The rich history of Los Gatos creates a demand in the heart of Silicon Valley that cannot be ignored. In the 1800's when Los Gatos was beginning, the building of the Santa Cruz Turnpike road placed it on the route of travel between Santa Cruz and San Jose. A few people became attracted by the beauty of the location and climate, and made it their home. A church was built in 1871.
The country around Los Gatos was settled more rapidly than the town itself. The history of the early settlers is found in biographical sketches. These settlers found the wildcats numerous in the adjacent hills, and very destructive to their property. This gave the name "Los Gatos" to the town. The first hotel was kept by H. D. McCobb, who was also the first postmaster, having been appointed in 1864.
The first building in thriving Los Gatos town was Forbes' Mill. The enterprise began with James Alex. Forbes, in 1850, but was not complete until 1854. It was an old-fashioned structure with overshot wheels twenty feet in diameter. Due to a lack of power, the mill was not successful in its operations. It passed from Forbes to a French firm, V. Marzion & Co., who also made a failure. A. Pfister & Co., of San Jose, then leased the property, but found it unprofitable. It then passed into the hands of Samuels & Fanner, who raised the water, by means of a dam, to a height of thirty feet. In 1866 W. H. Rogers & Co. purchased the property, raised the head to sixty feet, and substituted the turbine wheel for the old overshot. In 1870 the head was raised to two hundred feet. This gave abundance of power to all the machinery.
The Company then was made a joint-stock concern, and was known as the Los Gatos Manufacturing Company. A four-set woolen mill, two stories high, was erected and operated successfully until 1872, when it burned down and was not rebuilt. The flouring mill continued operations, changing its system, in 1883, from stones to improved rollers, and turning out a product that became noted throughout the coast for its uniform excellence.
Up to 1859 there were no houses in Los Gatos except the mill and a few cabins occupied by the workmen. In 1862 Mr. Samuels built a house, which has since been occupied by W. S. McMurtry as a residence. McMurtry & McMillan started a store and lumber yard in 1863. This store afterwards came into the hands of the Los Gatos Manufacturing Company.