THE REAL ESTATE BOOM
Without question the most distinguishing feature of Southern California in
the 1880s was "the Boom," most evident in a massive population increase, a
rapid rise in land values, the founding of numerous towns and increased
construction activity. Based upon the region's climate, the Boom was fed by a
series of fortuitous developments that had occurred in the two decades after
the Civil War.
The cattle industry's drought-induced failure in the 1860s and a similarly
disastrous experience that destroyed the sheep industry in the 1870s stimulated
the breakup of the great ranchos into smaller parcels, a process that began
with the sale of Abel Stearns' vast holdings in the late 1860s. This meant
that land became available for family-size farms and orchards in an area that
previously was held by a relatively few ranchers.
The opening of the Southern Pacific route from San Francisco gave Southern
California a rail link to the outside, circuitous though it was, further
stimulating agriculture. Coincidentally introduction of the navel orange in
the mid-1870s and its rapid acceptance by growers made the region the nation's
premier citrus area. While that encouraged many to move to Southern
California, vineyard and orchard blights in the early 1880s created an
atmosphere in which some landholders were ready to sell their cropland for
residential town lots when the opportunity arose.
By the 1880s Southern California's reputation as a haven for "invalids" was
well known, bringing an additional contingent of travelers to the area.
Journalist Charles Willard, who arrived in Southern California in 1886 as a
health seeker, soon to be followed by three of his Chicago doctors, attributed
the first great influx of population to publication of Charles Nordhoff's
California for Health, Pleasure, and Residence in 1872.
Despite these factors several historians claim that the population of Los
Angeles actually declined between 1876 and 1880. At best, the rate of growth
remained about the same in the early 1880s as it had been in the 1870s. Even
the opening of the Southern Pacific's Sunset line to the east in 1883,
providing a much more direct route, had no major impact on the growth rate.
But when the Santa Fe's competing route opened in November, 1885, the Boom
began, stimulated by cut-rate fares.
A) ON THE EVE OF THE BOOM
Already there were omens of the impending Boom that would transform the
lifestyle of Southern California. Henry David Barrows, who had arrived in Los
Angeles in 1854 and became one of its leading citizens and, along with James M.
Guinn, one of its lay historians, referred to the rising value of Los Angeles
city lots in a mid-1885 letter to the Times, written before the Santa Fe line
had opened. While his point was a bit of self-flattery, having served on the
1872 school board whose wisdom he cites in the letter, the statistics speak for
themselves. On the other hand, see the 1883 letter by Guinn {in the
"Education" chapter} in which he chastised the current school board for its
inability to profit from the sale of land in a similar crisis.
{Times, May 2, 1885. p.2}
Remarkable Increase in the Value of Real Estate.
To the Editor of the Times--Sir: Perhaps a brief
history of the school lot which was sold the other day by the
Board of Education, whereby it was made possible to keep the
public schools going, may interest the readers of the Times.
The Church tract, of which this school lot is a part, has a
church history that is not without interest; but I propose to
recount here merely the secular or school history of this
smaller lot, which has just been sold for the handsome price
of $12,000.
In 1872, when the Central school building on the hill
was erected, the act of the Legislature authorizing the
issuance of bonds ($20,000) for the purpose, provided that
the actual city school trustees at that time (to wit, Wm. H.
Workman, M. Kremer and H. D. Barrows) should constitute the
building committee, and further, that said Board, in
conjunction with the Common Council, should locate said
school building, which was done. Whilst the building was in
process of erection the Board became aware that the lot
belonging to the church was considerably larger than had been
supposed, and might possibly some day be used for other
purposes, or graded down, so as to seriously interfere with
the school lot. The writer distinctly recollects strenuously
urging the purchase of so much of the church lot as the
church trustees would be willing to sell, and especially of
all that portion fronting on Temple street above the church
building, which was not occupied. As the church had no use
for this latter, and as real estate in Los Angeles was not as
valuable then as it is now, a contract was easily effected
and the "First Protestant Society of Los Angeles," as the
church was then called, sold to the Board of Education 60
feet, fronting on Temple street, by 165 feet deep for $200.
And thus, by the fortunate act of a former Board, though for
a different purpose, the present Board of Education is
enabled to bridge over a serious financial difficulty and
avert the closing of the schools for an indefinite period.
An increase in the value of a lot from $200 to $12,000--6000
per cent.--inside of thirteen years is a significant fact in
the material history of Los Angeles.
H. D. B.
April 27, 1885.
B) THE INFLUX OF REAL ESTATE AGENTS
Historian Glenn Dumke estimated that as many as 2000 real estate agents
worked the streets of Los Angeles at the peak of the Boom. They met immigrants
at the train stations, badgered them at hotels and harassed them on street
corners. As the Boom reached its climax in the fall of 1887 the number of real
estate agents had multiplied to such an extent that the city council, seeking
additional revenue, moved to increase the monthly license fees required of
them. Two agents offered arguments in opposition. One of them, T. J. Luccock,
would soon become an officer in the Clearwater cooperative colony (see chapter
on Radicals}.
{Times, Oct. 27, 1887, p. 4}
A Thoughtful View.
Office of R. H. Innes & Sons,
Dealers in Real Estate and
Real Estate Brokers,
No. 132 1/2 S. Spring Street.
