William Knox D'Arcy: The Greatest Australian You've Never Heard Of


The story of the man who built one of Australia’s greatest ever small-cap mining fortunes and changed the course of history should be an unforgotten legend of risk, adventure and unimaginable riches.

But today practically nobody knows his name.

Today’s Daily Reckoning will resurrect this amazing tale – and remind us all of the potential profits than come from calculated punts and a healthy dose of vision.

‘The most influential Aussie who ever lived’
The greatest Australian you’ve never heard of is William Knox D’Arcy.

In August this year the Queensland State Government inducted D’Arcy into its Business Leaders Hall of Fame. He was one of six inductees. The award was recognition for ‘his major contribution to the success of the Mount Morgan gold mine and the international significance of his role in the discovery of oil in Persia.’

You could forgive D’Arcy for feeling a little peeved that it took 95 years for him to get some official recognition. Then again, it was a government award – but it still seems like a shocker even by that standard.

If you love geography and history you’ll know Persia is largely today’s modern Iran. Persia is also the location of the Middle East’s first oil find – thanks to our man D’Arcy’s money and appetite for risk.

This is the reason that historian Geoffrey Blainey recently said, ‘William Knox D’Arcy is, almost by definition, the most influential Australian who has ever lived. He is a giant figure on the world stage.’

That probably seems like a pretty big call. But you’ll soon see why. D’Arcy didn’t start with a lot of money. In fact, he had no significant wealth to speak of.

But we’re getting ahead of ourselves here. We need to backtrack, because D’Arcy didn’t make his first big money – and it was BIG – in oil. It was in gold.

When You Take a Risk…and Win

Born in England, D’Arcy’s father had brought out the family to Australia when D’Arcy was 17. In time, D’Arcy became a small time lawyer in the Queensland town of Rockhampton.

D’Arcy loved to punt on the horses and play cricket.

We don’t know what his luck was like at the track but he sure got lucky – almost unbelievably lucky – the day two gold prospectors walked into his office and slapped a bag of stone on his desk.

The two men were the Morgan brothers.

The Morgan brothers chose D’Arcy for no other reason than they had been told by their banker they needed a lawyer. D’Arcy didn’t have any expertise in mining or metals. The sample had come from about twenty miles out of Rockhampton at a place called Ironstone Mountain.

A sample was sent off and showed a high level of gold.

Recognising the chance to ride what could be a great thing, D’Arcy bought into the project with a single £500 stake. In fact, D’Arcy was essentially gambling with borrowed money, probably from his wife’s family.

Less than two years after the gold started to flow the Morgan brothers – who had renamed Ironstone Mountain Mount Morgan – decided to sell out. They thought the ore was rich at the surface but sparse at depth. So, the Morgan brothers cashed out.

But by this time D’Arcy must have thought he knew better. He kept buying until he owned around 36% of the shares.

It turns out the Morgans had made a terrible mistake. Not only was Mount Morgan rich with gold at the surface, but it was rich with gold at depth too. It was just that the initial digging at depth had missed it. After further exploration, the miners found the rich gold vein and the mine and Rockhampton boomed.

Geoffrey Blainey wrote about this in his book The Rush that Never Ended:

‘Ten years after the finding of Mount Morgan the return on the actual capital invested was over 200,000 per cent and dividends had exceeded £3 million.’

The shares rocketed over 1,600% at the peak of the mania surrounding the mine. But not everyone got rich from Ironstone Mountain. The original freeholder who owned the land didn’t get fabulously rich. The Morgan brothers made money, but missed out on a fortune. But the speculators did get rich.

Over the next 100 years the mine would produce nearly 8.8 million ounces of gold, 1.3 million ounces of silver and 387,000 tonnes of copper. At today’s prices, the gold alone would be worth nearly $15 billion.

This would prove to be one of the richest gold mines in Australian history and turn its investors into millionaires. The phenomenal gush of dividends would finance D’Arcy’s luxury living on the scale of European aristocrats and royalty. And, of course, his discovery of oil in the Middle East.

And best of all for D’Arcy, he didn’t have to lift a finger, let alone swing a pick axe.

