California - The New Frontier

What if there had been no gold?

California was a pastoral backwater and wilderness in 1848. The non-Indian population was about 14,000, and the whole area had just recently been acquired by the United States as part of the settlement of the Mexican American War. Relatively few Americans would have been able to guess at California's exact location on a map. The American frontier had crossed the Missouri River and was moving slowly westward while small groups of overland pioneers (a few hundred each year) were finding ways to bring their wagon trains across the deserts and mountains.

But all that changed with the discovery of gold. The non-Indian population of California reached 20,000 by the end of 1848, 100,000 by the end of 1849, and soared to 223,000 by 1852. By then, people from all over the world knew of California and were fascinated by its golden riches.

Very few "49ers" intended to stay to establish themselves and their families in California on a permanent basis. Most of them were ambitious, optimistic young men who had come to "seek their fortune" and then return home, but many did stay or returned later to become permanent residents of the Golden State.

Over the next fifty years some 125 million ounces of gold were taken from the hills of California ($50 billion worth by present-day values). More important than the monetary value of the gold, however, was its impact on the early development of California. If gold had not been discovered, California's advantages of climate, resources, and favorable location for world trade would have been ignored for another generation or two. There would have been far less interest in building a transcontinental railroad that would eventually bind the nation together. The U.S. treasury would have been considerably smaller, the national government far less able to finance and otherwise cope with the terrible tragedy of civil war.

A gradual influx, instead of an avalanche, of "foreigners" into the U.S. would have allowed the newcomers to be absorbed into California's existing Spanish/Mexican economy which was based on cattle-raising and agriculture. That starting point, and basis for development, would undoubtedly have resulted in a far different California than we know today.