History of the State of California

"Gold is the product of the country, and is immediately available, in an uncoined state, for all the purposes of exchange. It is not there, as in other countries, where the productions of the earth and of art are sent to markets – foreign or domestic – to be exchanged for the precious metals, or other articles of value. There, gold not only supplies the medium of domestic trade, but of foreign commerce.

"At first view, this state of things would seem to be unfavorable to an extensive intercourse with other parts of the world, because of the want of return freights of home production for the vast number of vessels which will arrive with supplies.

"These vessels, however, making no calculations on return cargoes, will estimate the entire profits of the voyage on their outward freights, and become, on their arrival, willing carriers for a comparatively small consideration.

"This tendency in the course of trade, it would seem, must make San Francisco a warehouse for the supply, to a certain extent, of all the ports of the Pacific, American, Asiatic, and the Islands.

"Almost every article now exported by them finds a ready market in California, and the establishment of a mint will bring there also the silver bullion, amounting to more than ten millions per annum, from the west coast of Mexico, and, perhaps, ultimately from Chili and Peru, to be assayed and coined.

"Vessels bound round Cape Horn, with cargoes for markets on the American coast of the Pacific, can, by taking advantage of the south-east trade winds, and 'standing broad-off the Cape,' make the voyage to San Francisco in as short a time as they can to Valparaiso, or any port south of California. Vessels have sailed from our Atlantic ports to San Francisco in less than one hundred days, and they have been, in more than one instance, over one hundred and twenty days in going from Panama to San Francisco.

"This astonishing difference in time and distance was caused by the course of the winds, and the gulf-stream of the Pacific, mentioned in my remarks on the climate of California.

"The vessels from our Atlantic ports took advantage of the winds by steering from the Cape as far into the Pacific as to be enabled to take a course west of the gulf-stream in sailing northward, thus availing themselves first of the south-east, then of the north-east 'trades,' and avoiding opposing currents.

"The vessels from Panama were kept back by calms, adverse winds, and currents. It will be perceived, therefore, that there can be no inducement for vessels bound round Cape Horn, with mixed or assorted cargoes, to stop at Valparaiso, Callao, Guayaquil, or any port on the west coast, because the exports of all those places will seek a market at San Francisco; and their supply of merchandise, as return freight, will be delivered at less expense than it can be by vessels direct from Atlantic ports, American or European. This tendency of trade to concentrate at San Francisco will be aided by the course of exchange.

"Gold dust is worth but $17 per ounce in Chili. It is worth $18 at the United States mint. If, therefore, a merchant of Valparaiso has ten thousand ounces in San Francisco, received in payment for lumber, barley, flour, or other produce, and desires an invoice of goods from the United States or Europe, he will gain $10,000 at the outset by sending his gold to New York, besides saving something on the freight and insurance, and at least one month's interest.

"The countries on the west coast of America have no exports which find a market in China, or other parts of Asia. San Francisco will, therefore, become not only the mart of these exports, but also of the products and manufactures of India, required in exchange for them, which must be paid for, principally, in gold coin or gold dust. Neither gold coin nor gold dust will answer as a remittance to China. Gold, in China, is not currency in any shape, nor is it received in payment of import duties, or taxes on land, or on the industry of the people.

"The value of pure gold in China is not far from $14 the ounce. Hence, the importer of manufactures and products of India into San Francisco will remit the gold coin or dust direct to New York, for investment in sterling bills on London. These bills will be sent to London, and placed to the credit of the firm in China from whom the merchandise has been received, and who, on learning of the remittance having gone forward to their agents, will draw a six months' sight bill for the amount, which will sell in China at the rate of four shillings and two pence or three pence per dollar.

"I have a statement before me from one of the most eminent merchants and bankers of New York, who was for many years engaged extensively in the India trade, which shows that the profit or gain on ten thousand ounces of gold, thus remitted, would be

"It will thus be perceived that nature has so arranged the winds and currents of the Pacific, and disposed of her vast treasures in the hills and mountains of California, as to give to the harbor of San Francisco the control of the commerce of that ocean, as far as it may be connected with the west coast of America.

"Important as the commerce of the Pacific undoubtedly is, and will be, to California, it cannot now, nor will it ever compare in magnitude and value to the domestic trade between her and the older States of the Union.

"Two years ago, California did not probably contain more than fifteen thousand people. That portion of it which has since been so wonderfully peopled by American citizens was, comparatively, without inhabitants, without resources, and not supplied with the common comforts of shelter afforded by a forest country.

