Secretary of State James Buchanan received a letter in 1849 describing San Francisco and Monterey. It said that three-fourths of the houses were deserted or selling for the price of the building lot. Every blacksmith, carpenter, and lawyer had left. Brickyards, sawmills, and ranches were abandoned. Volunteer soldiers had deserted and sailors were jumping ship. Both newspapers had been discontinued. Even the judges had left.
Californians had word of the discovery of gold all to themselves for the first six months of 1848, but eventually the news spread to Oregon. In July, Captain Newell docked his brig Honolulu at Fort Vancouver. He bought all the mining supplies he could under the pretense of supplying coal miners, but this pretense quickly wore thin. Once the word was out, two-thirds of all adult males in Oregon headed south. Wagon trains of up to 150 men and fifty oxen-pulled wagons traversed the Applegate Trail and Fremont’s route to Sacramento.
In Oregon, crops were neglected and Indian wars forgotten. Gaps appeared in newspaper editions. The Oregon Spectator, the first newspaper published west of the Rocky Mountains, disappeared from September 7th to October 12th, 1848, then reappeared with this apology: “The Spectator, after a temporary sickness, greets its patrons, and hopes to serve them faithfully, and as heretofore, regularly. That ‘gold fever’ which has swept about 3000 of her officers, lawyers, physicians, farmers, and mechanics of Oregon from the plains of Oregon into the mines of California, took away our printers.”
The 1848 session of the Oregon legislature was scheduled to meet on December 5, but twelve of the twenty-two representatives were missing. Seven had bothered to write letters of resignation, and five had actually been replaced by special elections. Among the missing were such Oregon Trail pioneers as Asa Lovejoy, founder of Portland, wagonmasters Peter Burnett and James Nesmith, and Osborne Russell, member of Oregon’s first Executive Committee. Arrest warrants were issued for those who had not resigned, and the legislative session was canceled. Elections were mandated for a special session to be convened on February 5, 1849.
Some Oregonians struck it rich and lived out their lives on Nob Hill in San Francisco, but most had returned to the Willamette Valley before the first 49ers arrived from the East. Many came home with pockets full of gold dust and trunks full of clothing and furniture from San Francisco. Henry Garrison recalled that his father returned with fancy clothes and made him wear them to church, making him the target of much giggling among the girls in the congregation. When the services were over, he rushed home to change back into his buckskins.
Oregon changed from a community content to provide for itself to an ambitious and efficient supply house for people too busy mining and building to produce their own food. New flour mills, sawmills, and towns grew up along the banks of the Willamette. The river was alive with vessels loading goods for California. Debts were paid off — except those owed to John McLoughlin — as Oregon’s economy leapt into high gear.
Across Oregon, businesses and industries were growing. New varieties of sheep were imported from Australia. Wheat purchased for 62¢ a bushel at the mill sold for $9 a bushel in California. Apples sold for $1.50 each in California, and 6000 bushels were immediately sent south. New orchards were set in the fall of 1848, and by 1856, 20,000 bushels were shipped. Roads and mail service from Oregon City to Sacramento were developed or improved.
Merchants like Francis Pettygrove, ship builders such as Lot Whitcomb, and ship owners like Captain John Brown made their fortunes overnight. Along the bluff above Oregon City’s business district were located at least a dozen fancy mansions financed with California gold. Almost all of these mansions are gone today, giving up their prime view locations to businesses and new homes.
However, the news wasn’t all good. Wages were driven up because so many men were at work in the mines, and many farmers and mill owners found it difficult to break even, let alone turn a profit. Oversupply prevented them from raising prices, and there was support in some quarters for the legalization of slavery in order to bring down labor costs.
Prior to the California gold strikes, an almost total absence of circulating currency in Oregon had spawned such innovations as Abernethy Rocks: small stones inscribed with the letters “GA” and used as change in Governor Abernethy’s store. But with gold suddenly pouring into Oregon as fast as $2 million a year, no standards existed for exchange. On February 16, 1849, the Provisional Government passed an act to provide the territory with desperately needed coinage. The law allowed $16.50 an ounce for virgin gold, without any alloys, to be minted into five and ten pennyweight pieces.
The only coins actually minted under this law were the Beaver coins produced by the Oregon Exchange Company. The pure gold $5 and $10 pieces were stamped “T.O. 1849, Territory Oregon, KMTAWRCS” on the obverse and “Oregon Exchange Company. 130G. Native Gold, 5D” or “l0pwts, 20 grains, 10D” on the reverse. The initials stood for the owners of the company: Kilbourn, Magruder, Taylor, Abernethy, Wilson, Rector, Campbell, and Smith. Most of the Beaver coins were later melted down and recast at the San Francisco mint, as they contained 8% more gold than US coins of equivalent dollar value. Those that survived have become rare and valued collectors items, as they were produced for only two weeks.
