In 1846, Alta California was a province of Mexico, as it had been ever since Mexico achieved independence from Spain in 1821. It was sparsely populated, Governed from Monterey, and was as remote from the nation’s capital and center of population as it was possible to be. Mostly it was a region of cattle ranches, trading cowhides and tallow with Boston merchants. (For a very interesting account of coasting along the California posts from San Diego to San Francisco, accumulating cowhides in the early 1840s, see Richard Henry Dana’s classic Two Years Before the Mast).
Native Californians revolted against the central Mexican government several times in the 1830s. (The Mexican government ended the final revolt, in 1836, by naming the head of the rebellion governor of the department.) But 1846 was a different story. This year, settlers raised the Bear Flag (featuring a bear, a star, a red stripe and the words “California Republic”) at Sonoma, and declared independence, then gave way to U.S. occupation during the Mexican War, as we shall see. Following the Treaty of Guadalupe Hidalgo, in January, 1848, Alta California became American territory. The newly acquired territory had a population of about 8,000 (plus about 100,000 Indians).
Then everything changed.
On January 24, 1848, less than two weeks before the signing of the treaty ending the Mexican War and making California American territory, a man named James Marshall found gold in the tailrace of a lumber mill he was building for Sacramento pioneer John Sutter. Sutter tried to keep it quiet, being more interested in agriculture than in fostering a gold rush, but the news got out. By March 1848, San Francisco newspaper publisher and merchant Samuel Brannan (after cornering gold prospecting supplies and setting up a store) was going around the city shouting “Gold! Gold! Gold from the American River!”
People came running. The first people to rush to the gold fields, naturally, were those who lived closest — California residents. Then they started to arrive from Oregon, Hawaii, and Latin America. A small number of “forty-eighters” arrived overland from the east. Some of them got rich pretty quickly, being able to collect in a month what it would take them a year to earn in wages back home.
As the news spread, people came from everywhere in the world. Estimates are that 90,000 people arrived in California in 1849—about half by sea, and half by wagon train along the California Trail. First to last, the hope of getting rich quick drew 300,000 people to California, not only Americans but Mexicans, Britons, Australians, French, and Latin Americans in the tens of thousands. Several hundred Chinese arrived in California in 1849 and 1850, and in 1852 more than 20,000 landed in San Francisco, forerunners of many more who would be recruited to build the western part of the transcontinental railroad. San Francisco alone went from 1,000 residents to 25,000 in two years, and by 1870 it had a population of 150,000.
The gold found and processed was worth billions in today’s dollars, but by 1850 most of the gold that could be recovered by simple methods like panning was gone, and what was left required technology, which required capital. As usual, most of the money made went to a relative few people. And, as usual, any Indians who were sitting on valuable land were evicted or murdered. (In twenty years, an estimated 100,000 California Indians died, 4,500 of them killed outright.) As to what the process of gold mining did to rivers and lakes, the less said the better. Large amounts of gravel, silt, heavy metals, and other pollutants went into streams and rivers, and 150 years later many areas still do not support plant life.
It is estimated that about half the gold-seekers made a modest profit, after taking all expenses into account. The people who made the real money were the merchants who sold the miners the goods they needed, and those who provided shipping, entertainment (including brothels, saloons and gambling houses), lodging, and transportation. By 1855, most people were making their living in the businesses that support ordinary life, most notably California’s second “Gold Rush” – large-scale agriculture.
California discovered gold in 1848, applied for admission as a state in 1849, and received statehood in 1850. As someone said, when a millionaire applies to join your club, you do not keep him waiting long.