The Discovery of Gold in California

“Then the people commenced rushing up from San Francisco and other parts of California, in May, 1848: in the former village only five men were left to take care of the women and children. The single men locked their doors and left for ‘Sutter’s Fort,’ and from there to the Eldorado.”

Summary Overview

In Hutchings’ California Magazine in 1857, John Augustus Sutter recounted the events surrounding the discovery of gold at his mill near Coloma, California, some nine years earlier. He explained how word of the discovery spread and how the discovery affected him personally. Sutter, a Swiss immigrant who became an early California landowner, could have become extremely wealthy as a result of the discovery of gold on his land, but it ran counter to his goals and eventually became the catalyst for a series of business failures that would characterize much of his later life. Within the context of American history, however, the discovery of gold in California helped to justify the country’s belief in Manifest Destiny. It also set into motion large-scale and rapid immigration, and forced the nation to further address whether slavery would be allowed to expand westward.

Defining Moment

In January 1848, the United States was already preparing to expand its holdings in the Southwest. The war with Mexico was ending, and the goals of Manifest Destiny—the belief that the United States was destined by Providence to expand all the way across the North American continent—were becoming realities with the negotiation of the Treaty of Guadalupe Hidalgo, under which Mexico ceded to the United States all the land from Texas to the Pacific. This Mexican Cession, as it was called, included the territory of Alta California, or Upper California, a name the Americans shortened to California.

Prior to Mexican independence in 1821, Alta California was a Spanish colony, and the search to find wealth in the Southwest dates back to the earliest Spanish entradas, or explorations, in the 1530s and 1540s. Stories of riches such as the mythical Seven Cities of Cibola had fuelled the imagination of explorers like Francisco Vásquez de Coronado, but in truth, the Spanish colonies of Texas, New Mexico, and Alta California had been a drain on Spanish resources. The riches the Spanish had found in their other colonies, such as Peru and Mexico, seemed not to be in evidence in Spain’s northern holdings. Therefore, relatively few Spaniards colonized Alta California, although a vibrant Hispanic culture, based around the large landholdings of a number of wealthy Californios (Spanish-speaking inhabitants of California) and the numerous Franciscan missions, was well established by the time the Americans arrived. Before US annexation, the future cities of San Diego, Los Angeles, and San Francisco (then called Yerba Buena) were nothing more than small towns in a region far from the corridors of Spanish, Mexican, or American power.

The events that John Sutter describes, however, would change everything. California would almost overnight go from a primitive expanse occupied by Mexican landowners to a bustling and wild frontier region dominated by mostly young, single men from the eastern United States, Europe, and China. Prior to the gold rush, Americans had gradually been moving across the continent. Afterward, as historian J. S. Holliday aptly put it, “the world rushed in.” The gold that flowed out of California, which had remained hidden until just after the Americans took over, seemed to justify the American notion of Manifest Destiny and the country’s preordained right to inhabit the continent.

Author Biography

Born in Baden, Germany, to Swiss parents in 1803, Johann August Sutter emigrated from Berne, Switzerland, to the United States in 1834 in order to avoid mounting debt, changing his first two names to John Augustus. He left his wife and family behind, though he hoped to bring them to the United States when his fortunes turned. He found his way to California in 1839, after stops in St. Louis, the Oregon Territory, and Hawaii. Along the way, Sutter relied on inflated stories of his past and his considerable “gift of gab” to get him out of financial difficulties and convince merchants to extend him credit and government officials to view him as a valuable new member of the community. Even the nickname “Captain” was the result of exaggerating his time as an under lieutenant in the Bernese reserve corps into service as a commander in the famed Swiss Guard (Hurtado 19–20). He tried his hand at trading along the Santa Fe Trail, raising horses and cattle, and building a hotel before leaving for California in order to avoid being sued for default on his debts in Missouri.

Once in California, Sutter impressed both American traders and Mexican government officials with his stories and apparent wealth, claiming, for instance, that he owned a ship. He applied for and received Mexican citizenship and then received a grant of 50,000 acres near present-day Sacramento, where he hoped to raise horses, cattle, and sheep. Once he made peace with the local Nisenan and Miwok Indians, whom he employed as laborers and as his own personal military force, his compound, which he named Sutter’s Fort, became the social, political, and commercial center for the entire inland region. Because the area was so isolated from the centers of Mexican power closer to the coast, Sutter became the de facto authority of the region. But the events that would change the history of California and the United States as a whole occurred on another part of Sutter’s land grant, about forty-five miles away from Sutter’s Fort at a sawmill he had commissioned in the Coloma Valley, named for a nearby Maidu Indian settlement.

