|"Becoming California, a series that brings the California Gold Rush alive with the people who lived it."
Gold Rush Nuggets Are Once Again Hidden Away
Some found it, most spent it immediately; where did all the gold go?
Most of the information we have on the rewards of the Gold Rush comes from the express companies who kept records on the amount of dust and nuggets they transported, and from custom house records on the amounts exported from San Francisco.
In 1848, the year James Marshall found gold on the American River, $245,301 worth of the yellow stuff came out of the ground. The following year, when the Forty-Niners began arriving, the take jumped to $10 million -- an increase of more than 40 percent in one year.
In 1850 the gold harvest increased to four times the previous year's -- totalling more than $41 million. This runaway place called California had become filled with eager young men digging everywhere and producing more gold each year than the world had ever known. In 1852 the annual value of gold discovered in California peaked at $81 million. From there it was all downhill.
A hundred years after Marshall saw a gleam in the water, two billion dollars in gold had been taken from the earth's grip. The yellow metal came first in a torrent as miners easily filled pans with dust, then as a trickle as more labor and more money were needed to free up the gold.
Today the U.S. produces more than $2 billion in gold -- the estimated value of all Gold Rush riches -- annually. Nearly three quarters becomes jewelry, almost a quarter of this country's current gold production ends up in electronic components where it is valued for its corrosion-free high conductivity. Seven percent goes in people's mouths.
The Forty-Niner gold began changing hands as soon as it was pried from the ground. Food, drink, gambling and entertainment relieved the tired miners of their dust, and the gold went into the youthful economy that was springing up to supply the mines. At the time an ounce of gold was worth about $11, and that's what it cost each day for provisions.
Banks set up in the gold fields were an added feature provided by Wells Fargo & Company. The company was there to move the gold, but first the yellow metal went into the stage line's banking system and miners were given deposit receipts for their pokes of dust. Once in the banks, the gold migrated East.
Where did California's $2 billion worth of gold end up?
Some was minted into coins. Eventually paper money was introduced to a skeptical public. The government guaranteed a gold coin in exchange for the paper, upon demand, and it finally caught on. Most of the nation's gold was tucked away in bank vaults to back the paper currency.
"You dig up gold from the veins of metal in the depths of the earth at risk of life only to hide it away," was the timeless comment on the search for the golden metal made by Saint Ambrose in the 4th Century.
The practice of redeeming paper with gold ended in 1934. In the 1930s many restrictions were imposed on private ownership of the precious metal. Coins, unless they had provable collector value, had to be turned in to the U.S. Treasury.
Not all the gold made it into the vaults.
Twenty-one tons of riches spent more than a hundred years hidden at the bottom of the ocean. In September, 1857 a hurricane 200 miles off the Carolina coast sunk the S.S. Central America. Along with $2 million in gold, 400 passengers returning from the Gold Rush were lost. Modern technology found the ship a few years ago in 8,000 feet of water. On board were the coins, bars, nuggets and dust of a Gold Rush fortune that lost its way.
A lot of the Forty-Niner gold is under lock and key at an army post 31 miles southwest of Louisville, Kentucky. There the U.S. Bullion Depository holds under heavy guard the remains of the fortune in gold wrested from California's soil by the Forty-Niners. No longer free for the picking up, the treasure is inside a granite, steel and concrete building behind a vault door that weighs two tons.
The gold's final resting place has given the world another term for great wealth: Fort Knox.
Copyright Don Baumgart, 2003
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