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On January 24, 1848, James W. Marshall discovered gold in the American River, on the property of his employer John A. Sutter. Despite their efforts to keep this discovery quiet, news soon got out that there was gold in the hills of the River and by August of that year the hillside was covered with tents as men from around the globe, made their way to California to strike it rich.
This was no planned event. The Mexican War had only just been won and the Eastern Seaboard was in a state of financial depression. California Governor Richard Barnes Mason declared, "I have no hesitation now in saying, that there is more gold in the country drained by the Sacramento and San Joaquin Rivers than will pay the cost of the present war with Mexico a hundred times over." It appeared that the promise of gold was too good to pass up.
To begin with, men came from the West. They were already close by, and they were hard working honest and trusting men. Soon however, settlers began to make their way across the country from the East.
The gold attracted many outlaws with little respect for the law. Robbery, murder, and conflict with Indians and bandits became common. With the inability of local law enforcement to manage this influx of crime, vigilante groups and lynching became a common form of mob justice.
The journey from the East was a hazardous one, more men died of cholera than the feared Indians on that trek across the country. The hard journey however, prepared the men for the harsh conditions of working for the gold. Although there was good money to be made, the cost of living was also high. Few of the prospectors stuck it rich, the wise ones become farmers or storekeepers.
The largest influx of settlers was in 1849 and since the settlers were often referred to as "forty-niners". $ 10 million dollars worth of gold was found in 1849. This rose to a peak of $ 81 million in 1852. All in all, over $ 2 billion dollars worth of gold was taken from the earth before mining became almost dormant.
For more on the California Gold Rush, with links to recommended sites, visit California Gold Rush at "Surfing the Net with Kids."