In previous reports I have expressed the opinion that the rebuilding of the city of San Francisco will be a task of many years, and that the extent of the disaster of April 18th was either not recognised, or was intentionally underestimated by the inhabitants. I see nothing now that can lead me to a different conclusion; indeed events subsequent to the Earthquake make me think that my first impressions as to the time required for recuperation were even too hopeful.
As the weeks and months pass by it is seen more and more clearly that the process of recovery will take much longer than was at first thought. For this there are several causes.
Five months have now elapsed, and there is very little sign of permanent construction. The mass of debris, millions of tons of it, remain more or less where it was. The amount removed is barely noticeable, though in the aggregate it is large. Some of the principal streets are cleared sufficiently to allow of the passage of Electric cars and wheeled traffic, but except in some of the main streets the pavements are still more or less obstructed. Business is active … but yet, even this statement must be qualified.
The nature of goods sold is not what it was before the disaster. Everything is of a cheaper kind. Luxuries are not to be obtained. Men who smoke shilling cigars now smoke three-penny ones. Men who wore six or eight suits of clothes made to order at seventy or eighty dollars a suit now buy ready-made clothing at about twenty five to thirty dollars a suit, and order half the number of suits or less. Economy is practised in every direction. Perhaps no clearer proof of this can be found in the fact that the leading fashionable clubs have reduced their monthly dues and now give a table d’hôte lunch for fifty cents, whilst beer is drunk instead of wine. Formerly the members of these Clubs spent five or eight dollars for a lunch, frequently more, where now they part with a humble dollar.
The question of whether the extent of the disaster was, as Bennett asserts, “intentionally underestimated by the inhabitants” has been a subject of much lively discussion in the years since. There is no doubt that city boosters wrote a good deal of hyperbolic nonsense—such as that in this section’s epigraph, about the state of the city being so “marvelous” by the following weekend. There were magazine articles and advertisements and morale-boosting performances, all fashioned along the phoenix-rising-from-the-ashes theme. San Franciscans were proud of their city, as they remain today: Any injury to the place is felt by the entire community, and there was much can-do optimism sprinkled about by civic and commercial leaders, the better to keep the citizenry content with the pace and direction of rebuilding.
But there is a good deal of evidence that some commercial companies were almost too anxious that the city—despite having been located with what seismologists would regard as wanton foolishness—should not become widely known as somewhere that was riskily earthquake prone. That it was, there was no doubt; nor is there any doubt that it remains a very dangerous city in which to choose to live today.
In 1906, however, official advocacy of new building codes and revised firefighting contingencies took second place to a public-relations campaign—not named as such but recognizable by today’s standards—that sought to prevent people from leaving, to induce would-be immigrants to continue coming, and to persuade investors that San Francisco was still the ideal place to sink uncountable sums of money.
A singular effort was launched to convince people across America and around the world that the city’s suffering was not the result of an unpredictable caprice of nature—that, in other words, its misery had not been caused merely by an earthquake. Quite the contrary: The destruction of this great imperial city was caused by fire. It was a direct consequence of the all-too-preventable carelessness of humankind, which, by its greed, insouciance, and neglect, had let the only slightly damaged city burn itself into ruin.
Moreover, the weakness of so many of the hastily erected buildings, the vulnerability of the fast-built system of water mains, and the widespread and self-evidently unsafe habit of throwing up structures on landfill—when so much solid rock was readily available—showed that humankind itself had not thought through the implications of living in a city so interestingly sited as San Francisco. There was no doubt about it: Humankind was to blame; nature was by and large exonerated.
Thus was the earthquake officially demoted, and further implications were made crystal clear: Since what had caused the crisis was the mistake of humankind, then all could be improved by humankind. Things could be bettered by a simple act of the common will. The city could be handsomely rebuilt, and anyone going to live there, or wanting to place his money there, could be assured that such a human-made disaster—since humankind had the ability to control how it arranged matters—would never happen again. Suggesting otherwise, that San Francisco had been ruined by a force of nature, was disloyal, unpatriotic, and just plain wrong.
Geologists were furious and bemused by turns. Writing two years later in the Bulletin of the Seismological Society of America (a body set up as a direct consequence of the 1906 event), John Branner said that
a major obstacle to the proper study of earthquakes [was] the attitude of many persons, organizations and commercial interests … to … the false position … that earthquakes are detrimental to the good repute of the West Coast, and that they are likely to keep away business and capital, and therefore the less said about them the better.
This theory has led to the deliberate suppression of news about earthquakes, and even the simple mention of them.
Shortly after the earthquake of April 1906 there was a general disposition that almost amounted to concerted action for the purpose of suppressing all mention of that catastrophe. When efforts were made by a few geologists to interest people and enterprises in the collection of information in regard to it, we were advised and even urged over and over again to gather no such information, and above all not to publish it. “Forget it,” “the less said, the sooner mended” and “there hasn’t been any earthquake” were the sentiments we heard on all sides.
There is no doubt about the charitable feelings and intentions of those who take this view of the matter, and there is a reasonable excuse for it in the popular but erroneous idea prevalent in other parts of the country that earthquakes are all terrible affairs; but to people interested in science and accustomed to the methods of science, it is not necessary to say that such an attitude is not only false, but it is most unfortunate, inexcusable, untenable and can only lead, sooner or later, to confusion and disaster.
The principal purveyor of this spin-doctored view appears to have been the Southern Pacific Company, which, since it owned or leased all the main railroad lines into San Francisco, had a lot to lose if the city was regarded by potential investors as having gone off the boil. The company was heavily indebted after building costly new rail lines and dams and bridges all across California. A sharp decline in its stock price in New York, where it had its headquarters, would seriously inhibit the company’s ability to service these debts.
The stock market had already been hit as a result of the earthquake. Naturally, some had made money, as some always do. The notorious speculator Jesse Livermore sold Union Oil stock short on Wednesday, some minutes before anyone else on the floor heard the news, and he made a small fortune.* But there was a more general stock market decline as well, one that went beyond a slump in prices of the locally based businesses that might be expected to find themselves in trouble. The nationally known insurance companies who were soon being pressed to pay claims as a result of the disaster had to raise lots of cash quickly, and many of them sold off holdings of blue-chip stocks, which consequently went into a steady decline for several weeks following. The Dow Jones Industrial Average, then a decade old, fell 10 percent in the month after the earthquake, worrying investors mightily.
Though there is no firm evidence that there was ever a fully fledged conspiracy—either to bowdlerize the word earthquake from the lexicon or to massage casualty figures down to more comfortable levels—it is abundant
ly clear that there were informal discussions about the problem, and the setting of a tone of rather forced jollity. Ernest Bicknell, a Chicago charity organizer who would later become a leading figure in the American Red Cross, heard something of the gathering mood when he was traveling out to offer official help on behalf of the state of Illinois. He first heard talk in the train corridors about the harm that might be done by idle chatter about San Francisco’s reputation as an earthquake-prone city. It was on the afternoon of the second day out of Chicago, as the train was weaving its way through the Rockies, that the talk began to coalesce:
As many men as possible were herded into the sleeping car for a mass meeting. After half an hour of vigorous speeches, a resolution was adopted to great cheering and entire unanimity, announced as a fact beyond dispute that the disaster in San Francisco was due solely to fire, to such a calamity, in short, as might occur in any well-ordered city and that the slight tremor which preceded the fire* had nothing to do with the tragedy beyond, perhaps, breaking gas mains or water mains here or there.
In some instances formal moves were taken. The San Francisco Real Estate Board, for example, fretted that customers might not buy houses if they thought that they would be periodically flattened. So they passed a resolution a week after the earthquake insisting that in all publications there should be pains taken to see that the phrase “San Francisco Earthquake” was replaced by “San Francisco Fire.”
In recent years there have also been suggestions that the earthquake casualty figures were made more palatable—softened, minimized, massaged—under pressure from the Southern Pacific and like-minded commercial firms. There is no evidence, once again; but the official figures, and the new calculations, are very different, and by a full order of magnitude.
William Walsh, the city coroner, issued a report that was a close analysis of the 2,195 questionable deaths that had occurred during the year from July 1905 to June 1906. Of those—which also included 343 accidents, 36 murders, 177 suicides, 11 continuing mysteries, and 1,200 deaths by natural causes—some 428 were officially classified as “deaths from shock from earthquake and fire.” For years that figure remained unchallenged. But during the 1990s a former city archivist named Gladys Hansen began to collate additional reports of deaths that occurred within a year of the earthquake and that could, in the opinion of some, be ascribed indirectly to the events of the previous April. Using this yardstick, Ms. Hansen has come up with a figure in excess of 3,000 deaths—which probably, but not definitely, reflects more accurately the toll taken by the disaster. The precise number will never be known; and it may never be proved that the Southern Pacific (which produced a book called San Francisco Imperishable) and its colleague companies ever conspired to keep the numbers acceptably low. Certainly no memorandum has ever been found, and, given the mergers within the railroad industry in the years since 1906, it is improbable, even if any exists, that such a document will ever be found.
Interestingly, the number of suicides in San Francisco dropped rather significantly in the year after the quake, from 177 to 131. Other than health problems, the principal reason for taking one’s own life in 1906—stated simply as “drink”—became one of the least common in 1907. Although twenty-four drink-afflicted men and women took their own lives in 1906, only seven people killed themselves in 1907 for this reason, just one more than the total of all those troubled that year by “love,” “jealousy,” and “business reverses.” One has to suppose the long period of prohibition had something to do with the change. “Death of sweetheart”—which was a reason for two of the suicides in 1906—quite possibly had a rather more direct connection to the quake. One assumes so, at least, because the statistical tables show that no San Franciscans died for this reason a year later.
