ULLIOX & rOEEICa ♦hB I ICHnGEI: Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924080975158 apciTi.rMmLiPMii comcLL^KiwciinT BULLION rOEEIGN EXCHANGES THEORETICALLY AND PEAOTIOALLY CONSIDERED; FOLLOWED BY A DEFENCE or THE DOUBLE VALUATION, WITH SPECIAL REFERENCE TO THE PROPOSED SYSTEM or UNIYERSAL COINAGE. By ERNEST SEYD. LONDON: EFFINGHAM WILSON, ROYAL EXCHANGE. 1868. London : Pkinxed by W. W. Mobqan, 232, Caiedonian Koad, N. TABLE OF CONTENTS. PART I. Intbodtjotion Ohaptise I. — Medium op Exchange II. — Medium op Exchange „ III. — Cukrency „ IV. — BiiLs v.— Gold... ' „ VI.— SiLVEE „ VII. — Bullion „ VIII. — Melting op Gold and Siltbe „ IX. — PuEE Gold and Silvek, and Ailots op Them with OTHEE Metals „ X. — Testing and Assaying Bullion „ XI. — Methods op Expressing and Eepobting the Fine- ness OP Bullion „ XII. — On the Weights used poe the Precious Metals , „ Xni. — The Peices op Gold and Silver „ XIV. — Practical Directions por Calculating the Value ■! OP Bullion in England ... J ... 1 8 17 29 67 95 111 117 122 s 131 139 } 146 154 157 165 XV.— "Parting" Bullion 176 XVI. — General Description op the Repining op Bullion... 185 XVII. — Methods op Assaying 204 XVIII. — Iridium, and Beittlbness in Bullion 238 XIX.' — The Bullion Oppice at the Bank op England ... 242 XX. — Bullion Beokees, and Shipping op Bullion ... 249 XXL— Coining 259 IV CONTENTS. PART II. I.- — Pars op Exchange 285 Monetary Systems, Great Britian 290 Prance 295 Belgium 301 Switzerland 302 Italy 803 Germany 305 Nortli Germany ... 309 South Germany 313 Hanse Towns 316 Austria ... 321 Holland 324 Sweden and Norway 326 Denmark 329 Russia 331 Greece 333 Spain ... 334 Portugal ... 337 Turkish Empire .. . 339 Egypt 342 United States of America 342 British North America 347 Mexico 350 „ „ West Indies 352 Tt ty Central America 353 )t j> South American Kepublios 354 „ „ Brazil 358 » >i La Plata States 359 1) 77 Africa, Barbary States 360 tt )) West Coast of Africa 362 It 77 East Coast of Africa 363 77 77 Abyssinia... 363 77 77 Persia . 364 7> 77 India . 365 If 77 Singapore . 368 /> 77 Burmah . 368 »7 77 Siam . 368 77 77 Cochin China . 369 7) 71 Dutch Possessions (Java, &c.) .. . 369 77 7) Philippine Islands . 370 CONTENTS. Chapteb I. — Paes op Exchange — contirmed. Monetaiy Systems, China „ ,, Japan „ „ Sandwich Islands Table of the Value of the Principal Coins Chapter II. — Shipments and Aebithations in Bullion Gold Shipments — From London to Paris From Paris to London From New York to London From London to New York Gold from California ... Half Imperials from St. Petersburg Silver Shipments — Silver Bars to Hamburg Silver Bars from Hamburg to London Silver Bars to Amsterdam Silver Bars to India Silver Bars from Marseilles to Calcutta Five Francs pieces from Marseilles to India Silver Dollars to Shanghai Silver Bars from OaUfomia to Hong Kong Chaptek III. — The Shoet Exchange „ IV. — The Long Exchange „ V. — The London Course of Exchange „ VI. — FOEBIGN COUESES OJ EXCHANGE Paris ... Brussels Turin ... Berlin ... Fraukfort-on-the-Maine Hamburg Bremen Vienna ... Amsterdam Botterdam Stockholm Copenhagen . St. Petersburg Madrid ... 3?0 372 374 375 382 385 391 395 400 401 402 403 404 406 408 413 416 417 417 422 427 434 442 444 447 448 449 450 452 454 455 456 456 457 458 458 459 VI CONTENTS. Chaptee VI. — Foreign Courses op Exchange — contvimed. Lisbon ... Constantinople Alexandria New York San Francisco . . . Mexico ... Lima ... Valparaiso Buenos Ayres . . . Montevideo Rio Janeiro Calcutta Bombay Madras Shanghai Hong Kong Tokoliama „ VII. — Calculation or Exchanges „ VIII. — ^Aebitkation op Exchanges Operations in Direct Exchange Operations in Indirect Excha/nge Bankers' Arbitrations „ IX. — ^Iniluences Appecting the Exchanges 460 460 461 461 462 462 462 462 463 463 463 463 463 463 464 464 465 466 478 485 491 497 510 PART III. Chapter I. — Criticism on the British Mint ... „ II. — Bullion and Rates op Discount „ III. — The Paris Conperence on International Coinage .. „ IV. — Defence op the Double Valuation „ V. — Proposal to Establish the Double Valuation in ' England ... ... ... ... ... ... J „ VI. — Universal Coinage ... 537 562 584 597 661 681 PART I. mTRODUCTION. BULLION and Foreign Exchanges are subjects generally comprised among the contents of higher class books on Practical Arithmetic; though, of course, the consideration given ia works of the kind to these interesting topics is necessarily only limited and superficial, at the best. There are several pubhcations on Banking and Commercial Business which go somewhat more deeply into' the matter : among others, GiLbart's admirable work, and Laing's ' Theory of Business ;' and there are, finally, at least three well known works specially devoted to the study of these most important subjects, — Goschen's ' Theory of the Foreign Exchanges,' Nicholson's ' Science of Exchanges,' and Tate's ' Cambist, or Manual of Ex- changes.' Why then, it might be asked, should the author of the present volume venture upon a field apparently already so well cultivated, which would seem to afford no legitimate opening for him? A brief glance at the nature and scope of the three last-named works will, he believes, show that, notwithstanding their 1 2 INTEODUOTION. confessed excellence, neither of the tliree can be said to fully answer and satisfy all requirements, to make it a complete and perfect guide in all matters relating to Bullion and the Foreign Exchanges ; and that there is room left, for another work on the subject, con- structed on more comprehensive principles, and more uniTersally adapted to all classes of readers. To supply such a work is the writer's object. The financial and commercial pubUc will judge whether he has brought the necessary qualifications to the task undertaken by hitn. We have then, first, Goschen's ' Theory of the Foreign Exchanges,' which may be defined as a general treatise on international commerce, and the effects produced by the ordinary and extraordinary vicissi- tudes of the same on the Exchange transactions of Foreign countries with England. The book is written in plain, clear language. It bears throughout a stonrg impress of the writer's personal experience. The views expressed, and the conclusions drawn by him, are lucid and logical, and there are not many of them open to contestation. It is altogether an admirable work, and does the fullest justice to its title, — ' The Theory of the Foreign Exchanges.' But, for that very reason, it falls necessarily short of the requirements of the ordinary reader. The author starts upon the supposition that the reader whom he addresses knows all about the elementary ground- work of the subject, and he confines his teach- ing, accordingly, to the higher and highest branches. There is, for instance, no information given on the INTEODUCTION. 3 value of Foreign Coins and Monies ; and there are only a few practical examples and illustrations to be found in tlie book. These omissions and deficiencies cannot but detract, ia some measure, from tbe practical use- fulness of tlie work to that large class of readers who, in their study of Exchange operations, have to begin with the beginning of the subject. Nicholson's ' Science of Exchanges' is conceived and constructed upon a different principle, — ^the author using the Catechetical form. The book consists principally of a series of 289 questions and answers, ranging over a wide field, fi'om the first question, "What is value?" to the last, "What should we desire most for the general welfare of aU classes in England?" Explanations are given on the subject of Grold, Silver, and Currency; also some practical illus- trations and calculations. The book forms a most excellent Manual, which should be in the hands of every student of Exchanges. Still, it may be ques- tioned whether the Catechetical form, with its inherent dogmatism, is the best calculated to give the student a clear insight into, and a competent knowledge of, a subject of such magnitude and importance, and one so open to difference of opinion on many of the leading points, as the Science of Exchanges. The more so, as the work is slightly tinged with the author's somewhat absolute free-trade views, and bears the impress also of his strong bias to look upon all things from an exclusively British point of view. We now come to the last of the three special Works on the Science of Exchanges, viz. — Tate's ' Cambist, 4 INTEODUOTION. or Manual of Exchanges ;' the Banker and Merctant's old and trusty friend,* as it is deservedly called. THs work is, — in conception, construction, and treatment, the very opposite to Goschen's book. Whilst the latter is nearly aU "Theory," Tate's 'Cambist' is almost exclusively " Practice ;" abounding in figures and cal- culations, practical examples and illustrations of aU possible Exchange transactions, single and compound Arbitrations, conversion of Bullion, &c. A considerable portion of the work is taken up with the Weights, Measures, Coins, and Monies of every country in the world, with their British equivalents. In short, every thing in Tate is dry matter-of-fact ; and the beginner who would take him for his guide in the study of the Science of Exchanges cannot but sadly feel the absence of aU theoretical explanations, which yet are so abso- lutely indispensable to a proper comprehension of the subject. The purpose of the author of the present volume then is, to endeavour to give the fullest information on every branch and detail of Exchanges. The title which he gives to his Work — ' The Foreign Exchanges Theoretically and Practically Considered' — is intended to express the end which he has in view. Before entering upon his task, he deems it neces- sary to explain to the reader how he intends to deal with the matter. The term, " Science of Exchanges," which has been repeatedly used in the foregoing * Mr. Tate has written other "Works on Business Matters. See, among others, his ' Conntiag-ho.use Guidej' INTBODUOTION. 