USA > California > San Francisco County > San Francisco > San Francisco, a history of the Pacific coast metropolis, Volume II > Part 16
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Speculation In Real Estate
Real Estate Dealers Promote Railroad Extension
MARKET STREET, LOOKING WEST, ABOUT 1880
UNION SQUARE IN 1880
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unable to get an advance on his purchase price but he was never compelled to sell at a sacrifice. He could rarely be persuaded to sell for less than the record figure.
In 1867 the volume of real estate transactions in San Francisco amounted to $17,000,000. Two years later it jumped to $30,000,000. Successful operators in the mines and other investors came into the market and bought freely. It was the fashion for the lucky speculator, who was not wholly given over to the gambling mania, to put aside a part of his winnings for a nest-egg, or as a resource in case of disaster ; and he usually regarded a bit of land as a safe investment, and particu- larly desirable because it could not be realized upon too swiftly in moments of excitement. The miner who struck it rich was also disposed to "salt his pile" by putting it into a form of property which the cautious always extolled as the most dependable. Hence when, as in the years of the first Comstock excitement, men were suddenly becoming rich, there was a rapid expansion of the volume of sales, a larger proportion of which than usual represented permanent investments.
While there was no disposition on the part of owners of land in San Francisco, even in periods of depression, to make sacrifices, the effects of bad business very promptly exhibited themselves in the dullness of the real estate market. The spurt of 1867-69, as already related, was followed by something like a complete collapse of trade, and a spirit of uneasiness created by the presence in the City of an un- usual number of unemployed. Under the influence of this depressing condition sales of real estate declined greatly, dropping from $30,000,000 in 1869 to $12,- 000,000 in 1873. Two years later, owing to the bonanza discovery on the Comstock, they mounted to $36,000,000, the fortunate speculators and the lucky miners fol- lowing the example set for them four or five years earlier. But the pendulum swung from one side to the other in those days with great rapidity, and with the passing of the speculative excitement, induced by the rich mineral discoveries, there was a cessation of interest in real estate which caused sales to shrink to $10,000,000 in 1879, and during several years following they hovered in the neighborhood of that amount.
When the ordinance which provided for the creation of Golden Gate park was accepted the area reaching from Stanyan street to the sea, within the limits north and south of the reservation, was a waste of sand dunes. No more dreary outlook existed anywhere than these rolling hills presented, and it required a powerful imagination to conceive of them being transformed into grassy and tree covered slopes. Familiarity with the propensity of the sand to keep in motion was not cal- culated to cause those who had to deal with the problem of reclamation to minimize the difficulties which would beset their work, but there was an abiding faith that a park could be made and before the decade 1870 had run its course even the doubters were convinced that the impossible was not being attempted. The progress of re- demption was slow at first, the sums appropriated for the purpose being small. During the five years preceding 1875 there was expended less than half a million dollars, a part of which was derived from the sale of lands, and as late as 1882 there was set aside for maintenance and additions as small a sum as $77,718, and in the next year this amount was cut down to $38,006. Despite these meager allow- ances there was constant improvement. Roads were made; trees and shrubbery were planted ; steps were taken to arrest the drifting sands, grasses which had served that purpose in foreign countries being imported and in the early Eighties it had already become the custom to point with pride to what had been accomplished, and
Investors in Reai Estate
Depression Affects Real Estate
Reclamation of Golden Gate Park
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to explain to the stranger that the growing green area which he saw when being taken to the Cliff house, which was still the show place of the City, was as unprom- ising in appearance as the rolling hills of sand which still surrounded the artificial oasis.
