“Crisis” and the California Gold Rush

IN HIS INTELLECTUAL HISTORY of the evolution of the term “crisis,” Reinhart Koselleck claims that it was in the decades between 1840 and 1860 that the economic use came into its own, as separate from previous medical and judicial meanings. In the writings of Marx and Engels, for example, it was used predominantly in the economic sense after 1844. Koselleck points to the role of the crash that followed the gold rush in creating the conditions for the first truly global economic crisis after 1856 that was locatable “everywhere and nowhere” at the same time. The global economic consequences of the gold find in the Sierra Nevada had been massive, spurring growth in shipping, changing migration patterns, boosting the buying power of countries whose gold reserves were greatly increased, and setting off a wave of worldwide speculation, the interconnected nature of which had hardly been seen before. In France, the influx of capital, that was a result of the gold rush, promoted lending at a low interest rate and created the conditions for the invention of the Crédit Mobilier, which would change the face of European finance and serve as a model for the great German industrial banks. In Germany, the gold rush contributed to a similar boom in credit institutions and an “orgy of bank founding” that accompanied the flourishing of Aktiengesellschaften (joint stock companies) as well as a rise in financial speculation in the middle and upper classes.

In addition to the economic effects of the gold rush, the cultural impact of the almost ten-year boom, and subsequent crash, reached far beyond the borders of the United States and throughout what had only recently begun to be understood as an interconnected global financial system. The Swiss pioneer John Sutter's place at the center of the gold fever resonated in the German-speaking world and was partially responsible for the large proportion of German speakers among the migrants drawn to California. The image of Sutter and the “49ers”—the international influx of prospectors seeking gold who followed him—remained as a symbol of speculation and risk for decades to come.