5 observations, might perhaps seem to imply a carefully studied systematic arrangement and scientific treat- ment of the subject, dressed in suitable elegant language to match. The author begs at once to state here, that such is not his intention. He is simply a merchant, with but few hours of leisiire at his com- mand, who does not aspire to a reputation for elegance of language and gracefulness of style. He means to treat the matter in the plainest and most practical manner, and to use the simplest and most familiar language, which he deems, in fact, the best suited to the purpose. Bankers and Merchants well versed in Exchange operations, may, perhaps, feel incUned to object to the frequent repetitions occurring in the book, of principles, facts, and figures, which may be familiar to them. They should bear in mind, however, that the work is intended also for the use of those less advanced ia the knowledge of the business, to whom the same repetitions may prove beneficial, as reminders and as guides to a more easy comprehension of its several branches. A few words wiU suffice to show and explain the plan followed by the author in the distribution and arrangement of the subject matter of the Book. The first Chapters are devoted to the consideration of the so-called " Mediums of Exchange." Here the reader will find a full exposition of the author's views upon this important branch of the subject, and of the principles upon which he intends to proceed in his treatment of the same. These are followed by Chapters 6 INTRODUCTION. on Gold and Silver Bullion, giving minute and elaborate accounts and descriptions of the various processes and manipulations through whicli the precious metals have to pass, — from their native state down to their ultimate conversion into Gom. The author has bestowed particular care and atten- tion upon this part of the work, — which he deems of special importance to the large class of people who, though quite aware of the practical use and applica- tion of Gold and Silver, as Mediums of Exchange and Standards of value, are yet more or less ignorant of the why and the wherefore of such uses and apph- cations, and of the manner in, and the means by, which the precious metals are fitted to subserve the intended purpose. Proper consideration is also given to the technicalities involved in the Bullion business, which, as a rule, are known only to a few financiers and men on 'Change, whom the special nature of their business obliges to make themselves masters of this particular branch of their line. Practical experience has taught the writer that an intimate acquaintance with these technicalities, and with Bullion operations in general, in aU the branches and details of the business, is indispensable to a competent understanding of the working of Exchanges. After these Chapters, which form, as it were, the ground-work of the book, comes the necessary in- struction in the "Monetary Systems of Foreign Coimtries," illustrated by practical examples of Exchange Operations and Transactions ; succeeded by the " Course " of Exchange, and the operations con- INTEODUOTION. 7 nected generally with " Foreign Exchanges," " Arbi- trations of Exchange," &c., &c. In conclusion of these introductory remarks, the author -would observe that he takes the reader, in- terested in the subject, and willing to follow him in his exposition and treatment of the same, to be a good ordinary arithmetician. CHAPTER I. MEDIUM OP EXCHANGE. THE Employment of a Mediiun of Exchange is a Social Necessity. There are only two states of Human Society in wMch no Medium of Exchange is needed; and even of these two States the one has no actual existence, and can only be considered as a mere matter of theoretic assumption ; whilst the other is restricted to the lowest and most absolutely un- civihsed of the Savage tribes. The untutored Savage readily supphes his few and simple wants from the great store of Nature ; his Hmited requirements leave him independent even of the aid and co-operation of his fellow Savages. So long as he finds food and shelter, and the coarsest covering to shield him from the weather, he is satisfied; and his benefactress — Mother Earth— does not call upon him to return her an equivalent for her gifts. The other imaginary State of Society which might dispense with the need of a Medium of Exchange, is represented by the pretty theory of Communism. The amiable Philanthropist may, in his search after a satisfactory solution of the great Social Problem, propound the question, — " Why cannot men live together on a footing of perfect MEDIUM OP EXCHANGE. 9 equality ? Why cannot they work for each other in amity and concord, and throw the produce of property and labour into one common stock, from which all may supply their wants with equal rights ?" True, if men were all models of paradisiacal purity, and correspond- ingly elevated intelhgence, they might do so ; which would, of course, enable them to dispense altogether with a Medium of Exchange ; but so angelic a State of Society is, unfortunately, simply Utopian ; — a mere creation of dreamland. "We have assumed here the two extremes of the Constitution of Society, — the lowest imaginable State which can possibly exist, and the highest and most perfect, but also the most impossible for mankind to attain. Between these two extremes lie the different degrees of civihsation. Raise the Savage but one step from that lowest state, and he will be found effecting exchanges of simple commodities with his brethren. Another step, and the sphere of his re- quirements enlarges ; he affects certain commodities in preference to others, and sets accordingly a higher value by them, until, at last, some article most highly esteemed by him is made to assume the functions of a Medium of Exchange; or, in other words, of a Standard by which he appraises the value of all other commodities. The Digger Indians of North Pacific America, who, certainly, may pass for the rudest of Savage tribes, were found to traffic in copper tools and natural produce. To this day the skin of the Beaver has a purchasing power in these regions. The higher tribes of Savages, such as the Pawnees and Sioux, in 10 MEDIUM OF EXCHANGE. America, and the Tartars, in Asia, reckon, in their commercial deahngs, by horses and some other articles highly valued by them. Cowries (the shells of the Gtjprcea Moneta) are still extensively used as small change in Bengal, the Phihppines, and on the Coast of Africa. In Abyssinia, pieces of coarse salt, in size and shape like the sole of a boot, are used as Currency ; thirty to forty of them going to the doUar. Amongst semi-barbarous nations. Gold and Silver ornaments are made to subserve the purpose of a purchasing medium; whilst the more civiUsed people ah-eady know the use of Coin made of the Precious Metals ; and, finally, the nations most advanced in civihsation have established a complete system of Mediums of Exchange, which may be considered the highest and most perfect so far attainable in this scale of progression. It is in reference to the most civilised state of Society that we call the employment of a Medium of Exchange a Social Necessity. Civilisation, so far from being an artificial state, in the invidious sense so often applied to the term, may really and truly be considered the natural state of man, on whom it confers so many material and intellectual blessings. This accounts also for the tendency more or less manifestly shown by savage tribes, when coming into contact with more advanced nations, to share in these blessings, and secure the advantages of social improvement. It is not saying too much, then, that the highest state of civilisation is also the most natural state of man, and that all the results springing therefrom, good or evil, are simply legitimate, natural. MEDIUM OP EXCHANGE. 11 and inevitable consequences thereof. Among these results figures, also, the existence of an acknowledged Medium of Exchange, which may therefore, without need of farther argument, safely be looked upon as one of the constituent elements of Society. The existence of an acknowledged Medium of Exchange strongly influences the general intercourse between individuals, communities, and nations ; whilst the commercial intercourse between them is entirely regulated by it. The Value of a Commodity is dependent upon the real, or fancied, benefit which its possession confers upon the holder. Upon the means at our command to secure such possession depends then, necessarily, our enjoyment of the benefit thereby conferred. The lack of a proper Medium of Exchange lessens our ability to procure the necessaries, comforts, and luxuries of life ; whereas the command of it in our hands enables us to satisfy our wants, and obtain the co-operation of our neighbours. A proper Medium of Exchange, there- fore, exercises a most powerful influence on aU classes of Human Society. It is the life-blood of commerce, that great agency by which the blessings of civilisation are carried and disseminated aU over the World ; and the due action and scope of this great agency may weU be said to be dependent, not only upon the proper quantity, but also upon the healthy movement, or cir- culation, of such Medium of Exchange. The functions which a Medium of Exchange is called upon to perform in social and commercial inter- course are twofold; it acts as an agent, and as a 12 MEDIUM OP EXCHANGE. principal. In tlie former capacity, it serves to effect tlie valuation of conunodities, and to put a price upon them ; its division into certain fixed fractional parts supplying us witt units by wMch to calculate and express in figures the value of things. The other function, that of a principal, is still more important ; for, in that capacity, it has to serve as an actual guarantee for the correct performance of the valuation of other commodities based upon its own value, as it has itself to pass in exchange for such commodities in accordance with such valuation ; which involves the necessity of a fixed intrinsic value of its own. We will now proceed to discuss and estabhsh the proper nature and form required to constitute a Medium of Exchange. This can be done best by following out, by way of illustration, a series of assumed transactions, such as are constantly occurring in ordinary fife. A stands possessed of certain goods in excess of his own wants, but which are required by B, who, on his part, is again in the same position with another article required by A. Provided the value of both commodities be equal, A and B can easily effect an exchange of them. B, however, may not want A's goods ; but may require certain other articles held by C, who may want the goods of A. If the articles are of equal value, the exchange can again be as easily effected, — A taking the goods of B, C those of A, and B those of 0. Let us carry the illustration still farther, and introduce D, E, F, and all the other letters of the alphabet ; and provided always, of course, the value of MEDIUM OF EXCHANGE. 