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A Brief History of the Great Gold Rush of 1849


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The San Francisco Mint circa 1882.
Photo courtesy of Library of Congress.

The accidental discovery of gold deposits at a Californian sawmill construction in 1848, spurred by the advances in steamship and railroad technology at the time, saw to the swift invasion of wealth seekers to the site of the newly discovered gold deposits.

These fortune-seekers (numbering about 300,000) were known as the forty-niners, named after the year (1849) when the mass migration to California began. The migrants came from far and near. Some from as near as Eastern and Southern United States, while others travelled from as far as Europe, Australia, Asia, and Latin America, travelling with covered wagons, clipper ships, and on horseback.

Life as a forty-niner was brutal. There was no law enforcement and the only semblance of justice available came through a vigilante group. Everyone wanted a part of the gold so the gold mines were overpopulated and a survival of the fittest. Yet, amidst these situations, the populations grew until it increasingly expanded. People staked claims to specific plots of land around the river and would then use pans to mine gold from silt deposits and sell the gold.

The Californian Gold Rush didn’t last long, enduring through the years of 1848-1855. In 1849, California had set up a state constitution and government and had officially entered the union in 1850. By 1855 larger well-funded, organizations had taken over and were mining for the gold in a more organized, effective, and efficient manner. Naturally, this competition led to the death of the ’lone gold miner’, as they could not compete with the sophisticated level of operation of these organizations.

In the midst of the gold rush, very few U.S. coins existed for use in transactions in the booming economy. The few available coins such as the Liberty Seated Quarters and silver Half Dollars were often hoarded by merchants to be used for importation.

Gold as Acceptable Tender

There was an abundance of gold available during the Gold Rush and not a lot of coinage, so most people learned to accept gold as a payment for goods and services, the issue with this form of payment was that it was difficult to measure exactly how much gold dust to pay a person for each good or service offered.

Example of an 1854 25c BG108 PCGS MS64 California Fractional gold piece.
Courtesy of PCGS TrueView.

Privately Minted Coins and Ingots

Due to the inaccurate measurement of gold dust as a form of payment, private goldsmiths and jewelers started to produce gold coins and ingots to cover larger transactions. For the large transactions, denominations such as the $5, $10, $20 and $50 were made. For smaller transactions, these privately struck California Fractional coins, such as the 25¢, 50¢ and $1 gold coins were made.

U.S. $1 & $20 Gold Coins Debut in 1849 and the San Francisco Mint

As the forty-niners mined for more gold, the amount of gold available for the making of new coinage rapidly increased. At this time, the U.S. Mint released the first ever $1 and $20 gold coins. However, this meant they had to transport the gold from California to any of the mints in New Orleans or Philadelphia. This journey usually took a lot of time and was often dangerous. Prior to this, there had been lobbying from Californian businessmen for the government to establish a U.S. Mint in California. To reach a middle ground, Congress established a U.S. Assay Office in San Francisco. The office was commissioned to assay gold and strike special issue gold coins of $10 and $20 denominations which were marked as U.S. Assay Office issues, most of these pieces have since been recycled into regular U.S. coins. In 1854, the San Francisco Mint was finally established which went on to produce some of the finest quality coins in history, such as the early 1878-1882 "S" mint mark Morgan Dollars.

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