A Classification of American Wealth
History and genealogy of the wealthy families of America - Sponsors


 Part 1 : Colonial and Mercantile America  Part 2 : America in the Gilded Age
 Part 3 : America in the Twentieth Century  Encyclopedia of American Wealth

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  Part II-Chapter 7 : The Mining Bonanza Kings  > Index and Introduction  :  Previous  12 - 3   Next

Placer mining, that is panning the Californian rivers to filter out the gold, did hardly make one rich in an economy, which soon experienced hyperinflation and usurious interest rates (2-3 % per month were commonplace). But the gold rush continued to attract hopefuls during most of the 1850's. And it did produce wealth. Bankers Darius Ogden Mills of Sacramento and William Chapman Ralston of San Francisco made individual fortunes, before they teamed up in 1864 to found the Bank of California. Scores of merchants earned above average incomes thanks to hyper-inflated prices. Peter Donahue prospered as an iron manufacturer and later increased his wealth providing San Francisco with a gas supply system. Levi Strauss made and kept a fortune producing his soon famous canvas pants and selling them to the miners.

Incidentally, Strauss invented the blue jeans more by accident than by inspiration. He had come to California in 1853 with a load of drygoods to sell in the doped market. His stock included silk, cotton ware and a few luxury goods as well as a supply of canvas, which was destined to equip Conestoga wagons. For some reason, the canvas was blue and did not sell, contrary to all his other articles. When a miner casually told him, he should have brought some pants to sell, because the gold prospecting was particularly rough on pants, he had the idea that would make his fortune and fame.

He cut the canvas and tailored some rough pants, which he proposed to the miners. As they had not much choice the miners bought the pants and using them in their day to day work, found them both comfortable and long lasting. Before long Levi Strauss' blue jeans were part of the standard outfit of the Western miner. Levi Strauss was a lifelong bachelor and consequently gave away the money he did not need to expand the factory. The latter, he left to four of his nephews, whose descendants (the Haas and Koshland families) still own it.

By the mid 1850's most California riverbeds had been thoroughly combed for gold and the yields of placer mining diminished rapidly. Most prospectors then left the gold mining camps and returned to an easier lifestyle. Only the most inveterate outdoor fanciers kept on for a while and the more astute professionals turned to the costly but more lucrative quartz mining. John Charles Fremont (1813-1890) started quartz gold mining in 1849 on his ranch in Mariposa county and thereby actually made a fortune. He later lost it in several railroad promoting ventures, including the Leavenworth, Pawnee & Western, a part of the first transcontinental railroad and the Memphis & El Paso.

A few other individuals, like John Hite, made money in the hard rock gold mines of California's mother lode, but the real bonanza would come from another, less valuable metal and from a territory lying East of the Sierra : Nevada. For over ten years, gold mining along California's Mother Lode was the major activity on the Pacific Coast, but in 1859, at the time the gold fever in California seriously cooled, an astonishing discovery was made near Mount Davidson, in the Washoe area of Western Nevada.

Nobody could have foreseen it then, but the silver mines of the Comstock Lode would create far greater fortunes than the Mother Lode of California. In the 1860's the focus of San Francisco's capitalists moved to Virginia City, Nevada, where a more organized sequence of the California gold rush was in motion. California's leading banker, William Chapman Ralston, who co-founded the Bank of California with Darius Ogden Mills and others, recognized the importance of the Comstock Lode and dispatched William Sharon to Virginia City to establish a branch for his bank. Both Ralston and Sharon derived a significant part of their fortunes from their Comstock lode activities.

The Mining Bonanza Kings  > Index and Introduction  :  Previous  12 - 3   Next  

The Mining Bonanza Kings

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