13 the articles be equal, there mil be no practical difi&culty in the way of effecting the whole series of Exchanges, without the intervention of a general Medium. But, leaving out of consideration the patent fact that Society, with its thousandfold divisions and rami- fications, cannot well be represented by the letters of the alphabet; and the equally patent fact, that the assumption here made, of an equal value of all the articles held by the different parties, is altogether improbable, it is quite clear that even in so hmited a community as the letters of the alphabet might suffice to embrace and designate, production and consumption, supply and demand are naturally subject to the ordinary variations; which, of course, must tend to upset the mathematical balance of the system, and to lead to lesser or greater differences in the respective values of the several commodities; and these differences would necessarily require some independent method of equalisation. The foregoing illustration represents Barter, the simplest and most primitive form of Commerce, which, it may as well be mentioned here, remains still a necessity among semi-barbarous nations, and in certain colonies in remote corners of the world. Let us now carry our alphabetical illustration a step further. A has supphed B with goods, for which B cannot give him anything in return at the time. B stands accordingly indebted to A, to whom he promises to give an equivalent at some future period. C, D, E, and the rest of the party, find themselves placed in the same position with reference to A, who happens to 14 MEDIUM 01 EXCHANGE. tave no immediate need of effecting a fiirtlier series of Exchanges to supply Ms own personal wants. The Accounts between him and the other parties represent the benefit derived by him in exchange for the goods he has supphed to his debtors. Here we have the positions designated in commercial intercourse as Accounts and Indebtedness. Let us proceed another step in advance, and con- vert these Accounts into Certificates of Indebtedness, promising to supply and deliver to A a particular com- modity. Give A the right of passing these Certificates from hand to hand, entitling the holder to claim at his pleasure delivery of the goods thereon designated. Now, although these Certificates are of a specific cha- racter, yet they will afford A a Medium of Exchange passing current within the limited circle in which he holds the advantageous position of creditor. Go stm one step further, and, instead of specifying on the Certificates the particular description of goods which the debtors severally promise to supply, let all the Certificates express the value of such goods calculated in fixed corresponding quantities of one general article in which they aU deal, and which they are at any time ready and willing to exchange for other commodities. By this means the sphere of use- fulness of the Medium of Exchange afforded by such Certificates of Indebtedness is considerably enlarged. StiU greater usefuhiess may be imparted to these in- struments by expressing the value represented by them measured by some generally accepted Standard. In the foregoing illustration, which shows the MEDIUM OF EXCHANGE. 15 difference between Barter Trade and Accounts and Indebtedness, we have assumed tlie Certificates of In- debtedness to be safe and certain to meet with due settlement and conversion into positive value ; for otherwise there is at once an end again to the mathe- matical precision of the system. Now, the fallacy of such an assumption is too pal- pable to require comment. It cannot stand for a moment. A much firmer and safer basis is required to secure the proper balancing of the Exchange of Commodities. The claim to an equivalent return which one party derives from the sale and transfer of an article effected by him to another party, must be properly secured by the actual possession of something of intrinsic value, which is held in the same high esteem by aU parties, and offers thus all requisite guarantees, independent of aU conditions of verbal or written promises ; which remains unaffected by external influences, and is of a convenient form and shape to pass readily from hand to hand. As a matter of fact, we know that the Precious Metals are the substances used for this purpose. The question whether they hold this high position simply by general agreement, or by an inherent right of their own, will be discussed hereafter. Still, Barter and Indeitedness continue, to the pre- sent day, to play an important part in commercial inter- course, both between individuals and nations ; and we must not, therefore, lose sight of them in connection with the subject of this work. 16 MEDIUM OF EXCHANGE. Nations, mutually exchanging their produce, may be said to Barter, in the fio'st instance ; if the balance of such Barter turns in favour of the one, the other is placed thereby in a state of Indebtedness, which Indebt- edness may, through the creation of Bills of Exchange, be made to serve for a time as a Mediwm of Exchange; such Bills serving as Economisers of actual money. But the final balance of the Account must be settled by a more sohd Medium, of the class of which Oold is the highest representative. 17 CHAPTER 11. MEDIUM OF EXCHANGE. (Contmv^d.) ~¥"\THY do we hold Gold so valuable, and how comes * * it that this metal exercises so powerful an influence in the afiairs of man ? Why should it, of all the substances at our command, be the one pre- eminently chosen to serve in the capacity of a Medium of Exchange as the highest value ? It must be admitted that a direct and positive answer to this question, precluding all need for further discussion, can hardly be given. Most pro- blems in science can be solved upon principles estab- lished with mathematical precision ; but in regard to this question we are continually driven to fall back upon the abstract meaning of the word value, which, together with such vague terms as common consent and general convenience, constitutes the only element given us wherewith to construct a rationally satisfactory theory to account for the practice which makes Gold our highest standard of value. We may, however, lay down here three propo- sitions : Istly. That the use of certain substances of intrinsic 2 18 MEDIUM OP EXCHANGE. value, and of a convenient form to pass from hand to hand, is necessary for tlie purpose of facilitating inter- course in civilised society. 2ndly. That there are certain substances of high intrinsic value within our reach, amongst which Gold holds an elevated rank. 3rdly. That Gold, from a mechanical point of view, is the material best suited for the purpose.* The first proposition we have already endea- voured to demonstrate in the preceding chapter; but we repeat it here once more, as it cannot be pointed out too strongly that our estimate of Gold, and aU our remarks about its employment in the capacity of a Medium of Exchange, are meant through- out solely in connection with, and in reference to civilised society. This consideration will also enable us to dismiss at once the popular anecdote of Robinson Crusoe, who found a lump of Gold on his island, and made such sorrowful reflections upon the uselessness to him of this discovery. Intrinsic value, and a convenient form to pass readily from hand to hand, rank among the principal conditions to constitute the suitableness of a material to serve as a Medium of Exchange. It is clear that the substances which possess these qualifications in the highest degree must be considered first. The term * We are entitled to claim this Mgli position for Gold, in so far at least as England is concerned, where the Gold valuation prevails, and Silver and Copper coins are looked upon as occupying a secondary position — a subject to which we shall return hereafter. MEDIUM OP EXCHANGE. 19 intrinsic value means tliat the •worth, of the material to which it is applied should be actually inherent in it, independent of any addition to it made by art or labour. Bearing this in mind, we may accordingly at once dismiss from consideration many costly portable objects of art, which owe their value only partly to the mate- rial of which they are made, and in a greater or lesser measure to the art and labour bestowed upon their fashion. The same remark applies equally, for obvious reasons, to all the more perishable productions of nature, however rare and costly they may otherwise happen to be. Among the most valuable substances within the reach of man. Pearls, Diamonds, Precious Stones, and the so-called Noble Metals, may be said to occupy the highest position. We know as a matter of fact that, with due reference to both weight and size, these sub- stances rank among the most costly, and that their intrinsic value is mainly naturally inherent in them, art having bat a secondary inflaence in regard to it. Which of these substances is the most noble and the most durable ? Pearls are deservedly considered of very high value, on account of their rarity and beauty, and also the peculiar circumstances under which their formation takes place. They are, however, easily destroyed, and therefore lack one of the most indis- pensable qualifications to serve for the purpose which we have here in view. The Diamond* (to which, as the very highest * We are quite aware, of cotirse, that the Diamond is simply 20 MEDIUM OF EXCHANGE. representative of Precious Stones, we limit our attention here), is, next to tlie Noble Metals, prac- tically the most indestructible of all the substances on earth. It is the hardest body in nature ; it scratches aU other bodies, and is itself scratched by none. Though, from its lamellar structure it is brittle, and will give way in the line of its cleavage, it will stand, unscathed, the test of the strongest force that can be brought to bear upon it through the agency of other bodies of a size not considerably exceeding its own; and, even where it has to yield to the crushing force of some other hard body, of relatively much greater bulk, the fragments into which it is shattered still remain Diamonds. A Diamond can only be cut or abraded by means of another Diamond, and the powder or dust coming off in this process alone will serve to effect the poHshing of its faces. It absolutely resists the dis- solving or corroding action of the very strongest chemical agents ; even a mixture of the concentrated acids fail to produce the shghest effect upon it. As it consists simply of crystaUised carbon, it will, of course, burn in fire with free access of air, and more readily still when heated even to ordinary redness in a vessel of oxygen, passing off as carbonic acid gas, without leaving a residue ; yet, so long as access of air is ex- pure carbon in a condensed and ciystallized form, and cannot, there- fore, properly be ranked among stones. Still, as it is held in com- merce the most precious of the gems, we think we are justified in taking it here as the highest representative of the class. MEDIUM OF EXCHANGE. 