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A History of Gold - The Modern Age

The Modern Age of gold began in 1803, with its discovery in Little Meadow Creek, North Carolina, sparking the United State's first, if not best known, gold rush. In fact, even coin collectors are not likely to know about it, because unlike later gold rushes, no federal mint was established in the U.S. at the time. Nevertheless, all of America's gold coinage from 1804 to 1828 was Carolina gold, shipped to Philadelphia for minting.

Meanwhile, in Great Britain (1816), the pound was officially tied to a specific quantity of gold for which British currency could be converted. In 1817, the British introduced the Sovereign, a small gold coin valued at one pound sterling.

Elsewhere in Europe, in 1830, Heinrich G. Kuhn announced his discovery of the formula for fired-on Glanz (bright) Gold. The coloring process was used on Meissen porcelain, manufactured in Dresden, Germany. As a result, Meissen gold-decorated china became world famous.

But the 19th century’s most significant "gold moment" came in 1848, when John Marshall found flakes of gold while building a sawmill for John Sutter near Sacramento, California. This triggered the California Gold Rush which hastened the settlement of the American West as news of the discovery spread far and wide, bringing upwards of 300,000 people—from around the United States and from abroad (Latin America, Europe, Australia and China)—to the Wild West. The impact on this part of the country was enormous. San Francisco grew from a small settlement into a boomtown, and roads, churches, schools and other towns were built throughout California. New steamships were designed and railroad tracks laid to move the golden bounty. Agriculture developed in the region to keep up with the settlers' needs. After a period of rule by the U.S. Army, the settlers wrote a constitution and California became a state in 1850. But while gold worth billions of today's dollars was recovered, the money was distributed to only a very few: most came away from the gold rush with not much more than when they arrived. This is because initially, the retrieval methods were simple: panning from streams and riverbeds, but as time went on, more sophisticated methods of gold recovery were developed. Eventually, the more and more sophisticated mining methods began to require significant financing, and this increased the proportion of corporate to individual miners—resulting in a fortune distributed among a select few. Although the California Gold Rush was responsible for building up the state to one of the largest in the U.S., it also had a negative impact: aside from the enormous loss of life as people made their way across tortuous and harsh lands to reach the gold, the Native Americans were attacked and pushed off traditional lands and the gold mining itself caused much harm to the environment. At the beginning of the Gold Rush, there was very little law regarding property rights, since California was a newly established state. A solution to the property rights problem was a first-come-first-serve basis with the right to "claim jump" on abandoned sites, leading to chaos.

The effects of the California Gold Rush were not confined to the United States. In 1850, Edward Hammond Hargraves, returning to Australia from California, said that he would find gold in his home country within a week. And he did, in New South Wales. The next major discovery was in 1868, in South Africa, where George Harrison uncovered gold while digging up stones to build a house. Since then, South Africa has been the source of nearly 40% of all gold ever extracted from the earth.

In 1900, the Gold Standard Act officially committed the United States to maintaining a fixed exchange rate in relation to other countries on the gold standard. However, World War I forced both the U.S. and Britain to suspend it.

The early 20th century also saw new discoveries and developments with regard to gold's versatility. Sigmund Freud speculated about our obsession with this metal. In 1927, a French medical study proved that gold could be used in the treatment of rheumatoid arthritis. AT&T used gold contacts pressed into a germanium surface to develop the first transistor in the 1940s. In 1965, Colonel Edward White used a gold-coated visor to protect his eyes from the sun during the first space walk on the Gemini IV mission, and such visors remain a standard safety feature for astronauts today. Furthermore, the first space shuttle (launched in 1982) used gold in its liquid hydrogen fuel pump.

As we enter the 21st century, gold remains one of the world’s most prized materials. It is widely associated with achievement—viz. Olympic medals, Nobel prizes, Academy awards and the Palme d’Or (the Cannes Film Festival’s top prize). It is also connected to our darker side, from the golden calf in the Book of Exodus suggesting idolatry, to communist propaganda using gold as a symbol of capitalist greed. And in Hollywood, stories of crime and greed often hinge on gold, famous examples being Goldfinger and The Maltese Falcoln. Gold clearly brings out the best and the worst in us: the response that it inspires in us is never neutral. This precious metal remains an economic anchor, a technological tool and of course, a material of enormous aesthetic appeal.