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After paying out to the easterners and Europeans who helped finance the rush of ’49, the relatively small California capitalists were looking for new opportunities. They found a big one in Nevada with the Comstock Lode’s first hit, in 1859, an exploding sequence of silver bonanzas to end all silver bonanzas that helped codify the membership of the West Coast aristocracy and its important institutions. What few cattle operations were left over from the Mexican period failed frequently in the 1860s in the face of natural disasters and falling prices, which aided the squatters and their U.S. government in efforts to transfer land claims to the Anglos. Wheat boomed, along with oats to power the horses and other draft animals who dragged the farm equipment. Santa Clara Valley farmers could rely on natural aquifers, which allowed them to skip the costly irrigation systems that much of the rest of the state required. Lucky for California’s remaining planters, there was still some money on the West Coast—after all, the state’s big industry was money mining. The Bank of California opened in 1864 as the nation’s first commercial bank, successfully investing deposits in Comstock silver claims and reinvesting in California agriculture. The state now had a new capitalist class to mirror its new working class, and they doubled down on commodity crops, plowing mining money into monoculture (mostly grains, but also wine grapes) and triggering boom-and-bust cycles. By the end of the 1860s, California agriculture topped gold in terms of both employment and output value. In only 20 years the gold rush had started, finished, and transitioned the state to a new economic foundation.
The point of this story isn’t that Amadeo Giannini was a bad man because he profited from stolen land. If we’re weighing hearts, his doesn’t seem to have been so bad unless you were a complacent banker, a forgivable antagonistic tendency if ever there was one. The point isn’t even that Johann Sutter and John Frémont were bad men because they stole and enslaved, though they were and it’s worth saying so. The point is that the series of plagues visited upon California in the second half of the nineteenth century took the form of men, and we can see the character of the tendencies that shaped the state (and in turn, the world) reflected in the men seized by them.
The gold rush turned Sutter’s bell with its generic, money days into a hegemonic order, but order needs actors and Anglo California needed these men, or men like them. Gold called out to the settlers from Sutter’s bell, begging them to find the shining flakes and kill anyone who got in the way, to do it more and faster and on a bigger scale until there was more gold to be made in some other way. The state’s farms and cities and banks called out for discipline, for an ambitious outsider unbeholden to the finance elite to whip everyone into rational shape. Amadeo Pietro Giannini filled the bill, but if after watching his father bleed out in front of him he had instead dedicated his life to stitching wounds, California would have found another such outsider.
chuckled
What interests me is not so much the personal qualities of the men and women in this history but how capitalism has made use of them. To think about life this way is not to surrender to predetermination; only by understanding how we’re made use of can we start to distinguish our selves from our situations. How can you know what you want or feel or think—who you are—if you don’t know which way history’s marionette strings are tugging? In the following pages you’ll meet characters who find ways to tug back, who pit themselves against the way things are and come to personify the system’s self-destructive countertendencies. People aren’t puppets, and to pull a person is to create the conditions for rebellion. Maybe we’re more like butterflies, pinned live and wriggling onto history’s collage.
The difference between the Central Pacific cabal and all the other fly-by-night railroad concerns that collapsed in the panic was not that the Sacramento shopkeepers were financially scrupulous. They were at least as overleveraged as their peers; their books were obvious bullshit; and they had taken advantage of the exact same scams that felled the Union Pacific’s directors the year before, in the Crédit Mobilier scandal. Rather, the difference was that they persuaded their bankers to persuade their bankers to play it cool. With the interested parties denying anything was amiss, the Associates were in place to snatch up failed lines at a discount. For capitalists at the end of the nineteenth century, it paid—as it has ever since—to have several corporate shells to switch between, just in case. They funneled money into the construction of their Southern Pacific line, another Associates-controlled railroad that subsumed the Central, earning the budding monopoly the nickname the Combine.
vibes-based theory of financial valuations. same as it ever was
“Believe this, young man,” exclaimed Shelgrim, laying a thick powerful forefinger on the table to emphasise his words, “try to believe this—to begin with—THAT RAILROADS BUILD THEMSELVES. Where there is a demand sooner or later there will be a supply. Mr. Derrick, does he grow his wheat? The Wheat grows itself. What does he count for? Does he supply the force? What do I count for? Do I build the Railroad? You are dealing with forces, young man, when you speak of Wheat and the Railroads, not with men. There is the Wheat, the supply. It must be carried to feed the People. There is the demand. The Wheat is one force, the Railroad, another, and there is the law that governs them—supply and demand. Men have only little to do in the whole business. Complications may arise, conditions that bear hard on the individual—crush him maybe—BUT THE WHEAT WILL BE CARRIED TO FEED THE PEOPLE as inevitably as it will grow. If you want to fasten the blame of the affair at Los Muertos on any one person, you will make a mistake. Blame conditions, not men.”
quoting from frank norris' the octopus. pano inspo?
[...] Shelgrim presents himself as a bundle of social forces, the embodiment of impersonal currents—and he is, but not of the currents he claims. Because it wasn’t demand for wheat that built the speculative railroad lines. Supply and demand determine commodity prices—though not nearly so directly as we’ve been led to believe—and if someone orders a loaf of bread, you can’t tell the hungry customer to hold on while you build a railroad, a farm, a mill, and a bakery. Capital and capitalists built the lines, under logic much closer to “If you build it they will come” (or even “There’s a sucker born every minute”) than to “Give the people what they want.” As Richard White explains in his book Railroaded: The Transcontinentals and the Making of America, many if not all of the railroads were nonsensical from a consumer supply-and-demand perspective. The impersonal drive animating those big men in suits wasn’t the people’s hunger for bread; it was capital’s hunger for profit.
