Hyperloop defines LA as a transportation industrial city

Howard Marks
Raising the Entrepreneurial Boom
3 min readOct 17, 2016

From 1876–1887, the Southern Pacific Railroad had a transportation monopoly in Los Angeles and the surrounding territory. The railroad, which owned a significant portion of the land surrounding the tracks on either side, successfully used its influence to force down land prices and drive speculation, thus spurning a massive migration to the southwest. Armed with similar land grants, in 1887, the Santa Fe Railroad established Los Angeles as the terminus for its western route. The two railroads began a fierce price war, dropping ticket costs for cross-country trips, thus throwing fuel on the migration fires. With an influx of population and capital, the land was transformed literally overnight. Irrigation lines were drawn and new towns built every day. The railroads promoted Los Angeles as the city for a healthy future due to its “Mediterranean” qualities; the land not already cordoned off for new cities became citrus groves. A new agricultural center, Los Angeles was poised to come into the 20th-century as a powerhouse.

But the economy collapsed in 1893, the railroad bubble burst, and much of the capital that was set aside for the growth of Los Angeles dried up. Nevertheless, the topography of the land was forever changed.

In August of 2013, Elon Musk released his alpha design of the Hyperloop, the “5th mode” of transportation (following planes, trains, automobiles, and ships). Representatives of the California State Assembly are moving forward with a $68 billion high speed train, the majority of which will be researched, developed, and assembled outside of the state. This train will connect Los Angeles to San Francisco in five hours, a remarkable feat, but still slower and with higher ticket prices than flying. Polls show a majority disapproval of the project, and the experts can already see a future mired in land acquisition difficulties, construction impediments, and costly environmental studies.

At the time the railroads were first brought to LA, it was the fastest means of transportation. Their transcontinental construction was a driving factor in the settling of the United States and moved millions of people across this nation. But at the time they were built, the companies were chartered with land grants from Congress delineating their tracks. The only way they were able to do such aggressive building and nation expanding was precisely because they received the full backing of the government during a time when there was no such thing as a populous west. The prospect of a Hyperloop, even with all the difficulties inherent to the project (and I will be the first to say that there are many of them), would drop the commute time between SF and LA to about 30 minutes, and every city linked within 1,000 miles. And you know what? I bet in the time it takes to design, get through all the legal problems, and then finally build the high-speed train (which will no doubt cost more than the initial $68 billion proposed), Musk’s hyperloop could be finished, and LA could again move into yet another booming area of the economy. The railroads revolutionized California more than 100 years ago, but they won’t bring that same sweeping change again. Rather than rest on our haunches, California should follow the Los Angeles model and push as many new technologies into development as possible. It could only help balance the deficit.

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Howard Marks
Raising the Entrepreneurial Boom

CEO at StartEngine and co-founder at Activision/Blizzard. Raise capital with equity crowdfunding on www.startengine.com