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The History of the California Gold Rush

On January 24th, 1848, James Marshall discovered gold in the tail race -- water exiting a mill stream used to power the mill wheel -- of the new lumber mill in the mountains east of Sacramento California. Had it not been for his partner John Augustus Sutter's tremendous ongoing demand for milled lumber for his fort in Sacramento, Marshall would have never setup the lumber camp or built the mill that caused the discovery of gold in California.

Sutter, an immigrant from Switzerland, was developing a large fort and agricultural colony (commune) where the American and Feather rivers merge near Sacramento. He named the area "New Helvetia." As part of his ambitious developments in New Helvetia, Sutter developed "Hock Farm," one of his larger holdings, on the banks of the Feather River. The Hock Farm, the fort and the surrounding colony demanded lumber, and lots of it. So he also built a saw mill and a flour mill on the American River.

Sutter went into partnership with Marshall and directed him to build the saw mill in the Coloma Valley, 150 miles from Sacramento. The mill and the town that grew up around it were to provide wood to meet the growing building needs of both the fort and the surrounding colony. Given that the lumber needed to be cut into planks for easier transport and various construction applications, it made economic sense for Sutter and Marshall to develop a mill rather than try to have laborers hew the required amount of lumber by hand. Marshall built the mill and a raceway -- which provided the water that turned the mill wheel -- on banks of the South Fork of the American River (named as such by the Mexicans in the area so that the Indians could distinguish between the Canadian-held lands and those held by the new American settlers).

Marshall set up the mill and when he first tested it, found that the race was neither wide nor deep enough for the outflow of water that turned the mill wheel. The water backed up and stopped the mill wheel from turning. He ordered his crew to rework the race so that the water flowed properly. He was surveying the worker's progress on the race and noticed small strange colored stones. He picked one up and quickly realized that it was not stone he was looking at, but rather metal. He suspected it was gold and tested it by having the wife of one of his workers, Mrs. Wimmer, boil it in a pot with lye soap. When the nuggets didn't discolor or melt, he knew he had found gold.

Marshall and Sutter tried to keep their discovery a secret. However, five Mormon workers were present when Marshall made his discovery. Word quickly spread to other Mormon workers building the flour mill for Sutter just downstream from the saw mill. Soon the Mormon workers were panning for gold, successfully, in their free time.

The news of the discovery of gold traveled fast through the Mormon community. Sam Brannan, an elder in the Mormon Church and owner of the California Star Newspaper in San Francisco, paid a visit to the Mill and the richer "diggins" (a term used to refer to all forms of mining operations) at Mormon Island on the lower American River. Brannan promptly set up stores at both locations anticipating the hordes of miners he expected would soon arrive and need to purchase supplies.

On May 12, 1848 Brannan walked the streets of San Francisco holding a bottle of gold nuggets in the air proclaiming, "Gold, gold, gold from the American River." San Francisco became a ghost town almost over night as most every resident -- around 800 at that time -- headed for the gold fields. Marshall may have discovered the gold, but Brannan created the rush.

Those already living in California were able to prospect immediately. Only a handful of people came west when word of the discovery reached the east coast in April of 1848. However, all that changed when president James K. Polk told the country in his State Of The Union Address on December 5th of that year -- 11 months after Marshall's discovery --that, "The accounts and abundance of gold are of such an extraordinary character, as would scarcely command belief were they not corroborated by the authentic reports of officers in the public service." Gold fever spread around the world and in 1849 more than 90,000 migrants looking for easy riches arrived in the California Gold Country seeking to share in the wealth. These migrants would be referred to as 49ers. They came from the United States but also from Australia, Chile, China, England, France, Germany, Ireland, Italy, Mexico, Panama, Peru and the Sandwich Isles (Hawaii).

Most of the 49ers were only able to scratch out a subsistence living from their efforts. Many became ill from the harsh working and living conditions in the gold fields and mines. Panning and sluicing for gold, which were the most common forms of mining, required standing all day in the ice-cold rivers formed by runoff from the melting snow caps of the Sierra Nevada Mountains. The miners were constantly wet and cold. They also exhausted themselves by moving and sifting tons of dirt and rocks to find the small deposits of gold. The sun beat down on them during the long hot summers in which temperatures would exceed 110 degrees regularly. Many miners wrote of long bouts of "Poison Oak Illness," which in reality was pneumonia. So many died prematurely. It is amazing to consider that the average age at death for a 49er was 23 years young. Those that survived proclaimed that they had "Seen The Elephant" and returned home penniless.

