The Scottish Gold Rush History

The Scottish Gold Rush March 1869

Click here to read a letter dated 17th July 1869 from a prospector

The history of Kildonan's gold started in 1818, when a solitary nugget of gold weighing about ten pennyweights was found in the River Helmsdale. It is claimed a ring was made out of this and is in the possession of the Sutherland family.
Following the discovery of gold in California in 1849, the yellow metal was found at many other places around the world during the next forty-five years. Scotland ensured its place in the history books late in 1868, when a brief announcement in a local newspaper stated that gold had been discovered at Kildonan in the county of Sutherland. The credit for the discovery goes to Robert Nelson Gilchrist, a native of Kildonan, who had spent 17 years in the goldfields of Australia. On his return home, he was given the permission by the Duke of Sutherland to pan the gravels of the Helmsdale River and he chose to prospect all the burns and tributaries in a very methodical manner.
He found gold in many places but the greatest concentrations were in the Suisgill and Kildonan burns. The accounts of his findings spread like wildfire throughout the north of Scotland. The Illustrated London News circulated the story further a field and, within six months, over 600 hopeful adventurers had made their way to the normally deserted Highland Glen. Two local papers, The Northern Ensign & The John o'Groat Journal carried regular reports "from the diggings", and The Inverness Courier and The Scotsman also maintained a regular stream of news from their "special correspondents".

Temporary Living Quarters at Bal an Or at time of Gold Rush (1868) At the height of the Kildonan Gold Rush the prospectors' huts formed a shanty town known in Gaelic as Baile an Or – Village of the Gold.

In those days, the railway line terminated at Golspie and the last 30 miles had to be tackled on foot. Many of the prospectors were novices but a hard core of miners from Australia and America helped to provide some much-needed expertise in gold recovery. In April 1869, however, the Duke of Sutherland introduced a system of licenses which cost one pound per month for each claim measuring 40 square feet. In addition to this, the prospectors were expected to pay a royalty of 10% on all gold found; not surprisingly, much gold was never declared but was used in barter for food, tools and accommodation.

By this time, two small 'towns' had come into being. Baille an Or was a settlement of huts which was established by the banks of the Kildonan Burn and Carn na Buth (meaning Hill of the Tents) served the workers on the Suisgill Burn.

Very soon a 'saloon' was added to the Town of Gold (Baille an Or) and provided meals and accommodation for the mining fraternity. The Northern Ensign carried a description of the stores:

"One end is devoted to culinary, kitchen and lodging purposes, the beds being arranged in layers like those of a steam boat. Potatoes, salt, butter, eggs, bread, cheese, onions, cabbages, spade handles, tobacco, pipes, snuff, writing paper, stockings, shirts, tea, sugar, barley, oilskins, candles, beef and castor oil, are all arranged in the most admired confusion, and are to be had at prices which might disturb the equanimity of local provision merchants and dealers in castor oil to quote"

During the summer months of June and July the issue of licenses continued at levels of about two hundred per month. Many tourists and journalists arrived by the stage coach which ran from nearby Helmsdale and the Duke of Sutherland paid a visit in order to present a valuable gold watch to Robert Gilchrist as the 'discoverer of Sutherlands gold". A drought in June allowed the diggers access to the gravels on the river bed and this may account for the fall in the gold price. The Scotsman reported 'it can now be got at £3 10s (£3.50) per ounce and when buyers are not plentiful, sales are being effected at £3 8s (£3.40). At the start of the gold rush the going rate was as high as £4 10s (£4.50). Nevertheless sales of 1.5 to 2.5 ounces per week were considered "fair wages" and many men expressed satisfaction in being able to wash eight or ten shillings worth of gold each day. That is, sums of a value 40 to 50 pence. The start of the herring season in August depleted the numbers and by September, the number of miners was down to fifty, who, with some justification, were anxious for the Duke of Sutherland to allocate more ground for gold prospecting. The Duke's reluctance however, was on account of complaints from his tenant farmers and the fishermen.

