California gold rush: Creating Mining Law - Business in United States of America

California gold rush

California gold rush: The Rush

California gold rush: Creating the California Market

The gold rush produced institutions that would continue to govern hard rock mineral mining in the United States. Because gold was discovered before the United States had organized its new acquisition or even established the basic functions of its government, miners were able to create their own institutions. Through camp meetings, miners established simple rules: a system of private ownership of mineral rights based on discovery, a sparse set of prohibitions on violence enforced through group action, a property registry, and respect for contracts. By simply moving onto the land and engaging in mining, they established de facto the principle of free access to public land for those seeking minerals. 

Because California became a state almost immediately after gold’s discovery and because miners dominated early California politics, mining interests enjoyed vigorous representation in Congress. This representation enabled them to stall efforts to assert federal ownership of the mineral resources of the newly acquired West. Furthermore, as gold prospectors spread to other locations, following other mineral booms, they carried the institutions created in California with them. As a result, by the time the federal government finally legislated on mining in 1866, it had little choice but to accept the existing mining practices. (Congress consolidated federal mining law in the General Mining Law of 1872.) Thus, the gold rush decisively shaped the laws governing the mineral industry in the United States. Both critics and supporters of the 1872 General Mining Law agree that it originated in the gold rush, even as they disagree about whether maintaining that statute in the twenty-first century is appropriate. 

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