21 eluded, it will bear a very intense teat witliout fusing or suffering alteration. One of tlie most marked and characteristic features of tlie Diamond is its peculiar splendid lustre, whicli surpasses the tigtest brilliancy of aL. other gems, and contributes much to make it a thing of such marvellous beauty. Add to aU this its great rarity, and there is certainly ample to account, in a great measure at least, for the high esteem in which mankind holds the Diamond. Now let us take Gold as the representative of the Noble Metals. Bulk for bulk, and weight for weight, Grold is certainly much less costly than the Diamond ; but, in so far as the virtue of indestructibility is concerned, it may be said to be even superior to the latter, for although it fuses at about 2016 degrees Fahrenheit, the intensest heat attainable fails to other- wise affect it in its nature and properties as Gold; whereas the Diamond, as we have just seen, is absolutely destroyed by fire, being converted into a comparatively almost valueless compound, which no art within the sphere of human ken can change back again into a Diamond. All chemical agents, even the strongest mineral acids, employed singly, are powerless against Gold, and it requires the combined action of two of the most powerful acids — nitric and hydro- chloric — to force it into a chemical union with another body ; but, even in the inferior compound thus formed, the Gold stiU continues to exist, and may be re-obtained in its virgin purity. The same remark applies to the mechanical mixtures or alloys of Gold with other metals ; fi:-om the amalgam which Mercury forms with 22 MEDIUM OP EXCHANGE. Gold, tte former metal is readily separated again by distillation. In ductibility and malleability Grold sur- passes all otber metals. Its beautiful colour, and the bigli polisb wMcb it takes, are otter qualities adding to its value. But, altbougb tbe foregoing considerations migbt certainly seem to afford ample grounds for tbe higli value we set by tliese precious materials, and althougli tbe fact of tbeir being held in such high, esteem by mankind is a matter of daily practical experience, yet, somehow, to many people aU this is not sufficiently convincing to preclude constant recurrence to the same plain question, "Why should comparatively small quantities of mere dead matter be esteemed of such high, value ?" To reply that this estimation is a matter of common consent, based upon general convenience, is really no satisfactory answer to the question, as it altogether fails to convey to the questioner's mind any positive or direct evidence of intrinsic value. There is nothing left, then, but to rest satisfied with the distinct recognition of the fact that these precious substances owe the exalted rank which they hold among the bodies of nature, independently of aU other considerations, to the peculiar material properties inherent in them. They have, in fact, always been held in high esteem from the earliest ages, even long before mankind had begun to enter upon the path of a more advanced civilisation, and when man's knowledge of their nature and properties remained still very imper- fect and defective. We, with the teachings of science to aid us in the consideration of the subject, are therefore MEDIUM OF EXCHANGE. 23 all the more bound to assign to tliese bodies tlie same exalted position among created matters which they have always held from time immemorial. We may even go so far, at the risk of taking too high ground, to advance our belief that Providence has purposely endowed these bodies with exceptional properties to fit them for the uses to which they are turned by civilised man. We do not mean by this to assert that Providence has explicitly pointed out Gold, for instance, as the only proper material for coined money ; but this much is perfectly clear, that a careful comparison of all known bodies in nature leads inevitably to the recognition of the fact that the Precious Metals, and more especially Grold, are the best suited to serve as the common measure of value for all other commodities, and as the medium through which one kind of goods may most readily be exchanged for another. And this fact is indeed practically admitted by man, inasmuch as he uses Grold chiefly in the capacity of Coin. But are we quite sure that this is really and truly the most useful application of Gold? Is it impossible but that other applications may be found for it of still higher importance ? Let us assume, for the sake of argument, that Gold is no longer used for Coin, but that some other material performs its present functions in that capacity. What would then be the value of Gold as compared to that of such other material ? Would it be higher or lower ? That must, of course, depend upon the use- falness of Gold for other purposes ; and, with reference 24 MEDIUM OF EXCHANGE. to this, it -would be difficult indeed to overlook the patent fact that the fine physical and chemical properties of Gold must necessarily fit it for a variety of uses and applications. Were it no longer used for Coin, then there would naturally be much fuller scope given to turn it perchance to better account in a great many different ways. We will endeavour to bring this to a plain, prac- tical illustration. Steam boilers are now made of Iron, or Copper, which, as we all know, wiU only last a few years. Suppose we were to make a steam boiler of Gold, suitably alloyed for the purpose. Being proof against the corroding action of the elements, such a boiler might, within certain limits, and leaving the chance of explosion out of consideration, be practically held fit to last for ever. True, there would be the great objection to the loss of interest upon the capital sunk in the manufacture of the article ; but, on the mere question of comparative usefulness and durability, there could hardly be a doubt that the deci- sion would be in favour of the Gold. And can it be said that we have actually arrived at the final limit of all invention ? The progress of science may at some future period lead to discoveries necessitating the use of even so noble a material as Gold for many important ends, of which we at present have as little notion as our forefathers had of the use of steam as a motive power. It is, indeed, in this very direction that there may before long arise a necessity for a new apphcation of Gold on a large scale. Our age is in active search of a new motive power of much greater force than MEDIUM OF EXCHANGE. 25 steam. Let us suppose a power of the kind to be discovered in some explosive compound, so corrosive in its action upon all other metals, and requiring the employment of so perfect a conductor of heat, that nothing but Gold will serve the purpose of a generator or boUer. It is certainly within the hmits of probability that the motive force of this new agent may be so vast, and yet that the employment of Gold in the construction of the machinery may enable us to keep it under such complete control, and make such perfect arrangements, that the great and hitherto apparently Utopian scheme of flying machines would no longer remain impracticable, and a journey from London to New York would then take as many hours as it now takes days. This idea, speculative and even wild as it may appear to be, is yet not entirely novel. What would be the value of Gold then ?* "We have here only pointed out at hazard one * It is only fair that we should quote here an opinion the very- reverse of ours. Mr. Hankey, in his ' Priaciples of Banking,' page 4, says, " Having mentioned Gold, I -will merely here say, with reference to that particular commodity, that I know of no other metal which can be accumulated with less general capacity for usefulness than Gold. Gold certainly possesses some merit as an article of mer- chandise, but if its use for coinage be set aside, I believe that it is the least useful of any metal or mineral production." We are afraid that Mr. Hankey has not gone deeply enough into this question. In reference to Silver, for instance. Science has, within the last twenty years, found a new and important employment for this me(al in Photography, which is now consuming a very large and still conti- nually increasing quantity of this material, likely to afiect, before long, its value in the market. 26 MEDIUM OP EXCHANGE. direction in whicL. tlie peculiar properties of Gold may before long necessitate tte employment of this metal for a new, most important end. But may we not hope that, with the continued progress of mankind, there will, in centuries to come, be discovered many other, perhaps still more important uses and applications of Gold ? In the foregoing remarks we have in some measure considered the Diamond and Gold jointly, each as the type of a class. We will now proceed to show that the Diamond, however, is not a suitable body to serve as a proper Medium of Exchange, even were it only for certain mechanical objections. Leaving altogether out of con- sideration the question of price, which fluctuates with the supply of the article and the demand for it (the supply and demand of Gold, and the supposed effects on the value of this metal, wiU form a subject for later inquiry), it is quite clear that the Diamond is disqua- lified for the purpose of serving as a Medium of Exchange, for the foUowing reasons : it is found in most irregular proportions; it cannot readily be divided into parts ; it is hable to fairly successful imitation ; and it cannot be stamped or marked with a visible patent sign of its exact value ; whereas Gold, on the other hand, can be manipulated with the greatest facility ; it can be melted, alloyed, and tempered; it can be hammered and drawn out ad lihitum, and it is sus- ceptible of infinite subdivision, without detraction from its value. Pieces can be made of it of precisely the same size and weight ; its real character is very easily detected by the test of weight, as well as by other MEDIUM 01" EXCHANGE. 27 tests, and it can be so impressed with figures tliat tlie most ignorant may know at a glance its numerical value as Coin. Silver, of which, we shall say more in another chapter, has certain characteristics which fit it for the same purpose, as we ah. know. It serves, there- fore, also to a great extent for coinage. But Gold and Silver are not the only ISToble Metals. Platinum, Palladium, Iridium, and several others, belong equally to the same class. Platinum is even heavier than Gold, and almost as noble a metal, although it is greatly inferior in lustre, and is in point of colour only a little whiter than iron. One of the great drawbacks to the employment of Platinum for monetary purposes is the extreme difficulty of melting it, as it will fuse only before the oxy-hydrogen blowpipe. StiU this difficulty might be considered disposed of in a measure by the property of the metal of welding, like iron, at a very high temperature. But there is yet another, and a more important drawback — viz., paradoxical as it may appear, its comparative scarcity. Whilst we can count Gold by hundreds of milhons of ounces, we can count Platinum only by hundreds of thousands. Gold is, therefore, say a thousand times more plentiful. If Platinum were found in quantities sufficiently abundant for this pur- pose, it might be used as money. The Russian Govern- ment tried in fact to introduce a Platinum coinage ; but the experiment failed. Platinum fetches about one-sixth of the price of Gold in the market. Palladium is even more rare than Platinum ; and Iridium, which 28 MEDIUM OF EXCHANGE. is scarcely inferior to the Diamond in hardness, is still more refractory than Platinum, and much less weld- able, and there are, moreover, probably no more than a few hundred ounces of it in existence. Now, it must appear quite clear that the material intended to be used for monetary purposes should pos- sess the requisite conditions as perfectly as is attain- able in nature ; and when, therefore, a material is defi- cient in one or other of these conditions, it is thereby necessarily disqualified for employment as Coin. These remarks, if they do not exactly demonstrate with mathematical precision that Gold and Silver are the right and proper materials for Ooiaage, must at all events be held to afford powerful arguments in support of this conclusion, which the undoubted fact of then- holding this position can, of course, only tend to con- firm and strengthen. Gold appears to possess these necessary quahfications in the highest degree ; Silver follows next in order. 