When the Spanish first arrived in the 1770s at the Santa Clara Valley, it was heavily populated by the Ohlone. In 1777, Mission Santa Clara was built by Ohlone converts to Christianity.
In 1842, Rancho Pastoria de las Borregas was granted to Estrada and Inez Castro. Portions of the land given in this grant later developed into the cities of Mountain View and Sunnyvale. Two years later, in 1844, another land grant was provided to Lupe Yñigo, one of the few Native Americans to hold land grants. His land grant was first called Rancho Posolmi, named in honor of Posolmi village of the Ohlone that once stood in the area. Rancho Posolmi was later known as Rancho Ynigo.
In 1844, Martin Jr. and Mary Murphy left Missouri and traveled by wagon along the California Trail to successfully cross the Sierra Nevada. In 1850, Martin Murphy Jr. bought a piece of Rancho Pastoria de las Borregas for $12,500. Murphy established a wheat farm and Bay View. Murphy had the first frame house, which was shipped from New England, in Santa Clara County built. When he died in 1884, his land was divided among his heirs.
In 1860, The San Francisco and San Jose Railroad agreed to use Murphy Station and was allowed to lay tracks on Bay View. Lawrence Station was later established on the southern edge of Bay View.
In the 1870s, county property tax laws, imports and soil degradation caused wheat farming to become uneconomical in Santa Clara County. Small fruit orchards replaced the large wheat farms. In 1871, James and Eloise Dawson established the first fruit cannery in Santa Clara County. Fruit agriculture and canning soon became a major industry in the county. The invention of the refrigerated rail car further increases the viability of an economy based upon fruit. The fruit orchards become so prevalent that in 1886, the San Jose Board of Trade calls Santa Clara County the "Garden of the World".
In the 1880s, Chinese workers made up 48% of the farm labor in Santa Clara County. This percentage reduced over time after the Chinese Exclusion Act was passed. In the following decade, the 1890s multitudes of immigrants from Italy, the Azores, Portugal and Japan arrived to work in the orchards.
In 1897, Walter Everett Crossman bought 200 acres (809,000 m²) and began selling real estate. He advertised the area as Beautiful Murphy. Later, in the 1900s, real estate developer Walter Crossman described it as "the City of Destiny".
Also in 1897, Encina school opened as the first school in Murphy. Previously, children in the town had to travel to Mountain View for school.
In 1901, the residents of Murphy were informed they could not use the names Encinal or Murphy for their post office. They decided to use the name Sunnyvale for the name of their town.
Sunnyvale continued to grow and in 1904, dried fruit production began. In 1906, Joshua Hendy Ironworks relocated to Sunnyvale. The ironworks was the first non-agricultural industry in the town. Joshua Hendy Ironworks switched from producing mining equipment to other products such as marine steam engines. In this same year, Libby, McNeill & Libby, a Chicago meat-packing company, decided to open its first fruit packing factory in Sunnyvale. Today, a water tower painted to resemble the first Libby's fruit cocktail can label identifies the former site of the factory.
In 1912, the residents of Sunnyvale voted to incorporate.
Fremont High School first opened in 1925.
In 1930, Congress decided to place the West Coast dirigible base in Sunnyvale. This naval airstation was later renamed Moffett Federal Airfield.
In 1939, the National Advisory Committee for Aeronautics (NACA, the forerunner of NASA) began research at Ames Laboratory.
During World War II, the war economy began a change from the fruit industry to the high-tech industry in Santa Clara County. Joshua Hendy Ironworks built marine steam engines, naval guns and rocket launchers to aid in the war effort. As the defense industry grew, a shortage of workers in the farm industry was created. Immigrants from Mexico came to Sunnyvale to fill this void of workers.
Following the war, the fruit orchards were cleared away to build homes, factories and offices. In 1956, the aircraft manufacturer Lockheed moved its headquarters to Sunnyvale. In 1969, AMD was founded and based in Sunnyvale.
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