California gold rush: Creating the California Market - Business in United States of America
The creation of the state of California itself was a major contribution of the gold rush. The state’s vibrant economy (if the state were an independent country, its economy now would be the seventh largest in the world) and its sprawling cities make it hard to imagine the time during the mid-nineteenth century when the Mexican territory of California was a backwater populated at most by a few thousand ranchers and missionaries, as well as roughly 150,000 Native Americans. Because the region was too far from Mexico’s centers of population to play a major role in supplying agricultural goods to urban centers, its major economic activity consisted of raising cattle for the production of hides and tallow.
The gold rush brought not only miners but also businesspeople and farmers to supply the miners. For example, San Francisco grew from a collection of ramshackle buildings to a thriving city of over fifty-six thousand in 1860, one of the fastest rates of growth of any city in history. Modern California’s lucrative agricultural sector has its origins in the production of food for miners.
Although most miners went to California intending to stay only a year or two before returning to their homes in the eastern United States, Australia, Britain, Chile, China, Mexico, and elsewhere, many found the mild climate, fertile soil, and growing business opportunities to be reasons to stay in the state even after they left the mines. With the mining population providing a large market with money to spend, California’s business community grew almost as rapidly as did the mines. The lure of California’s riches led to the construction of transcontinental railroads and telegraph lines, as well as luring ever more migrants to the new state. In many respects, the gold rush created America as a transcontinental nation.