29 CHAPTER III. OUEEBNOY. a OLD is then the most perfect of the Mediums of Exchange in actual use in the civilised world, and its superiority in this respect is so absolute that aU other practical substitutes are governed by it, no matter whether they be of intrinsic or of conditional value. The general Mediimis of Exchange ia use among civQised nations may now be given as consisting of — Grold coins . . . - SUver coins . . i Copper coins . . > The Currency. Bank notes, or \ State notes . . ^ BiUs of Exchange. Gold, Silver, and Copper coias, and Bank notes, pass cv/rrent from hand to hand without restrictions ; they are therefore called Currency. Bills of Exchange are' not Currency ; their trans- mission does not take place in the same free and simple manner ; but they also serve, under certain restrictions, as a Medium of Exchange. The Mediums of Exchange comprised here under 30 OUERENCY. tte general term Currency may be subdivided again into Gold coins . . . . ") Silver coins . . . >• Metallic Currency Copper coins . . . ) Bank notes and ) -n n State notes . . .) Paper Currency. and, upon the ground tbat in England Gold forms tte basis of valuation, into — Gold coins . . . Free Currency. Silver coins* . . . "^ T, ^i , 'j ' ' r Conditional Currency, isank notes, and C •' State notes . . .J METALLIC CURRENCY. — There is reason to be- lieve tbat Gold, Silver, and Copper bave generally stood in pretty mucb the same relation to each other with regard to their proportionate value as they do now. In so far as Gold and Silver are concerned, at least, the fluctuations of the proportionate value of these two metals may be assumed to lie within the narrow limits of a few per cent. But the case is somewhat difierent with Copper. This metal, though not belonging to the class called noble, holds yet a certain rank among the inferior metals, on account of its many valuable quali- ties, and its general usefulness. In some countries, and in some ages, it has been more extensively used than it is now in Europe. In the East and in China * In certain countries Silver is free currency, and Qold condi- tional currency, as will be shown hereafter. OUREBNCT. 31 Copper, Brass, and even Iron coins, still form an important part of the Currency. In Europe, towever, "we now look upon Copper Coins simply as tokens, as is clearly proved by the fact, for instance, that a few years ago tke wliole of tlie old Frencli, and soon after all the old English Copper Currency, were called in, and new coinages of the same denominations, but of little more than half the weight or size of the former pieces, were issued. The intrinsic value of these tokens falls accordingly very short of their deno- minational value. In England Silver coins are also tokens, but their intrinsic metallic value is compa- ratively much higher than that of Copper tokens, although it falls still below the actual market price of Silver. But it may be asked, if these Silver or Copper tokens do not possess their fall denominational metallic value, yet pass as money, would not this rather seem to militate against the assumed absolute supremacy of G-old ? Here we have the justification of our division of the Currency into Free Currency and Conditional Currency. In England a law exists, called the law of legal tender, in accordance with which Gold coin is legal tender for any amount ; whilst Silver coin is legal tender up to forty shillings, and Copper up to one shilling only. So a creditor, whilst bound to take all the Cold tendered him in discharge of his claim, can refuse to receive payment in Silver if the sum tendered in that coinage exceeds two pounds, and in Copper if it is more than twelve pence; and he can accordingly compel payment in Gold of any sum exceeding two 32 CUEEENCY. pounds sterling. He may also be paid in Bank of England notes, wMcli he is equally bound to take. But as the Bank itself has the right of refusing to receive payment ia its own notes, this description of Currency too belongs to the conditional. It will at once be seen that this law of legal tender is an eflfectual bar to any attempt to displace the supremacy of Gold in England, and to use iustead the conditional currencies of Silver and Copper. The values represented in Paper Currency and Bills of Exchange, are expressed in the denominations of the metaUic Currency ; and all other securities and values — State bonds, shares, lands, houses, and every other description of property and service — are also measured and expressed among civihsed nations in the denominations of the metaUic coins of the country. It is one of the special objects of this book to give as much information as possible upon everything con- nected with metaUic Coinage, as wiU be seen hereafter in the chapters on Bulhon, Gold, Silver, Mining, Melt- ing, Assaying, Coining, &c. But in this present chapter we will, in the first place, discuss the descrip- tion of Currency known as Paper Money, as a proper understanding on this subject is a matter of some importance in deahng with the Exchanges with certain foreign countries. PAPER CURRENCY — This description of current money, in contradistinction to which metaUic money is appropriately called Haed Cash, plays a highly important part in most of the systems of Currency. CUEEENCT. 33 "We hear of Bank Notes as good as Oold, of Paper Money depreciated in value, and of Notes that have become valueless. "We know — as a matter of history — that one of the causes leading to the demoralisation of French society in the last century was fairly im- putable to the profuse issue of John Law's notorious Mississippi and other similar Bonds — followed, at a later period, by a veritable deluge of Assignats. Modem history affords us the instance of the Confederate Notes, which are now absolutely valueless, whilst the Italian, Russian, and United States Paper Money is depreciated. But we know, on the other hand, that Bank of England Notes, as well as the pre- sent French and many other Foreign Notes, are looked upon as of the same value as Coin, and that they are quite safe. Occasionally we also hear of suggestions for an extension of the Paper Currency, or of some other scheme for the creation of a larger amount of Paper Money. Indeed, whenever Money is scarce, it is one of the most common things to hear the question asked, " Why does not the Government issue Paper Money, or give lawful authority to bankers and others to issue Notes marked with a Government stamp, as evidence of their safety?" &c. This suggestion has the barren merit of proposing the issue of Notes invested with the Government stamp as a kind of presumptive evidence of their goodness; but it fails in this most important particular, that it makes no provision for the ultimate conversion of the Notes into actual value; and without that provision the mere legislation of the issue by the stamp cannot have the least practical effect. 3 34 CURRENCY. A brief investigation of the principle upon which. Paper Money may properly be issued will therefore be useful. There are two descriptions of Paper Issue — ^viz., BANK NOTES, or Notes issued by banks, under the authority and with some participation or guarantee of the Government; and state notes, issued by the Treasuries of the State (these also are frequently issued through the agency of banks). Both Bank Notes and State Notes may be regarded on the same footing in their offices and fanctions as part of the Currency. Now each such Note carries on its face the promise to pay to the holder, or bearer, on demand, or upon presentation, a cer- tain amount of MetaUic Money. Upon the faith of this promise the Note becomes current, and is assumed to stand va. the place of Hard Cash. The simple plain promise to the bearer that, in exchange for the piece of paper he holds, he may at any time, at the place designated, receive Gold or SUver (as the case may be), admits of no quahfication. Intro- duce a quahfication on the face of the Note, pro- mising payment otherwise than on demand, or in any other value than in MetaUic Money, and the worth of the Note falls at once. We have, therefore, to deal with the plain and dry fact of this promise ; and the holders of Notes must have the absolute right, individually and collectively, of demanding Hard Gash for their Notes whenever they choose. Now here the question arises, — Is this promise to pay in Coin safe to be fidfilled under aU and any circumstances? The respective CUEEENOT, 35 degrees of the certainty that this promise will be kept may be illustrated by the following classification of Paper Currency into four descriptions : — 1st, Bank Notes made absohitely safe, by being issued only against an equivalent amount of Bullion held by the issuer. 2nd. Bank Notes made good for aU practical pur- poses, by being issued partly against JjuUion held by the issuer, and partly against Government and other valuable securities. 3rd. Bank or State Notes depreciated in value, issued against a small reserve of Bullion, but resting on the Credit of the country generally, and on the Strength and good Faith of the Government. 4th. State Notes issued almost entirely or alto- gether without a Bullion reserve, and under the bare Guarantee of a weak or tottering Government, which are already valueless, or threaten to become so. The riBST CLASS of Notes assumed here is only imaginary ; for there are no Bank Notes issued upon that system. If there were, the security offered by them would seem absolute in theory as well as in practice. A Bank, for instance, might hold ten millions in Gold, and issue ten miUions of Notes against them. The Gold being specially assigned to serve as security for these Notes, and resting dormant in the vaults of the Bank, to be paid away only against the production of the pieces of paper by which it is represented, there would be a complete balance between the two. If all 36 CTJERENCT. the Notes were presented at once, payment covild be made at once, and no question of liability would remain on either side. So perfect and safe a system of con- vertibility has frequently been suggested in England, and there is much to be said in its favour.