San Francisco Reclaimed from the Sands
The creation of Golden Gate park was one of the many progress marks in the growth of San Francisco, a little more striking than previous accomplishments in the way of reclamation, for the most of San Francisco was at one time a sand waste. Much has been said about the filling in of the water front by the pioneers, and their enterprise in providing for the needs of a growing commerce by bringing shipping and shipper as close together as possible cannot easily be overstated, but the transformation of the area over which the City later spread itself into acceptable sites for building was no less marvelous. The San Franciscan of 1912 who did not see the City earlier than 1883 can scarcely realize the changes made by the persevering industry of its earlier citizens. It is difficult for him to picture Market street as a place covered with sand dunes that deflected the line of travel, and he can hardly bring himself to think of the locality now bounded by Third and Folsom, and First and Market streets, as a vale in the sand hills in which lupin, yerba buena, yerba santa, wild lilac and other flowers flourished, and which, perhaps because of the forbidding appearance of the nearby sands, was called "Happy Valley."
Disappearance of Old-Time Resorts
Years before the close of the Seventies Happy Valley had disappeared from the map, and the "Willows," a once popular resort at Valencia and Eighteenth streets, and Hayes' park had ceased to draw visitors, being completely superseded by the superior attractions of Woodward's Gardens, a large part of the popularity of which was due to flowers and a bit of lawn it maintained, a distinction it had to share later with Golden Gate park, which finally so surpassed it in attractiveness, that it too passed with the other things known to the Pioneers. These were the changes which stood out most prominently, for the complete metamorphosis was accomplished so gradually that even the "old timer" found it difficult to remember when the appear- ance of this, that or the other locality was transformed by the removal of sand dunes, and the filling up of hollow places, or when streets were graded, which were later built upon, thus concealing the rugged and unpromising character of the original sites.
Increase of Urban Comforts
The topographical changes effected during the period were no more remarkable than those which contributed to the comfort of the inhabitants, such as the exten- sion of illuminating facilities. The introduction of gas occurred within a few years after the discovery of gold and its use developed slowly, but that was also the case in the older communities of the East. In 1854 there were 237 consumers and this number had grown to 9,400 in 1870 to whom 180,000,000 cubic feet of the illu- minant were sold. In 1880 the consumption had more than doubled, reaching 489,- 000,000 cubic feet, and the consumers numbering 14,300. By this time the streets in the business section were tolerably well supplied with lamps, but the supervisors did not respond with promptitude to the demands of the increasing numbers who were pushing out into new districts, a fact not unconnected with the high price charged for gas, which was $4.50 per thousand cubic feet in 1870, having been reduced from $6 under the pressure of competition, which, however, was ended by the absorption of the City Gas Company, organized in that year, by the old company.
Rival Gas Companies
The decade 1870-80 was noted for its activity in gas production rivalry. In 1862 a franchise had been granted to the Citizens Gas Company, but it did not
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begin to furnish gas until January, 1866. It was absorbed in 1868 by the San Francisco Gas Company, the same fate being experienced by the City Gas Company, formed in 1870. In 1871 the Metropolitan Gas Company came into existence and furnished gas at $3.50 a thousand, but it passed into the hands of the old company a few months afterward and the people were at once called upon to pay $4 a thou- sand. Owing to real and threatened competition the rate fluctuated between $4.50 and $1.50 per thousand cubic feet during the years 1871-73, and on December 31, 1874, it was $3.75, which price was charged until November, 1878, when the mu- nicipality for the first time exercised the power conferred upon it by the legislature of 1877-78 and fixed the rate at $3. A further reduction was made in 1880 to $2.75 and in 1882 the price was put down to $2.00. Between 1882-1885 there was fresh competition, during which the rate was forced down to 90 cents. The experience of the consumers during the Seventies was responsible for the passage of the act which gave to any corporation desiring to exercise the privilege the right to occupy the streets with gas pipes. It was thought by the author of the measure, and all the ardent reformers of that period, that the problem of obtain- ing cheap gas was solved by this step; but subsequent experience demonstrated that it merely helped men with the predatory instinct to profit at the expense of the old company, which had developed sufficient strength to buy out fresh competitors as fast as they appeared on the scene.
