Having taken in a fresh supply of wood and water, the prospecting party left in the Juanita for Johannet Island, which they reached on June 10th.
Whyte was asked by the "diggers" to point out the golden reef that he had discovered. He showed them a "buck reef" (by which is meant a quartz reef not bearing gold), which never had carried gold and never would. In fact there was no trace of gold on the whole island. The outraged feelings of the diggers may be imagined; they were simply furious.
Fortunately, however, there was a larger island seven miles distant, viz., Sud-Est.
They went there, and on the second day after landing discovered traces of gold. Their spirits rose at once. They diligently followed them up, and in a little over two months obtained 150 ounces, of the value of £550. Mr. Douglas had stipulated that at the end of three months the boat was to be returned to the British New Guinea Government, which was accordingly done. I saw the members of the party in China Straits upon their return from Sud-Est. They reported that they had worked the field out and that it was very patchy. This report speedily reached Cooktown, setting it on fire, everyone believing that there were millions of ounces of the precious metal awaiting their grasp. A party of 26 diggers left Cooktown on August 14th, in the schooner Griffin, other sailing vessels following at short intervals.
This discovery caused the Home Government to create British New Guinea a "British Possession," which was declared at Port Moresby on September 6th, 1888, and an Administrator, now Sir William Macgregor, was appointed.
A high customs tariff was at once imposed on all imports, which revenue came as a relief to the impoverished state of the New Guinea funds.
Six or seven weeks after the above events, the cutter "S——l," 12 tons register, owned by a friend of mine, arrived from Cooktown. As my friend purposed going on to the Sud-Est Goldfield, I decided to go with him in his cutter.
They had a large cargo on board of dutiable goods, such as tobacco, general stores, etc.
Up to this time (September 30th, 1888) no word of the declaration had reached us from Port Moresby, nor any schedule of the tariff, which we took for granted would be imposed. The Government schooner Hygeia, with the Administrator on board, was hourly expected from the above-named port.