California

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Economic Development, 1850-1900

Huge numbers of settlers continued to come to California in the decades following the end of the gold rush. Three major economic developments accompanied the arrival of immigrants: agricultural activities expanded and diversified; railroads were built between California and the rest of the country; and manufacturing activities and new economic enterprises grew rapidly.

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Agriculture

The focus of agriculture in California shifted in the 1860s from raising livestock, or ranching, to growing grain. Particularly in the vast Central Valley, farmers began devoting former grazing land to wheat and barley cultivation. Grain and flour produced in California were carried by ship around South America to the eastern United States. Farmers in the Central Valley and in southern California, however, found they could make more money raising fruits and vegetables. After 1869 California was linked by railroad with the Eastern states; refrigerated freight cars made shipping fruit and vegetables to those markets possible.

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Railroads

The first railroad within the state, a 35-km (22-mile) line between Sacramento and Folsom, was completed in 1855. Two railroad companies built the first transcontinental railroad: The Union Pacific Railway laid tracks west from Omaha, Nebraska, and the Central Pacific Railroad, under the leadership of wealthy Sacramento businessmen Leland Stanford, Charles Crocker, Collis P. Huntington, and Mark Hopkins, laid track east from Sacramento. The two lines were joined at Promontory, near Ogden, Utah, on May 10, 1869. In 1876 the Central Pacific was extended southward, reaching Los Angeles. The southern portion of this line was called the Southern Pacific Railroad. Early in the 1880s the Southern Pacific linked California with New Orleans.

Railroads had originally promised to stimulate the California economy and to attract new settlers to the state. Although economic growth did increase and settlers did arrive, especially in southern California, economic depression struck the nation in the 1870s, and few of the settlers who came could afford to begin farming immediately. Over time, however, the railroads encouraged the rapid growth of cities in California and made it easy and relatively inexpensive to ship agricultural products across the country.

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Other Economic Activities

Mining, primarily for gold, was the main nonagricultural economic activity in California after 1850; but, beginning in the 1870s, manufacturing increased considerably. In 1900 manufacturing had become the most important state economic activity, although meat packing as well as fruit and vegetable canning were based on California’s growing agricultural production. Other important activities included lumber milling, brick manufacturing, fish processing, and the production of farm machinery. Oil production also began in southern California during the last two decades of the century.

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Social Discontent and Reform Movements

In the latter part of the 19th century, California farmers had to pay high railroad rates and unfair taxes. Nonfarm workers were also bitter about low wages and high unemployment, which they blamed on the large number of Chinese workers in the state. Many of the Chinese had been brought to California as railroad construction workers because they were willing to work for lower wages than were Americans. Severe nationwide economic depressions in the mid-1870s and again in the early 1890s increased the problems of all farmers and workers. In addition, the state government was dominated by politicians who, allied with railroad companies and other corporations, often showed little concern for the issues raised by farmers and laborers.

In the 1870s a number of violent riots were directed against the Chinese. In 1877 the Workingmen’s Party of California was organized after riots in which Chinese-owned laundries were burned. Most of the party’s support came from workers and small farmers. Led by the fiery speaker Denis Kearney, the party ultimately encouraged both state and federal anti-Chinese legislation. When a second California Constitution was adopted in 1879 the Workingmen’s Party made sure it included anti-Chinese articles. The U.S. Congress followed that in 1880 by passing a law regulating Chinese immigration, and in 1882 Congress banned it completely for ten years. The Workingmen’s Party also encouraged the creation of a state railroad commission to oversee railroad activities, but railroad companies quickly gained control of the commission. After the demise of the Workingmen’s Party in 1880, large railroad companies and corporations dominated state politics.

In the first decade of the 20th century a group of progressive Republicans, who believed in more government action to stamp out corruption and to meet the needs of citizens, took over the state government. In 1910 Republican Hiram W. Johnson was elected governor, and during his administration sweeping political and economic reforms were passed by the state legislature. Among the most important of these were the initiative, the process of enacting legislation by means of public petition or a popular vote; the referendum, the practice of submitting an issue to a public vote; and the recall, the ability to remove officials from office by popular vote. In addition, California created a new and effective railroad commission, allowed women to vote in state elections, and required employers to participate in a plan that would compensate workers for work-related injuries. In 1912, when former President Theodore Roosevelt ran for president on the Progressive Party ticket, Johnson was his vice-presidential candidate, but Democrat Woodrow Wilson won the election.