He soon became one of the richest men in Australia. We don’t know what Rockhampton was like in the 1880’s. But there clearly wasn’t enough of interest to make him stick around. He sold his law firm, and left for England in 1887.

And as any millionaire is bound to do, he bought a mansion and two country estates. He had his own private box at the Epsom racecourse (King Edward of England had the only other one). D’Arcy never worked again. He and his wife became a fixture of London ‘society’, famous for their lavish parties.

D’Arcy had turned a small, speculative investment into a life-changing fortune. But he didn’t lose the speculative streak in his nature. After striking it lucky and making a fortune…he decided to do it again. This time it would reshape the history of the world for the next century…

From Aussie Gold…to Persian Oil…to the Hall of Fame

D’Arcy was smart enough to see a big change happening in the world when many were missing it. He saw a bright future for oil, especially thanks to the latest invention: the motor car.

And if there was going to be an industry based on an internal combustion engine, there needed to be more oil. And that would mean a bigger oil industry. Also, if the British could find a strategic source of oil it would give them a huge advantage.

By 1900, years of high living had taken its toll on D’Arcy’s finances. The company manager of Mount Morgan told him the mine’s best days were gone and his shares were overvalued. The dividend cheques began to shrink.

Looking for other opportunities, in 1901 D’Arcy was approached to invest in oil exploration in Persia. The gambler in him came out. If this opportunity was even half as good as Ironstone Mountain he could make a second fortune. So he took his chance. He bought a concession that covered 480,000 square miles of the country and was good for sixty years.

D’Arcy employed and sent out what would prove to be his key man, a tenacious geologist and engineer called George Reynolds. He would labour away for seven long years and find practically nothing. The project would nearly send D’Arcy bankrupt.

It seemed a reasonable bet that there would be oil in Persia because oil was known to seep to the surface. But finding a commercial field in the heat and the desert with little to no infrastructure and hostile locals was another thing altogether.

Persia had crushed many other hopeful schemes and enterprises before. From Daniel Yergin’s The Prize:

‘It was not a reasonable business proposition. Even the estimate for expenditures was to be grossly understated. At the outset, D’Arcy had been advised that it would cost ten thousand pounds to drill two wells. Within four years, he was to be out of pocket in excess of two hundred thousand pounds.’

D’Arcy was eventually forced to go to his London bankers and take out a huge overdraft, putting up his shares in Mount Morgan as collateral. That created a problem. The shares were falling as investors caught on to the fact the mine was no longer as rich in gold.

But it was still rich in copper, which had been ignored in the hunt for more and more gold. Luckily for D’Arcy, copper would save the mine. The copper would keep the dividend money flowing so that, along with the loans from London, D’Arcy could keep his men drilling in Persia.

But by 1905, D’Arcy wanted out. False starts, endless overruns, dry wells and trouble plagued his Persian oil play. He resolved to sell his concession. He turned to the French Rothschilds.

But around that time the British government was considering switching its Navy fuel from coal to oil. At the time Britain only had a limited source of oil within the Empire.

Seeing the opportunity, the British Government arranged to buy into D’Arcy’s concession via Scottish company Burmah Oil. This happened with days to spare. It was much needed capital. When you consider D’Arcy didn’t have a proven oilwell, let alone anything like an operating company, it was a lifesaver. But that wasn’t the end of the drama.

Three years later Burmah Oil had lost a lot of money for little return in Persia just like D’Arcy had before them.

The directors of Burmah Oil eventually caved in and cabled George Reynolds in May 1908 to cease drilling. But Reynolds must have known he was closer than ever before. He ignored the order and kept drilling. Six days later they struck oil. It was a gusher, drenching the drillers. A few days later, a second well hit oil. There was oil in Persia and D’Arcy’s team had found it.

D’Arcy’s fortune soon rocketed back up to its previous stratospheric level. Britain had a secure supply of oil that would influence the direction of both World Wars. Not only that, but the discovery of Persian oil formed the ‘Anglo-Persian’ oil company, which later became British Petroleum (BP), currently one of the world’s largest integrated oil companies.

Bottom line: the quest to find, secure, and produce this oil fundamentally altered the 20th century…and it all began with a gold mine in Queensland and a speculator named William Knox D’Arcy.

