Back in the 1860s Otago was an autonomous province with its own government. It benefited hugely from levies on miners and on the export of gold.
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But Dunedin and Otago flourished with the decline of gold fever as those lured to the Province by the promise of 'dust' stayed on to become farmers and entrepreneurs.
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By the 1870's, Otago had 'an excellent postal system, a network of established goldfield and rural towns, good consumer demand for its crops, the first university in New Zealand, and a surprisingly strong capacity in engineering and shipping (DCC).'
As the surface gold was exhausted new forms of extraction took over: deep-level hydraulic elevating, quartz mining, and dredging. All of which created demand for mechanical and engineering skills and manufacture.
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In the 1890s the Chinese entrepreneur Sew Hoy discovered a system of dredging that 'made it possible for large-scale mining to be carried out on the river-flats for the first time' with a new generation of paddock dredges.
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This gave rise to the dredging boom, which exploded across Otago and Westland.
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Otago received 27,000 assisted immigrants in the 1870s – more than any other province. Railways were laid linking with Christchurch (1878) and Invercargill (1879).
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The town's population nearly tripled again in the 1870s, to 39,000 by 1881.
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'In that year, it was New Zealand’s largest urban centre, and Otago had a fifth of the country’s population. Neither ranking was ever attained again.' (Teara)