Phase One; 1861-1872: The First Eleven Years

Discovery, Exploration and Development, 1861-1872.

Gold was discovered in what was to become the Sherbrooke Gold District⁽¹⁾ in late August 1861, by Nelson Nickerson, a Guysborough County farmer, while he was making hay in fields about a mile and a half west of the North West Arm of the St. Mary's River. However, it was not until October of that year that the news of Nickerson's discovery leaked out beyond his own family. By October 18, 1861,over 200 people had arrived in the district to stake their claims.⁽²⁾

The Sherbrooke discovery followed similar finds in Nova Scotia: Tangier (1858), Oldham (1861), Wine Harbour (July 1861), Stormont (September 1861) and Waverley (August and September 1861).⁽³⁾

A surveyor was immediately sent for to lay out the mining areas and to receive applications for leases. Sixty-nine claims were filed for "Class 1" areas by March 1862; an additional 411 claims had been filed b the following December. A large number of these claims had been worked up for speculation and were never worked.⁽⁴⁾

The response to the gold finds in Sherbrooke District was very similar to what had happened in other gold districts of Nova Scotia. Spurred on by the gold rushes of California and Australia, people flocked to the gold fields of this province with expectations of instant wealth. Within a year of Nickerson's discovery, the once-empty lands were filled with dwellings and stores; Goldenville was a thriving village.⁽⁵⁾

However, the gold of Nova Scotia was not to be recovered from the earth as easily as that California. It was not through a simple method of panning and washing that the gold nuggets would be recovered, but rather a systematic method of quartz mining was required.⁽⁶⁾

There was considerable optimism about the ease with which shafts could be sunk and the ore mined. In February 1862 the following communication was sent to S. P. Fairbanks, about developments in the Sherbrooke gold District:

…facilities for mining and exploring are very good - the ground being dry, and the surface of the rock but slightly covered with soil. The 500 yards in breadth, and occupy the planes of bedding of strata that are nearly vertically on the veins, to a great depth - which must prove of considerable advantage.⁽⁷⁾

The district appeared to be so rich that gold could be seen in the oil following a rainfall:

…this cannot fail to prove a gold field of extraordinary value - indeed gold has already been found on this band, four miles to the East-ward of the diggings, but no work of any con-sequence can be carried on there, until the re-turn of spring.⁽⁸⁾

Between 400 and 500 men were working in the Goldenville diggings in May 1862. Already there was disappointment among the miners about the extent of their returns from the quartz. Many men had left the district by the following July. Their departure was a consequence both of low returns and the upcoming hay harvest.⁽⁹⁾

Not only had the miners misjudged the nature of the Nova Scotia gold deposits, so had the officials of the colonial government. In 1862 the mining claims were laid our in areas measuring 20 feet by 50 feet and 150 feet by 200 feet, both of which were too small to facilitate quartz mining methods. In addition to there being insufficient space to erect the necessary buildings and gear, the claims were laid out in close proximity to one another, thus creating problems of drainage and insufficient wall supports underground.⁽¹⁰⁾

The summer of 1862 was marked by depression in the gold industry. However, the following years saw a change in policy both by the government and mining operators. The size of claims was increased and companies began to consolidate claims to provide larger working areas. Within the next few years the numbers of mine - claim lessees declined, although the number of areas worked increased.⁽¹¹⁾

During this early period the gold was extracted "by means of the simple hand hammer and other … rude appliances". Trenches, 15 feet long by 8 feet deep, were dug along the vein and the quartz extracted. Then, by means of a hammer, the quartz was broken apart and the nuggets or crystals were picked out by hand.⁽¹²⁾ Such crude mining methods could be used by small groups of miners, but were inefficient and expensive. In May and June 1862 the first ore crushers arrived in Goldenville.

