is an interesting question.
In any case, the bank reopened on 6 December to great fanfare, including a celebratory banquet at the Pico House hotel, at which Baldwin and Temple were feted with toasts amid the belief that all would be well in short order. Just over five weeks later, though, on 13 January 1876, the bank closed permanently and assignees (Daniel Freeman and Edward F. Spence) were named to conduct an inventory and begin the difficult task of settling the affairs of the failed bank.
While there were frequent views expressed in the press about how the disposition of the institution would go, there were many who waited with baited breath to see the results of the inventory, which was released at the start of February. In the meantime, the Star, along with its English-language contemporaries, the Express and Herald (which was run by a company of Los Angeles capitalists with Temple as treasurer) and the Spanish-language La Crónica (later edited by then-bank employee and son of its head, Thomas W. Temple), occasionally reported on bank-related matters.
The Star in the editorial section of this issue took umbrage with the Herald regarding an article appearing in the latter that claimed the former made “an unwarranted attack on Mr. E.J. Baldwin for the unpardonable sin of loaning his money at a rate of interest which the borrower was not only willing but anxious to pay.” The paper insisted that its article was a general one and that “if, in its way, it referred to the position of Mr. Baldwin as a lender of moneys to a needy bank, it did so in the line of respectful criticism. It went on,
So far as Mr. Baldwin and Mr. Temple are concerned we have carefully abstained from editorial comment until a statement could be authoritatively made. We must state, however, that we have heard no one say anything derogatory of Mr. Baldwin in the premises. In fact, he is one of the men who stepped up and helped save the Bank of California, and has seemingly done the same thing by Mr. Temple, and his name has generally been sounded in terms praise. As the Herald delights to say of Senator [John P.] Jones, Baldwin is for Baldwin, nevertheless, and if he had not acted entirely according to his stipulated agreement with Mr. Temple, we shall all know it in a few days.
The Star added that “even if we had unkindly referred to Mr. Baldwin, there is a satanic mockery” in any attack made by the Herald. Another editorial comment was prefaced with a reminder that it was the duty of journalists to keep its readers informed on matters of import and assured that “we are alive to the fact that there are two important things at issue in our midst that we have not as yet discussed.”
It continued that these items were of “too tender a nature to discuss with ease at present” and the paper demurred from saying anything “that may destroy a man’s character for life” without a certainty about the reporting. The Star acknowledged that “in the matter of the suspension of the Temple Bank,” note the lack of reference to Workman, “there are a hundred and one unpleasant rumors, and this is the case with regard to the City Treasurer. As with the mention of Baldwin, the paper ended its discussion by saying that “in a few days, at the furthest, the whole will be known, and we shall be enabled to make a statement.” The municipal officer, James J. Mellus, invested $23,000 of city funds in the bank on promise of a high rate of interest
In the “City and County” column, the Star reiterated that “we have nothing regarding the bank or the City Treasurer matter that we can place before our readers” and observed that there were plenty of rumors circulating “without the need of a newspaper.” Commenting that “we trust that all will come out right all around,” the paper cited a quote in the Express from “the present popular and efficient” County Treasurer Thomas E. Rowan about the safety of the county’s funds and that none of his predecessors had any issues with monies. It was not stated, but Rowan lost the election of 1 September, the day of the suspension of the banks, and his successor, in March, was none other than F.P.F. Temple.
Separately in the column, the Star took pleasure in reporting on the penchant of the Express for reporting on rumors and then retracting what was rendered, so that a claim that Mellus was a debtor of $15,000 in the bank was then walked back with the statement that “with the exception of the [city] money deposited in the Bank of Temple & Workman, that gentleman is able to come up with every dollar of the money entrusted to his charge.” The Star, however, took its rival to task for repeating whisperings that could “retail slander upon a young man’s character.”
In a lengthy report on the recent meeting of the Common (City) Council, the finance committee, comprised of Ramón Sotelo, one of the few Latino in a position of civic responsibility at the time, and William H. Workman, nephew of the bank owner, reported on its investigation of Mellus’ actions, based on the rumors, and determined that, through 20 January, there was a balance of $32,189.89. Of this, $23.083.47 was deposited with Temple and Workman “in the name of and to the credit” of the treasurer, while $6,712.50 was at Farmers’ and Merchants’, $2.356.30 was with the recently opened Los Angeles Commercial Bank.
Sotelo and Workman recommended to their colleagues that, “in view of the fact that the bank of Temple & Workman has suspended payment and made an assignment,” the Council move to “secure if possible the prompt payment by the bondsmen of the Treasurer of this amount, so that the city shall suffer no loss.” They also requested that they be given the authority to hire someone to review the treasury’s books and accounts from the beginning of Mellus’ term to the present. Mellus ended up being forced out of his position later in 1876.
Another notable report concerned the question of how much the liabilities of the suspended bank involved, with speculation running anywhere from $500,000 to $1,000,000, but it was reported that,
Yesterday, one of the gentlemen connected with the affair, and a very large creditor, added up a column of figures at the Pico House, and left said figures on a slip of paper. We do not know that they had any bearing upon the bank [wink, wink], but this is the total: $1,094,000.
Elsewhere, the Star stated “there was an informal meeting of a large number of creditors of the Messrs. Temple and Workman Tuesday night,” presumably at the office of United States Hotel owner Louis Mesmer and that the meeting was to continue on the 22nd, “when some action will doubtless be taken.”
Lastly, it was reported that “quite a number of people have sold their deposits” in the stricken institution, with these bringing anywhere from 60 to 75 cents on the dollar. The identity of the sellers and buyers were apparently not known, though it was noted that one depositor offered his $400 in deposits for $300.
