Gold’s history in the United States began in 1792 when the U.S. Congress established a bimetallic (gold and silver) standard for the nation’s newly minted currency. At the time gold was valued at $19.30 per ounce.
THE CALIFORNIA GOLD RUSH
In January 1848, John Marshall discovered traces of gold while building a lumber mill near Sacramento for a pioneer named John Sutter. Despite Sutter’s initial desire to keep the matter private and concealed, rumors spread and were confirmed by San Francisco publicist Samuel Brannan.
As word spread, Americans and immigrants alike abandoned their pursuits in favor of the Gold Country of California, eventually earning them the nickname, “Forty-Niners.”
The ensuing California gold rush would bring a total of 300,000 people to the state. Those who didn’t come by sea primarily traveled from the eastern portions of the United States by way of the California and Gila River Trails.
The hardships for those traveling were substantial, and while a few people made a fortune from their findings, many were hardly able to break even and pay for their trip.
This was partly due to how quickly the work necessary to obtain gold got progressively more strenuous.
The progression of difficulty went something like this:
- Picking up off the ground.
- Found in streams and riverbeds using the panning technique.
- More sophisticated and in-depth mining techniques.
- Technologically advanced systems requiring financing.
The longstanding effects of the Gold Rush made it a significant event in America’s young history, having grown the population of San Francisco from 200 in 1846, to 36,000 by 1852. During that time, roads, schools, churches and businesses were built, along with other towns, eventually leading to the establishment of California as a state in 1850.
The newly established agricultural and economical relevance of California would connect it with the eastern states via cross-country railroads that were completed by 1869.
THE SMITHSONIAN AGREEMENT
In 1933 President Roosevelt would suspend the convertibility of gold into dollars when it was still worth only $20.67 per ounce. By Presidential proclamation the conversion was reestablished, though at a higher rate of $35 per ounce.
THE GROUP OF TEN
It wasn’t until December of 1971 that the next landmark event in the American history of gold would take place.
During that month, members of 10 countries and the central banks of England and the United States, called the Group of Ten, would meet at the Smithsonian Museum and sign the Smithsonian agreement that effectively adjusted the fixed exchange rates that had been previously established at the Bretton Woods conference in 1944.
During that conference over 700 delegates from 44 allied nations in Bretton Woods New Hampshire established an international fixed exchange rate system based. Under this system, currencies were pegged to the U.S. dollar, convertible to gold at $35 per ounce.
This was done primarily as a response to the overvaluing or “deflation” of the dollar in the 1960s, brought on by debt from the Vietnam War, the Great Society programs and monetary inflation on the part of the Federal Reserve, all of which were draining the U.S. gold reserves.
The gold reserves kept in the London Gold Pool were an eventual casualty of these fiscal policies.
THE AGREEMENT
On August 15th of 1971, President Richard Nixon suspended the convertibility of dollars into gold, which culminated in a purposeful defaulting on the United States debt.
Almost immediately his administration began negotiating with industrialized countries to determine a new exchange rate.
While meeting at the Smithsonian Institute in Washington D.C. in December of 1971, a group of ten countries referred to simply as the Group of Ten, signed the Smithsonian Agreement. At that point the U.S. promised to peg the dollar at $38 per ounce of gold, along with 2.25% trading bands.
Additionally the signing countries agreed to appreciate their currencies against the dollar.
Though President Nixon touted the Smithsonian Agreement as a reorganization and improvement of international monetary affairs, the continued lack of discipline on the part of the Federal Reserve and the United States government caused pressure on the established rate and an eventual 10 percent devaluation of the dollar.
Within a matter of decades, every country involved in the Smithsonian Agreement decided to let their currencies float, effectively breaking the agreement.
While there is no clear cut answer to this question, gold has been in use by humans as far back as the Chalcolithic or Bronze Age. Early artisans of the time period used gold to fashion jewelry and other adornments. Golden artifacts have been found in the Balkans that predate the Christian Era by four millennia.