As the weather deteriorated, the outlook appeared bleak and it was no surprise when the diggers were summoned together to hear an order read by the Inspector. "After Saturday first, no new licenses will be given out and on the expiry of those current the diggers must remove their tents and leave the locality." Applying the principles of market forces, the diggers now demanded and received 4 an ounce for their gold.
The Scottish Gold Rush ended at midnight on the 30th December 1869.

Mysterious German and precious gold of Kildonan
By Malcolm Bangor-Jones

ALTHOUGH the Kildonan Gold Rush had come to an end in the winter of 1869, the lure of gold tempted several opportunists over the following years.

Of these speculators, none was perhaps as mysterious as one John Peter Dunker, a German whose real name was Kagenbusch.

The gold rush had fizzled out because of the poor returns from the alluvial gold found in the deposits bordering the burns up the strath, even though many of the prospectors had been experienced "colonial" diggers. However, the possibility of finding the source of the gold in the bedrock remained an attraction, although the rock would have to be crushed and the gold extracted, a process which required expertise and capital and which could have a significant impact on the landscape.

The Rev Dr Joass, minister of Golspie, local antiquarian, and amateur geologist, was keen to find the source of the gold. In 1880 he sent some crushed quartz from Suisgill for analysis to Professor Matthew Heddle, a renowned mineralogist, maker of the first geological map of Sutherland, and discoverer of the so-called Ben Hope diamond. The amount of gold was found to be some 11 grains, or 440th of an ounce, per ton of material.

Three samples were sent to a London laboratory. While one was put aside as worthless, the other two demonstrated that there was "actually Gold in the district – and if it is Known exactly whence the samples were taken might give a clue to richer deposits – but the quantity of Gold is not sufficient to permit it to pay for working in the ordinary way."

The results of these tests, and their experience of the gold rush, convinced the estate management that exploitation of the gold field would probably not be viable, particularly given its impact on farming and sporting operations. The Duke of Sutherland and his advisers did not wish to rule it out entirely, but they were to be wary of those making extravagant claims.

Dunker appeared on the scene in June 1880. He was staying at the Commercial Inn in Helmsdale, also known as Ross's Hotel after its landlord and now the Bridge Hotel. Having made some investigations he contacted James Peacock, the Duke's factor for the east of Sutherland, who sought the advice of the Rev Mr Joass.

It was not clear what Dunker was interested in and Joass was inclined to agree that "it may be the Limestone he is looking after – to work up perhaps along with materials from elsewhere into Hydraulic Cement."

However, William Ross, the local ground officer for the estate, reported that Dunker had been examining part of the strath in search of gold. Dunker must also have been boasting about his powers, as it was said that he could "abstract Gold from the hardest Stone".

Dunker revealed his proposals to Peacock who explained to General Sir Arnold Burrowes Kemball, the Duke's commissioner, that the German had "some wonderful Scheme for Extracting Gold from Quartz". However, Joass had commented that the rock specimens had "nothing whatever in them to support Mr Dunker's wonderful expectations – on the Contrary they are merely Chips of the red granite and gneiss of the District River Sand &c – among the Specimens in one parcel Dr Joass detected a piece of burnt clay!! possibly part of an old Brick".

Dunker proposed taking away up to two or three shiploads of supposedly gold-bearing material from near the Suisgill or Kildonan Burns for experimenting on. He had a company in Leeds and claimed to have been manager for the Marquis of Normanby at Whitby in the 1840s. Since then he had been "in various parts of the Continent inspecting Lead Copper & Silver mines". He had been born in Germany, spoke English well, and had "the appearance of a man who has been engaged in some practical work."

Peacock was convinced, however, that Dunker's real aim was to "get some money on the faith of his wonderful process – rather than engage in the operation on his own account." It was noted that in one of his letters, Dunker signed himself Peter Kagenbusch.

It is almost certain that Dunker was the Peter Kagenbusch from Westphalia in Prussia who, in 1842, registered a patent when working as a dyer in Yorkshire. He was probably also the same Peter Kagenbusch who was declared bankrupt in 1846 when a chemist in Liverpool.