But by far the most interesting development in the illuminating field was the appearance of the electric light. The first public exhibition of this new illuminant was made upon the roof of Saint Ignatius college, on the 4th of July, 1876, by the Reverend Joseph M. Neri. Three French arc lights were displayed on the north end of the building, which stood on the site now occupied by the Emporium department store on the south side of Market street. Old French machines used during the siege of Paris in 1871 were employed to generate the current, and also one Brush machine made by Father Neri, who lectured on the new light, and pre- dicted that it would revolutionize the lighting of the world. There was an exhibi- tion made by the Brush Electric Company at the Mechanics Institute Fair in 1879, and in the same year the California Electric Light Company was incorporated, its first plant being erected on a lot on Fourth street in rear of what is now the Pacific building on Market street. Prior to the exhibit by the Brush Company two arc lights, the electricity for which was generated by a Gramme machine, brought from Paris by Charles de Young in 1878, were installed in the editorial rooms of the "Chronicle." The editor was greatly impressed by an exhibit he saw in the exposi- tion of that year, and was induced by the inventor, Jablikoff, whose carbon candles were first used, to introduce the new light to America. Owing to the irregularities of the engine, and other imperfections, the light produced was very unsatisfactory, but the "Chronicle" was insistent in proclaiming that electricity would be the light of the future. It is interesting to note that when electricity was first put to prac- tical use in San Francisco the cost to the consumer for an arc light, then the only electric lamp used, was $10 a lamp per week, with the current cut off at midnight.
An innovation touching the life of the people almost as closely as the introduc- tion of electricity as an illuminant was the telephone. Although the original patents of Bell were filed as early as 1876, a demonstration of the wonderful discovery being made at the Centennial Exposition in Philadelphia in that year, the instrument did not pass into instant use and was not introduced into San Francisco until 1880.
First Electric Light in the City
Introduction of the Telephone
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In that year George S. Ladd organized the first company within Pacific coast ter- ritory, to which he gave the name of Pacific Bell Telephone Company, becoming its president, which office he filled until his death, in 1889. The Pacific Coast Com- pany received from the National Bell Telephone Company (predecessor of the Bell Telephone Company) of Boston an exclusive and perpetual license for the terri- tory comprising the states of California, Nevada and Washington, and a portion of Utah and the territory of Arizona. The company formed by Ladd was also ac- corded certain privileges by the municipality. The first list of subscribers pub- lished by the company contained 170 names. The astonishing popularity and al- most universal use of the instrument at present make it seem incredible that it should have been regarded with anything but enthusiastic favor, but it is true that the first people who became acquainted with the new device were in doubt whether it would prove a boon, and there were some even who were afraid to use it. The secretary of the company relates with considerable glee that he had to be persuaded by Mr. Ladd to take hold of the receiver of the first experimental "phone" installed in San Francisco.
The Calaveras Cow Pastures
Incidental reference has been made to the refusal of the people during the period immediately preceding the failure of the Bank of California to purchase the Spring Valley Water Company's system, which was controlled by Wm. C. Ralston. The subject of the acquisition of the plant was up for discussion at frequent intervals during the 1870 decade, but the deep seated aversion to the incurrence of indebted- ness, and the fear that the community might be overreached in buying, operated to prevent the carrying out of any project of municipal control. In 1871 General Alexander made some computations which indicated that a daily supply of 60,000,- 000 gallons could be developed from the peninsula water shed, but critics pointed out that he had neglected to indicate where 21,979,000,000 gallons could be stored. The season of 1871-72 was a wet one, and there was a measurable abatement of interest in the water supply question, but in 1872-73 the rainfall was under the normal and the agitation for city ownership was at once revived, and in 1874-75 extensive surveys of various sources of supply were instituted. The resulting re- port recommended the acquisition of Calaveras creek, draining the northwest slope of Mount Hamilton, and adjacent outliers to the north, forming the principal tribu- tary of Colomas creek. This proposition was received with ridicule, and the pro- posed source of supply was nicknamed the Calaveras cow pastures, but the city officials attempted to negotiate with the owners of the desired property. They proceeded so slowly, however, that Spring Valley anticipated any action on the part of the municipality by purchasing the derided watershed.
