Noah Brooks, who in later years has become best known in the East as the author of "Washington in Lincoln's Time," tales of the early California days, and juvenile stories, had been chief editorial writer. He now became editor, with William Bausman and N.S. Treadwell as editorial writers. O.B. Turrell was foreman of the composing room and was very friendly to George. Indeed, he next to McClatchy had encouraged the young printer to think of advancement, and now suggested that he submit an article to the new editor. Noah Brooks tells of his side of this transaction:

"Mr. Turrell, the foreman, had come repeatedly to me to recommend a young printer as a writer, and I said that I would look at some of his work. Turrell brought an article that was in editorial form and written in neat, regular and rather small hand, with the lines far apart, on buff sheets of paper such as was used for wrapping and sending the newspaper through the mails. I glanced at the article and then read it somewhat carefully, for it showed a style and largeness of thought that made me suspect that the young man had been borrowing. So I laid the matter aside for a day or two and meanwhile took a glance over the current magazines and other periodicals, but could find no signs of appropriation. I spoke to the foreman and he said that I need have no thought of irregularity – that the young man was bright and original, and that he was entirely honest and would not think of offering another's thoughts. So I put the article in the paper.
"Turrell told me where I should find the printer who had written the editorial. That day I passed through the composing room and saw a slight young man at work at the case Turrell had named. He was rather under size, and stood on a board to raise him to the proper height to work at his case. I was not prepossessed with him and little dreamed that there was a man who would one day win great fame – as little dreamed of it, as no doubt, he did.
"I invited him to write at our regular editorial column rates, which he did for a while, continuing at the same time at his printer's case. Afterwards I called him into the reportorial department, and then, on the death of Mr. Treadwell, invited him to become a regular editorial writer. Soon after this I fell out with the president of the board of trustees of the paper, Mr. Annis Merrill, and resigned, taking Mr. Bausman with me. My quarrel was not Mr. George's quarrel, and he remained, and took charge of the paper."

As reporter of the "Times," Henry George earned $30 a week; later, as editorial writer, $35 a week; and as managing editor, from the beginning of June, 1867, $50 a week. An incident about this time showed his great tenderness for his wife. One evening word was brought that his wife, who was expecting her third child, had fallen down-stairs. The husband ran most of the way home. The doctor feared consequences. But the medicine he gave was effective, for the patient by midnight grew quiet and fell asleep. Her husband, half leaning on one elbow, half bending over her, reclined beside her intently watching, all his clothes on and with hat in hand, ready at the first unfavourable symptom to spring up and run for the physician. When the grey streaks of dawn came, four hours afterwards, the wife awoke, greatly refreshed, to find her husband with unchanged position and tense eyes regarding her. When she spoke of this he simply said that all had depended on her sleeping. The wife fully recovered from the shock, and the child, born three months later, came into the world strong and sound of body and mind, and named Jennie Teresa, after its father's dead sister and its mother's living sister, grew up into beautiful womanhood.

Henry George became managing editor of the "Times" in the beginning of June, 1867, under the chief-editorship of Dr. Gunn, well known in San Francisco political affairs in that day, and who had bought into the paper. George retained the position of managing editor until he left the paper on August 12, 1868. During the interval, besides the regular office work, he was conducting occasional correspondence with the Hawaiian "Gazette" and other newspapers, so that his income was much larger than ever before in his life. Moreover, his work was telling, making him friends and extending his influence.

But more important than anything else during the "Times" period was the preparation he was going through for his life work. This related to style in writing and development in thinking. While his style always had been free and natural, he had from the beginning aimed at compactness, and it was to the necessity of re-writing news articles and compressing them into condensed items while he was sub-editor on the "Times," that, when reviewing his life, he said he had obtained valuable practice in terse statement. The development in thought was manifested in editorials on the larger questions of the day, such as free trade, government paper money and interconvertible bonds in place of national bank notes; personal or proportional representation; public obligations attached to public franchises; and the abolition of privilege in the army.

But perhaps the most important advance in thought appeared in an article entitled "What the Railroad Will Bring Us" in the "Overland Monthly" in October, 1868, just after Mr. George left the "Times." That San Francisco periodical was then in its fourth number, having started in July of that year, and was edited by Bret Harte, who, with two of its contributors, Mark Twain and Joaquin Miller, constituted "The Incomparable Three" of lighter literature in California. Noah Brooks was one of the assistant editors and numbered in the long list of bright, original writers who made the pages of the magazine, like those of the "Californian" which had preceded it, of exceptional brilliance – the more undoubted since most of the writers were new, and all wrote anonymously. The "Overland" as originally cast did not last very long, but long enough to call the world's attention to Bret Harte's "Heathen Chinee," and other productions.