* In the first place, on the Bullion deposit there would be the saving of the expenses of Coinage, and on the Coin lying inactive in the coffers of the Bank there would be the saving of the usual loss by abrasion or friction ; and, in the second place. Bank Notes constitute a far more convenient and portable kind of Currency, espe- cially for heavy sums, than Coin; and for all other practical purposes such Notes would seem to be as good as Gold. But even to this apparently so safe basis of con- vertibility at least a few theoretical objections worth mentioning may be started. Although Bank Notes are certainly more portable and more convenient, more especially for large payments, yet they are, on the other hand, also more hable to destruction than Me- tallic Money. They may also be more or less success- fally imitated by forgery, — a risk which, much as it is lessened now-a-days by superior manufacture and engraving, has still to be taken into account. "We must not lose sight either altogether of the expenses * We may here remark that in Hamburg the Bank holds a stock of Silver BulUon on something like the principle here suggested ; however, it issues no Notes against the same, but in heu thereof it keeps accounts with Merchants, and transfers the respective owner- ship in this stock of Bullion from one to the other. (See Hamburg and Mark Banco.) OUEEENCY. 37 entailed by the manufacture and issue of Bank Notes, wMcli would hardly be balanced altogether by the saving of the expenses of Coinage on the other hand ; for a certain amount of Coined Money would still be required under any circumstances. Then there are certain other contingencies which must be taken into account in comparing the respective worth of a Gold currency and a Note Currency. A war or a revolution might break out ; an enemy might invade the country, and might possess himself of the treasure in the Bank, and carry it away. What wotdd then become of the certainty of the convertibility of the Note ? In England we may now laugh at the very suggestion of such a contingency ; but however remote the risk, there is no bHnking the fact that it still really does exist, by however small a fraction it may be theoretically ex- pressed. In other countries, less secure than England, the risk will be more appreciable. It is partly for this reason that threatened wars and revolutions exercise so great an influence on Paper Currency. As the danger draws near the Note holder becomes alarmed, and presents his Notes for payment, preferring to have his Gold in his own possession rather than entrust it to any other custody ; and in spite of aU. principles of pohtical and social economy propounded and ex- pounded to him, he prefers to hoard it. The desire for the actual substance, for the material of intrinsic value itself, as afibrding the only absolute guarantee in the end, is too strong ; which again shows the supe- riority of Gold over all other Mediums of Exchange. "We refer to this natural tendency of the Note holder 38 CUREENCY. here, in connection witli our assumed first-class Bank Note system, as a mere theoretical objection of perhaps no great weight under ordinary circumstances ; but it becomes intensely practical under actually existing conditions of lesser certainty. TliG SECOND CLASS OP Bank Notes in OUT scale of gradation, which we haye designated as good, is repre- sented by the Paper Currencies of the more prosperous states, such as England, France, Grermany, Holland, and Belgium. It rests upon the basis of a combination of Precious Metals and other Securities, upon the joint value of which the issue is made. The Bank of England, for instance, under the Act called Sir Eobert Peel's Act, has the privilege of issuing Bank Notes against the amount of Buhion in its vaults, and also against an additional amount of fifteen milhohs sterling, which the British Grovemment owes to the Bank.* Thus if the Bank of England has (say) twenty millions in Bullion in its cellars, it may issue against this Bullion, and against the fifteen mil- lions Government liability, thirty-five millions in Notes. The Bank Note promises payment in Gold ; the Bank has thus issued thirty-five millions in Notes for which only twenty millions in Gold are in its hands, or about fifty-seven per cent. If the stock of BulHon should increase to thirty millions, and forty-five millions in Notes be thereupon issued, the proportion of the * In this sum of fifteen millions certain other securities held by the Bank are included. CUBEBNOY. 39 Notes actually covered by Gold -would be about sixty- six per cent. ; but witb a decline of the stock of Bullion to ten millions, tbe proportion would be only forty per cent, in an issue of twenty-five millions in Notes ; and it would fall to twenty-five per cent, if the stock of Bullion were reduced to five millions, and an issue of twenty millions were made in Notes. In the face of this, the promise to pay all Notes in Grold would seem somewhat paradoxical, and slightly illusory ; and, iu- deed, the uncompromising opponents of Sir Robert Peel's Act do not scruple to assert that the Bank of England is generally in a state of insolvency. If the term insolvency as used by them be meant to express the Bank's inabihty to pay all its Notes in Grold at once, they may, strictly speaking, not be altogether wrong in this extreme assertion of their views ; but there are other considerations in the case which effectually counterbalance this allegation. In the first place, the Government has guaranteed the fifteen mil- lions over-issue which is not actually covered by Gold. What is the value of that guarantee ? So long as the Enghsh Government remains as firm as it is now, it could easily, by loan or otherwise, raise that amount in Gold, and pay the Bank therewith, thus actually covering this over-issue of Notes by Gold ; or it could issue Stock bearing interest, and sell the same, taking in payment Bank of England Notes, and so withdraw them from circulation. Even in times of internal commotion and foreign complications, the British Government could raise money on its credit; and in case of urgent need, as the supreme authority of the 40 CUERENCT. nation itself, it miglit even raise money by extra tax- ation payable in Gold. The question then would be, — " Is there — ^leaving the stock of Bullion at the Bank out of consideration — sufficient Gold in the country, or can the industry of the people draw enough from abroad, to produce fifteen millions at the bidding of the authorities ?" The people must under the cir- cumstances of course be willing to support the Government ; should they, by revolution or otherwise, oppose or resist the call made upon them, or should the country turn out to be too poor ia Gold to pay the demand, the forced taxation fails of necessity. In England we fortunately have an acknowledged good Government, in splendid credit, and the wealth and industrial power of the nation are undoubted. This shows how important a bearing the stability of a Government, and the prosperity of a people, have upon the question. There are other safeguards besides the guarantee of the British Government. The Bank of England has a capital of fourteen mUlions sterhng, the securities for which may be realised and converted into Gold ; so that, with the aid afforded to the institution by the law of legal tender (which compels every body, except the Bank itself, to receive Bank Notes in payment), it may be looked upon as pretty well secured. And the supposition that the Notes should be presented all at once, without giving the Bank time to realise, is an extreme one, which may fairly be dismissed fi:-om con- sideration here. We in England have good reason to attach perfect CUREENOY. 41 faitli to tlie convertibility of our Bank of England Notes, and tlie common saying — tliat they are as good as Gold — is practically quite correct. The principle of making the amount of the Notes to be issued by the Bank of England partially de- pendent upon the amount of Bullion in its vaults is highly commendable,. although, as the additional fifteen millions against Government securities are fijxed issue, the relative per centage of actual metallic means of payment, dependent as it is, m a measure, upon the exports and imports of Treasure, will occasionally lead to a disturbance of the proper balance. But we may look upon the actual presence of Gold in the Bank as dependent, not only upon the profits of industry and commerce, but also, to some extent, upon the prudence or imprudence of EngHsh investments in enterprises at home and abroad. Accordingly, when the amount of Currency becomes contracted, a natural check is exercised upon overtrading and speculation.* We may then, upon the whole, be satisfied with the system as it is now — at all events until a better one * During the heiglit of a commercial crisis the BuUion of the Bank generally falls very low, which naturally leads to a panic in the Money Market, attended with great commercial distress. From their suddenness and severity (and very sndden and severe it must be admitted they are), these events cannot but exercise a most adverse influence upon the general prosperity of the people. This subject would involve a long discussion on the Bank Act, for which, however, we have no space to spare here. We also think it unne- cessary to say anything in this place respecting the issue of Bank Notes by other English, Scotch and Irish Banks, as limited by law. 42 CUEEENOT. be substituted ; for, if we may be permitted to borro-w tbe term used by its entbusiastic advocates and admirers, it is eminently sound. On looking again, from anotber point of view, at tbe position of tbe Bank of England, wliicb, with a stock of only twenty millions of Bullion in reserve, and fifteen millions of Grovernment Securities, is empowered to issue tbirty-five millions of Money in Notes, tbe question . naturally presents itself: — "If we can create fifteen millions of extra money on sucb easy terms, wby not make tbe sum twenty millions, or tbirty, or fifty ? Grovernment surely is good enougb for tbe larger as it is for tbe smaller issue !" We do not pre- tend bere to appraise and fix tbe amount for wbicb tbe Government of Great Britain may be beld to be actually good — in tbe commercial sense of tbe word ; but we very mucb question wbetber tbe Bngbsb Government itself could, ia times of great pressure, attended witb scarcity of Gold, force from its own constituents — ^tbe people — an amount of fifty millions sterHng in Gold, wbicb yet would be absolutely required to enable it to perform its own part of tbe engagement, to take up and pay in bard casb tbe fifty millions issued in Notes. We cannot say wbetber it would, under sucb circumstances, succeed in squeezing even tbirty millions out of tbe people ; aU we know for certain is, tbat at present it undertakes to pay tbe fifteen millions over-issue if called upon to do so. In Umiting its liability to tbis amount, tbe Govern- ment may certainly be considered to act upon a proper and prudent principle ; for it may pretty safely be CUEEENCT. 