Licensing Gold

Regulations for gold licenses were issued on 18 August.[1] The problem was that La Trobe lacked sufficient manpower to make them effective. [2] From 1 September 1851, all diggers had to pay 30 shillings a month (the equivalent of a week’s wages) for a license whether they were successful or not or risk prosecution. He hoped that this would provide sufficient territorial revenue to maintain services such as road-building and law and order, and limit those thinking of leaving their regular employment to try their luck on the diggings. Gold Commissioners were appointed, a process not completed until December, to police the license system and to defuse any disputes on the goldfields. Nicholas Fenwick, Commissioner of Crown Lands and a magistrate was appointed on 18 August to apply the regulations and issue licenses in the settled district around Melbourne. [3] Some diggers were able to pay the fee but many more were not and it created widespread resentment. La Trobe was described by the Geelong Advertiser as ‘our Victorian Czar’ imposing an unrealistic tax before any goldfield had shown a profit. [4] La Trobe thought he was acting in an appropriate and fair-minded manner by imposing the rule of law equally on all diggers. His was a desperate approach to the problem of maintaining government in Victoria and resulted in growing opposition.

Why did the gold license prove so unpopular in Victoria? The government needed additional revenue to police and administer the goldfields and many diggers accepted that some taxation was necessary to provide services and protection. A license to mine would in principle have had some deterrent effect on the disruption to the colonial labour market by providing a small barrier to entry into the industry and paid before any income could be earned in the industry. As it was paid monthly, it also provided inducement to leave mining where incomes were modest. Whatever the intention behind the license fee, it was considered unjust. It was a direct tax without legislative sanction. In the mid-nineteenth century, direct taxation was still uncommon and resistance to direct taxes like the poll tax had entered folk memory. The level of the fee was also a major source of resistance since only a minority of diggers were, as yet, paying their way. Was this an attempt to keep the poor from seeking their fortunes, many angrily retorted? Finally, some goldfield officials were tactless and arbitrary setting a precedent for events in 1854. In its haste to control the gold rushes, the Government had neither justified its actions (it was not to do so for two years) nor considered more acceptable alternatives.

[1] This is evident in La Trobe to Earl Grey, 10 October 1851, ‘Further Papers relative to the Recent Discovery of Gold in Australia’, Parliamentary Papers, Vol. lxiv, 1852-3, pp. 42-43. See ‘Licenses to Dig and Search for Gold’, Argus, 21 August 1851, p. 2.

[2] Goss, Alan, Charles Joseph La Trobe, (Melbourne University Press), 1956, pp. 103-126; Reilly, Dianne, ‘“Duties of No Ordinary Difficulty”: Charles Joseph La Trobe and the Goldfields Administration’, Victorian Historical Journal, Vol. 72, (1 & 2), (2001), pp. 173-186, 181-201, and ibid, Drury, Dianne Reilly, La Trobe, pp. 216-231, are useful studies of La Trobe’s problems.

[3] Argus, 21 August 1851, p. 2.

[4] Geelong Advertiser, 26 August 1851.

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