Throughout history, gold has had a rich history that has taken it through ancient Egypt, Greece, Rome and Africa. It has long been a part of the symbolism of these cultures and is used dominantly in their artifacts and adornments. In 2600 BC, the ancient king Tushratta of Mitanni claimed that gold in Egypt was more plentiful than dirt, perhaps the first reference to the modern phrase "streets paved with gold".
While we have no scientific proof of the claimed abundance of Egyptian gold during that time, there have been archaeological finds that seem to add some credibility to the claim, including the earliest known map, the Turin Papyrus Map. This map outlined the structure of an early gold mining facility and the local geography of a region in Nubia.
The Greek geographer, Strabo, shared the ancient methods of refining and extracting the gold from ore, including a smelting process called "Fire-Sitting". It is also believed that the Greek legend of the Golden Fleece that was pursued by Jason and the Argonauts may have referred to a practice of using fleece to trap gold dust in placer deposits, an early form of screening for gold.
The Romans were the first to develop wide spread gold mining methods, including hydraulic mining. Their quest for gold led the ancient Roman empire to expand throughout most of the known world.
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You probably hear about gold almost everywhere. Especially in the financial news, you will often hear about the price of gold or about some economic problems that have to do with gold. Gold is "real" money that has been used as a payment instrument since a long time ago. Who discovered it?
There are several theories about who discovered gold first in the world, but none are entirely accurate.
Gold: The Precious Metal
Gold has been used as currency and for other purposes for thousands of years. There are different types of gold: Gold bullion is gold in the form of bars or ingots. Gold coins can be in the form of sovereigns, Krugerrands, or any other type of coin which contains gold. Gold bars are like gold bullion, but they are usually smaller in size.
Early civilizations valued gold because it didn't tarnish so that it could be worked into jewelry or other objects and be passed on through generations. Today, gold is valued for its beauty and rarity. It is also widely used in industry. Gold is widely seen as a haven during financial trouble and a hedge against inflation. It tends to hold its value when stocks drop and economies are unstable.
The History of Gold
The history of gold mining begins with the earliest civilizations on earth. Miners dug deep holes in search of;
- Gold
- Silver
- Copper
- Tin
- Lead
- Iron
- Diamonds
- Coal and other minerals.
Gold miners used picks, shovels, baskets, pans, sluices, and drills to extract the minerals.
The development of metallurgy began when people realized they could use rocks to make things stronger. Metals were formed by heating an ore inside a furnace until it became liquid. They then poured the metals out of furnaces and made items like pots, pans, and weapons.
During the Middle Ages, many new ores contained more than one metal. For example, some alloys have both silver and gold. These are known as "mixed-metal" ores.
Who Discovered Gold First?
It may seem like an easy question to answer, but it's a bit more complicated than you might think. The first "discoverer" of gold was probably some random person who stumbled upon gold ore while they were out looking for food or something else. That person would have had no idea what he'd found since the concept of a precious metal like gold didn't even exist at the time.
The first person who recognized gold as an actual thing with value was likely a geologist or alchemist. These people studied rocks and soil to find valuable metals and minerals, so if anyone discovered gold, it would likely be them.
Gold has been around for thousands of years, even though it wasn't understood as a precious metal until much later. Many cultures from all over the world have legends and stories about gold, but one person discovered gold before anyone else did.
Gold Discovery in Egypt
The first person or civilization to discover gold is the Ancient Egyptians. They mined gold in Nubia around 2450 BC. An Egyptian alchemist named Zosimos was the first to find pure gold (24 centuries before Columbus reached the Americas). The discovery of gold is attributed to the ancient Egyptians, who made jewelry out of gold. It was at a time when other metals were scarce and valuable.
Historians agree that the civilization of Ancient Egypt was at its prime and had almost everything under control except when it came to maintaining permanent sources of weight. There was an era when even gold was relatively heavier for them than stone.
Gold Discovery in America
Gold was first discovered in California by James Marshall, who saw it in a river on his way to catch some boiling water. When he looked down, he saw gold flakes in the water. He soon went back and reported what he saw to his fellow miners.
