Mining the Miners: How the Service Providers Are the Only Ones to Get Rich During a Gold Rush
With the likes of indie book publishing, the Bitcoin craze and other business avenues to ‘get rich quick’ becoming more popular, we look now to some historical perspectives as to why the masses who follow a dream rarely achieve it. The reality is, sadly, only the early adopters and unique outliers ever do, as well as those selling ‘services’ for the specific industry
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As Lady Luck Would Have It
On January 24, 1848, a few days after the Treaty of Guadalupe Hidalgo was signed (ending the Mexican-American War), gold was discovered in California. It was to be the beginning of the greatest dash for wealth in 19th century America. Almost immediately people lucky enough to already be in the locale — mostly Californios and early American settlers — started digging and panning for gold. One far-sighted entrepreneur, Sam Brannan, a Mormon born in Maine who had settled in the California territory a few years before, came up with the great idea of cashing in on the situation. As lady luck would have it, he had opened a store a year earlier in Sutter’s Fort, close to Sutter’s Mill, where gold had first been discovered. Capitalizing on the situation that ‘he owned the only store between San Francisco and the gold fields’, he bought up all the shovels, pans, wheelbarrows, picks, and any other tools he could lay his hands on for next to nothing, then headed to San Francisco, where on the streets he stirred up excitement by exclaiming:
“Gold! Gold on the American River!”
It was reported he paid 20c for each pan, but sold them on at $15 apiece — you can work out just how much profit he made on the mark-up!
Brannan went on to open more stores during the gold rush, realizing that ‘mining the miners’ was a rather better business option than the one the thousands of Americans, Chileans, Mexicans, Irish, Germans, and other nationalities had made, travelling from faraway lands: some spending long months aboard…