43 taken for granted tliat, besides the Bullion reserve in the Bank, there is always sufficient Gold Ciu'rency in circulation to produce, at an extreme pinch, by the power and the credit of the Government, the fifteen millions wanted to pay off in Coin all the Notes of the fifteen millions over issue. This limit of the over-issue to fifteen millions may simply be accidental, or it may be the result of a careful consideration and calculation; but there can be no doubt that upon the whole it works weU.* Whenever a crisis occurs, and both Gold and Notes are scarce, we hear the cry for more Money raised, and Government is urged to sanction a larger issue of Notes to supply the eager demand. Every argu- ment is pressed into the service to prove that the requirements of the age and the expansion of trade impe- * The most conservative of our Knanciers regard even, tliese fifteen millions of Government Notes in the light of a mischievous surplns of cnrrency, and impute to this over-issne of Notes the periodical panics which visit ns in times of mercantile distress, They contend that if we had a Currency foxmded on Bullion alone, the exportation of Gold or Silver would not involve the risk, at all events, of disturbing the proper balance of our Currency System ; whilst, under the present arrangement, the exportation of Bullion in hard times cannot but tend to raise apprehensions in the pubHc mind lest the Bank should not be able to pay its own Notes, and thus to create a panic, in great aggravation of the general distress ; which panic, with its disastrous results, cannot justly be imputed, under such cii-cumstances, to overtrading and imprudent specu- lation. These Financiers see something arbitrary and unmeaning in the present privilege of the Bank of England, and advocate the falling back upon our "first class" plan — viz. issue of Notes based solely upon Gold. 44 CURKENOX. ratively call for an increase of Currency. It was so in 1866. Last year, in 1867, not a word was heard about tHs necessity of an increase of Currency, for tte Bank was not only oyerstocked witli Bullion then, but its Notes in reserve were nearly equal in amount to tbe fifteen millions guaranteed by GrOYernment, wbicb. cer- tainly shows that the requirements of the age and the expansion of trade should not be judged by the contin- gencies of a single year. Proposals have also been made for a double Paper Currency to be issued by the Bank — ^viz.. Bank Notes based exclusively upon the stock of Bullion (our own first class plan here), and Bank Notes based expressly upon the guarantee of Grovemment. It is argued that, supposing this latter description of Paper Money to suffer depreciation fi^om distrust, it might still continue to serve as a Currency, even though it should be at a discount of fifty per cent. The proposers of this scheme clearly overlook the disturbing action which the intro- duction of such a system would be sm-e to exercise upon the healthy operations of trade, as well as the im- portant fact that no provision is made in their project for the ultimate conversion of their guarantee Notes into actual value. "We, for our part, beheve in the wisdom of the present system of the Bank of England, which rests the basis of its issue upon the combination of the BuUion of the country, the substantial mark and token of its prosperity, with the credit of the Government ; restricting the latter factor, however, within prudent limitations. We are of opinion also, that though there might be room for rational improvement in the present CUEEENOT. 45 system, experiments in matters of this nature are too hazardoTis to be lightly attempted unless called for by absolute necessity. "We hope, then, that the English Government will listen to no plan tending to extend the Paper Currency of the country at the expense of lessening the proportion of Bullion which now serves as a fair basis.* The system of the Bank of France maybe said to be even more secure than that of the Bank of England, as the issue of Bank of France Notes has a comparatively much larger foundation of Bullion, the French Govern- ment owing only four millions to the Bank, instead of fifteen millions as is the case in England. The other good Continental Bank Notes which pass upon a par with the Metallic Currency, are also based on systems con- nected with Banks and State Treasuries, and suflB.ciently soHd to invest the Notes with that character of safety which alone can enable them to perform all the offices and functions of full-valued money. * The only really useful improvement "wliich may be suggested in reference to the Bank of England Notes is the issue of a £1 Paper Currency. Formerly the Bank issued £1 Notes, but now the smallest amount is £5. It may fairly be taken for granted that the issue of £1 Notes would have the beneficial result of bringing a good deal of the present Gold coiu back into the coffers of the Bank, preventing thus the wear of the coin. It might also be more convenient to the public. In other countries, quite or nearly as " sound" as England, Notes are issued for amounts m^uch less than £1. Our Bank authorities, no doubt, act upon what they consider a prudent poKoy ; but it is not clear whether an alteration of the system in this respect might not serve to bring out convincingly the advantages of £1 Notes. 46 CUEEENCT. The foUowing Bank of England statements show the condition of the Bank at two different periods : — Bauk of Bnglaud, IStli November 1857. Issue Depa/rtmerd. LIABILITIES. £ Notes Issued ...22,554,595 ASSETS. Govemment Debt Other Securities ... Bullion £ 11,015,100 6,459,900 6,079,595 £22,554,595 BcmJdng Depart/ment. £ Proprietors' Capital 14,553,000 Rest 3,433,500 Public Deposits ... 5,483,881 Other ditto ... 13,959,165 Seven Day's BiUs, &c. 829,544 £38,259,090 Govemment Securities 6,407,134 Other ditto -{30,299,270 Bills Discounted ... J liTotes 1,148,185 Gold and Silver Coin 404,601 £38,259,090 Thus, against 22^ millions in Notes, issued by the Issue Department, there were at that time (the great panic of 1857) only 6 millions of Bullion in hand to pay the Notes with, or ab^'ut 27 per cent. There was the sum of £1,148,185 in Notes ia the Banking Department in Reserve, les.^ening to that extent the amount in cu'culation ; but these were held as against liabilities. The position of the Bank of England Notes' Issue was then yery weak, and the Government had to come OUERENCT. 47 to the rescue by suspending the Bank Act, and autho- rising an extra issue of £2,000,000 in Notes. Bauk of England, 20th November 1867. Jsswe Department £ 11,016,100 Other Securities ... 3,984,900 (Total £15 miUions.) BullLon 21,087,615 LIABILITIES. £ Notes Issued ... 36,087,615 ASSETS. Government Debt 36,087,615 Bomlcmg B&pwrimieml. Proprietors' Capital 14,558,000 Rest 3,070,618 Public Deposits ... 6,053,907 Other ditto ... 19,053,683 Seven Days' BiUs, &c. 605,298 £42,336,606 Government Se- curities ... Other ditto Bills Discounted . Notes . 12,319,203 ■ 1 16,680,990 . 12,187,700 Gold and Silver Coin 1,148,613 £42,336,506 Against 36 millions in Notes issued by the Issue Department, the Bank held at the time 21 millions in Bullion, or about 59 per cent. But, in the Banking Department, there were in Reserve (lying there idle), £12,187,700 in Notes, and £1,148,613 in Coin, to- gether £13,336,313, not in circulation, which, deducted from the £36,087,615 Notes, leaves only £22,751,302 in actual circulation, against 21 millions Bullion, or about 94 per cent. The position of the Bank was consequently very strong at the time. 48 CUERENCT. The position of the Bank of England is thus always placed openly before the Public in the Weekly State- ment of the two Departments, the Issue and the Bank- ing. ' In estimating the position of the Bank from these Statements, the Items of Notes and Coin in Reserve must be taken into account. The following statements of the Bank of France at the same periods, will famish a comparison. The Bank of France has no separate Issue Department like the Bank of England. ending 12th November 1857. ASSETS. £ BuUion 7,581,796 Bills Discounted ... \ Advances on Bullion >• 26,945,764 &c 3 Advances on Public -n Funds, Shares and i 2,499,935 Debentures ... ^ Government Debt 2,000,000 Government Stock 2,606,804 New Bank Stock, I „ , Bauk of Fraijce for Week LIABILITIES. £ Notes Issued . 23,250,392 Post Bills, &c. .. 406,337 Deposits 9,001,426 Treasury Balance Reserve ... 2,895,078 1,044,230 Profit and Loss . . 797,366 Capital 7,300,000 £44,694,819 not yet settled ... Premises !,686,936 374,584 £44,694,819 The amount of BulHon in the vaults of the Bank at this time was thus about 33 per cent, of the Issue of Notes. This was during the commercial panic in England, which necessarily affected the French Bank. It is, however, worth remembering that beyond this adverse influence there was no crisis in France at that time. CUREEKCT. 49 Bank op Fbance, for Week ending 27th December 1867. LIABILITIES. £ Notes Issued ... 44,902,229 Post Bills, &c. ... 1,343,988 Deposits 17,070,815 Treasury Balance . . . 1,830,235 Reserve 1,044,230 Profit and Loss ... 694,830 Capital 7,581,791 £73,967,618 ASSETS. £ Bullion 40,609,572 BUls Discounted ... 