Dunker was informed that the Duke refused to have anything to do with his gold extraction process but would, however, not object to Dunker taking 200 to 300 tons of material away provided that he undertook to satisfy all claims for surface damage.

The factor had the impression that Dunker would decline, unless he was a "little more Racked" than he took him to be. Peacock pointed out that the coal which Dunker claimed to have discovered near Helmsdale was well known to Joass as "an extension of the Brora Seam, but much thinner and more impure."

In the meantime, Dunker had commenced operations in Helmsdale, erected a small furnace in a house on Dunrobin Street, and had started to smelt the rock he had taken from Torrish and other parts of the strath. The village was agog with excitement: there was "nothing but talking of Gold" and there was "a good deal of Agitation among the People".

Ross attempted to describe the process: "I see that they first Burn the Rock and then breaks it with hammers to a small Powder and then put into Small Mugs or Pots and places it into the furnace and abstracts the Gold".

According to the harbourmaster, Donald Mackay, the rock was "pulverised and put into conical crucibles which are then put into a furnace and by some chemical process the gold falls down in a molten state into the short conical apex at the bottom of the crucible and retains that shape after cooling". Mackay had seen a piece of gold so shaped.

The reference to a "chemical process" was confirmed by a report which stated that "the process to be adopted for separating the gold from the quartz is said to be quite new, chemicals being the principal agents employed". The exact nature of this process, however, was not clear.

Ross and Mackay reported that a penny weight of gold had been abstracted from 12 ounces of powdered rock and the following day about one ounce of gold had been abstracted from four or five pounds of dust. But both men had been told this by Dunker himself.

Dunker had rented space in Gordon Macintosh's curing yard to store the rock and had been enquiring about the cost of shipping it to England. The yard lay on the old harbour at the corner of Shore Street and Stafford Street.

At the height of the Kildonan Gold Rush the prospectors' huts formed a shanty town known in Gaelic as Baile an Or – Village of the Gold.

The news spread and on 1st July The Inverness Courier announced: "There seems a prospect of operations being resumed at the Kildonan Gold Diggings, Sutherlandshire. A German gentleman is at present testing the gold-producing properties of the quartz taken from several points in the Strath. The results are reported to be very promising."

Peacock had been making enquiries about Dunker's finances. James Hill, agent for the British Linen Company Bank in Helmsdale, revealed that the German had "at present Sufficient funds to pay his work people. He appears to me to be indifferent to money or appearances so long as he can get something to experiment upon."

Dunker accepted the Duke's offer and on Saturday 3rd July Peacock met him in the Strath to determine the scope of the operations. George Greig, the Duke's manager in charge of the land reclamations in the upper part of the Strath, was also present. A formal agreement was entered into permitting Dunker to remove up to 300 tons of material from an area bounded "on the South by the County road from Helmsdale to Kinbrace, on the north by the Skyline as visible from said road, on the East by Suisgill Burn, and on the west by the Kinbrace Burn".

The material was to be extracted in a way which would be "least injurious to the ground or the pasture". All surface damage was to be paid for and Dunker was to lodge a deposit of £10. To limit damage to the public road, he was to take the material to the nearest railway station – either Kildonan or Kinbrace. All work was to be completed by 31st August and he was to account for the Crown's right to a tenth of the value of all gold or silver extracted.

Peacock explained to Sir Arnold that the agreement should suffice until the estate saw "something more tangible in the way of performances". Dunker promised "wonderful results" and was busy experimenting on small samples of rock while two larger furnaces were being completed – one was already finished and would soon be dry. These larger furnaces would supposedly enable Dunker to smelt one hundredweight of crushed stone each day.

Dunker also claimed to have found considerable quantities of silver. Indeed, Peacock said the German declared he had discovered "an unlimited supply of Everything valuable". The factor suspected that it would all turn out to be "merely another Chapter in the old story of Imposition".

The people of Helmsdale were anxiously waiting the results of Dunker's experiments – "as might be expected among a number of poor people listening to the gossip Circulating about his marvellous promises and mysterious performances in the way of Smelting Small Samples of Stones, his display of Chemicals & Crucibles."

