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The United States at mid-century was growing rapidly, but was hampered by a shortage of money. The impact of the money supply on an economy is well studied today, but largely unknown at the time. There was no national paper money. Paper bills were issue by state chartered banks and unrelaible. This was the situation after President Jackson killed the Second Bank of the United States (1833). An economy based on private banks issuing paper curreny is and was a recipie for fraud. Greenbacks would not appear until the Civil War (1861-65). The Federal Goverment minted gold, silver and copper coins. The Constitutuion made only gold and silver legal tender for settement of debt. The shortage of gold in particular meant that the supply was inadequate for the growing economy. And just as the United States was acquired California in the Mexican War. a saw mill operator, James Wilson Marshall, saw gleaming specks in the tailrace at Sutter's Mill near what is now Sacremento (1848). His discovery set off a worldwide rush to a basically unpopulated California. (The Mexican populatuin was very small. Most of the population was Native Americans.) Marshall had set off the first major gold rush of modern times -- the California Gold Rush (1848-55). Marshall was ruined when hordes of crazed prospecting Fort-Niners forced him off his land. Getting to California was a major undertaking. The Eastern United States was separated from California by the vast Great Plains, near desert areas, and the towering Rocky Mountains. Thousands of individuals, and not just Americans, undertook the effort because of the alure of gold. About half came overland. There was no rail connection yet -- that would take another two decades. Crossing the country overland took months and could not even be attempted except in organized, well armed groups of slow-moving heavy covered wagons carrying supplies. This occurred in the age of sail, althhough steam ships were beginning to appear. There were two sail routes from the American East Coast. The shortest route was across the malaria-infested Istmus of Panana. The longer was around the Horn (Cape Horn/Magellan Straits). 'Round the Horn' is is today an idiomatic Anmerican expression. Finding gold was not the only impact. Only a few of the Forty-Niners got rich finding gold. But many stayed in Califirnia. Agriculture, ranching, forestry, as well as mining expanded to supply the growing population. San Francisco which was the port near the gold fields grew almost instantly grew from a non-discript settlement of about 200 people to a roaring boomtown of about 36,000. Roads, railoroads, churches, stores, workshops, and schools appeared as towns sprung up throughout California. Residents wrote a state constitution (1849). It was adopted by a referendum. A state government was elected and enpowered. California was admitted to the Union (1850). The Gold Rush had a huge impact on the state of Califiornia. It drew in people, many of them who stayed. And to sustain the Firty-niners, there needed to be farms and indstries to support the, There was no overland cimmections. Everything had ti be briught in by sea at great dustabce, making goods expensive, This also led to indusry developing. The most fanous was Levi Straus and blue jeans. But much more economic activity developed. This is all reported in considerable detail. Less well reported is the impact on the national economy. The United States was just beginning its industrial development. One if the major imedimenments o American development beyond the agicultural level was money. The United Strates was cash poor. The Federal Govermnt minted coins, but this required specie--gold and silver. There was no Federal paper currency, what would be the green-backs, yet. et. Paper money existed, but this was issued by state banks and of questionable value because they were often just printed, with nothing to back them. As a result. the California gold was a much needed infusion of gold. The major powers at the time were on the gold standard. We have not found any assessment of the impact of the Califirnia gold was. It did not end with Gold Rush, but was undoubtedly very imoprtant at a critical time in the econiomic development of the United States. Actually the industrial develooment it helped finance in the 1850s woukd be the critical difference in the Fedral victory in the Civil War (1861-65).
The United States at mid-century was growing rapidly, but was hampered by a shortage of money. The impact of the money supply on an economy is well studied today, but largely unknown at the time. There was no national paper money. Paper bills were issue by state chartered banks and unreliable. This was the situation after President Jackson killed the Second Bank of the United States (1833). A economy based on private banks issuing paper currency is and was a recipe for fraud. Greenbacks would not appear until the Civil War (1861-65). The Federal Government minted gold, silver and copper coins. The Constitution made only gold and silver legal tender for settlement of debt. The shortage of gold in particular meant that the supply was inadequate for the growing economy. It might have been sufficiet for an slowly growing agricultural economy. It was not for a rising industrial powehouse.
The Mexican War is not a war that most Americans know much about, but it is one of the most important wars fought by the United States because of the vast area of land annexed, about half of Merxoco at the time, but where almost no Mexicans lived. It was the last War fought by the United States before it emerged as an industrial power. The War has been given relatively little attention by American historians, possibly because it does not fit well into America's self image and and national narative. Of course it was soon overshadowed by the great crisis of the American Republic and much larger conflict--the Civil War (1861-65) which dominates American 19th century histrography. The Mexican War made possible the achievemebt of manifest destiny--a nation crossing North America from the Atlantic to the Pacific. This meant the acquisitiin of California. .
Just as the United States had acquired California in the Mexican War. a saw mill operator, James Wilson Marshall, saw gleaming specks in the tailrace at Sutter's Mill near what is now Sacramento (1848).
Marshall's discovery set off a worldwide rush to a basically unpopulated California. (The Mexican population was very small. The population was mostly North American) Marshall had set off the first major gold rush of modern times -- the California Gold Rush (1848-55). Marshall was ruined when hordes of crazed prospecting Forty-Niners forced him off his land. Getting to California was a major undertaking. The Eastern United States was separated from California by the vast Great Plains, near desert areas, and the towering Rocky Mountains. Thousands of individuals, and not just Americans, undertook the effort because of the allure of gold. About half came overland. There was no rail connection yet -- that would take another two decades. Crossing the country overland took months and could not even be attempted except in organized, well armed groups of slow-moving heavy covered wagons carrying supplies. This occurred in the age of sail, although steam ships were beginning to appear. There were two sail routes from the American East Coast. The shortest route was across the malaria-infested Isthmus of Panama. The longer was around the Horn (Cape Horn/Magellan Straits). 'Round the Horn' is is today an idiomatic American expression.
Finding gold was not the only impact. Only a few of the Forty-Niners got rich finding gold. But many stayed in California. Agriculture, ranching, forestry, as well as mining expanded to supply the growing population. San Francisco which was the port near the gold fields grew almost instantly grew from a nondescript settlement of about 200 people to a roaring boom town of about 36,000. Roads, railroads, churches, stores, workshops, and schools appeared as towns sprung up throughout California. Residents wrote a state constitution (1849). It was adopted by a referendum. A state government was elected and empowered. California was admitted to the Union (1850). The Gold Rush had a huge impact on the state of California. It drew in people, many of them who stayed. And to sustain the Firty-niners, there needed to be farms and industries to support the, There was no overland connections. Everything had to be brought in by sea at great distance, making goods expensive, This also led to industry developing. The most famous was Levi Straus and blue jeans. But much more economic activity developed. This is all reported in considerable detail.
Less well reported is the impact on the national economy. The United States was just beginning its industrial development. One of the major impediments o American development beyond the agricultural level was money. The United States was cash poor. The Federal Government minted coins, but this required specie--gold and silver. There was no Federal paper currency, what would be the green-backs, yet. et. Paper money existed, but this was issued by state banks and of questionable value because they were often just printed, with nothing to back them. As a result. the California gold was a much needed infusion of gold. The major powers at the time were on the gold standard. We have not found any assessment of the impact of the California gold was. It did not end with Gold Rush, but was undoubtedly very important at a critical time in the economic development of the United States. Actually the industrial development it helped finance in the 1850s would be the critical difference in the Federal victory in the Civil War (1861-65).
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