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"Citizens outside the Government": Business and Urban Policy in San Francisco and Los

Angeles, 1890-1932
Author(s): William Issel
Source: Pacific Historical Review, Vol. 57, No. 2 (May, 1988), pp. 117-145
Published by: University of California Press
Stable URL: http://www.jstor.org/stable/4492263
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"Citizens Outside the Government":

Business and Urban Policy in


San Francisco and Los Angeles,
1890-1932

WILLIAM ISSEL

The author is a member of the history department in


San Francisco State University.

More is known about the urban history of the


tieth-century American West than ever before. For
nia, urbanization, the working class, city bosses and
mayors, ethnic minorities, and the "metropolitan-
complex" can be discussed with increasing sophist
Studies of these subjects provide important historica
while at the same time provoking interest in anot

Earlier versions of this essay were presented at the Ninety-Eigh


Meeting of the American Historical Association, San Francisco, De
1983, and at the NEH Seminar on Business in the History of Americ
the University of California, Berkeley, July 12, 1984. I would lik
Roger W. Lotchin, Richard D. Abrams, Michael Kazin, and an an
reviewer for this journal for their comments and suggestions.

1. See, for example, Gunther Barth, Instant Cities: Urbanization an


of San Francisco and Denver (New York, 1975); William A. Bullough,
Boss and His City: Christopher Augustine Buckley and Nineteenth-Century S
(Berkeley, 1979); Michael Kazin, Barons of Labor: The San Francisc
Trades and Urban Power in the Progressive Era (Urbana, 1987); Ricardo
Los Angeles, History of a Barrio (Austin, 1983); Albert Camarillo, C
Changing Society: From Mexican Pueblos to American Barrios in Santa B
Southern California, 1848-1930 (Cambridge, Mass., 1979); Roger W. Lo
City and the Sword in Metropolitan California, 1919-1941," Urbanis
Present, VII (Summer/Fall 1982), 1-16.

Pacific Historical Review ? 1987 by the Pacific Coast Branch American Histo

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118 Pacific Historical Review

tion: How did business leaders shape California urb


opment by their individual and group involvemen
creation and implementation of urban public policy?
Company biographies often describe the activities
ticular businessmen in civic affairs, and studies of
history refer to activists who were businessmen.2 Res
state politics demonstrates that businessmen used bot
and private means to achieve control over their ec
environment.3 But we lack a coherent account of the interac-
tion of business leaders with public officials and an asses
ment of the contribution of businessmen to the state's urban
settlement process and the development pattern of particular
cities.
Historians Thomas C. Cochran and William Miller once
observed that "It is impossible to exaggerate the role o
business in developing great cities in America," and stud
of several cases outside California have provided evidence t
support such a generalization.4 In the case of the City Beau
ful Movement, research on San Francisco, Los Angeles, a
elsewhere has shown that businessmen, often in league wit
members of the professions, were key players in the origi
and early development of urban planning.5

2. See, for example, Marquis James and Bessie R. James, Biography o


Bank: The Story of the Bank of America, NT&SA (New York, 1954); Spencer
Olin, Jr., California's Prodigal Sons: Hiram Johnson and the Progressives, 1911-1
(Berkeley, 1968).
3. Mansel G. Blackford, The Politics of Business in California, 1890-1
(Columbus, 1977).
4. Thomas C. Cochran and William Miller, The Age of Enterprise: A So
History ofIndustrialAmerica, (Rev. ed., New York, 1961), 153. On business and c
building, see Blaine A. Brownell, The Urban Ethos in the South, 1920-1930 (B
Rouge, 1975); Burton W. Folsom, Jr., Urban Capitalists: Entrepreneurs and C
Growth in Pennsylvania's Lackawanna and Lehigh Regions, 1800-1920 (Baltimore
London, 1981); E. Kimbark McColl, The Shaping of a City: Business and Politic
Portland, Oregon, 1885 to 1915 (Portland, 1976); E. Kimbark McColl, The Gro
of a City: Power and Politics in Portland, Oregon, 1915-1950 (Portland, 1979); C
Abbott, Portland: Planning, Politics, and Growth in a Twentieth-Century City (Linc
1983); and Roger Sale, Seattle, Past to Present (Seattle, 1976).
5. Judd Kahn, Imperial San Francisco: Politics and Planning in an Ameri
City, 1897-1906 (Lincoln, 1979); Robert M. Fogelson, The Fragmented Metrop
Los Angeles, 1850-1930 (Cambridge, Mass., 1967); William H. Wilson, "Adapt
to Growth: Dallas, Texas, and the Kessler Plan, 1908-1933," Arizona and the
West, XXV (1983), 245-260; Mansel G. Blackford, "Civic Groups, Political Act

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"Citizens Outside the Government" 119

Beyond city planning, what aspects of urban public pol-


icy engaged California businessmen during the late nine-
teenth and early twentieth centuries? The cases of San
Francisco and Los Angeles suggest that business leaders played
active roles in the political processes used to initiate, imple-
ment, and monitor government policies. Because urban pol-
icy during the period emerged from the decisions of federal,
state, and local governments, businessmen concerned them-
selves with all three levels of the political system. During the
1890s, they created economic institutions designed to articu-
late their policy interests with efficiency and effectiveness.
During the Progressive era and the 1920s businessmen used
these new organizations, as well as political action groups and
informal personal networks to create governing coalitions
and guide day-to-day urban decision-making in ways that
would accommodate business priorities.
Never a monolithic political bloc, business developed its
political role in the urban policy-making process by a com-
plex combination of bargaining and conflict with its rivals,
and by accommodating to its internal differences, rather than
by imposing its preferences upon the body politic.6 Political
actors with competing priorities, especially organized labor,
constrained the options and conditioned the outlook of busi-

and City Planning in Seattle, 1892-1915," Pacific Historical Review, XLIX (1980),
557-580; William H. Wilson, "How Seattle Lost the Bogue Plan: Politics versus
Design," Pacific Northwest Quarterly, LXXV (1984), 171-180; Michael P. McCarthy,
"Chicago Businessmen and the Burnham Plan," Journal of the Illinois Historical
Society, LXIII (1970), 229-256.
6. My approach to the history of business and urban policy represents an
attempt to address both neo-Marxist concern with social forces and neo-Weberian
concern with institutional structures of politics and the policy process. For
discussions of the theoretical and conceptual issues involved, see William E.
Leuchtenburg, "The Pertinence of Political History: Reflections on the Signifi-
cance of the State in America," Journal of American History, LXXIII (1986),
585-600; Spencer C. Olin, Jr., "Toward a Synthesis of the Political and Social
History of the American West," Pacific Historical Review, LV (1986), 599-611;
Samuel P. Hays, "Society and Politics: Politics and Society," Journal oflnterdisci-
plinary History, XV (1985), 481-499; Terrence J. McDonald, "The Problem of the
Political in Recent Urban History: Liberal Pluralism and the Rise of Function-
alism," Social History, X (1985), 323-345; Robert R. Alford and Roger Friedland,
Powers of Theory: Capitalism, the State, and Democracy (Cambridge, 1985), 148-153,
427-443; John Garrard, "Social History, Political History and Political Science:
The Study of Power," Journal of Social History, XVI (1983), 105-121.