In reports from Goldenville throughout June 1862, there was considerable speculation as to when the first of five crushers would be in operation. The greatest problem facing the mill operators was the condition of the road between the Goldenville wharf and the gold diggings, and thus the problems of transporting the imported crushers.⁽¹³⁾ One of the first crushers to be erected was that A. D. MacDonald. It was on the diggings in late May, but was not operational until mid June.⁽¹⁴⁾ Two others were under construction: one owned by an American company and another owned by "an English Company". A total of five crushers was expected to be installed in the Goldenville area in the month of June, 1862. ⁽¹⁵⁾

The crushers brought into the Sherbrooke Gold District during this early period were manufactured in Nova Scotia as well the United States. MacDonald's crusher, know as the "Pictou Crusher", was cast by a Mr. Mitchell, Halifax; Alexander Archibald's crusher was built by the William H. Davis foundry in Pictou.⁽¹⁶⁾

The general impression of Goldenville to visitors during the summer months of '62 was one of bustling activity. There were trenches ever where as well as numerous shafts with a varity of structures built over them. ⁽¹⁷⁾ ILLUS. 1. However, the miners, many of whom were farmers either local or from Cumberland and Pictou counties, were deem to be generally inexperienced in the field of larger outfits argued that a great deal of money had been wasted, especially on shaft construction.⁽¹⁸⁾ In Spite of the disappointments and the inexperience of many of the miners, several well-defined lodes had been discovered and shafts up to 60 feet deep sunk.

The height of the activity in the goldfields in the summer months of 1862 was followed by a depression. Disappointed miners who had neither the technology nor the capital to mine their small claims, or whose claim prevented making adequate returns, left the fields. Over the next few years larger operations were begun as individuals leased a number of adjacent mining areas to carry on a more economical mining operation.⁽¹⁹⁾ The New York and Sherbrooke company, capitalized by Carlos Pierce and L. Sisen and incorporated in New York in 1864, acquired 40 mining properties which included approximately 25 lodes. The Wellington Mining Company, incorporated in December 1866 in Boston by C. F. McClure, controlled nine acres.⁽²⁰⁾

The Wellington Mining Company and The New York and Sherbrooke Company erected their own mill houses, as well as housing for their miners.⁽²¹⁾

With the amount of capital raised though American or Canadian Shareholders (selling stocks at $1 a share) these companies had the ability to develop their holdings more systematically. In 1874, Alex. Heatherington, a mining entrepreneur, was able to write about Goldenville, "The Mines …have been opened up more systematically that in many other districts, the credit of which belong in a great measure to having more experienced agents in charge."⁽²²⁾ By 1864 gold mining had become a settled business in the Goldenville District. Some of the older mines which had once been worked and then abandoned as being worthless were opened up once again.

The year 1867 marked the peak of production throughout Nova Scotia's gold fields as well as that of the Sherbrooke district.⁽²⁴⁾

In the 1868 Report of the Chief Commissioner of Mines, the Goldenville mines were described as being the most extensively worked operations in the province. The Wellington's main shaft extended 280 feet down; the hoisting shaft on the Hayden and Derby lode continued to the 110 foot level.⁽²⁵⁾ Among the companies working the Goldenville properties that year were:⁽²⁶⁾

The period 1867 - 1869 was one of speculation rather than of substantial mining activities. Although there were 19 companies recorded in operation in Sherbrooke in 1869, only four operations produced 85% of the returns. The following year only five companies worked throughout the full season, while 18 operations worked during the months of August and September.⁽²⁷⁾

Properties at this time bought and sold at inflated rates which had little connection with their mineral resources. Stamp mill returns were padded, inflating the potential value of the property and the companies' stocks. The durability of some of the companies which formed to exploit Goldenville's mineral resources can be illustrated by an examination of Malcolm's summary of operations and by listing the dates when companies began and ceased operations:⁽²⁸⁾

This period of rampant speculation continued until the early years of the 1870s. production levels never returned to the heights of the 1867 period, and the industry did not recover from the effects of the heady speculation on the American and English stock exchange until the 1880s. Goldenville did not recover until the mid - 1890s.

The American Journal of Mining depicted the hundreds of companies that had played the mining game in the Nova Scotian gold fields in this manner:

…[the companies were] shining examples of the [penny - wise and pound - foolish]. They had salaries to incompetent officers, large bonuses to speculative brokers, immense prices for under-developed and worthless mines, were within their through mining engineers, efficient business agents, upright and faithful lawyers, they could not afford to maintain.⁽²⁹⁾

One by one, the mining claims were leased to tributers. At first the Department of Mines argued that such a manner of operating the mines would be more efficient and profitable. Their reasoning stems from the early returns of the tributer's operations: in Goldenville, although the tonnage of ore crushed declined by 62% (13,882 in 1871 to 5,243 in 1872), gold production only fell by about 34% (6,579 to 4188.4 ounces). However, in the 1879 Mines Report the system was roundly criticized.⁽³⁰⁾

