Land Speculation and the Development of Fresno County: 1860 to 1891



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Cameron Ormsby
Land Speculation and the Development of Fresno County: 1860 to 1891

In 1863, Henry Miller filed patents or claims for thousands of acres of unsurveyed “swamplands.” The lands had been declared swampland, although no representative of the state of California had ever examined them, on the basis of eyewitness testimony by several land officers that Miller had been all over them in a boat. As he later confided to a biographer, he had—but the boat had been strapped to a wagon.1 Although probably apocryphal, this story illustrates the lengths that wealthy landowners were willing to go to secure cheap land. Swampland, which sold for half the value of ordinary farmland, became a popular ruse for land speculators to claim vast tracts of public land at bargain prices. William S. Chapman, a San Francisco real estate agent who for a period in the 1870s would become the largest landholder in the state of California, purchased 98,478 acres of “swampland” alone.2 The actions of these unscrupulous buyers would be felt on a state-wide level: by the 1870s, all of the state’s most easily arable land had been sold off, yet development remained close to nonexistent.

Immigrants arriving in California flooded the cities while rural counties languished. As early as 1860, just ten years after statehood, more than a fifth of Californians lived in communities of 2,500 or more.3 (In comparison, only one percent of Ohio residents lived in towns after ten years of statehood, and in Illinois there was not a single community that large.4) And during the 1870s and 80s, eight of the eleven western states grew faster than California.5 For a state that had seen such promising economic and social development during the mid 19th century, stagnation was a harsh blow. Disillusioned boosters and farmers alike saw the monopolization of land ownership as the single biggest factor in retarding California’s growth.

Land speculators, or as the San Francisco Chronicle referred to them, “remorseless land pirates,” were the primary culprits of this monopolization.6 By taking advantage of lax land laws and corruption within the state administration, private individuals could lay claim to hundreds of thousands of acres of prime real estate. Instead of developing these lands into functioning farms, speculators let the land lie untouched, betting that the value of the land would rise in coming years, frequently with the arrival of the railroads, and the land could be resold at a high profit with minimal effort. Unimproved land went virtually untaxed by the government, leaving speculators with little incentive to sell their land quickly. For example, owners of the state’s 5,000,000 acres of developed land in the 1880s paid eight or ten times the taxes paid by those who owned the 21,000,000 acres of undeveloped land.7 Resentment against these speculators, and the system that had created them, ran high. The San Francisco Chronicle published the following indictment:

There never has been a State on the continent in which the land laws were so well devised for monopoly and so directly against settlement and production… where it has been as difficult as here for men of small means to obtain a clear title, at a reasonable cost, to a homestead and farm; nor a State or country on the globe where monopolists and land sharks have found it as easy as in this state of ours to secure their thousands and tens of thousands of acres for little or nothing.8

The government, under pressure from angry homesteaders, passed laws restricting the amount of land that could be purchased by one individual, and tried to curb the use of military scrip.9

In protest, William S. Chapman wrote a letter in July of 1876to the San Francisco based Evening Bulletin. In it he claims that the speculators of the San Joaquin Valley, where the best agricultural lands could be found, had merely purchased land that nobody else wanted, and then developed it to make it more attractive to homesteaders. He writes, “I have entered some hundreds of thousands of acres of this land. I have sold it as fast as I could at reasonable prices to actual settlers… settlement and cultivation have progressed in the San Joaquin Valley at a ten-fold greater rate than if there had been no speculation in the matter.”10 This debate over the impact that land speculation and the resulting monopolization of property had on the development of California would shape land policy, settlement, and growth for generations to come.