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120 Pacific Historical Review

nessmen in San Francisco and Los Angeles.7 Differ


opinion among themselves and rivalries between their
divided them,8 but business leaders rose above these divi-
sions often enough to create a partnership with public officials.
The extent and significance of this partnership expressed
itself in a variety of policy-making practices: businessmen
served in elected and appointed positions and worked as
unofficial advisers to municipal officeholders; they played
quasipublic roles in the routine operation of municipal agen-
cies; they assisted research bureaus in contract work with city
governments; they assumed leadership roles in the establish-
ment and management of municipal reform organizations
and of large-scale urban infrastructure projects. Divisions
among businessmen and their need to work in ways that
required cooperation and compromise did not stand in the
way of political success; no other community interest groups
rivaled business in its ability to influence the shaping of
urban policy-making decisions in San Francisco and Los
Angeles during this period.

California businessmen, like their counterparts in other


states across the nation, turned to organized political effort
during the 1890s with an enthusiasm that resembled religious
revivalism.9 San Francisco merchants, faced with actual and

7. See Michael Kazin, "The Great Exception Revisited: Organized Labor


and Politics in San Francisco and Los Angeles, 1870-1940," Pacific Historical
Review, LV (1986), 371-402.
8. See Roger W. Lotchin, "The Darwinian City: The Politics of Urbaniza-
tion in San Francisco Between the World Wars," Pacific Historical Review, XLVIII
(1979), 357-381.
9. For discussions of the "organizational synthesis" and its bearing on
government-business relations, see Louis Galambos, "The Emerging Organiza-
tional Synthesis in Modern American History," Business History Review, XLIV
(1970), 279-290; Samuel P. Hays, "Introduction-The New Organizational Soci-
ety," in Building the Organizational Society: Essays on Associational Activities in
Modern America, edited by Jerry Israel (New York, 1972), 1-15; Ellis W. Hawley,
"The Discovery and Study of a 'Corporate Liberalism,"' Business History Review,
LII (1978), 309-320; Kim McQuaid, "Corporate Liberalism in the American
Business Community, 1920-1940," Business History Review, LII (1978), 342-368;
Robert E Berkhofer, Jr., "The Organizational Interpretation of American His-
tory: A New Synthesis," in Prospects: An Annual of American Cultural Studies,
Vol. 4, edited by Jack Salzman (New York, 1979), 611-629; Louis Galambos,

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"Citizens Outside the Government" 121

anticipated loss of trade to Portland and Los Angeles, mobi-


lized themselves to achieve control over their economic future.
Led by Isaac Upham and Joseph S. Leeds, the Traffic Associ-
ation of California began work in 1891 with the purpose of
limiting the Southern Pacific Railway Company's power.
Emboldened by the success of an experiment in oceanic
shipping, the association tackled interior trade issues when it
introduced a constitutional amendment in 1893 to abolish the
state railroad commission (the commission had refused to cut
rates to the point desired by the San Franciscans). The consti-
tutional amendment failed. A project to build a competing
railway from northern to southern California proved more
successful, but the original purpose of this "Valley Road"
project was compromised when its president, Claus Spreckels,
sold the San Francisco & San Joaquin Valley Railway to the
Santa Fe, and the Santa Fe and Southern Pacific then joined
in raising their rates.10
Although the Traffic Association and a related group
called the Merchant's Shipping Association did not achieve
their economic objectives, they set in motion a process of or-
ganizational innovation that laid the foundations in northern
California for business involvement in urban policy making.
The most significant new departure was the California League
of Progress, established in 1892. Composed of "the young
men of San Francisco" who were convinced that "the business
interests of the State are suffering from lack of co-operative
action," the League argued that "the interests of San Francisco

"Technology, Political Economy, and Professionalization: Central Themes of


the Organizational Synthesis," Business History Review, LVII (1983), 471-493;
Robert F. Himmelberg, "Government and Business, 1917-1932: The Triumph
of 'Corporate Liberalism'?," in Joseph R. Frese, S. J., and Jacob Judd, eds.,
Business and Government: Essays in 20th-Century Cooperation and Confrontation
(Tarrytown, N.Y. 1985), 1-23; Louis Galambos, "Foundation Stones for a New
History of Business-Government Relations in Modern America," ibid., 25-52;
Ellis W. Hawley, "A Partnership Formed, Dissolved, and in Renegotiation:
Business and Government in the Franklin D. Roosevelt Era," ibid., 187-219.
10. The Valley Road: A History of the Traffic Association of California, the
League of Progress, the North American Navigation Company, the Merchants Shipping
Association, and the San Francisco and San Joaquin Valley Railroad (San Francisco,
1896), 13-16. See also Ward McAfee, California's Railroad Era, 1850-1911 (San
Marino, Calif., 1973), 197-209.

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122 Pacific Historical Review

and the interior [are] identical" and urged "the united


of the whole State.""' Led by men in their late twent
thirties who would later play key roles in the po
urban policy, league members believed that "since the
was theirs, they were entitled, or even compelled, to
hand in shaping it to their best advantage." Frede
Koster, twenty-eight years old, assumed the presidenc
group in 1896. He led the successful campaign for
bond issue for the Union Ferry Depot that opened fo
ness at the foot of Market Street in 1898.12
If the Ferry Building symbolized the maritime prowess
already achieved by San Francisco, the 1897 congressional
funding for construction of San Pedro harbor attested to Los
Angeles businessmen's faith in their city's future prosperity.
San Franciscans turned to organization in order to create a
"reawakening of the independent spirit of Pioneer days" and
to achieve economic power that "will eventually give to us
the population which should have been ours twenty years
ago." Angelenos had their eyes on the census reports of 1890
which documented their progress from the state's fifth largest
city in 1880 (11,193) to second place in 1890 (50,395). San
Francisco's population, by contrast, had increased to 298,997
from 233,959.13
In Los Angeles, the Free Harbor campaign galvanized
the business community into political activity and stimulated
the emergence of a group of leaders who rapidly came to
regard themselves as the city's natural leadership class.
Although a pro-Southern Pacific faction in the new chamber
of commerce (1888) preferred Collis P. Huntington's pro-
posal for a Santa Monica site, the majority sided with Harrison
Gray Otis, owner of the Los Angeles Times and organizer of
the Free Harbor League (1895). The league successfully lob-
bied for a harbor "accessible to as many railways as may wish
to come to the waterfront."14 The two-day Free Harbor Jubi-
11. Valley Road, 39-41.
12. Ibid., 44-45, 50.
13. Ibid., 42-43.
14. Quoted in Robert Gottlieb and Irene Wolt, Thinking Big: The Story of
the Los Angeles Times, Its Publishers and Their Influence on Southern California
(New York, 1977), 66. For details, see Charles Dwight Willard, The Free Harbor
Contest at Los Angeles (Los Angeles, 1899).