The publicity generated interest from further away. One William King from Alnwick was advised by his mother to write to the John O'Groat Journal in search of employment. He had "many years Experience in Gold Mining & various methods of saving Gold. Could 'open' & carry on works for washing Gold by Hydraulic sluicing (the latest method) or otherwise. Understands mining & raising auriferous washdirt &c". He was a total abstainer and could furnish "Testimonials as to Character & practical Knowledge from Colonial miners & others".

Peacock advised the editor of the Journal that there was no "probability of Gold digging or Mining being resumed at Kildonan – a Mr Dunker is at Helmsdale just now making some experiments with a view to extracting Gold & Silver by some process of smelting – it remains to be seen with what result, and this will shortly be known – I am very doubtful at present & would therefore advise Mr King to wait a little before taking any further step in that direction."

Suspicions about Dunker began to reach the estate management. James Cam-pbell, school teacher and Poor Law Inspector for the parish of Kildonan, had heard in strict confidence that Dunker was "placing base metal in the Crucibles he is submitting to heat in the furnaces and that in all probability this is the only metal he is again extracting".

Greig had made some enquiries about Dunker at Leeds and found that a patent which he had obtained in 1879 had merely given "provisional protection" for six months for an invention for extracting and manufacturing aluminium, bronze and gold from clay, dross and other substances.

Peacock felt that further information obtained by Greig "considerably strengthens the doubts as to his (Dunker's) Character and necessitates still more Caution in any dealings with him".

In the meantime Dunker had employed men to collect raw material. On 12th July the ground officer went up by train to Kinbrace and walked down the strath, examining the burns where Dunker's men were "selecting Stones for Gold Smelting".

Near the bridge over the Kinbrace Burn there was a two-ton heap of stones. Further up the burn, Ross found "two men Washing for Gold with Tin Basins". Doll Mackay from the Reay Country and Colin Sinclair from Caithness had been working for Dunker but had turned to washing when the burns went into spate. Ross told them to stop and Dunker promised not to give them any more work.

There were three to four tons of stones near the bridge at Suisgill and at a few other places up the burn. The men apparently carried the stones in baskets to the road side.

Ross also reported that Dunker claimed to have abstracted "4½ ounces of Silver and of Gold I Can not Say" from 1½ lb of rock from Lothbeg. Dunker had also "bought Some Stones from a fishing Boat that came into Helmsdale Harbour. This Boat got the Stones at Barra and took them in as ballast Mr Dunkre thinks this Stones very valuable. And Paid 5/ for about 60 to 70 Pound weight. They look like the same stone that is got at Kinbrace".

On 13th July Dunker sent 18 men up the strath. Each had to select half a ton of material and carry it to the roadside for which they were to receive £1 10s (£1.50). This was less than the hourly rate of 6d (2½p) which the men had been previously paid and it was not surprising that "the People in general is not thinking so much about the Gold as they did some time ago".

A day or so previously, Peacock had spoken sharply to Dunker. Ross felt it had done him "much good for he is now working hard and keeping free from drink and also in high spirits".

But the start of the herring fishing brought a huge influx of people into Helmsdale and every available space was filled. Dunker's place on Dunrobin Street was filled by fishermen and he had to give up some of his space in Macintosh's curing yard. It looked as if Dunker would have to stop smelting until the herring fishing had finished.

Prospector had cash – but only for whisky
By Malcolm Bangor-Jones

ON 19TH July 1880 William Ross, the local ground officer for the estate, reported that Dunker's men had not been paid for the previous week. Some 16 or 17 went up the strath on the understanding that they would be paid that evening.
They were not, and returned to the village the next day. The following day they were given a few shillings in the expectation they would be paid at the end of the week.

Dunker was continuing with the smelting but had only one furnace in operation. He was apparently "minding the Public house more then his work – and the men that was working to him sees the way he is going on which makes them more dissatisfied with him".

