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Johann August Sutter was born to Johann Jakob Sutter and Christina Wilhelmina Stober on the February 15, 1803, in the village of Kandern in Germany near the Swiss border. Although Kandern was German, the town's occupants were Swiss. Sutter's early dreams of military glory and adventure were quelled by a hasty marriage to Anna Dübeld and the birth of their child one day later on October 25, 1826. In 1828, Sutter volunteered in the Reserve Corp in Bern, although he never became an officer in the Swiss Army as he later claimed. His business and marriage were threatened due to poor managerial skills, indebtedness from living beyond his means, and the eventual addition of four children.

Heavily in debt, Sutter's façade of wealth was broken in May 1834. In order to escape debtor's prison, Sutter abandoned his family and sailed for America. In order to borrow money for investments and establish himself in society when he arrived, Sutter refashioned his identity, complete with a formal education and a rank in the elite Swiss Guard. However, a series of failed business ventures resulted in debt. Adopting the motto “make or break—and run off!” Sutter left Kansas for Oregon in 1838 and went on to Hawaii by December. After a trip to Alaska, Sutter arrived in California on July 1, 1839.

Sutter aspired to build a fort and Swiss colony in the Sacramento Valley. By choosing to settle near the confluence of the American and Sacramento Rivers, Sutter combined the concepts of a residential settlement, military fortification, and trading post with the maritime trade business. This location catered to fur traders who hunted between the Oregon territory and California's Central Valley, as well as to the traffic from the overland trail across the Sierra Nevada.

Sutter's Fort expanded from its original village of Hawaiian-style grass huts to an imposing adobe structure with 18-foot walls. In his personal life, Sutter exhibited alcoholic tendencies, treated his laborers poorly, had several affairs with Native American women, and maintained a Hawaiian mistress who bore him several children.

In 1841, Governor Alvarado's land grant of 11 square leagues and the acquisition of the Russian Fort Ross and its adjacent ranches greatly expanded Sutter's settlement. After hauling timber to the fort, Sutter merged northern wood-frame architecture with the adobe structures of Southwestern Hispanic cultures. Although Sutter's purchase of the fort amassed debt he reputedly failed to pay, he appeased his creditors and acquired adequate supplies. Sutter garnered more control over the local Natives, expanded wheat farming, planted orchards, and initiated irrigation and lumber-cutting projects. He extended trapping expeditions, built up herds of horses, sheep, and cattle to their former greatness under the Californios, commissioned Native American women to weave woolen blankets, and manufactured wool felt hats. What's more, Sutter established the state's first fisheries, brandy distilleries, tanneries, and factories.

Sutter's vision of California as a promising residential, commercial, and agricultural empire depended upon gradual Americanization of the territory. On June 10, 1846, the violent upheaval of the Bear Flag Revolt shattered these dreams. With the beginning of the Mexican War that May, Sutter lost control of the fort to the U.S. Army. Nonetheless, Sutter contributed by commanding soldiers and supplying the military with food and horses until Mexico's surrender in 1848.

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