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"Citizens Outside the Government" 123

lee, called to celebrate the start of construction in 1899, began


appropriately with tributes to the secretary of the chamber of
commerce and the Times, praising their roles in securing the
appropriation.
"General" Otis had helped organize the Los Angeles Mer-
chants' Association (1893) and engineered its 1896 merger
with the Manufacturers' Association.'5 The new group set out
to master the threat of future depressions as well as to estab-
lish control over labor relations. Its program soon empha-
sized the open shop as much as the stimulation of local
industry, the repeal of business taxes, and the attraction of
tourists. In 1911, after a decade of bitter struggle, Los Angeles
businessmen defeated the labor movement and touted their
city as the open shop capital of the nation. The same year saw
the demise of socialism, after a hard-fought mayoral cam-
paign in which Job Harriman, the socialist candidate, secured
thirty-eight percent of the vote. Business leaders also contin-
ued to occupy the highest public offices, though few matched
William H. Workman's record as city councilman, mayor,
park commissioner, and city treasurer.16
San Francisco banker James D. Phelan, mayor from 1897
to 1901, played a leading role in organizing the Merchants'
Association (1894) and, from city hall, directed the associa-
tion's successful campaign for a "businessman's" city charter
(1898).17 Like William H. Workman, Phelan entered public
life as the son of a pioneer-era business leader. Like Harrison
Gray Otis, Phelan helped curb the political power of his
city's labor movement. The city's unions, through the Union
Labor Party, controlled city hall from 1902 to mid-1907, but
Phelan, with his friend Rudolph Spreckels, another second-
generation businessman, provided financing for the graft
prosecution that toppled the Union Labor Party from power
in 1907.18 After a brief Union Labor resurgence in 1909-1911,
15. Gottlieb and Wolt, Thinking Big, 41, 45; Grace Heilman Stimson, Rise
of the Labor Movement in Los Angeles (Berkeley and Los Angeles, 1955), 119.
16. Frederic Cople Jaher, The Urban Establishment: Upper Strata in Boston,
New York, Charleston, Chicago, and Los Angeles (Urbana, 1982), 630.
17. William Issel, "Class and Ethnic Conflict in San Francisco Political
History: The Reform Charter of 1898," Labor History, XVIII (1977), 341-359.
18. Walton Bean, Boss Ruef's San Francisco: The Story of the Union Labor
Party, Big Business, and the Graft Prosecution (Berkeley, 1952), 77.

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124 Pacific Historical Review

the Merchant's Association, Downtown Association, an


ber of commerce merged, and a coalition led by mem
the new group successfully supported James Rolph, J
mayor in 1911. A shipper, banker, and Merchants' Ex
activist, Rolph promised to be "the mayor of all the
without jeopardizing the interests of businessmen.19
however, Rolph's former associates in the chamber
merce doubted his loyalty during a turbulent wat
strike and formed a Law and Order Committee to dis
the city's labor force. Five years later, the chamber l
way in establishing the Industrial Association, a gr
broke the power of San Francisco unions and presi
an open-shop city for the next thirteen years.20
Men like Rolph, Phelan, Otis, and Workman esta
the institutional foundations for the effective particip
businessmen in urban policy making during the 1
building on these foundations, businessmen someti
agreed on details of policy or on partisan affiliation, a
professed varying degrees of commitment to laissez-fa
ciples. However, they seldom differed on the need to
policy-making agenda according to their own term
their point of view, only business values would insur
ress and prosperity for the general community. T
grams of organized labor were dismissed as repre
only a special interest. Frederick J. Koster expre
spirit of this ideology in his inaugural address as pres
the San Francisco Chamber of Commerce in 1916. "I have
said that the Chamber of Commerce is not of a class or for a
class; and yet we are in a sense, a class-a class upon whom it
is fair to lay great burden of responsibility, responsibility for
the development of fairness, because where that does not
exist the community cannot thrive; responsibility toward

19. William Issel and Robert W. Cherny, San Francisco, 1865-1932: Politics,
Power, and Urban Development (Berkeley, 1986), 155-164.
20. Robert W. Cherny, "Securing 'Industrial Freedom': The American
Plan in San Francisco," a paper prepared for the annual meeting of the
Organization of American Historians, Los Angeles, April 6, 1984.

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"Citizens Outside the Government" 125

causing the community to properly protect investments made


within its bounds."21
During the early twentieth century, business leaders and
their organizations forged a political role for themselves tha
matched their ideology. They worked closely with mayor
and governors, as well as members of municipal, state, an
federal legislative councils as informal advisors and quasi-
public consultants. During World War I and the Red Scare
businessmen self-consciously donned a mantle of patrioti
Americanism and they moved back and forth from privat
concerns to public offices at all three government level
James Rolph, Jr., and William D. Stephens seem to have
perfected the practice. Rolph moved from the Merchant'
Exchange to the mayor's office (1912-1930), and then to the
governor's mansion. Wholesale produce merchant William
D. Stephens served as president of the Los Angeles Chamber
of Commerce, United States congressman (1916), and gover-
nor ( 1918-1923).22
With the increasing influence of business leaders and
groups in the political system during the Progressive era
business priorities in policy making could have been effecte
by expanding the power of state government agencies t
include responsibility for municipal affairs and then staffing
the agencies with business executives who would manage
according to priorities acceptable to business. Given the zeal-
ous regard for local autonomy and home rule in the general
political culture, and the fact that most businessmen regarde
an active state with suspicion, most preferred - like Frederic
J. Koster and Harrison Gray Otis-to operate outside the
government. The exceptional career of Simon J. Lubin,
Sacramento merchant who pursued private business interest
while serving as director (without compensation) of the state
Commission of Immigration and Housing, illustrates both
the limited nature of state authority over urban development

21. San Francisco Chamber of Commerce Activities, III (June 1, 1916), 3.


22. Jaher, Urban Establishment, 670.

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126 Pacific Historical Review

and the impressive power of businessmen in the po


urban policy.23
Lubin was born in 1876. Like many other busin
who played active roles in the post-1900 period, he
son of a pioneer-era entrepreneur. His father, Davi
and his father's business partner, Harris Weinstoc
bined political reform activism with commercial
Simon carried on family tradition while an undergra
Harvard when he chose to spend his summer vacati
settlement house worker among the immigrants of Ne
lower east side and the year after his 1903 graduation
Boston South End House.24
When he returned to California in 1906, Lubin took
the management of Weinstock, Lubin, and Company,
family's Sacramento retailing firm. He also involved hims
in politics, and for the next thirty years, according to Spe
C. Olin, Jr., "much of California's social legislation...
drafted by Lubin at his desk in the company offices."25 A
account of his work is beyond the scope of this essay,
several episodes of Lubin's career point up the ways in wh
business leaders and their organizations shaped the course
those aspects of urban policy that can be considered part
the history of California Progressivism.
When Lubin took over the family business after return
to California in 1906, he devoted his days to commerce
his evenings to study and reflection. By 1911, he had bec
a director of the Sacramento school board. In 1912 he con-
vinced newly elected governor Hiram Johnson of the ne
for a coordinated response to the tidal wave of immigratio
that the state chamber of commerce expected to hit Califo
nia after the completion of the Panama Canal in 1914. Johns

23. Lubin has not been the subject of a biography. Spencer C. Olin, J
first described the importance of his work in California's Prodigal Sons, 76-80,
Kevin Starr has included a biographical vignette in his Inventing the Dre
California Through the Progressive Era (New York, 1985), 257-258. For a study
the Commission, see Samuel E. Wood, "The California Commission of Im
gration and Housing: A Study of Administrative Organization and the Grow
of Function" (Ph.D. dissertation, University of California, Berkeley, 1942).
24. Olin, California's Prodigal Sons, 77.
25. Ibid.

