# Charleston: Its Rise and Decline/Chapter 13

Chapter XIII.
BANKS AND CURRENCY—TREATMENT OF GOLD.
ONE of the first requirements of a newly-found goldfield is a ready means of disposal of the gold gathered, at a standard price and for cash. Another essential requirement is reliable buyers who will hold the proceeds at the disposal of the sellers, to be drawn upon by them from time to time as required, in small or large sums. Only trading banks can meet such requirements, and they willingly afford them to fields considered sufficiently important and likely to be long-lived. Charleston was considered one of such, and within eighteen months of its discovery three banks were operating there, the Union Bank of Australia, the Bank of New Zealand, and the Bank of New South Wales; not in tents, slab-huts, or corrugated-iron shacks, as were the first branches further south, but in substantial buildings; evidencing a belief in the permanency of the field, a faith which was shared by the Resident Magistrate and expressed in his report of 1870. Events have proved them to have been mistaken; it was short-lived.
The coming of the banks was of the greatest benefit to the settlement, a major factor in the rapid development of the town and its businesses, as in many cases they financed the gathering of the gold that, in turn, was expended in gathering more gold. Of those who made the long and hungry trek along the coast to this new field, not all, in fact few, possessed much beyond unbounded energy, tenacity, and courage; assets which the banks considered sufficient to advance money upon without further security.
​Everybody knew that rich patches of gold were there, somewhere; but like the pearl in the oyster shell, it was valueless until found and gathered; and for the gathering, water was essential, water with sufficient fall to reach the field, and with power for working; so it was more eagerly sought than were gold indications because, having water, gold would surely be gathered, whereas gold indications were but such, and no more, until worked. There are spots still unworked, lying neglected, that would afford good returns were water cheaply available. This is but cause and effect; had the water been available, such places would not have remained unworked. Ere long the high-lands were explored for water, but few sources found; so catchment areas had to be relied upon; dams were to be seen in every direction. One Renewal Certificate of Registration issued to McClatchie Bros. in 1888 was for eight of such.
The cost of water was considerable, being, according to a Magisterial report of 1870, from £4 to £9 per claim per week. It was sold at a price per “head” the measurement of which is explained in another chapter. Before the standardising of a “head” by regulation, and the maximum price fixed, payment was much a matter of bargaining, according to the “fall,” and the hours per day and the days per week that the water would be used. A good dam was a more valuable property than the average claim-holding. Several dams were within the town area; one close to St. Patrick’s School, another behind Section 333, and another occupying Sections 205-207 facing the old Buller Road.
As stated, the banks backed many enterprises, some too liberally for the banks’ ultimate good. At first the quantity of gold coming to the smelting-rooms was great, but as the supply diminished the aspect of business changed, securities fell in value, defaults were inevitable, and moneylenders suffered. Foreclosures on mortgages were not always easily or peacefully effected. It is told of one battery which a bank seized, that a keg of powder exploded on the premises, which were wrecked, including the hut in which the bailiff was sleeping.
​In the flush of easily-earned prosperity, many desired to share therein and engage in schemes for which the banks were to find the money and “carry the baby” in the event of failure; their geese were swans, and the banks had to distinguish the birds not likely to lay golden eggs. Yet, the despised goose often serves a good purpose, especially at Michaelmas—one rich field was discovered owing to gold having been found within a festal victim. In short, the banks were the guardians of the people during the varying vicissitudes of the field’s rapid growth and more gradual decline.
In February of 1869 the Bank of New South Wales unwittingly contributed to the festive life of the town. Its branch at Brighton had been closed, and its books and cash brought to Charleston on pack-horses. It was found that about £150 in half-sovereigns was missing, and enquiry revealed that a nail in the pack-saddle had torn holes in the sacks, resulting in a golden trail along the track. Only about £3/10/- worth was recovered by the bank, but it was observed that for several nights afterwards an unusual quantity of liquor was consumed at certain hotels, and was paid for with golden coins. On the 2nd of the following month (March) a man was charged at the Police Court with having found and retained some of the missing coins, but the charge could not be proven.
At times the counter work of banks had its light side. A tale is told of a public man having been presented with a purse of sovereigns; he accepted it, but the next day wrote to the Committee saying that “as he had only done his duty” he could not accept monetary recognition, so enclosed his cheque in refund of the amount. His high-principled action was marred by the fact that his cheque was not met, his account being perpetually overdrawn. In another case a cheque for £25 was presented, but handed back marked “not sufficient funds.” The holder with a smile paid in £5 and presented it again with the same result. He continued paying in amounts until he had paid in the full amount of the cheque, then, confidently presented it finally. It was returned again, with the remark “that there was still a small overdraft to be met.”
Perhaps the greatest service rendered by the banks was ​the ready cash market they offered for gold in small or large parcels, and its conveyance to Westport under police escort. The gatherers were thus relieved of the necessity for hoarding, with the attendant risk of theft, or of selling or bartering to traders at less than actual value. In addition to purchases over the counter, each bank employed a gold-buyer who visited each claim-holder for the purpose of purchasing his gold, thus bringing the market to his back door, and relieving him of the necessity of losing valuable hours of work when good returns were being made and every hour counted. Prosperous miners were wooed by the rival buyers as keenly as were electors at an election, or a newly-arrived danseuse at the casino. The duties of a gold-buyer on the Coast called for shrewdness and a close knowledge of gold values. Not all gold was of the highest quality or purity: alloys were present in varying proportions, and the assays of different localities varied considerably. Some diggers, aware of this, were not above offering gold from a low-grade spot while declaring that it was from a high-grade one. While the standard value of pure gold was £4 per ounce, much was not worth more than from £3/12/- to £3/18/-. Most of Charleston gold was high-grade when the gold was smelted.
