“There’s Gold in Them Thar Hills!” Most of us have heard that old saying before. We’ve heard it in cartoons, and in old songs. It’s an expression and a call to action referring to the California Gold Rush, which began in 1848. The saying was first in print in Mark Twain’s 1892 novel The American Claimant.
Gold has been a precious metal to cultures worldwide throughout ancient civilization. Its shining yellow nuggets were found and admired by early hominoids. It was beautiful, malleable, and quickly became treasure and currency. Gold became equated with the rich, the glamorous and the powerful.
Gold and the pursuit and discovery of gold have been an integral part of American culture and history. That hasn’t changed, although it is much more controlled than in the early days of the gold rush. Let’s take a look at where it all started and where America’s relationship with gold is today.
The California Gold Rush
America was a new country, but gold was nothing new to them. They just didn’t have much of it. But a discovery at a California sawmill would soon change that. Once word got out, hundreds of thousands of people traveled to California in search of gold and wealth. It was, arguably, one of the top 10 historical events that changed the world and American society in particular
People did get rich, some from finding gold, and others from trading with and serving the new population. San Francisco grew from a thousand residents in 1848 to over 100,000 at the end of 1849. These people who rushed to find riches in San Francisco were called the “’49’ers” because of how many had come that year. The San Francisco NFL football team still bears that name today.
The uncontrolled gold rush and influx of people from all over America and the world only lasted a few years. Soon, gold mining was done by government contract using a new industrial invention — the hydraulic high pressure water radiator. Gold was obtained much more efficiently this way. The United States soon ranked as a world leading gold producer. Half of the world’s gold was being mined in America.
In the ten years after gold was discovered, half a billion dollars’ worth had been mined from California. This amount in gold was 35 more times in money than the United States had paid Mexico for the entire stretch of land from Texas to California after their battles and disputes.
Since so many people were living in California, and because of all the potential gold reserves there, California became America’s 31st state in 1950. This kept California and all of its mineral reserves a permanent part of the United States.
The Golden Economy
Gold was also found in North Carolina, Colorado and South Dakota, but not in the amounts discovered in California. It wasn’t until Gold was found in Alaska in the 1870’s and 1880’s that America had its next gold rush.
The only problem was that it was in such a remote and treacherous area that it took almost a year for even the news of it to get to the mainland. Getting to Alaska was much harder than California. And surviving its brutal climate was even more difficult. People did make their way there, but soon industrialization took over as it did in California, and individual prospecting was over.
The United States’ boasts an enormous gold reserve protected by our military at Fort Knox, Kentucky. No one knows for sure how much gold is there, but estimates are over 140 million ounces, which is worth about $6 billion. Fort Knox is considered the most secure building in the world. The value of gold keeps increasing, and our economy depends on it.
The Gold Standard
The United States has based its currency on the value of gold since its inception. At certain times, one could legally convert United States’ currency to its value in gold. That has legally changed many times over the years and is no longer the case. Here is a brief history of the Gold Standard.
- 1879 – A portion of gold was equivalent to our currency unit, the dollar. Paper money was legally convertible into that portion of gold.
- 1900 – Congress passed the Gold Standard Act which made the “gold dollar” our official unit of currency.
- 1913 – Due to banking panics and dwindling gold reserved the U.S. issues Federal Reserve Notes which are backed by gold at 40%.
- 1933 – Four years after the stock market crash, the U.S. completely removes itself from the Gold Standard. You could no longer convert cash into gold. President Roosevelt orders all gold coins to be turned in to the government. Owners will be paid $20.67 per ounce. There is a $10,000 fine and jail time for hoarding the gold.
- 1944 – Representatives form 43 countries meet to normalize commercial and financial relations. The agreement results in a semi gold standard where foreign currency is pegged to the U.S. dollar and convertible to gold. Americans are left out from this part, and can still not own gold. The U.S. dollar becomes the world’s reserve currency.
- 1971 – President Nixon removes us from the Gold Standard completely. No currency can be converted to gold. Gold prices soar in the following decade from $35 to $850 per ounce.
As far as return on money is concerned, gold is the ultimate investment. That’s why so many things are still referred to as “the gold standard of —.“ Gold is always going to be valuable, always going to be in demand.
Gold will always be beautiful. Gold will always be desired and sought after. We want it around our necks, in our ears, around our fingers, even in our teeth. It’s unlikely we will find any prospecting on our own, but you never know. One thing is for sure, gold will always be valuable. Luckily, it lasts forever and can be passed down from generation to generation.
Image courtesy of Pixabay.
Kate is a health and political journalist. You can subscribe to her blog, So Well, So Woman, to read more of her work and receive a free subscriber gift! https://sowellsowoman.com/about/subscribe/