Gold Discovery in China
Three thousand years ago, the Chinese discovered gold in the Yellow River. The Chinese started trading for gold with other cultures, which led to the discovery of gold elsewhere in the world. Tibetans discovered gold around 700 B.C. They used it as a material for religious statues and jewelry.
Gold Discovery in Turkey
The oldest known gold artifact was discovered in Turkey in a tomb that belonged to King Midas, who ruled during the 8th century B.C.E.
Gold Discovery in South Africa
In pre-colonial South America, various cultures used gold extensively for ornamentation, including nose and lip ornaments, breastplates, and headgear. The Aztecs valued gold so highly that they paid tribute to Moctezuma in solid gold bricks.
How was Gold Used?
Gold has always been highly prized for its decorative value. It was often used in jewelry and ornamentation by many ancient peoples worldwide, including the Egyptians, Phoenicians, Greeks, Romans, Mayans, Chinese, and Japanese.
The Inca goldsmiths in Spain were called "tumis" (craftsman). Tumis had their guild and were very well respected. Gold, which could be hammered into thin sheets, was used to cover walls and roofs of temples, palaces, and houses.
The most common form of decoration in jewelry was small pieces of gold shaped like animals or made into a pendant. Other forms include earrings, necklaces, bracelets, and hairpins. The most valued material was the knotted cord, which contained all kinds of information about taxation, military service, and production quotas.
The artisans also made many gold tools, such as hammers, chisels, and knives. They even used a technique called "la Zapata" to adapt their designs to different materials to produce weapons and tools.
Gold has been considered valuable throughout history. Ancient Egypt was one of the first civilizations to use gold for coins, charms, and jewelry making. Egyptians believed that gold had protective powers -- they thought it could ward off demons and evil spirits.
Native Americans also used gold to make ornaments, tools, weapons, and more. The Aztecs believed that gold was associated with sunlight and fire -- they used it to make shields, which they believed protected their warriors from harm.
Mining- History of Gold Mining
The first gold rush occurred in California when gold was discovered at Sutter's Mill on Jan. 24, 1848. The California Gold Rush brought hundreds of thousands of people from around the world to California in a matter of months. In addition to the lure of striking it rich by finding gold nuggets, people were also attracted by the prospect of getting high-paying jobs in the mining industry.
Over time, miners developed more advanced mining methods and dug deeper into the ground. The first mining technique used during the California Gold Rush was panning for gold using a pan filled with sand and water to separate flakes of gold from the dirt. Miners found that pans worked well when water levels were low but not when they were too high since heavier rocks would sink to the bottom and leave behind pieces of shiny ore that contained little or no gold.
The history of gold mining dates back to the Stone Age and Bronze Age when humans first started using stone tools for mining. Although there are many methods for extracting gold from rock, large-scale industrial mining began in 1848 when rich deposits were discovered in California.
This discovery led to enormous growth in the industry and several more mines being found throughout the area. The discovery of these mines led to an increased interest in mining worldwide.
There are several ways to mine gold, such as using cyanide or mercury. However, these methods are dangerous and harmful to the environment. Instead, gold extraction from its ore is done through smelting. Crushed rock is heated with coke (a carbon source) to create molten metal in this method. The melted metal is poured into molds, where it cools and hardens into pure gold.
Implications of the Discovery of Gold
Gold is a trendy investment choice. Many people store their money in gold bars or gold coins. It's because gold has historically shown itself to be a good investment option. The price of gold tends to go up when the economy suffers as more investors look for ways to protect their assets.
When times are hard, many people turn to gold to make money by investing in gold stocks or buying and selling actual gold bars or coins.
With the discovery of gold in the early days came some effects, which include:
- Gold rushes were causing an influx of people, which strained state resources and often resulted in violence when there wasn't enough gold to go around.
- Banks could operate smoothly with money that was backed by gold.
Summing Up
Gold has been valued throughout human history for its beauty and utility, as well as its scarcity. The discovery of gold is a topic shrouded in mystery, but it is clear that many people have made their fortunes from precious metal over the centuries.
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Sources:
Today in History - January 24 | loc.gov
Who discovered gold? | A history of gold & the gold standard | focus-economics
Gold Discovered in California | americaslibrary.gov