Path of Gold

Portsmouth Square, San Francisco: 1851 daguerrotype. Once the gold was recovered, there were many paths the gold itself took. First, much of the gold was used locally to purchase food, supplies and lodging for the miners. It also went towards entertainment, which consisted of anything from a traveling theater to alcohol and gambling to prostitutes.These transactions often took place using the recently recovered gold, carefully weighed out. These merchants and vendors, in turn, used the gold to purchase supplies from ship captains or packers bringing goods to California. The gold then left California aboard ships or mules to go to the makers of the goods from around the world. A second path was the Argonauts themselves who, having personally acquired a sufficient amount, sent the gold home, or returned home taking with them their hard-earned "diggings." For example, one estimate is that some US$80 million worth of California gold was sent to France by French prospectors and merchants. As the Gold Rush progressed, local banks and gold dealers issued "banknotes" or "drafts"—locally accepted paper currency—in exchange for gold, and private mints created private gold coins. With the building of the San Francisco Mint in 1854, gold bullion was turned into official United States gold coins for circulation. The gold was also later sent by California banks to U.S. national banks in exchange for national paper currency to be used in the booming California economy.

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