John Sutter, Whose Sawmill Launched the California Gold Rush

Sutter Went Broke Despite Owning the Land Where Gold Was Discovered

Engraved portrait of elderly John Sutter
John Sutter in his old age. Getty Images

The California Gold Rush began in early 1848 with the discovery of a gold nugget on property owned by a Swiss immigrant named John Sutter. Within a year the United States, and much of the world, was seized by "Gold Fever" as prospectors flocked to California.

The owner of Sutter's Mill, where a nugget of gold was discovered on January 24, 1848, was a prosperous land baron when an alert sawmill worker noticed a rock with an unusual gleam. The gold strike turned out to be a curse. Many others would flock to California and find their fortunes. But when it seemed like the world was drawn to his property, Sutter was driven into poverty.

Early Life

In early 1834, a man with a failing store in Burgdorf, Switzerland abandoned his family and set off for America. He arrived in New York City, and quickly changed his name from Johann August Sutter to John Sutter.

Sutter claimed a military background, saying he had been a captain in the Royal Swiss Guard of the French king. There's a question whether that was true, but as “Captain John Sutter,” he soon joined a caravan headed for Missouri.

In 1835 Sutter was moving farther westward, in a wagon train headed for Santa Fe. For the next few years he engaged in several businesses, herding horses back to Missouri and then guiding travelers out to the West. Always close to being bankrupt, he heard about opportunity and land in remote regions of the West and joined an expedition to the Cascade Mountains.

Sutter Took a Peculiar Route to California

Sutter loved the adventure of the trip, which took him to Vancouver. He wanted to reach California, which would have been difficult to do overland, so he first sailed to Hawaii. He hoped to catch a ship in Honolulu bound for San Francisco.

In Hawaii his plans, typically, unraveled. There were no ships bound for San Francisco. But, trading on his purported military credentials, he was able to raise funds for a California expedition which, bizarrely, went by way of Alaska. In June 1839 he was able to take a ship from a fur trading settlement at Sitka to San Francisco, finally arriving on July 1, 1839.

Sutter Talked His Way Into Opportunity

At that time, California was Mexican territory. Sutter approached the governor, Juan Alvarado, and was able to impress him enough to obtain a land grant. Sutter was given the opportunity to find a suitable location where he could begin a settlement. If the settlement was successful, Sutter could eventually apply for Mexican citizenship.

What Sutter had talked himself into was not a guaranteed success. The central valley of California at that time was inhabited by Native American tribes who were very hostile to white settlers. Other colonies in the area had already failed.

With his usual optimism, Sutter set out with a band of settlers in late 1839. Finding a favorable spot where the American and Sacramento Rivers came together, Sutter began building a fort.

Over the following decade the little colony, which Sutter had dubbed Nueva Helvetia (or New Switzerland), absorbed various trappers, immigrants, and wanderers who were also seeking fortune or adventure in California.

Sutter Became a Casualty of Good Fortune

Sutter built up a huge estate, and by the mid-1840s the former shopkeeper from Switzerland was known as “General Sutter.” He was involved in various political intrigues, including disputes with another power player in early California, John C. Frémont.

Sutter somehow emerged unscathed from these troubles, and his fortune seemed assured. Yet the discovery of gold on his property on January 24, 1848 led to his downfall.

When word leaked out about the discovery the workers in Sutter's settlement deserted him to search for gold in the hills. And before long the entire world caught wind of the gold discovery in California. Crowds of gold seekers came streaming into California and squatters encroached on Sutter's lands. By 1852 Sutter was bankrupt.

Sutter eventually returned to the East, living in a Moravian colony in Lititz, Pennsylvania. While on a trip to Washington, DC, he petitioned Congress for financial help. While his relief bill was bottled up in the Senate he died in a Washington hotel on June 18, 1880.

The New York Times published a lengthy obituary of Sutter two days later. The newspaper noted that Sutter had risen from poverty to being the "wealthiest man in the Pacific coast." And despite his eventual slide back into poverty, the obituary noted that he remained "courtly and dignified."

An article about Sutter's burial in Pennsylvania noted that John C. Frémont was one of his pallbearers, and he spoke of their friendship back in California decades earlier.