
Carmel-by-the-Sea is permeated by Native American, early Spanish and American history. Most scholars believe that the Esselen-speaking people were the first Native Americans to inhabit the area of Carmel, but the Ohlone people pushed them south into the mountains of Big Sur around the 6th century.

The first Europeans to see this land were Spanish mariners led by Juan Rodriguez Cabrillo in 1542, who sailed up the California coast without landing. Another sixty years passed before another Spanish explorer and Carmelite Friar Sebastian Vizcaino "discovered" what is now known as Carmel Valley in 1602, which he named for his patron saint, Our Lady of Mount Carmel.

The Spanish did not attempt to colonize the area until 1769, when Gaspar de Portola and Franciscan Father Juan Crespi visited the area in search of a mission site. They returned one year later in 1770 to found the Mission San Carlos Borromeo de Carmelo at the southeastern edge of Carmel. The nearby colony of Monterey, established at the same time, soon became the capital of California until 1849. From the late 18th through the early 19th century, most of the Ohlone population died out from European diseases against which they had no immunity, and overwork and malnutrition at the missions where the Spanish forced them to live.

In 1821, Carmel became Mexican territory when Mexico gained independence from Spain. A Scottish immigrant, John Martin, acquired lands surrounding the Carmel mission in 1833, which he named Mission Ranch. Carmel then became part of the United States in 1848, when Mexico ceded California as a result of the Mexican-American War.

Known as "Rancho Las Manzanitas", the area that was to become Carmel-by-the Sea proper was purchased by French businessman Honore Escolle in the 1850's. Escolle was well known and prosperous in the City of Monterey, owning the first commercial bakery, pottery kiln, and brickworks in Central California.

In 1888, Escolle and Santiago Duckworth, a young Catholic developer from Monterey with dreams of establishing a Catholic retreat near the Carmel Mission, filed a subdivision map with the County Recorder of Monterey County. By 1889, 200 lots had been sold.

In 1902 Frank Devendorf and Frank Powers, on behalf of the Carmel Development Company, filed a new subdivision map of the core village that became Carmel; that village actually developed in 1904 and was incorporated in 1916. In 1910, the Carnegie Institution established the Coastal Laboratory, and a number of scientists moved to the area.

In 1905, in an effort to foster the arts, the Carmel Arts and Crafts Club was formed. After the 1906 San Francisco earthquake the village received an influx of artists and other creative types escaping the disaster area. Jack London describes the artists' colony in a portion of his novel, The Valley of the Moon; among the noted artists who thrived here were Mary Austin, Armin Hansen, George Sterling, Robinson Jeffers, Sinclair Lewis, Sydney Yard, Ferdinand Burgdorff, William Frederic Ritschel, William Keith and Percy Gray.
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