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Economy

Overall, the California Gold Rush had a significant and lasting impact on the state of California and the United States, and it continues to be a significant part of the state's history and identity. The economy ultimately rebounded due to the discovery of growth and a new booming industry in a less explored area. 

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01

Spanish American War 

  • America and Mexico tensions were unstable due to the Annexation of Texas

    • Mexico thought that Texas reached Nueces River (their territory)

    • USA believed to have the territory up to the Rio Grande [River]

  • James Polk, president at the time, attempting to dissolve conflict through sending troops

    • Led to some conflict and war declaration on May 13, 1846

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  • RESULT: Treaty of Guadalupe, lot of Mexican land handed over the United States

    • Allowed the US to access California and Texas without any legal issues​

    • Mexico lost claims on Texas​
    • Treaty signed on February 2, 1848 (after gold was found in CA)

  •  â€‹â€‹Economically, the USA just fought a war, and was recovering from an economic crisis from a decade prior

    • There needed to be upside from this acquisition, seen in the form of the immense amount of gold discovered in CA​​

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02

Merchant Boom

  • As people began settling in the California region, prices grew​

    • People from San Francisco and Native Americans migrated into the region​

  • 92% of the people that moved here were male​

    • Many of these males, and many others became merchants​

  • The "merchant boom" was highlighted in the huge inflation of goods

    • Eggs went for $25​

    • Boots went for almost $2000

  • The merchant industry boomed with the demand of the gold industry, causing economic growth and development of settlements

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03

Industrialization

  • The agriculture and transportation sectors saw a serious lift thanks to the Gold Rush

    • New roads, bridges and railways were constructed, and California became a leading state in terms of agricultural production.

  • Staple crops could be grown locally and that eliminated the long shipping times normally required to move crops from the East Coast to the West

  • The Gold Rush created a foundation for the modern American economy, integrating one side of the country with the other and showing the power of merchants as well as the importance of building infrastructure that connects a nation

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04

the Gold!

  • The amount of gold found in California went from close to 0 in 1848 to around 3,500,000 to 4,000,000 troy ounces in 1852. 

  • Examples of successes:

    • A man named Joe Dye found 40,000 dollars of gold in just seven weeks

    • A 12 year old boy was able to find $2,700 of gold in just two days

  • Gold prices rised with the demand of gold, but only a few people reached "success" as mentioned before

    • This simply shows the risks of mining​

Activity 3

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