"Men too began to come from San Francisco and the Sound - ragged - boots minus soles - unshaven, tattered, dirty and forlorn - miserable looking beggars - but active. These people would get an outfit and then looked like gentlemen, which many of them were and what is more were rich, that is to say most of them had leathern bags filled with gold dust - of which they were not miserly." John Sebastian Helmcken (BCARS: ADD.MSS.505, v.12.)

In its early days, the development of the Vancouver Island colony was somewhat slow. Blanshard blamed this on the HBCo's less than enthusiastic attempts at recruiting settlers. The Colonial Office and the HBCo wanted to be very selective about who would immigrate here, so they only allowed land to be purchased at 1 pound per acre, a high price in those days. The Americans on the other hand, were giving land away to settlers for free. Meanwhile in California, gold had been discovered, and shortly after gold fever was in full force. Sailors, Company employees, even Island Colonists were lured south to seek their fortune.

Then one Sunday morning in April 25, 1858, as the citizens of Victoria were leaving church, an American "side-wheeler" ship "The Commodore" moored in the harbor outside Fort Victoria. Out came its four hundred and fifty passengers, mostly, miners who'd lost out in the California gold rush, and hoped to strike it rich in British Columbia.

Gold had been found on the North Thompson in 1857, and the Fraser River shortly after. The Gold Rush that had swept California had hit British Columbia, and the coast was teaming with steamers sailing up and down its shores. By the end of summer, Victoria was forever changed from remote fur-trading colony to gold rush boomtown, as twenty five thousand men passed through on their way to the Fraser Canyon.

During the summer season, 225 new buildings were built in six weeks. Two hundred of these building's were stores and saloons, mostly operated by San Francisco merchants:

". . .Miners used to come to Victoria with lots of gold and exchange it for U.S. coin - this they absolutely squandered - chiefly in brothels or gin shops - so these places flourished and so did the dance houses - and of course business in the necessary articles flourished also. Hyder [Haida] women and men came in flocks, to go away ruined forever - Indians from the North West coast met with the same fate, from which they have never and never will recover.

In process of time Chinese women came and they in some measure took the business of the local Indians, Haidas, Chimpsehans [Tsimshians] and so forth and to end the matter the small pox and local demands drove them home in their own canoes, and hundreds perished on their way to their own country. I may say here that nearly every Indian attacked with small pox died - whether he was taken care of in the Indian small pox hospital or not - and it was also said that whether he had been vaccinated or not. I do not believe the last assertion because the Songish [Songhees] Indians kept comparatively free from he disease and many of them at various times had been successfully vaccinated by me - arm to arm."John Helmcken (BCARS:ADD.MSS.505, v.12)

This gold rush heralded the end of the Hudson's Bay Company. Its trading monopoly had finished, and in 1864, all of Fort Victoria had been demolished, giving way to store fronts and a new down town.

"At this time all payments were made in gold - American coin - and I remember carrying the gold home in a handkerchief! And when I got it there hardly knew how to keep it safely! Gold pieces were plentiful in town and there was no further trouble about currency or paying period in money instead of truck. I need not say we all lost our head - we were too green to make much money - somehow we could not comprehend and did not believe the change in Victoria to be permanent - others thought differently and speculated largely, buying at high figures. Legislation became irksome and it was hard to bet people together - they had better work to do. I had plenty patients among the tents, but charged them nothing. . .Victoria, however had grown, had become a town, with a large number of active live people in it - people who had been all over the work and experienced its uprisings and downfallings, so there were many hopeful still . . .could smile amidst misfortunes. There was still a good deal of business doing, and as Free Trade existed here a great smuggling business with the states ensued and many made a great deal of money - a sort of compensating balance."John Sebastian Helmcken (BCARS: ADD.MS.505,v.12)

By 1866, six thousand people lived in Victoria. The population, which had before been almost entirely British, became a mix of Americans, French, German, Italian, and Chinese. American blacks, escaping persecution by Southerners who settled in California after the US Civil War, became the first volunteer military force in BC.

Governor Douglas was chiefly concerned with the welfare of the miners. He relied on his gold commissioners to lay out reserves for the Indians and thus eliminate the threat of warfare. It was his responsibility to record mining and land claims, and to adjudicate mining disputes. For the gold colony he devised a land policy which included mineral and pre-emption rights. His water legislation met the needs of the miners who employed rockers and flumes. He was responsible for creating the Cariboo Wagon Road, a 640 km road following the Fraser to the distant Cariboo were gold nuggets had been found.