Thursday, May 31, 2012

The Free Harbor Fight - A Lesson in Commerce

This is the story of how the Spanish Empire's fear of pirates in the 16th century led to a battle to develop a port for Los Angeles between two powerful shipping magnates from back east in the 19th. The Gold Rush, trade with Hong Kong, the Comstock Lode, all factor in. The characters in the story founded LA's railroad system, it's ports, made Santa Monica a resort town, and developed many suburbs in Orange and LA county. It's the story of almost everything and I'm only going to brush up against it. I stopped when I felt I'd filled in enough gaps, but I haven't even begun to cover everything.

I admitted last week to Crash Course World History being a huge source of inspiration. This week's episode is about the trade relationship between the Venetians and the Ottomans. Our handsome (married, darn it) host has taken us down the Silk Road, discussed the Indian Ocean trade routes, and now wants to talk about Venetian trade.

Venice, that series of islands in the northeast corner of the Mediterranean, was made for trade. It's easy for boats to get in and out of, so the Venetians became expert boat makers. They were importing pepper from Egypt and latter goods from the Ottoman Empire and from there they spread throughout Europe. 

This control of the Eastern spice trade was what led the Portuguese and Spanish to look for alternate trade routes. It was just such an adventure that led Columbus to try sailing West and landing in what he called the West Indies. 

Since these European trade routes came to define the modern Americas and Africa, they're kind of important. Brazil became the landing point for the Portuguese before the sailed "around the horn" of Africa. Another modern Portuguese speaking nation, Mozambique was stop number two, then it was off for India. 

For the Spanish, they stuck to that Western route out to Havana, Cuba. Veracruz and Acapulco in Mexico became important Spanish ports, and then the Spanish conquered the Philippines to give them an Eastern port in Manila. 

North America really wasn't a factor at this point, the Europeans were after the cool stuff the Ottoman Empire and Chinese were producing, because those places were so much cooler than Europe. 

Why did I run down all of that on a Los Angeles history blog? Well the Spanish eventually ventured north out of Mexico, and by that time their city founding policy had been shaped by their experiences with pirates. 

Surely you heard of pirates, they have that ride at Disneyland that pretty much sums it up. The Spanish were wealthy, and so there were pirates, in the Caribbean, who made it their business to be able to raid Spanish Galleons. 

So the Spanish came up with the Leyes de Indias or Laws of the Indies in 1573. One of these laws stipulated that Spanish New World Cities should be twenty miles from the sea, near a freshwater source, and close to a native tribe. 

The site eventually chosen for El Pueblo de Nuestra Senora la Reina de Los Angeles de la Porciuncula in 1781 is about thirty miles from Santa Monica Bay, pretty close to the Los Angeles river as well as near Yangna, a Togvas Indian tribe on the LA River.

Of course, the Los Angeles settlement was founded ten years after Mission San Gabriel Archangel was erected along the Rio Hondo, although along the Santa Ana River was the first choice. The Mission was founded as a stop along El Camino Real, before there was an attempt to found a city.

Which is all to say the inland location of Los Angeles is very much a reflection of the city's Spanish heritage. One only need to look at New Orleans or New York that had the English or French been the ones to originally settle California, downtown would probably extend from here.

Santa Monica Pier, 1877. Photo credit LAPL

That photo is of a pier built in Santa Monica by the Los Angeles and Independence Railroad. Railroad Tycoon was where I learned about railroad building of the second half of the 19th century, the Baltimore and Ohio (B&O) probably being a well known example.

The LA&I was supposed to extend from Santa Monica Pier, to downtown Los Angeles, and on to Independence, CA - a small trade town in the Owens River Valley. The company was founded in 1875 and using mostly Chinese labor laid track between Santa Monica and downtown Los Angeles.

Before I continue, one brief final note about the Laws of the Indies. Not only are they the reason downtown Los Angeles is thirty miles inland, they're also the reason the grid is tilted 36 degrees. These original streets comprise an area of four Spanish leagues square, you can see on a map of Los Angeles the streets at an angle. Where they go straight north and south is how you can tell the boundaries of the original city.

Now what happens next is very much a story of merchants and men with funny hats. Because the Spanish hadn't developed a major port near Los Angeles, the race was on as men from the East with Jeffersonian ideas tried to be the one to control LA's trade potential. The other entrant in the race was San Pedro.

Port of Los Angeles, 1924. Photo credit LAPL

The man spearheading the San Pedro-Wilmington initiative was Phineas Banning. While Santa Monica and Redondo Beach were natural harbors, San Pedro was too muddy to allow ships in port. The cargo either had to be unloaded, or the ship had to beach.

