If you are familiar with Facebook, Google or Apple, you must have heard of Silicon Valley. The southern part of the San Francisco Bay area in California is the nerve centre of global innovation, high technology and social media. California on the western coast of the US has an economy as large as India’s. If it was a separate country it would be the fifth-biggest economy in the world. Besides technology, the state is a powerhouse of media, manufacturing, services and finance. But it was not always a major population center.
The rise of the state and its transformation into a wealthy and prosperous region is closely intertwined with the Gold Rush of 1849. The sudden rush of miners seeking their fortune into a region following a sudden discovery of gold is known as a gold rush. California is not alone to have witnessed a gold rush, mass migrations led by discovery of the metal were also reported from Australia, New Zealand and Africa. The California Gold Rush was significant due to its impact on the history and economy of the region and the larger US.
What was the California Gold Rush?
A carpenter, James Wilson Marshall, was commissioned by John Sutter to build a water-powered sawmill near Coloma, a town northeast of Sacramento. In January 1848, while working at the sawmill, Marshall found flakes of gold in the American River at the base of the Sierra Nevada Mountains. Even though Marshall and Sutter tried to suppress the discovery, word got out and reports of the gold discovery started appearing in San Francisco-based newspapers. The reports that appeared in the newspapers had little impact on the inhabitants of the town as most felt it to be a hoax. Many people react in a similar way today when they come to know of digital gold. Even though digital gold is a more secure form of the yellow metal, especially for people who use gold as an investment, they still buy physical gold. Digital gold is backed by physical gold and is easier to buy.
A storekeeper, Sam Brannan, was responsible for fueling the actual rush. Prospectors started rushing in after Brannan paraded through San Francisco with a vial of gold obtained from the river near Stutter’s sawmill. As people saw the evidence, the news of the discovery spread like a wildfire. Prospectors started arriving from Hawaii, Mexico, Chile, and Peru and from places as far as China. The inflow of people boomed and by the end of 1849, the non-native population of the California region jumped to 100,000 from just 800 before 1848.
Impact of the Gold Rush
The gold rush is one of the most significant 19th-century events in American history. It led to a westward movement of people and was responsible for California’s induction into the union of states. The population boomed, leading to the settlement of new towns such as Sacramento. The gold output peaked in 1852 and it is estimated that gold worth $2 billion was extracted from the area. The advent of hydraulic mining in the later years of the rush increased the production but took a heavy toll on the environment. Most people, however, left empty-handed from California as it became increasingly hard to find gold by simple tools after the initial phase.
Gold has been shaping world history from ancient times. The precious metal derives its value partly through its rarity. The prospectors in California had to sift through the slush to find small pieces of gold, but you can buy digital gold at a click of the mouse. The physical form has changed but the value and allure of gold remain intact, dictating gold prices. Digital gold doesn’t need expensive security arrangements and there are no chances of fraud. At Finserv MARKETS, you can buy and sell digital gold in a simple two-step process.
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