"I have further to inform your Lordship that the natives here have discovered Gold . . . on the west coast of Q.C.I. One of the Hudson's Bay Company's vessels visited the spot in the month of July last, and succeeded in procuring about sixty ounces of gold, principally by barter from the natives. One lump of nearly pure gold weighing one pound eleven ounces was seen in possession of one native, who demanded a price far beyond its value so that is was not purchased. The gold is associated with white quartz rock, similar to that of the auriferous deposits in California, it is yet found in small quantities, but I am of opinion that it exists abundantly in that and other parts of the Islands."
Ever mindful of the affairs of state and the welfare of both the Colony and his Company, Douglas added:--
"The report of that discovery having become known in this country, I am informed that several American vessels are fitting out in the columbia for Q.C.I. for the purpose of digging gold--a circumstance to which I would request Your Lordship's attention, as it may be the desire of Government to exclude foreign vessels from that part of the coast."
Further stories kept coming in to the rather primitive headquarters of Her Majesty's Government at Fort Victoria. A Haida man from the islands was reported to have brought to Victoria some coarse gold dust which he claimed to have found near his village. Several American vessels had touched at the little port, bound for the new gold-fields. It occurred to Douglas that they might even plunder the Company's isolated posts in the north. In December he again wrote to the Colonial office concerning the feared American inundation requesting immediate measures be taken to restrain the subjects of the United states and other foreign vessels from approaching Haida Gwaii.
In the meantime the Hudson Bay Company officers decided to investigate the reports on their own account. In the spring of 1851 Chief Factor John Work made the trip from Fort Simpson to Haida Gwaii in a native canoe. In July he made a second visit in the brigantine "Una" under the command of William Mitchell. This time he took with him a sufficient number of workmen to make a more thorough investigation of the quartz veins in the vicinity of what is now known as Gold Harbor.
In order not to alarm the Haida people, they went as traders, using as much secrecy as possible to cover their real purpose.
". . . that gold is to be found in [sufficient] quantities at Gold Harbor alone to pay an expedition to go there and work it."
Returning to Victoria with the ore on board, the Una was wrecked and sank in Neah Bay near Cape Flattery. The amount of gold thus lost has been variously stated, some maintaining it was between $20,000 and $75,000 worth. In all probability it was the most that ever was to be taken from the gold mines of Haida Gwaii.
Undaunted by the loss of their ship, the Company, the next year, again sent out an expedition, in their schooner "Recovery", this time with a large force of men to act as sentries and to repel the Haida attacks. In spite of these precautions the Haida people managed to make themselves a great hindrance to the mining operations. They collected in great numbers at the scene of the work and at every blast scrambled with the miners to obtain the best specimens of ore. American adventurers arriving at Gold Harbor and, finding it pre-emptied by the Hudson Bay Company, spread out in all directions over Haida Gwaii in search of other veins, but had little success. The gold-rush to Haida Gwaii was soon on the wane. Its chief influence on the history of that territory lies in the attitude taken to it by the Colonial Office.
In reply to Governor Douglas' first inquiry concerning the possibility of excluding all foreigners from Haida Gwaii, the Colonial Office replied that the Governor would not be justified by law in resorting to such a measure. In the meantime Douglas had appealed for naval protection for Haida Gwaii, and on June 22, 1852, Captain Kuper, in H.M.S. Thetis, arrived at Esquimalt and during the summer spent some time in the vicinity of Gold Harbor making sketches of the area. This was a step toward bringing Haida Gwaii under the jurisdiction of the Crown, and in a letter dated, "Fort Victoria, Aug 2, 1852," Douglas expresses his gratification at this fulfilment of his wishes:--
"I observe with much satisfaction that you have directed the attention of the Lords Commissioners of the Admiralty to the subject of stationing a vessel of war off Q.C.I. for the support of national rights and the protection of Her Majesty's subjects trading to that quarter."
The most important step was soon taken. Later in August, Downing Street addressed a letter to the Governor Douglas which in part, read:--
"I have to inform you that Her Majesty's Government, having taken into their serious consideration the measures which the discovery of gold in Q.C.I. seems to require for the protection of British rights and the preservation of order, have determined on furnishing you with a commission . . . as Lieutenant-Governor of that settlement. You will distinctly understand that Her Majesty's Government have no intention to sanction by this instrument the impression that they may have any design of colonizing the country, or placing any establishment in it. The Commission is issued solely to meet the circumstances of the times. It conveys to you no power to make laws, or constitute a regular government but it gives the party bearing it a position of authority as representing Her Majesty's Government in the district, which is both important and valuable."
In reply to this communication, Douglas wrote from Victoria on March 7th, 1853:--
"I have received Her Majesty's Commission, appointing me Lieutenant Governor of Q.C.I., with certain limited executive powers as therein described and while I return thanks for this high mark of confidence, which I shall endeavour to exercise for the honor and advantage of the Crown, I cannot forbear expressing a feeling of diffidence in my ability to discharge the duties of another Office involving a serious amount of labour and responsibility while I have no assistance whatever in the administration of public affairs."
Douglas' fears regarding the added burden of being Lieutenant-Governor of the new territory were ungrounded. Though he was empowered to grant mining licenses and in March, 1853, proclaimed the Crown's ownership of all the metals in Haida Gwaii, no licenses were ever issued. Very soon the new gold-rush to the Fraser River and Cariboo extinguished the few remaining sparks of interest in the gold-fields of Haida Gwaii.