Document Analysis

John Sutter had an ambition that was certainly as big as the events that swept through his land grant starting in January 1848, and though he personally did not profit from the gold rush that followed, he was an integral member of the drama that played out in California, transforming the area from a sparsely populated Mexican backwater to one of the economic engines of the United States in a matter of less than five years.

One might think that someone with Sutter’s ambitions who also had the good fortune to have gold discovered on his land would be well positioned to profit from the discovery. However, Sutter achieved all he had more by force of personality and slyness than business acumen, and this became readily apparent in the years following the discovery. By the time Sutter told his story to a popular journal—nearly a decade after the discovery—the gold rush was already well known across the nation. But the details Sutter revealed demonstrate much about who he was as a man as well as the importance of the California gold rush in the history of the state, the region, and the nation.

Sutter had chosen the then-remote area near the confluence of the American and Sacramento Rivers as his land grant some seven years earlier, despite having the chance to acquire land closer to the coast. However, being at a distance from the centers of power suited Sutter well, as he wished to have complete control over the development of his land grant as well as the people residing on it. In Sutter’s vision, what was wilderness at the time would become a profitable operation, producing cowhides, beef, horses, and lumber for the slowly growing cities of Monterey and Yerba Buena on the coast. Development had been slower than Sutter anticipated, though, and Sutter’s Fort was not yet self-sufficient. As a result, he was often seeking credit from suppliers on the coast to keep his operation functioning, something with which he had quite a bit of experience. Sutter had additional reasons for apprehension about what the future might bring in late 1847 and early 1848, as the United States was still at war with Mexico. Although California was still technically Mexican territory, it was by that time under the control of the United States, and a permanent change in government was almost inevitable. Sutter’s authority in the region was largely based upon the fact that the Mexican government in Alta California was weak, and his grant was far enough from the Mexican territorial capitol at Monterey that he had unrestrained control over his land (Brands, 17–18).

In late 1847, Sutter had entered a partnership with James W. Marshall to build a sawmill on the South Fork of the American River. Marshall was a mechanic from New Jersey who, like Sutter, had gradually made his way west. Like Sutter, he had briefly settled in the Oregon Territory, but, disliking the weather, moved farther south into California. Men like Marshall who had extensive experience with tools and construction were in high demand in the West, and he had no problem finding work with Sutter. The main portion of Sutter’s 50,000-acre land grant was near the present city of Sacramento, California, but he also had an additional grant in the Coloma Valley, which was in the foothills of the Sierra Nevada. Being close to the mountains and on a stream made a perfect location for a sawmill that would provide Sutter’s Fort and the surrounding area with the wood needed for construction, and Sutter and Marshall had agreed to share equally in the lumber that the mill produced.

By January, the workers building the mill were digging out the millrace that was to bring the water from the river into the sawmill, turning the wheel that would power the operation. On January 24, 1848, as the water flowed through the millrace, Marshall noticed flakes of a gleaming yellow metal left behind. As the flowing water would have washed away any dirt or lighter minerals, it was clear to Marshall that the metal left behind was gold. Quickly, Marshall collected the flakes and, together with a number of his workers, performed several tests to verify the identity of the metal. Convinced that it was gold he possessed, four days later Marshall embarked on the forty-five mile trip to from Coloma to Sutter’s Fort to discuss this development with his business partner.

As Sutter enters into his description of Marshall’s arrival at Sutter’s Fort, it is interesting that he veers into what others thought of his decision to settle on the Sacramento River rather than nearer to the coast. It appears that he is using the discovery of gold on his property to justify his decision and make his detractors look like fools, which is ironic considering the fact that Sutter profited very little from the discovery. In Sutter’s account, when Marshall does arrive, he appears to have a full sense of the significance of the discovery, as he asked to discuss the matter in “a place where we should not be disturbed, and where no listeners could come and hear what we had to say.” Marshall asks Sutter to lock the door, and Sutter portrays himself as somewhat incompetent when he forgets to lock the door and his clerk comes into the room just as Marshall is removing the gold from his pocket.

