Read All About It in the Los Angeles Star, 24 September 1875

by Paul R. Spitzzeri

The end of greater Los Angeles’ first boom in late August 1875 was sudden and swift as the ticking telegraph transmitted news from San Francisco of the collapse of the Golden State’s largest bank, The Bank of California, and then the mysterious death in the Bay of its president, William C. Ralston.

Key to the failure of the institution was investment of depositors’ funds in silver mines in Virginia City, Nevada and its famous Comstock Lode, but stock prices reached an unsustainable level in a “bubble,” which was largely burst earlier in the year by the sale of shares in mine stocks by Elias J. Baldwin.

The capitalist earned his sobriquet of “Lucky” from the fact that he dumped his stock at a higher price than he originally contemplated, having left San Francisco with a sale order placed, but with the key to his strongbox in his possession leaving him unable to proceed until his return. Having reaped several millions of dollars through his fortunate miscalculation, Baldwin began investing in Los Angeles County real estate.

This began with the princely Rancho Santa Anita, then owned by Angel City merchant Harris Newmark, who acquired it three years earlier for $85,000, then considered a hefty sum, from Lewis Wolfskill. Newmark recorded in his memoir, Sixty Years in Southern California, how Baldwin came to Los Angeles to buy the ranch, balked at Newmark’s price and then returned, after being counseled to not leave without a deal, and paid a higher amount thanks to the merchant’s coolness and savvy.

The two largest landowners and wealthiest individuals in the county were William Workman and his son-in-law, F.P.F. Temple, but the news emanating from the north led to a panic among Angelenos who flocked to their Temple and Workman bank, as well as that of their only competitor in commercial banking, Farmers’ and Merchants’, presided over by ex-Governor John G. Downey and ran by the brilliant Isaias W. Hellman, former partner of Temple and Workman before their 1871 split.

Hellman was in Europe on a well-deserved, long-desired vacation, including to his hometown in Germany, when news reached him that Downey decided, without consultation, to voluntarily suspend operations on 1 September to help Temple’s effort to stem the tide of depositors seeking to withdraw funds. While the effort was reported in the press as borne of a desire to calm the roiling financial waters, the truth was that Temple and Workman did not have adequate cash reserves after investing deposited monies in a wide range of development projects.

Adding to the drama was that the same day was the county election and Temple, in his second effort to unseat incumbent Thomas Rowan as treasurer, prevailed in a hotly contested campaign in which the bank president was the only successful Republican in a city thoroughly dominated for years by Democrats. Remarkably, the handover from Rowan to Temple did not take place for about a half year in March 1876, but an immense amount of activity took place during that period.

Following the panic, suspension and the election, Temple and his managing cashier, Henry S. Ledyard, immediately began far-reaching efforts locally and in San Francisco, where much of the state’s capital was to be found, to secure money for the institution, spending much of the next three months in the search, including after the 30-day suspension expired. Hellman, furious at Downey for closing his bank’s doors, rushed home, stopping in New York, to borrow funds, and reopened Farmers’ and Merchants’ on 1 October. Temple and Workman, however, remained shuttered while the desperate hunt for money continued.

This is some of the context for this “Read All About It” post featuring, from the Museum’s holdings, the 24 September 1875 edition of the Los Angeles Star. The paper, soon to mark its 25th anniversary the following May, was the oldest of the Angel City’s sheets, operating since spring 1851, except for a four-year period from 1864-1868, and was under the ownership and management of Benjamin C. Truman, an exuberant booster of the region since he came to Los Angeles a couple of years before and took possession of the Star.

While no direct reference was made to the financial crisis, the “Financial and Commercial” column, issued every Thursday, did note that,

Trade in all its branches continues dull, pending the resumption of the closed banks. Purchasers and vendors are both exercising a commendable degree of caution. The immense stocks which, however, are being brought by each incoming steamer bespeak the confidence of our merchants in the outcome.

Adding to the hopeful outlook, the paper reported that demand for lumber for construction, including that “farmers of the country [are] being actively engaged in making additions to their barns, stables, and fences, besides building new residences,” but it also observed that “the city trade is light, building not being very active.”

Perhaps no aspect of the development of greater Los Angeles was considered more vital than that of local railroads, with the Southern Pacific, having been forced by Congress to build through the area on its line from the north to Fort Yuma, on the Colorado River in Arizona, engaged in pushing through the rugged mountains north of the city, while “the L.A. and I.R.R. Company are still awaiting the final action of the City Council on the depot site.”