Throughout the remaining years of the 19^th century, countless theories were developed to account for the rapid rise and fall of the Nova Scotia gold field. A.R.C Selwyn put forward the following reasons in the 1870 - '71

Geological Survey of Canada Report:⁽³¹⁾

1. The rash expenditure of capital in purchase of mining rights respecting the actual value of which noting is know with certainty.
2. The hasty and inconsiderate erection of costly machinery for mining and treating the ores, before their quantity or their profitable value has been determined.
3. The attempts frequently made to enhance the value of stocks by declaring dividends, sometimes paid out of capital, but often by means of a process commonly know as 'picking the eyes out of the mine', or in other words selecting all the rich materials to secure a few high yields which are far in excess of anything likely to be the future value.
4. The too-common almost-universal practice of devoting the whole of the net proceeds to the payment of dividends, and having no reserve funds to meet expenses when poor ground has to be worked through…
5. The small size of the 'areas' or claims, not as regards actual acreage, but in relation to the position and thickness of the veins. This necessitates a wasteful multiplication of shafts and plants of machinery for crushing and dressing the ores…
6. The disregard of the natural features of the ground, shown in locating the crushing and dressing machinery without reference to the easy delivery of the material treatment of the ores, and for getting rid of the tailings…
7. The almost universal want of any appliances for saving pyrites and fine gold.

Three additional reasons were put forth by H. Y. Hind:⁽³²⁾

1. Frequent incompetency of some of the so-called mine managers.
2. Ignorance of mine manages regarding pay streaks.
3. Neglect to preserve records and plans of work done, which are absolutely necessary for acquiring a knowledge of the ore-shoots.

The above reasons for failure in the gold fields were not limited to the operations of the 1860s.⁽³³⁾Practices were not to change dramatically in the future either.

1

¹The Sherbrooke Gold District lies in Guysborough Country two miles west of Sherbrooke. See W. Maloclm, op. cit., p. 224. In the Eastern Chronicle June 19^th, 1862 the following description of the Sherbrooke district was printed: "…beginning at the north easterly corner of an old building formerly used as a saw mill, situated at the head of the North West Arm…, thence running north 65° west, or in a direction parallel with north and south boundaries of the mining lots laid out on this gold field three miles; thence southerly at right angles with the last mentioned three mines; thence eastwardly at right angles with the last mentioned line six miles; thence eastwardly to the place of beginning three miles".

²Harriet C. Hart, History of the Country of Guysborough, Nova Scotia, (reprint, Belleville, Ontario: Mika Publishing Company, 1975), p. 171; Industrial advocate (Halifax), v.III, n. l, November 1897, p. 6; Alexander Heatherington, The Mining Industries of Nova Scotia, (London: Turber, 1874) (hereafter referred to as MINS), "Sherbrooke District - Gold yield, 1862 - 1873", Heatherington attributes the discovery to Miss Margaret MacIntosh in August 1861, while she was out gathering berries.

2.

³A. Heatherington, A Practical Guide for Tourists, Miners, and Investors and All Persons Interested in the Development of the Gold Fields in Nova Scotia, (Montreal: Lovell, 1868) (hereafter referred to as A Practical Guide…), p. 52 - 53.

3.

⁴ W. J. Anderson, "Gold Fields on Nova Scotia", Transactions of the Literary and Historical society of Quebec, New Series, Part II, 1863 -64, p. 44.

4.

⁵ W. Malcolm, op. cit., p. 5 - 6.

5.

⁶ A. Gilman, "The Gold Fields of Nova Scotia", Atlantic Monthly, 89; 576 -86. Gliman noted that the nature of the Nova Scotian gold deposits necessitated the most scientific and systematic methods of the deep quartz mining. A. Heatherington, A Practical Guide…, p. 105: "Nova Scotia is essentially the Rich Man's Diggings…" Heatherington argued in his 1868 report that Nova Scotia gold mines could only be developed with machinery and skilled labour. The Halifax Sun, 25 July 1862.

6.

