by Paul R. Spitzzeri
In the wake of the publication of the fourth issue of its weekly bulletin, issued on 12 May 1924, the Greater Los Angeles Association moved aggressively to promote its plan for a $50 million financing scheme through stock sold under the aegis of a proposed Industrial Underwriting Corporation, serving expansion for existing commercial, industrial and manufacturing firms and companies launched by new arrivals to the region.
In June, outreach continue to yield results with respect to support for the Association’s aims, though an interesting situation in the San Gabriel Valley foothill town of Monrovia led its Chamber of Commerce to issue, through the Monrovia News of the 7th, a firm denial that it opposed the project. The question concerned the chamber’s policy that it would not endorse stock selling ideas, so it remarked that “this was the reason they [members] refused to endorse the Association although they did endorse the idea involved in its organization.”
Moreover, in a resolution the Chamber attested that its members “approve of the general purpose and principles of the Association and believe that if these can be wisely put into effect, great good will will be accomplished for Southern California.” It castigated unnamed persons and entities which “tried to make it appear that there was opposition” and, thereby, caused “real harm to the association.” It was added, though, that,
The haste with which the Association was organized and promoted and the methods and statements of some of its representatives consequent on this haste were the cause of some confusion of mind and understanding in Monrovia.
This somewhat veiled criticism is notable, especially after it followed “a meeting last night in the City Hall where representatives of the Association addressed the directors, city trustees and members of the Realty Board.
Other meetings held during this time to promote the proposition were at Lennox, part of unincorporated Los Angeles County adjacent on the east to today’s Los Angeles International Airport; Lankershim, now the Los Angeles neighborhood of North Hollywood in the San Fernando Valley; and the coastal town of Hermosa Beach, while a representative of the Association explained its goals to the Rotary Club of Alhambra, situated in the San Gabriel Valley adjacent on the east of Los Angeles.
In its edition of the 7th, the Los Angeles Express ran a lengthy feature under the interesting headline of “GREATER LOS ANGELES INDUSTRIAL MOVEMENT CLEARS BUSINESS SKY.” It was asserted that the Association project “has in the past few weeks assumed definite shape and proportions” and that “due to the great volume of publicity that has been given to the industrial advantages and opportunities in Southern California,” as well as Los Angeles Chamber of Commerce announcements of new factories and plants, “people of the Greater Los Angeles area are beginning to think with understanding about our future as a world manufacturing center.”
Avowing that “Greater Los Angeles is becoming a reality in their minds,” the article added that until just a few months prior, the idea of industry and manufacturing expansion “was somewhat hazy in the minds of a great many people in his region.” When it came to oil and real estate and building, there was no lack of understanding of the importance of those areas of business development, “but concerning the basic causes for this extraordinary development and growth many residents of the Greater Los Angeles area had no very clear idea.”
Misunderstanding engendered doubt, uncertainty and confidence, the piece went on, but it also addressed the purported feeling that, when it came to “the immense building development and increase of population” experienced in the recent book that peaked in 1923, “there was much repetition . . . of the statement: ‘We have gone too far.'” The implication seemed to be from these critics that there was “no sound cause for further growth . . . or even for the growth that had been attained,” so that some amount of belief existed that “a slowing up was inevitable.”
The Express decried the “pessimistic talk . . . inspired by a false impression of basic conditions” that, it asserted, “was not helpful to business generally.” With, though, the late March announcement of the formation of the Association,
Every day for weeks they told the truth about the already substantial foundation of industry that this community has in its 5000 factories, of the unparalleled advantages that manufacturers in Southern California have over their fellow factory operators in the east and middle west . . . The fact was made clear that the pressing need of the hour was the mobilization of Southern California’s resources and the unification of its efforts in developing a campaign for industrial expansion—the bringing of thousands of new factories and the expansion of established industries in the various Greater Los Angeles communities, so that the proper foundation of industry might be hastened to support the fast-growing population.