The Los Angeles and Independence Railroad was formed in spring 1874 by a group of local capitalists, headed by Temple as president, with the goal of building a narrow-gauge line to the booming silver mines of Inyo County in eastern California. The company struggled to raise the necessary funds, however, until United States Senator from Nevada, John P. Jones, who had major mining investments along that route, bought a majority of stock.

Jones, assuming the presidency from Temple, who took the role of treasurer, had another major project in mind, however. This was his seaside resort town of Santa Monica, which he was developing with Robert S. Baker and Jones’ issued a core condition that he would provide a significant amount of funding for the L.A.&I.R.R. if a branch line to the new town was built first.

Consequently, this was the focus of operations for 1875 as a line was surveyed and rails laid from the southern part of Los Angeles and then west to the coast (the E, formerly Expo, Line of the Metro light rail system follows this route today). As for that matter of the depot site, Mayor Prudent Beaudry was adamantly opposed to what was proposed for a location on San Pedro and 5th streets, considerably removed from the downtown area.

As the Common (City) Council report from the Star stated, “the mayor presented his veto of the ordinance granting the franchise to the right of way on San Pedro street for depot purposes.” This led Councilmember Joseph Huber to motion that Joseph U. Crawford (misidentified as “J.W.”), the L.A.&I.R.R. chief engineer, address the council on the topic and this was approved.

The minutes continued,

Mr. Crawford said that he had never been made aware that Senator Jones or Mr. Jackson [another company official] had changed their views in regard to the location of the depot, which had been left to him. Mr. Crawford read a telegram from Senator Jones fully endorsing the location of the depot on Los Angeles street; also portions of a letter from Col. Jackson, fully endorsing the location.

There was a mistake in the mention of Los Angeles Street, which is several blocks to the west, but the account went on that Huber then motioned that the ordinance be passed over Mayor Beaudry’s veto and the vote to do so was 8-4, with the ayes including Elijah H. Workman (who completed his term in December, with his brother William H. joining the Council then), nephew of William Workman.

The Star then recorded that,

The ordinance was declared to be passed. The announcement was received with much applause by the lobby, and the crowd in front of the hall gave three cheers for the L.A. and I. Road, and then for the Council.

Mr. [Thomas] Leahy moved that inasmuch as reports had gone abroad to the effect that certain members of the Council had been bribed, Mrssrs. [Thornton] Campbell, [Louis] Lichtenberger, Workman, [José/Joseph] Mascarel, and [Matthew] Teed be appointed to investigate the same. The resolution was adopted and the above committee appointed.

The L.A.&I.R.R. depot, a striking French Second Empire style structure, was soon completed and service inaugurated between the Angel City and Santa Monica, while work on surveying and grading east of the city, including through Workman’s Rancho La Puente, to the Cajon Pass, where some tunneling was also undertaken, continued.

Other Council items of note included that the Committee on Zanjas, these open ditches being the water transport system for the city, reported that it was in favor of taking out $35,000 in bonds to improve conditions, while the state legislature be petitioned to approve up to $100,000 for city-issued bonds for this work.

The city attorney proposed only allowing street grading if an entire block was done at a time and “recommended the placing of the names of the streets on street corners,” with this latter approved and referred to the Board of Public Works. L.H. Thomas, meanwhile, submitted his petition “asking to be employed to number the houses in the city.” This was “received and placed on file,” though whether Thomas’ proposal was revived or not is the question.

The city surveyor “presented an interesting report concerning the river bed, which he says has shifted considerably to the west since 1862” and recommending action to stop flooding and keep winter flows to the existing bed. That year was the one of a great flood, with changes to the river course not seen since 1825, when it turned west just past the town and emptied into the ocean where Ballona Creek now does this.

Finally, there was a report to the Council that “the Captain of the chain-gang,” comprised of prisoners in the city jail, located on the first floor of the structure on Spring Street in which county prisoners were on the second level, “was ordered to take his force and level off the piles of dirt near the corner of Requena and Wilmington streets.” The latter was opened in 1870 between Commercial and First streets, with lands of Manuel Requena on either side and what was known as Liberty Street from Los Angeles to Main street was extended eastward and renamed for the prominent Californio. Today, Judge John Aiso (formerly San Pedro) Street runs through this area, with Temple just to the north.

In its “Local Items In Brief” column, the paper noted that “Senator John P. Jones may be expected to arrive here about the time the cars commence running between this city ad Santa Monica” as well as that “the new locomotive of the L.A. & I.R.R. had her boilers warmed up yesterday at Santa Monica” in preparation for the momentous first excursion.

