CALIFORNIA

California is so large and so diverse that it is difficult to characterize. Native American, Spanish, and Mexican influences marked its earlier centuries. White settlers who came to exploit its various resources (from sea otter to beavers and gold) led it into statehood. Now an agricultural and manufacturing giant, the state has experienced many economic booms but has also weathered its share of harsh times.

European economic interest in California began in the sixteenth century, when Spanish explorers in their search for a western passage to the East discovered Baja California (now a part of Mexico). Believing there was a transcontinental canal, Juan Rodriquez de Cabrillo first landed in Upper (or Alta) California in 1542, at the bay now known as San Diego. Until the late eighteenth century, however, Europeans were little interested in the region. Spurred on by its economic rivals in 1769, Spain sent Father Junipero Serra (1713–1784) and military leader Gaspar de Portol to establish the first permanent European settlement in California. Franciscan friars established some 21 missions along the coast to convert the Native American population and also built four military outposts called presidios. San Jose de Guadalupe was the first civilian settlement in California.

Having done little to strengthen its California outposts, Spain lost control of the territory after the Mexican Revolution of 1821. The Mexicans gradually began redistributing the vast lands and herds owned by the missions to Mexican private citizens, who established huge ranchos (ranches) that produced grain and large herds of cattle. The rancheros (ranch owners) traded hides and tallow for manufactured products from foreign traders along the coast. They assigned most of the manual labor on the ranchos to Indian workers.

U.S. citizens first came to California in pursuit of the sea otter, whose pelts were shipped to China at profitable rates. Others came to exploit the hide and tallow trade, and inland explorers profited from the hunting of beavers. U.S. interest in California began to grow and during the administration of President James K. Polk (1845–1849) war was waged on Mexico. By the terms of the Treaty of Guadalupe-Hidalgo in 1848, California was ceded to the United States.

By far the largest effect on the economy of the new territory was the Gold Rush of 1849, which began with the discovery of gold along the American River. Thousands of prospectors poured into California, and by 1852, $80 million in gold was being mined in the state. The state's population quadrupled during the 1850s and grew at two times the national rate in the 1860s and 1870s. California became the thirty-first state in 1851.

Racial discrimination and racial divisions marked the first years of statehood, as white citizens attempted to put down the state's growing ethnic populations. New tax laws were passed to discourage Latin American and Chinese miners, and efforts were made to displace the original Mexican owners of large ranchos.

The completion of the transcontinental railroad in 1869 brought California into extensive contact with the rest of the country. The directors of the Central Pacific railroad—Leland Stanford (1824–1893), Collis P. Huntington (1821–1900), Charles Crocker (1822–1888), and Mark Hopkins (1814–1878)—wielded tremendous political and economic influence in the state, creating a transportation and land monopoly. Considerable opposition to this monopoly was expressed by novelist Frank Norris in his 1901 novel The Octopus.

In the late nineteenth century irrigation projects made it possible for agriculture to replace gold and silver mining as the mainstay of the economy. Orange and lemon groves began to supply most of the nation with citrus fruit. In the 1870s the state became the top cattle-raising state and the second-highest producer of wheat. California's population burgeoned in the 1880s because of the success of the citrus industry, the increasing popularity of the state as a destination for invalids, and a railroad rate war which made transportation cheap. The urban population grew rapidly during the early twentieth century. The San Francisco earthquake of 1906 brought a halt to that city's amazing success story, but only for a few years.

Los Angeles and San Francisco, the two major urban areas, were each at about one million people in 1920. The two cities increasingly vied with one another for water rights, vital to a growing population. Over the objections of conservationists, San Francisco created a reservoir by damming the Tuolumne River at the Hetch Hetchy Valley. Los Angeles angered farmers along the Owens Valley by diverting nearly all the water in the Owens River through an aqueduct. Manufacturing in the urban areas soon began to outstrip mining and agriculture as the major employer in the state.

California continued to boom throughout the 1920s as people were drawn to the state's favorable climate, natural beauty, and economic opportunities. Oil was discovered in the Los Angeles Basin, placing the state for a time in first place in crude oil production. By 1930 the size of Los Angeles had more than doubled, growing to over 2.2 million. The city also became known for its expanding network of highways and its large number of motor cars, a distinction that would plague Los Angeles in the traffic-clogged years to come.

Like other states California suffered during the Great Depression (1929–1939), but also gained in some areas. People from all over the United States, especially from the dust bowl of the southern Great Plains, fled to California in search of a better life. The California film industry grew as well, giving people in the United States movies that helped them escape from their worries during the 1930s. By 1940 the United States boasted more movie theaters than banks.

1930s politics in the state were marked by several socialist-oriented ideas, such as the Townsend Plan and the "Ham 'n' Eggs" Plan, which promised cash payments for the elderly. A candidate for governor in 1934, author Upton Sinclair (1878–1968, also a well-known socialist) promised to "end poverty in California," but he lost to the Republican incumbent. Only World War II (1939–1945) brought the state to real economic health by expanding the number of military installations, aircraft factories, and shipyards in the state. Along with this expansion came the increasing importance of ethnic minorities in California, particularly Mexican and Japanese Americans.

Throughout the 1950s and early 1960s California continued to grow rapidly, reaching the top population ranking among all states in 1963. The 1970s saw a slowdown in growth after a number of industries, particularly aerospace, experienced a downturn. The military buildup during Californian Ronald Reagan's presidency (1981–1989), however, helped the economy bounce back in the 1980s. It declined again in the late 1980s and early 1990s as defense spending decreased, real estate became expensive, and environmental regulations discouraged business. By 1992 the state's unemployment rate had reached 10.1 percent, with jobs in aerospace and manufacturing dropping by 24 percent. Another San Francisco earthquake in 1989 caused extreme economic stress in that city, with $5 to $7 billion in property damage. Still another earthquake northwest of Los Angeles in 1994 caused $13 to $20 million in property damage.

California felt the economic stress of illegal immigration more than most states and also struggled more with its treatment of ethnic minorities. Proposition 187, passed in 1994, banned illegal immigrants from welfare, education, and non-emergency health care. In 1995 Governor Pete Wilson issued an executive order banning the use of affirmative action in state hiring and contracting and in university admissions.

By the 1990s California had the largest work force in the nation and the greatest number of employed workers. In 1995, 49 percent of the total of employees in the guided missile and space vehicle industry were located in California. In 1995 nearly 18 percent of all workers were members of labor unions. The organizing of migrant farm workers has been the most difficult task. During the 1960s labor activist Cesar Chavez (1927–1993) mobilized migrants to secure bargaining rights in the grape, lettuce, and berry fields of the San Joaquin Valley. An organized nationwide boycott of these products helped this effort. After surviving a challenge from the Teamsters Union, the United Farm Workers gained the right to free elections among farm workers.

California led the nation in economic output and total income in the late 1990s, with per capita income at over $25,000 in 1996. It had quite a diversified economy, including manufacturing, technology, retail trade, banking, finance, and personal services. Not to be forgotten is the growth of the California wine industry, which became both a prestigious consumer commodity and a source of tourist dollars in the Napa and Sonoma valleys and in other grape-growing areas of the state. Tourism was a major contributor to the state's economy in many other areas of California, including San Francisco, Los Angeles, and the many national and state parks, as well as on the spectacular coastline.

CALIFORNIA

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