California Rich: The Lives, the Times, the Scandals, and the Fortunes of the Men & Women Who Made & Kept California's Wealth

California Rich: The Lives, the Times, the Scandals, and the Fortunes of the Men & Women Who Made & Kept California's Wealth

by Stephen Birmingham

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Overview

Since the Gold Rush, California has represented a land of opportunity and bounty for a special breed of Americans. Heading west in pursuit of sunshine, riches, and elusive dreams, the early mavericks of California set out to make their fortunes—and often succeeded beyond their wildest dreams. Prospectors became oil tycoons, squatters became cattle barons, and farmers’ wives became grandes dames of a new rough-hewn society.

In California Rich Stephen Birmingham explores this fascinating social history, showing how the ruling class of California was born, and how it evolved a lifestyle that continues to fascinate the world. Its colorful array of characters include: the despotic William Randolph Hearst, renowned for treating kings and copyboys with equal disdain; Governor Leland Stanford , who shamelessly used politics for the profit of his railroad; and the fiery James Irvine, who attended business meetings accompanied by an entire pack of hunting dogs.

In exploring how these self-made millionaires acquired their money—and what they did with it—Birmingham provides a glimpse of the customs and quirks of California wealth, shedding light on how the state came to symbolize the easy, opulent life, that still entices seekers of fame and fortune today.

Product Details

ISBN-13: 9781493024742
Publisher: Rowman & Littlefield Publishers, Inc.
Publication date: 08/15/2016
Pages: 318
Sales rank: 508,228
Product dimensions: 8.90(w) x 6.00(h) x 0.90(d)

About the Author

Stephen Birmingham is a preeminent social historian, known for his books The Right People, Real Lace, and The Grandees. He allows his reader unparalleled access to the most exclusive society sets, and tells their stories with great warmth and wit.

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California Rich

The Lives, the Times, the Scandals and the Fortunes of the Men & Women Who Made and Kept California's Wealth


By Stephen Birmingham

OPEN ROAD INTEGRATED MEDIA

Copyright © 1980 Stephen Birmingham
All rights reserved.
ISBN: 978-1-5040-4105-8



CHAPTER 1

Liquid Gold


California, it has been pointed out, has never, for all its riches, produced a fortune to equal the riches amassed in the East by such men as John D. Rockefeller, Jay Gould, and E. H. Harriman. Perhaps this is because in the 1850s and 1860s, when Rockefeller was putting together the Standard Oil Company, California was still too new and inexperienced a place to contain more than one get-rich enthusiasm at a time, and the enthusiasm of the moment, of course, was gold. The California gold fortunes had a way of being lost rather quickly, though the men who followed the prospectors — the speculators and con men, the supply merchants, the gamblers, the saloonkeepers and madams — did somewhat better. In the 1850s some quarter of a million Americans thronged across the valleys and mountains of California in search of gold-rush wealth, ignoring the black viscous substance that squished beneath their feet, the substance that was making Rockefeller rich.

It lay all about, in pools and open pits and puddles. It oozed from canyonsides. The coastal Indians had been making use of the sticky stuff for generations. They used it to waterproof their woven baskets, to caulk the bottoms of their canoes, and as a sealant to make containers of food both air- and watertight. They had also learned that when swallowed, it made an excellent if not very tasty purgative, that rubbed on the skin it made a soothing balm for cuts and burns, and that it could itself be burned for heat and light. The coastal tribes traded their brea, or tar, with tribes of the interior for spearheads and furs. The first Spanish settlers were puzzled by the tar pits. Arriving in Upper California from Mexico in 1769 with Don Gaspar de Portolá and Fra Junípero Serra — whose orders from Carlos III were to oust the Jesuits from the missions and replace them with Franciscans — the Spaniards concluded that the tar pits perhaps caused the earthquakes and were somehow connected with volcanoes in the distant mountains. Though the black substance was cool to the touch, it was assumed to be some form of molten rock.

In 1855, taking their cue from the Indians, the Mexican General Andrés Pico and his nephew, Rómulo, had begun in a modest way to market the crude oil they scooped up from pits in a canyon north of the San Fernando Mission. General Pico was the brother of Pio Pico, the last Mexican governor of California, and was a fallen hero of the Mexican War — he had defeated the American General Stephen Kearney in 1847, but had later been forced to surrender to General John C. Frémont. The Picos peddled their "coal oil" as a medicine, as a lubricant for squeaky oxcart axles, and as a cheaper — and much smokier and smellier — substitute for whale oil in lamps. (Whale oil could then only be afforded by the well-to-do; the very poor went to bed when the sun went down.) To the gold and silver prospectors, meanwhile, the oil was simply a nuisance. It seeped into streams and rivers and polluted their drinking water.

