Mexican Congress secularized the missions (removed them from the Catholic Church)
When Spain controlled California, the backbone of their power was the missions. With a few exceptions, all the early towns of California arose around missions, and the routes of trade passed between them. With the independence of Mexico (which included California) in the 1820s, the plan changed. Unlike the Catholic king of Spain, the rulers of Mexico considered using the Church for political ends to be outdated. Therefore, in 1826 Governor José María Echeandía made a plan for the secularization of California -- in other words, for it to become a non-religious-run state. Although the settlers and converts remained Catholic, the area would be governed without Church control.
Governor Echeandías’ proclamation of 1831, which was put into effect by Governor Figueroa in 1933, removed mission lands from the Church. This spelled the end of the mission system in Calfiornia. The missions were slated to become pueblos (towns), with each Indian family receiving a share of the land and some livestock. The padres would remain as parish priests, but would give up their political authority. Between 1833 and 1835, one by one, each mission was changed. Sadly, the Indians soon lost their land to colonists who bought it cheaply or gambled for it.
Los Angeles temporarily became the capital
From the days of Spanish colonial power in California, the capital of the region had been Monterey. Monterey was one of the earliest established Spanish presidios, or military forts, in the region, and was well-situated midway between the two ends of the mission chain, San Diego and Sonoma. However, in the mid-1830s, division grew between proponents of home rule and those who wanted government from Mexico. Around the same time Los Angeles was growing in importance as its population rivaled San Francisco’s. Nicolas Gutiérrez was appointed governor of California; in order to assert Mexican control he decided to move the capital to Los Angeles.
The people of Los Angeles were not all in favor of the move, and most other Californians opposed it. There were only two or three buildings in the town that could fit the administrative offices of the Mexican government, and the owners of these buildings refused to make them available to Gutiérrez. In the end he was replaced as governor before he could make the change, thus ending Los Angeles’s brief reign as capital of the Mexican province of California.
Juan Bautista Alvarado led a revolt and declared California an independent state
By 1836, with the missions abandoned or declining, much of California was in disarray. After Governor Gutiérrez, appointed from Mexico City, arbitrarily moved the capital from Monterey to Los Angeles, Mexican officials imposed more rules. Some found these rules unjust; in protest they formed vigilante committees (volunteers aiming to see justice done).
A young Monterey man named Juan Bautista Alvarado, born and raised in California, organized the vigilantes into a revolt. With the help of many followers and the aid of a group of American riflemen, he forced Gutiérrez’s surrender. Declaring California a "free and sovereign state," independent of Mexico, he returned the laws to the liberal federal constitution of 1824. He also granted the right of the people to their own religion, and returned the capital officially to Monterey. His demands to Mexico were later reduced to a request for self-government, without complete separation from Mexico. Nevertheless Mexico’s hold on California was weakened. A group of Mexican soldiers were sent to retake the province, but Alvarado rallied some troops and forced a retreat. Thereafter, Mexico paid less attention to what was happening in California.
Swiss settler John Sutter arrived in California
When the Mexican government dismantled the mission system , much land was opened up for settlement. Any Mexican citizen could request the grant of a rancho at no cost. More and more foreigners came to California to trade and to live. One was John A. Sutter, a Swiss settler who had the ambition of building a feudal colony. He arrived in 1839, became a Mexican citizen in 1840, and claimed land along the Sacramento Valley. Mexican Governor Alvarado granted him 48,400 acres of land at the junction of the Sacramento and American rivers. He called his rancho New Helvetia, and built a fort there. In 1841 he bought the Russian Fort Ross.
Employing not only Indians and Californians but also Americans and other foreigners, he set himself up as semi-independent from the Mexican authorities. He was not only a ranchero, but a trader, soldier, and ruler of his self-proclaimed empire. It was on Sutter’s land that gold was discovered in 1848, leading to the great California gold rush and the founding of Sacramento. It also led to Sutter’s ruin, as his land was overrun by gold-seekers.