No Place Like Home With a Stock Certificate from Southern California Home Builders, 30 December 1913

by Paul R. Spitzzeri

In the remarkable rise of greater Los Angeles from a remote frontier outpost of northwestern México to a burgeoning outspread metropolitan hub of southwestern America during the Museum’s interpretive era of 1830-1930, many fortunes were won and lost in the highly speculative world of real estate development, whether urban properties, generally of single residential or commercial structures or suburban tracts of multiple lots.

The Workman and Temple family participated in quite a few of these projects, especially during the boom periods of the 1870s and 1920s. In the former, F.P.F. Temple and his silent partner and father-in-law William Workman invested heavily with Centinela (modern Inglewood and nearby areas) and Lake Vineyard (today’s San Marino and environs), while Workman’s nephew was a founder of the Los Angeles neighborhood of Boyle Heights (the Museum commemorates its 150th anniversary with an event at the end of March.)

During the latter, Temple’s son, Walter, created the Town of Temple, renamed Temple City in 1928. All of these had varying degrees of success for a variety of reasons, including location and demand for acquiring property or building, buyers purchasing for pure speculation rather than settlement, and the degree of planning and execution by the developers, as well as external issues, such as the general state of the economy and markets.

Moreover, in boom times, the rush to reap the rewards in real estate led to an over-saturation of projects, not to mention the many instances of questionable methods employed by some developers—this was especially true during the fevered frenzy of the Boom of the 1880s, for example, when William H. Workman was mayor of Los Angeles during its peak in 1887-1888, or, as we saw in prior posts on this blog with the Los Angeles Investment Company in the 1910s or the rise and fall of Hollywood promoter Gilbert H. Beesemyer during the Roaring Twenties.

This post, highlighting a stock certificate from the end of 1913, summarizes the activities of the short-lived Southern California Home Builders (SCHB) firm, which aggressively developed several projects in greater Los Angeles, as well as San Diego, as another real estate boom peaked and then a lengthy economic recession ensued. The firm soon disintegrated, though there were quite a few houses constructed, many of them still with us today over a century later.

The company was launched locally, having been founded in San Diego, in February 1912 with an investment scheme that proved popular in real estate and other endeavors, such as oil, which proved particularly potent and problematic in many cases from the turn of the 20th century onward. This involved cheap stock prices to lure a large number of investors, including a good number of smaller ones, for the raising of capital to carry out development projects. Among the directors were Beesemyer and noted neurologist and psychiatrist, Dr. Henry G. Brainerd.

After advertising that it “wants a representative in every town,” which seemed a bit ambitious and unrealizable, the company took out advertisements, many of these large ones chock full of information (or what passed for such) in Angel City newspapers. An early one from the Times of 11 February blared “BUY NOW / SHARES 20c” and grandiosely proclaimed, as these were wont to do:

California is becoming more and more the mecca for the people of the whole world, who wants its climate and life, AND HAVE MONEY.

It is this feature that has made absolutely sure the permanency of the growth of these wonderful COAST CITIES

It is this feature that enables Home Building Companies to pile up their great profits and assets, running into the hundreds of thousands and even to millions of dollars, within a few short years.

It was, moreover, what was said to assure the success of the SCHB, which was to apply its thorough understanding of real estate in the two principal cities of southern California, Los Angeles and San Diego. As to the former, the ad went on that “Los Angeles will undoubtedly be a city of one million people within a few years” and “this is so sure that it is needless to give space here to the reasons.”

Actually, the metropolis realized this landmark around 15 years later, but the point was that “we offer you the opportunity to share in the profits of building these thousands of homes,” while it was noted that the low capitalization of $100,000 “means greater proportionate value to every share you own.” To make it easy for almost anyone, the firm offered 5% cash and the same percentage monthly on the purchase of stock, while it was asserted that many firms (unnamed in unstated fields of business) with similar offerings saw prices increase at anywhere from 50-275%.

