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The report of F. T. Gregory's explorations in 1861 resulted in a new industry being founded. Though it was previously known that pearls and pearl shell existed on the north-west coast, it was considered impracticable to invest capital to examine the liquid beds. But when Gregory returned with a number of pearls and "several tons of pearl shells," gleaned in Nickol Bay, a new excitement entered colonial life, and wealth, romance, and inexorable fatalities found fresh and adventurous fields of enterprise. His report so closely coincided with those of others that Fremantle boat-owners seriously contemplated exploiting the northern waters. The Messrs. Bateman lost no time in equipping a party. These gentlemen for numbers of years had been active whalers along the south-western coast and, besides, conducted a successful mercantile business at Fremantle. While other colonists pursued rural occupations the Batemans were exploring the waters and garnering their elusive wealth. Thus almost since the foundation of local whaling, representatives of this old family had been associated with it. They, more than any other colonist, were likely to be attracted by a pearl shell industry.

Within a month of Mr. Gregory's return in November the Batemans made all arrangements, and were fortunate in interesting Mr. Jas. Turner, Mr. Gregory's companion, to lead their party. On the 15th December, 1861, the Flying Foam sailed on her mission. She quickly reached Nickol Bay and the search was begun. It was not an easy task, for the pearl shells were scattered over many banks a great distance apart. Mr. Turner did not, therefore, obtain the quantities he anticipated, and after a few weeks' work he collected only 910 shells and 150 pearls. But he was not disheartened, and announced on his return that he believed numerous beds existed in the neighbourhood. The Flying Foam arrived at Fremantle on 9th February, after a tedious homeward passage. A small export of pearl shells was made in 1862. The Blue Book gives the value as £250.

Interest in pearls temporarily collapsed, for these returns were not considered commensurate with the risks and amount of capital which had to be invested to further the industry. Thus little is heard and nothing done for some years. The expedition in search of gold at Camden Harbour in 1864, as already stated, mentioned that the natives lived almost entirely on pearl oysters, oval shells of which they strung into necklaces. Dr. Martin also said that pearl oysters were numerous. A few shells were collected, exported, and sold. But attention was so concentrated on north-west settlement that small thought was given to what the coastal waters hid. Thus two more years elapsed. In June or July of 1866 a boat was fitted out to further examine Nickol Bay, but the pearlers could not find any defined bed. The export for 1866 was valued at £6.

Occasional discoveries of pearl shell were made previous to this by settlers and navigators of coasting vessels. In October, 1866, it was announced that fine pearls had just been obtained in Nickol Bay, and one, weighing seven carats, was valued at £10. Mr. Tays more carefully searched the bay than his predecessors, and by January, 1867, had collected nine tons of shells of good quality, which he estimated to be worth £1000. Five tons were conveyed to Fremantle in the Mystery and shipped to England. The same gatherer continued his quest during the remainder of the summer, and up to May had secured eleven tons of shells, with a few pearls. Others joined with Mr. Tays and conducted the search in a primitive manner, going only to the shallow places at low tide and collecting what they could. Australian natives were employed to do the diving. The result was satisfactory, and by December, 1867, there were said to be more than twenty-five tons obtained. Several persons had seen pearl shell at different places along the coast, and it was now believed that they existed in immense quantities. It was said that one man, with the expenditure of only three bags of flour—wages to the natives—secured ten tons of shell, valued at £1000. The export in 1,867 was estimated to be £556.

A slight commotion was awakened. The success of 1867 led other people to go forth, and in December, 1867, and January, 1868, there was a flutter of excitement in Fremantle and Perth caused by preparations being made to send out a pearling fleet. Those boats which were at all suited for the work were fitted up, and crews were obtained. One and another wished to participate in this peculiarly attractive quest, and now that north-west settlement was more solid in its few years' growth, pearls and pearling absorbed conversation and attention. By the end of April, 1868, about ten boats had proceeded to the neighbourhood of Nickol Bay, such as the Fairy (Wilcox, master), Little Eastern (Knight), Pilot (Adams), and Industry (Tucker). It was a curious little fleet, and not such as is usually employed for pearling purposes. The captains and crews were usually the owners of the crafts, and shared the profits. Most of the work was done after midnight, and until sunrise. The natives—especially the women—proved excellent divers, and without them the fleet would have fared badly. The women could dive to a depth of ten fathoms without inconvenience. But a gale coming on wrecked two boats—the Nautilus and Ariel. Three men from the latter were drowned, and the fate of all except one on the former was not explained.

A few men here and there were in the habit of erecting tents on the beach, or among the neighbouring mangroves, and, with a native, going out after midnight to gather shells. Often they merely waded into the water at low tide, and collected what lay nearest at hand. In this way, many pearl gatherers, with no means other than their bodily vigour to begin with, became fairly well off. About the time of the gale a tragedy as serious occurred on land. Mr. Sholl, the Resident Magistrate at Roebourne, sent Constable Griffs and Peter, a native policeman, along the coast to apprehend several native robbers. One black was caught, and a chain was placed around his neck. That night the police, with their prisoner, remained in the tent of a pearl gatherer named Jermyn. The friends of the prisoner conspired to effect his rescue. With the aid of the latter, both the captors were killed as they lay asleep. Jermyn left his tent at 2 a.m. to gather pearls with his native, and returned at sunrise; he, too, was murdered in the neighbouring mangroves. Abreast of the tent the Nautilus was wrecked, and fifty yards distant from Jermyn the body of one of the sailors—Geo. Breem—was found. Breem was evidently speared as he ran from the murderous blacks. All this news was conveyed to Mr. Sholl through the medium of Jermyn's native servant. Mr. McRae, with a party of eight men, started in pursuit of the murderers. He came upon them near a mangrove thicket, and as they rushed for this the whole party fired. Chilwell, said to be one of the offenders, was killed, and several others were wounded. In the natives' camp were found many articles which belonged to the murdered men.

The results of the 1868 pearling season were beyond expectation. Such satisfactory quantities of pearl and shell were secured that the industry was viewed with great favour, and soon the exports became very large. No further items of interest remain to be chronicled. The pearling fleet completed their season without further serious mishap. The export of