When news of James Marshall's January 1848 find first got out, a mania for gold began to spread across California. Thousands of ranchers, soldiers, and others from California poured into Sutter's Fort, a fur trapping, wheat farming, fruit growing, and cattle ranching enterprise founded near the Sacramento and American Rivers by Swiss entrepreneur Johann Augustus Sutter.

In March, the first reports appeared in the San Francisco newspaper the Californian. Excitement grew as stories spread about the chunks and nuggets of gold that could be plucked from the streams and rivers with very little effort. These stories were told by word of mouth and then in military reports, letters back home, newspaper accounts, and even officially announced by President James Polk in his annual message to Congress.

Colonel Richard B. Mason, U.S. military governor of California, reported in August that as many as four thousand men (half of them Indians) were working the goldfields and extracting between $30,000 to $50,000 gold per day.

Stories about the gold find at Sutter's Mill quickly became legends.