The American History of Gold Mining

When the United States of America declared their independence from the British Crown in 1776, the country was in a dire state of financial ruin. It owed people money due to the ongoing war with the British and it didn’t have any of its own gold and silver stocks. The issued paper money had no coverage and led to inflation. What was the country to do?

The only significant gold deposits to date were discovered in North Carolina. The United States ended their struggles with Mexico in 1848, by paying $15 million for a large area (Texas to California). No one knew that days earlier gold had been found near a California sawmill. The discovery led to the first and biggest gold rush in U.S. history. Hundreds of thousands of people took by boat or land to California. People made small and large fortunes due to the gold rush and it wasn’t because people were finding actual gold. Large profits were made by traders and merchants who demanded exorbitant prices for equipment. San Francisco grew immensely from January 1848 to December 1849 from 1,000 people to well over 100,000.

The uncontrolled, massive influx of people caused considerable problems; but the days of privatizing gold rush lasted only a few years. By 1854, gold deposits were being mined industrially with the help of the invention of the hydraulic high pressure water radiator. These rich gold deposits on the west flank of the Sierra Nevada contributed significantly to the fact that the United States was becoming a major economic power. The U.S. ranked as the world leader of gold-producing countries as it produced nearly half the world’s gold production by 1855. In the decade after the discovery of gold, over half a billion dollars was found in California – almost 35 times the amount that the United States had paid for the region of Mexico. Because of the high gold deposits and increasing colonization, California was inducted as the 31st state in 1850.

Even though gold was found in places like South Dakota, North Carolina and Colorado, Alaska held the United States next big gold rush in the 1870’s and 80’s. The discovery was made by George Washington Carmack and two Indians, Skookum Jim and Dawson Charlie, near the influx of the Klondike River in the Yukon River in August, 1896. The area was then named Bonanza Creek. It was so far away from human civilization that it took eleven months for the report to hit the United States. In no time, gold fever hit the country again.

The first prospectors arrived from San Francisco and the West Coast, and then later saw Europeans and Asians visit the area. Much of the fortune seekers and adventurers traveled by ship to Skagway or Dyea and from there followed an arduous walk through the White Pass or the Chilkoot Pass to the border area between the United States and Canada. From Lake Bennett they would travel by boats or rafts on the Yukon River to Dawson City. Many turned back while many were killed. Of the 100,000 people that made the trek, only 40,000 reached their destination.

The American writer Jack London, who was among the first wave of gold seekers, put his own story of the gold rush in Alaska in his novels. Another famous gold rush story is the feature film “Gold Rush” (1925) starring Charlie Chaplin, who portrays the hardships and privations of the gold prospectors. The hostile climate and the resulting hardships of the adventurers in Alaska were great topics for people who were writing stories; but, by 1900, the largest deposits on the surface were largely exhausted and the industrial gold mining period began, which meant people’s dream of hitting it big were practically over.

Today, the U.S. gold reserves are held in the military stronghold of Fort Knox, Kentucky. Around 500 rail cars were needed in 1936 to gather practically all the gold bars in the country and ship it to this location. Fort Knox is now considered the most secure building in the world, and theft of gold from this facility is impossible because of the high security and due to the enormous logistical effort.

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About the Author:

Chloe is a freelance writer that focuses on luxury asset trends for Borro Private Finance.