PROFITS

Although the conventional wisdom is that merchants made more money than miners during the Gold Rush , the reality is perhaps more complex. There were certainly merchants who profited handsomely. The wealthiest man in California during the early years of the Gold Rush was Samuel Brannan, the tireless self-promoter, shopkeeper and newspaper publisher. Brannan alertly opened the first supply stores in Sacramento, Coloma, and other spots in the gold fields. Just as the Gold Rush began, he purchased all the prospecting supplies available in San Francisco and re-sold them at a substantial profit. However, substantial money was made by gold-seekers as well. For example, within a few months, one small group of prospectors, working on the Feather River in 1848, retrieved a sum of gold worth more than $1.5 million by 2006 prices.

On average, many early gold-seekers did perhaps make a modest profit, after all expenses were taken into account. Most, however, especially those arriving later, made little or wound up losing money. Similarly, many unlucky merchants set up in settlements that disappeared, or were wiped out in one of the calamitous fires that swept the towns springing up. Other businessmen, through good fortune and hard work, reaped great rewards in retail, shipping, entertainment, lodging, or transportation. Boardinghouses, food preparation, sewing, and laundry were highly profitable businesses often run by women (married, single, or widowed) who realized men would pay well for a service done by a woman. Brothels also brought in large profits, especially when combined with saloons/gaming houses.

By 1855, the economic climate had changed dramatically. Gold could be retrieved profitably from the goldfields only by medium to large groups of workers, either in partnerships or as employees. By the mid-1850s, it was the owners of these gold-mining companies who made the money. Also, the population and economy of California had become large and diverse enough that money could be made in a wide variety of conventional businesses.

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