In the past fifty years, historians have concluded that land speculation did indeed have a significant effect on the settlement of California. However, there appears to be no general consensus among said historians as to what that effect was. Paul Gates, a prominent scholar of public land law, argued that development in California pitted wealthy speculators against poor and disorganized homesteaders, in which the speculators emerged victorious at the expense of state growth. He focused on how laws pushed through by wealthy lobbyists were designed to discourage small farmers in favor of large landholdings. More recently, Donald Pisani, a professor of the American West at the University of Oklahoma, has called for a closer focus on how land monopolists used riparian water rights to drive small farms out of business. Both of these historians agree that speculation consolidated the power of the wealthy and created a permanent inequality in the distribution of land. Pisani explicitly links the lack of agricultural development with land monopoly, writing, “the baneful effects of concentrated, nonresident ownership were painfully obvious in the almost complete absence of a rural society and stable rural communities.”11 Both argue this narrative in terms of the rich versus the poor, casting land speculators in the role of greedy robber barons, despite evidence that many of these businessmen ultimately went bankrupt.

There are other, more conservative stances in this ongoing debate. Gerald Nash, a professor of history at the University of New Mexico argues for an interpretation of the land speculator as a necessary middleman, irrigating farmland to make it more attractive to settlers, publicizing the most desirable locations, and introducing eastern farmers to techniques of agricultural production better suited to a western climate. Khaled Bloom, an independent scholar and historian of California, focused specifically on the San Joaquin Valley. He found that speculation created an initial inequality that was gradually dispersed as speculators sold off their lands. Yet none of these interpretations offer verifiable data that links land speculation to the development, or lack therof, in California’s rural interior.

This study will examine patterns of land ownership and development in Fresno County from the 1860s through 1891. The study relies on a county atlas created in 1891 by Thomas Thompson. This atlas notes every landholder in Fresno County, as well as schools, post offices, land colonies, and canals: ideal markers to measure community growth in Fresno. The maps are restricted, however, in that they offer only a snapshot of Fresno some thirty years after the county’s creation. To get a clearer picture of Fresno in the 1860s, landownership in 1891 will be compared with the database of land patents filed with the State of California, using ArcGIS to situate them in the geographic context of the map. Then, to measure how patterns of landholding shifted with the construction of the Central Pacific Railroad’s line through Fresno in 1872, land records from 1860 to 1875 obtained from the Fresno Hall of Records will be analyzed. By tracing the land owned by the twenty largest property holders in Fresno through 1875, and then analyzing those patterns and the patterns of development in the 1891 atlas, the impact of land speculation can be explored on the most concrete level: the geography of Fresno.



Development, as measured by the presence of schools (light green) and post offices (dark green), is centered in three main areas:

The first is in and around the town of Fresno, where the main railroad line branches into two. By 1890, Fresno was the only town that had more than 2,500 people.12 The 1890 census reveals that of the 32,026 people living in the county of Fresno, 10,818 lived in Fresno proper. The fact that almost a third of the county could be found in one city points to a county where extensive homesteading has not taken root. This assumption is borne out by the gender distribution within the county; with 20,129 men to 11, 897 women, Fresno was overwhelmingly male.13 Unlike farming families, where the gender ratio was roughly even, both mining and logging employed predominantly men. This inequality hints that mining and logging played a much larger role in 1890 then the farms that would eventually dominate Fresno’s economy. The second significant center of development is in the south-east, near the border of Tulare County. This area corresponds closely to part of the land given to the Central Pacific Railroad under the railroad grant, and reveals significant homesteading. Here development of Fresno seems to have gone according to plan. Finally, and most extensively, there are surprising signs of development in the foothills and more mountainous terrain to the north and north-east.



Comparing the map of community development with a map of all land patents filed under the Homestead Act, there is a strong correlation between the two.

Homesteaders, or people who actually settled on the land, would have far more need for schools and post offices than absentee land holders who were letting their land lie fallow. The only unusual feature here is that the homesteaders have settled so far from the railroad and in what is topographically less desirable terrain. Here the presence of land monopolization can be seen. Instead of settling in the most fertile and desirable regions of the valley, near the railroad line, small farmers had to buy land on the edges of the valley, in the foothills. The center had already been bought up by speculators.