Los Angeles, Oct. 26.--[To the Editor of The Times.] I
am a subscriber for your paper, and a real-estate agent in
the city of Los Angeles. I notice in your paper of today the
following:
"Too few plums make too small picking for too many
fingers. A movement is on foot to increase the monthly
license of real-estate agents from $5 to $50. It is supposed
that this movement will tend to weed out the lower class of
real estate men who are now fiends in our midst." Will the
reasonable men, who desire the future wealth and prosperity
of Los Angeles, stop and think once on this subject? What
has made Los Angeles the city that it is? There is no one
who will doubt that the real-estate agents of the town took
an active part in it. Each agent writes back to his friends
and relations and persuades them to come. In fact, I will
say, that through the influence of real-estate agents, more
than one-half the population of our most beautiful city has
been induced to come. Now, Los Angeles is raising her arm
against the so-called "lower class of real estate men."
Where is the injustice of these using their pen and influence
against Los Angeles? Should this law pass there will be 500
men thrown out of employment. Suppose each of these should
take his pen and paper and write back to the town whence they
came, and condemn Los Angeles as a town which is exceedingly
partial to the rich and influential men of her town, and
turns her back upon every man of moderate means, or no means
at all. There is not a paper in the East which would not be
glad to publish this, and imagine the evil effect it would
have on the immigration to this town from the East.
Secondly, if there are 500 men who are trying to make an
honest living in this business thrown out of office and out
of work, there will be at least 100 rooms of the town thrown
on the market for rent. Of course this will make less demand
for rooms and consequently rent will be cheaper. Now, when
rent is reduced of course the value of real-estate must be
reduced too. The record of all booming towns in the past has
plainly shown that when real-estate once begins to fall no
man is able to tell when it will stop. Los Angeles is doing
well, yes, very well and why not "let good enough alone." I
hope to be able to meet my license, and really believe it
will be individually better for me to have the law passed.
But I am an ardent lover of the town of Los Angeles and had
rather see her prosper than to see any other city in the
United States prosper. I sincerely hope the men who are
indeavoring to pass this law will reflect a moment on these
ideas, and am thoroughly satisfied if they will they will
abandon this thought altogether.
R. H. I.
{Times, Oct. 30, 1887, p. 3}
The Real-Estate License Question.
A New View.
Los Angeles, Oct. 28.--[To the Editor of The Times.] I
notice a letter in The Times in regard to the proposed
increase of the real-estate license to $50 per month. I
agree with most of the article referred to, and would like,
with your permission, to add a few thoughts. In the first
place, let me inquire the object of the movement. Is it to
force out as many poor men as possible and give the entire
business into the hands of the large corporations and the men
who have already made immense fortunes, and in some cases by
very questionable methods? If this is the intention the
proposed increase would probably accomplish the object. But
would this be the part of wisdom? Some of these men are the
ones who have been forcing so much undesirable property on
the market, such as river beds, tide lands, alkali lands and
the like, thereby doing their utmost to bring discredit on
the boom and disgrace on the real-estate business generally.
Many of these large operators, however, doubtless are
honorable, upright men, who are willing to pay their share of
taxes for the support of the city government. If this is
what is wanted allow me to suggest a plan that will bring a
largely-increased revenue to the city, and at the same time
do nearly equal justice to all. It is this: Let each real-
estate firm be taxed at a certain rate for every person in
the firm or employed by them in any capacity in the business.
This would place the burden of taxation very nearly in
proportion to the amount of business done. If a certain firm
does business enough to justify the employment of ten men,
let it pay ten times as much into the city treasury as the
man who is carrying on a small business alone.
T. J. LUCCOCK.
C) THE SEAMY SIDE OF THE BOOM
The Times' depiction of land salesmen as "fiends in our midst" resulted
from an increasing number of complaints, beginning early in 1887, regarding
swindles and misrepresentations perpetrated by developers and real estate
agents. Typical was the complaint raised by "Property-owner" regarding the
claims made by those selling the Urmston tract, located some distance southwest
of the then center of town. The following day the Times printed a reply by the
developer.
{Times, Jan. 13, 1887, p. 3}
AN IMPOSITION ON LAND BUYERS.
Los Angeles, Jan. 12.--[To the Editor of The Times.] I
notice with a great deal of satisfaction your course
regarding real estate misrepresentations, and the public will
not fail to extend to you a full measure of indorsement for
the same. The only trouble is that, thus far, the parties to
these reprehensible dealings have not been singled out and
shown up, that the thousands of buyers, many of whom are
workingmen and women, might steer clear of them and not be
caught in the net of the imposter. A glaring case in point:
In April last, as may be seen by reference to the advertising
columns of the city papers, a self-styled land company of
this city (of very unsavory San Francisco memory, by the
way), gave out by spread-eagle publication that certain
important and valuable improvements were to be made upon the
"Urmston tract," situate just outside the corporate limits of
the city; that, in addition, three street-railroad lines were
to run by the tract very soon, using such publication as the
means to sell the 378 lots, which, it is unnecessary to add,
went off as though on eagles' wings. The purchasers were
induced to buy because of these misrepresentations, and how
have the promises been performed? A few little houses, a
short and narrow line of very cheap and badly build cement
sidewalks and some bad plank walks, light from the small
electric poles semi-occasionally, and that is all! The chief
and all-important condition--the condition without which the
property with the remaining promises unfilled could not be
valuable--the street railroads--are not there, nor is there
even one line where three were promised. More than this,
this grand promiser refused to take any interest in a line
down Vermont avenue where the property-owners are endeavoring
to raise a fund to secure a road, alleging that he has sold
out, etc. Again he is now, in his usual flamboyant style,
deceiving the public by referring to the cable road down
Vermont avenue, which does not exist, which is only a
possibility, which he has before used to get money from
hundreds of wage-workers, and which he has done more than any
one else to prevent. Is this man going to repeat his San
Francisco business in Los Angeles? It looks mighty like it,
unless The Times takes its stout club down. Yours,
PROPERTY-OWNER.
