On the chilly morning of Jan. 24, 1848, a man looked down into a sawmill ditch off the American River, about 40 miles east of Sacramento, California, (or 120 miles east of Yerba Buena, which soon became better known as San Francisco). The man, a dour carpenter from New Jersey named James Marshall, saw a pea-shaped dollop of yellow metal glinting in the gravel.

"Boys," Marshall told the group of laborers who were helping build the sawmill, "By God, I believe I have found a gold mine."

What he had really found was the ignition switch for one of the most massive migrations in human history: the California Gold Rush. It was quite literally a rush, once the news got out. That took awhile. Although rumors of the find surfaced in the East not long after Marshall's discovery, no one paid much attention. Then President Polk announced in December 1848, that there looked to be enough gold in California to pay for the costs of the Mexican War many times over. That made people sit up and take notice.

Going West

More than 90,000 people made their way to California in the two years following the first discovery and more than 300,000 by 1854 — or one of about every 90 people then living in the United States. The stampede ripped families apart and stripped towns of a large percentage of their young men. Not all of the prospectors were American. An 1850 census showed that 25 percent of those counted were from countries as far away as Australia and China.

It wasn't easy getting there. From the East Coast, one could take a 15,000-mile, five-month voyage around the tip of South America. More than 500 ships made the voyage in 1849 alone. You could also cut across the Isthmus of Panama and take two months off the trip, if you were willing to risk cholera and malaria. By land, the 2,200-mile journey from trailheads in Missouri or Iowa might take three or four months — with a lot of luck.

Some of those who came were already famous, like explorer and soldier John C. Fremont, who got rich when a land agent bought him property in the foothills rather than along the ocean — which is where Fremont wanted to buy — and the foothills proved to be drenched in gold. Some became famous later, like the New York butcher who made enough money from a meat shop in the Gold Rush metropolis of Hangtown to open a meatpacking plant in Milwaukee. His name was Phillip Armour.

History recalls them as the 49ers, since the first big year of the Gold Rush was 1849. They called themselves Argonauts, after the mythical Greek heroes who sailed in the Argo with Jason to search for the Golden Fleece. Most of them found nothing but disappointment, and many found death.

With few women to add a touch of civilization and balance, and no government, it was a pretty rough place. In just one July week in 1850 in a town called Sonora, two Massachusetts men had their throats slit, a Chilean was shot to death in a gunfight, and a Frenchman stabbed a Mexican to death. The town of Marysville had 17 murders in one week, and at the height of the Gold Rush, San Francisco averaged 30 new houses and two murders a day.

A miner making $8 a day (about $165 in 1999 dollars) was doing eight times better than his coal-mining counterpart in the East. But prices were outrageous too. A loaf of bread that cost 4 cents in New York cost 75 cents in the goldfields. All in all, most gold seekers were not any better off than laborers in the rest of the country.

What was worse, many of the diggers had always believed in the American adage that working hard would bring success. Finding gold, America learned, depended a lot more on luck than good intentions. Of course there were other ways to find gold than digging for it. Men like Collis Huntington, Charles Crocker, Leland Stanford, and Mark Hopkins — who became known as California's "Big Four" — made fortunes selling miners supplies and then branching into other pursuits such as banks and eventually railroads.

But there was gold, and plenty of it. During the Civil War alone, California produced more than $170 million worth of bullion, which helped prop up wartime Union currency.

The Gold Rush had other impacts as well. Although many of the 49ers came and left after a relatively short stay, many of them also stuck around. From a non-Indian population of about 18,000 in January 1848, California grew to a resident population of 165,000 within three years. San Francisco became a booming U.S. port and doorway to the Pacific. The growth and importance of the state also helped spur long-delayed congressional approval of the proposal for a transcontinental railroad.

Eventually the state was to become a magnet for different kinds of gold rushes. The beginning of the aerospace industry, Hollywood, the beginnings of the computer age in Silicon Valley, and the birth of the biotechnology industry all had California roots. But before all that could happen, it had to become a state.

The Compromise of 1850

Zachary Taylor was probably the least political of all American presidents. He served 40 years in the Army, but never held any other office before being elected president. In fact, he had never even voted in a presidential election. But the popularity of "Old Rough and Ready" carried him to the White House in the 1848 election after Polk lived up to his promise not to seek a second term.

Taylor had expressed no opinions during the campaign about the hottest issue of the time, slavery, and had no plans for what to do about all that land he had just helped take from Mexico. At the time, the country was equally, if uneasily, divided into 15 free and 15 slave states. So when California asked to be admitted as a state, the debate raged on which side it should fall. Its own constitution banned slavery, mostly on the practical grounds that gold miners didn't want to compete with slaves digging for their masters. The president agreed.

Those aging giants of Congress, Henry Clay of Kentucky and Daniel Webster of Massachusetts, urged yet another compromise approach. But Taylor was adamant that California be admitted without delay as a free state. Southerners, led by their own aging giant, John C. Calhoun of South Carolina, were just as adamantly opposed. Representatives from nine southern states met in Nashville in June 1850, to consider leaving the Union if California were made a free state.

Fortunately for everyone but himself, Taylor helped solve the problem by suddenly dying of typhoid fever. His successor, a pliable fellow from New York named Millard Fillmore, was much more acceptable to a deal. Pushed by the last great speeches given by Clay and Webster, and with the help of a U.S. Senate newcomer from Illinois named Stephen Douglas, a deal was reached.

The Compromise consisted of a series of five bills. California was admitted as a free state; New Mexico and Utah were admitted as territories, with the slavery question to be settled later; Texas received $10 million for land it gave the new territory of New Mexico; the slave trade was abolished in Washington, D.C.; and a fugitive slave law was approved that made it much easier for slave owners to recapture escaped slaves by getting federal help.

The Fugitive Slave Law put all black people at risk, since all a slave owner had to do was sign a paper saying the person was an escaped slave, show it to a federal magistrate, and slap the chains on. Although only a few hundred African Americans were victims of the law, it outraged many Northerners, and anti-slavery resentment grew. But talk of dissolving the Union died down. For the last time, a compromise worked. Clay, Calhoun, and Webster would all be dead before it fell apart.