Trolley Thursday 01-7-21 - The History of Pacific Electric, 1900 to 1911

Despite its status as one of the largest and most well-beloved mass transit systems in America's history, the Pacific Electric Railway was not supposed to be a tool to move people across five different counties in Southern California. It was, instead, a tool to move real estate, as its creators Henry Huntington and Isaias Hellman were into the real estate business instead of the railway business. Nevertheless, Huntington's new trolley attracted plenty of investors and rivals in the early 1900s, with one particular figure eager to take Huntington's new toy for his own. All of this business skullduggery and more on today's Trolley Thursday history of the Pacific Electric!

Huntington's Big Scheme

The Huntington Mansion (now the famous Huntington Library & Gardens) in 1915, San Marino, CA.
(Public Domain)

Isaias Hellman, better bank on that beard.
(Public Domain)

When Henry E. Huntington got together with Isaias W. Hellman on November 14, 1901 to create the Pacific Electric Railway (PE), the two men were already quite influential and wealthy from other pursuits. Huntington grew up doing business with his uncle, the famous Collis P. Huntington of the Southern Pacific Railroad (SP), and helped consolidate Oakland's small street railroads for the SP under one banner operation. His business partner, Hellman, functioned more as a financier for the PE as he also helmed the largest bank in San Francisco at the time, the Nevada Bank, and owned plenty of property in Southern California. 

Before the two men agreed to do business in real estate in California, Huntington had already bought the narrow-gauge Los Angeles Railway (LARy) from its bondholders in 1898 and was undertaking an effort to fully electrify the aged system of horsecars and cable cars. In an effort to save money, the lines were kept at a narrow 3 feet and 6 inches (Cape gauge) rather than re-gauged to standard (4 feet, 8.5 inches) like the rest of the country. The money Huntington saved on this conversion was handled by Hellman and used to form the Pacific Electric Railway of California in November of 1901, with the full intention to "commence building suburban railroads out of the city."

Los Angeles in 1902, on Spring Street and 3rd, with LARy streetcars
surrounded by motorcars and horsecarts. 
(Water and Power Associates)

Designing The Railway

Epes Randolph, puppy-dogged
eyed architect of the PE.
(Public Domain)

At the time the PE was first formed, Los Angeles' city population was a generous 102,479 people, with an additional 68,000 or so spread across the whole county. The areas outside the city were mostly empty fields with the lands farther south dedicated to farms and oil rigs. Already anticipating the need for streetcar traffic to the ports of San Pedro and Long Beach, Hellman hired engineer Epes Randolph (who helped build railroads for Collis P. Huntington) to design the first line for the PE. Within a year, Randolph designed and built the first leg of PE's eventual "Southern District", the Long Beach Line.

At a cost of a million dollars and in just one year of construction, the 20.37 mile Long Beach line officially opened to the public on July 3rd 1902. Much of the cost was burdened by the land purchases undertaken by Hellman to secure the right-of-way, as well as additional bridges and dirt cuttings made to facilitate a flat and smooth "high speed" interurban line, with overhead wires providing an ample 600V DC power supply to the wooden trolley cars. Before the creation of the "Huntington Building" at 6th and Main (which was built in 1905, more on that next week), the trains terminated further south at 9th and Main, which became known as the "Los Angeles Terminal District" and was originally a narrow-gauge LARy line.

Pacific Electric No. 220 arrives at Long Beach for the first time on July 3rd, 1902.
(Metro Transportation Library and Archive) 

Enter E.H. Harriman

Edward H. Harriman, a man whose name and figure
looms so large in American railroading that I didn't
make this picture bigger. It happened to be this size.
(Hudson Valley Magazine)

Huntington and Hellman's success with the Pacific Electric was short-lived, however, as new rivals began popping up on the horizon. The most significant rival was Edward Henry Harriman (better known as E.H. Harriman), then-president of both the Southern Pacific and the Union Pacific Railroads. Huntington and Harriman originally crossed paths following the death of Collis Huntington in 1900, when Harriman led a boardroom dispute that screwed Henry Huntington from inheriting his uncle's railroad as stipulated in his will. Incensed, Henry fled to the West Coast and this is where our story picks up.

In early 1903, Harriman saw the success of Huntington's new start-up interurban and was more than a little concerned. In his mind, if Huntington was able to reach his interurban across all of LA County and beyond, that would fly in direct competition with SP's local passenger and freight operations. Thus, he had to have it, and Harriman was never the type of person to say "no". He prodded Huntington for joint ownership of the PE, but was met with an immediate "no". In response, Harriman proposed a franchise plan with a three-cent fare that significantly undercut the fares of Pacific Electric, which Huntington then countered with a $6.25 ticket book ($178 in 2020) that allowed "500 miles of travel". 

