I'll tackle a few issues here:
1. Don't panic, the odds are pretty good that the California Grizzly is not extinct...it just lives in other states. (explained below)
2. The Cali Grizzlies were highly adaptable and lived in all habitats. See early sub-species map here
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3. Cal Griz populations were high when Europeans first arrived. It seems as if the second the Spanish landed they had unavoidable Grizzly conflict...literally on the landing beach as they began their explorations.
4. After a 150 year hiatus the Spanish began to colonize California en masse. The early Mission record 1769 - 1780 is replete with Bear encounters at every turn. The Bear population skyrocketed thereafter, as Mission and Private cattle holdings 100,000+, provided the Grizzlies with a food source previously unimaginable. So by the time the Gold Rush started the Grizzly population was artificially high to begin with and human/grizzly conflict was bound to be problematic.
5. As the Gold Rush began, sightings of groups of 20 to 50 Grizzlies were not uncommon in virtually every county. Traveling solo in most of California without a horse wasn't an option and the immigrant diaries bear this out. One only need to take a look at Oso or Bear in California Place names to see that the Grizzlies were dominant and omni-present.
6. California Grizzlies ate everything - horse, cows, pigs, sheep, bugs, salmon, roots, acorns herbs...literally anything. They were highly adaptable which is why they thrived in virtually every California ecosystem except the desert.
7. Unfortunately, as we all know...Grizzlies and people don't mix well and the search for Gold in every nook and cranny of California led to their demise. In fact the destruction of the grizzly was so fast and thorough that 90% of the kills almost certainly occurred in the 1st 10 years of the Gold Rush 1849 - 1859....by 1861 the last Grizzly in Merced County was killed...the vast majority of Counties fell like dominoes such that by 1874 Most California Counties had their last confirmed Grizzly kill and the remaining Counties weren't quite sure if they had Grizzlies or not. Individual Grizzlies became so rare that almost every Grizzly had its own nickname by the 1880's. Only a handful of Grizzlies survived into the 20th Century. Arguably only 4 survived the turn of the Century, 1 each in Amador, Fresno, Orange and San Diego. Unconfirmed sightings continued into the late 1920's. The last confirmed kill was in 1922 near Sequoia National Park.
8. The problem with the speedy demise of the Grizzly is that there were no museums out West before people realized they were vanishing. As far as we know "parts" of 66 California Grizzlies were preserved and there are no complete specimens in existence...only parts...claws, skulls, pelts, paws, skeletons..etc. Complete specimens sent to DC were not well cataloged nor inventoried such that the best hope for a complete California Grizzly has been lost, misplaced, sold in part, traded, exchanged or destroyed. This brings us full circle to a question above re: the extinction of the California Grizzly and the difference between Ursus arctos horribilis (Yellowstone) and Ursus arctos californicus (California) .
9. The original Biologist who created the "California Grizzly" sub species in 1896 based his designation on micro-variations in skull size. He admitted "These average differences (between the Yellowstone and California) might disappear if more specimens were available." So the speed with which the California Grizzly disappeared and the corresponding lack of viable specimens made it difficult to state with any statistical certainty that a sub species existed at all!
10. Of the 96 sub-species proposed in 1896 for the Brown Bear hardly any have legitimate scientific basis today. mtDNA studies show that all Grizzlies in the lower 48 states, incl. California and Rocky Mt Grizzlies share mean DNA variation of 1.5% ...mind you if that number were lower you'd begin to worry about incest and lack of genetic diversity. In any event all Grizzlies in the lower 48 states are genetically part of a single genetic "Clade". The most genetic variation is seen with a group of bears from New Mexico & Arizona...while the bears in the Rockies and California share a much more recent common ancestor. Scientists sum up the notion that there is a California Sub-species as follows: "There is no support for previous subspecies designations." Still we see Wikipedia references to the Ursus arctos californicus sub-species all the time in the media and in blogs...its all non-sense. Minor variations between Grizzlies in the lower 48, if any, is based on local diet and habitat....and while that may present heavier or darker bears in given specific localities, it doesn't really create a meaningful sub-species. The notion that the California Grizzly is extinct is more political than scientific. As a practical matter, as we move into the 21st Century we will find that all of the sub-species designations for Grizzlies will slowly erode and disappear as they have been doing for 100 years. Of the 90+ Grizzly sub-species proposed in 1896...hardly any are in use today (3?)...DNA is simply a superior method of species evaluation. Its fair today to say from a DNA standpoint, that what we understand to have been the "California Grizzly" is genetically alive and well...in Montana, Wyoming, Idaho and Washington.
11. To Freestone: I don't know that the California Grizzly was made to be a "monster" in fact I'd say the exact opposite is true ... it was feared, revered and admired by all. Hence the reason its on the State Flag. It simply wasn't compatible with human settlement. In the 1860's many people noticed the immediate decline in Grizzly populations, many decried the savagery of humans rather than the savagery of the Grizzlies...and almost all observers lamented the loss of the Grizzly to the State. From 1870 - 1920, there is an ongoing heroic nostalgia that develops of a prior Golden Age in California when the Grizzly Bear flourished. Make no mistake, the Grizzly was always admired in California since the day the first Americans arrived...they don't call it the Bear Flag Rebellion for nothing.
Enthusiasm is the burning spirit within that says, ‘I can!’ It is the indomitable ‘Yes!’ without which nothing worthwhile is ever accomplished. ~ ROYAL ROBBINS