The Gold Rush and its Impact

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The Gold Rush and its Impact

TheGold Rush and its Impact

In1848, in the Sacramento Valley, one of the most significant events inAmerican history took place, the discovery of gold nuggets. Thespread of this news resulted in a mass exodus of prospective goldminers into San Francisco and its surrounding areas, resulting in anextraction of about $2 billion worth of precious metal. This essaydiscusses the Gold Rush Era and the Chinese contribution in shapingthe history of America economically, politically, and socially.

Overviewof the Gold Rush

TheGreat Gold Rush of California started on 24thJanuary 1848,following a discovery by James W. Marshall in the American River.Knowledge about this discovery brought immigrants from elsewhere inAmerica and other countries numbering in their thousands, causing aninflux of the population of California from 1000 to almost 20,000between 1848 and 1850 (American Gold Rush History Video).

Inthis large global exodus from Chile, China, Mexico, Germany, Ireland,Turkey and France, the population of Chinese gold-seekers wassignificantly large, looking to acquire as much gold as possible thenreturning home wealthy, instead of settling in America. This largeinflux of foreign labourers resulted in ethnic tensions, leading tothe California legislature enacting tax laws on foreign miners andeven going to the extreme extent of restricting immigration toCalifornia halting Chinese immigration and prohibiting Chinese frombecoming US citizens for nearly ten years. (Rice, et al. 1988 pp168-171)

Impactson the California Economy

Whilea few of the gold-seekers, mostly the early birds, struck it rich,most found smaller, but still substantial returns. Many of thegreatest beneficiaries weren’t even miners, but rather cleverentrepreneurs who ventured into the business offering services andsupplies to the miners. Like Sam Brannan for instance, who suppliedhis newspaper, The California Star, to miners at extravagant pricesby hyping the Gold Rush (American Gold Rush History Video). “TheBig Four” Sacramento merchants accumulated capital in theirhardware and grocery stores into a transcontinental railroad empire,which played a major role in rooting large scale business ventures inCalifornia.

Negatively,The Gold Rush caused a labour shortage as Californians left theirjobs to go mining. This shortage consequently opened job openings toimmigrants who found gold harder to find. This labour shortageresulted in exploitation of Native Indians, Chinese and Mexicans. Italso made the cost of living very high, and many basic commoditieswere grossly overpriced.

However,the huge migration into California, especially San Fransisco openedup options in manufacturing, merchant trades, agriculture, trade,entertainment and newly formed financial institutions and banks. TheCalifornia economy blossomed, so did the nation’s, contributingabout $465 million.

TheGold Rush Society

Arrivalsand departure of immigrants, the wide multicultural nature ofsociety, and the fragility of American institutions made California achaotic and a challenging place for both natives and newcomers. Theover 300,000 gold seekers brought to the state an astonishinglyforeign variety of religions, social customs and languages.

Theseincluded the Chinese, who emigrated from China by sea, the NativeIndians who were long-term dwellers of America, free slaves who camewith immigrants from the South, Mexicans from the nearby Mexico,Californios, who are Spanish speaking people born in California andthe Yankees.

Impactof Population Increase

Thesudden large influx of immigrants into California had several impactson its place in the United States. First was the issue of slaveryresulting from the diversity of nationalities and races. Californiabecame a very chaotic place, and this put pressure on nationalgovernment forcing it to deal with territorial issues and slavery.Admission of California into the union brought imbalance between freeand slave states. Following a series of events, the Compromise of1850 would fail to plunge America into civil war.


Chineseminers worked in the least productive diggings for meagre wages andlived in dilapidated conditions. Few managed to pay their debts orsave up enough money to return home, making them prime targets forwhite miners’ hostility due to competition.

Experienceof Chinese Workers Between 1863 and 1870

Havingalready helped build the California Central Railroad, they weresuggested to help in building the Transcontinental Railroad. Workingunder very risky conditions of blasting and laying ties over thedangerous landscape of the high Sierras, they received approximately$28 a month.

Theyused methods they learned in China like being lowered by ropes fromthe top of cliffs, and while suspended they nicked away the graniteand placed explosives used to blast tunnels (Rice, et al. 1988 p179). A large number perished in the process and also due to harshwinters. By 1868, two-thirds of the 4000 workers were Chinese and thehad completed the railroad over the Sierras. On May 10, 1869, the tworailroads met at Promontory, Utah.

Duringthe Gold Rush, food came majorly from cattle-raising. Entrepreneursthen hired Chinese labourers in other large construction projects,like land reclamation and levee building (Rice, et al. 1988 p 165).When the first Chinese migrated to California, China had developedthe most advance agricultural technology in irrigation, crop rotationand fertilization. Starting in the 1860s, Chinese began reclaimingland in Sacramento-San Joaquin Delta, a swamp with heavy flooding. By1880, 88,000 acres were rehabilitated, developing the “AsparagusCapital of the World” and a significant source of Bartlett pears.

ChineseCulture and Society

Knownfor their work ethic, the Chinese labour force became a threat to thelocals. Racial segregation and repressive legislation drove them intoa neighbourhood known as Chinatown. Its success depended on familyand district associations serving as social support systems to newarrivals. They ventured into restaurant businesses, fishing andleather goods manufacturing even importing an entire theatre buildingfrom China (Gold Rush Video). Chinatown offered security and hope tosurvive ethnic and racial discrimination of greater San Fransisco.


Unionsand “anti-coolie” clubs vouched for federal laws limitingimmigration and employment of Chinese blaming them for unemploymentand low wages. As early as 1871, a mob swarmed and massacred scoresof Chinatown residents. The climax reached in 1877, with nationalstrikes and labour violence, and the new constitution did little tohelp this situation. Even the Exclusion Act of 1882 failed to satisfylabour leaders, who organized boycotts of Chinese-made goods andagitated for expulsion (Gold Rush Video). By 1904, legislation andtreaties had made exclusion permanent, and it is only during WorldWar II, as a gesture to an ally, did the United States reopen itsshores to Chinese immigrants.


Itis evident that the Chinese contributed largely in shaping andspeeding up American history and development during the Gold Rushera, politically, economically and socially through their efforts inthe construction of America’s railroads and other economic sectors.


Rice,R. B., Bullough, W. A., &amp Orsi, R. J. (1988). Theelusive Eden: A new history of California.Knopf. rush video) (American Gold Rush History)