 It started when Sutter hired Marshall, a New Jersey native who had served with John C. Frémont in the Bear Flag revolt, to build a water-driven sawmill in Coloma, along the American River.Sutter was intent on building a city on his property (not yet named ), including housing and a wharf on the Sacramento River, and needed lumber for the construction.One morning, as Marshall inspected the tailrace for silt and debris, he noticed some gold nuggets and brought them to Sutter's attention.