Saturday, December 31, 2016

British Seizure Of Burma’s Ruby Mines (1886)

(Compilation of various articles on the Ruby Land and British March on it in 1886.)

British Imperial State Crown with the largest Burmese Ruby
which has a historical Burmese name "Nga Mouk" Ruby.
Mogoke famously known all over the world as Burma's Ruby-Land is about 200 km northeast of Mandalay. It is part of the Kathe district of the Mandalay region, in an area often referred to as Upper Burma. The famous gem-producing area called the Mogoke Stone Tract is actually made up of several valleys and their towns.

The main ones are Mogoke and Kyatpyin, but gems are also found in the valleys surrounding the villages of Bernardymo, Chaung Gyi, and Kyauk Pya That; they are also produced in the Kabaing and Kin valleys. Mogoke nowadays has approximately 300,000 residents and Kyatpyin around 250,000. But in 1880s Mogok as a small town had only about few hundred inhabitants.

Besides ruby, inhabitants also mine sapphire and spinel, along with commercial quantities of other gems, including apatite, scapolite, moonstone, zircon, garnet, iolite, and amethyst. The Tract is also home to rare stones such as painite, hibbonite, and poudretteite, which are found only in Mogoke and a few other gem localities.

Mogoke Histroy

In 1915, G.F. Kunz reported hearing a legend about how rubies originated in Mogok. The legend goes that around 2,000 years ago a serpent laid three eggs. The first egg bore the King of Bagan, the second egg bore an Emperor of China, and from the third egg came the rubies found in the ruby mines of Mogok.

References to rubies and Burma have been found dating to the sixth century, during the Shan Dynasty. The ruby mines in Mogok were taken over from the Shan by the king of Burma in 1597. Any rubies over a certain size and weight had to be given to the king. It’s said that some larger stones were broken up so they could be sold rather than turned over. This is illustrated by the legend of Daw Nan Kyi and Nga-Mouk Ruby.

According to the legend, a miner named Nga-Mouk found an amazingly large ruby. Instead of giving the entire stone to the king, he broke it in half and gave half to the king, for which he was rewarded handsomely. He sold the other half to a Chinese merchant.

Later, a Chinese prince requesting protection from the king presented the ruby as a gift to his court. Upon examination, the king felt that something about it looked familiar. When he compared the newly gifted ruby to the one the miner had presented, he saw that they fit together perfectly and realized he had been cheated.

The king had the miner and his family burned alive. His wife, Daw Nan Kyi, witnessed this from a hill where she was collecting wood. She then died from a broken heart—broken in half like the ruby.

The story of the Nga Mauk ruby does not end there. In the 1870s, during the reign of King Mindon (1853-1878), the French and the English were building colonial empires in Asia. A representative of the French visited the Burmese king and asked him how much he would ask to let some French companies mine in Mogok.

The Burmese king then showed the Nga-Mouk ruby to the Frenchman, asking him how much he would estimate its value to be. The Frenchman, who had never seen such a beautiful gem, said that it would be impossible to assign a value to such an exceptional gem. The Burmese King replied: If you cannot give me an estimate for that stone, how do you expect me to give you an estimate for the mine that produced it?

The Frenchman was speechless and departed. Later, the British learned of the French interest in Mogok and Upper Burma, and feared that the French would take over the region and control access to China. Backed by a consortium of London-based gem merchants, they planned an invasion of Burma with one of its main objectives being control of Mogok and its ruby mines.

In 1885 King Thebaw, by his contumacy and his atrocious massacres of his nearly 200 half-brothers and sisters, made the invasion and annexation of Upper Burma inevitable. In 1886, the British succeeded in taking over Upper Burma by overwhelming force of British Indian Army led by General Prendergast.

The invasion proper known as “Third Anglo-Burmese War” in November 1885 lasted barely a month. The next year British troops were engaged in various parts of Burma, subjugating the territories which had already been annexed. Ruby mines were the very first target to occupy and pacify for London gem merchants and financiers who later formed Burma Ruby Mines Ltd Company.