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"Citizens Outside the Government" 127

agreed with Lubin's assessment of the danger to the state: "I


the immigration that is coming to us through the Canal i
permitted to congest in our cities, and if a wise foresight doe
not provide for it, ultimately the conditions of awful povert
presented by our Eastern Cities will be reproduced in our
centers of population in California."26
In August 1912, Johnson appointed a California Immi-
gration Commission charged with advising the state legisl
ture of "the best means for taking care of and distributing th
immigration that will soon be ours, and the best means o
preventing the conditions that exist in Eastern cities from
becoming a part of our social structure." The five commi
sioners, to serve without pay, were Lubin; Robert Watchorn
and Dana W. Bartlett, Los Angeles residents close to the
business-reform movement; Katherine C. Felton, general sec
retary of the Associated Charities of San Francisco and daugh
ter of a corporate and railroad attorney who had served a
mayor of Oakland; and Robert Newton Lynch, vice president
and general manager of both the San Francisco Chamber o
Commerce and the California Development Board (the stat
chamber of commerce).27
Lubin believed the legislature ought to establish a per-
manent Immigration Board, but he defined the role of such
government agency in strictly limited terms; its prime duty
he explained to his mentor David Blaustein of the Columb
University School of Philanthropy, "should be to organiz
and coordinate municipal, private and social efforts, but t
do very little itself other than its work of organization."28
Lubin also defined the purpose of a new state agency partly
as social control; in this respect he expressed a widely articu
lated belief among reformers that social legislation coul
contribute to the maintenance of moral order. Playgrounds,
he explained to Robert Newton Lynch, would help "bridg
over the chasm" that separated the immigrant from his cul
ture of origin and provide "the best force at our command fo

26. Hiram W. Johnson to Simon J. Lubin, Aug. 20, 1912, box 2, Simon J
Lubin Correspondence, Bancroft Library, University of California, Berkeley.
27. Ibid.
28. Simon J. Lubin to David Blaustein, Aug. 23, 1912, box 4, ibid.

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128 Pacific Historical Review

harnessing and guiding those perfectly wholesome in


and emotions" that would otherwise "find vent in some form.
If not in social activity, then in unsocial practice.""29
Katherine Felton, seeing an opportunity to put teeth into
the state's tenement law, urged Lubin to add housing to the
mandate of the new agency.30 Paul Scharrenberg, general
secretary of the California State Federation of Labor, sensing
an opportunity to add union labor personnel to state govern-
ment, pressured Governor Johnson and the state legislature
to require that a "labor representative" be appointed as one
of the five commissioners. Felton's proposal succeeded;
Scharrenberg's did not. Johnson, with some vehemence,
objected to "the way the labor men have been acting toward
many bills," and protested that "if they mean a representative
of union labor, why don't they say so." The AFL lobbyists
made three attempts during the legislative process to secure
their mandated seat on the commission, but ultimately failed.31
Lubin depended heavily on Robert Newton Lynch for
aid in the passage of the bill that established the Commission
of Immigration and Housing. As a highly respected manager
of both the San Francisco and state chambers of commerce,
Lynch's name had California-wide recognition. In order to
avoid the impression that the new agency was a Hiram
Johnson and Sacramento-based imposition upon the rest of
the state, Lubin signed Lynch's name to a series of newspaper
editorials which were then published in 350 newspapers.32
The new commission operated under Simon Lubin as
chairman from December 1913 until he resigned in 1923.
From the very beginning the commission experienced inter-
nal tensions because Governor Johnson, notwithstanding his
private reservations, had made Paul Scharrenberg one of the
five commissioners. Lubin's first executive secretary, Univer-
sity of California economist Carleton H. Parker, found him-

29. Simon J. Lubin to Robert Newton Lynch, Oct. 23, 1912, box 4, ibid.
30. Katherine C. Felton to Simon J. Lubin, Nov. 25, Dec. 11, and Dec. 16,
1912, box 2, ibid.
31. Simon J. Lubin to Robert Watchorn, April 25, 1913; Lubin to Dana W.
Bartlett, May 20, 1913, box 4, ibid.
32. Simon J. Lubin to Robert Newton Lynch, Jan. 13 and 17, 1913, box 4,
ibid.

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"Citizens Outside the Government" 129

self continually at odds with Scharrenberg over appointments


to the commission staff. Scharrenberg, keen to avoid the
possibility that "the workmen of San Francisco" would regard
the commission as "a high-brow affair," remained, in Parker's
terms, so "unfriendly" that Parker resigned before serving a
full year. Six years later, in 1919, Scharrenberg was still
grumbling about the commission's hiring practices.33
While the commission experienced internal tensions
related to the priorities that should guide the hiring of staff,
Simon Lubin's policies as chairman did not depart from his
original intention that the commission should facilitate and
coordinate private and local government activities in the field
of immigration (and now housing) rather than impose state
policy.34 In 1914, the commission worked with individual city
chambers of commerce and municipal governments in the
establishment of local housing ordinances. After meetings
with J. B. Levison, a San Francisco insurance executive, and
Duncan McDuffie, a Berkeley realtor, the commission began
a long-term association with the private California Confer-
ence on City Planning.35 A prototype for the kinds of public-
private cooperative relationships that are usually associated
with the 1920s, this relationship proved highly productive
from 1914 to the end of Lubin's tenure as chairman. The

33. Carleton H. Parker to Simon J. Lubin, Dec. 18 and 31, 1913, box 3;
Paul Scharrenberg to Lubin, May 19, 1919, box 3, ibid.
34. The maneuvering that accompanied the legislative process over the
state housing bills in 1919 offers a revealing instance of the ways in which Lubin
pursued such a strategy. See the following letters: J. J. Backus to Simon J.
Lubin, May 17, 1919, box 1; Simon J. Lubin to J. J. Backus, May 9, 1919, box 5;
Lubin to William D. Stepehens, May 13, 1919, box 5, ibid.
35. Carleton H. Parker to Simon J. Lubin, March 24, 1914, March 28,
1914, box 3, ibid.; Charles Henry Cheney, ed., "What City Planning Commis-
sions Can Do," California Conference on City Planning, Bulletin No. 1 (N.p.,
June 1915). The Commission of Immigration and Housing produced a booklet
entitled "The A.B.C. on Housing" against the objections of Paul Scharrenberg,
who believed that "land taxation would do more in a year's time toward
bringing about genuine reform in housing than all the treatises on housing
ever written." Paul Scharrenberg to George L. Bell, Sept. 3, 1915, box 3 Lubin
Correspondence. The Commission's work with the Sacramento municipal gov-
ernment and chamber of commerce can be followed in Simon J. Lubin to
Caroline Schleef, July 9, 1914; Lubin to Charles A. Bliss, July 9, 1914; Lubin to
My dear Andrus, July 11, 1914; Lubin to Bliss, July 11, 1914, box 4; and Bliss to
Lubin, July 11, 1914, box 3, ibid.

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130 Pacific Historical Review

commission coordinated housing institutes, state l


that enabled municipal governments to establish
commissions, and specific housing bills. In all of the
ties Lubin's commission worked closely with local
realtors, developers, and their organizations in a
successfully encouraged compromise and accommoda
The commission's work on matters of urban h
policy succeeded because of the cooperation it receiv
business leaders and their organizations. Its imm
work, however, designed to improve the conditions
cultural workers in California's rural areas, made the com-
mission an enemy of many entrepreneurs who practiced
laissez-faire agribusiness. Also, Scharrenberg's presence on
the commission became increasingly repugnant to business
after he joined in the call for a reconsideration of the guilty
verdicts handed to Tom Mooney and Warren Billings for the
Preparedness Day Parade bombings of July 1916.37
One of the commission members, worried in November
1919 about "the present hysterical condition in America,"
believed that "it is perhaps best that we should treat this
hysteria like a cyclone and merely sit tight until it blows
over." Unfortunately for Lubin, the ultraconservative Better
America Federation chose his commission as the target of one
of its campaigns to cut back state government activities and
drive from public life officials like Lubin and Scharrenberg
who did not share its brand of Americanism.38
The federation's campaign coincided with the successful
election of Friend W. Richardson as governor in 1922; when
the economy-minded Richardson took office in early 1923, a
bill to abolish the commission was pending in the state legis-
lature. Lubin's fellow commissioner, Archbishop Edward
Hanna of San Francisco, brought Republican party banker
Herbert Fleishhacker to Sacramento in an effort to persuade

36. This process had become institutionalized by the early 1920s. See the
"Minutes of the Housing Institute of 1922," Commission of Immigration and
Housing Files, Dept. of Industrial Relations Records, State of California
Archives, Sacramento.
37. H. M. Haldeman to Simon J. Lubin, July 30, 1920, box 1; Lubin to
Haldeman, Aug. 2, 1920, box 5, Lubin Correspondence.
38. Mary S. Gibson to Simon J. Lubin, Nov. 19, 1919, box 2, ibid.

