The Real Story of the California Gold Rush


Yerba Buena is sleepy Spanish village (population 747) nestled on the central Pacific coast when gold is discovered nearby in 1848. It set off one of the great world migrations. What was soon to be called San Francisco developed so quickly it earned the nickname, “the instant city.”

Oh, the romance and lore of those rugged “49ers.” In a cavern, in a canyon, excavin’ for a mine…”

But there was another aspect to the Gold Rush, one that proved to be more significant and enduring than the pioneers who panned and dug – the equally hearty entrepreneurs who came to California to “mine the miners.”

The Great Race

Word spread by telegraph, newspapers, and ships sailing to distant ports. It took at least six months from anywhere to get to remote San Francisco.

Once they began arriving, it was a human tsunami, hundreds and even thousands pouring daily into this tiny hamlet. Where’s the food? The clothes? The horses? The hardware to mine? The houses? Not to mention the liquor.

The census of 1850 was destroyed by fire. By 1852 there were 34,776 souls. In 1860, city fathers counted near 57,000. Ten years later, the number almost tripled. An additional 85,000 had arrived by 1880.

Free Enterprise

In those years, San Francisco represented the greatest entrepreneurial vacuum in history.

In 1849, there were already 60 bakeries. A few years later, a young Italian began selling supplies and confections to miners, soon opening what became one the great names in American chocolate. His name was Domingo Ghirardelli.

A dry goods merchant listened to miners who pleaded for a tougher pair of working pants. He bought a patent for rugged canvass type trousers with small copper rivets. The product caught on. He had a continuous supply of material from covered wagons arriving daily from the East. His name was Levi Strauss.

The Del Monte fruit-canning enterprise traces its origins to early San Francisco. Wells Fargo Bank was established in 1852 to provide banking services for Western pioneers, and quickly became, in the words of a newspaper editor, “the universal business agent of all the region from the Rocky Mountains to the Pacific Ocean.”

A young fellow named Sam Brannan was already in Yerba Buena with a group of Mormons when word of gold surfaced. He quietly bought up all the equipment that miners could need and stashed it at his general store. Brannan, who has a major street in The City named after him, became San Francisco’s first millionaire.

Chinese heard about the opportunities in California from ships arriving at their eastern ports. Eager to escape poverty, thousands jumped at the chance to start anew. Some came to mine but others grabbed at any opportunity to prosper, establishing enterprises from restaurants to laundries to hotels.

Character of the City

Tolerance was a virtue born of necessity. An incredible diversity of humanity was crammed into a mere 47 square miles on a peninsula. Walking down the streets of San Francisco in the 1850s, you would see Australians, Austrians, Chileans, Chinese, English, French, Germans, Italians, Mexicans, Samoans, Swedes, Indians, cowboys, former slaves, fugitives from justice, urban dandies, and sodbusters.

What drew all these people together was a dynamic spirit and desire to prosper. Anyone who would risk his life to make a grueling 6 month journey to the ends of the earth for a chance at new life had to be “crazy” in the positive sense of word: risk-taking, resilient, independent, an out-of-the-box thinker.

The personality of The City was forged in those early days, and it has never changed. Innovative in business, experimental in culture, liberal and tolerant in politics, it is no coincidence that three of most significant social upheavals of the past century have all started in this relatively small city: the Bohemian Movement at the turn of the 20th century, the Beatniks, and the Hippies.