Background History of the California Gold Rush

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The real story of the California Gold Rush has to be traced back to the Mexican War, which was fought from 1846 to 1848. The war started out as a dispute over Texas. However, under the Treaty of Guadalupe Hidalgo, America ended up not only with Texas, but also Nevada, Utah, Arizona and California.

During this time period, the country was expanding and its transportation improving. Once gold was discovered in California, waves of fortune-seekers, also known as 49ers (because they came during 1849), came from all over the world to California, thus drastically impacting both the economy and social life of California, which in turn impacted the rest of the nation. Even though few of the 49ers actually made a fortune from mining gold, many found other ways to earn a living, especially once the gold became scarce and xenophobia emerged. Nonetheless the incredible number and diversity of people who came to California seeking an easy fortune influenced Californian and American life.

John Sutter, on whose lands the gold discovery had occurred, moved to California from Switzerland in 1830 and obtained a property charter from the Mexican government. During this time, he established a fort at New Helvetia, at the junction of the American and Sacramento rivers. He strove to build an agricultural empire, but the gold discovery was the beginning of the downfall of his dream. Along with James Marshall, Sutter located gold at his mill in 1848.

It may seem odd that James Marshall and John Sutter were quite displeased upon testing the gold and confirming its identity. But Sutter was barely interested in profits to be made from the discovery; his original plan was to establish an agricultural powerhouse, and he stuck to it. He was afraid, however, that if news of the discovery leaked, his workers would abandon him and try to make a profit of their own from the gold fields. He also feared the competition over land and resources that would ensue if a massive rush of immigrants came to California to seek gold. Thus, he and Marshall agreed to keep the discovery secret until the mill’s completion, so that Sutter would retain the manpower necessary for the job.

Stories circulated the countryside within weeks. However, they were all too often dismissed as wild rumors, until they caught the ears of a new and ambitious Mormon immigrant, Samuel Brannan. Brannan immediately sensed immense riches in store from the potential gold boom, and keenly bought most of the picks, pans, and shovels in California at extremely low prices. Then, after he established a colossal stockpile, he ran through the streets of San Francisco, holding up gold, and shouting “Gold, gold in the American River!” He provided enough empirical evidence to be believed and trigger a massive inflow of immigrants as the news spread east. In just the next nine weeks, by selling mining equipment at prices far higher than his costs, he made $36,000.

Gold Seekers’ Journey Westward During the 1849 California Gold Rush

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The journey westward during the 1849 California Gold Rush was an arduous ordeal for many. As news of the 1848 discovery at Sutter’s Mill spread, people all over the United States were allured by the prospect of gold, but the pathways from the population centers of the East Coast to California were few and arduous. Two essential choices for forty-niners, the first wave of Gold Rush immigration in 1849 were an overland journey across the 2000 mile stretch of yet unsettled land in between, or a sea route around Cape Horn in South America.

The sea route, preferred by gold seekers from the Eastern states, would often take about six months. It was not a pleasant journey, either. Seasickness and spoilage of food and water were omnipresent.

Some time later, a third route was thought up, though not any less perilous than the other two. Migrants sailed as far south as Panama, disembarked, then made 3-day trip by mule and canoe across land to the Pacific side, where they boarded another ship. Tropical diseases in that part of the world were devastating. Malaria and cholera claimed many lives. Lieutenant Ulysses S. Grant, when journeying to California in 1852, wrote that a third of his regiment was killed or incapacitated by these afflictions. To add to the problems, ships to ferry the immigrants up to San Francisco were rare, and the travelers would often end up being stranded in Panama for months.

Over land, a favorite route of immigrants from the Central states was the Oregon-California Trail, a well-worn path carved out several years earlier by fur trappers. This overland road much shorter than the sea route, but not faster. Its travelers would go for six months by covered wagon through desolate landscapes with scarce supplies of water. The Native Americans along the way, whom many xenophobic settlers initially feared, actually turned out to be helpful, providing supplies, information, and guides. The occasional entrepreneur in the area would also capitalize on the scarcity of water by selling it at prices as high as $100 per drink. Supply and demand worked even in the desert.

Because travelers reached California successfully did not imply that their journey was over. Gold was further inland near Placerville, far from the port of San Francisco where the ships docked. Some travelers were also repulsed upon reaching San Francisco by the sight of numerous bars, gambling places, and saloons, all sites of licentious life that had been taboo in the East. Additionally, many immigrants explored the Sacramento River and its delta for new gold sites to mine.