Discovered in 1866, Charleston was by the end of 1867 a thriving township, an isolated settlement in a wilderness; its rapid growth was remarkable. The Nelson Evening Mail of 4th March, 1866, stated: “The annals of colonisation contain no record more remarkable than the progress of events on the West Coast of this Island. Fifteen months ago, the whole of the country between the great range and the sea, from Cape Foulwind to Cape Providence, a distance of nearly 500 miles, was as unknown as the interior of Africa . . . now a population of 25,000 souls has settled in the desert, producing and exporting gold to the value of £200,000 every month.”
The goldfields were profitable to the banks, and the latter paid large dividends in the early days. In 1867-1868 the Bank of New South Wales paid 18%, the Bank of New Zealand 17%, the Union Bank of Australia 17%.
CURRENCY.
In the first stages of British occupation of the Colonies, all trading was by barter. A Sydney newspaper of 1796 in announcing a play, stated that the admittance fee would be one shilling, “paid in meal or rum, taken at the door”; and this system prevailed in New Zealand until the establishment of trading banks—the Union Bank of Australia in 1840, and the Banks of New Zealand and of New South Wales in 1861, with some others between and after those dates.
On the early goldfields the first medium of exchange was loose gold, measured by thimblefuls, pannikinfuls, or billyfuls; but if ever this system prevailed at Charleston it cannot have been for long, seeing that trading banks were operating there soon after its discovery. The value of thimblefuls varied but little, but of the other measures considerably, so they were weighed. It is said that the average value of a billyful was £1,200. The practice of weighing soon became general, and stores and hotels kept gold-scales on their counters for the purpose; but the price per ounce was, until the advent of banks, a matter of bargaining. Later, bank notes and coinage came into circulation, but not, until recent years, copper coins—they were despised. Bank notes were at first looked at askance; gold was gold; notes were but paper, merely “pipe lights”—and some madcaps actually used them as such. Gradually, with the introduction of banking-accounts, came cheques, drafts, bills, and other accessories of banking routine, resulting in the full monetary and currency system of to-day.
THE CHARLESTON BANKS.
Bank of New Zealand. This bank was situated on Section 115 at the corner of Prince’s Street East and Rotten Row South. It was opened in January, 1867, and closed 6th August, 1888. Officers: Matthew Cleland, January to May, 1867; George Kirton, May, 1867, to May, 1868. Later records are not available, but it is believed that Mr. H. G. Smith was in charge in 1875; Mr. H. F. Gorrie from 1877 to 1880; and that he was succeeded by Mr. W. H. Brown (to about 1885), Mr. S. J. Brookfield, and Mr. W. A. Mason (1888). The smelters were —. Filder, C. Woodhead. This branch took ​over the Brighton business in February, 1869. The Charleston Argus of 16th March, 1867, stated that this bank was then “moving to Carter’s Corner”—that is, to Section 115. Where the first premises were situated is not clear, but one informant states that its temporary building was on Section 72, very shortly afterwards occupied by the Bank of New South Wales.
BANK OF NEW SOUTH WALES.
This bank was situated on Section 72 at the corner of Prince’s Street West, south side, and Greenwood Street South, at the beginning of the cutting that led to Constant Bay. It was opened in these premises in 1867, but in its later years removed to Section 407 in Camp Street North. It closed in 1895. It was at first a gold-agency under Mr. Hugh Jones (1867 to 1868 or later) but was later converted into a branch under Mr. Edward Williams, who remained until 1885. In 1867-1868 Mr. John Pickering was accountant. From 1885 to 1888 Mr. A. H. Vernon King was manager; 1888 to 1891, Mr. J. Lundon; 1891 to 1895, Mr. W. J. N. Blaxall. In February of 1869 the branch at Brighton was closed and its business transferred to Charleston branch. The branches at Hokitika and Westport were opened in 1864.
UNION BANK OF AUSTRALIA.
This bank was situated on Section 114 at corner of Prince’s Street West, south side, and Rotten Row South, west side. Hardly any records are obtainable. It opened in 1867, and in 1875-1878 was in charge of Mr. T. Bowman. Mr. Charles Godso, later manager of Maori Chief Battery, was smelter in 1869. The premises were later occupied by the Charleston Herald newspaper.
TREATMENT OF GOLD.
As stated elsewhere herein, the gold found about Charleston was fine, and caught upon mercury-coated copper plates or upon fabrics. Copper plates were scraped with broad scrapers or chisels, and the amalgam therefrom required only to be retorted and smelted. Fabrics (cloths) were rinsed daily or more frequently in a trough (often improvised from a ​cask or packing-case) and these “washings” periodically “streamed down,” i.e., passed a second time over the tables, handful by handful, in a small stream of water, and the cloths again rinsed in the trough. To this second “wash,” now containing only a small proportion of the sand or earth, was added a quantity of mercury (quicksilver) and the whole stirred until full amalgamation of gold and mercury was effected. It was usual to add a quantity of cyanide of potassium to assist amalgamation. The gold-bearing mercury was placed in a bag and the free mercury squeezed out. The ball of amalgam was then retorted; the bowl of the retort rested in a fire, but the tube-end was immersed in water which caught the evaporating mercury, for further use. Small quantities of amalgam were merely placed on shovels and held over a fire. Goodly quantities of mercury have, in consequence, been found in old chimneys. The retorted gold was taken to the banks for smelting, i.e., to be re-melted, treated for impurities, weighed and purchased. The smelting crucibles were, when discarded, eagerly gathered by boys who pulverised them in search of pellets of gold fused into cracks or bottoms. The gold purchased by banks was melted into large moulds of semi-pyramidal shape, for export. It was a constant joke for smelters to offer one of these to lady visitors if they “cared to take one away”—an impossibility, as no finger-hold was possible on the smooth, sloping surfaces.