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Page 6

Newsletter 142 August 2023 © Hampshire Mills Group



Watermill Triggers Gold Rush


Ashok Vaidya


On a recent visit to Sacramento in California I spent time at a local museum hearing from the guide the fascinating story of the development of the transcontinental railroad – and the push from the west starting in Sacramento to go up and over the Sierra Nevada mountains and the Donner Pass. This was the infamous location of the stranding of a party of settlers through the winter of 1846, which led to reports of cannibalism and the deaths of 29 of the 87 strong group.

The guide then made a statement which for anyone interested in mills would have triggered instant attention. “The discovery of a gold nugget in the workings of a mill leat set off the California ‘49ers Gold Rush”. Although the story is well known, it was new to me and so I thought I would describe the events in this article.



John Augustus Sutter was a Swiss-German immigrant who became a citizen of first Mexico and then the United States. In 1839 he arrived in California which was then part of Mexico, and got permission to found a settlement in the Central Valley, named New Helvetia after his country of origin, a place now part of Sacramento. Sutter’s Fort was the centre of a ranching and farming development, relying on local native American tribes for labour. Sutter’s treatment of the indigenous people would not be acceptable today – or even in those days – but that is outside the scope of this narrative.

The defeat in 1846 of the Mexicans in the war with the Americans led to California becoming part of the USA. Through this Sutter was encouraging white settlers from the east to come to California and he set about building businesses that catered for their needs.


One key requirement was timber for house building and Sutter decided to build a sawmill in a forest about 30 miles north east of New Helvetia, on the banks of the South Fork of the American river. This was to be water powered with a mill leat seven or eight miles long which was also designed for irrigation.


John Augustus Sutter

Half plate daguerreotype, circa 1850, online archive of California, public domain
An eyewitness to the events, James S Brown writing in 1894, takes up the story:

The site chosen for the mill was at a point where the river made a considerable bend, and just in the bank of what appeared to be the old bed of the river, which was lowered to carry the water from the mill. The mill was started up, and it was found that it had been set too low and the race would not carry off the water, but that it would drown or kill the flutter wheel. To avoid this difficulty several new pieces of timber had to be got out. It had been customary to hoist the gates of the force bay when we quit work in the evening, letting the water through the race to wash away the loosened sand and gravel, then close them down early in the morning.
Mr Marshall (Sutter’s partner) came down to look after the work in general. Having talked a few moments, he stepped away to where the race entered the river. He discovered a bed of rock that had been exposed to view by the water the night before; “This is a curious rock, I am afraid that it will give us trouble” and as he probed it a little further, he said, “I believe that it contains minerals of some kind, and I believe that there is gold in these hills.”
The next morning, 24 January 1848: Just when we had got partly to work, here came Mr Marshall with his old wool hat in hand, and stopped within six or eight yards of the saw pit, and exclaimed, “Boys, I have got her now”. I jumped from the pit and stepped to him, and on looking in his hat discovered say ten or twelve pieces of small scales of what proved to be gold.

From http://sfmuseum.org/hist6/grush.html


1850(?) daguerreotype by R H Vance of Sutter’s Mill

 from United States Library of Congress digital ID cph.3c37164, public domain

by Sarah Stierch,


Creative Commons 2.0

So there it was – the first flecks of gold which led to a mighty explosion of human endeavour, greed, lust, riches, crime, optimism, disappointment, and failure: which became known as the 1849 California Gold Rush, The 49ers. As news of the gold spread, people dashed from all over the world to seek their fortunes. About 80,000 a year for the first two years, and over 300,000 in the next seven. This changed the territory permanently both economically and in population, setting the touchpaper for the growth of the state into the powerhouse it is today with an economy ranked (if it were an independent nation) 5th in the world.

As in the later Klondike Gold Rush at the end of the century a few people made it really rich; these were often the early prospectors who were on the scene at the start. Often you could do better setting up a business supplying to the prospectors than seeking gold directly. Let them do the hard work to find it and then get them to spend it with you. For the multitudes following – overland from the eastern US, over water from China and Europe – a few would strike lucky, many would just about break even, and sadly a large number would lose everything, returning homeward disillusioned and broken. Until news of another strike came flashing over the telegraph and they were drawn once again to seek their fortune.

So it might be worth keeping a watchful eye on the mill leat – perhaps there will be a glint of something waiting to be picked up. A replica of Sutter’s Mill (below right) has now been reconstructed and is a California Historical Landmark in the Marshall Gold Discovery State Historic Park.


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