On January 24, 1848, James Marshall, who had constructed a mill for Colonel Sutter, spied a queer-looking bit of rock on the floor of his sluice-way. It looked like gold. He showed it to his men and then rode to Sutter's Fort and handed the specimen to Colonel Sutter. They decided it was gold and hoped to keep it secret, but news like this could not be kept secret. It was not the first time that any gold had been found in California, but it was the first time that a large amount of gold was found and received wide publicity.

On March 18, 1848, the "California Star" published in San Francisco wrote that "Gold has been discovered in the Northern Sacramento Districts about forty miles above Sutter’s Fort." Rapidly, the word spread. People left their jobs, their homes, and their ships and headed to the gold fields. Within a year, over 100,000 newcomers arrived in California. They came overland and by ships around the Cape of Horn or across the Isthmus of Panama. They became known as the '49ers and they changed California forever.