"Notwithstanding the great distances immigrants have been compelled to travel to reach the territory, more than one hundred thousand have overcome all difficulties and spread themselves over its hills and plains. They have been supplied from distances as great as they themselves have passed with not only the necessaries, but the comforts and many of the luxuries of life. Houses have been imported from China, Chili, and the Atlantic States of the Union. All the materials required in building cities and towns have been added to the wants of a people so numerous, destitute, and remote from the sources of supply.

"These wants will exist as long as immigration continues to flow into the country, and labor employed in collecting gold shall be more profitable than its application to agriculture, the mechanic arts, and the great variety of pursuits which are fostered and sustained in other civilized communities.

"This may be shown by mentioning the prices of a few articles. Last summer and autumn, lumber was sold in San Francisco at $300 to $400 per thousand feet. At Stockton and Sacramento City, at $500 to $600. At these prices, it could be made in the territory, and many persons were engaged in the business. I perceive, by recent accounts, that the price had fallen at San Francisco to $75. At this price, it cannot be made where labor is from $10 to $15 per day; and the difficulties attending its manufacture are much greater than in the Atlantic States. Lumber can be delivered in our large lumber markets for an average of the various qualities of $16, and freighted to San Francisco for $24, making $40 per thousand feet. This price would cause the manufacture of it in California to be abandoned. We may add $20 per thousand, to meet any increase of price in the article itself, or in the freight, and the result would be the same.

"It is probable that the demand, for several years to come, will not be less than twenty millions of feet per annum, which, at $40 per thousand, will be $800,000.

"When California comes to have a population of 200,000, which she will have before the close of the present year, she will require nearly half a million barrels of flour from some quarter, and no country can supply it so good and cheap as the old States of the Union. Including freight and insurance, this may be set down as an item of about $5,000,000. The article of clothing, allowing $20 to each person, would be $4,000,000.

"There is no pretension to accuracy in these items, and they may be estimated too high; but it is quite as probable they are too low.

"We have no data on which to found a calculation of what the value of the trade between the States east of the Rocky Mountains and California will be during the current year. I will venture the opinion, however, that it will not fall short of twenty-five millions of dollars. It may go far beyond that sum. At present, I can conceive no cause which will retard or diminish immigration.

"If the movement shall continue five years, our commerce with that territory may reach one hundred millions per annum. This is doubtless a startling sum; but it must be borne in mind that we have to build cities and towns, supply machinery for mining, coal for domestic purposes, and steam navigation, and all the multifarious articles used in providing the comforts and luxuries of life, for half a million of people, who will have transferred themselves to a country which is to produce, comparatively, nothing except minerals and the precious metals, and whose pursuits will enable them to purchase, at any cost, whatever may be necessary for their purposes.

"It is difficult to imagine or calculate the effect which will be produced on all the industrial pursuits of the people of the Old States of the Union, by this withdrawal from them of half a million of producers, who, in their new homes and new pursuits, will give existence to a commerce almost equal in value to our foreign trade. Let no one, therefore, suppose he is not interested in the welfare of California. As well may he believe his interests would not be influenced by closing our ports and cutting off intercourse with all the world.

"The distance round Cape Horn is so great that bread-stuffs and many other articles of food deteriorate, and many others are so perishable in their nature that they would decay on the passage. This would be the case particularly with all kinds of vegetables and undried fruits. Until some more speedy mode of communication shall be established by which produce can be transferred, the farmers and planters of the old States will not realize the full value of this new market on the Pacific.

"Many other important interests will be kept back, especially the consumption of coal. The American steamers, now on that ocean, those on their way there, and others shortly to be sent out, will consume not far from one hundred thousand tons of coal per annum. The scarcity of wood in California will bring coal into general use as fuel, as soon as it can be obtained at reasonable prices. Suppose there may be, three years hence, forty thousand houses, which shall consume five tons each per annum. This, with the steamers, would be a consumption of three hundred thousand tons. If delivered at $20 per ton, it would compete successfully with the coal from Vancouver's Island and New Holland, and amount to $6,000,000.

"The construction of a railroad across the Isthmus of Panama would secure the market for those articles against all competition.

"Some idea may be formed of the demand for them from the prices paid in San Francisco last autumn. Coal was sold at $60 to $100 per ton; potatoes $16 per bushel; turnips and onions for 25 to 62½ cents each; eggs from $10 to $12 per dozen.

"The distance from Chagres to New York has recently been run in seven days. The same speed would carry a steamboat from Panama to San Francisco in ten days. Allow three days to convey freight across the Isthmus, on a railway, and both passengers and freight will be conveyed from New York to San Francisco in twenty days.