In 1857 a former New York sperm-oil dealer named George S. Gilbert built a primitive oil refinery near the Ventura Mission. In order to reduce his oil to axle grease, which he hoped to market, he boiled the oil, and, in the process, the vaporous fumes of what would one day fuel the automobile industry escaped into the blue California sky. One of Mr. Gilbert's first sales that year was a consignment of a hundred kegs of grease to one Mr. A. C. Ferris of Brooklyn, New York. Alas, the heavy burden of Gilbert's oil was too much for the mule teams assigned to carry it across the Isthmus of Panama. The hundred kegs were jettisoned somewhere in the jungle. If Mr. Gilbert's oil had reached its intended destination, the birthplace of the oil industry might have been southern California instead of Titusville, Pennsylvania, where, that same year, a blacksmith named Uncle Billy Smith dug a hole in the ground that became America's first oil well. Within two years the great Pennsylvania oil stampede had begun and the desolate little farm community of Titusville had become a boomtown. And down from Cleveland, less than a hundred and fifty miles away, young John D. Rockefeller was already on hand.

It was not until April 1892 that the California oil industry was ready for a man named Edward L. Doheny. Ed Doheny was a most unlikely character to signal such a momentous event. He had been born in 1856 in Fond du Lac, Wisconsin, the son of a poor Irish immigrant who had fled from the great potato famine of the 1840s and had headed westward lured by the siren song of riches. The senior Doheny, however, had never found them, and at age sixteen his son had run away from home. Ed Doheny had worked variously as a booking agent, a fruit packer, a mule driver, and as a singing waiter at the Occidental Hotel in Wichita, Kansas, where he also picked up bits of change acting as a procurer of young ladies for the traveling drummers who passed through town. At the age of eighteen he embarked on what was to be his lifelong occupation — searching for wealth underground — and become a gold prospector.

For the next few years Ed Doheny was a man without a permanent address, and the chronology of his wanderings is unclear. He is known to have spent time in Texas, Arizona, New Mexico, and Mexico, sometimes making a small strike, sometimes going broke. During these years he acquired a reputation in prospecting circles that was unsavory, not to say dangerous. The sheriff of Laredo in 1878 described the passage through that town of one "E. Dohenny [sic] a rough character." Doheny had early learned to use a gun and was quick to reach for his holster in tough situations. It was rumored that he had once killed a man — or possibly several. He seems to have been a man able to adapt himself easily to one side of the law or the other as he moved through the one-street towns of the Southwest, and in New Mexico, Doheny was known as the man who had cleared the little town of Kingston of local cattle thieves and bad men. One of these was said to have fired sixteen bullets at Doheny before Doheny was able to overpower and disarm him. As a prospector, however, he employed more mystical methods, and for a long time his principal mining tool was a divining rod. When the rod quivered and dipped in his hand, Doheny stopped on the spot and began digging for gold, occasionally finding some but usually not.

He was thirty-six years old in 1892 when he arrived in the still-raw California town that had been dedicated to Nuestra Señora de Los Angeles, and his prospects for discovering a real bonanza had begun to look exceptionally dim. He was still rawboned and fast on the draw, but youth was slipping away. His mining adventures in Arizona and New Mexico had all been failures and he was virtually penniless. But then one of those queer strokes of incredible luck that have marked the beginnings of so many American fortunes came to Ed Doheny. Passing in the street one day he noticed a black man driving a horse and wagonload of black, steaming, tarry stuff. Doheny asked the man what the substance was, and was told that it was brea, and that it bubbled from a pit on the edge of town, and that the poorer families of Los Angeles collected it without charge and used it for fuel.

From his diggings around the West, Doheny knew even without his divining rod that the brea was crude oil, and set off to investigate the bubbling pit. He located it in Hancock Park, decided that it looked promising, and with a small amount of hastily borrowed cash, leased the land. Because he could not afford to buy or lease a drill, Doheny dug by hand with a pick and shovel, arduously extending a four-by-six-foot shaft into the ground. At a depth of 460 feet he was able to dip up four barrels a day. The deeper he went the more oil came up, and within a few months he had brought in the first real gusher in California.