When Territorial Governor Joe Lane arrived to take office, one of his first duties was to review all laws enacted by the Provisional Government. The only law he voided was the coinage act, as the US Constitution restricts the power of minting money to the federal government. The stamps were to be broken on the rocks of Willamette Falls, but they somehow ended up in a museum, instead.
That, however, was not the end of gold fever in Oregon. The town of Jacksonville, Oregon, exists because James Cluggage and John R. Pool discovered gold in the Rogue River Valley in December, 1851, and January, 1852. Later in 1852, gold was discovered along the Umpqua River near Scottsburg, a town founded in 1850 by Applegate trailblazer and pilot Levi Scott. These strikes started a gold rush in southern Oregon that attracted miners from both the Willamette Valley and California. The mines generated enough wealth that in 1853 and ’54 there was talk in Jacksonville of attempting to separate southern Oregon from the rest of the Oregon Territory in the hope of eventually founding a new, pro-slavery state between California and the Willamette River Valley. Plans harbored by this movement to annex the northern reaches of California doomed it to failure.
Like the California gold fields, the Oregon mines attracted single, unattached men almost exclusively. Heretofore, Oregon had been the destination of families, farmers, and settlers; the mines brought a distinctly unsavory element to the Territory. This might have had little impact on the character of white civilization in the area — miners tended to follow the latest rush, and the boomtowns along the Rogue and Umpqua Rivers would have eventually emptied out — except that the Indians of southern Oregon were generally more hostile to whites than those in the north. The spring and summer of 1855 saw an escalating cycle of provocation, retribution, and retaliation that culminated in what was then described as the “most sanguinary war” — that is, the bloodiest — in Oregon’s short history.
Tensions exploded in July, 1855, in the Humbug War, named for the creek along which the hostilities took place. More than two dozen Indians were cruelly and indiscriminately killed by shooting, hanging, or being thrown down abandoned prospect holes. On October 8, 23 noncombatant Indians (women, children, and old men) were killed in what was known as the Luptin Affair. The next day, 16 whites of all ages and both sexes were killed in the Rogue River Massacre. The fighting climaxed on October 17 at the Gallice Siege, wherein four whites and an undetermined number of Chinese were killed when Indians trapped a volunteer militia in buildings which they set ablaze with flaming arrows. (Note that when whites were killed, the settlers generally labeled the incident a “massacre”; when Indians were killed, the settlers chose different words.) The situation was eventually calmed by Indian Agent Joel Palmer, who spent 1855 imposing treaties on almost all the tribes of Oregon and sending them to reservations.
A few years later, in the early 1860s, gold was discovered in the southern Blue Mountains of eastern Oregon in the areas of Union Flat and the John Day River. These strikes gave rise to boomtowns such as Auburn, Sumpter, Elkhorn, Pocahontas, John Day, and Mitchell. Hard rock mines and prospect shafts were sunk throughout the area, and in the area around Sumpter, the entire valley was dredged and sluiced in search of gold. Baker County in eastern Oregon was unofficially born in May, 1862, when a group of miners in the Union Flat area organized an election board and sent in their returns under the name of Baker County, though at the time the area was part of Wasco County. On September 22, 1862, Baker County was carved out of Wasco County and Auburn was designated the county seat, an honor soon lost to Baker City.
The lure of gold is largely responsible for the speed with which white civilization spread beyond the Willamette Valley in Oregon during the 1850s and ’60s. Prior to the strikes in southern Oregon, towns and villages in that area were slowly being established along the routes connecting the Willamette Valley to California; once gold was discovered, miners, merchants, and scoundrels of every sort flooded into the valleys of the Rogue and Umpqua rivers. Boomtowns sprang up overnight, new roads were graded, and the power of the local Indian tribes was broken. When the mines played out and the riverbeds would yield no more gold, the miners and prospectors moved on and left behind the infrastructure necessary to support farming communities and logging camps. Likewise, eastern Oregon was generally considered Indian country — few others wanted to live there — until the gold strikes in the Blue Mountains led to the forced relocation of the Nez Perce to make way for whites eager to exploit the newly-discovered gold fields. The search for gold became a dominant force not only in Oregon, but Idaho and Montana, as well, altering the patterns of settlement that had ’til then been driven by emigrants looking for farmland.