[...] Financiers wanted a way to access the potentially unlimited western gains they read about. Like the forty-niners who chased easy, transformative wealth, speculators were looking to get their hands on yields that weren’t yoked to the magnitude of the investment, all without having to do any actual work. Here again is the real impersonal demanding force that built the West—not hunger for bread but hunger for increased profits. Of course they could buy businesses, or invest in founding their own firms the way the Associates themselves had, but ownership was so restrictive. Converted to productive capital, money ceased to be liquid; it was tied up in machinery and other concrete assets. To make the best use of the opportunities to finance settlement in the fourth quarter of the nineteenth century—in California in particular, but also throughout the colonized world—capital needed a middle road between a bonded loan and a partnership, an instrument with the tradable liquidity of the former and the speculative upside of the latter. The answer was the joint-stock corporation.
Away from the Associates, Stanford came into his own in Palo Alto. Never all that interested in railroads (or really anything in particular), he finally found something worth his time: horses. The nouveau riche hobby of breeding racehorses captured his attention in a way that other business didn’t. What with the care Stanford lavished on Leland Jr. and the trotters, his partners among the Associates despaired of getting him to fulfill even his official duties, never mind add any value to their common enterprise. By that time he had plenty of cash secured, and the Stanfords invested it in land and luxuries. The ranch became the Palo Alto Stock Farm, a place where Stanford could see to the rearing and training of his horses (as well as his son). He poured money into the farm, hiring dozens of workers to equip the stables, including his elite chief trainer, Charles Marvin. The project grew massive, and he kept acquiring land to expand his now beloved Palo Alto tract. By the end of the 1880s, the stock farm boasted nearly 800 horses and a staff of 150 spread over 11,000 acres, the largest and finest institution of its kind in the world. Shipping horses back and forth to the West Coast from the farms of Kentucky and the markets of New York might have been a prohibitive expense for most, but not for Stanford the railroad man. He had a custom railcar built for his fine equine cargo.
getting real 'sorry to bother you' vibes here
When it came to translating bionomic insights into eugenic policy, California was ahead of the curve. Chinese exclusion made the country’s racial health a question of border security, and the West was the edge of whiteness. At the same time, agricultural employers in the West needed a regular (though not constant) supply of labor, preferably with high skills and low wages. The Southern Pacific Railroad’s strategy of importing vulnerable workers from abroad became integral to California’s particular mode of production. Growers paid their workers by race, segregating them according to pseudo-scientific ideas about capacity and the intricate matrix of legal rights allotted to Americans by race, ethnicity, gender, immigration status, and national origin. When new profit opportunities arose, growers gathered foreign laborers; when the profit rates attenuated, the state expelled them. For example, in 1897, soon after Californians embarrassed the nation by forcing Chinese exclusion and abatement, a new American sugar duty (secured by a new American sugar trust) boosted West Coast sugar beet production, and the trust began importing Japanese agricultural workers by the tens of thousands.vii These skilled gardeners transformed the industry, making the regional beet business the nation’s most profitable, and since beet labor was seasonal, the surplus of cheap skilled harvest labor made the further spread of off-season intensive (and expensive) crops such as strawberries possible. The value of California cropland exploded.
By 1907, the Japanese workers, who had just recently commanded the lowest field wages of any ethnic cohort, became the highest paid and began accumulating their own plots, which they made considerably more productive. However, as soon as they started getting their own land, “the Japanese ceased to be desirable aliens,” writes Carey McWilliams in his masterly study of California agriculture, Factories in the Field.33 As the most productive proprietors, small Japanese farmers could pay more than white farmers to buy and lease land, and the industrial growers began to resent the challenge to their position. The old fears that Chinese and Japanese workers would “under-live” Americans morphed into a new anxiety about being outbid.viii San Francisco exclusionists attempted to segregate Japanese children out of the city’s schools, causing an international crisis necessitating the intervention of President Theodore Roosevelt, who got the school board to back down and negotiated a deal with the Meiji emperor to confine the immigration of Japanese laborers to Hawaii. “The infernal fools in California, and especially in San Francisco, insult the Japanese recklessly, and in the event of war it will be the Nation as a whole which will pay the consequences,” Roosevelt told his son, presciently, but California’s Anglos kept pushing.34
The 1924 Immigration Act struck a delicate balance between racial and national distinctions—between admitting the workers American capitalists needed and avoiding the “racial indigestion” Cubberley observed. The law instituted a quota system, ranking Europeans by national-racial preference and admitting them accordingly, concocting a finely tuned racial diet for smooth white assimilation. Countries with racially unassimilable populations were assigned the minimum quota of 100 souls, but there remained a problem. What stopped a person of Chinese descent from immigrating through Mexico or Canada, which, along with the rest of the Western Hemisphere, were exempt from quotas? What stopped 100,000 of them? The 1924 act solved the problem by banning the immigration of anyone who was racially ineligible for citizenship—that is, Asians. “Congress thus created the oddity of immigration quotas for non-Chinese persons of China, non-Japanese persons of Japan, non-Indian persons of India, and so on,” writes Mae Ngai in Impossible Subjects: Illegal Aliens and the Making of Modern America.45 West of the Ural Mountains, people could become Americans, and it was up to the nation’s scientists and policymakers to cook up the right ratios. The law separated whites into national groups, but only in order to incorporate them in proper proportion as white Americans. Black Americans secured their citizenship by force in the Civil War, and so the bill’s logic required the annual admission of 200 black Africans: 100 each from the free nations of Ethiopia and Liberia. As for the rest of the racially undesirable world, European colonialism ensured that the most desirable whites—defined as desirable in large part thanks to their success in colonization—controlled those quota slots.