The paper provided the information that there were those 5,000 plants in existence with a collective payroll of some $350 million, while “in a decade Los Angeles has risen from twenty-sixth place to seventh in volume of manufacturing among the cities of the United States.” Moreover, readers were informed that “industrially Southern California has the brightest prospects of any American city” and that growth in the southwest part of the nation “is based on industrial growth and opportunities.”
More telling was the claim that “it is industry and not climate that is building Greater Los Angeles and that will be responsible for its continued growth and prosperity and will carry it forward to its destiny as the greatest seaport and commercial metropolis of the Pacific ocean,” not just the west coast of the U.S.
Yet, a serious lack was in financing and the formation of the Association and the future underwriting firm, rather than interfere in the work of the powerful Los Angeles Chamber of Commerce, which had an industrial department, it was supplemental “by getting more people to thinking more along industrial lines” as well as to “educate the public to investing some of their money in our own factories rather than in eastern industrial plants.”
The next day’s Los Angeles Times, as part of a feature on the automobile industry by Gerald Fitzgerald, head of the Union Terminal Warehouse Company and vice-president of the Los Angeles Terminal Company, who remarked that “Greater Los Angeles . . . reminds me in its present stage of a sleeping giant arousing himself. Around him lie the materials and the tools for a mammoth task of building.” With vision and knowledge, the writer remarked, the region “is about to begin work” on a growth process that “will win the admiration and excite the wonder of mankind.”
Fitzgerald also remarked on the between 5,000 and 6,000 factories in greater Los Angeles and who inquired, “how rapidly is that number of manufacturing plan[t]s to be doubled?” This was along with a project doubling of population and he added that his query “can be answered only by the people of Southern California themselves, because it is in their hands to say how fast the building of a great world industrial center is to progress.”
Fitzgerald continued that the conditions were ripe and that “Southern California is beginning to awaken to a realization of its wonderful opportunities industrially.” Another question was where “the work [is] to be pushed with energy and determination” or “advance slowly, gathering momentum only as natural causes force it along?” For his part, the writer concluded with:
My prediction in answer to these questions is that we are going to show speed in accomplishment along industrial expansion that will equal our immense increase in population and our amazing volume of building of the past five years. I think one of the most striking signs of an awakening of the Southern California people to the big task before them is the organization of the Greater Los Angeles Association.
The Express of the 11th, with the title of “L.A. INDUSTRIES GROW YEARLY 100 PER CENT” reported that manufacturing in Los Angeles for 1923 topped $1.1 billion, while, just a half-dozen years earlier, the figure was only $160 million, meaning that growth was at an annual rate of that 100%. Lawyer and development Shirley C. Ward, who played a key role in establishing the Los Angeles Bureau of Power and Light, a precursor to today’s Department of Water and Power, wrote a letter to Association president Harry H. Merrick to urge “support to the aims of the city bureau” and recognition of the vital importance of cheap power to industrial growth.
Ward continued that “this actual industrial experience has given rise to the positive conviction that our demonstrated industrial advantages warrant the active campaign we are undertaking of trying to make this city the greatest industrial center of the Pacific coast, and one of the greatest manufacturing cities of the world.” He asked how the Association could achieve its aims other than to support the bureau because “at this moment we are suffering more from [a] lack of ability to supply power to obtainable industries than we are from [an] inability to secure new industries.”
Noting that power was cheaper in Los Angeles than elsewhere, which spurred industrial growth and which were a requisite to the Association’s goals for more expansion, Ward informed Merrick that,
The primary purpose of this letter is to focalize your attention upon the point that the purposes of your association would seem to be practically frustrated at the very outset, unless a way can be found to give assurance to new industries of a continuance of the same cheap power rate that has made our phenomenal industrial growth of the last few years possible.
The 14 June number of the Express highlighted the namesake town in Orange County as an exemplar in “the organization work of the Greater Los Angeles association” because, explained V.D. Johnson, secretary of its Chamber of Commerce,” Orange, a community of some 8,000 persons, “formerly strictly a citrus belt town, [is] now blossoming forth as a manufacturing center.”