The company began operations in San Diego, with work also done at Coronado Island, so more attention was given to that city in the ad, including that it “is completing one house every working day in the year” and “built and sold more houses in the first six months of 1911 than the largest building company in Los Angeles built and sold in the entire year of 1910.” It was stated that this is why shares were prices at just twenty cents, though they would not remain so for long—this was another time-tested method of attracting early buyers through price increases over intervals. Lastly, readers were informed that SCHB would “commence paying dividends just as quickly as consistent with good management.”

The firm, operating for a short time in quarters in the California Building at the southwest corner of Broadway and 2nd Street, soon relocating to the Consolidated Realty Building at the southwest corner of Hill and 6th streets across from Central (6th Street) Park, renamed Pershing Square later in the decade, also issued a pamphlet, titled “The Whisper,” though the advertising, if not the most florid, was hardly that.

Despite the assertions that the firm built more houses in half a year than the largest Angel City builder did in all of 1910, the first development was modest. The 83rd Street Tract, not particularly imaginative if, however, easy to locate, was on that east-west thoroughfare between Main Street and Moneta Avenue—this latter soon became an extension of Broadway—in what had generally been known since the 1870s as the Florence section and now just east of Interstate 110 and north of Manchester Avenue.

The wide plain south of downtown was certainly a key area of suburban development especially as aggressive annexation pushed Angel City limits further south. Just several years before, the “Shoestring Addition,” encompassing a very narrow corridor from South Los Angeles to the Port of Los Angeles, where San Pedro and Wilmington were recently annexed, was established and the 83rd Street Tract, with houses and lots generally sold in the low $3,000 range, was marketed as part of it.

The 27 July 1912 edition of the Los Angeles Record remarked that the original name was the “Manchester-Moneta Tract” and was to include other streets, but it appears that SCHB scaled down its original plans. By then, however, it was noted that “the first six new houses in the tract of 79 . . . were started last week” and featured were the inclusion of such modern appliances as the “no-ice,” meaning electric, refrigerator, as well as automatic water heaters and furnaces. Moreover, in addition to dedicated “chicken yards,” in this era of the small farm ideal for suburban tracts,

A feature in the construction . . . is that when the key is turned over to the new owners everything about the house and yard will be complete. Each lot will contain two kinds of orange trees, a lemon, grapefruit and apricot tree, in addition to the large eucalyptus trees that will be set out along the back yards of each house.

Several months later, a new project was announced with the Los Angeles Express of 20 November reporting “the Southern California Home Builders has begin construction work on 10 new houses on the Manzanita tract of the company, located on Sunset boulevard and Manzanita and DeFrees street at what is known as the Sanborn junction.”

The term “Sanborn Junction” referred to the intersections, sometimes called Sunset Junction today, of Sunset and Santa Monica boulevards, with Manzanita and DeFrees, soon renamed Sanborn, running north to south on either side. The area is now near the western edge of the Silver Lake community with East Hollywood just a bit beyond and prices originally ranged from $3,950 to $5,000, reflecting the higher prices of this area compared to the 83rd Street tract, which was much further from downtown.

The paper continued that, as these first structures were to be finished as quickly as possible, the tract contained 51 lots “all of which will be improved by the company with model bungalows as quickly as possible.” It concluded that “several of the popular model houses built by the Company in San Diego will be duplicated in the Manzanita tract.”

An early Manzanita ad, from the 14 December edition of the Times, was titled “Give Them a Real Home” and emphasized that, for $250 down and $35 monthly, owners could have “one of the handsomest bungalows in the City of Los Angeles.” The six-room dwellings, with dedicated breakfast rooms, were in a located denoted as “one of the best in the city” and just 15 minutes by streetcar to the Los Angeles Railway hub on Hill Street just north of Central Park.

In mid-September, a third subdivision was announced as work on the new Venice Boulevard was being pursued in areas sold by Harry H. Culver and which soon became part of Culver City. The Express of the 14th noted that “among the several large building companies which have entered that district . . . is the Southern California Home Builders, who will probably erect on their 150-acre tract approximately 750 homes.” This was obviously at a far larger scale than the 83rd Street and Manzanita projects.