⁷ Public Archives of Nova Scotia (hereafter referred to as PANS) RG 1, v. 462, Document 31. John Campbell's report to S. P. Fairbanks, February 1862.

7.

⁸ Ibid.

8.

⁹ Eastern Chronicle (New Glasgow), 8 May 1862. The reporter notes that there is already considerable disappointment about the mining returns of Goldenville, but still there is optimism: "Great things are expected from the crushers…"

9.

¹⁰ The government gold mining policy appeared to present many problems to prospective miners. The government demanded a regular fee for the property claims well as a 30% royalty on the gold recovered. The annual rent posed a problem for some of the early miners at Goldenville who described themselves in the following manner in petition to the Gold Commissioner:

…[We] are still deterred owing to the want of a proper system for sifting gold from quartz - from making sufficient tests, to decide as to the value of claims, and whereas your Petitioners have undergone a considerable outlay in ercting Houses, in the purchase of mining implements, and labour in searching for lodes, after having paid the first installment, would now as such claims are to be confiscated, upon which the second installment is not paid as, the same becomes due, pray that the claims be allowed to remain in the possession of the original holders until they have a sufficient opportunity to decide to their values."

Dated 18 July 1862 and was signed by 149 individuals in Goldenville. PANS, RG 1, v. 465 ½, Document 129. B. Silliman, Report on the Property of the Halifax Gold Mining Company, (Boston : 1864), p. 18 - 19; A. Gilman, op. cit., p. 583 - 84.

10.

¹¹ W. Malcolm, op. cit., p. 6; G. Evans, "Early Gold Mining in Nova Scotia", Collections of the Nova Scotia Historical Society, v. 25, 1942, p. 32 - 33.

11.

¹² Anonymous, The Gold Seeker's Guide, A Practical Directory in the Search for Gold, especially in Nova Scotia. (Yarmouth: H. Huntington, 1862) (hereafter referred to as The Gold Seeker's Guide), p. 15; Professor M. C. Vincent, Report on the Gold Propertyof the Tangier Mining Company, (London: G. W. Bacon & Co., 1866), p. 5.

12.

¹³ Eastern Chronicle, 22 May 1862, reports that one crusher has been erected, but the road between the gold mines and the river leaves a lot to be desired. Ibid. 5 June 1862; The road to the diggings was reported as incomplete and expected to be ready in two weeks. Halifax Sun, 23 July 1862; the carriage road from the ferry terminates Messrs. Elliot and Gunnison.

13.

¹⁴ Eastern Chronicle, 22 May 1862; 5 June 1862.

14.

¹⁵ Ibid, 5 June 1862 reports that only one crusher was working on the 'diggings' and there was another, owned by Joseph Oulton, four miles away on the river. Three other crushers were to be erected when the road was complete. The three crushers were owned by American, English and Nova Scotian Companies.

15.

¹⁶ It is difficult to accurately match crushers with companies and/or individuals. The Halifax Sun, 23 July 1862 identifies the McDonald Crusher as being manufactured by Mr. Mitchell, Halifax. The 25 July, 1862 issue of The Halifax Sun identifies McDonald's crusher as the 'Glencoe Crusher', while the Eastern Chronicle (New Glasgow) calls the mill owned by J. McDonald and Alexander McDonald the 'Pictou Crusher'. In the Industrial Advocate's list of provincial crushers, Alexander Archibald is noted as the owner of the Glencoe Crusher while J. McDonald owned the Pictou. In spite of this confusion over provenance it does appear that at least two crushers in Goldenville during the 1862 season ere manufactured in Nova Scotia. See Eastern Chronicle (New Glasgow) 23 May 1862; The Halifax Sun 23 July 1862.

The W. H. Davis Foundry was founded by William Davis, Albion Mills, then moved to Pictou in 1855. See Our Dominion and Commercial Sketches of Halifax and Environs, (Toronto: The Publishing company of Canada, 1887) p. 128. It would appear that Mitchell's foundry was the same operation as the Chebucto Foundry, later know as the Nova Scotia Iron Works. See Hutchinson's Directory, 1864 - '65, p. 173 - 591, Belcher's Almanac 1868, p. 205.

16.

¹⁷ Halifax Sun, 23 July 1862; W. J. Anderson, op. cit., p. 44.

17.

