"Day of the Dons" Was Short
However, the great "day of the dons" was of but short duration. The boom brought by the 1849 Gold Rush inflated prices, and many ranchers expanded their holdings too rapidly. Cows, which brought five dollars for their hides, suddenly were worth $60 for beef at the mines. Supply quickly caught up with demand, and by 1860 prices began to fall.
A great flood in 1861 drowned many cattle, causing hard times for some ranchers. However, a worse natural disaster came when the rains stopped. A long period of drought ruined many of the ranchers. Money borrowed at high interest rates could not be repaid, as livestock died by the thousands.
Los Alamitos, Stearns' first and most cherished rancho, and perhaps his most valuable, was one of the first to be lost. In 1861 Stearns had mortgaged Los Alamitos to Michael Reese for $20,000; the rancho passed from Stearns' control in 1865.
With Stearns deeply in debt and with back taxes due on most of his property, a group of investors organized the Robinson Trust, which controlled Stearns' land empire. Rancho Los Coyotes was the largest and totaled 177,796 acres, or nearly 278 square miles.
Stearns was able to liquidate his debts and amass sizable assets before his death in 1871. The Trust proceeded to retail 120 to 160 acre tracts at prices from $2.50 to $10 per acre.
As the land was mainly fertile and capable of irrigation, sales were brisk. With the influx of people into the state brought by the completion of the transcontinental railroads, this initial effort at subdivision in Southern California was a great success. It was remarkable that Stearns, who had been in California since 1829, should pioneer this modern method of disposing of real estate.
This first Southern California boom was slowed by the panic of 1873. However, the great boom of the 1880s picked up where the earlier one had left off. Before the orgy of real estate speculation had spent itself, it transformed the region.
As one historian put it, "the great boom was the outstanding event in Southern California's history. By bringing in a new population, it forced the region one step further away from the mellow Spanish-Californian culture that had so tinged its early development, and as the third and final step in the breakup of the ranchos, completed the transition from range land to agricultural economy."
The preceding history is from the News-Enterprise Archives, written by Eileen Wheeler and Dr. Warren Beck. It is reprinted here with permission.