Key Figures in the California Gold Rush: John Sutter, Richard Barnes Mason, William T. Sherman, and Ulysses S. Grant

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The 1849 California Gold Rush was a magnet for ambitious personalities: individuals who would later rise to extraordinary heights in American politics, military, and economic life. The Gold Rush ruined the great landowner John Sutter but served as a testing ground for Richard Barnes Mason, Ulysses S. Grant, and William T. Sherman.

John Sutter was, as he had predicted, economically destroyed by the inpouring of gold seekers into California. His ambitions for an expansive enterprise were ruined by the desertion of his laborers and by squatters overrunning his lands after the discovery of gold. Sutter never extensively attempted to benefit from the Gold Rush, except for one half-hearted expedition which he abandoned almost upon arriving at the gold fields. His losses were never officially compensated.

Another key person in Gold Rush history was Colonel, later General, Richard Barnes Mason, who served as the fifth military governor of California from 1847 to 1849. Governors were changed with extreme rapidity during that time period, but Mason served on his post the longest. He was an astute observer who toured the gold fields with his assistant, Lieutenant William Tecumseh Sherman, and reported to Washington first-hand observations of the social and economic conditions in the state. His writings are an excellent primary source for understanding the Gold Rush phenomenon.

Sherman, the Sherman who would become an infamous Civil War general, wrote down his observations in his memoirs. Quite unexpectedly, he became a banker for Lucas, Turner & Co. in September of 1853, and oversaw construction of “Sherman’s Bank,” a building so durable and finely engineered that it still stands in California today.

The California Gold Rush seemed to be a magnet for future great generals. Ulysses Grant, upon arriving in California, also wrote detailed notes for his memoirs. His own experiences however, were not to be as glorious as his later life. Grant struck a deal with his troops to start a potato growing business, which failed miserably.

Grant’s financial failure happened because hundreds of other entrepreneurs got the same idea at the same time. So many potatoes were grown that season that everybody had enough for themselves, and no one wanted to buy any. So Grant and his troops ended up eating a lot of what they grew and letting the rest rot away. As for Grant himself, put simply, he had a drinking problem, which would notoriously feature in his later life. In 1853, he was discharged from his regiment and sent home, though he conveniently omits this fact from his accounts.

Economic and Cultural Leaders During the 1849 California Gold Rush

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A number of America’s future economic and cultural leaders began their rise to prominence during the 1849 California Gold Rush. Among them were such individuals as Mark Twain, Sam Brannan, Levi Strauss, Phillip Armour, John Studebaker, Henry Wells, and William Fargo.

The Gold Rush was the proving ground for Samuel Clemens, the future Mark Twain. He came to California as an absolute unknown and took a job at the San Francisco Call, one of the two newspapers in the city at the time. He distinguished himself before the world in a rather unorthodox manner, writing a story about a local frog-jumping contest.

As for Sam Brannan, the great businessman who first spread news of gold’s discovery in California, he became the richest man in California without once mining the gold himself. He outmaneuvered the market many times through his publicity skills and adept purchases, eventually owning much of downtown San Francisco and even printing his own currency. Brannan was also disgusted with some of the racist, nativist miners’ oppression of foreigners and new arrivals in the state. He often broke up ethnic clashes and defended the rights of immigrants against the typically racist-slanted legislature. Why did Brannan care about the plight of working immigrants? The simplest answer is that foreigners were a large portion of his customer base, and the more miners were in the business, the more Brannan would profit. The market, and its most skilled representatives, are blind to irrational prejudices of race and nationality.

Levi Strauss, the future inventor of blue jeans, was known during the Gold Rush as a dry goods salesman and tent maker. In 1853, he made what he called “canvas pants” out of tent fabric especially for miners. These gained widespread popularity and earned Strauss a fortune.

Another great businessman who got started during the Gold Rush was Phillip Armour, who came to Placerville, California and opened a meat market there. Later, he moved back to Indiana with his profits and founded the gargantuan Armour Meat Packing Company.

Moreover, John Studebaker, a wagon manufacturer, established a firm in California to provide transportation to Oregon pioneers. It would expand to become a major car producer during the first half of the twentieth century.

Finally, Henry Wells and William Fargo offered a stable, honest banking, transportation, and mail delivery system to miners, something that the uncertainty-faced miners desperately needed. Their venture would also soon expand to a nationwide level.

California’s Colossal Economic Growth During the 1849 Gold Rush

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The economy of California grew at a phenomenal rate during the days of the 1849 Gold Rush. Much of this growth was made possible by the laissez-faire economic policies of Governor Richard Barnes Mason.