¹⁸ Halifax Sun, 23 July; 1862; Eastern Chronicle (New Glasgow) 19 June 1862 "Letter from Sherbrooke".

18.

¹⁹ G. R. Evans, op. cit., p. 32 - 33; W. Malcolm, op. cit., p. 6.

19.

²⁰ Heaterington, A Practical Guide …, Appendix III; T. S. Hunt, Report on the Gold Region of Nova Scotia, in Canada: Sessional Papers, n. 75, Ottawa, 1868, p. 29.

20.

²¹ Ibid.

21.

²² A. Heatherington, MINS; See also Nova Scotia Journals of the House of Assembly, Mines Report, Appendix 4, p. 2.

22.

²⁴ Malcolm, op. cit., p. 228 - 29.

23.

²⁵ Report of the Chief Commissioner of Mines for the Province of Nova Scotia, 1868 (Halifax); see also, JHA, 1868, Mines report, Appendix 4 Inspector's Report, p.25.

24.

²⁶ Malcolm, op. cit., p. 277-230; Eastern Chronicle (New Glasgow), 1 February 1868.

25.

²⁷ Ibid, p. 229; American Journal of Mining (AJM), v. IX, n.8, 22 February, 1870, p.116. The AJM reported that "the 1867 gold mania" had collapsed during 1869. At Sherbrooke, the Wellington Mine had stopped in the summer of '69. The lode they had been working had been fully exploited to the limits of the property. An English Company was reported to have taken over the property for $60,000.

26.

²⁸ Ibid, p.228-230. "Inc." refers to date of incorporation as reported in A. Heatherington, A Practical Guide… He does not always include the dates that companies began and ceased operations.

27.

²⁹ G. R. Evans, op. cit., p.33; See also W. Malcolm, op. cit., p.6. The AJM comment is rather interesting. It appears to assume that most mining companies of this period were more concerned about their operations than their apparent value on the stock exchange.

28.

³⁰ Malcolm, op. cit., p.236; RDM, 1872, p.22-23; also Malcolm op. cit., p.7: "In 1872 a great change took place in the system of mining; operating by companies was almost completely discontinued, and the system of working by tributors was introduced, became very general, and was the chief system in vogue for a decade." N.S. RDM, 1879, p.9; AJM, v. xv, n.19, 13 May 1873, p.297. See also J. C. Murray, "Gold Mining in Nova Scotia", Transactions of the Canadian Institute of Mining and Metallurgy, v. xxix, 1926, p.3-4.

29.

³¹ Quoted in W. Malcolm, op cit., p. 6-7. The rise and fall of so many companies in the pursuit of Nova Scotian gold mining resources prompted mining entrepreneurs such as A. Heatherington to begin or conclude their comments on the wealth of the resource and its potential, with such phrases as no chimera. In his A Practical Guide, p.11, Heatherington also used Selwyn's report to reassure investors about Nova Scotia mineral resources:

All those points are affirmatively answered by Mr. Swelyn's admirable report; for although he hedges this remarks with the advice that 'no one should in-vest in such enterprises to an amount beyond what he can afford to lose without serious embarrassment; the facts personally and officially testified to by him demonstrate that the auriferous quartz veins in Nova Scotia are abundant, likely to extend to agreat depth, and, with skill and economy, ought to be mined at considerable profit. By avoiding the mistakes of previously organized under-taking, there appears, then, to be, better colony than in the distant foreign countries where, within the past two years, nearly as many millions of British capital have been irrecoverably lost in wild speculations. Let us hope that a change is about to take place, and that Englishmen who uphold legiti-mate mining eterprise will cease to neglect the now well-proved advantages of a British dependency for chemical allurements abroad. The formation of a company for consolidating the principal gold claims in Nova Scotia, and developing them under British energy and methods, besides evincing patriotic spirit, appears to be actually a necessity. Such a project, under respectable administration would, we opine, not only receive substantial encourage-ment from the investing public, but, if conducted on the basis of Mr. Selwyn's views, assuredly become both a paying and lasting institutions.

30.

³² Quoted in Malcolm, op. cit., p.7.

31.

³³ The correspondence between R. V. Neily and J. B. Neily, (June 1914 to December 1914) attests to the continued practice of gold mining concerns depending on the returns of the stock market rather than the mine operations. PANS, Goldenville Mining Company Correspondence.