The company made this purchase in May, 1875, and there were comparatively few at the time who took umbrage at what was later regarded as an attempt to prevent competition. In 1876 a bill was introduced in the state senate by Rogers of San Francisco, which was denounced by the "Bulletin" as the consummation of a plan devised by Ralston to sell Spring Valley to the City without the consent of the people. It had opposed the acquisition of a supply by the City, at an earlier date, and declared that the people were in no hurry to have the bill passed, as they had some resources for cheap water that were not yet exhausted. Incidentally it recurred to a statement previously made that Ralston had devised a scheme to buy out Spring Valley for $7,000,000 and sell it to the City for $15,000,000. Whatever may have been planned no results followed. Spring Valley continued to operate its
The Rogers Water Bill
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plant and it was broadly intimated by a part of the press that it deliberately invited the opposition which prevented acquisition by the City. One paper in commenting on the situation, remarked in April, 1877, that the gossips on the street were whis- pering that Spring Valley was master of the situation, and that the commission cre- ated by the Rogers act would play into the hands of the monopoly by recommending a scheme which would be sure to be rejected, thus prolonging the company's lease of power.
If there had been no further opposition to the acquisition of Spring Valley at this time, the project would probably have suffered from neglect, for the winter of 1875-76 was one of abundant moisture, and it had become the habit of San Fran- ciscans to regard with complacency the water situation when the reservoirs were full. But the ensuing season was exceedingly dry, the rainfall being the smallest recorded in many years. The subject of a municipal supply was at once revived, and another investigation of possible sources was made by Colonel George H. Men- dell, U. S. A. This developed a number of possibilities which were thus enumerated in the report:
1. Existing supplies and undeveloped sources claimed by Spring Valley.
2. Clear Lake.
3. Lake Tahoe.
4. El Dorado Water and Deep Gravel Mining Company's water properties and rights on south fork of American river.
5. Blue Lakes (Moquelumne river).
6. McGregor Water and Mining Company. Rubicon river (south fork of middle fork of American river).
7. San Joaquin and San Francisco Water Works.
8. Feather River Water Company.
9. Lake Merced.
Although the presentation of this formidable list of sources of supply suggests that the City was earnestly seeking to emancipate itself from the domination of the Spring Valley Company the discussion of the period does not show that such was the case, for it revolved wholly about the question whether the established water company's property should be acquired. All the arguments. were directed against the purchase of Spring Valley, little or no attention being paid to the possibility of developing an independent supply. Spring Valley made an offer in 1877 to sell at $13,500,000, which the City met with a proposal to pay $11,000,000 for its properties on the peninsula, which the water company refused to entertain, where- upon there was talk of acquiring the Blue lakes and conducting their waters to the City. It is doubtful, however, whether a project of any sort involving the necessity of incurring a heavy bonded indebtedness would have met with public favor. In- deed the disposition to procrastinate was manifest throughout, the enemies of Spring Valley being apparently as well satisfied to let matters drag along as those to whom was imputed the dark design of complicating the situation by proposing conditions which it was asserted with great vehemence the people could not be induced to accept.
In the following winter the rainfall was again bounteous and as usual the water question ceased to be an absorbing one; besides the people were engrossed with the more menacing trouble of its discontented unemployed and a little later by the neces- sity of considering the new constitution in process of formulation and which they were presently called to vote upon. That instrument when it began to assume shape
Investigation of Possible Water Supplies
Spring Valley Offers to Sell
Bounteous Rains Diminish Interest
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inspired the hope that it would solve the water problem by placing the power of rate regulation in the hands of the people. Although in the heat of antagonism the opponents of Spring Valley were in the habit of charging that the waters supplied by the company were unfit for human consumption, and horrible monsters of vari- ous sorts were exhibited in glass and labeled as products of the water company, the people were perfectly satisfied with the quality of the beverage supplied to them, and were only concerned that it should be furnished cheaply. Consequently the possibility held out by the new instrument was accepted without suspicion that rate regulation might prove a frail thing to lean upon, and perhaps bring greater evils in its train than those from which the community at times had made ineffective efforts to escape.