The following map illustrates the properties of the twenty largest landholders in Fresno County as measured in patents filed.

The land in the center of the San Joaquin Valley, where the railroad would eventually come through, would be the most valuable. Speculators, who could purchase this land with up front with cash or even military scrip, had an advantage over homesteaders who had to stay on the land for up to five years before it officially became their property. Already then, land speculation would have a significant impact on the initial distribution of the population in Fresno that still lingered two decades later.



But what of Chapman’s argument that the speculator acted as the middleman between state and settler? Within Fresno County at least, the majority of sales and purchases by the twenty largest landholders seem to have been to other wealthy businessmen. Fifteen of the twenty had documented transactions to each other, and for several these transactions composed the bulk of their sales. Rather than the trickle-down effect proposed by Chapman, these properties seem to have been shuffled between the same speculators that bought them in the first place.

Here each transaction between two individuals is illustrated by a line. The thicker the line connecting two individuals, the more closely they cooperated within Fresno County. A full circle shows that the two individuals bought and sold from each other, while a single arch like that connecting William Chapman to John Magary shows that Chapman sold to Magary, but did not purchase property from him. The diagram illustrates the extent to which the top level of land ownership in Fresno remained a tightly interwoven network.



However, an equally large portion of the sales were going to a second generation of speculators, who had arrived later to the game. The following table shows what percentage of the total sales these two groups comprised. The first generation is the original group of twenty; the second generation is the twenty-five largest purchasers of land between 1860 and 1875. (Unlike the first group, which bought their land from the state of California, the second group of speculators bought land from individuals.)

Although the total percentage of sales that were going to the county’s largest speculators varied widely, in every case at least 25% of the properties were being passed to another speculator, rather than the small farmers that these men ostensibly supported.



Land speculators claims that they facilitated growth by acting as the middleman between the state and the small farmer were largely groundless. A large percentage of their sales were to one another. As a result land remained in large parcels held by speculators who had little interest in farming the land. Although some speculators, notably William Chapman, dabbled in developing their holdings through irrigation and the creation of land colonies, the ultimate impact of land speculation overwhelmingly slowed development. As late as 1891, growth in Fresno County was centered around land that had been patented under the Homestead Act some thirty years earlier. As Paul Gates and Donald Pisani argued, the land acquired by speculators experienced little if any development. However, we should avoid casting land speculation as yet another Gilded Age example of the wealthy succeeding on the backs of the downtrodden. Land speculation often proved as unprofitable to the rich as to the poor. Like the decision to homestead a small farm in one of the dry plains of California, there was inherent risk in betting that land prices would rise. Many investors found themselves dangerously overextended when years passed without a significant change in value. Isaac Friedlander and William Chapman both went spectacularly bankrupt in the mid 1870s. Following the failure of the Bank of California, William Ralston committed suicide. Land speculation, with its immediate casualties and long-term effects, must also be seen in the context of this culture of risk.

1 Winchell, Lilbourne, History of Fresno County and the San Joaquin Valley (Cawston Publishing: Fresno, 1933) pg 104

2 Gates, Paul, “Public Land Disposal in California” pg 166

3 Pisani, Donald, “Land Monopoly in Nineteenth-Century California” pg 24

4 Ibid, pg 24

5 Ibid, pg 24-5

6 San Francisco Chronicle, 10 May 1877

7 Pisani, pg 22

8 San Francisco Chronicle, 28 March 1876

9 Military scrip was given to soldiers who had participated in the War of 1812 or the Civil War, and entitled them to a certain amount of land for free. Many soldiers who had no interest in being farmers sold their scrip for as little as half the price the state charged for land

10 San Francisco Evening Bulletin, August 31, 1868

11 Pisani, pg 18

12 “1890 Census: Fresno, California.” www.nhgis.org (last accessed 8/12/2010)

13




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