{Times, Jan. 14, 1887, p. 3}
The Urmston Tract.
Los Angeles, Jan. 13.--[To the Editor of The Times.]
The Urmston tract was sold by the Southern California Land
Company in April last at $220 per lot, with the guarantee of
certain improvements. Every dollar of these improvements has
been made. Six thousand dollars was expended by contract on
houses. These houses are well built and are first-class.
The receipt for the amount stated is in the hands of F. C.
Howes, Esq., of the Los Angeles National Bank, the trustee.
All of the streets were sidewalked at an expense of $5000
more, the money having been paid to the Oregon Lumber
Company. Artificial stone paving, the full front of Adams
street was constructed of the best material by Mr. Molitor at
an expense the same as the stone pavements on the Childs
tract. The work is first-class. The streets were all
graded, costing nearly $2000, and signboards were placed on
the tract at a cost of $1800, and the light is the same as in
any part of Los Angeles. Nearly $17,000 has been expended by
this company on this tract.
In regard to the street railroads, we stated, outside of
our agreement, that which was current news at the time, and
which we have no question will be veritable facts in the
future. The cable road through Vermont avenue, we have been
assured by property-holders there, is a settled matter. The
Urmston lots were satisfactorily distributed. The greater
number have largely increased in value, deeds are being given
out daily and payments have been always regularly made.
SOUTHERN CALIFORNIA LAND CO.,
Baker block.
Reports of fraud began to surface. In an editorial, "Squelching the
Humbugs," the Times pronounced that:
The colony fake, the townsite fraud, and the brood of
parasites that always follow in the wake of prosperity,
should be incontinently squelched.
The man who locates a townsite in the heart of a swamp, or
sand-wash; in the bed and track of a winter torrent, or, as
in the case of the Manchester fake, on the rocky declivity of
a bald mountain, and who foists the same upon the people of
distant localities as "lovely spots of lovely Los Angeles,"
is a public enemy. An enemy to the people he deceives and an
enemy to the future welfare of Los Angeles county. It is the
duty of every honest man to expose such schemes and to
squelch such schemers....
Conjuring up the image of the current infestation in the orange groves and
referring to recent New York Herald articles by Charles Nordhoff that warned
prospective buyers about the dangers inherent in the California boom, the Times
continued:
The real-estate scale bugs that are feeding upon our young
and vigorous growth can inflict more damage in a single
season that can a century of the lies of Nordhoff.
"Lex" compared these schemes to similar frauds perpetrated elsewhere, and
drew a conclusion.
{Times, Nov. 15, 1887, p. 6}
About Fraudulent Land Schemes.
Los Angeles, Nov. 14.--[To the Editor of The Times.]
The comments of fictitious and bogus townsites in this
morning's Times are opportune and commendable. Will you
permit me to say that several years ago in New York, and, in
fact, all through the East, people were "Florida stricken."
There came to New York several firms of Florida land
speculators who opened offices and advertised largely various
"townsites" at suspiciously low prices. People are
credulous, and many, mostly the poor, bought large quantities
of lots. At last the newspapers commenced an investigation
and sent down to Florida a number of correspondents, who
failed to find the Utopian townsites at all, or, if found,
transpired to be wretched frauds. Consequently Florida,
through the greed of a few speculative cormorants, suffered
immensely. Now, sir, the point is that, unless this thing be
stopped, these fraudulent acts will cause a reaction which
will be extended and disastrous in its effects. Yours, etc.
LEX.
One particularly galling account related by the Times was the case of Mrs.
Flora Shepherd, a former Chicago schoolteacher who arrived in Pasadena in Oct.,
1887, and the next day, for $350, purchased land on the summit of Mt. Wilson.
The agent assured here that her parcel could be reached by a railroad, to be
built by San Francisco and Pasadena capitalists, that would terminate at a fine
hotel in the center of the tract. Her property, it turned out, was only a
mining claim located at the top of the mountain.
The incident reached the courtroom a year later and was reported by the
Times, calling forth a response from "F. E. R." Before dismissing this as an
example of a gullible buyer who should have known better, consider that within
a decade Prof. Thaddeus Lowe would actually construct a successful incline
railway and trolley line to nearby Echo Mountain and Mt. Lowe, with a
mountaintop hotel overlooking Pasadena. It remained a major tourist attraction
until the 1930s.
{Times, Nov. 5, 1888, p. 5}
Real-estate Swindles.
