California Gold Rush
Settling the west
How it began
January 24 1848, coloma, california, James Marshall found a piece of gold in a river. Marshall informed his boss, John Sutter, about his ⅓ ounce, $5.12 gold nugget. He owned thousands of acres around the Sacramento and American Rivers. It wasn’t long before the big secret got let out and the area soon became a center of activity for all sorts of miners. The land was open for everyone.
In 1849, people around the United States borrowed money, mortgaged their property or spent their life savings to make the journey to California. In pursuit of the kind of wealth they had never dreamed of, they left their families and hometowns; in turn, women left behind took on new responsibilities such as running farms or businesses and caring for their children alone. Thousands of would-be gold miners, known as ’49ers, traveled overland across the mountains or by sea, sailing to Panama or even around Cape Horn, the southernmost point of South America.
World-wide economic stimulation
The Gold Rush stimulated economies around the world as well. Farmers in Chile, Australia, and Hawaii found a huge new market for their food; British manufactured goods were in high demand; clothing and even prefabricated houses arrived from China. The return of large amounts of California gold to pay for these goods raised prices and stimulated investment and the creation of jobs around the world. Australian prospector Edwards Hargraves, noting similarities between the geography of California and his home country, returned to Australia to discover gold and spark the Australia gold rush. Preceding the Gold Rush, the United States was on a bi-metallic standard, but the sudden increase in physical gold supply increased the relative value of physical silver and drove silver money from circulation. The increase in gold supply also created a monetary supply shock.
California's name became indelibly connected with the Gold Rush, and fast success in a new world became known as the "California Dream." California was perceived as a place of new beginnings, where great wealth could reward hard work and good luck. Overnight California gained the international reputation as the "golden state". Generations of immigrants have been attracted by the California Dream. California farmers, oil drillers, movie makers, airplane builders, and "dot-com" entrepreneurs have each had their boom times in the decades after the Gold Rush.