A Brief History of the California Economy
20th CENTURY INDUSTRIES
In 1900, agriculture, mining
and the railroads-especially the Southern Pacific-dominated California's
economy. San Francisco-the state's largest city-had cemented its place as
the economic hub of the Pacific Rim by becoming one of America's great
port cities. The Southern Pacific railroad carried produce and other goods
to San Francisco to be shipped around the world. The railroad also carried
California's produce eastward over the Sierra Nevadas to the nation's
mid-section and the East Coast. California was already feeding the world,
as it still does today.
One of the most important crops grown in California is cotton. The first attempts at growing cotton in California were made in the 1850s when several efforts to establish Southern-style cotton plantations failed. However, in the 1920s cotton was reintroduced to California. In 1921 cotton was grown on 1,500 acres in the San Joaquin Valley. By 1931 cotton acreage had increased to 600,000 acres. Moreover, the yields were triple those of other cotton-producing states. By 1940 California trailed only Texas in cotton production.
California's farmers were the most organized in the nation. The most famous growers cooperative was the Southern California Fruit Growers Exchange founded in Los Angeles in 1893 following several years of financial troubles that resulted from weak distribution and marketing practices. It became a model for farming cooperatives around the world. By enabling growers to cut out middlemen, their fruit could be sold directly to the east coast. The Exchange launched a major publicity campaign promoting the orange and it soon became a symbol of health. By convincing people that oranges were good for them, this campaign changed many consumers' eating habits. Oranges were no longer considered a delicacy, and were now eaten on a regular basis.
Oranges were also used by
the railroads and others sell land in California. Orange promoters claimed
that you could make more money growing five acres of California Oranges
than a Kansas farmer earned from 200 acres of grain crops. The orange
helped promoters convince many people that California was America's Italy
by fostering the idea that California was a clean place to escape dirty
eastern industrial centers. Many wealthy people, such as Chicago meat king
Philip Armour, settled in California.
Venice Italy. Many towns also competed for new residents by promoting a romantic vision of California history. The missions were emphasized and restored, and Mission Revival architecture became popular. In 1884, Helen Hunt Jackson wrote the novel Ramona that romanticized the mission period in California history. It was a best seller until the 1940s. The Southern Pacific passed out free copies of the book to California-bound passengers. Once the trains entered the state, crewmen would tell the passengers where certain events in the novel took place and made it seem as if the novel was a true story.
In 1919, the California Farm Bureau was established, which promoted high standards of farming and lobbied state government for funding for agriculture research. Much of this funding paid for research conducted by the University of California (UC) system, primarily at what are now its Davis and Riverside campuses. This research yielded many innovations that have changed agriculture worldwide. The use of airplanes for rice seeding, portable sprinkler systems and the Cerati rice dryer are three examples of agricultural products and techniques developed in California.
Several famous scientists spearheaded agricultural research in California. The most famous was Luther Burbank. He settled in the Santa Rosa area in 1875 and developed 800 to 1,000 new varieties of plants. He developed 40 types of prunes and plums, a white blackberry and the Russet Burbank potato. Today this potato accounts for forty percent of the potatoes sold in the United States.
Because of agriculture's dependence on water, California built massive irrigation projects. By 1945, 63 percent of California's farms used water brought in by irrigation. The largest projects were the Owens Valley, Central Valley Project and the Colorado River Project. To pay for expanded irrigation, water districts charged assessments. These fees forced many small farmers to sell out to bigger growers.
Expanding the available water supply would have a profound impact in other areas of the economy. It would facilitate dramatic population growth in the Los Angeles basin and allow the state's economy expand into other industries not tied to agriculture.
Canning the Harvest
A Fishing Leader
By 1940 California was a leading fishing state because of the sardine industry. Between 1914 and 1929, an average of 300 million pounds of sardines were caught each year. Sardines were used for fertilizer, fish oil, salmon bait and other products. By 1910 Monterey was the canning capital of the world-with its Cannery Row employing low wage Chinese laborers. In fact, sardines were being over fished and in the late 1930s the catch began to dwindle. In 1967, a fishing moratorium was declared and Cannery Row became one of California's most famous tourist attractions.
California also became the nation's leading tuna fishing state. Croatians
living in San Pedro established the industry, and it became the nation's tuna fishing capital. In the North Pacific, California companies dominated most of the fishing and controlled seventy percent of Alaskan fishing.
It was also during this era that new industries began to develop in California that were not merely population-serving nor directly connected to agriculture. The provision of new water for Southern California would allow its population to grow dramatically-by 1920 Los Angeles had passed San Francisco as the state's largest city. Manufacturing industries were now emerging and would become a prevailing force in the state's economy in the decades ahead.
Aerospace Gets Its Start
In 1919 Allan Lockheed started Lockheed Aircraft in Santa Barbara, relocating shortly thereafter to Burbank. During World War II, it became a major defense manufacturer. In the Cold War, Lockheed (and its famous "Skunk Works") led the aerospace industry in missile development.
In 1920 Donald Douglas founded Douglas Aircraft, two of whose planes in 1924 became the first to fly around the world. In 1932 the company signed a contract with TWA to produce passenger aircraft. Their first model, the DC-1, could only seat 12 passengers, but in 1935 it rolled out the DC-3, which became an industry standard. Douglas Aircraft went on to manufacture 30,000 aircraft during World War II.
An important aspect of Hollywood motion picture production during the first half of the 20th Century was the studio system in which the studios signed directors and stars to long-term contracts. For example, Judy Garland had a long-term contract with Metro Goldwyn Mayer (MGM). Director Orson Welles signed on with RKO. Stars were expected to act in four to five films each year. The studios also controlled distribution by owning the large movie theatre chains although this practice was halted in 1949 as a violation of antitrust laws.
Beginning in the 1950s, movie stars and directors become more independent. Instead of long-term contracts, they were increasingly hired on a project-by-project basis. This gave them more control over their careers, allowed more independent film production and eroded the dominance of the major studios. By the end of the century, short-lived, single-project companies and independent filmmakers were producing many films. The major studios eventually came to focus less on film production and more on film distribution, and the provision of a variety of other services-including providing financing, physical facilities and technical equipment and skills.
Many in the motion picture industry viewed the rapid spread of television in the 1950s with considerable alarm. Indeed, television sounded the death knell for low-budget "B" movies, and for many neighborhood "second-run" theaters. From a parochial standpoint, television was a New York-based industry, and Californians stood not only to lose a significant part of a major export activity, but were also forced to watch fuzzy, two-week old kinescope recordings of network programs.
But the setback was short
lived. Beginning in the 1950s the major film studios began devoting some
of their efforts and resources to producing shows for the emerging
television medium. Some of the popular shows produced in California at
this time included I Love Lucy, Maverick, Lawman, 77 Sunset Strip,
Cheyenne, and Hawaiian Eye. Eventually, Hollywood and nearby Burbank
became the center of the television entertainment industry. Today, the
vast majority of prime time television originates in California.
Apparel Follows the
The first three decades of the 20th Century saw the beginnings of the dramatic changes that were in store for California. While the economy was dominated by agriculture and railroads, some of the state's future leading industries sprang to life during this period. California's inherent benefits, including its climate and location, attracted or encouraged the creation of many new enterprises that would play important roles in the upcoming decades. California's dependence on trade with the other states and the world meant that major national and international events were about to profoundly alter the state's economy.