"This celerity of movement would secure for American produce the entire market of California. Sailing vessels may be successfully employed between our Atlantic and gulf ports and the terminus of the railway on this side of the Isthmus; and propellers from Panama to San Francisco. These latter vessels will be found peculiarly suited to that trade; they can use their steam through the calms of the Bay of Panama, and against head-winds and currents going north, and their sails with favorable winds and currents coming south.

"These modes of conveyance, in connection with the railroad across the Isthmus, would be sufficiently expeditious and economical to turn the tide of commerce, between the Atlantic and Pacific States of the Union, into that channel. The tendency of our commerce on the Pacific to promote the employment of ocean steamers is of much importance as connected with the defence of our extensive line of coast from latitude 32° to 49°, the protection of the whale fishery, and other branches of trade on that ocean. The establishment of a line of heavy steamers to China would promote all these objects; increase our intercourse with that country, and probably be the means of opening communications with Japan. Money wisely employed in promoting these objects, it is believed, would add more to the power and prosperity of the country than its expenditure on any general system of fortification at the present prices of labor and materials. There is one point, however, of such vast importance that no time should be lost in taking the necessary steps to render it perfectly impregnable – that is, the entrance to the harbor of San Francisco. On the strength of the works which may be erected to defend that passage will depend the safety of California in time of war with a maritime power. Permit a hostile fleet to cast anchor in the harbor of San Francisco, and the country would be virtually conquered.

"The coast has not been surveyed, nor has its outline been correctly ascertained. There are many rocks above and below the water-line, and small islands not mentioned or indicated on any chart, which render navigation near the land, especially at night, extremely dangerous.

"An accurate survey of the coast, to commence at the most important points, the construction of lighthouses, and the placing of buoys in proper positions, are objects of much importance, and, it is not doubted, will attract the early attention of Government."

We come now to that which has built up so rapidly this empire of the Pacific – the metallic and mineral wealth of California. As to the extent of the region, and indications of the existence of the gold, together with the attendant geological formations, the statements of Mr. King's report will not be, nor have not been, gainsayed; but as to the origin of the gold, whether in combination with quartz, or mixed with the sands of the ravines and streams, various opinions have been expressed by those who have spent considerable time in working and observing the different formations. That due weight may be given to both of the principal theories, we extract the observation and opinion of a person who favors the idea of the gold having been scattered over the country, by a tremendous volcanic eruption.

"The gold found in every placer in California bears the most indubitable marks of having, at some time, been in a molten state. In many parts it is closely intermixed with quartz, into which it has evidently been injected while in a state of fusion; and I have myself seen many pieces of gold completely coated with a black cement that resembled the lava of a volcano. The variety of form, which the placer gold of California has assumed, is in itself sufficient evidence of the fact, that it has been thrown over the surface while in a melted state. The earliest comparisons of the California gold were to pieces of molten lead dropped into water. The whole territory of the gold region bears the plainest and most distinct marks of being volcanic. The soil is of a red, brick color, in many places entirely barren, and covered with a flinty rock, or pebble, entirely parched in the summer, and during the rainy season becoming a perfect mire. The formation of the hills, the succession of gorges, the entire absence of fertility in many portions, distinctly exhibit the result of a great up-heaving during past times. But there is one phenomenon in the mining region which defies all geological research founded upon any other premises than volcanic formation. Throughout the whole territory, so generally that it has become an indication of the presence of gold, a white slate rock is found, and is the principal kind of rock in the mining region. This rock, instead of lying as slate rock does in other portions of the earth, in horizontal strata, is perpendicular, or nearly so; seeming to have been torn up from its very bed and left in this position. On the banks of the Middle Fork are several excavations, which can only be accounted for upon the supposition, that they were at some time volcanic craters. There is one of these on the mountain side, about five miles below the "Big Bar;" from which, running down to the base of the mountains, is a wide gorge entirely destitute of verdure, while the earth around it is covered with shrubbery. This, I am fully convinced, was the bed of the lava stream that was thrown up from the crater; and in searching for gold at the very foot of it, I found several pieces entirely covered with the black cement or lava, of which I have previously spoken. From all these evidences, I am fully satisfied that at some early date in the world's history, by some tremendous volcanic eruption, or by a succession of them, gold, which was existing in the form of ore, mixed with quartz rock, was fused and separated from its surrounding substances, and scattered through every plain, hill, and valley, over an immense territory. By its own gravity, and the continual washing of the rains, it sank into the earth until it reached a rock, or hard, impenetrable clay. It still continued washing and sliding down the hill-side, until it reached the rivers or ravines, and in the former was washed along with its current until it settled in some secure place in their beds, or was deposited upon their banks; and in the latter rested among the crevices of rocks."[13 - Six Months in the Gold Mines, by E. Gould Buffum.]

