El Pueblo de San José de Guadalupe (The Town of Saint Joseph from Guadalupe) was founded by José Joaquín Moraga on November 29, 1777, the first settlement not associated with a mission or a military post (presidio) in Alta California. (Mission Santa Clara, the closest mission, was founded earlier in 1777, three miles (5 km) from the original pueblo site in neighboring Santa Clara. Mission San José was not founded until 1797, about 20 miles (30 km) north of San Jose in what is now Fremont.) The town was founded by the colonists led to California by de Anza, as a farming community to provide food for the presidios of San Francisco and Monterey. In 1778, the pueblo had a population of 68. In 1797, the pueblo was moved from its original location, near the present-day intersection of Guadalupe Parkway and Taylor Street, to a location in what is now Downtown San Jose, surrounding Pueblo Plaza (now Plaza de César Chávez).
In the ensuing years a number of Mexican Land Grants were confirmed within the lands now considered San Jose. For example, the Rincón de los Esteros Grant was conferred upon Rafael Alvisa in the year 1859; the name of this rancho became the monicker for the modern redevelopment project area.
During the Bear Flag Revolt, Captain Thomas Fallon led a small force from Santa Cruz and captured the pueblo without bloodshed on July 11, 1846. Fallon received an American flag from John D. Sloat, and raised it over the pueblo on July 14, as the California Republic agreed to join the United States following the start of the Mexican-American War. Fallon would later become the tenth mayor of San Jose. It's unclear whether or not Fallon ordered all townspeople of Spanish/Mexican origin out of San Jose, as some local historians claimed.
During the California Gold Rush period, the New Almaden Mines just south of the city were the largest mercury mines in North America (mercury was used to help separate gold from ore). The cinnabar deposits were discovered in 1845 by a Mexican cavalry captain, Don Andres Castillero, when he recognized the red powder used by local Ohlone Indians to decorate the chapel at Mission Santa Clara. Mining operations began in 1847 at what was the first operating mine in the province, just in time for the Gold Rush. The importance of the mercury industry at the time explains why the local newspaper is named the Mercury News.
On March 27, 1850, San Jose became the first incorporated city in the U.S. state of California; the first mayor was Josiah Belden. It also served as the state's first capital with the first and second sessions of the California Legislature, known as the Legislature of a Thousand Drinks, being held there in 1850 and 1851. The legislature was unhappy with the location, as no buildings suitable for a state government were available in the city, and took up State Senator Mariano Guadalupe Vallejo's offer to build a new capital on land he donated to the state in what is now Benicia.
In 1881, because of a forceful campaign by editor J.J. Owen of the San Jose Mercury, the city council authorized the construction of the San Jose Electric Light Tower, ostensibly to replace the gas streetlights that had illuminated downtown San Jose since 1861. It didn't provide sufficient illumination, and by 1884 was used only for ceremonial purposes. It collapsed during the great gale of 1915. In 1989, an informal "Court of Historical Inquiry" looked into the issue of whether the Eiffel Tower was a copyright infringement of the Electric Light Tower; the Justice ruled that it was not.
In 1884, Sarah L. Winchester (née Pardee), the widow of William Winchester and heiress to the empire that manufactured the Winchester rifle, was told that the Winchester family was cursed and haunted by ghosts who were killed by the rifle. She moved from Connecticut to San Jose and began a construction project of such magnitude that it was to occupy the lives of carpenters and craftsmen until her death: the house was continually under construction for thirty-eight years. It is believed that she built the massive, bewildering house to confuse these spirits. Before the 1906 San Francisco Earthquake, the Winchester Mystery House reached a height of 7 stories; today it stands three stories with approximately 160 rooms. Many visitors to the house claim to have felt the presence of ghosts, while others claim there is no detectable presence.
The 1933 kidnapping and murder of Brooke Hart resulted in mob violence in San Jose. About 10,000 residents (approximately 1/6 of the city's population at the time) stormed the jail and lynched the two men who had confessed to the killing. The case drew international attention to San Jose, for the kidnapping, lynching, and for the praise that Governor James Rolph directed to those who participated. It is also notable as the last public lynching in California's history. Photos of the lynchings were even used as Nazi propaganda, to demonstrate that Americans were supportive of their Jewish population (the Hart family was Jewish).
During World War II, San Jose experienced racial tension in neighborhoods where large populations of African Americans, Mexican Americans and Japanese Americans lived on the city's western and eastern edges. Most of the Japanese community were removed and interned in war detention camps in the course of the war. Anti-Mexican violence based on the earlier zoot suit riots in Los Angeles took place in the summer of 1943 in San Jose. And after large numbers of blacks from the Southern states moved to San Jose's growing wartime manufacturing industry, locals were well divided but grown to accept the thousands of new residents, who happen to be black.
San Jose was a conservative Republican bastion until the 1980s, when continued population growth yielded a political shift away from the more conservative agricultural heritage still shared by most of rural California to a more urban outlook, mirroring the voting patterns of the more densely populated urban centers of Los Angeles and San Francisco. San Jose now has a Democratic majority in party registration.
San Jose lies near the San Andreas Fault; a major source of earthquake activity in California. Significant quakes rocked the city in 1839, 1851, 1858, 1864, 1865, 1868,1891 and 1906. The Daly City Earthquake of 1957 caused some damage. Most recently, the Loma Prieta earthquake of 1989 also caused some major damage to parts of the city. The most serious earthquake, the 1906 San Francisco earthquake, with its epicenter slightly off the coast of San Francisco near Golden Gate Park, devastated many buildings in San Jose. The city was still primarily rural and the population much smaller than San Francisco, so houses and businesses were not so closely built, providing no opportunity for a major fire like the one that destroyed the city up the Peninsula. The all-brick Agnews Asylum (later Agnews State Hospital) suffered possibly the worst damage in the San Jose area, killing over 100 people as the walls and roof collapsed. The 8-year-old San Jose High School's three-story stone and brick structure also collapsed, and many other buildings were severely damaged. There have been many other earthquakes felt in San Jose that cause little or no damage other than causing a "stir" around town and a few broken bottles or windows. Although most damages from earthquakes are quickly repaired, if you look closely, earthquake damage may be seen around town in the way of cracked sidewalks, raised curbs, slanted or cracked walls, patched freeway divider walls. The other faults near San Jose are the Monte Vista Fault, South Hayward Fault, Northern Calaveras Fault, Silver Creek Fault and Central Calaveras Fault.
Food Machinery Corporation (FMC) was founded in nearby Los Gatos as the Bean Spray Pump Company in 1884 and moved to San Jose in 1903. In 1941 the company received an order from the United States War Department for one thousand LVTs, bringing defense contracts to San Jose for the first time. After World War II, FMC continued as a defense contractor, with the San Jose facilities designing and manufacturing military platforms such as the M113 Armored Personnel Carrier, the Bradley Fighting Vehicle, and various subsystems of the M1 Abrams. FMC's military business would later be spun off into United Defense.
IBM established their west coast headquarters in San Jose in 1943. In 1952 they opened a research and development facility in downtown, where Reynold Johnson and his team invented RAMAC. In 1956 IBM opened its Cottle Road manufacturing facility in the Santa Teresa neighborhood, where disc drives were invented in 1962. It was sold to Hitachi, who in turn sold the property to a developer. IBM still rents two buildings on the campus. IBM moved the research and development operation out of downtown, opening the Silicon Valley Laboratories in the Coyote Valley in 1976, and the Almaden Research Center in 1986.
A. P. Hamann (nicknamed "Dutch") became city manager in 1950. At the time, the city had a population of 95,280 and a total area of only 17 square miles. Hamann instituted an aggressive growth program by annexation of adjacent areas, such as Alviso and Cambrian Park, and a program of dispersed urbanization, called urban sprawl. Hamann also spent significant time on the East Coast, selling San Jose as an ideal place for businesses to expand into. Hamann's efforts resulted in an annual population growth rate of over eight percent. When Hamann left office in 1969, San Jose had grown to 495,000 residents and 136 square miles.
The costs of uncontrolled growth—high municipal debt load, deteriorating public services (including double sessions at public schools and overtaxed fire and police services), and environmental degradation—triggered a populist revolt against Hamann's growth machine. In the late 1960s, several anti-growth candidates were elected to the City Council. Seeing the writing on the wall, Hamann retired. In 1971, Norman Mineta—who had been appointed to fill a vacant City Council seat by pro-growth Mayor Ron James but who proved to be an independent—was elected Mayor. During the early 1970s, a feminist-environmentalist electoral alliance consolidated a liberal, anti-growth majority on the City Council. In a final coup against the growth machine, voters elected Janet Gray Hayes as mayor in 1974. Since then, San Jose has been governed by a liberal-managerial regime focused on growth management, neighborhood services, and fiscal solvency.
Subsequently, the city adopted a general plan that established an "urban service area" (also known as "urban growth boundary") within existing city boundaries, limited development in the eastern foothills, and deferred growth in Coyote Valley to the south. To the west, communities such as Campbell and Cupertino had incorporated as cities to avoid being annexed to San Jose, while expansion to the north was impossible because of San Francisco Bay. The city also adopted more rigorous planning practices and a "pay-as-you-grow" system of paying for new infrastructure. However, San Jose's new policies did not stop or even significantly restrict growth; rather, they directed growth towards incorporated areas and mitigated the costs of growth. The city's housing stock and population steadily increased during subsequent decades.
Indeed, continued growth has created enormous challenges for the city and region. With the boom of the electronics industry, specifically personal computers and integrated circuits, the population of San Jose and Silicon Valley continued to grow rapidly. By 1980, the city's population was 629,442; it reached 782,248 by 1990; and at which point Santa Clara County as a whole had grown to 1,682,585 residents. Because of rapid job growth and in-migration, housing costs in San Jose and the rest of the Bay Area rose faster than the national average in the 1980s and 1990s; between 1976 and 2001, San Jose's housing costs increased by 936%, the fastest growth in the nation over that time. The average 2003 home price in Santa Clara County was approximately 330% of the national average.
In the early 1990s, San Jose and Santa Clara valley had received a heavy dose of negative press as a poorly-planned and troubled suburban community, said the November 25, 1991 Time Magazine article: How gray is my valley part of the special issue on California: The Endangered Dream. In response, the city has tried to direct growth inward and densify already urbanized areas. In 1994, the city council approved another general plan with the original 1974 urban growth boundaries intact. In 1998, city voters rejected a ballot measure that would have eased development restrictions in the foothills. Sixty percent of the housing built in San Jose since 1980 and over three-quarters of the housing built since 2000 have been multifamily structures, reflecting an orientation towards Smart Growth planning principles.