Mogoke (1886), Mogoke (1950), and Mogoke Today.
British Indian Army Marching On Mogoke (1886)

On Dec. 27, 1886, the Ruby Mine column under the command of General Stewart, A.D.C., consisting of two mountain battery guns, two Gardner guns, with a hundred and fifty of the 51st King's Own Light Infantry, the 43rd Goorkha Light Infantry, and a company of Bengal Sappers and Miners, came in sight of Mogok, the centre of the ruby mining industry, in Upper Burmah.

The Goorkhas and the King's Own had previously driven the Shans out of a very strong stockade by a successful flank movement, killing about twenty of them: with only one man wounded on our side. After a rest on Christmas Day, the column cautiously advanced, but found that the Shans had evacuated a nasty-looking stockade at the top of the pass.

On the next day, Mogok itself was found deserted. The troops encamped on the hills overlooking the town. General Stewart allowed no troops to enter the town for three days, and thus confidence was assured, and the villagers began to return, bringing in their arms, and specimens of rubies, all of a very inferior quality.

The houses and Poungy-kyoungs (Buddhist monasteries) are well built and elaborately carved; and the inhabitants are reported to be very rich. The Ruby Mines, which have long been famous, extend about seventy miles north-east of Mandalay, being situated in a valley, about a hundred miles square, surrounded by nine mountains, on one of which evidently the column under General Stewart is now encamped.

They are described by Tavernier, a writer of the seventeenth century, as producing not only rubies, but yellow topazes, blue and white sapphires, amethysts, emeralds, and other precious stones.

(Following is the extract from Streeter, 1887, a Murray's Magazine by G. Skelton Streeter, Mogok, March 8, 1887.)

It was anticipated that we should not reach this unknown country without meeting with some opposition, and on Nov. 15th [1886] a force of Shans was found stockaded in our front on the Kodan River. The ground they had chosen was a spot on which two years previously an army of Burmese King Theebaw's had been completely routed.

A successful flanking movement, however, cleared them out completely in a little over an hour, several dead and wounded men being left behind. No more opposition being met with, Sagadoun at the foot of the hills was reached and occupied, and a halt was made for a few days.

From here, 6000 feet above us, glittering in the sun, could be seen the peaks of Shwee-ov-Toun, which were promptly christened Sheba's breasts, from their supposed likeness to the hills that guarded King Solomon's mines, and lesser peaks covered with jungle forest, from which peeped out a native village or a green patch of cultivation.

On Dec. 18th the march up the hills began. The only transport that could be used along these mountain tracks was that of pack mules and ponies, and hard work these poor beasts found it, often ascending 2000 feet in a day, and many a man wondered as he tramped along if his kit and food would reach him before midnight.

At each camp new and curious views would open themselves out before us; at one point the plains and hills between us and Bhamo could be seen stretching for miles and miles in the bright evening sunlight; next morning the same country would be covered with white clouds floating far below our position, appearing like some huge snow field. Again, at another camp would be discovered away to the east some mountain range of Yunnan veiled in blue mist.

As the force proceeded, the Shans and Dacoits fell back, evacuating one strong stockade after another, till at last, on the morning before Christmas Day, we reached a point at the end of a narrow valley where the hills rose high above us, and through which two narrow passes lead directly into the Ruby Mine district. It was found that these passes were strongly stockaded, and held by the enemy in force.

General Stewart determined to attack the position on our right front first, as it would otherwise command our flank. A few shells were first dropped into it, and then an attacking party moved forward; in about an hour a ringing cheer informed us that the stockade was taken, and soon its former occupants could be seen scuttling over the hills, conspicuous in their white jackets and large straw hats.

It was too late, however, to give proper attention to the stockade on our left which commanded the road to Mogok; so camp was pitched, and on the order bugle sounding it was found that we were to spend a quiet Christmas Day, for the last few days' work had exhausted both men and beasts.