The following from Mr. King's report, presents the opposite theory, with its evidence in full. The two accounts are at variance both in regard to fact and theory. But that of Mr. King, who enjoyed every facility of obtaining information from observation, and from the statements of intelligent miners, is considered most reliable, in respect to matters of fact, and, therefore, of more dependence in forming a theory. He says —

"The principal formation, or substratum, in these hills, is talcose slate; the superstratum, sometimes penetrating to a great depth, is quartz. This, however, does not cover the entire face of the country, but extends in large bodies in various directions – is found in masses and small fragments on the surface, and seen along the ravines and in the mountains, overhanging the rivers, and in the hill-sides in its original beds. It crops out in the valleys and on the tops of the hills, and forms a striking feature of the entire country over which it extends. From innumerable evidences and indications, it has come to be the universally admitted opinion, among the miners and intelligent men who have examined this region, that the gold, whether in detached particles and pieces, or in veins, was created in combination with the quartz. Gold is not found on the surface of the country presenting the appearance of having been thrown up and scattered in all directions by volcanic action. It is only found in particular localities, and attended by peculiar circumstances and indications. It is found in the bars and shoals of the rivers; in ravines, and in what are called the 'dry diggings.'

"The rivers, in forming their channels, or breaking their way through the hills, have come in contact with the quartz containing the gold veins, and by constant attrition cut the gold into fine flakes and dust, and it is found among the sand and gravel of their beds at those places where the swiftness of the current reduces it, in the dry season, to the narrowest possible limits, and where a wide margin is, consequently, left on each side, over which the water rushes, during the wet season, with great force.

"As the velocity of some streams is greater than that of others, so is the gold found in fine or coarse particles, apparently corresponding to the degree of attrition to which it has been exposed. The water from the hills and upper valleys, in finding its way to the river, has cut deep ravines, and, wherever it has come in contact with the quartz, has dissolved or crumbled it in pieces.

"In the dry season, these channels are mostly without water, and gold is found in the beds and margins of many of them in large quantities, but in a much coarser state than in the rivers; owing, undoubtedly, to the moderate flow and temporary continuance of the current, which has reduced it to smooth shapes, not unlike pebbles, but has not had sufficient force to cut it into flakes or dust.

"The dry diggings are places where quartz containing gold has cropped out, and been disintegrated, crumbled to fragments, pebbles, and dust, by the action of water and the atmosphere. The gold has been left as it was made, in all imaginable shapes; in pieces of all sizes, from one grain to several pounds in weight. The evidences that it was created in combination with quartz are too numerous and striking to admit of doubt or cavil. They are found in combination in large quantities.

"A very large proportion of the pieces of gold found in these situations have more or less quartz adhering to them. In many specimens, they are so combined they cannot be separated without reducing the whole mass to powder, and subjecting it to the action of quicksilver.

"This gold, not having been exposed to the attrition of a strong current of water, retains, in a great degree, its original conformation.

"These diggings, in some places, spread over valleys of considerable extent, which have the appearance of an alluvion, formed by washings from the adjoining hills, of decomposed quartz and slate earth, and vegetable matter.

"In addition to these facts, it is, beyond doubt, true that several vein-mines have been discovered in the quartz, from which numerous specimens have been taken, showing the minute connection between the gold and the rock, and indicating a value hitherto unknown in gold-mining.

"These veins do not present the appearance of places where gold may have been lodged by some violent eruption. It is combined with the quartz, in all imaginable forms and degrees of richness.

"The rivers present very striking, and, it would seem, conclusive evidence respecting the quantity of gold remaining undiscovered in the quartz veins. It is not probable that the gold in the dry diggings, and that in the rivers – the former in lumps, the latter in dust – was created by different processes. That which is found in the rivers has undoubtedly been cut or worn from the veins in the rock, with which their currents have come in contact. All of them appear to be equally rich. This is shown by the fact that a laboring man may collect nearly as much in one river as he can in another. They intersect and cut through the gold region, running from east to west at irregular distances of fifteen to twenty, and perhaps some of them thirty, miles apart.

"Hence it appears that the gold veins are equally rich in all parts of that most remarkable section of country. Were it wanting, there are further proofs of this in the ravines and dry diggings, which uniformly confirm what nature so plainly shows in the rivers."

It is an interesting inquiry – what was the amount of the golden treasure collected during the years 1848 and '49? The satisfaction of this inquiry will enable us to form some faint conception of the value of the gold region, and the dependence which may be placed upon its yield for a commercial return. Premising that the gold was first discovered in May, 1848, and that intelligence of it was not received in the United States till late in the following autumn, Mr. King, in his report, proceeds in making an estimate of the quantity accumulated till the close of 1849: