Understanding John Ebbott's foray in the world of mining

Poster - Chronological Tree of Victorian History, James McKain Meek, Melbourne, 1873
 © Museum Victoria and 
Curriculum Corporation 
2008 

In 1870 John's world looked very different to what it would look today if he were still alive, speculative activity was the norm and anyone with cash could easily be involved as companies looks for cash to fund their operations.  Initially mining companies on the Goldfields would issue a few shares of high value which only needed to be partly paid for.

“The ability of gold mining companies to make calls was particularly useful given the nature of quartz mining with its continual exploration and development costs. In the gold mining industry, very few mines were continuously profitable as deep leads changed course, ran into a neighbouring lease or yields fell, possibly rising again at greater depth. When a rich ore body was found, this generated speculative activity in the share market. Calls on shares would be made by companies that owned the mines where ore bodies were discovered”(Melbourne University Law Review Vol 31 p. 814 ff A HISTORY OF COMPANY LAW IN COLONIAL AUSTRALIA: ECONOMIC DEVELOPMENT AND LEGAL EVOLUTION PHILLIP LIPTON IV THE TRANSPLANTING OF THE COMPANIES ACT 1862, 25 & 26 VICT, C 89)

In the early days John didn't seem to be himself, the stable and well respected citizen that is evident in the records, his behaviour almost seems erratic or at the very least irresponsible. He was probably one of the “inexperienced shareholders who started with inflated hopes of enormous returns and immediate dividends become disheartened and forfeit their shares by refusing to pay calls” (GETTING GOLD A PRACTICAL TREATISE FOR PROSPECTORS, MINERS, AND STUDENTS. By J. C. F. Johnson, F. G. S., Member of the Aust. Inst. of Mining Engineers; Author of "Practical Mining," "The Genesiology of Gold," etc. (1896)accessed atg http://web.nickshanks.com/books/getting-gold.html 14/2/2013)

He brought and forfeited shares frequently, and it wasn't just John but it was also his brother Philip and once even his mother. The gold rush was a heady time for opportunity and, its flip side of disaster, was everywhere. Everyone wanted the possible profits but no-one want the losses. This notion of the inexperience investor and company owners may help us to understand John’s behaviour as directors were appointed not 

“because of any special knowledge of mining they may possess, but as a rule simply because they are large shareholders or prominent men whose names look well in a prospectus.” (GETTING GOLD A PRACTICAL TREATISE FOR PROSPECTORS, MINERS, AND STUDENTS. By J. C. F. Johnson, F. G. S., Member of the Aust. Inst. of Mining Engineers; Author of "Practical Mining," "The Genesiology of Gold," etc. (1896)accessed atg http://web.nickshanks.com/books/getting-gold.html 14/2/2013)

Because of the difficulty of raising initial funds for a potential mining venture the industries response

“was to include provisions in the memorandum of association that enabled the forfeiture of shares on non-payment of a call. The forfeited shares could then either be purchased by existing shareholders or sold at auction.” (Melbourne University Law Review Vol 31 p. 814 ff A HISTORY OF COMPANY LAW IN COLONIAL AUSTRALIA: ECONOMIC DEVELOPMENT AND LEGAL EVOLUTION PHILLIP LIPTON IV THE TRANSPLANTING OF THE COMPANIES ACT 1862, 25 & 26 VICT, C 89)

But let’s consider all this in the context of John Ebbott who arrived in goldfield the son of a farmer in an area where there were no schools (yet) and who grew up during his teen years on an unsuccessful cattle farm. He could read and write well his learning however was most likely limited to the bible, religious publications and the weekly delivered newspapers that didn't always arrive. At around 26 he falls in love with the girl next door and suddenly the door of opportunity opens, his father-in-law is an experienced mine engineer/manager from Cornwall, consequently John’s world view begins to change, but he has no experience although many contacts mostly of Cornish origin through the Wesleyan church.

John was a frugal man he didn't drink, he was a member of the Temperance movement, he didn't gamble and although life was very expensive on Goldfields he didn't want for much, with the support of his mother and father in law he began to dabble in speculative market of gold mining shares, which is where his future occupation of Mine Manager was beginning to be forged.