The signing of the Treaty of Guadalupe Hidalgo in 1848, ending the Mexican War, effected the transfer of the territory of California to the United States. Under this treaty the land grants which were valid under Mexican rule were to be recognized by the U.S Government. However, with the discovery of gold at Sutter’s Mill and the resulting interest in the potentially rich lands of the well-watered valleys of California, pressure was brought up on Congress to break up the ranchos of the established Californians, in much the same manner as the Californians and their immediate predecessors had pressured for the release of the mission lands barely two decades earlier.
Disregarding the terms of the 1848 treaty, the U.S Land Commission was formed under the Land Act of 1851, requiring all landowners to prove title to lands acquired prior to American rule. Due to the haphazard manners in which the land grants and records were originally made and kept, and the fact that accurate surveys and descriptions of land were infrequently made, and the consequential overlapping and duplication of many of the land grants, the sorting out of these land claims proved to be lengthy and complicated process. Further complicating the situation, were squatters who had situated themselves on the disputed property boundaries to away the outcome of the litigation. Over the next 30-year period most Californian’s titles were proven correct, however, the financial burden resulting from the litigation, along with the devastating floods in 1861 through 1862 and the ensuing droughts, virtually destroyed the cattle-based ranchos forcing most of them to be parceled out or leased to pay off their debts.