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How California Grew: Getting Rich Through the Gold Rush
September 21, 2020

How California Grew: Getting Rich Through the Gold Rush

by Kelsey Gainer

California’s Historic Gold Rush Led to the State We Know Today

The California Gold Rush is an important part of American history, but is especially important to California’s history. Many could argue that this event led to the growth of the state and laid the groundwork for people migrating to California to this day.

The discovery of gold nuggets at Sutter’s Mill in 1848 in the Sacramento Valley was one of the most significant events to shape American history during the first half of the 19th century. As news spread of the discovery, tens of thousands of prospective gold miners traveled by sea or over land to get in on the gold rush. This unleashed the largest migration in United States history and drew people from dozens of countries to form a multi-ethnic society on America's fringe.

Before the gold rush, population estimates in California were near 100,000 in 1847. By the end of the gold rush in 1855, California’s population had exploded to over 300,000.

Get Rich Quick in California

As word of California’s natural resources spread quickly, thousands of Americans borrowed money, mortgaged homes, or spent their life savings to take advantage of an opportunity they never dreamed possible. In a society that was becoming increasingly centered around wage labor, the idea that a person could alter his destiny by collecting gold off the ground proved irresistible. This idea lives on as the American Dream, which still motivates people from around the world to move to California today.

An astounding amount of gold was pulled from the earth:

  • $10 million in 1849 - $338 million in 2020
  • $41 million in 1850 - $1 trillion in 2020
  • $75 million in 1851 - $2.5 trillion in 2020
  • $81 million in 1852 - $3 trillion in 2020

After that final year of the gold rush boom, the take gradually declined until 1857, when it leveled off to about $45 million per year. The fortunate bettered their circumstance, but mining required, above all, luck -- and not everyone got lucky. However, the idea lives on as the American Dream, which still motivates people from around the world to move to California today.

How The Gold Rush Shaped California

The population explosion caused by the gold rush led to the establishment of boomtowns, rapid economic growth and prosperity, as well as the building of railroads, churches, and banks to accommodate all the newcomers. The significant increase in population and infrastructure allowed California to qualify for statehood in 1850, only a few years after it was owned and controlled by Mexico, and facilitated U.S. expansion to the American West.

Many gold rush towns are still around today. The most historic towns in California can credit their early gold rush entrepreneurs to the foundation of their communities, including:

  • Placerville
  • El Dorado
  • Georgetown
  • Coloma

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