California Gold Rush
During the mid-19th century, the United States would see several major changes in the way it’s economic system worked, forever changing the way business and capitalism worked. These changes were just the beginning of something larger, which would later be kenned as the Californian Gold Rush. This Gold Rush would cause an influx of thousands of people endeavoring to get rich quick from the copious amounts of the precious metals in the ground. Although the conception of this idea being reality was tempting, many never made it big, causing a negative view of the Gold Rush to be born. Even due to this fact, the Gold Rush would refine and revise the U.S. economy into something it had never experienced before. How did the California Gold Rush Impact
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Local banks fulfilled this need by providing a safe and reliable place for one to store their gold, and would then give out what was called “banknotes”, similar to the modern U.S. dollar, in order to easily retrieve ones gold when it was needed. The closer the issuers of said banknotes were to the miners, the more reliable they were, so many outside of the California Gold Rush did not have the best of reputations, which caused an unstable economy during the earlier days of banking. Even due to this fact, the privately owned competing banks in areas such as California faced fierce competition with these local banks. The most important role that these banks had were to create a sort of ‘middleman’, providing a cash substitute in the form of their “banknotes”, as well as showing the importance of such intermediaries in a new and growing economy that would be later called the California Gold …show more content…
Determining the purity of gold was in its early stages, so weights were used instead. This meant that the miners would not only be forced to carry around a satchel with all of their findings, but would also have a secondary pouch with a scale and some weights. Some miners would weigh their gold differently than others, creating a problem when attempting to buy items. Mints were then created to solve this problem, charging a small amount in order to refine and stamp the user's gold with the correct weight, making it easier for both the miner and the supplier of goods to determine a price. The early gold merchants had a set price for buying gold per ounce. The usual prices were between $8-$16, depending on the ounce, and would later sell their findings for around $18-$20 to other buyers (Doti, 214). These buyers were more concentrated on the East Coast of the United States, as it was rare to find such precious metals in areas such as
Local banks fulfilled this need by providing a safe and reliable place for one to store their gold, and would then give out what was called “banknotes”, similar to the modern U.S. dollar, in order to easily retrieve ones gold when it was needed. The closer the issuers of said banknotes were to the miners, the more reliable they were, so many outside of the California Gold Rush did not have the best of reputations, which caused an unstable economy during the earlier days of banking. Even due to this fact, the privately owned competing banks in areas such as California faced fierce competition with these local banks. The most important role that these banks had were to create a sort of ‘middleman’, providing a cash substitute in the form of their “banknotes”, as well as showing the importance of such intermediaries in a new and growing economy that would be later called the California Gold …show more content…
Determining the purity of gold was in its early stages, so weights were used instead. This meant that the miners would not only be forced to carry around a satchel with all of their findings, but would also have a secondary pouch with a scale and some weights. Some miners would weigh their gold differently than others, creating a problem when attempting to buy items. Mints were then created to solve this problem, charging a small amount in order to refine and stamp the user's gold with the correct weight, making it easier for both the miner and the supplier of goods to determine a price. The early gold merchants had a set price for buying gold per ounce. The usual prices were between $8-$16, depending on the ounce, and would later sell their findings for around $18-$20 to other buyers (Doti, 214). These buyers were more concentrated on the East Coast of the United States, as it was rare to find such precious metals in areas such as