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It is the 150th anniversary of the California gold rush. Spencer Michels reports on the history of the search for gold.

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SPENCER MICHELS: The South fork of the American River in the foothills of the Sierra Nevada Mountains looks much like it did on January 24, 1848. That's when John Marshall, who was operating a water-powered sawmill on the river looked into a ditch and saw something shiny. "I reached my hand down and picked it up," Marshall later wrote. "It made my heart pump, for I was certain it was gold." Matt Sugarman, superintendent of the Gold Discovery State Park at Coloma, California, visits the site often.

MATT SUGARMAN, Park Superintendent: It just really, really sends chills up my spine to realize that at this site a nugget about half the size of your pinkie fingernail was picked up out of the river began a migration that literally hasn't stopped since it started 150 years ago.

SPENCER MICHELS: This quarter ounce nugget at UC-Berkeley is reputed to be the original one that Marshall fished out of the mill tray. It started a rush that brought 100,000 miners to sparsely populated California the first year and many more in the next decade. The discovery of gold changed the face of California physically and in spirit. And California, in turn, inspired dreams of opportunity across the nation. J. S. Holliday is a leading historian of the gold rush.

J.S. HOLLIDAY, Historian: Suddenly, California is a place where you have something for nothing, suddenly you can have it in a hurry. There is a sudden opportunity to make a fortune, not just make a living.

SPENCER MICHELS: In hundreds of canyons like this, where rivers tumble down from the mighty Sierra Nevada mountains, the newcomers set up camp and began to mine for gold. That quest is the main focus of the Oakland Museum's commemoration of the gold rush. On display are the most extensive collections of photographs and artwork of the gold rush ever assembled, works that shed light on a major world event. Curator Drew Johnson put on display an old Daguerreotype camera, which had been invented a decade before gold was discovered. Such cameras and the men who operated them quickly made their way into the gold field.

DREW JOHNSON, Oakland Museum: Everybody thinks the Civil War was the first major historical event to be photographed by the camera lens and, in reality, it's the California gold rush.

SPENCER MICHELS: For a dollar or two a lonely miner who had traveled months to get to California could have his Daguerreotype taken--metal photographs encased in beautiful frames. Sent to families back in the states, they evoked great emotion and presented a personal look at this important event.

DREW JOHNSON: They were aware that it was a historic event, and they had this wonderful medium, photography, that could record their presence and their participation in it.

SPENCER MICHELS: The pictures tell a thousand stories. 92 percent of the new migrants were male; 48,000 Chinese came to look for gold. For everyone, mining was a tough life. While gold was plentiful--$128 million worth had been mined through 1851--success eluded most miners. But failure was part of the excitement.

J. S. HOLLIDAY: While your mine is failing and while your river dam is washed away, just as your hole in the ground has turned out to be a great disappointment, you hear a shout and you hear a scream, and my God, they're drinking, and some jumping up and down because somebody hit it rich. So there's a constant sense of renewal.

SPENCER MICHELS: Life in the mines was romantic as captured by artists in the 19th century whose work is on display in Oakland. The paintings show, sometimes fancifully, the new, strange life being lived in California. Not everyone liked it, but the freedom it afforded convinced some of the hundreds of thousands of newcomers to stay.

J. S. HOLLIDAY: People began to like the freedom. Aside from making money, they liked the freedom--you don't have to bathe; you don't have to shave; you don't have to listen to the sermon on Sunday--so California changed our--not only our economic expectations--it changed our social values, and that's why California is looked upon and has been for so long as sort of an oddball place, isn't it?

SPENCER MICHELS: Mining changed its nature after the early days of the gold rush, leaving new legacies for California. Large companies, heavily financed, took over, digging into hard rock far under the surface of the earth for veins of gold, as here at the Empire Mine in Grass Valley. Gold mining became an industry. The miners, no longer free spirits, earned just $3 a day right up through World War I, a far cry from the fortunes possible earlier. Yet, the owners became rich--6 million ounces of gold came out of this mine alone, found in quartz rock and painstakingly brought to the surface from as far as 8,000 feet underground. Other mining companies did well also, using hydraulic techniques. The small crew aimed nozzles a hillsides. It eroded the dirt and rocks so the gold would come loose. The result was an environmental disaster. And the state of California has remembered that part of the mining story as well. Near the old mining town of North Bloomfield California has created the Malikoff Diggins State Park, a hydraulic mining site, as an example of ruinous technology. Donna Jones is a state park interpreter.

DONNA JONES, State Park Interpreter: This is the result of hydraulic mining for many years. It did so much damage because that hillside isn't isolated; that hillside is part of the system. And, of course, that water and all the debris they washed down went downstream and created a lot of damage, destroyed good farmland, created floods.

SPENCER MICHELS: The water flowing through the mine site is still yellow in color and unfit to drink. Downstream from this and hundreds of other mining sites the California environment has been degraded by mining according to David Rubiales, who teaches gold rush history at Yuba College in the city of Marysville, which is surrounded by levees to protect it from two rivers.

DAVID RUBIALES, Yuba College: The city also now faces danger every year because of the gold rush, and now the streets or the city of Marysville are barely above the level of the river.

SPENCER MICHELS: Environmental damage is only part of the story. The toll on the native population and on other minorities has historians debating to this day. Before the gold rush this rock at Sutters Mill was used by native Americans to grind acorns, but according to Frank Lapena, who teaches Native American History, once the miners arrived, the Indians and their way of life were no longer welcome here.

FRANK LAPENA, Sacramento State University: Indians began to suffer under the pressures of the new people but also under the pressure of the loss of their land and the pollution of their streams and the taking of their women and the fact that they began to retaliate.

SPENCER MICHELS: So at that point what happens?

FRANK LAPENA: What happens is the people are moved out, the Indian people are moved out, they are slaughtered in some instances.

SPENCER MICHELS: Lapena says that between 1850 and 1910, the Indian population dropped 90 percent. Those facts and the discrimination in the gold fields against Chinese, African-Americans, Mexicans, and Chileans have prompted Park Superintendent Matt Sugarman to call the gold rush a holocaust.

MATT SUGARMAN: When they organized hunting parties, went out on Sunday afternoon and hunted Native Americans for sport, to me, what else do you call it? You don't celebrate a holocaust. You commemorate it; you honor it; you understand it; and hopefully not repeat it.

SPENCER MICHELS: Sugarman says documents prove there was a pattern of violence against Native Americans throughout the mother lode. Historian J. S. Holliday agrees there was racial discrimination but not of the magnitude alleged and not peculiar to the gold rush.

J. S. HOLLIDAY: Most people never saw an Indian, and if they did, the Indian was running away. The Indians had already suffered abominably before the gold seekers got here. I don't think you can look upon the gold rush as a period of destructiveness.

SPENCER MICHELS: While historical controversies continue to swirl, tourists still flock to the towns of California's gold country. Charming old mining towns like Nevada City, remnants of towns with names like Rough and Ready and You Bet--they come to soak of the ambiance of the gold rush. And for the next two years those towns, plus museums and state parks, will commemorate, if not celebrate, what all agree was a seminal event in the nation's history.

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