1. Themes
  2. A to Z

Commerce and Industry: Overview

The great gold lottery

The discovery of gold in Australia is as much a story of commercial and industrial innovation as one of mere ‘good fortune and hard work’. During 1851 and 1852, the immediate impact of the discovery of gold on a pastoral and agrarian economy was dramatic, and for the most part, negative. Although the discovery of gold provided obvious benefits, they were qualified by the desertion of farms and factories by workers leaving for the goldfields, depriving industry and agriculture of sufficient manpower to carry on production.


The impact of the gold discoveries is also a story of capital formation, and the establishment of the organisational structures required to extract gold from a diversity of mining sites. New industries emerged, and a financial system (underpinned by stock exchanges and the powerful entrepreneurial spirit of those favoured by Fortuna in their quest for precious metals) developed. Powerful business coteries, such as the Collins House Group, also had their antecedence in the gold rush era and, as Geoffrey Blainey has observed, the politics of the nation were so influenced that, by the late 1960s, nearly half of Australia’s prime ministers were sons of men associated with the mining industry.

Industrial relations became an issue in the emergent gold industry as successful mining cohorts sought protection from trade unions. Conflict increased as more and more men were employed as wage labour for mining companies. Broken Hill, a city synonymous with mining giant BHP and silver, became a hub of industrial politics and trade unionism.

In the early days of the rushes, in 1851, London banks had to fix the exchange rate of bills for shipments at a 10% discount in order to deal with the full impact of the gold discoveries. The banking industry in Victoria at this time was very limited – by April 1852, there were only two banks in the state – however, the situation rapidly changed with branches becoming established on every significant goldfield. The banks made tremendous profits, although they had faced temporary uncertainty as they waited for the arrival of sterling. The impact of the gold yields on Victorian society is especially apparent in the increase in the money supply of the colony, which nearly trebled between 1852 and 1854.

Gold and 'progress'

A key thesis of Blainey’s The Rush that Never Ended is his celebration of progress: the ‘three cheers’ narrative of gold seeking emphasises the economic development of Australia. Blainey, and others, argue that the gold discoveries were central to establishing the wealth and business structure crucial to the nation’s growth in the century following them.

For other historians the success of the gold rushes was not measured so explicitly in terms of economic development. For example, in The Golden Age, Geoffrey Serle saw the gold rushes as the cause of the staggering population explosion in nineteenth-century Victoria – in the decade from 1851, the population increased from 76,000 to 540,000 – and the colony’s subsequent rise to eminence within the British Empire. He argued that most of these immigrants were younger, more energetic and of a higher quality than those of the earlier convict and pastoral societal structures. The ethnic diversity of the immigrant diggers socially enriched and democratised the goldfields communities; Serle’s close reading of the relationship between the colonial government and the diggers concludes that the social upheaval of the 1850s, with its resultant democratic urges, found its most enduring expression in parliamentary representation.

Others, such as David Goodman in Gold Seeking, have investigated the social disruption of gold on an ‘idyllic agrarian scene’. Robin Annear’s novel Nothing But Gold adopted a more literary style in order to capture the liminal moment where anything seemed possible.

Attracting the 'gold generation' to Victoria

Notwithstanding the various interpretations of the impact of gold, it is clear that economic growth and social development went hand in hand during the gold rush era. A closer examination of the Mount Alexander Diggings provides a good example of how the phenomenal scale of the gold discoveries attracted both people and capital to Australia. The rush to Forest Creek, on the Mount Alexander diggings – where rich shallow-alluvial gold was found – was the first in Australia to spark the popular imagination of European and Chinese prospectors. The immense wealth wrought from these diggings also convinced others, initially wary of the viability of the Victorian gold rushes, to try their hand at gold seeking. By the mid-1850s, the allure of gold, and the attraction of a rich alluvial field like Mount Alexander, would have been heightened by the many panoramas exhibited in Britain depicting Australia and the gold rushes. After the initial wave of British migrants, other international gold seekers soon followed in great numbers, drawn by the twin prospects of material gain and greater individual autonomy. Many were sojourners whose imaginations had been captured by the ‘promise that all men might one day acquire the wealth with which to become owners of property’; a significant proportion of these originated from southern China.

The gold discoveries on the Mount Alexander diggings were not the first, the largest in volume, or the most enduring of the Victorian gold rushes but, as mentioned earlier, they were the ones that promoted the idea that an individual could make a fortune and gain financial and social autonomy. It could be argued that nearly all of the gold seekers who came to Mount Alexander and other Victorian goldfields were part of an international group that embodied the cosmopolitanism of the mid-nineteenth century. This group came to be known as the ‘gold generation’ and dominated Victorian social and political life until the 1890s.

Although diverse, historical representations of the impact of the gold rushes on the nation’s commerce all acknowledge that the rudimentary techniques of extraction used in the early 1850s (the period when diggerdom reigned supreme and seemed to have turned the world upside down) were quickly to be replaced by a more sophisticated and capital-intensive form of gold mining. These company-based practices have continued to prosper throughout the twentieth century. Bendigo, once renowned as having the deepest gold mines in the world, is poised for a new mining boom – with the Bendigo Mining Limited company extracting gold from a depth of more than a kilometre under the city – and Kalgoorlie, particularly the golden mile, continues to be a key location of the mineral resources boom in regional Australia.

Keir Reeves

Annear, Robyn, Nothing but gold: the diggers of 1852, The Text Publishing Company, Melbourne, 1999. Details
Blainey, Geoffrey, The rush that never ended: a history of Australian mining, Melbourne University Press, Melbourne, 1963. Details
Colligan, Mimi, Canvas documentaries: panoramic entertainments in nineteenth-century Australia and New Zealand, Melbourne University Press, Carlton South, 2002. Details
Goodman, David, Gold seeking: Victoria and California in the 1850s, Allen & Unwin, St Leonards, 1994. Details
Serle, Geoffrey, The golden age: a history of the colony of Victoria, 1851-1861, Melbourne University Press, Melbourne, 1963. Details