Not All That Glitters Is Gold…

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Author: Jacob Hill

Melbourne’s prestige is nothing new. Founded in 1835, It was known as “Marvellous Melbourne” by the 1860s. The 1880s saw tremendous economic growth that made it the second largest city in the British Empire. And before that growth turned to slump, Melbourne was the richest city in the world (apart from Bendigo briefly, which is only 150km from Melbourne).

It continues to be an incredibly rich city and serves as the capital of Australia’s powerhouse state, Victoria (which contributes a quarter of Australia’s economy!). Melbourne is regarded as a world-leader in sports, live music and culture. It is rapidly growing (perhaps a bit too rapidly) and its standard of living is among the best in the world. It even served as Australia’s capital from 1901 to 1927 – Take that, Sydney!

But how did Melbourne become so prosperous so quickly? Why didn’t the other cities reach such heights in so little time?


The first Brit to visit Australia was Captain Cook when he landed at Botany Bay in 1770. He went on to sail throughout the Pacific, but when the British Government received reports of a huge, faraway, ‘empty’ continent (it was populated by hundreds of thousands of Aboriginals, but Cook thought there were only four thousand at best), they were excited.

21st Century Jacobsweg: Marker at Botany Bay, Sydney, marking the spot where Captain Cook landed on 29th April 1770.
Marker at Botany Bay, Sydney, marking the spot where Captain Cook landed on 29th April 1770.

This was the Age of Empire, so naturally Britain wanted to colonise the continent. But there was another issue they were facing: Crime. Their prisons were overflowing with criminals (mainly petty thieves) and after 1776 they couldn’t ship them to the Americas anymore due to the American Revolution. But this new southern land held promise: The government could ship the prisoners halfway across the world and they can colonise the empty land in the process – men, women and children alike were to be sent.

And so, the “First Fleet” arrived in Botany Bay on 20th January 1788, eighteen years after Cook. However, they relocated to nearby Port Jackson on 26th January 1788 and founded Australia’s first city, Sydney. These hardened criminals, convicted of crimes ranging from stealing tea to murder, were to work until they were released into the continent. but it’s important to note they were not slaves: while they were forced to work sunrise to sunset Monday to Saturday, they had political and legal rights and were usually granted land and labour after their term.

Settlements popped up around Sydney (many, like Parramatta, are now part of Sydney). In 1793, the first free settlers arrived in Sydney, the first of many. Convicts continued to be transported, but native-born settlers and now-free prisoners were outnumbering the convicts. Van Diemen’s Land (now known as Tasmania) became the main destination for transportation from 1804 as Sydney and other New South Wales towns grew.

Settlement spread up the eastern coast, with Redcliffe being the first settlement in Queensland in 1824. In 1826, Swan River (now Perth) was founded 3,600km away. Australia had close to 100,000 settlers by this stage, but the area now known as Victoria was not settled until Portland was successfully established in 1834. An attempt was made to settle in present-day Sorrento in 1803, but that was quickly abandoned. Apart from sailors making brief stops along the coast, Victoria was unexplored territory.

And so Melbourne was founded in this lonely corner of Australia in 1835. It was still part of New South Wales, but became the capital of the separate Colony of Victoria on 1st July 1851. At its inception, Victoria had a population of 77,000 settlers, just under a fifth of the settler population.

So again, how did Melbourne (and Victoria) become forces to be reckoned with?

21st Century Jacobsweg: Sunrise over Portland, Victoria. This was the first town founded by Europeans in Victoria.
Sunrise over Portland, Victoria. This was the first town founded by Europeans in Victoria.


On the 2nd July 1851, gold had been found near Ballarat. This is commonly given as the date the Victorian Goldrush began.

But this was not the first discovery of gold in Australia. Gold was first discovered in Australia near Bathurst in 1823. More deposits were found in New South Wales throughout the 1830s and 1840s (including by Pawel Strzelecki during his exploration of the Great Dividing Range). However, these discoveries were not disclosed by the government lest a developing society was undermined by greed.

In the 1840s, gold was first found in Victoria (then known as the Port Phillip District). These specimens were found in the Pyrenees Ranges, the centre of what would become one of the largest goldrushes in the world. Gold continued to be found throughout the country, and eventually the government decided to begin issuing rewards for gold discoveries near settlements.

But the goldrush fever began not in Victoria, but rather New South Wales.

Edward Hargraves discovered lots of gold near Orange, New South Wales, in 1851, triggering a mini-goldrush in the area. The government acknowledged it and gave Hargraves his reward. However, the gold reserves were smaller than expected and the weather made prospecting intolerable. But would-be prospectors were salivating at the chance to make their fortune. Months later, gold was discovered in Warrandyte, Victoria, (about 30km from Melbourne). Hundreds flocked to the hills of Warrandyte, much like in Orange.

21st Century Jacobsweg: Statue of Queen Victoria in Bendigo, Victoria. Bendigo prospered into a major city due to the Goldrush.
Statue of Queen Victoria in Bendigo, Victoria. Bendigo prospered into a major city due to the Goldrush.