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"Citizens Outside the Government" 131

the governor to save the commission. Richardson agreed to


withhold his support for the abolition bill, but he also an-
nounced his intention to drop Scharrenberg. Lubin, incensed
by the governor's intimations that the union official had used
his position on the commission to further the cause of labor,
resigned when Richardson refused to reconsider.39
Although his career in urban policy making ended when
he left the Commission on Immigration and Housing, Lubin
subsequently directed a businessmen's council for the eco-
nomic development of northern California counties, helped
organize the Pan American Reciprocal Trade Conference,
and served as secretary of the California State Bureau of
Commerce.40
While the Commission on Immigration and Housing
must be considered a significant innovation of California's
Progressive era that brought business into the urban policy-
making process, a more important development, one that
would have more lasting consequences for the state, was the
creation of institutions designed to foster certain common
causes of businessmen and their organizations throughout
the state. Leadership in the establishment of statewide busi-
ness unity came first from the handful of San Francisco
activists who had entered public life during the 1890s and the
Union Labor Party period. Principal among these leaders
were Frederick J. Koster, who had served as president of the
League of Progress, and A. B. C. Dohrmann (son of Frederick
W. Dohrmann, founder and president of the Merchant's Asso-
ciation during the Association's successful campaign for a
new city charter). Rueben B. Hale, Alfred I. Esberg, and
Frank Brown joined Koster and Dohrmann in calling for the
rationalization of both local and statewide business associa-
tions. They reasoned that increased efficiency and an end to

39. Simon J. Lubin to Friend W. Richardson, April 25, 1923, box 5, ibid.
For the Better America Federation, see Edwin Layton, "The Better America
Federation," Pacific Historical Review, XXX (1961), 137-148.
40. Governor James Rolph, Jr., appointed Lubin director of the Bureau
of Commerce. See California Dept. of Finance, Bureau of Commerce, Report
July 6, 1932, to January 31, 1933. Material related to Lubin's presidency of the
Sacramento Region Citizen's Council and his work with the trade conference
can be found in the Lubin Correspondence at the Bancroft Library.

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132 Pacific Historical Review

duplication of effort could improve the effectiveness of


ized activity.41
After engineering a merger between their Merch
Association, the Downtown Association, the Board of T
and the Merchant's Exchange in 1911, the San Franc
turned their attention to several moribund state group
result was the California Development Board, a state
ber of commerce formed by the consolidation of the C
nia State Board of Trade, the Manufacturers and Produ
Association of California, and the California Promotion
mittee. The Development Board initially defined its
include both advertising California's products and pr
ing immigration. Linking its work to the 1915 Panama P
Exposition, the board placed "agents in every coun
Europe to advertise our State and the exposition
encourage the right kind of people to immigrate t
shores."42
The board's work reflected its northern California ori-
gins during its initial years from 1908 until World War
1916-1917, Koster and Dohrmann began meeting with so
ern California businessmen in an effort to broaden the lead-
ership base. As Maynard McFie of Los Angeles described the
process some years later, Dohrmann and Koster "saw the
currents of public opinion which sprang from the two focal
centers of population in the North and South, sometimes
running at cross currents, and they did not feel that the
unanimity existed that should be...." Koster's experience as
the director of San Francisco's Law and Order Committee
after the Preparedness Day Parade bombing on July 22, 19
may also have contributed to his determination to inspire
revitalizing" of the board. "Mr. Koster... started crusading
a most dignified way, getting together little groups of men
Los Angeles and in San Francisco, here at Del Monte, and
Pebble Beach, in little informal conferences where no reso

41. California-Magazine of Pacific Business, Feb. 1937, p. 35.


42. Twenty-First Annual Report of the California Development Board, (N.p
1910).

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"Citizens Outside the Government" 133

tions were passed or no publicity was given, where nothing


was done except in a most friendly, informal way."43
In 1921, the Development Board experienced a struc-
tural change when, by merging with the California Industries
Association, it became the California Development Associa-
tion. The new group described its mission as "coordinating
development of diversified interests, by formulating and put-
ting into execution sound and progressive policies." The
group's frankly stated policy-making purpose would be pur-
sued by means of "effective cooperation of the industrialist of
the city with the agriculturist of the interior."44
The decade between 1922 and 1932 was the heydey of
business "Associationalism" in California. Although local
boosterism and urban rivalry persisted throughout the dec-
ade, these years were also a time of growing statewide busi-
ness unity. Herbert Hoover's federal government plan to
create an "American System," intended to combine the old
free enterprise philosophy with the new management and
engineering by means of the work of private associations
cooperating with government, had its California counterpart
in the activities of the California Development Association.
Just as Secretary of Commerce Hoover drew upon antistatist
principles as he directed his agency to coordinate the activi-
ties of the nation's trade associations, research agencies, and
professional bodies, the California Development Association
pulled together the state's various business organizations on

43. "Iron, Steel and Allied Industries of California, Proceedings of the


Third Annual Conference," at Hotel Del Monte, Del Monte, Calif., January
21-22, 1927, reprinted in California Journal of Development, Feb. 28, 1927, p. 29.
44. California Journal of Development, March 1922, p. 4. The scope of the
state chamber's influence may be suggested by its establishment of a uniform
building code for California. Fifteen years in the making, the code was written
by the state's members of the American Institute of Architects, the American
Society of Civil Engineers, the Associated General Contractors of Southern
California, and the General Contractors of San Francisco, Inc. See J. J. Backus,
"A Standard Building Code: Its Necessity, and What It Means to the State of
California," California Journal ofDevelopment, Feb. 1927, pp. 13, 30-32; California -
Magazine of the Pacific, Aug. 1939, pp. 6, 31. The work was coordinated by the
state chamber; Frederick J. Koster, a director during much of the period of the
1920s and 1930s, provided important continuity between 1917 and 1940.

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134 Pacific Historical Review

behalf of a vision of cooperation between business


ernment that envisioned the former as the senior par
Southern California representatives had particip
the group's work all along, and Frank Wiggins, secre
the Los Angeles Chamber of Commerce, sat on the bo
directors long before World War I. Koster's "crus
however, succeeded in making the organization a tru
wide effort that linked its work to President Hoover's brand
of postwar economic planning. Wigginton E. Creed, remind-
ing his audience that "Capital is willing to follow American-
ism," reinforced the need for transcending local loyalties at
the inauguration meeting of the "California Forward Move-
ment" at the Fairmont Hotel in June 1923. Creed, president
of Pacific Gas and Electric Corporation, regarded the associa-
tion as the vehicle for "timely and orderly development of all
of our activities," avoiding "the folly of attempting to stimu-
late advance in one direction by stifling advance in another."46
Between 1921 and 1923, the association increased its mem-
bership from 500 to 2,000 and its income from $35,000 to
$120,000. With headquarters in both San Francisco and Los
Angeles after 1924, the board of directors now included such
southland business leaders as Harry Chandler, president of
the Times-Mirror Publishing Company, son-in-law of Gen-
eral Otis, and officer and director of thirty-five California
corporations, as well as Henry M. Robinson, president of the
First National Bank and Union Oil Associates, and Paul
Shoup, president of the Pacific Electric Railway and Asso-
ciated Oil Company, and vice-president of the Southern
Pacific Company.47
In 1922, the association expanded its Bureau of Research
and Information and began an industrial survey of California
designed to lay the groundwork for a national campaign to

45. For the national events, see Ellis W. Hawley, "Herbert Hoover, the
Commerce Secretariat, and the Vision of an 'Associative State,' 1921-1928,"
Journal of American History, LXI (1974), 116-140. The desire to control the power
of labor was as strong in California as elsewhere; for the larger picture, see
Robert F. Himmelberg, "Government and Business," 9-12.
46. "California Forward," California Journal of Development, July 1923, p. 14.
47. "Your State Organization: The California Development Association,"
ibid., July 1923, p. 6.

