In the year 1876, a small schooner engaged in the seal fishery, and commanded by a noted Argentine sailor, Don Gregorio Ibañez, was stranded near Cape Virgin, the extreme southeast corner of Patagonia. The crew, without exception, had the good fortune to escape to the land with some provisions and other valuables, including a shovel. The shovel may seem to be a novel tool for shipwrecked seamen to carry through the surf, but Don Gregorio knew what he was doing.
Patagonia is a desert region very much like certain parts of the United States. One may travel hundreds of miles without seeing a drop of sweet water, and yet with a shovel water a-plenty may be had by him who knows where to dig. Don Gregorio, having landed his provisions, put a man at work digging in the sand not very far from the surf in search of water. Whether he found water or not tradition does not tell. The story tellers all forget about the water as they relate how, when the digger had gotten down about three feet, he began to throw out a layer of black sand such as no one of the crew had seen before—a black sand that was dotted all over with little and big dull yellow particles. That was such an odd-looking sand that Don Gregorio and the digger and all hands had to take a proper look at it. And when they had taken this look, they almost went crazy with excitement, because those yellow particles were pure gold.
But, as I said, neither this discovery nor the gold that was dug from Las Minas creek at Punta Arenas, nor the stories of these doings which were carried to England and to California by ships passing that way, had any effect in creating a rush to the diggings near the straits.
In explanation of this indifference, it may be said that the diggings, even of Las Minas creek were, on the whole, rather lean. Instances of considerable finds are mentioned by the old timers of Punta Arenas. Men cleaned up the stuff by the ounce, in spots, but the run of what men got was "mere day wages." The find of Don Gregorio's sailors was not considered of any importance—the tiny nuggets were supposed to be a stray deposit, and not indicating any bed of gold-bearing sand. The stuff lay in the sand of the beach, and who had ever heard of such a thing as placer diggings in the sand along the shore?
In 1877 as many as 120 men worked the sands of Las Minas creek and made day wages at it. In the United States the fact that 120 men with hash bowls could wash out even "mere day wages" would create a rush to the region, while the finding of an occasional nugget "of the weight of 300 grammes," as occurred in Las Minas creek, would create a stampede, of course, but in the Spanish-American countries the conditions and the people are different.
However, a time came when even the people of Punta Arenas got excited. The steamship Arctic of one of the lines running through the strait was, in 1884, wrecked on Cape Virgin very near the place where Don Gregorio's sealing schooner went ashore. Like the inhabitants of the Bahama Islands, the people of Punta Arenas used "to thank God for a good wreck." The Arctic was a remarkably good wreck, for she was a well-found, handsomely fitted passenger ship. A motley crew of men hastened from Punta Arenas to the beach at Cape Virgin, some to get what they could from her lawfully, and some to get what they could in any way. It is said now that some one of the number was familiar with the story of what Don Gregorio's sailors found when digging for water, and so the old story of gold discoveries there was retold as the gang smoked and talked and sorted their plunder. Thereat some of them went digging "just for luck," and found something more exciting even than the silk fittings, chronometers, cordage, and anchors which they had taken from the Arctic—they found gold.
One Fred Otten cleaned up seventeen kilos (37.4 pounds) of gold in the course of two weeks, they say, and that sort of luck was enough to rouse even the phlegmatic wreckers of the Straits of Magellan.
Here, then, at the wreck of the steamship Arctic, is found the real beginning of the story of the Cape Horn gold diggings. In those days Punta Arenas was a supply depot for a fleet of sealing schooners that eventually destroyed the rookeries of the region to the south. The sealing sailors took a hand in with the gold washers. They did more than that. They had, as they would have said, a severe look at the ground round about as well as at the layer of sand in which the gold was found. The lofty banks—in fact, everything in sight from the beach—was what geology sharps would call an alluvial formation. The lofty precipices were composed of layers of clay, sand, pebbles, shells, the débris of prehistoric seas and floods. In one of these layers—a layer that cropped out under the tide waters—was gold galore. Jack couldn't explain it, and he didn't want to; but when he had helped to skin the gold-bearing layer from the clay as far as he could reach, he remembered that he had seen just such beaches with banks behind them elsewhere—on Tierra del Fuego, on New Island, on Lennox, on Navarin, on Wollaston, on Hermit, on Cape Horn itself. He had seen those lofty banks from the decks of sealing schooners, and he was game to go to them to see if there was gold in the sand along the shore there as there was at Cape Virgin. Why shouldn't there be? And there was.
Nor were the citizens of Punta Arenas the only ones excited by this find of gold dust in the sand at Cape Virgin. The Argentine Government sent an engineer to examine the region, and the opinion formed by the engineer was that "the gold-bearing sands of Patagonia are richer than those of California and Australia." So says an old public document. Further than that, "there was much agitation in Buenos Ayres among speculators in mines who had great hopes that grand fortunes might be obtained easily in Patagonia. A great number of persons solicited from the government concessions of mines of gold. But as the greater part of the solicitors had never been in Patagonia, and were obliged to gather their information from others as to the desirable points, it happened that much confusion arose."
"Much confusion" just describes what happened. Many concessions were not only issued on overlapping claims, but on the same claims, and there were many heart-burnings and feuds over patches of sand that were not worth anything.