In 1870 San Francisco had a population of 150,000, plus 24,000 in Alameda County (around Oakland) and 26,000 in Santa Clara County (the south bay) at a time when Los Angeles only had 15,000 and Sacramento 27,000. Thousands of Chinese were scattered in the mining counties: Nevada, Placer, Yuba and Butte all had more than two thousand Chinese, and these were counties with less than 20,000 people (there were only 234 Chinese in Los Angeles).

The 1870s were a decade marked by railroad and land monopolies, and by government corruption, while the manufacturing and agricultural sectors were making the transition from sweatshop and family business to factory for mass production.

In the 1870s San Francisco (that 30 years earlier was still a tiny village) boasted a rich and powerful caste of international merchants, banking titans, mining magnates and railroad moguls, which together represented a veritable financial empire.

In 1870 the Bank of California started the City Gas Company to compete with Donahue's gas monopoly and in 1873 it evolved into the San Francisco Gas Light Company, which in 1896 would venture into electricity and yield the San Francisco Gas and Electric Company.

James Lick, who had made a little fortute in South America as a piano maker, invested in the village of San Francisco before the Gold Rush (he arrived just before the discovery of gold), got rich selling city land that had been thought worthless and bought more land in the south bay, where he established orchards, and many other places. In the 1870s he was possibly the richest man in California (and one of the most reclusive tycoons) and he donated money for the construction of the world's first mountain-top observatory with the world's largest refracting telescope, completed 12 years after his death in 1888 on Mt Hamilton, east of San Jose, and known as Lick Observatory. In 1862 Lick opened the most opulent hotel west of the Mississippi River, nicknamed the Lick House, one of the four luxury hotels that turned Montgomery Street into one of the most fashionable streets of the city (the others being the Russ House of 1862, the Occidental Hotel of 1861, and the Cosmopolitan Hotel of 1865).

In 1878 the Big Four of the transcontinental railroad formed the Pacific Improvement Company, a holding company that went on a buying spree and would eventually become one of the largest corporations of California with dozens of subsidiaries in fields ranging from mining to electric streetcars, water systems, shipping, real estate and hotels. To start with, in 1880 they built in Monterey a luxury hotel called Hotel Del Monte, and extended the Southern Pacific Railroad to Monterey (later known as the Del Monte Express), and in 1881 their Pacific Improvement Company opened a scenic "17-Mile Drive" along the coast between Monterey and Carmel.

As it expanded, San Francisco became a city of steep hills. The famous San Francisco cable-car, the first in the world, was conceived by Andrew Hallidie, an English gold miner of the 1850s who had become a bridge builder. He had the cable car built in 1873 by his German engineer Wilhelm Eppelsheimer (the Clay Street Hill Railroad). In 1882 Leland Stanford and other investors formed the Market Street Cable Railway to convert the old horse-powered lines into cable-car lines. The vogue of the cable car was short-lived because the electric streetcar was popularized in 1887 by Frank Sprague in Virginia, and in 1893 the Market Street Railway Company becan replacing the cable cars with electric streetcars powered by overhead power lines.

In July 1876, to celebrate the centennial of the USA, a blind Italian-born Jesuit priest and scientist, Joseph Neri, who had been experimenting on a lighthouse placed on the roof of the St Ignatius Church of St Ignatius College (today's University of San Francisco) using a generator imported from France (a "magneto-electric machine"), turned on the first electric streetlights of San Francisco (on downtown Market Street).

In 1879 Canadian-born broker George Roe formed the California Electric Light Company, hiring as first president James Richmond Hardenbergh (a 49er who had been mayor of Sacramento, postmaster of Sacramento and US surveyor general of California). It was the first company in the country to operate a central power station (boiler, steam engine and dynamos), located near St Ignatius church and using dynamos purchased from Charles Brush (the Ohio inventor who had improved the dynamo in 1876), and the company sold electricity to 21 privately-owned arc lamps, the first example of utility-scale distribution of electric power, three years before Edison lit up Manhattan. Unlike the East Coast, where electricity mainly served the industry, in the Bay Area and in Los Angeles electricity first came to the cities for public and domestic use. Later, electric consumer goods (such as the washing machine) would spread more rapidly in California than in the rest of the USA, creating the image of high-tech living.

The upper class of San Francisco moved to a hill called California Hill after the steep California Street. The first people to pick that hill for their homes were lawyers: Richard Tobin in 1870, James Haggin in 1871, and David Colton, chief laywer of the Central Pacific Railroad, in 1873. The Tobin and Colton houses were designed by the architectural firm of Samuel Bugbee and Son, founded by the Canadian-born Samuel Bugbee who had opened a successful practice in Boston in 1846 before moving to San Francisco in 1861. Bugbee designed the California Theater in 1869 for William Ralston, Mills Hall at Mills College in 1871, the Wade Opera House in 1876 (today's Grand Opera House), and Golden Gate Park's Conservatory of Flowers, completed in 1879 after his death. The hill became famous after the Big Four railroad tycoons moved there: Leland Stanford in 1876 (905 California Street), Mark Hopkins in 1878 (999 California, a Gothic-style mansion designed by Canadian architects George Sanders and John Wright, whose tower was the highest point in San Francisco), Charles Crocker in 1880 (1100 California Street, a mansion in the style of France's Second Empire), and Collis Huntington in 1892 (1020 California Street, the Colton mansion, built in the Palladian style). Three of the four mansions were designed by Bugbee's firm. Central Pacific Railroad's superintendent Arthur Brown supervised work on the Crocker and Stanford mansions, at the same time that he was designing the Solano ferryboat to ferry transcontinental trains to and from San Francisco, which, inaugurated in 1879, was the largest ferry in the world. California Hill became known as Nob Hill after these four "nabobs" of the Central Pacific Railroad. Some went even further west, like Faxon Atherton's widow Dominga who built her city mansion in 1881. All of the Nob Hill mansions designed by Bugbee were destroyed by the earthquake and fire of 1906.