After Marshall shows Sutter the gold, Sutter does exactly what Marshall did at the mill, chemically testing the metal to ensure that it actually was gold and reading up on the material to determine its quality. Satisfied that this was, indeed, high-quality gold, Marshall returned to Coloma, and Sutter left to join him the next morning. Sutter, too, was well aware of the consequences of the discovery, and he became determined to keep the secret for as long as possible. Although Sutter asks the workers at the mill to keep the discovery secret, he states that he knew that it would be nearly impossible to prevent the workers from talking. After the visit, Sutter explained that “On my way home, instead of feeling happy and contented, I was very unhappy, and could not see that it would benefit me much, and I was perfectly right in thinking so; as it came just precisely as I expected.” The workers at the mill were well acquainted with the workers at Sutter’s Fort, so Sutter concludes that it was inevitable that word would escape. At the same time, Sutter takes great pride in describing the ring that he had made with the first gold taken from the millrace, which he stated he did very soon after, so Sutter himself could have been responsible for spreading news of the discovery. Rather than seeking a way to profit from the discovery personally, Sutter laments the fact that he could see no way to profit, as it did not fit with his plans to build a flour mill and continue his other operations at Sutter’s Fort. Rather than seizing the opportunity to profit from gold before the world rushed in, Sutter remains steadfast in his own operations, “as it was uncertain how it would pay and would probably be only for a government. So I thought it more prudent to stick to the plow, notwithstanding I did know that the country was rich in gold, and other minerals.” In fact, finding no way to participate in the gold rush itself, Sutter’s other operations suffered as his workers left his employ in droves, looking instead to enrich themselves by being among the first in the gold fields.

Interestingly, Sutter mentions in passing Sam Brannan of Mormon Island, who he said placed a tax on his people to mine there. What he does not mention is that Brannan was also a merchant who ran a store at Sutter’s Fort. Perhaps if Sutter had possessed the business acumen of his hero John Jacob Astor, he might have followed Brannan’s example. As soon as he learned of the discovery, Brannan bought up all of the mining supplies he could, took a trip to San Francisco, and did everything he could to spread the word of the gold strike. As a result, Brannan became the first millionaire in California, not through joining the rush to the gold fields, but by realizing that he was in the right place at the right time to profit from it. However, Sutter continues to complain about the discovery of gold ruining his dream of setting up his private kingdom: “What a great misfortune was this sudden gold discovery for me! It has just broken up and ruined my hard, restless, and industrious labors, connected with many dangers of life, as I had many narrow escapes before I became properly established.” Narrow escapes certainly characterized Sutter’s life, though his self-pity was meant to disguise the fact that the narrow escapes were too often from circumstances of his own making.

As the gold rush progressed, Sutter focused on keeping what he had. But the vast majority of those who worked for him, with the exception of American Indian workers who were largely chased away from the gold fields, led the throngs that would come to California from all over the United States and the rest of the world to seek their fortunes. Many of the early miners were successful, as there was a significant portion of gold that could be found in much the same way that Marshall had. Placer gold—gold that is on the surface of the earth rather than underground—was still relatively abundant, and miners quickly descended on the region’s streams hoping to follow Marshall’s example. Governmental jurisdiction of the land was lax because of the gold fields’ distance from the coast and because the Treaty of Guadalupe Hidalgo did not go into effect until July 4, 1848. The absence of effective government restrictions meant that there were no rules and no taxes. Small impresarios like Sutter could no longer hold sway over their land grants, as the miners largely made up their own laws to govern themselves in the mining camps.

As much as Sutter had sought to delay the spreading of the news, those like Brannan, who saw opportunity in the influx of immigrants that was sure to follow, ensured that the word would get out. The first outsiders to seek their fortunes began to arrive during the summer of 1848. News had spread to the neighboring Oregon Territory, where many Americans had already migrated. By the end of the year, miners were appearing from Hawaii, Mexico, and South America, and the first settlers from the eastern United States were beginning to arrive. But those numbers would snowball during 1849, when tens of thousands flocked to the California territory. Most came on the overland route via the California Trail, although those with some means could purchase a ticket to come by ship and sail either around the cape at the southern tip of South America or by the Panama shortcut (the Panama Canal would not be built for another sixty-five years).

Mining became more difficult as the “forty-niners” arrived. Competition over claims in the gold fields was intense, and the prices that miners paid to merchants like Brannan for necessary supplies were often exorbitant. It was said that just to survive, a miner in 1849 or 1850 had to mine one ounce of gold every day. Although those who arrived came looking for easy wealth, mining whatever gold was available was extremely difficult work. Success could still be found during those first few years, but after 1853, the amount of placer gold that was mined began to decrease while the number of miners continued to increase.

It is impossible to separate the history of the gold rush from the story of the rapid population growth in California. Although many of the miners returned home disappointed and destitute, many others decided to stay in the region, which became a state on September 9, 1850. Ironically, it was those very miners who saw the potential of the region as agricultural land who realized many of Sutter’s dreams, albeit on a much smaller scale.

Like Sutter’s own life, the fate of California was determined by a number of events that seemingly overwhelmed the area. The gold rush, clearly, brought huge numbers of people and made the dream of Manifest Destiny a reality. Only nine days after Marshall’s discovery of gold, the Treaty of Guadalupe Hidalgo was signed, which, when ratified by the US Senate, would make California a US territory. The timing of the discovery of gold, combined with the transfer of California from Mexico to the United States, made the fate of the region a national issue, since Congress had been debating for decades whether new states and territories would be admitted into the union as slave or free. The rapid increase in the population of California meant that quick statehood would be a necessity. California was ultimately admitted as a free state, but only as a part of the Compromise of 1850, which allowed for a popular vote on slavery in other parts of the territory gained from Mexico, the continuation of slavery in Washington, DC, and, most importantly to Southerners, the passage of a new Fugitive Slave Act, which stated that Southern slave owners could cross into the nonslave states and territories to capture escaped slaves.