At an elevation of about 6000 feet, the morning of Dec. 25th dawned in quite an English fashion; a heavy white frost covered the ground, and bitter were the complaints at the coldness of the night. The popular Padre of the force held divine service and the day passed quietly.

Next morning the column started early, but only to discover that the series of stockades on our left had been abandoned: they had been most carefully constructed and cleverly masked, and would, properly held, have formed a very formidable obstacle to the advance….

…[Due to the head man absconding with the payroll], the opposition against us evaporated and we entered the Ruby Mine valleys of Burma without firing another shot. On the morning of January 27th the last ridge overlooking Mogok was reached and the town lay at our feet.

51st King's Own Light Infantry camp on one of nine Mogoke hills. (1887)
Indian soldiers of Bengal Native Infantry (1887).
The Burma Ruby Mines, Ltd.

By 1889, British colonialists had formed Burma Ruby Mines Ltd. With tremendous interest in the company stock, the company received a series of leases, and was generally profitable until World War I. They introduced water cannons, washing plants, and other mechanized mining methods, and actually moved the town of Mogok into alluvial mining.

The company did much to promote Burmese rubies in Europe and around the world. There were numerous operational problems, however, including flooding and theft. Also, the introduction of synthetic ruby caused widespread fear and plummeting prices in the marketplace. These problems finally led the company to abandon the mines in 1931.

(Following is a descriptive story of Burma Ruby Mines Ltd Company (1889-1932).)

The Times of London published the prospectus for the company on Feb. 27, 1889. That morning, extraordinary scenes were witnessed at the company's offices, as the following extract (Financial News, London, Feb. 28, 1889) shows:

If St. Swithin's Lane had been a ruby mine itself the scene witnessed there yesterday morning could not have been more remarkable. The crowd around New Court was so dense that Lord Rothschild and other members of the house were unable to get in by the door.

So a ladder had to be got, and the spectacle was seen of a number of great financiers entering their own office in a burglarious fashion. The clerks had to be smuggled in by a back entrance behind the Mansion House. The surging crowd in front drove a telegraph boy right through the window of a baker's shop opposite, the poor fellow being rather severely hurt.

The fortunate possessors of Ruby Mine application forms, which were being hawked at five shillings, had to pass between files of policemen to hand in their applications. The next time the Messrs. Rothschild make an issue, it would be well for the police to arrive on the scene before the stags.

Within hours, the issue sold out. General public and company directors alike were under the mistaken impression that fabulous riches were just waiting to be unearthed in Mogok. No one gave a thought to the difficulties of mining gems in such an inhospitable and remote location. Instead, they could see but one thing--rubies--pigeon's blood rubies.

A share certificate of Burma Ruby Mines Ltd issued in Rangoon.
Following extract from the Editorial, Engineering and Mining Journal, New York, March 16, 1889 shows the extent of London Mine Gambling:

London has periodical investment or gambling crazes. At one time it is railway "securities," so called, at another the bonds of some bankrupt State, at still another some South Sea bubble in the shape of Indian or African gold mines. At present the fever is African and Burmese mines.

The latest London craze was finely exhibited at the recent allotment of shares in the Burmese ruby mines, concerning which our well-informed London correspondent wrote us February 15th: "The mines may be immensely valuable, or perhaps not; no one can tell as to this until a year's work has been done upon them."

All London rushed to get the prospectus, and the crowd began to collect in front of the Rothschild's offices long before they were open in the morning. The £1 shares went immediately to £4, and the total amount of stock offered was applied for many times over.

These shares are "a pure gamble," even more than is usual in mining, though they have this advantage over most of the London mining stocks, that there is a possibility that they will pay, and pay largely, while the average London mining stock is absolutely certain never to pay anything.