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"Citizens Outside the Government" 135

attract outside investment in the state's industry and agricul-


ture. At the same time, the association set up an "Organiza-
tion Service Department" with a mandate to initiate or
revitalize "properly financed and well-balanced chambers of
commerce" in particular communities. With the assistance of
the Development Association, businessmen in Manteca,
Madera, Santa Cruz, Blythe, Tracy, San Leandro, and Lodi
were now "in a position to cope with local civic affairs and
[able] to assist in the solution of larger State problems."48
The association's research and information department
worked with local governments, state agencies, and federal
offices in an attempt to "centralize all available economic
data portraying the potentialities and problems of develop-
ment in cities, counties or other regional subdivisions of the
State."49 In 1926, in pursuit of this charge, the association
convened the first statewide conference of all economic statis-
tical departments and research agencies. Representatives of
some 125 agencies met and created the California Economic
Research Council and pledged themselves to "foster and
promote the correlation of the activities of all economic
research and statistical agencies, the standardization and
co-ordination of existing economic data, and the develop-
ment of new sources of statistical and research information in
the state of California." In true "American System" fashion,
the new agency's executive committee brought together the
public and the private sectors. Willard E. Hotchkiss, dean of
Stanford's Graduate School of Business, served as chairman;
other members represented the Security Trust and Savings
Bank of Los Angeles, the United States Bureau of Foreign
and Domestic Commerce, the University of California, the
United States Forest Service, Eberle and Riggleman Eco-
nomic Service of Los Angeles, Southern California Edison
Company of Los Angeles, and a number of firms and govern-
ment agencies.5
California water development provided another case of

48. "Organization Service," ibid., Aug. 1923, p. 22.


49. "Policy and Program," ibid., Nov. 1924, p. 13.
50. Herbert E Ormsby, "Organizing Fact Finding Machinery in Califor-
nia," ibid., June 1926, pp. 7-8, 29.

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136 Pacific Historical Review

government-business relations according to the "Am


System." The California Development Association inv
itself in "the unification and co-ordination of effort" a
the variety of government agencies charged with water
opment. At the same time, the San Francisco and Los A
chambers of commerce were financing the State Engine
Department planning studies aimed at comprehensive
agement of domestic water use, irrigation, industrial use
flood-control work as well. The state legislature reimbu
the chambers of commerce and, satisfied with the in
planning work, made further appropriations.51
The cooperative relationships that characterized the
ifornia Economic Research Council informed all the work
carried out by, or stimulated by, the Development Associa
tion. At the same time, however, the production of services
that would result from such projects was not meant to impl
any loss of autonomy by business firms to government. When
Frederick J. Koster addressed himself to "The Obligation of
Leadership" in a 1926 speech, he described the ways in which
his vision for the future of California had been suggested
"long before the war," by "what was then perhaps the most
effectively organized group of human beings on so large a
scale in the whole progress of civilization, viz., the German
Empire." Koster's admiration of the Kaiser's Reich was for the
effectiveness of its organization, not for the power of the state.
In the United States, it was necessary to "continue through
voluntary organization, to work out problems essential to our
progress. Let us refrain," Koster continued, "from placing
upon government any new responsibilities. Let us continu
to carefully watch proposed legislation and hold new legisla-
tion down to the lowest minimum. Keep the government out
of business wherever it is possible to do so."52
"We cannot," said Wigginton Creed, "afford to be apa-
thetic and leave to the manufacturers of political hokum the
determination of what ought to be done in the interests of th

51. Wigginton E. Creed, "The Future of the Iron and Steel Industry on
the Pacific Coast," ibid., Feb. 1926, pp. 13-16.
52. Frederick J. Koster, "The Obligation of Leadership," ibid., Feb. 1927,
p. 10.

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"Citizens Outside the Government" 137

state. It is time for American businessmen to awake to their


responsibilities and concern themselves unselfishly with pub-
lic affairs." Maynard McFie agreed: "we will have just as
good government as we business men, and not the politi-
cians, make it, and if we do have fault to find with loads of
taxation, city and county, or with spurious bills appearing in
our State Legislature, it is no one's fault but the business
man's and his lack of foresight and failure to create public
opinion, the background of which will overcome that type of
bill."53

Secretary of Commerce Hoover's leadership in calling


for the "American System" informed the work of the associa-
tion at every step during the 1920s. Koster took great pleas-
ure in 1927 at Hoover's evaluation of the California group as
the most effective organization of its kind in the United
States.54 R. E. Miller, vice-president of Pacific Gas and Elec-
tric Company, invoked Hoover's ideas in describing "The
Responsibility of Organized Business." According to Miller,
"sound development can no longer proceed along the lines
of an unguided, unlimited promotion of industries and pop-
ulation." Only "organized business leadership" could accom-
plish "sound development and growth of California." Miller
quoted Hoover's belief that "The solution of the problems of
the American people lies wholly in our ability to build up a
cooperative spirit in the communities themselves."55
Maynard McFie, pleased that "business people have real-
ized that California should be a unit, and that it is a unit, and
notwithstanding the jingoistic remarks and talk, the bol-
shevistic talk that is dying down, the business leadership of
this great commonwealth is coming to the front and making
rapid strides," attributed such progress "largely [to] the work
which was set in motion by that little nucleus of men ten
years ago."-
53. "Iron, Steel and Allied Industries of California, Proceedings of the
Second Annual Conference," held at the Hotel Del Monte, Del Monte, Calif.,
January 22-23, 1926, in ibid., Feb. 1926, pp. 20-27.
54. Koster, "The Obligation of Leadership," ibid., Feb. 1927, p. 10.
55. R. E. Fisher, "The Responsibility of Organized Business," ibid., June
1930, pp. 29, 45-46.
56. California Journal of Development, Feb. 1927, p. 29.