All at once, as news of Doheny's hand-dug discovery spread, it was Titusville all over again. Anyone who could scrape a few hundred dollars together began leasing land west of downtown Los Angeles to dig or drill for oil. The wells were shallow and cheap to dig; the average cost was $1,500, including tanks and pumps, and by 1899 there were more than three thousand wells pumping oil, all from a narrow tract of land varying from 800 to 1500 feet wide and about four and a half miles long. The silhouettes of oil rigs dominated the skyline, and the drilling became so frenzied that the city fathers of Los Angeles declared that oil wells were a civic nuisance, and a moratorium was pronounced on further drilling within city limits. The moratorium did no good whatever. Everyone in Los Angeles, it now seemed, needed to drill a well for water. The city council could not deny its citizens the right to do that, and so the drilling continued. If the water wells spouted oil instead — well, that could be dismissed as just a lucky accident.

There were, as it turned out, economic reasons more pressing than esthetic ones for trying to bring oil exploration under some sort of control. Within five years of Ed Doheny's find so much oil had been pumped out of the Los Angeles basin that the market was glutted. It cost less to buy oil by the barrel than it did to drill for it, and boom was followed by panic. By the end of 1899 oil leases were going begging, and it was in this panic that Edward Doheny made his next important move. Quietly, systematically, he began buying up leases at bargain-basement prices. The market for oil, he reasoned, did not have to be limited to southern California. Los Angeles, after all, offered something that western Pennsylvania did not. Titusville was an inland city and oil could only be shipped out expensively overland by rail or by pipeline. Los Angeles was a port city. To be sure, no canal yet existed across the Isthmus of Panama, and various schemes and projects to build one had languished over the years since the French construction had been undertaken in 1879 and abandoned ten years later. But the Spanish-American War of 1898 had given tremendous new impetus to the idea of a canal, and in the minds of most of the American public it had become almost an article of faith that such a canal had to be built and would be built, and would be built soon, and would be built and controlled by the United States. A canal through the isthmus would greatly enlarge the market for California oil. With this thought in mind, Edward Doheny set about seeing to it that within ten years of his first bonanza in Hancock Park he would own or control nearly the entire oil production of California.


Meanwhile another character had arrived on the turbulent California oil scene. He was Lyman Stewart, and his future would one day be entwined with Ed Doheny's. In character and background Lyman Stewart was totally unlike Doheny. For one thing, Stewart was an easterner, and whereas Doheny's rich strike had been a matter of luck, Stewart brought to the business a certain amount of experience. He had been "born to oil," barely ten miles from Titusville, and had already made and lost — and partially recouped, to the extent of about $75,000 — a fortune in oil before he set out for California in 1882. Where Doheny was rash, impetuous, and headstrong, Stewart was cautious and precise. Doheny was rough-spoken and hard-drinking, and Stewart was abstemious and pious almost to the point of prudishness. He had descended from a long line of strict, Bible-quoting Scottish Presbyterians.

In his oil-exploration activities in California, Stewart had avoided the Los Angeles basin, primarily because the cost of Los Angeles city land — as much as $1500 for a twenty-five-foot lot — went against his Scotch grain. He had begun drilling farther north, in the Central Valley, and though he had one or two good strikes, a discouraging share of Stewart's wells were dusters. Stewart's early efforts were handicapped by a variety of factors. For one thing, South America had begun exporting oil to the United States, and each time a freighter full of oil sailed into San Francisco Bay the price of California oil plummeted. There was also the matter of Stewart's hardline religiosity. If, for example, a choice option on a piece of promising oil property became available on a Sunday, Stewart refused to consider it because he would not conduct business on the Sabbath. His stubborn refusal to work on the Lord's Day often cost him money, because for some reason a number of his better wells had had the perverse habit of coming in on a Saturday night, and by the time Stewart permitted his crews to go back to work on Monday morning, much of the black gold had spilled away.

He was equally strict in dictating the moral code for his employees. Once, inspecting the progress of one of his wells, Lyman Stewart noticed a frail young boy drenched with perspiration from his labors at the rig and commented to the youth that his was pretty heavy work for a man of his tender years. "Mister," replied the boy, "she is a son-of-a-bitch, and you can tell the whole Goddamn world I said so!" Horrified at such language, Stewart quickly withdrew from earshot, and immediately decided to establish, with his meager profits, a chapel in Torrey Canyon, and hired one Reverend Mr. Johnson to conduct services in it. Not long afterward Stewart set aside funds to erect a "temperance rendezvous" for the neighborhood. This establishment would contain "a temperance bar, a library, a reading room, a gymnasium and so forth for the purpose of giving men and boys a place to spend their evenings and keeping them out of saloons." The temperance rendezvous, which was indeed built, was something less than a popular success with members of the drilling crews.

