You'd think that finding gold on your property would mean the end of all your troubles. But for John Sutter, it was just about the worst thing that could have happened. In the 19th century, Sutter was an entrepreneur and owner of a large tract of land in Coloma, California. He hired a carpenter named James Marshall to build a water wheel for a mill on his property. Then in 1848, Marshall discovered flakes of gold in the river.
Although the two men tried to keep the find a secret, they failed miserably. The news spread like a modern California wildfire. Especially after an enterprising gentleman named Sam Brannan paraded around carrying a vial of gold and announcing the whereabouts of the new discovery. He himself didn't go prospecting. He knew of a smarter way to make his fortune, as we shall see.
In just four years — by 1852 — Sutter would be bankrupt, his property overrun and his livestock stolen by avaricious prospectors. It's hard to exaggerate the enormity of the gold rush's demographic impact on California. In a few short years, it transformed from a sparsely populated, newly acquired territory of the U.S. to a fully formed state with a thriving economy. Between 1848 and 1849, the influx of settlers exploded from just 400 to 90,000.
History of the California Gold Rush
To accommodate the flood of '49ers (as these new, would-be gold miners were called), gold mining towns sprung up all over. Shops, saloons, brothels and other businesses set up in these towns to serve the '49ers and make money of their own. Chaos and disorder were common, as were gambling, prostitution and violence. San Francisco became the center of the booming new economy.
But seen from other angles, the gold rush was not a happy event. In particular, for the indigenous peoples who lived there, it was an unmitigated disaster. Thousands of new immigrants pushed the native populations off their land, depriving them of their hunting grounds. Violent confrontations broke out and the newcomers slaughtered as many as 16,000 of California's first peoples in what amounted to state-sanctioned genocide.
The vast majority of the early gold rush immigrants were men, or at least they appeared to be. In fact, there were numerous instances in which women dressed as men. "This phenomenon was so common in gold rush California that when a newspaper photographer advertised for a 'lad' to help him, he was compelled to specify that 'no young women in disguise need apply,'" Clare Sears, associate professor of sociology at San Francisco State University, says via email.
Meanwhile, the mining camps were populated almost exclusively by men, or at least by people dressed as men. At camp dances, this led to a cross-gender practice. "Several men became women for the night, wearing a sackcloth patch to indicate their new gender," Sears says.
Who Got Rich?
Many prospectors did well at first. There was a lot of gold to be found. There are estimates that over the course of the gold rush 1,750 pounds (793.7 kilograms) of the buttery metal were unearthed. But few people were able to hold on to their newfound wealth. Life in a boomtown was notoriously expensive and there were so many ways to lose what you'd found — alcohol, brothels and gambling being the chief enticements.
Still, there were a few characters who got rich and stayed that way. One of them was George Hearst, the father of publishing magnate William Randolph Hearst. By the time he died, George Hearst was worth $19 million, but interestingly he didn't prospect for gold when he arrived in California. Instead, he mined quartz. Building on his earnings, he went on to invest in silver mines across the country, amassing a vast fortune and ending up a U.S. Senator.
Jean-Baptiste Charbonneau probably didn't strike it rich, but he must have made enough to afford the exorbitant cost of living in gold-crazed California because he stuck it out there for years and ended up running a hotel. Charbonneau was an intriguing figure, in part because he was the son of the famous Sacagawea and a Frenchman named Toussaint Charbonneau. As a child, he accompanied his parents on the Lewis and Clark expedition, and after his mother's death he was adopted by Clark.
One of Charbonneau's fellow prospectors ended up running the hotel with him. The man's name was Jim Beckwourth, and his story is at least as colorful. Born a slave, Beckwourth was freed by his master, who was also his father, and headed west where he became a successful fur trapper. Living with the Crow Nation for years, he married several Crow women and was anointed a war chief. He was also credited with discovering the Beckwourth Pass through the Sierra Nevada Mountains, and for helping to establish the Beckwourth Trail, which thousands followed on their way to California.
The Merchant Millionaires
The people who really made money on the California Gold Rush were merchants. Take Levi Strauss. When he heard news of the California Gold Rush, he headed to San Francisco where he established his wholesale dry goods business in 1853. Then in 1872, Strauss partnered with one of his customers, a Reno, Nevada, tailor named Jacob Davis, who was designing heavy cotton work pants hammered with rivets in the pocket corners to make them more durable. The company, "Levi Strauss & Co." couldn't sell enough of their "waist high overalls" to the miners, lumberjacks and farmers. And, well, you know the rest of the story.
And remember Sam Brannan from the beginning of our story — the one who basically kicked off the gold rush by paraded around with that vial of precious metal? Rather than staking a claim on the gold, Brannan bought up all the equipment that prospectors would need; then, when the rush began, re-sold the merchandise at a steep markup. His store made enormous profits, selling as much as $5,000 (about $155,000 in 2020 dollars) in goods per day to miners. He became California's first millionaire, perfectly illustrating the old maxim, "during a gold rush, sell shovels."