Meanwhile, one of the few new advertisements in the Star for the day was one for “The Coming City By The Sea” as readers were exhorted that there were just ten more days “to secure cheap lots at Santa Monica,” where an auction was held earlier in the year. The office of the Santa Monica Land Company was located at the corner of Utah and Ocean avenues, the former was renamed Broadway in 1924, a block north from the pier, which is where the L.A.&I.R.R. wharf was then situated.

As of the 1st of October, prices were to rise so that two divisions on either side of 13th Street (now Euclid) would be from $200 to $400 on the ocean side of that line and from $150-300 on the inland side with categories based on “inside,” “avenue,” and corner lots as well as those “fronting on R.R. Avenue,” this changed in 1902 to Colorado. A notable exception, however, was 12th Street, where inside lots fetched $500 and corner ones went for $800—this thoroughfare deemed of greater importance than elsewhere in the tract.

The reason for the centrality of 12th Street was because “the Passenger Depot of the L.A. & I.R.R. will be situated on the corner of Twelfth Street and Railroad Avenue.” Moreover, a proposed and never realized Santa Monica Street Railroad was to run from that location north to Nevada Avenue (renamed Wilshire Boulevard in 1913), then west to Ocean and then north to a San Vicente Park, apparently where North Beach is today.

The ad also informed readers that “the main of the Santa Monica Water Company will be laid down Nevada Avenue to the ocean beach” with pipes that would branch off “along every street southwest [on the ocean side] of Thirteenth street.” The L.A.&I.R.R. also would be issuing monthly reduced rate tickets and a schedule would soon be released “for the convenience of persons desiring to live in Santa Monica and do business in Los Angeles.” This was a very long commute for the time, given that the suburbs of the Angel City were within its limits, being East Los Angeles [Lincoln Heights] and the newly formed Boyle Heights, which celebrates its 150th birthday next spring!

Apropos of the ad, the Financial and Commercial column added that “all things considered, the real estate market is buoyant, as our daily reports of sales will show” while “the fall tide of travel has fairly set in and many of the new comers are enquiring as to the price of lands, and report a heavy influx of immigration of the most desirable as on the way to this section.” Much of this report, however, was likely designed to put the most positive spin on what would become an increasingly dire situation following the crash.

As to other local news, intensive grading was taking place on Main Street; an Anaheim constable was readying to serve eviction notices on 89 alleged squatters in the Bolsa Chica and Gospel Swamp areas near the coast in what later became Costa Mesa, Fountain Valley and Huntington Beach in Orange County; and the severe injuries suffered by several Chinese laborers on the Southern Pacific railroad tunnel north of the city.

Also of note was the report of the delayed opening of a new Los Angeles Gold Bank opening was delayed “until their elegant new building is completed”—this institution, formed by San Diego capitalists, was renamed the Commercial Bank of Los Angeles and opened in a French Second Empire structure on the east side of Main Street north of 1st Street on a lot sold to it by San Gabriel Valley rancher Leonard J. Rose.

While Farmers’ and Merchants’ reopened on the 1st with Hellman greeting visitors with piles of gold coin to show that all was well, Temple and Workman remained closed until early December, not finding funding until a deal, “on rather hard terms” as Temple wrote Workman from San Francisco, was struck with Baldwin. Meanwhile, the first L.A.&I.R.R. trains ran to Santa Monica in October and the Commercial Bank opened, while hope was expressed for a financial rebound.

It was not, however, to be. Temple and Workman, even with further infusions of cash from Baldwin, failed on 13 January 1876 and the disaster, the first major business failure in Los Angeles, had massive repercussions as depositors received little of their funds. William Workman committed suicide in May and F.P.F. Temple, despite being allowed to assume office as county treasurer, declared bankruptcy in July and suffered a series of strokes that increasingly incapacitated him until his death in April 1880.

Los Angeles languished, as did much of the country during the “Long Depression” that burst forth with the Panic of 1873 and lasted for several years—the L.A.&I.R.R., for example, sold out to the Southern Pacific in 1877. It was not until the early Eighties that some improvement finally came and, once the Atchison, Topeka and Santa Fe railroad reached the region directly with a transcontinental line at the end of 1885, the great Boom of the Eighties ensued, peaking during William H. Workman’s mayoral administration.

We’ll continue featuring Los Angeles-area newspapers from this era as part of our “Read All About It” series of posts, so keep an eye out for those.