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Printable Version
Timeline of History, Price, and
Economics of U.S. Gold
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Introduction
Gold has been used as a universal standard of value and the common
medium of exchange in the world of commerce. It still is the
“noblest of metals” and most praised commodity in the world for many
people. The saga of gold has touched many nations; here in
California the Gold Rush was the basis of much of our local history
and heritage.
This documentation about gold is a compilation (1579 – 2008) of
events in a timeline starting from the beginning of the formation of
the United States economy.
More Gold Mining Techniques Information
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Gold in Tuolumne County |
Gold in California |
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1579
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Sir
Francis Drake, famous English pirate, reported gold “occurring in abundance,” when he landed on the coast of California. |
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1717
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Sir
Isaac Newton, master of the British Mint, established a fixed price
for gold equivalent to about $20 per ounce (Troy.) |
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1776 |
American Revolution began; ended 1783. U.S. won its freedom from
England and established its own government and economic systems. |
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1792 |
Alexander Hamilton, first U.S. Secretary of Treasury under President
George Washington, priced the American dollar at 24 ¾ grains of gold
(not quite 1/20 of an ounce, making its price $19.39.) This set the
“gold standard.” The price of gold remained approximately $20 per
ounce until February 1934, a period of 142 years.
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1814-15
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Other reports of gold during the governorship of Jose Argello during
the Spanish regime were down played as a result of local Indian
hostility in California. |
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1783 |
Between the end of the American Revolution War and 1823, the U.S.
purchased gold at $15 per ounce and accumulated $20 million in
gold. Much of the gold went to England after the end of the War of
1812. |
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1824 |
Gold was being used by Spanish soldiers for barter in California. |
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1837 |
U.S. raised its buying price for gold to $16 to again accumulate
gold for coinage, which reached a reserve value of $250 million. |
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1842
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The
earliest beginning of the rush to gold was in Southern California
after Francisco Lopez, majordomo of San Fernando Rancho, stopped to
rest in San Feliciano Canyon and dug up wild onions to eat. He
found particles of gold in the roots, and found alluvial gold
deposits nearby. Locals from the area, within 35 miles, from the
Pueblo of Los Angeles initially came in search of gold. Within the
year, men experienced in gold mining came from Sonora, Mexico. The
miners used “dry washing” to extract the gold which was inefficient
and hard work. |
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1843 |
Don
Abel Stearns, a miner from Los Angeles, sent 18 ounces of placer
gold dust to the U.S. Mint in Philadelphia by messenger. The mint
paid $19 per ounce and recorded the first discovery of placer gold
from California. Very little excitement was generated because of
the small amounts of gold that was recorded |
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1846 |
In an official communication in March, Thomas Larkin,
Vice-Counsel
at Monterey, notified Secretary of State James Buchanan of the fact
that gold was found. There was still very little publicity of the
gold. Mexican authorities were not inclined to increase immigration
into California. At the time, California was still under the
control of Mexico. |
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1846-48
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The Mexican-American War started over the control of Texas and
California. By 1848 the U.S. had won the war, taking over both
states. This happened about the same time gold was discovered in
Coloma, California. |
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1848 |
January 24th, James Marshall party discovered gold on the
South Fork of the American River at the sawmill (Coloma) constructed
for John Sutter. Marshall and Sutter attempted to keep the gold
discovery a secret, but by March 15, 1848, the San Francisco
newspaper The Californian, published an article. The
discovery of gold became known worldwide, starting the beginning of
the major Gold Rush in California. |
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1848 |
During the summer, gold was found at Woods Creek in what is now
Jamestown by Benjamin Woods and James Savage party. This discovery
was the beginning of the Southern Mines and what is now Tuolumne
County |
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1848 |
In
December, President James K. Polk reported to Congress the samples
of gold dust from California indicate a rich discovery of gold in
the far west reaches of the continent. This official report created
a major migration of the 49ers to California. The number of people
engaged in mining skyrocketed from 4,000 in 1848 to about 100,000 by
1852, staying at that level until the late 1850s |
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1850 |
California became the 31st state of the U.S. in
September. Because of California’s potential wealth, rapid
population growth, law and order issues, and financial institutions
earned its statehood. This process skipped the usual process of
first becoming a territory. |
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1852 |
The
Gold Rush made up of mostly placer gold mining, reached a peak. The
price of gold was still $19.39 per ounce. Mining technology during
the placer mining period, 1848-1860, consisted of “dry washing,”
panning using Indian “batea” or metal gold pans, rockers or cradles,
and “long toms” or sluice boxes of various sizes. Later came the
use of leveraging water to do more work using a method called
“booming” or “hushing” for clearing away sediment using dams and
employing ground sluicing to recover gold from the gold laden river
beds |
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1853 |
Hydraulic mining used water under pressure with nozzles termed
“giants” to cut down the outcrops on hillsides of alluvial gravel.
