“The principal store at Sutter’s fort, that of Brannan and Co., had received in payment for goods 36,000 dollars’ worth of this gold from the 1st of May to the 10th of July.  Other merchants had also made extensive sales.  Large quantities of goods were daily sent forward to the mines, as the Indians, heretofore so poor and degraded, have suddenly become consumers of the luxuries of life.  I before mentioned that the greater part of the farmers and rancheros had abandoned their fields to go to the mines.  This is not the case with Captain Sutter, who was carefully gathering his wheat, estimated at 40,000 bushels.  Flour is already worth, at Sutter’s, 36 dollars a-barrel, and will soon be 50.  Unless large quantities of breadstuffs reach the country much suffering will occur; but as each man is now able to pay a large price, it is believed the merchants will bring from Chili and the Oregon a plentiful supply for the coming winter.

“The most moderate estimate I could obtain from men acquainted with the subject was, that upwards of 4,000 men were working in the gold district, of whom more than one-half were Indians, and that from 30,000 to 50,000 dollars’ worth of gold, if not more, were daily obtained.  The entire gold district, with very few exceptions of grants made some years ago by the Mexican authorities, is on land belonging to the United States.  It was a matter of serious reflection to me, how I could secure to the Government certain rents or fees for the privilege of securing this gold; but upon considering the large extent of country, the character of the people engaged, and the small scattered force at my command, I resolved not to interfere, but permit all to work freely, unless broils and crimes should call for interference.

“The discovery of these vast deposits of gold has entirely changed the character of Upper California.  Its people, before engaged in cultivating their small patches of ground, and guarding their herds of cattle and horses, have all gone to the mines, or are on their way thither.  Labourers of every trade have left their work-benches, and tradesmen their shops; sailors desert their ships as fast as they arrive on the coast; and several vessels have gone to sea with hardly enough hands to spread a sail.  Two or three are now at anchor in San Francisco, with no crew on board.  Many desertions, too, have taken place from the garrisons within the influence of these mines; twenty-six soldiers have deserted from the post of Sonoma, twenty-four from that of San Francisco, and twenty-four from Monterey.  I have no hesitation now in saying, that there is more gold in the country drained by the Sacramento and San Joaquin Rivers than will pay the cost of the present war with Mexico a hundred times over.  No capital is required to obtain this gold, as the labouring man wants nothing but his pick and shovel and tin pan, with which to dig and wash the gravel, and many frequently pick gold out of the crevices of rocks with their knives, in pieces of from one to six ounces.