Sutter, however, remained focused not on the transformative impact that the discovery of gold on his land had on the region, but rather on his own personal misfortune that was caused by his poor business decisions. His concluding remarks continue his theme of feeling personally ruined by the discovery of gold. “By this sudden discovery of the gold, all my great plans were destroyed. Had I succeeded for a few years before the gold was discovered, I would have been the richest citizen on the Pacific shore; but it had to be different. Instead of being rich, I am ruined.”

Essential Themes

The discovery of gold on John Sutter’s land in 1848 had dramatic consequences for many different populations within California. For miners, the impact was felt economically, and for a few of them it was a time of incredible profit and good fortune. For others, it was a fool’s errand, and they returned home destitute and in disgrace. Furthermore, for many of California’s American Indians, Sutter’s discovery was the beginning of the end of their culture. As happened in other regions where Euro-American settlers arrived in large numbers, disease spread rapidly, decimating many communities. The dependency some tribes had on Euro-American trade meant that with the increased prices of those trade goods, many Indians slipped into poverty or even died of starvation. The justice of the gold fields did not include justice for the Indians, who were sometimes killed for their land. Those who remained had their land and their cultures invaded by the flood of Euro-Americans.

The gold rush that resulted from the discovery also greatly diversified the California population. Mexicans and American Indians constituted the majority of native inhabitants in the region at the time of the discovery. That would quickly change, however, as immigrants from all over the world flooded in. The Chinese arrived in greater numbers than any other. By 1850, there were five hundred Chinese in California, and by 1855 the number of Chinese who had made the trip across the Pacific to the “Gold Mountain” reached twenty thousand, over twice the entire population of the region seven years earlier. San Francisco quickly became the center of Chinese American culture, and although many other cities in California developed Chinatowns, San Francisco’s remained dominant and iconic. Chinese miners, like Indians, were persecuted and many had their claims stolen by Euro-American miners. However, the Chinese soon earned a reputation for making profitable claims that other miners had abandoned. After the gold rush, discrimination increased, and by 1882, the United States passed the Chinese Exclusion Act, which was the first immigration law restricting the entry of one particular group based on ethnicity.

Finally, the discovery had a dramatic impact on the landscape. Once the placer gold began to run out in 1853, more destructive means were employed to extract gold from beneath the surface. Hydraulic mining decimated entire hillsides by using torrents of water to find the gold hiding underneath. Chemicals such as arsenic, cyanide, and mercury—used to extract the gold from the materials in which it was embedded—poisoned the land and water. The burgeoning population cut down huge stands of timber to fuel the growth of their towns. In the end, the discovery of gold resulted in the creation of a new California, but—as Sutter would have pointed out—at the expense of destroying the old California.


  • Brands, H. W. The Age of Gold: The California Gold Rush and the New American Dream. Rev. ed. New York: Random, 2002. Print.
  • Holliday, J. S. The World Rushed In: The California Gold Rush Experience. New York: Simon, 1981. Print.
  • —. Rush for Riches: Gold Fever and the Making of California. Berkeley: U of California P, 1999. Print.
  • Hurtado, Albert L. John Sutter: A Life on the North American Frontier. Norman: U of Oklahoma P, 2006. Print.
  • Osborne, Thomas J. Pacific Eldorado: A History of Greater California. New York: Wiley-Blackwell, 2013. Print.
  • Starr, Kevin. Americans and the California Dream, 1850–1915. New York: Oxford UP, 1986. Print.

Additional Readings

  • Dillon, Richard. Fool’s Gold: The Decline and Fall of Captain John Sutter of California. Sanger, CA: Write Thought, 2012. Print.
  • Owens, Kenneth N., ed. John Sutter and a Wider West. Rev. ed. Lincoln: U of Nebraska P, 2002. Print.
  • —. Riches for All: The California Gold Rush and the World. Lincoln: U of Nebraska P, 2002. Print.
  • Trafzer, Clifford E. and Joel R. Hyer, eds. Exterminate Them! Written Accounts of the Murder, Rape, and Slavery of Native Americans during the California Gold Rush, 1848–1868. East Lansing: Michigan State UP, 1999. Print.
  • Vaught, David. After the Gold Rush: Tarnished Dreams in the Sacramento Valley. Baltimore: Johns Hopkins UP, 2007. Print.