Los Angeles, Oct. 28.--[To the Editor of The Times.] A
day or two ago you gave an account of a swindling operation
practiced upon a tenderfoot in a sale of property located on
Wilson's Peak. You apparently regarded this as something new
in real-estate trickery. It was undoubtedly new to that
victim, but it is not new to the writer. Scores upon scores
have been victimized to a greater or less extent by that
class of swindlers, and whoever heard of one of them being
brought to punishment? We have in Los Angeles a large number
of real-estate dealers, a large majority of whom make
statements, verbally and in print, that they themselves know
are utterly untrue. They knowingly misrepresent and
victimize every one they deal with to the fullest extent of
their ability, receiving in every case money under false
pretenses and yet call it legitimate business. We are today
sadly feeling the effects of these fraudulent transactions,
and as we expect a large influx of tourists the coming
winter, many are preparing to practice the same games. Is it
to the credit or profit of Los Angeles to continue such a
course. There will be very little done in the way of real-
estate sales the coming winter, for the old maxim still has
force, "A burnt child avoids the fire." and the burnt child
will not be silent on that subject, and the truth will out to
our shame and disgrace, as well as our pecuniary loss.
I have faith in the future of our beautiful city, but it
will not be built up by fraud. The old maxim, "Honesty is
the best policy," will apply to the selling of real estate as
well as coffee and sugar.
Will the honest real-estate dealers (I think there are a
few still left) continue to countenance the practices that
are such a stench in the nostrils of all right-minded people,
whether citizens or strangers? We shall see.
F. E. R.
D) THE BOOM IN QUESTION
Just before the Boom peaked in 1887, Charles Nordhoff, whose 1872 volume
had been credited by Harris Newmark with doing more "than any similar work to
spread the fame of the Southland throughout the East," published several
letters in the New York Herald critical of the California land frenzy. That
drew the editorial wrath of the Times. Bascom A. Stephens, a Los Angeles
journalist, rallied to Nordhoff's defense. "B. D." argued that land in
Southern California, at least agricultural land in Westminster, was still
grossly underpriced. In the central part of the state partisans claimed that
their land was better for citrus, referring to the region as the N. C. B. - the
Northern Citrus Belt. Otis sourly redubbed it the Northern Quinine Belt in one
of his editorials. James Guinn, the educator-historian, examined the competing
claims in some depth and, to no one's surprise, found Southern California land
to be a better buy.
{Times, Nov. 4, 1887, p. 5}
Nordhoff Defended.
Los Angeles, Nov. 2.--[To the Editor of The Times.] I
fear that the recent adverse criticisms of the press on
Charles Nordhoff are not justifiable. I have just finished a
careful reading of his article on the California boom. The
only clause therein, to which the least objection can be
made, is where he hints that a large part of the State is
crazy on the land boom, and the injudicious subdivision of
fertile acreage into uncultivated town lots, in the undue
haste to get rich. The Northern Citrus Belt has repeatedly
charged this section with lunacy, and in turn the upper half
of the State has been called Lunar California. If one-half
of the State says the other half is crazy, has Mr. Nordhoff
committed the unpardonable sin by intimating that a large
part is crazy? Many here who have to bear the burden of high
rents and the extortions of shylock landlords, believe that
somebody's heads are turned. I know The Times itself, as
well as other level-headed journals, and the Los Angeles
County Pomological Society, have condemned the "town lot
craze," as it is familiarly called. This is the only thing
Mr. Nordhoff condemns about the boom. I can go out on the
streets and find a large number, if not a majority, of our
real estate agents who hold the same opinion. Besides, Mr.
Nordhoff has large landed interests in California; why should
he write the country down? Even a town {later renamed Ojai -
Ed.} has been named in his honor. It is a foul bird that
would soil its own nest. I have read scores of books and
hundreds of articles on California, and so far as my limited
knowledge and judgment go, Mr. Nordhoff's writings are par
excellence above all others. I believe no one writer has
done more good for California than he. As to the accuracy of
his observations in California, I can testify to their utmost
fidelity so far as the major part of them is concerned, for I
have traveled over much of the same ground myself, and have
always found his descriptions of the resources, climate,
scenery, etc., wonderfully truthful. By the way, how long
ago has it been since Maj. Ben C. Truman was the subject of
like adverse criticisms? and who has done more for Los
Angeles than he? Then Mr. Nordhoff, as private secretary of
Mr. Bennett, the proprietor of the New York Herald, at a
salary of $10,000 per annum, is above the manufacture of such
base slanders against the fair land of which he is even now
making arrangements to become its adopted son.
B. A. STEPHENS.
{Times, Oct. 21, 1887, p. 8}
Value of Lands.
Los Angeles, Oct. 20.--[To the Editor of The Times.]
The senseless cry that Los Angeles county is "sowing the wind
to reap the whirlwind," by booming her lands and creating
artificial values, is both senseless and untrue. The
observer who will coolly overlook the markets, both in realty
and its products, will see that fruit, nut and alfalfa lands
can be purchased today for one-half their actual value. The
value of land is estimated upon the amount of interest it
will return. "R. S.," in his letter from Westminster in this
morning's Times, gives the yield of potato land at $200 per
acre, and says, "Why is not the land worth $1000?" Now, a
yield of $80 per acre would make the value of the land $1000,
and here we have two and one-half times $80; hence, why is
not the value of the land two and one-half times $1000? Let
us call the value double, setting aside $500 per acre for
cultivation and incidental expenses. Then we have potato
land giving 8 per cent. interest on $2000 per acre. In the
same article "R. S." shows that $60,000 have been recently
invested in these lands, none of which sold for more than
$200 per acre. When one year's crop of potatoes would pay
for the purchase, and also in full view of the fact that
twenty-six first prizes were awarded to this section in the
recent fairs for best oranges, Japanese persimmon, other
fruits and vegetables. These are a few items from a locality
which, we are told, a few years ago was considered, as to
quality of land, anything but first-class. We respect the
skill that has brought this harvest. Let us consider orange
land, for example. It is a minimum yield that gives $400 per
acre; next there are walnut orchards in Los Nietos that have
given a crop worth $1000 per acre, and yet an owner would be
considered insane to ask $500 for an acre of orange or walnut
land to be so cultivated. The common verdict is when land
sells for $200 an acre it will not pay to raise fruit. It
does pay, and pays well, for the ordinary fruits and
vegetables will pay interest and taxes on an average price of
$1500 per acre. But understand me the land will not do all
the work. This is under careful cultivation, with best
methods and varieties of seed. Intelligent care must be
given, and nowhere will it bring a larger return than when
applied to the soil of this county.
