This is the United States in 1840:
Golbez, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons
At this point, California was part of Mexico, which had recently gained independence from Spain (Mexican War of Independence 1810 – 1821).
Due to the annexation of Texas by the United States in 1845, Mexico and the United States fought the Mexican-American War from 1846-1848. With the United States victorious the Treaty of Guadalupe Hidalgo was signed increasing the size of the US by 339 million acres (almost 1.4mio square km). The modern states of Arizona, California, Colorado, Nevada, New Mexico, Utah and Wyoming can all trace their roots back to this treaty.
So the sparsely populated California, essentially just a desert with Redwoods and pristine beaches became part of the United States on 2nd February 1848. Less than two weeks before this momentous treaty was signed, gold was discovered in California.
The Carpenter and the Miller
In the tiny town of Coloma, California, on the American river a carpenter of English descent by the name of James Marshall, was employed by a German-Swiss immigrant to build a water-driven sawmill.
Every morning during the construction, Marshall inspected the water below the mill. The ditch that had been planned to drain away water from the waterwheel was insufficiently wide and not deep enough to operate effectively. Thus, Marshall decided to use the natural flow and power of the river to enlarge the ditch. This was done overnight to protect the builders during the day.
One morning, on examining the effects of the overnight water flow, Marshall’s eye caught the glint of the reflection of what appeared to be flecks in the river. As he recounts in the H.W. Brand’s “The Age of Gold”:
Marshall, perhaps surprisingly, immediately shared his discovery with Sutter, who asked, “What is it?”:
The secret was out. Gold had been discovered in California, and the speed of events would overtake both men. Despite their discovery, neither man would go on to profit from the impending gold rush.
Gold! Gold! Gold from the American River!
Back then, of course, news travelled at a more genteel pace. Yet, by March, the news had reached the press, though not as smoothly as one would expect.
Samuel Brannan, a businessman and journalist, had founded the newspaper “The California Star” in San Francisco in 1847. Just over a year later, employees from Sutter’s Mill walked into one of Brannan’s stores and paid for goods with gold they had found. His paper could not publish the story for want of employees who had abandoned their posts and scurried away to prospect for their fortunes on hearing the news!
Instead, Brannan decided to take advantage of the fact his store was the only store between San Francisco and Sutter’s Mill. He bought up every shovel, pick, hammer and every other implement possible that could be sold to potential prospectors. Famously, he then ran down the streets exclaiming “Gold from the American River!”. Brannan would become one of the richest men of the early stages of the gold rush, not from the gold itself, but from the services and goods he offered to the newly arrived prospectors.
The Californian Gold Rush had begun.
By August, the East Coast newspapers had picked up the story, and by December even the US President, James K. Polk, put on the record in Congress what everyone already knew. There was gold in California.
“The accounts of 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.”
The consequences were tremendous. San Francisco, a tiny town, if it could even be named as such, grew from a population of 200 in 1946, to 1,000 in 1948, to 25,000 in 1950, to 150,000 in 1952. California’s population rise was just as dramatic.
From the East Coast, Europe, South America, and even Asia, approximately 300,000 people travelled to the whole of California in search of their fortunes. Some traversed the continental United States on sometimes arduous routes such as the Oregon or Californian trails. Others took ships, either sailing around the Americas, via Cape Horn, or stopping in Central America and traversing to the Pacific Coast by land, before continuing their voyage by sea once again. Voyages could take up to six months. Some of these prospectors were named “49ers” after the year they arrived. The US American Football team, the San Francisco 49ers is named after these hopeful miners.
Arriving in California, there were few signs of formal government or rule. California only became a state in 1950 and thus there were few laws and little to enforce those that did exist. In essence, the early years were a free for all. Some attempts were made to enforce Mexican mining law, but most disputes were settled personally and sometimes violently.
The effects of the Californian Gold Rush reverberated not just in the state itself, but around the world, and were long–lasting.
The migration to California was one of the largest in US history. This created a boom in support services and goods for the immigrants, as well as buildings and infrastructure. This boom undoubtedly led to the acceleration of California’s rapid rise to statehood. Even though gold production peaked in 1852, many of the migrants stayed and settled. This created the requisite population, as well as entrepreneurial spirit and drive, that helped California become one of the richest areas of the planet today.
The investment in infrastructure made a huge and lasting impression on the economic fortunes of California. Set within the context of the Industrial Revolution, significant strides were made in technology, facilitated by the newfound wealth from California, which created multiplier effects around the world.
With such a large population to feed many entrepreneurs turned their attention to the soil, rather than the rock, to made fortunes and industries in agriculture. California’s climate was perfect for an entire array of wine, fruit and vegetables, many of which would be exported.
As gold became harder to find by traditional, single person methods of panning, so the industrialisation of the industry occurred. The Gold Rush helped developed new mining technologies as production from firms increased. Hydraulic mining was developed in 1953, and while far more efficient the environmental degradation that it produced was severe.
Dams, and hydraulic mining caused environmental havoc, the effects of which can still be seen today. Sediment from hydraulic mining blocked lakes and clogged riverbeds leading to conflicts between agricultural and mining interests. Rivers were diverted and the logging industry, producing much–needed timber for the new population, meant significant deforestation occurred.
For the people who emigrated, the era of lawlessness could be dangerous. As the University of California explains:
The Gold Rush era was marked by lawlessness: duels, murders in broad daylight, public hangings, jail breakouts, and vigilantism were everyday occurrences.
Native Americans suffered greatly. They were pushed from their land, murdered or starved as access to their lands and crops was restricted. Toxic chemicals from mining industrialisation destroyed some of their natural fishing and hunting habitats. Massacres were commonplace.
Economically, the demand from California meant that goods from all over the world arrived. Both the newly found gold and economic activity helped stimulate global demand already boosted by the Industrial Revolution. Approximately 10 million troy ounces of gold were extracted worth roughly USD19 billion at today’s prices. The effect on the Californian and the world’s’ economy was far greater.