According to James Peacock, the Duke's factor for the east of Sutherland, Dunker was "extracting Gold from the Mica Schists which he terms 'Silicates of Gold'". He claimed to be able to extract gold and silver from the burns. Peacock suggested that if Dunker could "by any process really extract Gold – he may out of this quantity make some money – we shall see the result in a little time – I expect he will be off some time one morning without saying goodbye to his friends at Helmsdale".

On 23rd July Peacock told the Marquis of Stafford that Dunker did not "appear to be doing much good. I shall not be sorry to hear that his work is at an End – it looks so very like imposture". Peacock informed General Sir Arnold Burrowes Kemball, the Duke's commissioner, that while Dunker had no money to pay his men, he was apparently able to "find a little to pay for whiskey – more indeed than is good for him".

Dunker had only a few men working for him but towards the end of the month funds came through from Leeds to pay his hotel bill and he went to Brora to see about some fire clay and brick.

James Hill, agent for the British Linen Company Bank in Helmsdale, arranged for a lump of Dunker's metal to be sent to London to be assayed. The metal consisted of over 98 per cent copper, small quantities of silver, and traces of gold. Peacock felt that this accorded "with the information previously obtained respecting him, what can he mean by barefaced misrepresentation?"

Dunker's response was to assert coolly that the "Assayer does not understand his Secret process!!" and to complain about his landlord Gordon MacIntosh who had not allowed him to put fire into his furnaces. The fishermen were throwing water from up stairs and were destroying his chemicals.

He asked for alternative premises but Peacock refused to allow him to take part of the old distillery in Helmsdale or to use the vacant peat ovens at Brora. The Duke would not provide any accommodation and the lease holders in Helmsdale required the Duke's permission to sublet.

Peacock suggested that Dunker should take the material south. Dunker had, in fact, already arranged to send 50 tons to Leeds or elsewhere, and had obtained costings from the Highland Railway.

By the end of July Dunker had apparently raised money with which to pay some of his men. However, his foreman, D Rutherford, had had to be sacked for misappropriating funds, and there was much confusion over what the men were due.

Peacock wished he had been shown earlier the correspondence concerning Dunker in the possession of the Chief Constable of Sutherland, Alexander McHardy. Investigations into Dunker's background continued with the focus on events in Leeds in 1872.

Dunker went to Inverness to arrange for the stones to be taken to Leeds. But the stones were not dispatched, possibly because Peacock had told the railway company that the material was not, as Dunker claimed, "gold quartz" but merely mica schist, and had advised them to demand payment in advance.

Dunker went up the strath on 14th August "and was to return tomorrow morning by Mail train – but I understand the Trucks with the Stones is not yet Sent off". Nor had he settled with his men. However, he had two working for him up the strath and one in Helmsdale "making Pots for Smelting". It appeared that Dunker did intend to recommence smelting after the fishing season was over.

Dunker was being assisted by John MacLeod, better known nowadays for his later career as an activist for the crofters' cause, Land Leaguer, and MP for Sutherland. MacLeod was from the district (he stayed with his aunt, Isabella MacLeod, at 33 Gartymore) and had received a training as a chemist.

The plan to take the stone to Leeds fell through and Dunker focused his attention elsewhere. On 16th August he left Helmsdale for Glasgow on the 6am train. Two days later he telegrammed that he had sold 500 tons of material to a chemical company.

Peacock reported the news to Sir Arnold, remarking that it was "rather Cool of him to sell 200 tons more than he has yet obtained permission to get". Peacock doubted "very much the truth of this Telegram from Glasgow".

But the railway company would not dispatch the four loaded trucks at Kildonan and Kinbrace until the carriage had been paid and the trucks were eventually unloaded. At the end of August Dunker wrote intending to come to Helmsdale and take the stones on to Glasgow directly. He was trading as The Precious Metal Smelting Company and claimed to have bought a large smelting establishment costing over £1000. But there was no appearance of Dunker nor of any money.

Leisure-time prospectors still come to Kildonan to pan for gold.

The herring fishing in Helmsdale finished on 30th August. A number of boats had put to sea the previous day but, having returned with little or no success, made ready to leave. It was a time for celebration and Ross had never seen "so much drinking and fighting on the streets a person could hardly Walk, with men and also Women fighting".