Los Angeles Traction Company No. 86 poses for a photo op in the late 1890s.
Don't mess with the man holding the broom.
(Guen Hodgson Sheets)

A cartoon representation of Harriman and 
Huntington's backroom deal in 1903.
(Dreamstime.com)

When Harriman's proposal failed, the railroad tycoon bought up the Los Angeles Traction Company in April 1903, which ran both downtown lines as well as a line down to San Pedro in direct competition with Pacific Electric's Long Beach line. The two men remained in hot competition until it came time to bid on the 6th Street Franchise in mid-1903. With the promise of new track construction deeper into downtown, the franchise was won by Harriman through a secret bid at a staggering $110,000 ($3.13 million in 2020). It seemed Huntington had had enough of Harriman's skullduggery and finally agreed to meet with him in private in May of that year in San Francisco.

After tense negotiations, the two men walked out of their deal a little happier. Huntington's end of the bargain was he would get all of SP's interurban holdings (the Los Angeles Traction Company, the San Gabriel Valley Rapid Transit, the 6th Street Franchise, and even some downtown track) and be allowed to expand the PE so long as it didn't compete with SP lines. Harriman's end of the deal was an equal amount of the PE's ownership with Huntington (about 40.3% of stock, with the remaining 20% being owned by other investors) and that the banking unit of his Wells Fargo Company be sold to Hellman and merged with Nevada Bank. This is where we get the modern Wells Fargo Bank now.

Mergers, Acquisitions, and New Routes

A Pacific Electric Car, No. 33, trundles through
Pasadena in the early 1900s.
(Pasadena Weekly) 

With Harriman placated for now, Huntington and Hellman were soon at work heavily expanding the Pacific Electric all over Southern California. The first of these efforts came under the "Los Angeles Inter-Urban Railway" in June 6, 1903, which formed to extend the Long Beach Line to Orange County through Santa Ana and Newport Beach, as well as build new lines in Riverside, San Bernardino and Redlands in the east and the San Fernando Valley in the Northwest. The land for all of these new lines were purchased under the Los Angeles Land Company, another Huntington enterprise. This essentially made him the most powerful man in Los Angeles, with most of the funding coming from stockholders and Hellman's banking.

The PE reaches Monrovia on March 1, 1903.
(Monrovia Historical Museum)

Huntington also went about buying other existing interurban lines for the sake of expanding the Pacific Electric, with the first major acquisition being the Los Angeles & Glendale Railway, then the Riverside & Arlington in Riverside, then the Santa Ana and Orange Motor Railway in Orange County. The PE also was able to finally build an interurban line into Pasadena, serving the Raymond Hotel and the Mount Lowe Railway, and through here were trains routed through to San Bernardino. 

The Los Angeles Pacific Railroad, popularly known as
the "Balloon Line", became the PE's Santa Monica
Airline later in life.
(Pacific Electric Railway Historical Society)

Then, a bombshell hit the Pacific Electric. Harriman reared his head again and purchased Moses Sherman's Los Angeles Pacific Railroad (LAP) for a cool $6 million ($171 million in 2020). The railroad was a major beach line to Santa Monica and Redondo Beach, and losing this major asset put Hellman's syndicate in a concerning situation. All this time, Huntington refused to declare any dividends or profits as he continued expanding the PE, and this extended to his management of the LARy as well. With no increased profits in either the PE or the LARy despite their growth, Hellman's Syndicate quietly sold their 45% ownership stake in the LARy to Harriman's Southern Pacific Lines to recoup their losses.

We All Love a Good Labor Strike

The official logo of the AASERE.
(Scripophily)

With Henry E. Huntington as the most powerful man in Los Angeles County thanks to the Pacific Electric Railroad, the power was bound to go to his head at some point. Under his tenure as PE's president, the worst labor strike came in April 24 1903, when Mexican track workers (or "traqueros") formed the "Union Federal Mexicanos" (UFM) to strike demanding higher wages equal to their white counterparts. At the time, the strikers (boosted by our good old friends, the Amalgamated Association of Street and Electric Railway Employees of America, or AASERE) demanded a raise from 17.5 cents an hour to 20 cents an hour, with 30 cents at night time and double pay on Sundays. European immigrant track workers earned double that, about $1.75 every ten-hour shift versus the $1.25 a day earned by the Mexicans.

