After the Mexican War, California became a territory of the United States. Already a number of settlers were there, attracted by the fertile soil and fine climate. Among them was Captain John Sutter, who had moved to California from St. Louis about ten years before the Mexican War.

Captain Sutter had built a fort on the site of the present city of Sacramento. About fifty miles above it, in 1848, he was having built a saw-mill on the American River. The mill was finished and started, when the tail-race was found to be too small to carry off the water. To deepen the race, the whole head of water was turned on to wash it out to the required depth.

One of the men, named Marshall, who had charge of the mill, watched the work of the water, and saw many shining particles lodged in the crevices of the rocks, or in the dirt the water had carried down. Thinking these particles might be gold, he gathered a small bag of them, without saying anything to anybody about his suspicions.

As soon as he could leave, without attracting notice, he mounted his horse; and rode to the fort, fifty miles away, in order to show what he had found. He asked to see Sutter alone.

Sutter was surprised at the earnest manner of his foreman, and led the way into his private room; here he locked the door. "What is the matter, Marshall? Is anything wrong at the mill?" asked he.

"Nothing is wrong at the mill, sir," replied Marshall, "but I have something here to show you that may surprise you."

He then handed his employer the bag, which, being opened, was found to contain a handful of yellow metal, in small flakes and little lumps, which he said he had taken from the mill-race, and which he thought might be gold.

The two men by the light of a candle bent eagerly over the little heap of shining particles. Sutter could not believe it was gold. Marshall declared it was nothing else. Acid was applied, the metal was weighed, and other tests were used, until there was no doubt of the fact.

"You have found gold," said Sutter at last. "But let no one know of it until I can set my house in order; for this knowledge will change everything here."

His was an idle request. The next day the secret leaked out at the fort, and the news went at once to the mill. In a week, it was known for miles around, and everybody was saying to everybody else, "Gold has been found at Sutter's Mill."

Sutter's men deserted him in a body, and the saw-mill was left without hands to run it. Every settler and Indian in the neighborhood began searching the streams, the gullies, the mountain sides, and the bed of the river for gold particles. The miners then began to straggle down to San Francisco with their pouches of gold-dust, and to show them to the people there.

This was enough to start a panic rush for the gold fields. In three months most of the houses in San Francisco, and in Monterey, were shut up, and their occupants turned in mad haste for the hills. Sailors left their ships in the harbor, carpenters abandoned their benches, lawyers closed their offices, physicians deserted their patients, even the newspapers suspended indefinitely.

Everybody who could get a shovel and a pan, and a week's supply of provisions, was off for the mines. The people were as wild for gold-hunting as ever were the Spaniards of former days.

The result was that mills were left idle, fields of wheat were turned over to the horses and cattle, houses became vacant, and farms went to waste. People had no thought for food or anything else.

Tents were built near the mines, and along the river-beds where the gold was found. There were fabulous stories of men who made fifty dollars a day. One miner, with a common tin pan, washed out gold to the value of eighty-two dollars in a single day. A man who made less than ten dollars a day was not considered a good miner.

Prices went bounding higher and higher. Flour was worth fifty dollars a barrel, a common spade sold for ten dollars, rooms were rented for a dollars a month each, and a simple two-story house at Sutter's fort brought five hundred dollars a month as a hotel.

In the meanwhile, gold was found in other areas. Every day new stories were heard of some rich "find" somewhere, followed by a mad rush to the place. In a few months, four thousand people, half of whom were Indians, were washing for gold, as if it were the only business in life.

Vessels, returning from San Francisco, carried the wonderful news to all parts of the world. Everywhere was blazoned the story that gold was found in the streams, on the mountain sides, and in the gullies of California. There was a mad race for the gold-fields! Adventures from the islands of the Pacific, from South America, even from China, began to pour in by every arriving ship.

The news reached the Atlantic ports, and society was stirred to its very depths. First there was wonder and distrust, but the stories kept on coming, until the East went wild with the fever for gold. How to get to California was the one great question!

It was three thousand miles across the plains, and a still longer journey by the Isthmus of Darien, or by water around Cape Horn. This did not deter or dismay the eager people. Ships were fitted out in every port, caravans were made ready for the overland journey, and thousands of gold-hunters started for the land of wealth.

In one year, a hundred thousand people moved into California, coming from all sections of the country, and from nearly all parts of the world.