In the early 1840s, California was a distant outpost that only a handful of Americans had seen. The sleepy port that would become San Francisco had just a few hundred residents.
One of the wealthiest people in the region was John Sutter–an affable Swiss immigrant who came to California in 1839, intent on building his own private empire. Sutter soon built a fort, amassed 12,000 head of cattle, and took on hundreds of workers. His most prolific crop was debt. He owed money to creditors as far away as Russia. But Sutter was a man with a dream; a dream of a vast agricultural domain that he would control.
By the mid 1840s, more and more Americans were trickling into California by wagon and ship. Sutter welcomed the newcomers–he saw them as subjects for his self-styled kingdom. But Sutter had no idea that the trickle would become a flood–a deluge of humanity that would destroy his dream. Sutter’s undoing began 50 miles northeast of his fort on the American River. In late 1847, James Marshall and about 20 men were sent to the river by Sutter to build a sawmill–to provide lumber for Sutter’s growing ranch. The sawmill was nearly complete when a glint of something caught Marshall’s eye. It was January 24th, 1848.
“I reached my hand down and picked it up; it made my heart thump, for I was certain it was gold. The piece was about half the size and shape of a pea. Then I saw another.”
After making the greatest find in the history of the West, Marshall and the other workers went back to work. But they kept stumbling upon more gold. Still in disbelief, Marshall took samples back to Sutter’s Fort. Sutter and Marshall tested the shiny metal as best they could–a tattered encyclopedia gave them clues. It was gold, they concluded–but neither man was happy about it.
Sutter was building an agricultural fiefdom–he didn’t want the competition that gold-seekers might bring. And Marshall had a sawmill to build–gold hunters would just get in his way. So they made a pact to keep the discovery a secret.
But it wasn’t long before stories of gold filtered into the surrounding countryside. Yet there was no race to the American River. The news of Marshall’s gold was just another fantastic tale–too unlikely to be believed.
The gold rush needed a booster, and Sam Brannan was the man. A San Francisco merchant, Brannan was a skilled craftsman of hype. Eventually, the gold rush would make him the richest person in California–but Sam Brannan never mined for gold. He had a different scheme–a plan he set into motion by running through the streets of San Francisco shouting about Marshall’s discovery. As proof, Brannan held up a bottle of gold dust. It was a masterstroke that would spark the rush for gold–and make Brannan rich.
Brannan keenly understood the laws of supply and demand. His wild run through San Francisco came just after he had purchased every pick axe, pan and shovel in the region. A metal pan that sold for twenty cents a few days earlier, was now available from Sam Brannan for fifteen dollars. Sam Brannon became the richest man in California, not because of Gold, but because he saw what was possible.