That isn't to say that no one profited from the Gold Rush. In addition to the few mine operators who became wealthy, the merchants who sold the miners food, clothing and supplies were the big winners. In fact, women were among the most successful with their ventures -- operating restaurants, hotels, bath houses, bars and laundries. It seems that the miners -- who were mostly men -- believed that washing cloths was "women's work" and was beneath them. It was common for these men to send their clothes to Hawaii and even China to be cleaned creating an opportunity for enterprising women to make a killing. And they did. It was common for a good meal in the Gold Country to cost as much as $10.00 in 1849 -- which in today's dollars would be equal to $1,000 -- making operating a restaurant a highly profitable business. (And we heard stories of the $10 slice of pie!)

Given that women made up a paltry 10% of the Gold Country population at the time, there were lots of opportunities for these women to make significant livings. In fact it is a myth that the only women working in the Gold Country of 1849 were prostitutes. Many of these women were in fact the bread winners in their families while their husbands, high on gold fever, labored at diggins finding nothing and squandering the earnings of their wives.

Marriage was another way for women to acquire wealth. Being vastly outnumbered by men, they ladies of the Gold Rush era had their pick of husbands. When a man came along with more gold in his pocket than her current spouse, it was not uncommon for a women to divorce her mate and marry the richer suitor. This where the term "Gold Digger" originated. Divorce rates were astronomical, approaching 80%, blowing the concept that only modern marriages fail. To learn more about the women of the Gold Rush read They Saw The Elephant, Women In The California Gold Rush and Daughter Of Joy, A Novel Of Gold Rush San Francisco, by Joanne Levy

Some who made fortunes during the Gold Rush, but not necessarily because they found gold -- became household names. Levi Strauss made rugged cotton clothing for the miners. Italian Domingo Ghirardelli came to the Gold Country by way of Peru. After taking his chances at panning for gold with no luck, Ghirardelli opened a store in Hornitos, California. When it closed in 1852, he went to San Francisco to begin producing his now famous chocolate. Henry Wells (founder of Wells & Company) and William G. Fargo (Livingston & Fargo, and Butterfield, Wasson & Co.) joined forces to form American Express. When they moved west in the early 1850s they formed Wells, Fargo and Company famous for their stagecoaches and now one of the nation's largest banks. Rowland H. Macy left Boston in 1850, where he had been involved in several unsuccessful businesses, several of them small retail stores. When he came to California he opened a retail store in Marysville where he was no more successful than in Boston. He returned east in 1858 to open a small fancy dry goods store in New York City and finally had his success. Today, Macy's is one of the world's largest retailers.

Surprisingly two people who failed to capitalize on the Gold Rush were Marshall and Sutter. Even though Marshall was credited with the discovery of gold, he never did profit from it. For a number of years he prospected for gold unsuccessfully. In the 1850s he lived in a cabin on a hillside above Coloma, which later burned down. He planted a vineyard and worked as a carpenter. In the early 1870s he operated a blacksmith shop in the town of Kelsey. Marshall, in his later years, lived in a small room at the Union Hotel in that same town. He worked two small claims, the Gray Eagle and the Big Sandy, and sold his signature on cards for ¢.25 to the curious who sought him out for advice on prospecting until his death -- a penniless and bitter man.

In a way Sutter fared even worse than Marshall. Sutter was building up his colony and holdings when gold was discovered. Sutter's dreams were destroyed in the crush of 49ers coming west. Sutter wrote in a letter in 1857, "By this sudden discovery of the gold, all my great plans were destroyed. Had I succeeded with my mills and manufactories for a few years before the gold was discovered, I should have been the richest man on the Pacific Shore. Instead of being rich, I am ruined." Prospectors occupied his lands and he was unable to evict them. He left his fort and lived for a few years in his "Hock Farm" before moving to Litiz, Pennsylvania. He spent the rest of his life, traveling to Washington D.C. petitioning Congress for restitution for his losses.

On September 9, 1850 California became the 31st state in the Union. The Gold Rush ended around 1856. More than 90,000 people made their way to California in the two years following the discovery of gold, and by 1854 more than 300,000. Between 1848 and 1856 about 465 million dollars worth of gold was taken from the ground. 10 million dollars worth of gold was found the first year. Over the remaining years of the California Gold Rush, 40 million to 60 million dollars worth were found each year.