Story: Otago region

Page 7. Gold and development

All images & media in this story

Before the rushes

Gold was identified in a number of Otago waterways through the 1850s, but the leaders of the Otago settlement were ambivalent – a gold rush might bring riches, but also disorder and a labour shortage. However, rewards for finding gold were offered from 1860, suggesting opinion was shifting.

The first gold rush

The first rush came after gold was discovered in payable quantities near the Tuapeka River, a tributary of the Clutha, in 1861. It drew miners from Australia’s Victorian goldfields, which had been thriving for a decade. A slice of the goldfields population of Victoria moved across the Tasman – not just diggers, but businesspeople, entertainers and others who saw prospects in the new fields.

Across Central Otago

From Gabriels Gully at Tuapeka, named after discoverer Gabriel Read, diggers fanned out across Central Otago. The cold winter of 1862, when river levels were low, was the making of the Dunstan (Cromwell) rush, after diggers found gold at the junction of the Clutha and Kawarau rivers.

The summer of 1862–63 saw finds in the Arrow and the Shotover rivers – Thomas Arthur found 200 ounces (6 kilograms) of gold in eight days on the Shotover, at the place still named Arthurs Point. Nearby, Queenstown ‘erupted into existence’ 1 on Lake Wakatipu.

Closer to Dunedin, new finds were made in the Manuherikia and Taieri Rivers and their tributaries in late 1863.

Stream of diggers

James Beattie was shepherding at Galloway on the Manuherikia River in 1862 when payable gold was discovered in the nearby Clutha River. 55 years later Beattie reminisced about the rush that followed:

On Saturday we enjoyed our usual sylvan quietness on that remote sheep-run. On the Sabbath morning, a clear frosty morning in August, we could see the diggers coming … in one long continuous stream, all heading for the Clutha River … they reminded me of the gipsies in the Old Land. Some came with packhorses, some with bullocks, some even utilised dogs as carriers, while many carried all their belongings on their shoulders in ‘swags’. 2

Gold from gold

The 1860s as a whole saw Otago earn £10 million from gold exports, compared with £3.57 million from wool.

Alluvial gold lent itself to individual mining endeavour, but the finds were often quickly exhausted. The peak annual production of 17,400 kilograms was reached in 1863, as was the peak goldfields population of 22,000.

From 1866 the arrival of Chinese miners (brought in initially by Otago businessmen) prolonged the life of the diggings, as did the use of elaborate water sluicing races (first introduced in 1862), but there were no ‘rushes’ after 1864.

Goldfields people

The goldfields population was mostly male – about three-quarters so in 1874 – and older, without the prolific families of the more settled districts. The influx of Irish alongside Scots and English made the goldfields districts more Catholic and less Presbyterian than the rest of Otago.

Immigration and public works

Premier Julius Vogel’s colony-wide immigration and public works scheme was a gold rush by another name. Otago received 27,000 assisted immigrants in the 1870s – more than any other province. Ōamaru and Dunedin invested in ports, and in railways linked with Christchurch (1878) and Invercargill (1879). Dunedin’s population increased nearly tenfold between 1858 and 1871 (from 1,700 to 14,800), and nearly tripled again in the 1870s, to just over 39,000 by 1881. In that year, it was New Zealand’s largest urban centre, and Otago had a fifth of the country’s population. Neither ranking was ever attained again.

New techniques

From the 1880s quartz mining – where quartz rock was crushed mechanically to extract the gold in it – was tried in the Shotover and at Bendigo, east of the Clutha River upstream of Cromwell. Quartz-mining enterprises were eager for electric power, and New Zealand’s first industrial hydroelectric plant was set up at the Bullendale mine near Queenstown in 1886.

Gold booms around 1890 and later in the decade thrived on the basis of massive dredges – Otago’s contribution to mining technology – which could extract river gold out of reach of individual miners.

At the peak of dredging, around 1900, about 100 dredges operated on the Clutha River, 15 on the Manuherikia, and 33 on the Kawarau and Nevis. The last dredge stopped working at Alexandra in 1963.

The very efficiency of the dredges exhausted the new finds, but they also triggered one of New Zealand’s first stock-market booms. Engineering firms in Dunedin such as A. & T. Burt also benefited.

Footnotes:
  1. Erik Olssen, A history of Otago. Dunedin: McIndoe, 1984, p. 60.› Back
  2. James Herries Beattie, ‘The magic of gold.’ Chambers’s Journal 7, no. 7 (September 1917), pp. 647–648.› Back
How to cite this page:

Malcolm McKinnon, 'Otago region - Gold and development', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/otago-region/page-7 (accessed 22 October 2018)

Story by Malcolm McKinnon, published 8 May 2009, updated 18 May 2015