The water flowing downhill washed the soil into large long sluices
strung along the base. Hydraulic mining was stopped by farmers in
1884 by legal injunctions concerning its negative environmental
effects |
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1853 |
Hardrock quartz mining was explored in the early placer mining days,
with little success. Tunnel mining, drift and pocket mining was
used to drill into the ancient river beds covered by volcanic rock
at Table Mountain in Jamestown. The concept of dredging was tried
unsuccessfully, until 1898, when a dredge floated and worked river
beds below the surface on the Feather River, near Oroville. This
concept continued in to the late 1960s. |
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1860 |
The
population of California was 380,000. |
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1862-65
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During the Civil War, most of the $250 million U.S. gold reserve was
sold to England for $16 ounce. |
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1860-1880
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Many
California miners went to Comstock, Nevada to follow the gold and
silver mining strikes. This depleted the manpower available to
California hardrock mining, which still was experimenting with
various techniques. Renewed interest in California deep shaft
quartz mining in the 1880s was a result of these new techniques |
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1870 |
The
population of California was 560,000. |
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1880 |
The first 100 years of California’s statehood, the population
doubled about every 25 years. In 1880, the population was 865,000. |
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1880-1905
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The Second Gold Rush in California was realized when many miners
returned from the Comstock after learning and developing new
techniques necessary for drilling deeper mines and applying
electricity, including chemical extractions of gold from poor grade
ores. Environmental law limited the use of chemical (cyanide) in
California. |
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1929 |
The stock market crashes and investments dwindle; meantime, people
are seeking out gold and hording it. |
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1933 |
During the Great Depression, President Franklin D. Roosevelt was
elected and moved quickly to end the outflow of gold from banks.
With a proclamation, he closed all banks in the U.S. for a three day
moratorium. This stopped citizens from removing and hording gold.
He then required all citizens holding gold return it to the banks
under threat of imprisonment and a fine of $10,000. This stimulated
the domestic economy by encouraging people to spend their money
instead of holding it in gold bars. In addition, only those U.S.
citizens who dealt with gold for “customary industrial,
professional, or artistic” use could own refined gold by obtaining a
special license. |
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1934 |
Roosevelt signed the Gold Reserve Act, which gave the government
authority to demand physical possession of gold, to prevent its
export, to reduce the amount of physical gold in coined dollars, to
set aside the gold clauses in private and public contracts, and to
fix the price of gold. |
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1934-1960
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The U.S. attempted to maintain the price of gold at $35 per ounce by
selling to the free market when the price increased, bringing the
price back down. |
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1935 |
The increased price of gold, combined with lower wages and material
costs prevailing during the Depression, caused gold mining to become
attractive again. Old mines reopened and currently operating mines
expanded. |
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1942 |
The U.S. government closed down the gold mining industry as a
non-essential, war-related industry (War Production Board’s Order
No. L-208.) This was an attempt to move the mining labor force into
mining metals needed for the war effort. |
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1944 |
A
“foreign-exchange gold standard” was adapted to regulate
international trade. Currencies of many countries were valued in
terms of the U.S. dollar. At that time, the U.S. was the most
powerful nation in the world, both politically and economically,
having the most stable currency in the world. In theory, the
U.S. would redeem its paper money for gold on the international
market. |
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1945 |
At the end of WW2, U.S. gold mining was reinstalled. Many
California gold mines had flooded, caved in and were in a general
deteriorated condition, requiring prohibitive capital needs to
reopen. |
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1950s |
The
U.S. spearheaded an ill-fated attempt to change the world’s thinking
about gold, weaning it away from gold as a medium of exchange, and
setting the worldwide value of gold at $35 per ounce. This was
known as the London Gold Pool, made up of eight major European
countries. The pool agreed to sell off their gold, if the
international price rose above $35 per ounce, and continued until
the price dropped. When implemented, the pool lost $991 million of
gold reserves. The U.S. lost $3.2 billion in gold reserves using
this concept. |
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1968 |
One-fifth of the U.S. gold reserves were gone. President Lyndon
Johnson asked the Bank of England to discontinue the London Gold
Pool. |
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1968 |
In
March, a two-tier market was established by the U.S. government.