Ordinary alfalfa land will give seven cuttings a
year--each cutting one ton--on the ground. This will sell
for $8 per ton. Fifty-six dollars per year from ordinary
alfalfa land, which is interest and taxes on $700, an acre.
There is at El Monte extraordinary alfalfa land, which,
without irrigation, gives fourteen tons a year to the acre;
at $8 per ton, gives $112 an acre yield, which is interest on
$1400 per acre, and this land is held by the owner at the
high figure of $500. I will say, on the other hand, there
are men in every locality I mention who will show you that a
man grows poorer each year who raises fruit. There is but
one reply. Look at the condition of the places. These
croakers are one step below the man who hid his talent in a
napkin. They can take good money (greenbacks or notes) and
bury it in a napkin, and after a season, dig it up and find
the money consumed by decay, when they flaunt the napkin in
one's face and say: "I told you so, money is not even safe
in a napkin!" This country has too many of this sort. What
is needed is men who can look into the future; men who can
comprehend the fact that the wealth of a country is what its
soil will yield; men who do not fear panics, so long as
inflated values are attached to country town lots, and only
there.
Let Eastern purchasers bear in mind that the returns we
mention are products of the native soil, without artificial
fertilization. Also let buyers remember that the best lands
will never be bought for less money than at the present time.
Southern California fruit lands will steadily advance. The
best orange and walnut lands, without a tree, are today worth
$1000 per acre.
B. D.
{Times, Jan. 13, 1889, p. 3}
The Cheap Lands of the N.C.B.
Los Angeles, Jan. 3.--[To the Editor of The Times.] The
opinion prevails very generally among our eastern visitors,
and to some extent among our own people, that the price of
land in Southern California is excessively high as compared
with the price of land in the northern citrus belt. The up-
country newspapers are doing their best to spread this
impression, with the hope of drawing immigrants to their
section with the promise of cheap lands. If any one who has
been carried away with the idea that the dwellers of the
n.c.b. are yearning to give away their fertile acres for a
small consideration to the in-coming home seekers will
carefully peruse the real-estate advertisements in the San
Francisco dailies, he will discover that well-located,
improved fruit lands in the n.c.b. are no cheaper than the
same kind of lands in Southern California. He will discover,
too, that the guileless real-estate dealer of the north can
mark up the price of his acres as high, if not higher, than
does the conscience-less boomer of the south. Take these,
culled from advertisements in the San Francisco dailies, as
samples of great bargains offered by the real-estate agents
of the n.c.b.:
"Twenty acres in Vaca valley in fruit and vines,
$12,000--$7000 cash, balance on time" only $600 per acre.
Los Angeles valley can discount that 50 per cent.
"Fourteen acres 1 1/2 miles from the city limits of
Oakland, high ground, fine view, delightful climate--$150 per
acre." We can offer a finer view, a more delightful climate,
and 14 acres of hill land one-half mile from the city limits
of Los Angeles for $200 per acre. Los Angeles city has
double the population of Oakland. "$28,000 buys the cheapest
fruit farm in Santa Clara county, consisting of 56 acres all
in fruits and vines."
"Twenty thousand dollars for thirty acres of trees and
vines, in Santa Clara valley." It is true these farms are
located within a radius of fifty to one hundred and fifty
miles of San Francisco. It is with these that we should
compare the value of our fertile acres and not with wild
lands in Shasta or Siskiyou. Los Angeles offers as good if
not a better market than San Francisco for every agricultural
product. Here is what an agent calls a "Napa county
bargain." "Five acres all in bearing fruits, cottage house,
barn, etc., $5000." One thousand dollars per acre and no
boom in Napa. This last is the only one that has water for
irrigation. These are a few samples of the prices asked for
well located, improved and unimproved lands in Central
California. They go to show that first quality fruit lands
near to a good market are higher priced in that part of the
State than in Los Angeles. It must be borne in mind that
these are not orange lands, but deciduous fruit and vine
lands, without water rights. The land seeker can find plenty
of cheap land ads, in the San Francisco dailies and in the
circulars sent out by n.c.b. real estate dealers.
Land at "$1 an acre and upward" has an attractive sound
to the immigrant, and the alluring bait of cheap lands draws
him northward. The cheap lands of Northern California are
mesa or valley lands without water for irrigation, lands on
which a grain crop can be grown in a year of abundant
rainfall, but in a dry year they are a desert waste.
