Order without law? Property rights during the California gold rush

The paper reconsiders the nature of mining districts and property rights during the California gold rush. According to a widely accepted view advanced by Umbeck [Explorations in Economic History 14 (1977) 197; A Theory of Property Rights with Application to the California Gold Rush. Iowa State University Press, Ames, IA, 1981], in the absence of effective legal authority, district codes established secure property rights in mining claims. Such accounts neglect essential aspects of the economic context, specifically that the gold rush approximated an open-access race for a small number of high value deposits. We show that mining district codes gave equal attention to the rights of claim-jumpers as to claim holders, a balance that in practice generated chronic insecurity and litigation. A simple game-theoretic model illustrates stylized features of the situation. 2004 Elsevier Inc. All rights reserved. 0014-4983/$ see front matter 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.eeh.2004.05.003 q For valuable advice and comments, the authors thank Roxanne Nilan, Gregory Clark, Avner Greif, Steven Shavell, and seminar participants at Carnegie-Mellon, UC-Riverside, the University of the Pacific, Harvard Law School, and the All-UC Economic History Group, plus two anonymous referees. Expert research assistance was provided by Aaron Althouse, Kyle Brinkman, Petra Moser, and Mary Speck. For help with historical documents, we are grateful to Lorrayne Kennedy of the Calaveras County Archives, and to Ken Mayhan and Ray Milenna of the Tuolumne County Museum. None of these people are responsible for any remaining shortcomings. * Corresponding author. E-mail addresses: [email protected] (K. Clay), [email protected] (G. Wright). 156 K. Clay, G. Wright / Explorations in Economic History 42 (2005) 155–183