Up The Road: The Gold Rush Finances The California Dream

Mar 13, 2019

Individual miners with gold pans started gold country communities like Columbia, now a state historic park.
Credit David Berry / Flickr

This week we start touring California’s gold rush history with Carey McWilliams as our guide. “California is no ordinary state,” he said in his book, California: The Great Exception, published in 1949. “It is the anomaly, the freak, the great exception among the American states.”



Many of us today resist, or maybe shrug off, the notion of American exceptionalism, if only because it’s so immodest. If you’re truly great, do you need to tell people? Back in the day, the answer was: No. Don’t embarrass your family by being a braggart. But I digress.


Historian and journalist, McWilliams was better known as long-running editor of The Nation magazine. He was no promoter of American exceptionalism, the notion that the U.S. is unique because of its social and political accomplishments, or business successes, or all of the above. And yet California, in his view, was, and continues to be, exceptional—a fact established by the gold rush and which continued to define the state as it rushed into the modern world.



The discovery of gold in 1848 at Sutter’s Mill on the American River started it all. This was, as Harper’s Weekly said in 1859, “perhaps the most significant, if the not the most important, event of the present century connected with America.”

Blacksmiths at Marshall Gold Discovery State Historic Park in Coloma, where the gold rush began.
Credit Patrick Beuchner

By 1849 the gold rush was fully on, quickly populating California and the West with newcomers. Hundreds of thousands of fortune hunters arrived from around the globe—in a few months, accomplishing the settlement imperial Spain couldn’t manage in three centuries. Among early arrivals were young, educated Americans, seeking adventure as well as wealth.

But this was fundamentally a people’s gold rush, McWilliams pointed out, because the land was in the public domain. Native Californians disagreed on that point, of course—they certainly defined “public domain” differently—but by 1849 their numbers had already been decimated by disease, their ties to the land weakened by the mission system.

Technically, California’s gold belonged to the federal government, but there was no way to enforce that law, so in the beginning “free mining” held sway. Which meant whoever could get to California and find gold could keep it. Democratic production with democratic results, and room for all comers, at least for a decade or so. Some $100 million—in 1850 dollars—was the result of free mining, and not a cent to the feds in taxes.


Later, when placer mining played out, big money was needed to go after bigger gold deposits. Banks and businessmen would run things. But even then, most of that corporate backing came from California.

Democratic gold mining—one man, one gold pan— came first, and towns of miners sprang up overnight—Coloma, of course, where James Marshall first discovered gold, now a state historic park, and Columbia, an entire town preserved as both state park and national historic landmark.