On 2nd July 1851, more gold was discovered in a creek 34km north of Ballarat. As prospectors reached Ballarat, more gold was discovered in Castlemaine 60km away. Then, in August 1851, gold was discovered in Buninyong – 10km south of Ballarat. Then, gold was found. In September 1851, gold was discovered in Bendigo – not far from Castlemaine.

It’s not clear who actually discovered the gold in Bendigo. What was clear was there were massive reserves of gold over this huge area. In fact, Bendigo produced more gold than the rest of the Goldfield towns put together. By the time Gold mining died out, Bendigo had harvested 700 tons of gold. However, given Bendigo gold was often hidden within hard rock that required deep-mining expertise, Ballarat was initially the richest camp since its gold was more accessible.

By the end of 1851, thousands had flocked to the area, including my great-great-great-grandfather! With so many new people in the area, gold continued to be found in places like St Arnaud, Ararat and Stawell. It was difficult not to discover gold – shepherds kept accidentally stumbling upon the stuff during their travels! All throughout Central Victoria, you’ll find the towns feel very frontier-like with the main strip and colonial architecture. These towns are very small now (many towns died after the Rush was over), but they used to be home to tens of thousands of people, a lot of them camping in makeshift accommodation.


Victoria’s population was 77,000 before the rush in 1851. In 1852, 90,000 people had arrived in Melbourne alone! Most came from Britain and among them were Cornish miners, renowned for their mining skills (and their words were adopted by others and became the technical terms: sill, adit, flue, dry-house, girder, jig, shaft, balance bob, whim, skip etc.).

21st Century Jacobsweg: Old mine shaft at Balaclava Hill in the abandoned mining town of Whroo, Victoria.
Old mine at Balaclava Hill in the abandoned mining town of Whroo, Victoria.

The next biggest group were Australians from the other colonies, some of whom were veterans of the California Goldrush. Continental Europeans, particularly Germans, joined in prospecting, but their contributions were minimised later due to WWI and WWII. Plenty of Chinese came too, but they were shunned for their opium and gambling habits. The Americans were similarly despised. They were perceived by Australians as ignorant, insensitive, unintelligent and conceited (an image that still persists, sorry to say). But no matter the country of origin, all were looking to get rich.

By 1861, there were 540,000 people in Victoria, about 90% of them migrants. To visualise the population explosion, think of this: For every person living in Victoria in 1851, there were six new people added ten years later, most of them from overseas or another colony. In contrast, New South Wales ‘merely’ doubled its population. Victoria became Australia’s economic powerhouse and in 1868 convict transportation was brought to an end – it was no longer a punishment to go to Australia!

The goldfields transformed Australia from ranchers and farmers hugging the coast into a wealthy nation that penetrated well into the interior. Telegraph cables, roads, railways and river trading networks like the Murray-Darling system were rapidly developed off the backs of the miners in the Victorian Goldfields. Millions pounds of gold was transported to Melbourne, which mostly got transported overseas. Obviously, some got kept in Melbourne and helped boost its economy and standing on the world stage.

But as precious as it was, gold was not without its problems.

21st Century Jacobsweg: The Old Gold Bank in Creswick, Victoria. These colonial-style buildings are common throughout the Goldfield towns.
The Old Gold Bank in Creswick, Victoria. These colonial-style buildings are common throughout the Goldfield towns.

Inflation was a constant risk as gold was added into the economy rapidly. Combined with an explosion in population, prices soared and places like Ballarat and Bendigo became expensive to live. This was exacerbated during bad weather – roads would become boggy and untraversable. This brought trade to a standstill, making more gold discoveries a burden on the inflation rate.

Major cities, particularly Melbourne, had chronic labour shortages as people left to go find gold. Wages were rising dramatically across the state and bank loans were being taken out at five times the rate before the Rush. The credit system was about to implode. The Victorian Government had a difficult time dealing with the financial crisis, so they decided to introduce the infamous “Gold Licence” on 1st September 1851.


21st Century Jacobsweg: A Gold Licence on display at the Central Deborah Gold Mine in Bendigo, Victoria.
A Gold Licence on display at the Central Deborah Gold Mine in Bendigo, Victoria.

See, according to British Law, all gold in the Empire belonged to the Crown. But there was no way in Hell prospectors were going to give up their findings to the government. A solution was first introduced in New South Wales whereby any gold found by a prospector could be kept, so long as they had a licence saying they could keep it.

Sounds fair…except it wasn’t. In Victoria, the licence entitled you to a twelve foot square plot that cost thirty shillings. That was two weeks’ worth of wages for some people! If you didn’t work the claim for twenty-four hours, you lost the claim, so you needed to stay and dig. On top of that, and you had to renew the licence every month. Unsurprisingly, the first recorded protest against the licences occurred in Buninyong the same year they were introduced.

Prospecting was hard enough as it was: Injuries were common, disease was rife, uncontaminated drinking water was scarce, mineshafts ran the risk of flooding, and the weather was inhospitable at times. Then there was the risk of unscrupulous prospectors stealing your gold. Vigilante justice in remote camps was a constant worry (but vigilante killing, known as “Yankee justice” because of its frequency in California, was incredibly rare).