As one biographer, Margaret Carnegie, wrote, it was ‘a fitting monument to an achiever who took big risks and stood fast.’

And that’s what this story is really all about.

Great fortunes can be achieved no matter who you are. You just need to be willing to recognise a good opportunity when you see one…and be willing to take a risk.

Kris Sayce has just finished a presentation on this very idea. He says there are great opportunities to back in 2013. Stay tuned.

Callum Newman
for The Daily Reckoning Australia

From the Archives…

Why the Worst is Not Over For China’s Economy
23-11-2012 – Greg Canavan

Currency Devaluation: While Europe Gets Sinned, Australia Sins
22-11-2012 – Nick Hubble

The Pyramid of Real Wealth
21-10-2012 – Dan Denning

The Revival of US Manufacturing: An Update
20-10-2012 – Chris Mayer

Australia’s ‘Eggs-in-One-Basket’ Banking Sector
19-10-2012 – Dan Denning

Callum Newman

Callum Newman

Callum Newman is the editor of The Daily Reckoning and Associate Editor of Cycles, Trends and Forecasts. He also hosts The Daily Reckoning Podcast. Originally graduating with a degree in Communications, Callum decided financial markets were far more fascinating than anything Marshall McLuhan (the ‘medium is the message’) ever came up with. Today Callum spends his day reading and researching why currencies, commodities and stocks move like they do. So far he’s discovered it’s often in a way you least expect. To have Callum’s thoughts and insights on the current state of the currency, commodities and stock markets delivered straight to your inbox, take out a free subscription to The Daily Reckoning here.


  1. Suggested reading for context is The Strangling of Persia by Robert Shuster. http://en.wikipedia.org/wiki/William_Morgan_Shuster

    What goes around keeps coming around.

  2. Having been involved in the perhiphery of the clean up the Dept of Mines and Energy (not sure what it is called now) are doing at Mt Morgan I would have to say your view on D’Arcy and mine are not quite the same.

    While in business he may indeed be a legend but his legacy is a town where the ground water is poisoned, a hole in the ground filled with water so acidic it can burn the flesh from skin and dissolve a car in less than a day, a creek where only now has the Dept of Mines managed to clean it up enough that aquatic life is capable of living in the creek only 50km downstream from the mine, a series of tailing damns so toxic running your hand through the soil and licking your hands would give you heavy metal poisoning if the arsenic didn’t kill you first.

    Great miner and business man, maybe, but he makes 100,000 teenage slobs look like clean freaks and environmentalists.

    Sorry to get on my high horse here but Mt Morgan is truly one of the most hellish places I have ever worked.

    • Belatedly reading this story and comments. I know the toxic river, it ran a couple of hundred yards behind our house on a property outside Mt Morgan. I remember being told not to go near it as a child. It has made me think about the legacy. There was no legacy for Mt Morgan in the mine, no benefit from the wealth D’arcy and others took from the mine. There were jobs, that’s all. D’arcy has his name on an unsealed dusty street. It has intrigued me since I did some research about it all. We must question the legacy he left.

      Judy Masters
      August 15, 2015
  3. A good story, which could be expanded with a read of Henry Longhurst’s “Adventure in Oil”. He makes no bones about it, D’Arcy was the founder of the modern oil industry. Though the really big driver came from the British government when young and forward thinkers like Winston Churchill decided that coal powered warships were no way to prosecute war – Convert them to oil burners… Read Longhurst from front to back, it’s rattling good narrative, especially the politics and the risk taking.

    However, Longhurst aside, one could add Walter and Eliza Hall. They were principal shareholders in Mt Morgan – Indeed, made 300000% on their investment.


    Their legacy .. One of the worlds foremost medical research institutes


  4. Here is the link for the free download of The Strangling of Persia.


    As Garry says D’Arcy was essentially Britain’s man on a mission. Being your own man in terms of risk was encouraged in the same manner as it had always been in the Brit Empire as long as the dividends also flowed back to the city. By D’Arcy’s time you didn’t need to be in uniform to claim the rents from the rackets and land grabs enforced by the guns that backed you as was earlier the case in the colonies.

