Gold found in 1850s by South Australian diggers brought from Victoria in 1850s; used by them to buy land

The Adelaide gold pound issued in 1852 in South Australia by the government as part of the response to the financial threat posed by the Victorian gold rush. The province produced its own currency from gold found in Victoria by South Australian siggers and brought back home under police escort. 
 

South Australia responded with novel solutions to the financial crisis created by the mass exodus by 1852 of more than a third of the colony’s male population to the Victorian goldfields, taking with them most of the ready cash and causing a run on the banks for coin. 

In a rescue operation, the South Australian government introduced the Bullion Act in 1852, which effectively transferred gold into legal tender. 
After George Tinline, temporary manager of the South Australian Banking Company, lobbied the government successfully to place its money at the Adelaide banks, the Legislative Council passed the Bullion Act.

This enabled uncoined gold to be assayed. This gold would come from the South Australian diggers in Victoria. A fixed price of £3/11/- an ounce was offered by the government to the diggers for all their uncoined gold.

An assay office was opened in Adelaide to receive the South Australian prospectors’ gold and to melt and purify the parcel of each depositor into a separate ingot stamped only with its weight. The banks issued certificates for ingots to be used as legal tender for the 12 months of the Act.

Within the first two weeks, deposits at the assay office were valued at £24,000. Small buildings were hurriedly erected for the gold melting and bullion making operations on the northern side of the courtyard of the former Treasury Buildings (now Adina Hotel) in Flinders Street, Adelaide.

To attract safe deliveries of gold to Adelaide, a monthly armed escort under the control of police inspector Alexander Tolmer was set up to bring the gold back from Victoria. The first escort arrived at the Treasury Building in Flinders Street in March, 1852 and offloaded 5,000 ounces.

The total gold assayed in 1852 was worth £1,449,873. In 1852-54, gold brought into South Australia was valued at £1,820,369.Twenty-two and a half ounces of gold could buy an 80 acre section of land in the country and diggers were keen to embrace this.

Sale of rural crown land reached £400,000 in 1854, with diggers returning from Victoria using their ingots. This fueled a rural boom, with a flurry of railways built. South Australian wheat farmers had already done well out of the ready market on the Victorian gold fields. South Australian had become the bread basket for the other colonies.