Johnson continued that just three years prior was when some larger plants were opened and tat “these industries apparently discovered fertile soil and now find themselves growing so rapidly that expansion is necessary to take care of the demand for their products.” It was true that lemon, orange and walnut growing and packing dominated, but the example of the California Wire Company, founded by Louis Koth, a recent arrival from Chicago, was cited.
Koth invested a million dollars into the plant, but double that amount in business was expected in 1924, and it was added that the firm was the only of its kind west of Koth’s former hometown, while “the demand for insulated wire for electrical purposes is increasing each day.” A subsidiary firm was the California Cordage Company, manufacturing the cotton twine for the insulation, and the investment there recently doubled to a quarter million dollars, but this was expected to climb to $500,000 “to meet the requirements of the trade.”
Another enterprise was the Western Cordage Company, owned by O.B. Eller, and which produced hemp rope and which was expanding to larger sizes. Other companies mentioned were producers of clotheslines and cotton and jute cords; fig cereal; ice and cold storage; cement pipe; and gold leaf. The Orange example is instructive in understanding that smaller outlying communities hoped to tap into the Association’s plan to enlarge whatever industrial capacity existed in their towns and which were outside the larger areas in Los Angeles.
The Express of the 21st turned to another Orange County figure, Anaheim Metal Industries, Inc. president John Q. Roscoe, to pen a piece titled “INDUSTRIAL GROWTH AIDS EVERYBODY,” with the manufacturing official opining that “the awakening of interest in the industrial expansion movement in Southern California” through the efforts of the Association “has been one of the most important developments in the Southland in recent years.”
Roscoe cited the work of chambers of commerce, banks, realtors and others “to promote a better industrial understanding” through the proposed financing scheme and he remarked, with no small amount of exaggeration, that,
“Industrial Southern California” is not a plan devised and fostered merely as a safeguard against [a] possible decline in tourist travel, crop uncertainties or poor market conditions. On the contrary, actual experience has proved conclusively that we have more manufacturing advantages, such as small labor turnover cost, low plant investment and upkeep cost, cheap power, cheap transportation to principal markets, raw materials and more markets for our manufactured goods than any other place on earth.
These, combined with our wonderful climate, where all classes of people want to live, earn money and enjoy it, have already caused a phenomenal industrial growth. To be sure our industrial activity does now and will in the future serve as [an] insurance and safeguard against the periodical financial disturbances . . . many people prefer to consider industry as a means of stabilizing land values, stimulating commerce and increasing realty sales and rentals . . .
The piece went on that “our Greater Los Angeles area is logically a manufacturing country” and visionaries “created a picture of almost limitless industrial possibilities, prosperity and wealth for our Southland.” The efforts of the Association were such, Roscoe continued, “so that there will be unity of thought and action in our endeavors to make realities out of these opportunities.”
Despite obstacles and opposition from business figures and the general public, the writer asserted that validation of the Association concept could be found by the example of eastern arrivals “who, having correctly pictured the limitations and costs surrounding their own enterprises in their home sections, came here to manufacture because goods could be made, sold and delivered cheaper in Southern California than elsewhere.”
Roscoe pointed out that hundreds of millions of dollars worth of products, rather than purchased from other parts of the country, “could be made here at good profits, while making them here would help develop this wonderful area,” and the amounts so manufactured would reach well into the billions. So long, however, as locals fixated on agriculture, oil, real estate and tourism, the region would “be deprived of the prosperity that goes hand-in-hand with legitimate manufacturing development.”
What was needed, of course, was industrial financing, as such powerhouses as Chicago and New York City had “publicly-financed concerns for helping legitimate manufacturing enterprises.” This led Roscoe to conclude,
Southern California now needs a similar institution, and the Greater Los Angeles association is the necessary educational step towards its establishment. The taking of memberships in this association will insure a realization of the greater purposes behind it.
Speaking of steps, we’ll halt here and return soon with part four, so be sure to check back for that.