Fortunately, perhaps, for Lyman Stewart, his son William, who had come with his father from Pennsylvania and worked as his father's field superintendent, was much more liberal in his views. At one point in his California career the senior Mr. Stewart received a report that one man on his drilling crew was a perpetual drunkard, that the fellow arrived at work in the morning sober and left half drunk at the end of the day. Mr. Stewart ordered the man immediately dismissed. But William Stewart interceded on the man's behalf and argued with his father that regardless of the man's condition he was a superior worker and more than worth his wages. "Actually," William Stewart said later, "what my father heard about the man was completely untrue. He didn't come to work in the morning sober and go home drunk. He came to work in the morning drunk, and he stayed drunk all day long."

Despite Mr. Stewart's problems, however, he was able — on a shoestring, and a borrowed shoestring at that — to put together, in 1890, the Union Oil Company. Three years later, in the wake of Doheny's bonanza in Hancock Park, the Stewarts made their first moves into the Los Angeles area, but, unfortunately, they did not have Doheny's immediate good luck. No sooner had the Stewarts got three producing wells dug in Los Angeles than oil prices took one of their periodic nose dives. Discouraged, the Stewarts moved northward again, into the San Joaquin, Lompoc, and Santa Maria valleys. Ed Doheny meanwhile had also lost interest in the Los Angeles area — though not in his lands and leases — and was expanding his exploration southward into Mexico.

Ironically, what none of the restless explorers in the Great California Oil Scramble yet realized was that beneath the Los Angeles basin, and stretching out under the ocean beyond, lay one of the widest and deepest oil lakes in the world. It was 46 miles across and 22 miles long, and from it in time would come three and a half billion barrels of oil. In the 1890s a visiting professor of geology at Yale named Benjamin Silliman had speculated that there was more oil beneath the soil of California "than in all the whales in the Pacific Ocean." Professor Silliman's projection was considered a naïve easterner's wild-eyed exaggeration. His estimate would turn out to be very much on the conservative side.

The California oil rush, of course, would always be overshadowed by the gold rush. The gold rush, after all, had more glamour. Gold is mankind's most ancient symbol of wealth, the basis for his most valuable coins. And yet, for all practical purposes, gold is an almost useless metal. Unlike other precious substances, including diamonds, there is little industrial use for gold, unless one counts dental inlays. (Recently, computer technology has found a few new uses for gold.) Gold is pretty, yes, but the beauty of gold is a matter of opinion, its value a matter of faith. It serves no practical, but only an emotional need, a religious need, and has decorated history's greatest altars and temples. And yet, for all the impracticality of gold, explorers and conquistadors throughout history have set forth in search of gold, of King Solomon's Mines. The quest of the Argonauts has always been a bit like the search for the Fountain of Youth, because once one finds gold, it doesn't quite work. Perhaps the ephemeral, spiritual context of gold, and the fact that the use of gold is essentially ornamental, explains why all the gold that was mined in the California gold rush — some three billion dollars' worth — made no man permanently rich. It slipped like dross through its finders' fingers and made its way underground again, to Fort Knox, the temple of United States currency.


(Continues...)

Excerpted from California Rich by Stephen Birmingham. Copyright © 1980 Stephen Birmingham. Excerpted by permission of OPEN ROAD INTEGRATED MEDIA.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Prologue: The Gilded Man 13

Part 1 The Seed Money

Chapter 1 Liquid Gold 21

Chapter 2 Grants and Grabs 31

Chapter 3 The Big Four 50

Chapter 4 How to Buy a King 59

Chapter 5 Chronicle of Power 71

Chapter 6 The Great Museum War 80

Chapter 7 Silver Kings and Other Royalty 94

Chapter 8 Disasters, Natural and Unnatural 106

Part 2 The Easy Spenders

Chapter 9 Throwing It Around 123

Chapter 10 Prince and Pauper 131

Chapter 11 Wedding Bells 136

Chapter 12 Mother and Children 146

Chapter 13 Tempest About a Teapot 156

Chapter 14 Final Curtains 179

Chapter 15 Scandals 185

Part 3 Blood and Water

Chapter 16 J.I.'s Land 199

Chapter 17 Tough Lady 212

Chapter 18 End of the Battle 229

Chapter 19 Overnight Tradition 236

Chapter 20 "Valley People" 245

Chapter 21 O Little Town 260

Chapter 22 Finisterra 271

Postscript: Further On

Chapter 23 The Gilded Nomads 298

Bibliography 301

Index 309

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