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138 Pacific Historical Review

In addition to their support for statewide activities


at influencing policy by creating cooperative relati
between their voluntary associations and government
ness leaders also allied themselves with good gove
leagues and directed urban reform organizations
local communities. In this way, business organizatio
to exercise a powerful role in the routine admini
work of municipal government. Describing their w
nonpolitical, they funded private research bureau
recommended improvements in municipal governmen
ations and established public commissions that pursue
reforms compatible with property rights. Business
prided themselves on their role as provider of inform
local voters and congratulated themselves on their ef
ness in shaping election outcomes.57
Charles D. Willard, secretary of the Los Angeles
ber of Commerce and the Associated Jobbers dur
1890s, ran the city's Municipal League from its found
1901 until his death in 1914. Businessmen dominated the
league's membership, and the head of the Merchants a
Manufacturers' Association (George Mowry called the M
and M. "a functioning part of the Los Angeles city gove
ment") served as one of its presidents. Like the Non-Partis
Committee of One Hundred founded in 1906 (at the chamb

57. The San Francisco and Los Angeles chambers of commerce, like t
state chamber, expanded their publication programs during the 1920s; in
1930s they produced specialized research reports keyed to municipal gove
ment policy issues as well as glossy monthly magazines aimed at a wid
audience beyond their memberships. Radio talks and films were also used. T
following are representative: "Ballot Recommendations of the San Franci
Chamber of Commerce on the Municipal Propositions which will appear
the Ballot, November 7, 1916," San Francisco Chamber of Commerce Activi
Oct. 26, 1916; Los Angeles Chamber of Commerce Civic Bulletin, No. 14 (193
"Suggested Legislation for Beach Protection," July 16, 1930, and Los Ang
Chamber of Commerce Research Department, "Monthly Report," Nov. 19
both in Institute of Governmental Studies Library, University of Califor
Berkeley; Frederick J. Koster, "The Statewide Campaign to Control and Red
the Cost of Government in California," radio address on Station KGO, San
Francisco, Dec. 12, 1932, printed in California Journal of Development, Dec. 1932,
pp. 5-7, 20-21; Donald M. Baker, "Community Planning with Uncle Sam,"
Southern California Business, Feb. 1934, pp. 10-11; Frederick J. Koster, "Proposed
Laws That Affect Business," California -Magazine of the Pacific, March 1939,
pp. 22-23, 48.

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"Citizens Outside the Government" 139

of commerce assembly hall), the Municipal League had what


Mowry described as a "Chamber of Commerce flavor."58 Fre
W. Viehe has demonstrated how the league and the Southern
Pacific Company cooperated in "a partnership for civic deve
opment"; supporters of both the league and the Committ
of One Hundred came disproportionately from the rosters o
the city's business firms, and they expressed themselves very
directly as to their philosophy of government.59 Dana Bartlet
1907 study of nonpartisanship quoted a "leading banker"
Los Angeles who wanted the record to show that the reform
ers sought much more than "purity in politics." "In its trues
and most complete sense, the movement means the election
to office of men whose worth has been established in the
business world, who have proven by the management of their
own affairs their fitness to govern those of the municipality."60
When the Municipal League described its philosophy, it
did so in practical language: "What the Chamber of Com-
merce is with respect to the business interests of the city, the
League should be with respect to its civic interests, the sub-
stantial, permanent, standard authority." The actual working
relationship between the league and the municipal govern-
ment, outlined in the League's Bulletin in matter-of-fact terms,
highlights the power exercised by this voluntary association
of businessmen:

When a member of council decides to make a fight on the


inadequate depot plans of the Southern Pacific, in the face of
public eagerness for a new structure and the endorsement of the
plans by commercial and real estate bodies, he comes first to the
League and asks that one of its committees be sent to make an
investigation. When an effort is made to put through an ordi-
nance that practically nullifies the law passed by referendum

58. Donald R. Culton, "Los Angeles' 'Citizen Fixit': Charles Dwight


Willard, City Booster and Progressive Reformer," California History, LVII (1978),
158-171; Jaher, Urban Establishment, 633; George E. Mowry, The California
Progressives (1951; Chicago, 1963), 42, 49.
59. See membership list in Municipal League Bulletin, Jan. 10, 1917; see
also Fred W. Viehe, "The First Recall: Los Angeles Urban Reform or Machine
Politics," a paper delivered at the Pacific Coast Branch of the American
Historical Association, Honolulu, Hawaii, Aug. 14, 1986.
60. Dana W. Bartlett, The Better City: A Sociological Study of a Modern City
(Los Angeles, 1907), 178.

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140 Pacific Historical Review

vote requiring the street car companies to use girde


rails on paved streets, the city engineer appeals to the
make the fight against the change.... The Board of E
asks to have a report from the League on its controv
the Board of Supervisors as to the amount of its tax
for the ensuing year.... In establishing its Efficiency B
city depends upon the League to outline a general po
inaugurate the work, and later it will call upon the L
final checkings and inspection.... This list could be p
indefinitely.61

The limitation of local government sovereignty i


in the extensive quasipublic functions carried ou
Municipal League (and the chamber of commerce
Angeles did not imply unanimity among all business
in the southland city. Routine differences on partic
government policies were frequent enough to be con
the norm: a case in point was the heated disagreemen
the Municipal League and a coalition made up the fiv
daily papers, the Community Development Associa
several large banks and real estate firms over the E
Park Coliseum completed in 1923. The league was
that after the 1920 bond issue for the project had bee
by voters, "a few big promoters and realtors" "proc
line up the City Council and the Board of Super
favor of appropriating the necessary funds out of th
taxes."62
In San Francisco, a city that did not experience t
business expansion of Los Angeles during the post-1
the more stable and tightly knit business commu
cally demonstrated uncommonly high degrees of un
on priorities for public policy means and ends. A
Merchants' Association successfully campaigned for
Charter, it went on to exercise what could almost be
as joint sovereignty with the municipal governmen
the mayoral term of James D. Phelan (1897-1901). F
relinquish its powerful role during the Union La
61. Municipal League Bulletin, Oct. 1, 1913, p. 2.
62. "Who's Running Los Angeles Anyway?" ibid., Jan. 1924;
Reply to Challenge of the Los Angeles Record," ibid., March 15, 19

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"Citizens Outside the Government" 141

administrations of Eugene Schmitz and Patrick McCarthy,


organized business restored its influence during the graft
trials and reclaimed power through quasipublic activities
with the inauguration of James Rolph, Jr., (in January 1912).63
In 1916, the Bureau of Governmental Research, founded
and financed by the San Francisco Chamber of Commerce
and the Real Estate Board, began its long career as the city's
most important business-oriented civic affairs organization.
From the time of its founding to the 1940s, the bureau played
a direct role in every important municipal policy discussion.
Rarely did the bureau lose on an issue it considered impor-
tant, and on perhaps the most important issue of the post-1900
period, the shaping and passage of the 1932 Charter, it
achieved nearly all of its objectives.64
As might be expected given the relatively unified charac-
ter of its constituency, the chamber of commerce in San
Francisco consistently achieved its electoral objectives dur-
ing the twenties and thirties. The record on general obliga-
tion bond issues is instructive. Between 1928 and 1948, San
Francisco voters acted on 64 bond issues, and the chamber
made recommendations on all but one. Of these, the voters
turned down all 13 on which the chamber recommended a
"no" vote. On the 50 bond issues supported by the chamber,
voters passed 31 (62 percent). The chamber's recommenda-
tions, therefore, matched the results in seventy percent of the
cases (44 out of 63).65
As the work of the San Franciso chamber suggests, busi-
ness leaders worked with local, state, and federal officials
to foster public and private economic development of the

63. Differences, of course, continued to exist between particular business


leaders in San Francisco. For details, see Issel and Cherny, San Francisco, 165-199.
64. Ibid., 192-199. See also San Francisco Chamber of Commerce, Board of
Directors Minutes, Sept. 19, 1916, in California Historical Society Library, San
Francisco; The City, XI (March 2, 1931), an issue devoted to "San Francisco's
Proposed New Charter"; Preston Devine, "The Adoption of the 1932 Charter of
San Francisco" (M.A. thesis, University of California, Berkeley, 1933).
65. San Francisco Chamber of Commerce- Municipal Affairs Commit-
tee, "History of General Obligation Bond Issues, City and County of San
Francisco, 1928 through 1948," Nov. 5, 1948, copy in folder 56, box 4, Greater
San Francisco Chamber of Commerce Records, California Historical Society
Library, San Francisco.

