Capitalism Comes to the Diggings: From Gold: Rush Adventure to Corporate Enterprise

Abstract

Mention the stock market, the rise of the modern economy, or the growth of cor porations, and most people think of the New York Stock Exchange and railroads in the eastern states. When it comes to U.S. business history during the nineteenth cen tury, relatively little attention has focused on California or the growth of mining cor porations. Recent historians have rarely examined the role of corporations and the growth of stock exchanges in the mining West, apart from Marian V. Sears s rare vol ume, Mining Stock Exchanges 1860-19J0, published in 1973.1 Californias unique con tribution to the history of corporations has been neglected, in part, because of the long-standing interest in the more romantic, individualistic, and unorganized aspects of the Gold Rush. Thus, we still think of the Gold Rush as an adventure undertaken by individuals, although historians have recognized for more than a century that most emigrants traveled to California as members of companies.2 Despite the im portance of companies to the subsequent development of Californias economy, we know relatively little about the pioneer firms that organized the Gold Rush. Simi larly, we know little about the gold-field mining companies and corporations that su perseded them. Few company records survive to tell the story. Apart from occa sional mentions in diaries and letters, newspaper articles, government reports, and corporate filings, few reliable sources exist.3 Still, if we examine such records from an organizational perspective, we can begin to construct a history of California s min ing companies and their role in a larger transformation: the development of the modern corporate economy that emerged in California during the decades follow ing the Gold Rush. This process was characterized by three developments: the rise of business corporations, the widespread ownership and trade in corporate securities, and the formation of stock exchanges to organize investment.4 While railroads drove economic expansion in the eastern United States, mining