The Company started its career with a paid up capital of £150,000 and a highly exaggerated view of potential production. All kinds of unforeseen difficulties were encountered during the first years, with an unusual amount of time spent in preliminary operations. The annual rental fee to be paid to the Government of India was originally fixed at the high sum of £30,000 per year plus 30% of any profits made, in return for the sole rights to mine with machinery.

Native mining was also allowed by native methods in areas not utilized by the Company, for which a tax of 30% on all finds was collected. This tax soon proved unworkable and so a fee per workman was charged instead. Revenue from native workings later became an important source of funds, but in the beginning little was collected.

Mogoke - A City Built On Rubies

Mogoke has always been known as the city of rubies. Just how true this is was brought home when geologists and engineers first began to study the gem deposits of the area. They found that some of the richest alluvials lay right beneath the town itself and so in 1902, and again in 1908 and 1909, parts of the town were purchased and the people resettled elsewhere.

Tremendous difficulties were encountered from the outset. First, a road had to be constructed from Thabeitkyin to Mogok, through nearly 100 kms of densely-jungled hills. Machinery had to be imported; diseases took their toll of men and livestock; flooding was common in the rainy season; these were but a few of the problems.

Power generation was yet another obstacle. Coal was not practical as it would have had to have been brought from Thabeitkyin. Steam pumps were used at first, but required too much timber. Since Mogok had plenty of water, it was decided to construct a hydroelectric plant. This was completed in 1898, the first of its kind in that part of Asia.

Although water helped in electricity generation, it remained the nemesis of miners at Mogok, continually flooding the workings. The company's engineer, A.H. Morgan, proposed a tunnel through the rock some 100 ft (30 m) below the surface and more than a mile (1.6 km) in length.

Construction began in 1904 and finished in 1908. The tunnel was immediately successful in dewatering the diggings. Unfortunately, its completion coincided with a downturn in the gem market, in part brought about by the development of Verneuil's synthetic ruby.

Introduction of cheap Verneuil synthetic rubies hurt sales, as did the economic downturn resulting from World War I. With losses mounting, the Company renegotiated its lease with the Government several times, but it was not enough.

In 1925, faced with mounting losses, the Company went into voluntary liquidation. No buyers were forthcoming and so in 1931 the lease was surrendered. Thus ended the first attempt at mechanized mining of the world's richest ruby deposits.

Many have speculated about the reasons for the Company's failure concluding that it was just not meant to be, the difficulties being too great to surmount. But evidence uncovered by the author suggests the Company owed its failure less to the difficulty of the task and more to that old devil we know--human greed.

In a confidential report written to the Government of India on the future of mining at Mogok, the head of the Geological Survey of India, J. Coggin Brown, pointed his finger straight at the De Beers diamond cartel in his (1927 confidential report) Gem Mining in the Mogok Stone Tract:

At this juncture I cannot refrain from writing an opinion which I have already expressed verbally, that the influence of the De Beers diamond concern has had more to do with the present [1927] position of mining for coloured gems in Burma than appears on the surface. The reasons for this are obvious, and it is significant that there has always been a powerful representative of the Great South African concern on the Board of the Burma Ruby Mines, Limited.

Brown was referring to the competition for a share of the gem market between De Beers and the Burma Ruby Mines Ltd. Apparently, he believed that the Burma Ruby Mines Ltd. was sabotaged by De Beers.

This idea is not as far-fetched as it might seem. De Beers was not always the huge and powerful monopoly of today. It has taken over eighty years of monopolistic practices and masterful marketing to reach such a position of dominance.

Early in the 20th century the diamond market faced the real problem of oversupply, due to discovery of vast new deposits in South Africa. It takes no great leap of faith to see that, from De Beers' perspective, the potential success of the Burma Ruby Mines Ltd. represented a substantial threat. Of course, one cannot sell rubies if they are not being mined and effectively marketed.

