And there grew a convenient market for their crops in the nearby pueblo of Los Angeles. A boom had been created by the discovery of silver in the Inyo mountains some 200 miles to the northeast of L.A. Silver had been first discovered at Buena Vista Peak in 1865, but it was not until 1867 that word reached other California mining camps that rich ore was to be found at Cerro Gordo and the stampede began southward.
Not only did miners in the new camps need to be fed, but 500 mules moving continuously up and down the 200 miles of trail had to be maintained.
This was a ready-made market for the local barley farmers. The small farmers of Los Nietos experienced near instant prosperity. They didn’t have to ship their produce to San Francisco. The market was now in Los Angeles, just a short wagon haul across the river.
But as things began to boom in nearby Los Angeles and the produce markets bustled with activity, both from foodstuffs and silver ore, there were no commercial institutions ready to fill the needs. The atmosphere was one of barter and credit-on-the-cuff, of fortunes buried in back yards. What was now needed was banking.
Former governor John Downey (for whom Downey is named), saw the problem and acted. A landowner who knew the southland must grow, he nonetheless failed to interest local merchants who were somewhat short-sighted. So, he went to San Francisco, enlisting J. A. Hayward there as a partner. Together they raised $100,000 capital and opened a bank in an adobe building on Main Street in L.A. (a site that is now the southeast corner of the Federal Building).
When local businessmen saw one bank go up, they started to get the idea. Downey even attended the opening of a competing bank organized by Isaias Hellman, F.P.F. Temple and William Workman, and toasted their success.
Hellman soon became disenchanted with his partners, bought them out and joined Downey. Together they then formed the Farmers and Merchants Bank that has served Southern Californians well to this day.
Downey drew the Los Angeles pueblo’s scattered retail establishments to a central location by building a two-story block long building at Main and Temple. Warehouse sheds went up on nearby Los Angeles Street for Los Nietos farmers to deliver their produce to. The newcomer Americans were making a mark on the pueblo. It hummed with business.
Downey himself spanned the gap between the old and new cultures. He was married to a Californian, and together he and his wife threw parties where families old and new alike waltzed in his large ballroom. A mixture of cultures was developing that has baffled outsiders to this day.
California and particularly Southern Californians were different.
There was still much work to be done. The old pueblo’s irrigation system was still a series of open ditches. Downey helped organize the Los Angeles City Water Company.
An artesian well dug in the area now known as Compton proved there was an artesian water bonanza under much of the arid southland’s soil. All you had to do was drill for it.
Phineas Banning’s stage route from the harbor to L.A. even made a detour so passengers could see the wonder of water bubbling up from beneath the Compton earth!
Los Angeles was a bustling, growing city ready to explode on the national scene by the time the railroad finally arrived in the mid-1870s to free it from its ring of mountains.
And John Downey had a lot to do with it.