Another editorial concerned the reportedly commonly held view that “suitable public buildings should be erected in this city” as “the present dens are a disgrace to our community, to our section, and to our civilization.” It lambasted the naysayers who, the Star claimed, “came here as poor as men can be found anywhere, and have grown up and got rich here among the adobes.” Moreover, it asserted that these same persons were opponents of railroads, sewers, lights, improved streets, steam fire engines, and “now they look with holy horror upon the new plan to improve our water supply, and to do away with present hovels that are used for public offices.”
For those, who migrated to the Angel City “poor as ecclesiastical rodents” and “made hundreds of thousands of dollars during the past ten or twelve or more years,” the paper pugnaciously declared “we can along mighty well without them.” It asserted that property values had risen dramatically in recent years, so there was no reason to construct sorely needed suitable civic structures, including a proper city hall, county court house and jail. The paper added that
That terrible place, the jail, has been denounced by every Grand Jury that has met these last seven years. Why, the cramming of good, bad and indifferent human beings into that filthy place is an insult to our civilization. Let us all favor the immediate erection of public buildings. They are greatly needed. All of the little counties around us have suitable public buildings, and we, who profess to have the banner county, next to San Francisco, have none . . . when it is understood that the property now owned by the county will bring $50,000 at auction, we fail to see where the intelligent opposition comes in.
The back page contains a reprinting to the text of a summary of a bill for a new court house and jail suggested by the Board of Supervisors and carried the county’s delegation in the state legislature. If successful, the bill would allow the board to acquire a lot, spend up to $100,000 for a combined edifice or separate ones, and that, when these were completed, to sell the existing buildings. The proceeds from the latter were to be deposited in a “Los Angeles County Building, Interest and Sinking Fund,” with the County Treasurer (Temple) advertising for proposals for bonds and the board able to levy a tax of 12 cents per $100 of taxable property applicable to the fund.
Another improvement project that led to the Common Council also sending a proposed bill to Sacramento concerned irrigation with the City seeking approval to issue up to $75,000 in bonds for “building dams and reservoirs, constructing suitable zanjas [ditches] and irrigating canals and improving the same.” The bonds would be payable in 20 years at 7% interest with funds placed in an Irrigation Improvement Fund and a tax of .5% of taxable property in the city to pay the interest on the instruments and for their redemption.
With the completion in 1874 of the line using horse-drawn cars of the Spring and Sixth Street Railway, of which F.P.F. Temple was treasurer, several new lines secured franchises from the City including, in November 1875, one that was to run from the northern end of the Spring and Sixth at what would soon be the River Station of the Southern Pacific where Los Angeles State Historic Park is now and north into East Los Angeles.
This subdivision, the first within city limits and east of the river, was organized in 1873 by Dr. John S. Griffin and associates and the ordinance allowed for a 25-year term for the physician and his fellows to build the line across the river to Downey Avenue, which is now North Broadway. From there is was to be built along “the most convenient route over the streets in East Los Angeles to the workshop grounds of the S.P. Railroad.”
The Star, though, reported that iron for the track had just arrived “and will be put down in a few days from the eastern [northern] terminus of the Spring Street Railroad to the park in East Los Angeles,” this presumably being land acquired by the S.P. for its maintenance yard and then, in 1881, became Eastlake Park, changed to Lincoln, when the community was renamed Lincoln Heights. In its article, the paper then added,
East Los Angeles has been one of the marvels in the way of suburbs. Yet, there is an unmistakable permanency about all of its improvements and surroundings that have ensured its success. It is a part and parcel of the city. It has the finest and best graded streets and avenues in this section. Its system of water privileges is perfect. It is the Oakland of this city, except that it is itself a portion of Los Angeles . . . One thing about East Los Angeles is, there is no risk. It keeps on growing, and growing, and, with a street railroad running from our city to the heart of the burg across the river, there is no telling what proportions it will assume.
Reports from the new coastal town of Santa Monica, the project of the aforementioned United States Senator from Nevada, John P. Jones and where the Los Angeles and Independence Railroad, of which F.P.F. Temple was treasurer, included work to improve that road’s tracks, the completion of the [San] Vicente station three miles east, and the purchase of new passenger cars for the railroad (said to be ready for expansion east from Los Angeles to Cajon Pass), as well as new houses and businesses (such as an impending brewery) and the “Club-House,” with a bar, billiard room and parlor with a grand piano. An auction of city blocks and five-acre lots in the “Villa Farm” tract, adjacent to the railroad near today’s Mid-City section was held there two days prior and mention was also made of steamers stopping at the wharf, built by the L.A.& I.R.R.
Finally, there is an interesting report on the extensive efforts of Mathew Keller to expand his wine business from Los Angeles and San Francisco to Philadelphia as the celebration of the American centennial was nearing—the anniversary, of course, was in summer 1876. The San Francisco Journal of Commerce was quoted as praising Keller for his move of the San Francisco facility to the City of Brotherly Love, noting his Los Angeles and Rising Sun vineyards as being “two of the best and choicest in the State.” It concluded that “this is the first time, perhaps, that the purity of the California wines is guaranteed in the East by the presence of the vineyardist and wine maker himself,” and a prior post here summarized Keller’s long career in the Angel City.
This edition of the Star came at an important time, with the economy heading into a downturn that lasted for several years, the Temple and Workman bank soon revealed to have been very poorly managed and with little hope for depositors and creditors to salvage much from the wreckage, including the City losing its $23,000, those public buildings delayed until well into the 1880s, and the L.A.& I.R.R. failing to not only extend eastward, but being sold to the S.P. in 1877. As to the Star, it, too, collapsed during the economic downturn, with Truman selling it the following year and it ceasing publication in 1879.