Any one who has experienced a dry year in California can
appreciate the value of land with irrigating facilities. At
least one-half of our population has come to Southern
California within the past five years. During that time we
have had an abundant rainfall every year. These later
arrivals do not know the real value of our irrigable
lands--lands that will produce a crop every year. A few dry
years, such as we experienced in the sixties and seventies,
would convince our new-comers that the price of irrigable
lands is not so badly inflated after all. The new-comer has
very little idea of what it cost the pioneers to develop the
water rights that go with our fruit lands.
Fifty to one hundred and fifty dollars per acre in some
cases has been spent to construct ditches, build dams and
pipe water on these lands. The immigrant very often
considers himself being imposed upon when he is asked from
two to three hundred dollars an acre for first-class fruit
land with irrigating facilities. He compares these prices
with the price of land in Kansas and Nebraska and grumbles
about inflated values. He does not take into consideration
that from his cheap Kansas lands he gets a crop about one
year in three; that he expends three years' labor to secure
one full crop, while our irrigable lands produce a crop every
year.
Los Angeles furnishes one of the best markets in the
United States for anything a farmer can produce.
Considering their nearness to a good market, their
freedom from flood or drouth, from cyclone or blizzard, their
richness of soil and variety of production, our irrigable
lands are the cheapest lands in the United States.
The boom has departed this life, and the little white
corner stake marks its grave. The subdivision craze is over
and the land buyer no longer figures profits from the number
of town lots an acre will produce.
Real-estate values are determined more by the return
that can be obtained on the investment.
The seeker for cheap land can find plenty in Los Angeles
county as cheap as any offered in Northern California. But
if he is seeking it for a home, he will discover in time that
a 10 acre farm near a good market, near to schools and
churches and in a good neighborhood is a far more profitable
possession than a vast domain of the chaparral-covered hills
of either Northern or Southern California.
J. M. GUINN.
E) THE BUBBLE PRICKED
Charles Willard, who was both a participant in and historian of the Boom
of the 'Eighties, claimed that the end of the speculative frenzy occurred in
the fall of 1887, when banks, and particularly those dominated by Isaias W.
Hellman,
refused to accept land as security for loans unless it was
located in the very heart of Los Angeles, and then only on
the basis of its ancient and established value.
Real estate sales plummeted and bankruptcies increased.
Historians of the Boom agree that the greatest problems occurred outside
Los Angeles city. In the numerous townsites that sprang up in the hinterland
prices had escalated wildly and there the worst frauds occurred. It was also
in those communities, such as the mountain tract of Manchester and a
subdivision in the flood plain of the San Gabriel River known as Chicago Park,
that the crash in values was the greatest. "A Newcomer" explained the plight
of one such buyer in this letter, leading the reader to wonder if "Newcomer"
was really inquiring on behalf of "a friend" or was too embarrassed to admit to
having been the purchaser.
{Times, Mar. 10, 1889, p. 2}
A Nut for the Lawyers.
Los Angeles, March 5.--[To the Editor of The Times.] Is
it possible for a land company to collect payments on
property bought at boom prices, when said company has failed
to construct railroad, street-car lines, public buildings,
and to make other improvements promised to the purchaser, and
so advertised at the time of purchase? I cite the case of a
friend, who bought land at $300 per acre, near a townsite,
the map of said townsite showing hotel, schoolhouse, parks,
etc., and it was represented to him that these buildings were
to be built where located on the map. The hotel was to be
run in fine style, parks were to be laid out and planted as
represented, street cars were to run near the property, and
other improvements were promised to be completed within a
given time. The sum of $100 per acre was paid down and notes
were given for the balance in one and two years. Now the
second payment is due, and as good land, as near town and in
as good a location, can be bought for $100 per acre. Now the
query is, can that company collect those notes if the buyer
chooses to lose his first payment rather than meet the other
two payments?
The company's plea for non-fulfillment of their promises
is "lack of funds." If that plea holds good in the company's
case would it not also apply to the purchaser? I am an
easterner and am not familiar with the custom of giving notes
on contracts.
A NEWCOMER.
One of those caught up in the collapse was Moses L. Wicks, an attorney
turned real estate dealer, who had been in Los Angeles since the late 1870s.
Active in charitable work as well as the law and land development, he was
well-known in the city. With his holdings overextended in the Boom, Wicks fell
into financial trouble, as explained by "S. Chivalry."
{Times, Mar. 29, 1889, p. 5}
Financial Embarrassments of M. L. Wicks.
A DEFENSE.
Los Angeles, March 27.--[To the Editor of The Times.]
It is true that M. L. Wicks, the real-estate speculator, is
being pressed by some of his creditors, but these people seem
to forget that by pulling him down, they are liable to do
great damage to a number of dealers who have done much toward
building up Southern California. It has been known for some
time past that Mr. Wicks is trying to carry too much land,
but it was believed that his creditors would not push him.
It is evident, however, that they have become weary, for the
other day foreclosure suits were brought on three notes and
security mortgages for an insignificant sum, which goes to
show that Mr. Wicks is in no position to tide the storm. The
title of the suit is:
"Fort Bragg, Redwood county, vs. M. L. Wicks, T. W.
Brooks, M. G. Rogus, C. M. Wells, Richard Dunnigan and W. F.