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142 Pacific Historical Review

major water, power, transportation, and military bas


ects of the period. Chambers of commerce and pr
committees of businessmen financed and directed th
relations campaigns that created broad community
for municipal bond issues. The San Francisco Cham
Commerce led the get-out-the vote campaign in 1
produced well over a two-thirds majority for the
Gate Bridge bonds. In 1931, the chamber directed
cessful campaign against the Southern Pacific Com
attempt to block the project. A. P. Giannini, chairma
board of the Bank of America, created a syndicate
chase the Bridge District's bonds after the original f
arrangements fell apart. His personal intervention
ted the directors to begin construction.66
Leland W. Cutler, president of the San Francisco
ber of Commerce and close friend of Herbert Hoover
what he called "the magic power of friendship" when
to Washington and successfully lobbied the Recons
Finance Corporation to purchase the bonds for
Francisco-Oakland Bay Bridge.67 Vincent Ostrom cre
Los Angeles Chamber of Commerce with playing "t
crucial role" of "any community group in the develop
water and power resources."68 Nelson Van Valen c
that the chamber of commerce was "the communi
whose support of the municipal power enterprise

66. By the early 1920s, local government officials routinely


with business leaders before proceeding with public hearings and fo
ing on major projects. For a typical case, see Vincent Ostrom, Water &
Study of Water Policies and Administration in the Development of Los A
Angeles, 1953), 84, 85. For further details see, Jaher, Urban Establishme
Fogelson, Fragmented Metropolis; William L. Kahrl, Water and Power: T
over Los Angeles' Water Supply in the Owens Valley (Berkeley, 1982); Lo
City and the Sword," 1-16. For the role of Giannini, see San Franc
Oct. 28, 1932; copy of financing agreement dated Nov. 10, 1932, i
Record Group 2.3, Bank of America Archives, San Francisco; John
to A. P. Giannini, Dec. 2, 1936, item 271.9, Record Group 10.1,
America Archives.

67. Leland W. Cutler, America Is Good to a Country Boy (Stanford,


163, 158-178.
68. Ostrom, Water and Politics, 84.

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"Citizens Outside the Government" 143

almost indispensable through the entire generation-long


struggle [1905-1937]" in Los Angeles.69 Whether the Owens
Valley Aqueduct or the Hetch Hetchy water system, the Los
Angeles Airport or the San Francisco-Oakland Bay bridge,
the large-scale, capital-intensive urban infrastructure proj-
ects of the 1920s and early 1930s were in large part the
products of the political work of business leaders acting as
quasipublic officials.70
Like others of his generation, Leland Cutler drew no
firm distinctions between his private interests and his civic
responsibilities. "I suppose," he wrote, "my participation in
public affairs attracted business to my company and I was
always on the lookout for it. I can't recall, however, of any
civic work I did with the idea of getting business. I never
gave it a thought. I like people, I wanted to help my city and
believed in progress generally."71 The election of Franklin D.
Roosevelt and the Democratic party's ascendancy after the
mid-1930s opened the way for a revival of organized labor's
demand for a voice in California urban policy making.72
Business leaders met the challenge by working to control the
implementation of local, state, and national legislation whose
passage they could not stop. In addition, they made room for
representatives of organized labor in governmental decision-
making bodies without surrendering their dominant posi-
tion. The New Deal, as it turned out, posed less of a threat
than it might have, had business leaders not occupied such a
69. Nelson S. Van Valen, "Power Politics: The Struggle for Municipal
Ownership of Electric Utilities in Los Angeles, 1905-1937" (Ph.D. dissertation,
Claremont Graduate School, 1963), 363.
70. In addition to the sources cited in note 62, see Robert Ingram, A
Builder and His Family, 1898-1948 (San Francisco, 1949), on W. A. Bechtel;
Mark S. Foster, "Giant of the West: Henry J. Kaiser and Regional Industrial-
ization, 1930-1950," Business History Review, LIX (1985), 1-23; Lawrence B. Lee,
"California Water Politics: Depression Genesis of the Central Valley Project,
1933-1944," Journal of the West, XXIV (1985), 63-81.
71. Cutler, America Is Good to a Country Boy, 126.
72. On the revival of the Democratic party, see Michael Paul Rogin and
John L. Shover, Political Change in California: Critical Elections and Social Move-
ments, 1890-1966 (Westport, Conn., 1970), 112-152; Royce D. Delmatier, Clarence
E McIntosh, Earl G. Waters, eds., The Rumble of California Politics, 1848-1970
(New York, 1970), 230-271.

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144 Pacific Historical Review

secure place in the public policy-making process by the b


ning of the 1930s.73
Elected officials and bureaucrats in Washington,
and Sacramento welcomed San Francisco and Los An
businessmen as the legitimate spokesmen for the ge
welfare of their communities. Public officials in city
regarded businessmen as partners in progress with thei
ies because their political successes since 1890 had ea
them what Charles E. Lindblom has called "a privilege
in government." Their influence "unmatched by any lea
ship group other than government officials themselves
ifornia business leaders operated as "a kind of public of
and they proceeded to "exercise what, on a broad vi
their role, are public functions."74 Herbert Hoover had
men in mind when he paid tribute to his friend, San Fra
businessman Milton H. Esberg. Such a man, accordin
Hoover, "represented a phenomenon unique to Ame
life. The greatest good fortune of American villages, to
and cities is a citizen outside its government who gives
leadership which makes for cooperation in the spiritual
physical progress of the city."75
Hoover's characterization implied that business lea
ship in urban policy making represented an aspect of A
ican cultural exceptionalism, but the cases of San Fra
and Los Angeles suggest a different conclusion. In the G
State's leading cities, business leaders developed new g
to represent their economic interests, created political
organizations in order to erect governing coalitions
maintained policy networks to supervise the actual wor
government. Complex and protean, these processes of
ness activism became the means by which business l
secured access to power over the initiation, implementa
and monitoring of urban policy practices.

73. John H. Mollenkopf discusses the role of "political entrepre


and "progrowth coalitions" during the New Deal in The Contested City (Pri
N.J., 1983).
74. Charles E. Lindblom, Politics and Markets: The World's Political-Eco
Systems (New York, 1977), 172.
75. A Man and His Friends (San Francisco, 1953), 121.

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"Citizens Outside the Government" 145

Business political successes thus emerged as the outcome


of social and political activities that cannot be reduced t
being functions of cultural or economic forces. Anxious t
achieve California's potential and worried about econom
conditions beyond their control, urban business leaders com
bined and mobilized themselves to protect their ability t
shape economic growth in the face of competing leadership
claims from representatives of labor. Alert to a variety o
challenges against their view of themselves as the communi
ty's natural leaders, business politicians built strong local an
statewide organizations that created governing coalitions an
insulated informal business influence from electoral interfer-
ence. They sought opportunities for collaboration with dissi-
dents in their ranks who questioned the concept of a single
definition of good government policy. They bargained with
critics outside business who rejected the equation of business
values and policy integrity. Aware of charges that they
represented special interests, business leaders successfully
used innovative public relations campaigns to convince the
voting public that business priorities were equivalent to the
general good. In these ways, business activists practiced a
pragmatism that opened opportunities for cooperation in the
name of the community as a whole.
Business ascendancy in the urban policy-making process
did not evolve automatically as a feature of modernization.
Nor was business dominance in the local community fore-
ordained as the functional requisite of a capitalist state. Civic
pride and self-defined interest as an economic class with
political responsibilities comingled as motivating factors for
business leaders active in urban policy-making institutions.
Business power emerged gradually as a by-product of the
intense political conflicts generated between the 1890s and
the 1930s when Californians, like Americans across the nation,
struggled to define the priorities that should govern public
policy making in an industrial democracy.

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