ACCORDING TO the coroner’s report, “financial troubles” provided a common reason for men and women in San Francisco to do away with themselves in both years. In a few of these cases there is probably some connection—difficult to prove, however—with an aspect of the tragedy that still nags, even today: the number of bitter arguments that broke out between owners of buildings and businesses that were damaged during the disaster, and the attitude of the insurance companies that had written the policies designed to protect them.
The notion that, for a price, a company with great financial resources might secure another firm, or an individual person, “against pecuniary loss,” as the Oxford English Dictionary has it, “by payment of a sum of money in the event of destruction of or damage to property (as by disaster at sea, fire, or other accident), or of the death or disablement of a person” was born in the seventeenth century, in London. It was an idea that spread to America almost as soon as the colonists were properly settled and, following the establishment of the first fire insurance companies in New York and Philadelphia in the late 1750s, it has been an integral part of American capitalist life ever since.
Some might inveigh against the idea—pointing out the vast present skyscrapered wealth of modern insurance companies, agencies, brokerages, and reinsurance firms and noting with scorn and envy the mysterious web of commercial complexity that surrounds them; but few would argue that insurance companies have not, generally, had a largely beneficial effect on society. All manner of social reform occurred at the urging of those companies who decided to shoulder the risks of society’s multifarious spheres of activity. Properties were insured against fire—but only if the property owners could show that “they cleaned their chimneys regularly,” thus making fire-plagued cities rather safer. When Lloyd’s began to offer smallpox insurance at the beginning of the last century—“but only to those who were vaccinated”—it prompted people to get their shots, and the world became a little more healthy in consequence. When insurance companies inserted clauses into their policies demanding crash helmets for motorcyclists or seat belts for drivers, the traveling public became a little less vulnerable to injury, too.
The shared risk that these insurance companies assume—by way of their stockholders or their reinsurance agencies or their syndicates of underwriting “Names,” as they are called at Lloyd’s—truly is shared, as it has to be. A once-wealthy friend of mine who lives in California became a Lloyd’s Name when he had sufficient cash in his bank to do so, and always scoffed genially at the idea that from that moment on he was, theoretically, at personal risk down to his last shirt button. But the scoffing stopped in September 2001, with the World Trade Center attacks, and the heart-stopping realization that his Lloyd’s syndicate had underwritten coverage for both of the buildings and for all four of the crashed aircraft. His personal financial liability, per his understanding when he became a Lloyd’s Name, was from then on—and not theoretically but in practical fact—unlimited.
He lives 3,000 miles away from the tragedy, in a small village beside a lake, a place where crime and violence of any sort are almost unknown. But since that September seldom has a month gone by without my friend—who is now long retired, in his eighties, and living with his wife what he once imagined would be a peaceful and prosperous old age—receiving from London an urgent demand for funds. The language of each message is always the same, always spare, exquisite in its blunt delivery of pain. Kindly wire, it always begins, a quarter of a million dollars—the sum is invariably the same—for settlement of such and such a claim, by noon on this coming Friday. No ifs or buts, no excuses, no delay. And so, quarter million by quarter million, his long-accumulated wealth has been steadily drained away. He has sold all of his houses but for one modest cottage. He may have to sell this, too, and move into a rented apartment. He is now on the verge of total ruin. He seems outwardly phlegmatic, but his lip quivers when he tells his story. Yet this is what he had signed up for, he tells me; he hoped it would never come to this; but now that it has, he has no choice but to do as bidden, and it does not help matters to complain. Besides, he adds, so many others suffered so very much more.
And, very generally speaking, such also appears to have been the attitude
of most of the insurers in San Francisco in the days and weeks that followed the ruinously costly disaster of April 1906. The tone was best set by the famed British insurer named Cuthbert Eden Heath, the tall, deaf son of an admiral who joined Lloyd’s at eighteen and, in a matter of five years, began to turn the Victorian insurance industry on its head, taking on risks that no one, up to that time, had ever thought worth insuring against.
It was Cuthbert Heath who first had the idea, for example, of offering fire victims insurance against the loss of profits they might suffer. It was Heath who took Lloyd’s into the American market for risks other than the traditional shipping ventures. It was Heath who came up with the smallpox-if-vaccinated insurance plan in 1901, who in 1887 had offered jewelers policies that covered any of their diamonds that might be lost in transit, and who in 1914 would cover people against damage from air raids (their premiums becoming higher as the German bomb aimers became more skillful). It was Heath who set out the first plans for workmen’s compensation, and who in 1907 offered the first Lloyd’s policy covering American drivers and their cars—and in 1895 it was Heath who first offered, in America, insurance against damage caused by earthquake.
The message he sent to his American agents and claims representatives in the aftermath of the April 18 event was short and simple, and has passed into insurance legend and lore: “Pay all your policyholders in full, irrespective of the terms of their policies.” It was a generous offer, honored perhaps more in the breach than in the observance by some; and it came at a very difficult time for the industry.