California had adopted a new constitution in 1879 and the Southern Pacific corporation had started interfering in its application through a vast network of corruption. The Southern Pacific had become known as “The Octopus” (even before Frank Norris' 1901 novel "The Octopus"). John Haynes, a Los Angeles land speculator, became the leader of the anti-corruption grass-roots movement in 1900 when he founded the Direct Legislation League, advocating for direct democracy. California held a debate on women's suffrage in 1896, but failed despite the support of influential women like Phoebe Hearst (George's widow, William Randolph's mother). Resentment against the Southern Pacific and against corrupt politicians like Abe Ruef and Eugene Schmitz (famously implicated in the "graft trials" of 1905-08) kept building up, and at the same time the example of other states influenced the (male and white) electorate: several states had introduced referendums (South Dakota in 1898, Utah in 1900, Oregon in 1902, Montana in 1906, etc) and five states had already granted women the right to vote (Wyoming in 1890, Colorado in 1893, Utah in 1896, Idaho in 1896 and Washington in 1910). And so in 1910 California elected as governor the anti-corruption crusader Hiram Johnson, and in 1911 the state held its first referendums, including the one on women's suffrage which this time was approved, and 22 amendments to the state constitution were approved all at once. The "Progressive Reforms" of 1911 curbed the political power of the Southern Pacific.

Capitalism was on shaky foundations, as proven by the New York Stock Exchange panic of 1907, which can be considered the first worldwide financial crisis. Socialism percolated into the social fabric. The leader of the Socialist Party, Job Harriman, had run for governor in 1898 and was a well-respected labor organizer. The Industrial Workers of the World, founded in Chicago in 1905 and nicknamed "the Wobblies", were increasingly popular among the workers of California. San Francisco was the theater of escalating battles between the working class and the capitalists, like the streetcar strike of 1907. In 1908 hundreds of socialists marched in Los Angeles demanding free speech. And then there were intellectuals like Jack London, perhaps the first major writer born in San Francisco, who wrote the dystopian novel "The Iron Heel" (1908). The socialists were opposed especially by the publisher of the Los Angeles Times, Harrison Gray Otis. In October 1910 the Iron Workers, formed in 1896 in Pittsburgh, who had already launched a bombing campaign in other cities, blew up the Los Angeles Times building, killing 21 people. That event alone killed the socialist movement. The wobblies rallied longshoremen in San Diego in 1912 and migrant workers in the Central Valley in 1913.

Having failed in his political career, in 1913 Job Harriman founded a socialist community in the Mojave Desert, Llano del Rio, that lasted until 1918, designed by architect and feminist Alice Austin according to the "garden city" movement (Only Whites were allowed to join).

There was also a sizeable community of Indian immigrants, mostly from Punjab, and mostly Sikhs. In 1912 one of them, Lala Har-Dayal, who the previous year had been hired as a Stanford professor, but mostly a cosmopolitan Indian nationalist, established the Guru Govind Singh Sahib Educational Scholarship for Indian students, turning his Berkeley house into a hostel modeled after Shyamji Krishna Varma's house in London (another famous revolutionary in exile), and in 1913 founded a Bakunin Institute of California in Oakland, a "monastery of anarchism", dedicated to teaching the theories of the Russian anarchist Mikhail Bakunin. (Har-Dayal fled the USA in 1914 when he was about to be arrested for his anarchic propaganda, remaining a homeless revolutionary like his role model Bakunin).

Finally, in July 1916 a bomb exploded in San Francisco across from the Ferry Building during a march in favor of entering World War I, killing nine people. The war was opposed by the anarchists and so it was convenient to frame two anarchists, Tom Mooney and Warren Billings, although the evidence was entirely fabricated, but the press, led by William Randolph Hearst, had created a strong anti-anarchist (or, better, anti-pacifist) sentiment in the public opinion. It didn't help that coincidentally two famous Lithuanian-born anarchists and pacifists were in town: the legendary Emma Goldman, who had been invited to delivering lectures, and Alexander Berkman, who, after serving 14 years in prison for trying to assassinate a capitalist, was publishing in San Francisco his anarchist journal "The Blast". (Goldman and Berkman were eventually deported to Russia in December 1919 after serving two years in prison for opposing the military draft before the USA entered World War I). Then in 1917 the Bolshevik revolution in Russia further increased the fear of the revolutionaries.