Heathman. On July 11, 1888, Wicks gave a promissory note,
payable six months after date, for $4,000, and also a
mortgage to secure the payment of the note. The mortgage was
on lots in the Schmidt tract. Plaintiff sets forth that no
part of principal or interest has been paid. The co-
defendants are made parties to the suit for the reason that
they claim to have an interest in the mortgaged lots. The
same complaint sets forth that a second note was given on the
23d of July, 1888, for $3,913.05 and also a mortgage. On
March 21, 1888, a third note was given for $3,691.76, secured
by mortgage. The notes went to protest in due time and
plaintiffs have brought suit to foreclose and pray that an
execution may issue. The sum, interest and attorney's fees
amount to $17,235."
This is the first suit that has been brought against Mr.
Wicks to amount to anything since the boom died, and there
are many large speculators who are very much afraid that if
Mr. Wicks cannot gather himself up there will be a general
crash all along the line. The plaintiffs in the above suit
might have held off a while longer, for it is almost certain
that Mr. Wicks, although he is one of the boldest speculators
in the State, would be able to come out all right.
S. CHIVALRY.
Mortgage agents, too, had their problems and drew considerable complaints
from the land-buying public. One of them, W. S. Williams, rose in defense of
his practices after the Times cited him as an example of the "people who have a
mania for getting money without working for it." The Times implied that
Williams charged fees for real estate loans that never materialized and that he
may have left town.
{Times, July 29, 1889, p. 6}
"A Small Fake."
Los Angeles, July 25.--[To the Editor of The Times.] An
article in your paper, under the above heading, reflecting
upon my character, demands an answer from me.
I am authorized to receive applications from those who
desire to borrow money, and if their property is of
sufficient value and their title good, they can get their
money. In all cases I am required to collect from the
intending borrower a fee of $10, to pay the broker's fees.
From some of those who desired a loan I collected this amount
and paid the same to the broker, and to some I returned the
money and from some I received nothing. Its our positive
instructions that their loans will not be considered unless
this deposit is made.
Some loans are now under consideration and the
applicants will get their money. There has been no desire on
my part to defraud any one, but on the contrary, I desire to
do a legitimate business. Have loaned large amounts of money
and can give the best of references as to my character, etc.
Boom values have injured money-loaning and lenders are
very cautious. Bankers outside Los Angeles need not accept
the values of property made by local brokers, until values
have become more fixed; loaning, in a measure, will be
unsatisfactory.
I am duly authorized to receive applications and make
loans.
Frequently I have refused applications from residents of
this city, knowing that my principals would not consider the
same.
I regret that some persons unknown to me have seen fit
to inspire the article referred to, as I desire to assist in
building up this city, my adopted home, and if I can in a
legitimate way add to your population and induce capitalists
to invest their money here, when I think with care it can be
loaned safely, I will only be doing a duty which every
citizen ought to do, and will aid others who desire to build
up this beautiful and growing city.
In one instance I returned to the applicant his $10,
after having paid the broker this amount, as the loan could
not be put through as quickly as he desired. Respectfully
yours,
W. S. WILLIAMS
F) THE BOOM ASSESSED
The city's population stood at 11,183 in 1880, with 64,371 in the five
southern counties - Santa Barbara, Ventura, Los Angeles, San Bernardino, and
San Diego. During the Boom decade an estimated 200,000 immigrants arrived in
the region. While large numbers of the newcomers left shortly after their
arrival, most remained to take up residence in the city, in one of the dozens
of new towns that sprang up during the Boom or on agricultural land. By 1890
the city had grown to 50,395, with a total of 201,352 in the counties, though
historians familiar with that era estimate that at the peak of the Boom in
1887-88 the city's population reached 80,000, with 250,000 residing in the
entire area.
Near the end of the decade two correspondents offered a summation of what
the Boom meant to Los Angeles, examining totally different facets of the great
event. "W. H. C." wrote in early 1888 when optimists were denying that the
Boom was over. "Non Boomer," whose letter was printed on the last day of 1889,
used the location of the post office as one way to assess the Boom. In the
midst of the real estate frenzy the post office had been moved south from its
North Main location, which was near the heart of the city, to a building on
Broadway below Sixth, a site that even Harris Newmark considered to be out in
the country. He recalled how one wag reportedly offered overnight
accommodations for those journeying south to get their mail. Another joked
that the S.P. and the Santa Fe were fighting for the right of way to the new
post office site. In 1893 the post office was removed uptown to Main and
Winston, given its own building for the first time in forty years and located
next to other government offices.
{Times, Feb. 10, 1888, p. 6}
A Poor Man's Experience.
Los Angeles, Feb. 7.--[To the Editor of The Times.] It
is now three years since I left the State of Ohio and came to
Los Angeles. When I arrived in this city I had just $50 in
money and a chest of carpenter's tools. I think I have done
fairly well since that time, as have also many of my
acquaintances. If you have no objection I will relate my own
experience, and the experience of some others who are now
here. It may encourage newcomers and help to prove what I
fully believe, that Los Angeles is the finest place on the
globe for the poor man, and will continue to be for some time
to come. Work in my trade since I first arrived, I scarcely
need to say, has been abundant and wages good. Three months
after my arrival I had saved up $175, and had $200 for
investment. Having seen something of "booms" in western
cities, I concluded that land must steadily rise in value in
Los Angeles and I made the first payment on a lot on a street
near Seventh. Three months longer I continued at work, and
then sold my lot for what seemed to me then the enormous
profit of $1000. Alas, had I held it one year I should have
made $5000. I next bought on Hope street, making a small
payment on a lot, and here cleared in six weeks $630. I felt
like a capitalist then, and going into partnership with
another young man we built two small houses on a lot on Boyle
Heights. This venture in three months netted us $750 apiece.
