The Australian goldrushes transformed Australia as hundreds of thousands of hopeful diggers rushed to New South Wales and Victoria in search of their fortune. The gold license system was introduced soon after the first rushes began: from 23 May 1851 in New South Wales and from 1 September 1851 in Victoria. Everyone wanting to dig for gold had to pay 30 shillings ($1.50) a month for a license. This allowed digging within a specific area and laid down certain rules: diggers must carry their licenses with them at all times; they would be fined 5 pounds for the first time they were found without it, 15 pounds the second time and up to 30 pounds the third and subsequent times; digging was not permitted within ten feet of a public road; tents had to be erected at least 20 feet apart; and all diggers were to 'maintain, and assist in maintaining a due and proper observance of Sundays.'
The gold license system caused considerable unrest on the diggings. It was regarded as a tax and greatly resented since it was applied regardless of the success or failure of the digger. However, the gold commissioners enthusiastically policed the goldfields, checking on licenses and arresting and fining the unfortunate diggers who could not produce them. These 'license hunts' came to symbolise the government's oppression of the diggers and directly led to major protests on goldfields in Sofala in 1852, Bendigo in 1853 and the Eureka Rebellion in 1854. In 1855, the gold license was replaced by a Miner's Right which cost one pound a year for the right to dig and also entitled the owner to vote.
Since the fines for not having a license were high, diggers took great care of them. This particular license shows signs of having been carefully folded and kept in a pocket or wallet.