One tier required the U.S. Central banks to continue to transact
business at the gold standard of $35 per ounce. The second tier
allowed gold to fluctuate at what price supply and demand dictated. |
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1971
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In
August, to prevent further leakage of gold, President Richard M.
Nixon issued an Executive Order which ended the U.S. redemption of
gold at $35 an ounce, and raised the price of gold to $38 per
ounce. In December, the U.S. dollar was devalued |
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1972
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The
gold standard price of gold was raised to $42.22 per ounce. With
the announcement by the major U.S. Central banks that they would buy
and sell gold at the free market price, the two-tier market
perished. The concept of government regulation of the price of gold
ended and was now based on supply and demand. This marked the end
of the 180-year-old gold exchange standard and ushered in the
current monetary system of floating exchange rates. Now, currencies
are backed by a nation’s economic net worth rather than by gold. |
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1974
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President Gerald Ford repealed all sanctions against U.S. citizens
owning or selling gold to anyone they wished. Gold essentially
became a commodity and was now listed on the New York Commodity
Stock Exchange. |
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1975
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The international gold market was dominated by the Union of South
Africa, Soviet Union, China, and other foreign countries, including
Canada. The largest and best known gold trading center was the
London Gold Market. |
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1980 |
The price of gold reached an all time high of $850 per ounce and an
average of $615 per ounce. This again raised interest in some
California gold mining districts. Large corporate interests with
major capital and access to newer mining technologies and high
volume open pit mining techniques. Many new mining enterprises
sprung into action. |
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1986-87
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The large Sonora Mining Company in Jamestown owned primarily by
Canadians, with a small share of California ownership, started high
volume open pit gold mining. It was an operation near the Harvard
Mining conglomerate, the Trio. Gold had risen to $368-$447 per
ounce over that period. The ore was transported to Nevada for gold
extraction due to California environmental restrictions. |
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1988 |
California’s annual gold production exceeded $320 million; most of
the gold came from about 15 large open pit mines. The most
productive California revitalized mines were not in the Sierran gold
counties, but in the Coast Ranges of Napa, Lake and Yolo Counties,
north of San Francisco. These areas had been previously mined for
mercury, not gold. |
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1994 |
After
eight years of gold mining, the Sonora Mining Company closed
operation because the average price of gold had fallen to $384 per
ounce. The overall cost of doing business, with the new
environmental laws, made mining an unattractive investment. This
basically ended major gold mining operations in Tuolumne County and
the Southern Mines in California |
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2006 |
In May, the average price of gold went up to $603 per ounce with a
high of $725 per ounce, the highest price since 1980 when the
average price was $615 with a high of $850 per ounce. |
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2007 |
The
yearly average price of gold was $695, with a high of $833 per
ounce. |
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2008
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In March, gold reached its all time high, with average price of $968
and a high of $1,011 per ounce; the yearly average was $871 per
ounce. |
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2008 |
In December, the U. S. government officially recognized the country
was in a technical recession. Unemployment rate rose beyond 8.5%,
the highest in 26 years. |
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2008 |
The
Dow averages in the stock market went from a strong value of
$13,000+, dropping in September to new lows, finishing in December
at $8,700 for a loss of about 34% in value.
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2009 |
In December, gold
reached its all time high, with an average price of $1,134 and a
high of $1,212 per ounce; the yearly average was $972 per ounce. |
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2010 |
Gold
reached an all time high price of $1431. The average Dow was
$11,578, an 11% gain over 2009 at the close of the year. |
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More Gold Mining Techniques Information
References:
Geologic Guidebook, Along Highway 49--Sierran Gold Belt, The Mother
Lode Country
(Centennial Edition), Olaf P. Jenkins, 1948.
Gold Mines of California, Jack R. Wagner, 1980.
Gold, The California Story,
Mary Hill, 1999.
A
Golden State, Mining & Economic Development in Gold Rush California,
James J. Rawls and Richard J. Orsi, 1999.
Fabulous Gold,
Donlu D. Thayer, 1975.
“Historical Gold Prices – 1833 to Present”, National Mining
Association, Washington D. C.,
www.nma.org
Gold Historical London PM Fix – USD”, Kitco
Bullion Dealers. |
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Historical average gold prices:
http://www.nma.org/pdf/g_prices.pdf. |
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