    Nationalism was to be a tide that the US also came to beat back with COIN and client state regimes in the manner of the Brits and French. Like the tide however it just keeps on coming until the tipping point. The French finally slaughtered 300,000 in Algeria and still couldn’t push it back.

    If the US elite had switched horses from Social Darwinism and Progressivism to a more tolerant and principled support of Westphalian doctrine in the first instance and non interventionism in the second (after nationhood) then the idea of the Mohommaden Democracy might have averted the US Empire from falling into its twilight zone.

  5. US twilight zone 34 points as now channeled to you by the Persians citing a north American US domestic source.


    If you trace the source, the irony shouldn’t be lost. It appears that he is a Stanford geneticist who plainly doesn’t think highly of Lodge and Roosevelt’s Social Darwinism underpinnings and the prospects for the US progressivist interventionist welfare-warfare empire.

    Trouble in Rome.

  6. Come on Ross! Look at the healthy level of consumer confidence in Walmart.



    Human nature. Our denial and apathy often prevails until we meet an obstacle we cannot skirt around. I believe the leader/s we need/needed are already here and have been for a long, long time. They just have not been and won’t be wanted until enough people want to get real. Until then they serve as a living testimony to the zombies (the dead).

  7. I have interesting records of Mt Morgan in a book called “Gold and Ghosts” by D.W.de Havelland. Like many gold mines there are conflicting stories concerning how what and when.
    In 1954, north of the open cut and 15m below the cap of a hill, there were dinosaur footprints found in the sandstone and shale. Five different types to be exact. Fossilised ichthyoid remains were found in the mine excavations. Ancient fish that is.
    Interestingly the first man to talk of gold in the area was a theologist/geologist named Rev.William Branwhite Clarke who declared the area highly auriferous. However he believed gold was “the cry of Mammon” and passed through. He also thought gold mining was economically and morally undesirable. Another doctrine of poverty I think. Is gold mining a problem or just the way we relate to each other. Surely we can ruin anything we all find desirable. Money, women and any resources. Anything. Sorry Rev, ya blew it on that occasion. :)

  8. Lachlan, like CSG and rare earth minerals? Poor old men of the book.

    American social Darwinism at Walmart; rapacious white people starting the civil order break down in the front, black people and hispanics coming in from the outer ring for no pickings, and tempted to grab one from the early arrivers before it gets checked out. The USA. I came, I saw, I took it. I am the 1%.

    Walmart was waiting for the decent people, the suckers that came but didn’t partake of the orgy, to be the promotions’ foot traffic that buys the regularly priced stuff after the melee. The takers wouldn’t be hanging around, they would be through the check out and long gone. They provided the nation’s aspirational moral leadership, and they are perplexed as to why the spectre of socialism and civil society’s degeneration is all around them.

  9. Yes Ross, we truly ARE our government. How could a tyrant government stand against a responsible group of people? It takes courage to be responsible however. We cannot expect anyone else in particular to come with us.

    I must report my ignorance on the subject of soc Dar…which I will rectify in good time. I have bought a very good little head lamp for book reading when I am bushed overnight.
    I am glad the internet can show us everything without much/if any censorship though…the good stuff yes…plus the sad the bad and the mad. The truth stands on it’s own. There is nothing to fear. Yet I hear my close ones even asking for censoring. So we can live in denial? We really do want authoritarianism…and only pay lip service to freedom. The people still want a king to fight their battles.
    Money is evil, sex is evil, free speech is evil, wine is evil. Freedom is evil. Ban it and save us all.
    Cynic over and out ;)

  10. Big Bill Taft was sent out on “The Imperial Cruise” by Teddy Roosevelt. It was on this cruise that Roosevelt started laying the foundations for the US’s Pacific War. I will quote James Bradley, son of Iowajima John Bradley who was one of those that raised the American flag after “that” slaughterous battle.

    Taft made the secret treaty with the Japanese gifting them Korea and acknowledging the prospect of an East Asia carve up among the two that has only recently seen the light of day. The US had lately taken the Philippines after claiming to the support the local “freedom fighters” against Spain and then immediately proceeding to usurp them as was always their secret plan. From then until today the Filipinos have been at the cutting edge of COIN. 300,000 died in the US-Philippino war with the US forces atrocities of the vein later to be seen in Korea and Vietnam.

