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.
James
Marshall 
"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 Brannan
for fifteen dollars. In just nine weeks he made thirty-six thousand
dollars.