A snippet of artist Sandra De la Loza's newspaper
installation of LA Times and Daily News articles
against the UFM. More information here.

Like any good railroad tycoon, Huntington retched at the thought of any unions on his railroads. Once his lower managers granted the increased wages to 20 cents, he immediately struck it down and told the LA Times through a spokesman that he would "have raised wages if only the workers came to him instead of bringing the union". As the Main Street line was under an intense deadline of May 6, when President Theodore Roosevelt was visiting Los Angeles, Huntington didn't want to deal with a strike and immediately began displacing striking Mexican workers with other track men from around the system. Huntington also appealed to the LA Times to write anti-Latino smears against the strikers, who described them as "peons, stupid fellows who don't know what a union is."

The strikers planned to put the hurt to Huntington on April 29, 1903, when they planned to convince motormen and conductors of the PE to walk out with them and bring the interurban system to a grinding halt. Unfortunately the amount of replacement workers and the lack of momentum meant the strike failed in the end, as well as the hesitance of the AASCE's white motormen to join in solidarity. The strike ended without action, with the LAPD at the time commenting it was "probably [...] the dullest Saturday night all year." The Main Street Line opened in time for President Roosevelt's visit, but the strike remained a black mark on Henry E. Huntington's reputation.

Profits Up and Down

A Los Angeles Evening News cartoon of Henry Huntington,
October 16, 1905, showing him as the ironic "Colossus of Roads"
in the same vein as his uncle Collis was referred to as the "Octopus".
(The Huntington Library)

Huntington's reputation was further sullied as Pacific Electric's profits finally came to light, beginning in 1905. At the time, the PE made $90,711 in profits. This, however, was propped up by Huntington's Land and Improvement Company, which made that several times over by 1907, with land company earnings towering at $402,000. This was the start of PE's profitless backslide, which also made it a perfect example of why public transit ventures done in private never usually make a profit on passengers alone. 

It was also around this time that E.H. Harriman returned for one last round of begging Huntington for control of the Pacific Electric. Huntington, who saw his trolley system as a means to facilitate his real estate ventures, again refused to sell it to Harriman, who was obsessed with making the PE part of his Southern Pacific passenger empire in Southern California. As if to placate the greedy man (then again, both of them are different shades of greedy), Huntington began leasing the lines of the Los Angeles Inter-Urban Railway to Harriman in June 1908, then sold the SP his systems in Fresno and Santa Clara County in 1909. However, when Harriman tried to press the issue of getting the Pacific Electric, Huntington simply responded with, "Over your dead body."

Edward H. Harriman died on September 9, 1909.

The Great Merger

After Harriman's death, Huntington continued to talk with Southern Pacific management on consolidating his streetcar holdings with the SP's. On September 27, 1910, a final agreement was reached where the SP gained control of Huntington's 50% controlling interest in the Pacific Electric while Huntington gained back the 45% interest the SP had over his Los Angeles Railway. This mighty act of corporate dealing was known as the "Great Merger", and it was a turning point for the Pacific Electric that would end up defining most of its history in the years to come. 

A 1910 system map of the Pacific Electric, one year before the Great Merger.
(American Rails)

With all of its constituents companies under the Pacific Electric banner, the once-ambitious real estate scheme was now the largest interurban passenger railroad in the world. 1000 miles of electrified railway track spanned from the western shores of Southern California to the desert foothills of the San Bernardino Mountains, all running on the tracks Henry Huntington paid to have someone build. The services also grew, with 2,160 daily trains running to all points West, East, and South in four different counties. For some, it was the end of the "Old" Pacific Electric, but to others it was the beginning of the PE we are all nostalgic for.

The Huntington Building, opened in 1905 as a headquarters and main terminus of the PE,
makes home to two wooden interurban cars bound for Long Beach. The building would eventually
be renamed to the "Pacific Electric Building" in 1925.
(Water and Power Archives)

Thank you for reading today's Trolley post, and watch your step as you alight on the platform. My resources today included "Henry Huntington and the Creation of Southern California" by William B. Fredericks and the history pages of the Southern Californian Electric Railway Historical Association. The trolley gifs in our posts are made by Brian Clough and can be found on his site, Banks of the Susquehanna. On Tuesday, we continue our Pacific Electric history with the era of Southern Pacific ownership! For now, you can follow myself or my editor on Twitter, buy a shirt or sticker from our Redbubble stand, or purchase my editor's self-developed board game! It's like Ticket to Ride, but cooler! (and you get to support him through it!) Until next time, ride safe!