Lost history rediscovered

By Michael Waterhouse

In the mid-1920s, Europeans had barely penetrated the interior of the New Guinea mainland. Much of the rugged, jungle-covered terrain was inhabited by fierce tribes, which fought each other and any white men who strayed into their territory. The former German colonial territory was a backwater, with the Australian Government unwilling to contribute financially to its development.

A decade later it was the location of unparalleled scenes as New Guinea led the world in commercial aviation, with planes flying more than half as much freight as Canada, Germany, the USA, UK and France and 20 times the amount flown in Australia.

A pivotal figure in this transformation was my grandfather, Leslie Waterhouse, who graduated from Sydney University as a mining engineer in 1910. New Guinea was administered by Australia between the wars under a Mandate from the League of Nations; yet due largely to the destruction of most official and private records following the Japanese invasion in 1942, few today know about it.

In 1926, Australian newspapers carried accounts of a major new gold discovery, with headlines such as “Phenomenal New Guinea Goldfield”, “Gold Madness Grips New Guinea” and “Gold Fever. New Guinea Infected”. The inspiration for these stories was the discovery of gold at Edie Creek, 50kms inland from the coast but a six to eight day hike over some of the most difficult country imaginable. One traveller portrayed the challenge as climbing 9000m for a net gain of 900m, another describing the terrain as “as steep as a steeple”. Miners needed carriers to bring in all their food and equipment over the jungle trails, and labourers to work the alluvial gravels, so it was costly. As the Administrator said, it was not a poor man’s field.

The discovery was a rich one, with prospectors recovering as much as 20 ounces (560gms) to a dish – 100 times what was regarded as rich on other goldfields. Two miners won 7600 ounces (215kgs) in six weeks – the equivalent of $500,000-worth today. But for most, the pickings were slim, and within a few years much of the easily found gold had been taken.

A former District Officer turned miner, Cecil Levien, was convinced that, however rich Edie Creek was, there was likely to be even more gold downstream. There the Bulolo river, into which Edie Creek drained, opened out from a narrow gorge into a valley, whose floor of alluvial gravel had been washed down over the ages. The valley was uninhabited, though the dense jungle provided a rich hunting ground for the occupants of villages located on ridges in the surrounding hills where they could be defended against attack.

Levien used the Edie Creek discovery to attract Australian investors and before long a new company, Guinea Gold NL, was established to test for gold in the Bulolo Valley. But the company was small and costs high, and in 1928 a Canadian mining company, Placer Development, took an option over Guinea Gold’s leases. While Canadian-based, Placer’s chairman and one of its directors, Les Waterhouse, were Australians and four of the five directors were mining engineers.

Testing with hand drills – there being no other source of power – indicated that Levien was right: the alluvial gravels were rich in gold. But how to extract it? The valley was suitable for dredging, but there was no infrastructure to support this: no road on which equipment could be brought in from the coast, no airfield, no power and no townships.

While an airfield could be constructed, the few planes then in New Guinea were mostly ex-WW1 biplanes and several small aluminium planes – quite unsuitable for the job. However, an experienced aviator alerted Placer’s directors to the existence of a three engine aircraft, the Junkers G31, which could be loaded through a top hatch in the fuselage and whose payload was three tons. It was one of the largest planes in the world.

The directors were soon convinced, deciding in December 1929 to construct an airfield at Bulolo and fly in the components of two dredges and assemble them on site. The risks were high; aviation had never before been used to fly mining equipment on the scale envisaged and the Great Depression was beginning to take hold. An operating company, Bulolo Gold Dredging (BGD), was quickly formed, a prospectus issued and the necessary funds soon raised – despite slumping share prices worldwide. The target to begin dredging was set: 11 March 1932.

To meet this timetable, BGD needed to order and ship several thousand tons of material to Lae, where there wasn’t a port, fly it to Bulolo on planes it didn’t have, to an airstrip that didn’t exist. And it would need to construct a dredge and a hydroelectric power plant, using a labour force that hadn’t been recruited.

Placer’s directors orchestrated an extraordinary logistical exercise from their Canadian and Sydney offices, ordering equipment and supplies from all over the world. The dredge hull and superstructure were made in Sydney, dredge machinery came from San Francisco, turbines from Sweden, electrical equipment from England, electric motors from Switzerland and the G31 planes from Germany – with American engines.

The key to BGD’s success was the aircraft. Flying up to five round trips a day between Lae and Bulolo, they were named Peter and Paul after the children’s nursery rhyme. Their job was to ensure that whatever was needed in Bulolo to construct the dredge and power station was on hand when required.

On 21 March, only ten days later than the date set nearly two years earlier, the Administrator, Brigadier-General EA Wisdom, launched the first dredge. It weighed over 1000 tons (.907 tonnes) and had 63 ten cubic foot (0.28 cubic metre) buckets, each capable of gouging the alluvial gravels at the rate of 23 buckets per minute, 24 hours a day.

Building the hydroelectric power station was easier than the water race that fed it, which drew water from 2.5kms upstream. Its construction involved hand-hewing a tunnel through sections of steep mountainside, as well as constructing long sections of cedar fluming, often mounted on wooden trestles.

Dredge No 2 was launched in October 1932. Over the next few years, with a higher gold price and substantially increased reserves, BGD constructed a further six dredges, the last of which began operating in 1939. The two largest weighed around 2000 tons (more than 1.8 tonnes) and were capable of digging at much greater depths.

It was an extraordinarily profitable operation. In eleven years, BGD’s dredges produced 1.3 million ounces of gold (close to 37,000kgs) and 576,000 ounces of silver (16,000kgs). This made BGD easily the largest gold miner in New Guinea, and the second largest in Australasia during the 1930s. While a general manager managed day-to-day operations at Bulolo, Les Waterhouse oversaw and directed progress from his Sydney office, visiting the field regularly.

Aerial support for mining in a remote location had never before been attempted on such a scale and drew a constant stream of visitors from all over the world, including the Australian Governor-General, Lord Gowrie, federal ministers and many international mining and aviation experts.

Throughout this period, Peter and Paul flew back and forth between Lae and Bulolo, bringing in everything required to construct and maintain eight dredges, three hydroelectric plants and two townships. While owned by BGD, the planes were operated by Guinea Airways, of which Les Waterhouse was also a director. By the time they were destroyed by Japanese Zeros at Bulolo on 21 January 1942, they had flown 1.4 million miles (2.25m kms) and carried 40,000 tons of freight (36,300 tonnes), without ever losing an item.

The goldfields exerted considerable influence over the rest of New Guinea. Indentured labourers were drawn there from all over the country, putting pressure on traditional village life – often with unforeseen consequences. Royalties on gold production were the lifeblood of the Administration, starved as it was of support from the Australian government. The miners’ need for an ample supply of labourers became the main driving force for extending European influence, with recruiters often not far behind patrol officers as they opened up new territory.

Relations between BGD and villagers who lived near the field were good, with Buang villagers in particular a prolific source of fruit and vegetables. But conflict was never far off. In the early ’30s, after several miners were injured or killed by the fierce Kukukuku within a few miles of Bulolo, patrol officers embarked on a policy of pacification, which resulted in many deaths. Thereafter an uneasy peace prevailed.


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