The discovery of gold in California created a mining frenzy that attracted many people to the territory. According to Lawrence & Cummins (2014, p. 26), the gold rush attracted so many people to California that the population doubled every six months for a time. For instance, it rose from around 9000 in 1846 to more than 264000 in 1852. Additionally, the population, which was predominantly Latino before the gold rush, changed to more than 80% Euro-American after over the years. The gold rush had various spillover effects on the economy of the state. For instance, it created a heightened demand for goods and services, and, hence, various entrepreneurial opportunities.
Transportation was one of the services whose demand intensified within the region. Four entrepreneurs, popularly known as the Big Four, undertook to meet this demand by forming the Central Pacific Railroad in 1861. The four were Mark Hopkins, Charles Crocker, Collins Huntington, and Leland Stanford. They anticipated the demand for transportation services and acquired small railroad companies throughout the state. By the time they consolidated the small to one company, they had controlled approximately 85% of the railroads in the entire state (Lawrence & Cummins, 2014, p. 26). Huntington, who was very well connected in Washington DC, served as the lobbyist for the group. He was able to convince the Congress to designate the company as the one responsible for the western portion of the transcontinental railroad (Orsi, n. d., p. 8). Additionally, he convinced Congress to grant loans and land to the company as a way of funding its growth and expansion. The company acquired more funds when Huntington became governor of the state and obtained additional loans and subsidies from the state’s legislature.
The company monopolized the state’s railroad transportation networks. It controlled all matters regarding the industry. For instance, it varied the freight rates to reward the friends of its owners and to punish their enemies. As a result of the monopoly, the Big Four acquired a lot of wealth and gained a lot of political influence throughout the state. For instance, they had so much wealth that they would just simply buy off any competitors to maintain their high rates. Additionally, the great political influence that they acquired enabled them to control all levels of government within the state. They established a Political Bureau that was active throughout all levels of government, and that helped them overcome the possibility of state regulation of monopolies due to widespread resentment of their company (Lawrence & Cummins, 2014, p. 27). The Political Bureau controlled all the incumbent legislators, party conventions, and the nomination of candidates, thereby ensuring that no politicians would be opposed to the company’s interests.
The influence of the Big Four was, however, not sufficient to cope with the effects of the national economic depression of the late 1800s. Many people, especially the unemployed across the state, believed that the company was the largest contributor to the depression. For instance, they felt that the company’s act of importing cheap paid Chinese labor to compete for job opportunities with the local whites significantly contributed towards their unemployment. Additionally, the people felt that the State Senate, which was largely controlled by the railroad company, was also to blame for the high unemployment rates and, therefore, the economic depression (Lawrence & Cummins, 2014, p. 27). To this effect, they favored the election of a State Senate that would have the interests of the people, instead of corporations, at heart. Denis Kearney, one of the workers from San Francisco, helped form the Workingmen’s Party in 1877. The party was largely against the importation of Chinese workers and the Big Four.
Just like the constitutions of many other states across the nation, the Constitution of the State of California needed some revisions in the late 1800s. However, the need for the revision of the state’s constitution happened during the economic depression, the anti-railroad monopoly uprisings, and the heightened campaigns against the importation and employment of Chinese workers (Lawrence & Cummins, 2014, p. 27). The majority of the delegates elected to the 1978 constitutional convention were from the newly formed Workingmen’s Party, which led the afore-mentioned campaigns and uprisings (csun.edu, n. d.). To this effect, they made sure to include provisions for the regulation of railroad and other corporations in the state. They also included provisions that regulated the importation and employment of Chinese workers in the state. For instance, one of the provisions stated that no Chinese would be employed on any public works of the state, county, or municipal governments (csun.edu, n. d.). The voters approved the constitution on May 7, 1879.
As mentioned elsewhere in this essay, the Big Four, and their railroad company had a lot of influence throughout the state. Many people described them like an octopus that strangled other businesses across the state (csun.edu, n. d.). For instance, they readily bought off any steamship lines to ensure that their railroad faced no competition. With no competition, the company charged higher-than-necessary rates for its services and made it impossible for other businesses to make profits. Additionally, they corrupted the state offices by controlling their holders. For instance, as mentioned elsewhere in the essay, they formed a Political Bureau that controlled the incumbent members of the state’s legislatures and the nomination of political candidates. The state officers were so corrupt that the Big Four were able to acquire additional funding from the state’s legislature to finance the expansion of their company when one of them, Collins Huntington, became the state’s governor.