    “Taft referred to the Filipinos as those wards of ours ten thousand miles away from here”. “(The term wards was layered in meaning: former judge Taft and his audience knew that the US Supreme Court had defined American Indians as “wards”.

    Taft reminded Americas young men that the Filipinos were not ready for independence: “it takes a thousand years to build up…. an Anglo Saxon frame of liberty” (another precursor to Hitlers thousand year reich).

    It gets better. Bradley takes readers through the pseudo intellectual and humanly degenerate social Darwinist underpinnings. Of course it starts with Arynan race myth in the north of Persia and the bastardisation of the Aryan race having occured in all places except in the Northern German woods where the Teutons remained pure and struck out to the west to form the superior Anglo-Saxon race. The myth propagated for the purpose of crafting the jingoes childish rape and plunder narrative was that it was in the 1890’s to be the US’s destiny to keep pushing West and subjugating China and all the Asian people’s all the way back through central Asia to the Aryan birthplace in Persia.

    Does that ring any historical and contemporary bells?

    The exceptionalism accorded to the “warrior core” of the US empire to eradicate the racially impure was just as explicit in East Asia as it was with the Indian tribes. Freedom was an idea that was only ever to be granted at home to the privileged Anglo Saxon of the Republic.

    US Newspaper editor John O’Sullivan coined the term “manifest destiny” in 1845 to describe the essence of this mindset. At the heart of manifest destiny was the pervasive belief in American cultural and racial superiority. It was crafted in order to support US Democratic President Polk.

    A succinct description of the appended condition is available here: http://www.iefd.org/articles/american_exceptionalism.php

    As much as Toqueville is quoted as a source he in fact addressed the racial basis in a different way, and intended to show it as the US’s achilles heel in the same manner that Gibbon had shown Abrahamic intolerance as Rome’s achilles heel.

  11. Here is Tocqueville, who the “Punch and Judy show’s” neo-liberals try to paint as a neocon clearly deriding Social Darwinism.

    “An old and sincere friend of America, I am uneasy at seeing Slavery retard her progress, tarnish her glory, furnish arms to her detractors, compromise the future career of the Union which is the guaranty of her safety and greatness, and point out beforehand to her, to all her enemies, the spot where they are to strike. As a man, too, I am moved at the spectacle of man’s degradation by man, and I hope to see the day when the law will grant equal civil liberty to all the inhabitants of the same empire, as God accords the freedom of the will, without distinction, to the dwellers upon earth.”

    There have been better and worse US Americans but the worst interspersed by the occasional less worse like Hoover have continuously had the ascendancy since the end of Grover Cleveland.

    Of the better:

    “The worst thing about war is that it has practically to be fought on the basis of the most uncivilised and soon gets to be a matter of mere hatred. They were – these Filipinos – only a short time ago our wards to whom we owed sacred duties, duties we could not abandon in the face of a censorious world without soiling our Christian faith. Now they are “niggers” who must be punished for defending themselves. This is the history of the world with perhaps a stronger dash of hypocrisy than usual to soothe our feelings.”

    Letter from Thomas Reed (Republican Speaker of the US House of Representatives ret. 1899 to George Gifford dated April 17, 1902)

    And Henry James – what is needed is the “moral equivalent of war”. The nation needed a way to celebrate and enshrine “martial virtues” without devoting them to the pursuit of violence. He proposed that young people be universally conscripted – to work at building roads and tunnels, on fishing boats and in mines, or constructing skyscrapers, “to get the childishness knocked out of them, and to come back into society with healthier sympathies and soberer ideas”.

    “The War Lovers, Roosevelt, Lodge Hearst, and the Rush to Empire 1898” Evan Thomas 2010

  12. Excellent Ross. One can learn so much from history about the nature of men and the natural order that underpins the world….not that we always can define it. I have read some on your subjects on line and it always spills into an investigation of various philosophic concepts wherein lies much wisdom…even if it is in part the attitude of honest personal enquiry and introspection itself. Glad we have Mr Bonner here to keep up such an effort to and his perspectives are often appealing.
    As for books, I feel like am spoiling myself when I buy them. Many advantages over computers still I see.


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