SOCKING IT AWAY

How 49ers Protected Their Gold

© Craig MacDonald

"Gold! Gold! Gold! Gold!

Price of many a crime untold,
How, oh how, can I protect my gold?"

Protecting hard-earned gold was a growing concern for miners in the 1850s. After thousands of immigrants descended upon the Sierra in a frantic search for riches, there was a dramatic increase in robberies, violence and other crimes.

Prospectors sought safe ways to protect and transport their gold. Being armed with a gun and knife didn't necessarily "cut it" when it came to securing valuables. You could not even be near your "wealth" all the time, so Forty-Niners tried creative ways to hide their loot.

Some kept dust around the waist in special buckskin belts. Others tried hiding it beneath logs, behind wall-boards, in tree trunks, tin pots and pans; one even kept live snakes in his cache to deter thieves.

Sometimes they were lucky enough to have a person of "outstanding character" take in their dust and nuggets for safekeeping. Innkeeper Mary Stanfield of Rich Bar was selected as "community banker." She tagged, then carefully placed bags of dust under her kitchen floorboards. Gallant Dickinson of Mokelumne Hill was given similar responsibilities. Dickinson's "vault" was an "excavation" a yard square under his bed. There he stored miner's treasure bags, tied together with string. He always kept a large revolver handy to protect the "bank."

If a merchant had a safe, miners often placed their dust in it. In return, they got a receipt other storekeepers could honor or discount against.

"Banks," without any government regulations, started popping up all around the Sierra. One was in a livery stable, another at a hotel, yet another in an undertaker's office.

Many "bankers" kept funds securely on deposit until customers wished to send home money; then they sold "Bills of Exchange." Some even paid miners 5-6% interest per month on deposits.

Merchants and bankers also bought dust with gold coins, which were accepted everywhere. An ounce of dust was worth about $16 but buyers purchased it at a discount.

D.O. Mills, whose family operated a store and bank in Sacramento, bought dust in exchange for slips of paper that could be cashed for gold coin at banks back home. "The Bank of D.O. Mills" developed such an honest reputation that it helped Sacramento become a financial center. He even opened a successful bank in Columbia.

Wells, Fargo & Co. also built a solid reputation for integrity as it flourished, purchasing several express businesses and having bank branches or agents throughout the Mother Lode and elsewhere. Most miners trusted Wells Fargo in giving them an "honest shake" when purchasing their dust.

Express companies transported the dust to banking facilities in San Francisco. A lot of the Sierra dust was then shipped to New York, New Orleans, London, China, South America and other distant destinations.

In 1850, dust valued at more than $29 million was shipped out of San Francisco; the figure jumped to over $45.8 million in 1852. And, these figures may have been only half of the dust "officially" reported, according to some historians.

In 1851, Henry Schliemann was taking in Sierra dust "hand over fist." "The Bank of Henry Schliemann," at Front & J streets in Sacramento, was "constantly jammed, crammed and rammed—full of people from all nations and I have to speak all day long in 8 languages," he wrote in his diary. "Gold dust comes in plentifully (from 5am-10pm). My purchases go (mainly) to the House Of Rothschild in London, whose branch in San Francisco (B. Davidson & Co.) supplies me by every night's steamer with the necessary gold coin."

Funny thing, not only did American gold coins circulate in camps and cities but also French francs, English shillings and Mexican double-reals. Some businesses accepted all of these and others from the emigrants who flowed in from around the World.

To complicate money matters, some banking firms, like Felix Argenti & Co., actually issued their own paper money--$50, $100, $500 and $1,000—pledging they would pay "on demand for value received." (In 1855, the State Legislature banned the issuing of such "money.")

No wonder financial crises erupted in the 1850s. They were due to a lot of factors, such as the issuance of money by private firms, bad banking practices, over-expansion, wild speculation and white collar crime.

But even during the worst crisis in 1855, several firms, like "The Bank of D.O. Mills," "stood through the tempest unshaken by keeping their business consolidated," reported "The Sacramento Journal."

During these crises, some miners chose to once again hide their precious dust, just like before. Problem was, sometimes they were unable to recoup their treasures for many reasons, including forgetting exactly where they hid them.

In 1892, a woodcutter near the old diggings of Bangor, noticed a peculiar mark on a tree. Having heard the stories of Gold Rush stashes, he carefully cut into the pine, finding a tin box loaded with gold dust and nuggets.

Such finds probably have occurred every year since the Gold Rush—though most undoubtedly go unreported as many fortune-finders chose to "sock it away" Sierra-style, just like their predecessors.

(Craig MacDonald's great-grandmother came to California in a covered wagon during the Gold Rush. Two other relatives came as a miner and gambler. He has spoken at national conferences & universities and been nominated for a Pulitzer Prize.)