According to Brown, poor decisions taken by the Board of Directors of the Burma Ruby Mines Ltd. greatly contributed to the venture's eventual failure. In his summary, Brown discussed the future potential of ruby mining in Burma:

The operations of the Company, apart from an abortive attempt to mine gems from the limestone, and one or two half-hearted efforts to prove the hill deposits, have consisted entirely in working the valley alluvials, confining their attentions to the Mogok, Kyatpyin and Kathe Valleys.

There are, however, other valleys in the stone tract and the question arises whether these have been sufficiently explored. It is exceedingly doubtful if they have, in particular the Kin and Khabine [Kabaing] deposits. It is notoriously difficult to prospect this type of mineral deposit and no two geologists of experience would agree as to the reliability of the results so obtained.

But it was surely the duty of the Company to put these questions beyond doubt. This has not been done, not through any fault of the local technical command but owing to the inhanition of the Board of Control.

It has been stated to me repeatedly, and I see no reason to doubt the fact from my own view as a geologist, that there are great possibilities in the hillside deposits. They will certainly be more difficult to evaluate and occasional failures might result, but, in a speculative business like gem mining perhaps this does not matter much.

The history of the Company proves that time after time the selection of a field for a new enterprise instead of being a matter of scientific certainty, has been a pure speculation, based for the most part on reports and rumours of the success of native miners.

British Parliamentary Debates On Annexation Of Upper Burma

Those who recall the Parliamentary debates in Great Britain after the annexation of Upper Burma will remember that there was much criticism of the use of some Buddhist monasteries by the troops, of the continuance of the opium trade, and of the seizure of the ruby mines. It is specially interesting to know what Sir Charles Crosthwaite the author of “The Pacification Of Burma” says on these points.

As regards the use of the monasteries, he writes that it was a military necessity, and he remarks that the Thar-thana-baing (a Buddhist clerical authority monk who bears much the same relation to Burmese Buddhists as the Sheikh-ul-Islam to Sunnite Moslems) never made any complaint. When the- barracks were built at Mandalay and some troops were ordered to leave a large group of monasteries, the abbots and chief pongyis petitioned that the soldiers might be allowed to remain.

In the case of the opium traffic Sir Charles Crosthwaite says that if the Burmese alone had been concerned opium might have been prohibited; but prohibition would have enraged the Chinese, who were a useful and quiet element in the community. But the chief reason which weighed with him was that it would have been almost impossible to stop smuggling.

Overland transport of opium from Yunnan and from the hilly country on the Salween would have been beyond control without enormous expenditure. He goes on to a defence—in which we must not be understood to follow him—of a free opium market, quoting with approval the argument of Sir J. G. Scott that where opium is cheap the people are always healthy. It is dear opium, he says, which causes poor people to pinch themselves in order to obtain it. When they die of hunger they are said to have died of opium.

The Burmans will not become slaves of opium or drink so long as they practise Buddhism. The danger, as in India, is that Western education will undermine their ancient creed without replacing it with any other religious or moral motive.

As for the ruby mines the decision to let them on a temporary lease to a mining company—a short lease of three years in order to ascertain the value- of the mines—was taken by Sir Charles Crosthwaite's pre- decessor. The excited discussion in the House of Commons of what was supposed by some people to be a "job" caused it to be supposed by the public that the mines were richer than they really were.

The Secretary for India sent out an expert to report on them. Sir Charles Crosthwaite describes the sequel: Late in 1889 a concession for seven years was granted to five lucky promoters, and then the course usual in such cases was followed. A company was floated in London under the auspices of a big financier.

The success for the concessionnaires was un-exampled. The public, especially the small investors, in an enthusiasm of greed tumbled over each other to secure shares. In November 1899 the company began to work. Its history since has not been one of remarkable prosperity either for the Government or the shareholders. The terms have been revised several times. The receipts of the Government from the company in 1003-4 were Rs. 2,11,500, or £14,000.

Related posts at following links:
Burma's famous "Nga Mouk" Ruby On The British Imperial Crown.