The following day’s Times noted that the tract was “Washington Park” and gave some typically error-filled history, stating that, while it was part of Rancho La Ballona, the grant was from Governor José Figueroa, when it was from a successor, Juan Bautista Alvarado, and was to the “Ballona family,” of which there was no such clan—the grantees were the Machado and Talamantes families. Moreover, it did not stretch from Los Angeles pueblo limits to the ocean, but was from near an edge of the Baldwin Hills to the sea.

It was promised in the piece that “the modern march of improvements will not altogether destroy the natural beauty of Ballona Creek” (correctly stated to be a former path of the Los Angeles River, though the 1884 date for the change in route was about six decades off, as it was in 1825), as “picturesque bridges will be built over the creeks and the natural beauty . . . strengthened by the new park” developed with the tract.

In any case, an ad from the Express of 26 October observed that “it takes big money to buy in the most desirable sections of Los Angeles,” including those near the Los Angeles Railway lines (though the rapid increase in the use of the automobile would soon change that condition), while it was claimed that,

No power under heaven and earth can keep the natural growth of this marvelous city from the section between IVY JUNCTION and VENICE.

It is “a new heaven and a new earth, easily accessible, and clothed in nature’s loveliness . . .

NOW is the time to get in ahead of the crowd. The movement has started. WASHINGTON PARK IS RESPONSIBLE FOR IT.

Ivy Junction is located along the former Los Angeles and Independence Railroad (co-founded in the 1870s by F.P.F. Temple) line and used the Pacific Electric (now part of the Expo line to Santa Monica) where Washington and National boulevards and with Venice Boulevard running through that section.

By the onset of 1913, advertisements included the three local projects along with one adjoining Balboa Park in San Diego, but, in May, SCHB purchased a tract of just above 25 acres in the southeast corner of Boyle Heights next to what became Belvedere (East Los Angeles), while, in February, the firm acquired more than 7,000 acres in the Coachella Valley east of Palm Springs, where, by November, it advertised large tracts of agricultural land said to be suitable for a variety of field crops and fruit, though the area soon became well known for its date palms and the fruit harvested from them.

As was mentioned above, the bungalow was the core product of SCHB projects and of a great many others that sprung up in greater Los Angeles during this period, so it is no surprise that the firm issued, in fall 1913, a publication titled “Southern California Bungalow Plans.” The Express of 17 December reported “that the people of Southern California are becoming more and more interested in the modern California bungalow” was becoming clear “through the large demand for the Bungalow Plan Book recently issued by the company and now on the market.” It comprised some 64 pages with 75 illustrations of 48 plans, as a short 19 November piece in the paper observed.

By the time the plan book was published and this stock certificate for 100 shares issued to Ross P. Braley, however, conditions were changing. A severe economic recession broke out that lasted for much of the remaining years of the decade (the First World War also soon erupted and America entered the conflict in 1917), but it may well be that, as was so often the case, SCHB was far too ambitious, grew too quickly and did not realize the financial returns that were so confidently promised. It also experienced delays with approvals for paving and sewers and got into trouble with the City for conducting work that was not properly permitted.

It does not appear that the number of houses built by the firm were anywhere near what was announced, the large advertisements ended after April 1914 and more attention was paid to promoting the Coachella Valley properties. A sobering coda was that a lawsuit was filed by SCHB against former directors and officers, including John A. Barnes, the vice-president, and R.O. Davis, the secretary (and whose fine Hollywood bungalow was completed during the brief heyday of the firm) concerning three dividends issued despite growing debt and not “consistent with good management,” as mentioned above.

The suit was finally adjudicated by the state Court of Appeals in early 1920, two years after the last found mention of any activity by SCHB, and, as the next big real estate boom, paralleling that of oil, was underway in greater Los Angeles—including Walter Temple’s Town of Temple project during the peak in 1923.

This stock certificate is an excellent reference for the Southern California Home Builders scheme, which, in turn, is an apt microcosmic example of boom-time real estate subdivisions that can look successful and substantial and then quickly turn south. Notably, the logo embossed on the certificate and used in company ads has the firm name, a money bag with the “$” on it, and the word “Thrift,” but the reality, as was all too often the case, belied the image.