The sudden downturn in the local economy reduced the population by 20 per cent. Fortunately for Ballarat the Phoenix Foundry came into prominence about this time.

The foundry began operations in 1856 when it was founded by William Shaw, originally from Belfast, and George Threlfal and Richard Carter, both from Blackburn, Lancashire. The company was originally known as Richard Carter and Company in 1855 and in 1856 Threlfal induced Shaw to go to Ballarat as manager. The foundry began making mine machinery, and in 1870, amidst other problems, the Phoenix became a Limited Liability company.

The Phoenix Foundry was fortunate enough to win a tender for 10 locomotives and tenders for the railways. William Henry Shaw, the manager, went to England to arrange the machinery necessary to build the engines.

March 4, 1873 was a big day when the first locomotive was hoisted onto a specially designed huge steam lorry and transported to the railway station. Owing to the weight of the lorry and the superimposed weight of the engine and its tender it was frequently coming to grief by sinking in the roadway. Withers' ``History of Ballarat'' 1887 tells us that by April 2 the engine had completed its 1000 miles test and the feat was celebrated by bringing up a special train of cabinet ministers and others from Melbourne, by flags all over the city, by the pealing of the Alfred Bells, and by a banquet in the city hall.

The successful completion of the first contract was followed by a second. Initially all the locomotives were built to local designs, but after the late 1870s they were practically all after English drawings.

This continued for about 15 years until the ``locomotive standardisation'' of the Victorian Railways.

In the 1880s, the Phoenix Foundry built locomotives to the design of the American ``Baldwin'' which are familiar to the devotees of American western movies. Night classes were held at the foundry for the licensing of engine drivers.

The 100th Phoenix engine was involved in a ceremony outside the foundry on July 4, 1883, American Independence Day. Appropriately it was a ``Phoenix Yankee'' engine.

Originally new locomotives were transported from the foundry in Armstrong St, to the railways on a steam road lorry, however in 1883 the Ballarat Council gave permission for a railway line to be laid, which actually crossed the tram lines at Sturt St. Locomotives then came from the foundry under their own steam, were turned on a turntable in Armstrong St, a fragment of which still survives outside Central Square, and proceeded to the Doveton St sidings. A small section of the old rail has been preserved in the Sturt St footpath.

The Phoenix Foundry completed its last government contract in 1904. The demise of the foundry was politically brought about by the government decision that all its locomotives be completed at the railway workshops at Newport.

Although the foundry continued with general engineering work, it went into liquidation in 1906. The plant was sold for 25,000 pounds to Cameron & Sutherland, of Melbourne. In 1900 the Phoenix Foundry manufactured the largest pumping plant ever made in Australia, for the Lodden Valley Gold Mining Company.

At the company's peak, it employed 438 men, and its buildings occupied more than an acre. The 1890s publication, ``Ballarat & Vicinity'' tells us that when in full work, 500 Tubal-cains were employed and 23 Vulcanian fires were kept going.

Shaw died in 1896 after an involvement of more than 40 years with the company.