There were many Chinese gold miners who participated in the Fraser River gold rush. Many of them were experienced prospectors who had panned for gold in California. Just as many had panned for gold back home in China.
The Chinese were mining gold by 1300 BC. They had systematic ways to prospect for it. In the 7th century an official wrote, “If the upper soil contains cinnabar, the lower will contain gold.” They had also discovered that plants were a key indicator of what lay beneath the surface. “If in the mountain grow spring shallots, there will be silver under the ground; if leek in the mountain, gold.”
The Chinese also had interesting ways of clearing the gold from other debris. They panned for gold and washed as much debris away as they could, then they mixed what was left with chaff, and fed it to ducks. Later they collected the droppings, panned out the gold a second time, mixed the refined gold with another batch of chaff and fed it to the ducks. They did this process three times and then they fed the ducks a final batch of chaff to collect any gold bits left behind. This brings to mind the old saying, “don’t kill the goose that lays the golden eggs”.
At the beginning of the first millenium, China’s rulers owned gold reserves of 200 tons, about the same as the Roman Empire. Then the mining collapsed. When the Mongols came to power in 1300 AD they tried to turn the gold mines around. They ordered 4,000 households in Shandong to pan for gold. They supressed bandits and removed tyrants who were robbing the mines, and warned their own generals not to steal gold.
Wei Zhongxian, a former criminal and gambler, obtained a position in the imperial household, which was advantageous because creditors were not allowed to pursue him in the Forbidden City. When the crown prince became emperor Wei began his climb to power. He built shrines and statues to himself and adopted the title Nine Thousand Years. The emperor, known by custom as Ten Thousand Years, gave Wei the Linglong Mine in 1621.
According to legend, a river flowed into the sky from the peach orchard of the Grand Old Lady of the West to a peak in the Linglong hills. The river fed streams that flowed down the mountain and collected in a basin. One day a hunter discovered a pool teeming with gold fish. They leapt from the surface and spewed streams of golden liquid. When news of this pool reached the imperial court they sent an official to Shandong. The official was so overwhelmed at the sight of the gold fish that he dove into the pool and disappeared. A second emissary arrived and found the pool dry. Not wanting to return to the Forbidden City with bad news, he ordered 10,000 peasants to dig in the mountain for the fish. They found the Linglong gold.
Wei ran the Linlong mine for six years and the country’s gold production increased to 40,000 ounces a year. When the emperor died, Wei’s enemies killed him. Seventeen years later the dynasty collapsed and so did Linglong.
The new Manchu rulers believed that the gold veins were that of dragons’ and digging them up would disrupt spatial harmony. On a practical note, the Manchu feared that the gold could finance an insurrection amongst the people they had conquered. Subsequently, they decreed an end to gold mining and they executed those they caught digging for gold illegally.
The last gold bars left the Chinese treasury in 1842, in reparation payments to the foreign occupying powers – Britain, France, Germany, Russia, and Japan. It was at that point the ruling Dowager Empress repealed the gold mining prohibition. In actual fact, the mining had never stopped.
During the time of the prohibition, a British colonial official stationed in Burma wrote “by far the larger portion of all the gold used [in Burma] is brought from China. It is imported in the form of thin leaves of gold made up into little packets, each packet weighing about one viss [3.6 pounds].” Gold had also leaked out of China along the Himalayan smuggling routes. When the gold mining prohibition ended, the gold simply headed back to the domestic market.