"What the Railroad Will Bring Us" was a forecast of the era of California which the operation of the then almost completed trans-continental railroad would usher in – adding enormous artificial advantages to the already great natural advantages that San Francisco possessed, and laying foundations for her rapid rise to a commercial and intellectual greatness that should not only make her mistress of all the coasts washed by the vast Pacific, but, indeed, as to population, wealth and power, cause her eventually to overtake and surpass New York and London, and make her the greatest city in the world. But, as if reverting to the question that had arisen in his mind years before when, sitting in the theatre gallery, he saw the advent of the railroad pictured on the new drop curtain[1] – the author asked, would California, with her great population and wealth, and culture, and power, have so even a distribution of wealth as in her earlier, pioneer days? Would she show so much general comfort and so little squalor and misery? Would there then be so large a proportion of full, true men?

"Amid all our rejoicing and all our gratulation let us see clearly whither we are tending. Increase in population and wealth past a certain point means simply an approximation to the condition of older countries – the Eastern States and Europe. Would the average Californian prefer to 'take his chances' in New York or Massachusetts, or in California as it is and has been? Is England, with her population of twenty millions to an area of not more than one-third that of our State, and a wealth which per inhabitant is six or seven times that of California, a better country than California to live in? Probably, if one were born a duke or factory lord, or to any place among the upper ten thousand; but if one were born among the lower millions – how then?
"For years the high rate of interest and the high rate of wages prevailing in California have been special subjects for the lamentations of a certain school of local political economists, who could not see that high wages and high interest were indications that the natural wealth of the country was not yet monopolised, that great opportunities were open to all – who did not know that these were evidences of social health, and that it were as wise to lament them as for the maiden to wish to exchange the natural bloom on her cheek for the interesting pallor of the invalid.
"But however this be, it is certain that the tendency of the new era – of the more dense population and more thorough development of the wealth of the State – will be to a reduction both of the rate of interest and the rate of wages, particularly the latter. This tendency may not, probably will not, be shown immediately; but it will be before long, and that powerfully, unless balanced and counteracted by other influences which we are not now considering, which do not yet appear, and which it is probable will not appear for some time yet.
"The truth is, that the completion of the railroad and the consequent great increase of business and population, will not be a benefit to all of us, but only to a portion. As a general rule (liable of course to exceptions) those who have, it will make wealthier; for those who have not, it will make it more difficult to get. Those who have lands, mines, established businesses, special abilities of certain kinds, will become richer for it and find increased opportunities; those who have only their own labour will become poorer, and find it harder to get ahead – first because it will take more capital to buy land or to get into business; and second, because as competition reduces the wages of labour, this capital will be harder for them to obtain....
"And as California becomes populous and rich, let us not forget that the character of a people counts for more than their numbers; that the distribution of wealth is even a more important matter than its production. Let us not imagine ourselves in a fool's paradise, where the golden apples will drop into our mouths; let us not think that after the stormy seas and head gales of all the ages, our ship has at last struck the trade winds of time. The future of our State, of our nation, of our race, looks fair and bright; perhaps the future looked so to the philosophers who once sat in the porches of Athens – to the unremembered men who raised the cities whose ruins lie south of us. Our modern civilisation strikes broad and deep and looks high. So did the tower which men once built almost unto heaven."

For this "Overland" article, seven thousand words in length, Henry George received $40. To many who have knowledge of California's progress during the past three decades a remarkable feature about the article is the prophecy of hard social conditions which have since enveloped the masses and checked – and almost stopped – the State's growth. But to others its political economy is a still more remarkable feature. For though there is in the article what he subsequently may have called a confusion of what is rent with what is interest, there is in the tracing of high wages and high interest in California to the fact that the "natural wealth of the country was not yet monopolised – that great opportunities were open to all" – a distinct foreshadowing of that formulation of the laws of wages and interest which ten years later, in "Progress and Poverty," he put in these terms – that "wages depend upon the margin of production, or upon the produce which labour can obtain at the highest point of natural productiveness open to it without the payment of rent"; and that "the relation between wages and interest is determined by the average power of increase which attaches to capital from its use in reproductive modes – as rent rises, interest will fall as wages fall, or will be determined by the margin of cultivation."

In August, 1868, Henry George left the "Times." He had asked for an increase in salary. This not being granted, he withdrew, though on good terms with and at the convenience of the management. While continuing to send remittances home, he had been able by economy during the stretch of prosperity to save a little money and to open a bank account. He now resolved to carry out the long-cherished plan of going to Philadelphia, and he sent his family East under escort of his brother, John Vallance George, who had come to California three months before – Henry George intending himself to follow as soon as opportunity permitted.