This threat was heightened by the number of escapees or former convicts rushing from Van Diemen’s Land to try their luck, including Ned Kelly’s father John ‘Red’ Kelly. Many were reformed, but there were some dangerous characters throughout Victoria now. Some of these criminals became bushrangers who attacked gold transports. The worst attack was in July 1853, where four of the six guards were killed.

Victoria police didn’t have enough resources to mount an effective offense against these Bushrangers, but they reserved their best weaponry for the gold transports. Their efforts on this front weren’t recognised, however, because they spent more time on the Goldfields to enforce the law…including the Gold Licences.

The foot officers in particular were cruel and callous in how they treated the mining population. A majority of them had served in Van Diemen’s Land and thus were used to dealing with prisoners. Their unsympathetic methods were despised, perhaps most of all by former Van Diemen’s Land prisoners.

Police staged surprise raids on miners twice a week. Those who forgot to bring their licence with them or never bothered getting one were fined heavily. The police would receive half the fine for themselves. They were thus incentivised to target otherwise innocent miners, who were usually struggling due to the financial crisis and the exhausting labour. ‘Authority’ became synonymous with ‘greedy’ on the goldfields.

21st Century Jacobsweg: The main drag in St Arnaud, Victoria. Although the town grew wealthy from goldmining, not everyone who went looking for gold found it...
The main drag in St Arnaud, Victoria. Although the town grew wealthy from goldmining, not everyone who went looking for gold found it…

It wasn’t just that police collected exorbitant fees from the miners. They would storm camps and threaten miners with bayonets. They drove offenders like cattle to Government camps to be fleeced of money (or imprisoned for a month if they lacked funds). They would then work in the Government camps as unpaid labour.

Oh, and these camps often didn’t have lockups (certainly not enough to house everyone), so they would be chained to trees and logs during the night. It appeared the police were prioritising hunting down miners without a piece of paper over trying to tackle the bushranger attacks. It’s no wonder their reputation took a hit in the 1850s amongst those on the goldfields.

The Gold Licences were a clear point of contention. But there was much brewing underneath the surface…


Gold licences destroyed people’s finances and caused miners of different backgrounds to band together for financial purposes, uniting them in a common cause against imperial bureaucrats in favour of more laissez-faire economic rights. In this was a nascent democratic political philosophy.

Where did the miners get this remarkable tolerance and ideas of democracy from?

Of course, notions of democracy, freedom and economic liberalism were present (and practiced) in Britain, the progenitor of the Australian colonies. The British in Australia, whether descended from settlers or fresh off the boat, found the punitive police practices totally alien to their cultural sensibilities and political traditions.

21st Century Jacobsweg: Kyneton, Victoria. Note the colonial-style buildings that are still in use today.
Kyneton, Victoria. Note the colonial-style buildings that are still in use today.

The first convict societies drew attention to the equal standing everyone was on, aside from a few government officials. There was also the insistence of religious tolerance between the English, Scottish and Irish settlers, who didn’t want to bring Old World antagonisms between Anglicans, Presbyterians and Catholics to the new world. In one sense, the tolerant attitude of Australia was present from the very beginning.

But the nature of the goldmines was integral in fostering the egalitarian spirit that characterises Australia today. Mining requires cooperation to succeed, and since there were people of so many ethnic backgrounds intermingling (ranging from Canadians to Russians to Italians to Finns), differences were tolerated if it meant finding gold. Being packed so closely together too meant having to be more respectful of boundaries and property rights, which led to greater cooperation and mateship between complete strangers.

Melbourne faced a severe labour shortage as people left their jobs to try their luck in the goldfields, so migration was welcome to fill these jobs. The city-slickers that abandoned their jobs were shocked to learn that their social status made no difference to miners. What was valued was whether you could work and look out for your mates. Nobody was a lord or lady in the Goldfields, but rather just a ‘mate’. This egalitarian approach to life rubbed off on urbanites and they brought the miner’s attitudes back with them to Melbourne (and other parts of Australia).

21st Century Jacobsweg: Sovereign Hill, a living museum that recreates life on the Goldfields, located in Ballarat, Victoria. It is also home to the sound and light show "Blood on the Southern Cross" about the Eureka Stockade.
Sovereign Hill, a living museum that recreates life on the Goldfields, located in Ballarat, Victoria. It is also home to the sound and light show “Blood on the Southern Cross” about the Eureka Stockade.

And there was probably some foreign influence just for good measure. The Europeans, particularly the Germans, would have witnessed the 1848 riots in Europe and may have recalled these fresh memories in response to heavy-handed government action. And as annoying as the Americans could (can) be, their intense love of liberty and franchise cannot be denied. Furthermore, British North American colonies (modern-day Canada) were granted self-governance in the early 1850s and South Africa gained representative government in 1852. Surely the Australasian colonies could enjoy this right, too?

And in Ballarat, the town with the worst reputation for Gold Licence enforcement, the most spectacular demonstration that emphasised these brewing tensions between a democratic culture and an imperial bureaucracy took place in 1854: The Eureka Stockade…

Find out about the Eureka Stockade in the next post!


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