Regulation of Water Rates
How much was expected from the rate regulating power may be inferred from the fact that not long after the supervisors began to exercise the function the theory was advanced that the City had a right to tap the mains at its pleasure, and take water free of charge for the flushing of sewers, the irrigation of parks and other municipal purposes. The water company resisted, and carried the matter into the courts, which sustained its contention that the City was not entitled to free water for any purpose whatever. Under the earlier practice the City had escaped paying for a great deal of the water it used, but the later definition of the rights of the water company given by the courts compelled the City to pay for what it used the same as other consumers. This decision resulted in the creation of the pumping system in Golden Gate park in 1885, which developed a sufficient supply for all park purposes and greatly promoted the progress of the reclamation work in the people's pleasure ground, while reducing the cost of maintenance, which was con- tinually increasing owing to extension of lawns and the addition of beds of flowers.
Increased Consumption of Water
As in the case of the consumption of gas the growth of the City caused a rapid increase in the demand for water. In 1865, according to the figures of the engineer of Spring Valley, San Francisco with a population estimated at 110,000, used 2,360,000 gallons of water. In 1870 the consumption had increased to 6,040,000 gallons, the population being 150,000; ten years later a population of 233,000 required 17,050,000 gallons. If the records of the company are at all dependable in this particular the consumption between 1880 and 1885 did not increase at all, the estimates of population and consumption for the two years being the same. There were causes operating which may have diminished the demand made upon the company, but there was no ground for the assumption that population had re- mained stationary during the five years. Indeed the population estimate for the earlier year was 33,000 more than that shown by the census, and the 265,000 esti- mate of the later year was probably as faulty as that of 1880.
The extension of urban transportation facilities during the period was not more marked than the improved modes of communication with other parts of the state which occurred during the Seventies. By far the most important event of the period was the opening of the line between San Francisco and Los Angeles by the South- ern Pacific Company, which occurred in September, 1876. Prior to that date a line of steamers plying between San Francisco and San Diego, touching at San Pedro, and a daily coach which traversed a road running along the coast, provided the only means of transit for passengers and freight, the latter being wholly carried by water. The new railroad ran through the San Joaquin valley, crossing the Tehachapi range. Travel between the two cities was so light at the date of its
Awakening of Southern California
NEW CLIFF HOUSE AND SUTRO HEIGHTS
-
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opening that one daily train afforded all the facilities required. At that time Los Angeles was still in the dolce far nienti stage of its existence, and scarcely had any aspirations, but its neighbor, San Diego, was filled with ambitious views for the future. Later came the awakening of the City of Angels, and the subsequent devel- opment of its horticultural and other resources. The progress of the South and that of the intervening country in the great valley and along the coast between the two cities has called into existence other railroad lines, over which scores of pas- senger and freight trains are dispatched daily, caring for a traffic whose volume could scarcely have been conceived at the time of the opening of the original line.
At the opening of the decade 1870-80 there were 925 miles of railroad in Cali- fornia. During the following ten years 1,270 miles were added, and in 1883 the mileage had increased to 3,806, nearly all of which, with the exception of some few lines under private ownership, and which were in no sense rivals, were under the control of the men who had built the Southern Pacific. In describing the po- litical conditions created by the monopolization of the traffic system of the state only passing reference was made to the building operations of the Central and Southern Pacific which tended to aggravate the situation created by the disap- pointment which followed the opening of the first transcontinental line. The earlier hostility to the corporation was very largely influenced by the greed displayed by the managers in appropriating every possible method of making money which grew out of the construction and other operations to themselves. The creation of construction and land handling companies composed of insiders was greatly re- sented and the methods adopted were denounced as bare faced robbery. It was urged that the selling of the lands granted to the Central Pacific en bloc was an evasion of the law which contemplated that they should be sold to actual settlers at a price not to exceed the double minimum of the government, and there was a demand for an investigation by congress which however, went unheeded.
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