Just then Mr. George was invited by Charles DeYoung to help him develop a morning newspaper from the "Dramatic Chronicle." He was engaged to be managing editor, and at his suggestion, DeYoung made John Timmins foreman – the same John Timmins who was foreman in the Sacramento "Union" office in 1864 and had discharged George. But Mr. George's connection with the "Chronicle" lasted only a few weeks, as he disliked DeYoung's policy.

The success of the San Francisco "Times" in breaking into the press telegraph monopoly had encouraged the starting of other papers, of which the "Chronicle" was one and the San Francisco "Herald" another. There were not many important Democratic papers in the State and John Nugent's idea was to establish a good one by reviving the San Francisco "Herald," and he engaged Henry George to go to New York and try to get the paper admitted to the Associated Press, or if that should be refused, to establish there a special news service for the paper. Charged with this commission, the young man about the beginning of December started East on the overland and stage route.

"It was just before the completion of the transcontinental railroad, and I crossed the plains in a four-horse 'mud wagon.' I spent many nights sitting at the driver's side, and I was all the more impressed, therefore, when we reached the railroad and got a sleeping-car. We had to sleep two in a berth, however."[2]

He went first to his old home in Philadelphia where he found father and mother, sisters and brothers, as well as wife and children eager to welcome him. After a short season there, he engaged John Hasson, one of his boyhood friends, to go in with him, and then went to New York and made formal application for access of the San Francisco "Herald" to the Associated Press news service. Writing early in January (1869) to Charles A. Sumner, managing editor of the paper, he said:

"Nobody received me with open arms, unless I except the Peter Funks. I have made no acquaintances beyond those necessary for my purpose and not yet delivered any letters except business ones. The newspaper offices here are like big manufactories and they don't seem to be in the habit of asking strangers to take seats and look over the exchanges. The bosses come down for a few hours occasionally; the managing editors get down about twelve and leave about four or five in the afternoon; and I don't think the smaller guns begin to work as hard as those on the Pacific Coast."

Before the "Herald" business had advanced far, the active and courageous spirit of the young man manifested itself by a signed letter in the "New York Tribune" (March 5) attacking two of the great corporations in California – the Central Pacific Railroad and the Wells, Fargo Express, the former for its excessive charges; the latter for reckless treatment of the newspaper mails in the stage-coach intervals on the plains between the yet incompleted Union Pacific and Central Pacific lines. As to the Central Pacific Railroad he said:

"So far as cheapening the cost of transportation is concerned, the Pacific Railroad has, as yet, been of no advantage to the people of the Pacific Coast, who have to pay just as much as, and in some cases more than, when they relied on horse or ox flesh. There would be some excuse for this, if the road had been constructed by private means; but it has been, and is being, built literally and absolutely by the money of the people, receiving liberal aid from cities, counties and State of California, as well as the immense gratuity of the general government....
"But minor grievances sink into insignificance when the enormous political power which these great Pacific Railroad corporations can wield is considered. The Central Pacific can dictate to California, Nevada and Utah, and the Union Pacific to the States and Territories through which it passes more completely than the Camden and Amboy dictated to New Jersey, and each or both will be able to exert an almost irresistible pressure upon Congress in any manner in which their interests are involved. I don't know about the Union Pacific, but the Central already influences conventions, manages Legislatures, and has its representatives in both Houses at Washington. And it is already buying up other corporations, and bids fair to own the whole railroad system of the Pacific...."

But returning to the San Francisco "Herald," the Board of Directors of the Associated Press, after many vexatious delays, refused its service to that paper, and an independent service had to be made up. Concluding that Philadelphia would suit their purpose better than New York, Henry George and John Hasson opened their press bureau in a little coal office occupied at the time by Henry George's father, on Third Street, almost opposite St. Paul's church. Here they collected by wire from various sources their news, and dressing it to fit their California requirements, putting as much as possible in a prearranged cipher, to save expense, telegraphed it by the Western Union Company, which controlled the only route to San Francisco, at a rate fixed by a clear agreement and based upon a schedule adopted before any news war was in sight. In exchange for the full credit, access was given to the "New York Herald's" special despatches, and in this and other ways a good news service was supplied; so much better, indeed, than that which the Associated Press papers in California received that they made a great commotion inside the association, and that body urged the Western Union Telegraph Company to interfere. The latter hesitated to do so directly, but on the ground of interference with the rules, refused to allow the use of the cipher code or to receive the service from Philadelphia; and then finding that the agent of the California paper at once moved to New York and continued the service, the company took summary action by giving short notice of a new schedule of rates, which in effect increased the San Francisco "Herald's" charges, while it reduced those of the Association. The "Herald's" agent vigorously protested and was invited to call upon Vice-President McAlpine of the Western Union. In a letter of April 21, to John Nugent, the San Francisco "Herald's" owner, Henry George recounts what occurred:

"I saw him accordingly, but was informed by him that the contract had already been signed by at least the San Francisco papers [in the Associated Press] and that the thing was past remedy. I nevertheless protested with all my force, minced no words, but denounced the whole thing as a most outrageous breach of faith which had been procured by the underhand workings of a ring. I told him in very plain terms what I thought of his company and how this operation would appear to the public; that it was meant to crush the 'Herald' and would crush the 'Herald'; was meant to prevent any future opposition to the Associated Press and would do so until a new line was built; that they had virtually agreed to give a monopoly of the news business to the Association for $40,000 a year – less than they were now getting; that I could not say what you would do, but that if it was my paper I would issue my last number on the 1st of May, declare that it was killed by the Western Union Telegraph Company, who had sold a monopoly to the other papers, fill it with the history of the whole transaction and print an immense edition, which I would circulate all over the Union.
"He appeared much moved by what I said, declared that there was great force in it, but that he did not see what could be done; that he had opposed this thing from the beginning: that he had been overruled; and that though he was sorry for it, there was no use of protesting or appealing.
"Afterwards I made a written request to be heard before a full executive board. Pondering over the matter, I came to the conclusion that the case was very desperate, that the only hope of inducing them to go back was by appealing to their sense of shame and dislike of being stigmatised as a monopoly; that nothing could be hoped from their favour; and that it was useless to mince words. I, therefore, abandoned my purpose of making a verbal protest, and during that night wrote out a lengthy protest with the idea of printing it if my other efforts seemed ineffectual; and that if the instructions I expected immediately from you did not direct another course.
"By one next day (Wednesday) I got several copies and sent them in, calling upon Mr. McAlpine about 2.30 P.M.... He was anxious for me to see President Orton.... I got an interview with Mr. Orton this morning, who read the protest in my presence and seemed unable to say anything in justification.... He did not seem disposed to defend it, but said that he was sick of the whole matter; that the Associated Press had been urging this for a long time, and had been growing ugly, threatening to stop their arrangement."

But John Nugent at this crisis was as silent as the grave and gave no instructions. Indeed, he cannot be said to have given any instructions at any time since his paper started, except to get the news as cheaply as possible. The New York agent was left to act entirely upon his own responsibility. And it might have been supposed that having done all that was possible for his paper, he would consult self-interest and avoid aggressiveness, for otherwise he ran the risk of embittering all the papers in the California Associated Press against him and of winning the active and lasting hostility of the great telegraph company. But what he had in mind could be realised only by aggressive action. He wished to make the subject of telegraph service a political question. In other words, this unknown newspaper correspondent from the far Pacific Coast, unbacked by even his own struggling little newspaper, had chosen, like David, to go out and contend with the gigantic telegraph Goliath. What added to the daring of the performance was that the Associated Press people were circulating the report that the San Francisco "Herald" was on its last legs, which the silence to his private despatches seemed to confirm. But counting costs no more now than when two months before he had in the "New York Tribune" openly attacked the California railroad and express corporations, he held to his resolution to strike publicly at the Western Union. He sent his printed protest out to such of the newspapers in New York and other cities in the East as he thought would notice it, and also to Senator Sprague of Rhode Island with a letter, because of his antimonopoly views; and to the California representatives in Congress – at the same time writing to his friend Sumner, the managing editor of the San Francisco "Herald": "You will hear thunder all around the sky notwithstanding the influence of the Western Union and the Associated Press."

The "New York Herald" was about the only newspaper of influence that published the protest, and whether or not the Western Union directors cared about it, the axe fell, and the San Francisco "Herald's" telegraph news service, so long as that paper could continue to struggle on, had to be reduced to a mere skeleton.

Almost from the beginning John Nugent had been slow to make remittances, and now nearly a thousand dollars was due in New York on salaries and rent and other bills. Confident that he could be of no further use to the paper there, and leaving John Hasson as New York agent, Henry George went to Philadelphia, took leave of his family and relatives, and on May 20 started west over the Erie railroad for California. Under a contract through John Russell Young, its managing editor, he wrote several letters for the "New York Tribune," descriptive of the new transcontinental railroad, and the country through which the road passed. But though paid for, none of these articles were published, for John Russell Young left the paper soon after Mr. George had left New York, and Whitelaw Reid, succeeding as managing editor, not only withheld them, but annulled the contract, to which Mr. George, not wishing to put Mr. Young at the slightest disadvantage for his act of friendship, made no further objection than a mild and formal dissent.