August 2012

The rush for gold

By Fathi Habashi

Gold has a special place among metals: it was the first metal to be mined, it plays an important role in world economics, it caused wars and unprecedented mass migrations, and it has been the inspiration for numerous myths. It was for all these reasons that prospectors and adventurers rushed to the scene as soon as they heard rumour of a gold discovery.

Gold rushes started in California in 1848 and went on to Australia in 1851. From Australia, gold seekers went to New Zealand and on to other countries. Gold discoveries resulted in mass movement of gold miners in North America and South Africa. But, in Imperial Russia, local authorities did not want any social disturbance when gold was discovered in 1813, due to fear of creating chaos in areas populated by serfs. Also, in Australia, authorities did not want to let the largely convict population know about the presence of gold in New South Wales for fear of creating an uncontrolled gold rush in the area. In South Africa, gold discovery resulted in the Boer War, a war between the Dutch settlers and the British from 1899 to 1902.

Gold rushes were responsible for development of Alaska and the Canadian North as well, creating new cities and founding schools of mines in most of the regions where gold was uncovered. Alcohol, isolation and struggles over access to gold made for high rates of homicide and other violent crime. While the promise of easy riches drew many migrants, the reality was often not what they had hoped for: miners worked long hours in remote places, lived in miserable accommodations and paid exorbitant prices for food, shelter and clothing. Gold deposits accessible by hand digging were quickly exhausted, leaving buried veins that could only be exploited by well-capitalized ventures, employing expensive machinery. Most remaining miners were not independent prospectors but employees of large mining companies. Most gold rush fortunes were made by those marketing supplies to the miners. For example, Levi Strauss supplied the miners with trousers that became known as “jeans” and California newspaper magnates, the Hearst family, made their fortune reporting the region’s news.

California Gold Rush

The earliest record of gold mining activity in the U.S. was in Virginia around 1804. Mining continued until the onset of the California Gold Rush, at which point most serious speculators moved west. Gold production in Virginia continued at a low level until the Civil War. Near the end of the war, Union troops began a systematic campaign to destroy the economic base of the South. Many gold mines were damaged beyond repair and never reopened.

On January 24, 1848, when James Marshall was overseeing the construction of a sawmill on John Sutter’s property near Coloma, California, he saw gold in American River and unintentionally initiated a set of events that dramatically transformed both California and the United States. Although Marshall and Sutter attempted to prevent news of discovery from spreading, word reached San Francisco within a few months. By 1850, California’s American- and European-born population increased 10-fold, with San Francisco alone growing from a small village of 1,000 to a city of 35,000. The diversity of nationalities, the sharp fluctuation in economic prospects and the great proportion of men, made social life in the goldfields unstable, and mining camps and towns instantly acquired reputations for wildness.

The diseases and violence of the newcomers brought the state’s Native American peoples to the brink of extinction, while racism kept most Chinese, Latin American and African American prospectors out.

The gold rush made California the most populous and prosperous western territory. Connecting the West Coast to the rest of the country added to the impetus to build the transcontinental railways, to defeat the last independent Indian nations on the Great Plains, and to settle the interior West. Finally, the wealth it produced made thousands flock to later discoveries of gold in Nevada, Colorado and Alaska.

John Augustus Sutter (1803–1880) was born in Kandern, Baden, Germany. He went to school in Neuchâtel, Switzerland and later joined the Swiss army, eventually becoming captain of the artillery. Debts incurred through business dealings compelled Sutter to leave Europe for the U.S. in 1839. Sutter extensively travelled the U.S. before being granted permission to become a Mexican citizen in 1840 and settling in Yerba Buena, a tiny poor mission station that was formerly a part of Mexico but is now San Francisco.
The following year he received a title to 198 square kilometres of land, where he envisioned creating an agricultural utopia. For a time, the settlement was quite large and prosperous, and was the destination for most California-bound immigrants. Sutter employed Native Americans, Mormons and Europeans at his compound. In 1847, the Mexican land was handed over to the United States.
After the discovery of gold near Sutter’s sawmill, masses of people overran the land and destroyed nearly everything he had worked for. Sutter’s son, who joined his father in September 1848, saw the commercial possibilities of the land, and promptly started plans to build a new city, which he named Sacramento, after the Sacramento River. 
  James W. Marshall (1810 -1885) arrived in the Sacramento Valley in July 1845 to work as a carpenter for John Sutter. Fairing well there, he purchased a ranch to raise cattle. In 1846, he joined the California Battalion to seize control of California from Mexico. When he returned, he found his cattle had been stolen and was forced to sell his land. He partnered with John Sutter to build a saw mill. After the discovery of gold, the area was flooded with miners, and the saw mill failed. Neither Sutter nor Marshall profited from the discovery of gold. In 1872, Marshall was awarded a two-year pension by the California State Legislature in recognition of his role in an important era in California history. 


The Gold Rushes were only for the collection of alluvial gold by panning, washing the sand in a cradle, or later with the shaking table. Once the superficial deposits of alluvial gold were exhausted, mining companies took over the exploitation of the subsurface layers, which required massive financing for dredging equipment, and mining the underground veins, which required extensive engineering know-how and specialized mining tools.

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