In the meantime, Hill reported privately to Peacock that he had "received replies from a confidential Source describing his [Dunker's] general Appearance – his photograph taken after his trial Sept. 1872 was also sent for inspection". A case against Dunker had been recently put before "the Home Secretary for which the Treasury will prosecute him, and the matter is now in the hands of the Leeds Police".

On 18th September MacLeod wrote to Peacock about Dunker's activities. When MacLeod had arrived in Glasgow he had found Dunker "in possession of a large work containing machinery etc., and that he has been building furnaces which he has used for the Smelting of the ore, which he had brought with him to Glasgow". The Government Assayer had "stamped one piece of metal which Mr Dunker obtained through smelting (after purification) as 22¾ carat gold."

MacLeod explained that Dunker wished for a renewal of the agreement to take the remaining part of the 300 tons. In the meantime, Dunker was to send MacLeod to Helmsdale to pay any bills and arrange for the material to be sent on.

MacLeod was told that the Duke "will not object to Mr Dunker removing the Stones already Collected at Kildonan & Kinbrace Stations – but is not disposed to Extend the permission to any further supply". The stones at the stations were reloaded onto the railway wagons and forwarded to Glasgow at the beginning of October.

The attitude of the estate hardened and on 19th October the Duke refused to give Dunker permission to remove any more of the "so called minerals from Kildonan or Kinbrace – or to Entertain your Tender for any further supply, until assured of their auriferous Character by the testimony of Analytical Chemists of unquestionable authority".

The Duke was "well aware of the existence of Gold in the Kildonan and other districts of Sutherland under certain well known geological Conditions – but not in the form supposed by you". The Duke declined "to have his name associated in any shape with a Scheme of which Experience has afforded him Sufficient reason to doubt the practicability".

Peacock informed Chief Constable McHardy that Dunker had commenced operations in Glasgow and suggested that he should let his "London correspondents Know of Mr Dunkers movements – I hear he has got hold of some person or persons there with money".

MacLeod had already arrived in Helmsdale and, while various sums of money came through, he soon became fed up trying to settle Dunker's accounts. Ross, the innkeeper, thought that "a number of People that was working to Mr D. has got little money and a few others has got quite enough for all the work they did". MacLeod tried his best but could not agree with Dunker.

By 3rd November MacLeod expected that his connection with Dunker would soon be severed and hoped to examine the strath on his own account. (He was to return in the summer of 1882 when working for a company investigating the extraction of gold from crushed rock, before taking up the crofters' cause.)

The official investigations into Dunker had been continuing and in mid-November the news reached Sutherland that he had been "found out. His works are stopped, and a detective from London has been down making inquiries". Peacock was merely surprised that Dunker had been "permitted to go on so long" before the police had shut up his premises.

In February 1881 a report by Professor Heddle on some "metals and slags" said to be from Kildonan and received from Dunker was not encouraging and confirmed what the estate already knew. It only remained for John Blake, manager of the Mains of Dunrobin, to go up the strath and assess the value of the surface damage to the various farms.

This was not quite the last which was heard of Dunker. In June 1881 Alexander Hathorn and Thomas Allison Readwin, who were involved in gold mining in Wales and were interested in Kildonan, were visited by Dunker who talked about his "process for the treatment & extraction of Gold from its matrices".

Readwin, who was a genuine expert, considered that "if the man can do what he asserts he Can, the Duke will be able to make a lot of money of his Quartz reefs". Peacock warned that they should have nothing to do with the German, "the Police both here and in Glasgow watched him very closely and are well informed as to his antecedents".

Hathorn confirmed that they had indeed met with Dunker who had been "loud in his Complaints against the Helmsdale folks having poured Water down his Chimney & been guilty of other obstructions, preferring to grow Sheep & Deer &c to finding gold & Silver in the Quartz under their feet". One of those involved referred to Dunker as Sir Walter Scott's Dousterswivel, a reference to the German swindler in The Antiquary who obtained money on the promise of finding buried wealth by a divining-rod.

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The Scottish Gold Rush March 1869