Phineas Banning arrived in Los Angeles in 1851 at the age of 21, having taken the journey from Wilmington, Delaware, across the isthmus of Panama, and up to California. Banning ran a stagecoach line from the sleeping fishing town of San Pedro up to Los Angeles, and used the profits to expand all over the Southwest. Staging wasn't the future, and Banning knew it. In 1868 he invested in rail lines to Los Angeles, the first to connect the two areas, as he sought to make San Pedro a shipping destination.

Colis Huntington was born in Harwington, Connecticut, but came out to Sacramento during the Gold Rush to make money as a merchant. Huntington, as well as another famous name Leland Stanford and others formed the Central Pacific Railroad to build the western half of the Transcontinental Railroad.

The Big Four involved with the Central Pacific Railroad later invested in the Southern Pacific Railroad. The first goal was traveling south, but in 1871 the SP was able to name their price for connecting Los Angeles with a southern transcontinental route across Texas into New Orleans. They wanted $600,000 cash, a wide right of way, 60 acres of downtown property, and Banning's 20 mile Los Angeles and San Pedro railroad, plus the link to the harbor.

Remember the LA&I railroad. That had been founded in 1874 by Nevada senator John P Jones. He made his money on the Comstock Lode, and completed his railroad in 1875. The SP went out of their way to undercut that business, and on July 4th, 1877, the SP acquired the tracks the LA&I had laid down.

Banning had dredged the San Pedro harbor in 1875, and built a breakwater in 1873. Even having to pay SP's prices to move his goods over land, by his death in 1885 the San Pedro port was doing 500,000 tons in shipping goods each year. Much of that was trade between San Pedro and British controlled Hong Kong. With the Panama Canal opening up soon, Los Angeles was going to explode as a trade port.

In anticipation, other groups laid track to the area around the San Pedro bay, angering Huntington. He went full in to the Santa Monica port, opening a long harbor in 1893. He named it the Port of Los Angeles, and strong armed area merchants into using Santa Monica or not be able to use his railroads. San Pedro was the customs center for Los Angeles, but Huntington had Santa Monica declared a sub port of entry.

Now up to this point, this was simply a case of two businesses going toe to toe. Huntington controlled the rails, Banning developed a port. When Huntington realized a free port would hurt his business, he set out to develop a private port. However, with the Panama Canal opening things were about to heat up.

Congress had concluded in 1890 that LA needed a deep water port necessary for handling large deep sea vessels. $4 million was allocated to build a breakwater. San Pedro and Santa Monica were the two developed cities, and thus were the two entries for the money. The city knew Huntington would only increase the power of his monopoly if Santa Monica were chosen, so they backed San Pedro.

The LA Times and it's publisher Harrison Otis (a key figure in the development of the San Fernando Valley) also sided with San Pedro, lest the government give funds to a single corporation. The Free Harbor Fight as it was called in the press saw the Los Angeles Chamber of Commerce vs Huntington and the Southern Pacific. The Chamber of Commerce found a hero in Stephen M. White.

By the way, it's amazing to roll through all these names cause growing up by the port, they're everywhere but not many know who they are. Banning's house is now a museum, so he's pretty well known and the Wilmington High School is named after him. Stephen M. White got a middle school in Carson.

Anyhow, White filibustered for two days, damning the Southern Pacific's practices and amending the 1986 Rivers and Harbors bill to read that if Santa Monica were chosen, any railroad could connect for a nominal fee. The bill was adopted with this language, and in 1897 San Pedro was chosen by a team of engineers.

So in this battle, the funny hats won out over the merchant, but that'll happen in a democracy. After all, White was speaking for his constituents, the plurality, and Huntington had become a funny hatted Baron looking out only for himself.

I mentioned that Banning's family donated his mansion and drum barracks in Wilmington as a park and museum. The Huntington Library, a major research library, was donated by Colin Huntington's more benevolent nephew.

Henry Huntington operated the Los Angeles Pacific railway after his uncle had abandoned the line to the port. This combined with the Pasadena and Los Angeles railway to form the Pacific Electric Railway in 1901. The Red Cars of the PE became the dominant means of transport in Los Angeles until the advent of the freeway system in the 50s. The PE became so important to Los Angeles life, a small beach town south of LA sold it's naming rights to his land development company (Huntington Beach, natch)

As for San Pedro, it was annexed as well as 16 mile strip of land known as the Harbor strip and the city of Wilmington into the City of Los Angeles. This gives Los Angeles it's strange southern appendage. A long story full of intrigue that could have been avoided if it weren't for the Spanish being so afraid of pirates.


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