I then put all my available cash into a piece of property on
the newly opened Second street, and returned to day labor.
In nine months the land which cost me $500 I sold for $2500.
I invested again in the same neighborhood, and was lucky
enough to make a turn in six weeks which cleared me $1450.
Without going into details I may add that by good fortune and
reasonable prudence in investing in a little over three years
I have increased my original capital of $50 to something over
$20,000. Many others, I am aware, have done better than I
have, but I think mine is a fine example of what Southern
California can do for a poor man who is not afraid to try.
Some will say the opportunity has passed but I am convinced
that this cannot be said for several years yet. Immense
interests are now involved in sustaining Southern California,
and I predict the coming spring and summer will be the best
we ever had. My role has been to buy the best property my
means would admit, and it has proved an excellent one. Cheap
property in price is not always cheap in reality.
Among my acquaintances, a lady who had only $1000 to
commence with, has within the last 18 months, increased her
capital to $10,000 by judicious investments. Two young men
from Cleveland, since last May, have each made $2500 by
buying and selling on their own account. A friend of mine
from Youngstown, O., who came here in September, 1886, with
$700 and now owns six houses which bring a monthly rental of
$180--all made by rapid turns in real estate. Who, in the
face of these facts, and the "woods are full of them," can
deny that Southern California is the place for a poor man.
The Argonauts of 1849 bore all kinds of hardships and few of
them did as well as our modern Argonauts of 1886-87. For the
next three years there will be a great many fortunes made
here. There is to be a dense population here and land must
steadily become more valuable. As was the case in 1884, when
lots of people went away from here and were fearful to put a
dollar in real estate, so it will be this year. A little
later they will wonder "why they didn't see it." Desirable
land in the city of Los Angeles will never be as cheap as it
is at present. In the country buy good acreage property and
you will never regret it. My faith in Southern California
has never been greater. It is the only place in North America
where life is really worth living.
W. H. C.
{Times, Dec. 31, 1889, p. 5}
Coming to Their Senses.
Los Angeles, Dec. 25.--[To the Editor of The Times.]
Ever since the boomers folded their tents and departed, the
people have gradually been coming to their senses again, and
viewing the havoc the wild schemers had made, they naturally
are casting about to find the best method to reinstate
themselves and put our city on the right road again to
success. It seems that the booming epidemic was no respecter
of persons. Municipalities, corporations and individuals
were all alike its victims, and when the baneful scourge had
run its course its wrecks were to be seen on every side. So
far as individuals were concerned, the financial mistakes of
the weak ones were made to serve the ends of the strong.
All who pay taxes must help pay for the mistakes of the
municipality. The mistakes of many of our mushroom
corporations swamped them and they had not money enough put
up to quarrel about. The mistakes of our big railroad
monopoly is of trifling moment to them, for they can
reinstate themselves at the expense of the public.
The above thoughts were suggested by an article in The
Times of the 13th inst., in which it is stated that there
will be built a grand union depot at the Southern Pacific's
old depot on San Fernando street; and that the Wolfskill
depot would be moved up there. Of course the railroad is not
suffering only in the great damage it has been to its
business, but the mistake of moving our postoffice into the
country the whole city suffers. To sit down and complain or
stand up and curse does not help the matter any, but it
remains for us as individuals, municipalities and
corporations to accept the situation and do as the railroad
folks purpose to do, get back to the place they should never
have left. Many a man left a good business or a good
situation to go with the boomers. The railroad folks left
their homes to go with the boomers to build a big hotel.
Now, under all this excitement and rush of business, the
public allowed the boomers to steal their postoffice and
carry it into the country. And right here allow me to
predict that our people are not going to sit down quietly and
see our postoffice built where it accommodates nobody,
comparatively, when it can just as well be built where all
our streetcars center and accommodate everybody. This is a
fact too apparent to occupy valuable space in your paper to
show why it is so. The writer, though a taxpayer, and
interested as much as the average business man, pleads guilty
to letting the theft be committed. In fact, the scheme
looked so chimerical and absurd it was thought the Government
would never lend its aid; for there was no precedent for
anything of the kind. Whenever the Government have built
postoffices they have built on the old sites. When the new
office was built in New York they did not go out to Central
Park because the city had grown miles up Broadway. In
Philadelphia they adhered to the old ground, though the city
had built miles of business blocks out Market and Chestnut
streets; the same in Baltimore and Detroit. Chicago, like
Los Angeles, grew in all directions from the postoffice, but,
unlike Los Angeles, they built their new office on the old
site. Now, the proper place for the postoffice is at the old
Courthouse, or raise the Temple block and build the
postoffice under it; then we will have a postoffice that will
accommodate the people for all time, no matter if the city
builds west to the ocean or east to Pasadena. What is a few
thousand dollars compared with the importance of getting our
postoffice where it should be. The same remark applies to a
grand union depot, for it accommodates the whole people. It
may not require quite so many hacks to do the business at a
union depot, neither will it require our people to pay quite
so much street car fare, or wear out so much shoe leather to
do their business at the postoffice if located at the proper
place.
NON BOOMER.