Why the two people who discovered gold in California never cashed in

Missing a golden opportunity

How the two primary people of the gold discovery in California failed to cash in.

On Jan. 24, 1848, gold was discovered on the American River. James Marshall, the first to find it, never made a fortune from it. On May 12, a pioneer named Sam Brannon ran through the streets of San Francisco shouting, “Gold, gold from the American River!” This ignited the “gold fever” that changed the course of the area. The area’s population doubled in a few short years and California became the 31st state by Sept. 9, 1850.

Marshall’s discovery occurred while he was employed by John Sutter to build a mill near Sutter’s settlement. Sutter never capitalized on the finding either.

Sutter was a Swiss immigrant who spoke English, French and Spanish. He traveled the world before coming to California and became a Mexican citizen while establishing the fort. Construction began on August 1839 and Sutter named his land New Helvetia, or “New Switzerland,” after his homeland. When the settlement was completed on June 18, 1841, he received title to 48,827 acres on the Sacramento River.

Sutter employed or enslaved Native Americans, and also employed some Europeans at his compound. There are several historical accounts of his ruthlessness to people at the fort. He envisioned creating an agricultural paradise, and for a time the settlement was prosperous. Prior to the Gold Rush, it was the destination for most immigrants entering California via the high passes of the Sierra Nevada, including the ill-fated Donner Party of 1846, for whose rescue Sutter contributed supplies.

After the discovery

In 1848 Sutter hired James Marshall, a New Jersey native who served with John C. Fremont in the Bear Flag Revolt, to build the sawmill in Coloma, along the American River. Sutter needed lumber to build a town (what is now called Sacramento). Marshall’s Jan. 24th discovery was confirmed by Sutter and they tried to keep it quiet. But word got out and large crowds of people overran the land and destroyed nearly everything Sutter had. To avoid losing everything, Sutter deeded his remaining land to his eldest son, John Augustus Sutter Jr., who had come from Switzerland to join his father in September 1848. His son had some success saving the property.

Marshall suffered a similar fate with the onslaught of miners killing and stealing his livestock. Marshall became part owner of a quartz mine near Kelsey. Hoping to raise funds to develop the mine, he went on a lecture tour, only to find himself stranded and penniless in Kansas City. In a philanthropic gesture, Leland Stanford bailed him out.

For his role in the Gold Rush, in 1872 the State Legislature awarded Marshall a $200 monthly pension for two years. He paid some debts and equipped a blacksmith shop in Kelsey. The pension was halved for the next four years and ended in 1878 amid criticism Marshall’s problems with liquor became an embarrassment to the state. He died in 1885.

Monumental decisions

In 1890 a monumental statue  —  California’s first State Historic Monument  —  was commissioned and placed on the hill overlooking the gold discovery site to mark the location of Marshall’s grave.

Marshall Gold Discovery State Historic Park, created in 1942, encompasses most of the historic town of Coloma, with about 200 year-round residents in the surrounding area. A number of historic buildings and sites  includes the working blacksmith shop;, the Price-Thomas and Papini homes; the Mormon, James Marshall and Miner’s cabins; and the Indian bedrock mortar. The main attraction of the park is the full sized replica of Sutter’s sawmill. Gold panning activities take place year-round.

Sutter’s Fort

Sutter’s Fort has been reconstructed at its original location. Costumed docents reenact pioneer life. Also on the location is The State Indian Museum, which opened in 1940, and depicts three major themes of California Indian life: nature, spirit and family.

You can learn more about Sutter’s Fort here.

You can learn more about the Marshall Gold Discovery State Historic Park here.

Gold Rush notes

From Jan. 24, 1848 to 1898, roughly 125 million ounces of gold taken from the hills had a critical effect on California’s early development. California still has gold mining operations but falls behind Alaska and Nevada in total ounces.

Nine days after Marshall’s discovery —  at the conclusion of the Mexican-American War  —  the United States had been granted this land as part of a treaty.

California’s population grew by 200,000 between 1848 and 1852.

California has 337,412 records of mining claims on public land managed by the Bureau of Land Management and 25,673 records of mines listed by the United States Geological Survey (USGS). Of those 9,963 are active mining claims.

Top counties by active mining claims

San Bernardino: 3,656

Imperial: 1,540

Inyo: 900

Riverside: 643

Plumas: 592

Sources: California State Parks and Recreation, thediggings.com, APMEX, California State Library