Category: Archive

Hibernian Chronicle: Phelan and the Gold Rush

February 17, 2011

By Staff Reporter

With visions of fabulous riches dancing in their heads, they’d dropped everything, quit their jobs, and boarded the first vessel they could find bound for California. Phelan, too, saw riches, but not in the hills above the city. Rather, he planned to stay in San Francisco and sell supplies to the gold hungry miners at astronomical prices. As a result, he went on to become the richest man in California.
James Phelan, Jr. was born in Queen’s (now Laois) Co., Ireland in 1821. His father, James Phelan Sr., was relatively well educated and prosperous (he owned some land) in an era when Catholics in Ireland still lived under many restrictions. Seeking a better life for his family, which included a wife and three sons, he traveled to New York to assess the opportunities he’d heard so much about. He returned to Ireland to discover that his wife had died, sold his property, and returned to New York with his two eldest sons. James Jr. stayed in Ireland with relatives for two years before being reunited with his father and brothers in 1827.
James Sr. started a dry goods business in New York but it eventually failed in one of the periodic national recessions. As a result, James Jr. received little formal education, leaving school at a young age to work as a clerk in a succession of dry goods stores. He developed a keen eye for business and by the time he was in his late twenties he owned a successful store in Cincinnati.
When word of the great gold strike in northern California reached Cincinnati and the eastern states in late 1848, thousands of normally rational, sober, and conservative American men caught gold fever. They quit their jobs, sold their farms, and shuttered their businesses and headed for California, filled with the absolute certainty that they would strike it rich.
“I have no pile yet,” wrote one typical miner to his family back east, “but you can bet your life I will never come home until I have something more than when I started.”
Phelan kept his head while all about him people were losing theirs. Instead of striking out immediately for California, he drew up a careful plan. Instinctively, he knew the surest fortune to be made in the gold rush was in “mining the miners.”
Most, he knew, would arrive in California with cash in pocket needing to buy supplies for mining. Accordingly, he bought a vast store of preserved food, rope, tents, shovels, picks, nails, guns, knives — anything miners would need to begin prospecting in the wilds of northern California. To minimize the risk to his investment, he wisely divided the supplies into thirds and arranged for three ships to carry them on the perilous journey around South America to the Pacific coast. One of them was never heard from again.
Phelan nearly died making the journey to San Francisco (he contracted malaria in Panama while crossing the isthmus), but he arrived in August 1849 just ahead of his supply ships. His intuition proved correct as he found swarms of men willing to pay more than ten times the normal price for mining supplies. And every day his customer base grew as California’s population exploded, rising from just 14,000 at the start of 1849 to more than 100,000 by year’s end (and 220,000 by 1852).
Within a year James Phelan Jr. cleared $100,000 in profit, an astonishing sum in the days when many families lived in modest comfort on annual incomes of $300. He invested much of it in San Francisco real estate and a wholesale liquor business which he ran with his n’er do well brother Michael. Over time he broadened his business activity to include establishing several successful banks and insurance companies. Phelan also built the massive excavation machinery used in the first attempt (by a French company) to dig a canal across Panama. As both a wise investment in the future and a monument to his past success, he erected the beautiful five-story Phelan office building in downtown San Francisco. When James Phelan, Jr. died in 1892, he left behind an estate worth more than $11 million.
Phelan married Alice Kelly, a fellow immigrant from County Laois, Ireland, in 1858. They had two daughters and a son. The latter, James Duval Phelan, went on to become a leading citizen of San Francisco. In the late 1880s and 1890s he led the city’s “good government” movement that eventually brought down the Irish American political machine run by Chris “Blind Boss” Buckley. He later served three terms as Mayor of San Francisco beginning in 1897, during which he earned a reputation for good government and a commitment to the “city beautiful” movement. Phelan also served a term in the U.S. Senate from 1914-1920.
The Phelan legacy lives on in San Francisco in two significant buildings. The Phelan building in downtown San Francisco was badly damaged during the 1906 earthquake, but it was rebuilt and remains to this day a prominent landmark. James Duval Phelan’s mansion, Villa Montalvo, was willed to the state of California and now serves as a museum for the extensive Phelan art collection.
Sources: Timothy J. Sarbaugh and James P. Walsh, eds., The Irish in the West (Sunflower Press, 1993); R. A. Burchell, The San Francisco Irish, 1848-1880 (1984). Learn more at www.edwardtodonnell.com/irish.htm

August 17, 1877: William Bonney, a.k.a., Billy the Kid, kills his first man — F. P. Cahill.
August 19, 1920: Lord Mayor of Cork, Terence MacSwiney, begins his hunger strike to protest his arrest by the Royal Irish Constabulary. His death on October 25 boosts popular support for the War of Independence being waged by the IRA.

August 17, 1920: Actress Maureen O’Hara is born in Milwall, near Dublin.
August 20, 1778: Bernardo O’Higgins, father of Chilean independence, is born in Chile.

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