Prices rose dramatically as more people found gold and gold became widely circulated on the market. Seeing that customers would afford it, merchants raised their fees on all sorts of commodities, from real estate to food to transportation. A miner in California may have made about six to ten times as much as his eastern counterpart, but he also had to pay about that many times more for his upkeep.

The following concrete illustration of this trend is useful: a plot of San Francisco real estate that cost $16 in 1847, sold for $45,000 just 18 months later. Imagine investing in real estate during that time period.

The city of San Francisco grew from an isolated village to a thriving city in the five or so years of the Gold Rush. Its population rose from 1000 in 1848 to 35000 in 1850. This contributed dramatically to California’s admission to the Union as a state in 1850. 30 new houses and 2 new murders came about every day. Theaters and newspapers were built and prospered, and eventually only London would have more newspapers than San Francisco. Wages rose with the general standard of living, and great economic expansion and demand for jobs made employment readily available.

The California agricultural boom was another significant economic result of the Gold Rush. Many of the forty-niners and later immigrants contributed to the growing demand for food. Initially, this was satisfied by imports from merchants as far away as Chile or as nearby as Oregon. However, gradually the capacity was developed to grow the food in California itself. Machines were imported into the country to equip an efficient farming industry, and eventually wheat was exported from California to other parts of the U.S.

This phenomenal economic growth was made possible by Governor Richard Barnes Mason’s laissez-faire approach to the economy. Mason recalled of his administration: “I resolved not to interfere, but permit all to work freely, unless broils and crimes should call for interference.”

During the military period, when California’s future within the United States was still uncertain, as it was not yet a state, and governments changed with great frequency, no political factions could emerge to attempt to regulate and restrict the economy. The courts were based on the Anglo-Saxon model, which stressed property rights and the rights of the accused, though occasional acts of “vigilante justice” did occur. The government was highly limited and mainly acted as a second line of defense against crime. People fended for themselves mostly, and did surprisingly well. Unlike the cities, in the mining camps, crime rates were extremely low, lower than even in the relatively peaceful Eastern cities, mainly because almost every miner owned a gun. The principle of “more guns, less crime” was clearly demonstrated there.

Immigration to California During the 1849 Gold Rush

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The Gold Rush resulted in massive foreign immigration to California from virtually every area of Europe, Asia, and the Pacific. At first, immigrants were accepted by almost everyone, as land, gold, and other resources were plentiful. As those resources became less abundant, however, a minority of white racists played on miners’ fears of foreign competition and came to dominate the legislature, setting up barriers to foreign immigrants. While some immigrants left, many others persisted, and set the stage for the vast cultural diversity seen in California today.

During the 1849 Gold Rush, California’s government was tolerant toward all immigrants under the laissez-faire military administration of Richard Barnes Mason. But as soon as the civilian legislature came along in 1850, a minority of racist white miners, who feared competition with foreign immigrants, influenced the government to abandon laissez-faire and institute the Foreign Miners Tax.

This $20 monthly fee from every foreign miner was intended to “protect” American miners from foreign competition. It was a disaster and was repealed a year later, as many foreign miners quit their careers and crowded the cities, jobless and penniless. Some did not give up and spread into other fields of business, having thus defended their individual rights against the bigoted government.

Mexicans had comprised much of California’s population before the Mexican War. The war unseated them from a dominant social position and many came to the mines, seeking to regain lost wealth and status. Tensions between Mexican miners and racist/nativist interests escalated into the 1850s. An example would be the attempt by racist miners, supported by politicians from the East, to drive Mexicans out of the Calaveras and Tuolumne counties where the Mexican miners had claimed land.

The Chinese migrants to California would shape the state extensively. Once again, the Chinese encountered animosity from racist miners and the legislature. Nevertheless, their industry and persistence enabled them to find jobs as cooks, cigar makers, restaurateurs, vegetable farmers, fortune tellers, and merchants, found temples, gambling halls, theaters, and laundries, and become key contributors to the agricultural boom. Many of them planted crops or built levees.

Women and African Americans also found a new home and opportunities in Gold Rush California. In both conventional and unconventional economic roles, they defied constricting Eastern stereotypes and met with great financial success. As for African-Americans, though many came as slaves, they bought freedom with gold and those already free used gold to free families, fight discrimination and start newspapers, schools, and churches. Upon its admission to the Union, so many were free and economically active that slavery was prohibited in the state.

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