19,863,756 Advances on Bullion") „„„„„„, [ 3,700,961 &o J Advances on Funds, •> Shares and Deben- [ 8,503,500 tures ... ... } Government Debt 4,000,000 Government Stock 1,958,779 Premises 331,050 £73,967,618 The proportion of the Bullion to the Note Issue was then above 90 per cent. The GoTernment debt is only £4,000,000. The position of the Bank of France was, according to this statement, much stronger at the time than that of the Bank of England. We now come to the third class of Paper Money, known as Depreciated Currency. The countries where Paper Issues are at the present time depreciated are, in Europe, notably Austria, Russia, Spain and Italy ; in the Western World, some of the smaller Republics, and the great Republic of the United States. In these countries Gold is worth more than Paper Currency ; in the United States, for instance. Gold was quoted in November last at 139, which means that 100 dollars in Gold are worth 139 dollars in Paper Currency, or thirty-nine per cent. more. In Austria the pre- mium on Gold varies from twenty to fifty per cent. 4 50 CUERENCT. (towards the close of last year it stood at about thirty per cent.) ; in Kussia it varies from ten to twenty per cent. ; in Italy about the same. The fluctuations in the value of Gold in these countries are closely con- nected with the varying phases of their commercial prosperity, and with the internal and external changes in the political horizon, upon which commerce and wealth, as well as the stability of Governments, ulti- mately depend. The over-issue of Paper Currency is either caused by the inferior industrious and mercantile condition of the country (frequently aggra- vated by unwise acts of the Government in reference to the trade of the world), or mainly, and generally in the first instance, by the actual necessities of the Government. Requiiing very large sums of Money for War or other purposes, and finding that the country cannot, even by forced taxation, be made to yield suffi- cient Coin, for the very simple reason that there happens to be in circulation only a fraction of the large amount so suddenly wanted, — and having besides exhausted its borrowing powers in the Money Market of other countries, the Government is forced to have recourse to the issue of Paper Money, either direct from the State Treasuries, or through the Medium and Agency of Banks. State Notes of this kind carry upon their face the usual dry promise to pay the amount stated in cash to the bearer or holder on presentation or demand. So long as the credit of the Government remains pretty good, and prudent arrangements have been made respecting Bullion reserves, to secure the conver- sion of the Notes into Coin under certain circumstances, CURBENCT. 51 the system is elastic enough to permit of a compa- ratively wider range than is required for good Notes of our second class. So soon, however, as the issue breaks these elastic bonds, and the public become aware that it is impossible for the issuer to pay at the time, and that the fulfilment of the promise to pay has to be waited for till some future period, the contingency even of the deferred payment being dependent upon the fature prosperity of che nation, and the stability of the political organisa^jion, confidence in the safety of the Notes is at once destroyed. With an increasing issue of Notes the Treasuries and Banks furnish actual proof of their inability to cash them ; the Government forbids the export of Grold, and declares its Notes legal tender; creatiag thus a so-called /orcecZ Paper Currency. The Bullion basis is set aside, and Gold is turned into simple merchandise, in spite of the weU-recognised fact that it is the true standard of value. The degree of faith still reposed in the Government by the people, and inspired by the hopes of a future revival or improvement of Industry and Commerce, is expressed in the marketable sense, by the per cent- age rate of , depreciation of the Paper Currency, and the premium which Hard Cash, or Bullion in all shapes, brings in the market. Operations of over-issue of this kind by State Governments, or Communities generally, closely re- semble the borrowing of money by individuals upon promise to repay the loan at some future time. The charges of Interest — sometimes in both cases of a usurious character — are in the case of State operations 52 CUERENCT. of this kind represented by the greater or lesser depre- ciation of the Paper Money, and the effect which such depreciation has upon the home and foreign trade of the country. An over-issue of Paper , Money in a country may apparently create a momentary flushness ; indeed, in the United States, for instance, during the late civil war, the flood of Grreenbacks pouring into the Market stimulated the home trade, and afforded an easy means of amassing wealth to those who knew how to profit by the circumstances of the times. In the end, however, a people will find the obHgation of re- paying Capital and Interest just as onerous and diffi- cult of fulfilment as an individual may find it ; and if the hopes of the fature, resting on an improved state of Trade and Politics, are disappointed, National Bankruptcy becomes imminent. An over-issue of Paper Currency, no matter whether brought about by political and financial mis- management, or forced upon the Government of a State by absolute necessity, is therefore not only detrimental to the present interests of a country, in so far as its Exchanges with other States are concerned, but it involves, like a continual discount and renewal, a heavy charge on the future prosperity and resources of the State. In Italy the forced Currenqy is only a few years old, but it is continually on the increase. In Spain the state of things is so uncertain that the relative value between Paper Money and Metallic Money can no longer be fixed with any degree of accuracy. As regards the Rouble Notes in circulation in the Russian Empire, it is stated that the Imperial Grovernment itself is not aware CUREBNCY. 53 of tlie actual totals issued, and lias thus lost control over its liabilities in reference to the same ; morever, a large quantity of successfully forged Notes is in circu- lation, which the authorities hesitate to suppress, fear- ing a further disturbance of credit. If this be true, we may soon hear of something more serious than a mere further depreciation of Russian Paper Money. Austria offers one of the most remarkable instances of the position of an over-issuing State. For many years Bankruptcy has hung over her like the sword of Damocles ; yet she still stands erect. Gold and Silver Coins have almost entirely disappeared from the land, and Paper Money reigns paramount, in Notes from thousands of florins, down to the value of a few pence. Indeed, the Austrians seem almost to have solved the problem of dispensing altogether with a Metallic Currency. Their intercourse with other nations is hmited, and their Industry is shut out from the markets of the world. Yet they do not seem to be poor ; they have a full measure of aU the luxuries and refinements which other nations enjoy. The Austrian system of Paper Money seems to drag on its existence on the faint hope that, at some future time or other, a suc- cessful movement may be accomphshed to regain a sufficient stock of Bullion. A day of reckoning, how- ever, must come, sooner or later, for Austria as well as for other States that are equally in a condition of almost hopeless financial confusion and embarrassment. It needs only — and with the ever-increasing liabihties which certain States load upon themselves in our times such an event is not unlikely — that one of these 54 CTTBBENCY. States should become Bankrupt, wten tlie wliirlwind of the panic created thereby "would be sure to blow down all the rest. Then we may expect to see revo- lution, civil war, and anarchy taking the place of the peaceful interchange of benefits upon which civilised society is founded. The means of averting such a catastrophe are, first and foremost, the strictest economy on the part of the Government. Every effort should be made to reduce the Expenditure of the State within the narrowest pos- sible limits, and to secure an excess of the Revenue over it, applying the balance to the gradual withdrawal of the fictitious Currency from circulation. In the second place, Government and People should heartily luiite in fostering those Industries, more especially, of which the products can be beneficially exported, thus attracting Bullion into the State. In this manner. Government, Industry, and Commerce would aU regain strength and credit, sufficiently to enable the State ultimately to command the necessary confidence, either for the Consolidation of its Liabilities into a properly- regulated State Debt, or for the re-establishment of a proper far between Paper and Metallic Money. Let us hope that the Austrians wiU be able to accomphsh this much desirable end. At least they have an example before them in — England. During the wars of Napoleon, this country was called upon suddenly to raise enormous Sums of Money ; and so severe was the strain at the time, that for twenty years Specie payments were suspended, and Gold stood at a premium of forty per cent. In the CUEEENCY. 55 years of peace which followed, Retrenchment of Expen- diture — but, above all, the indomitable Industry of the Nation, which commanded the markets of the world ; the insatiable thirst for enterprise which, aided by this Industry, and strengthened by the influence gained in the victorious struggles, drew Bullion to the country — enabled the Statesmen of England to convert the Floating Liabilities into a National Debt, and a Bullion basis was regained sooner than even sanguine people had expected. It is true, that this National Debt — ^^on which we of the present generation, who have inherited this burthen from our forefathers, stUl continue to the present day to pay the Discount or Interest, and even are not altogether without some hope of being yet able some time to pay back the Principal — is a heavy charge ; but the fearful evils of National Bankruptcy, with its attendant demoralisation, were avoided. If this proved a hard and difficult task for England, with all her extensive means, her great industry, and her vast power, leaving her still to the present day bearing the heavy burden thereby entailed upon her, how much more difficult may such a recovery be expected to prove to other States of so much less power and wealth and ability to cope with the overwhelming difficulties of their position ! The United States, whose present Floating Debt is enormous, are likely to follow iu the footsteps of England. Their Paper Currency has already recovered to a very considerable extent, the premium on Gold, which at one time ranged from 100 to 200 per cent., being down now to about 40 per cent. The American 56 CUERENCY. Government acts wisely in forcing Gold, by timely ar- rangements, to pass througli its Treasury. Meanwlule tlie American National Debt undergoes, moreover, a continued reduction, and we have no doubt but tbat — slowly and gradually, but surely — tbe Notes wiU rise in value until they stand on a par with Gold. This may take five, ten, or twenty years ; but the ultimate accomplishment of the end is almost certain, as the Country is possessed of immense natural wealth and numerous other advantages, and the People have all the requisite characteristics of Industry and Intelligence conducive to such a result. The American Greenback Currency forms a part of the United States Debt incurred during the late Civil War. On the 1st November, 1867, this stood as follows : — Dollars. Bonds — Interest payable in Gold. . . 1,778,110,991 „ in Paper ' 426,668,640 „ tobepaidofi" 18,237,538 Gold Certificates 14,514,200 Greenbacks and Small Notes ... 387,971,277 Dols.2,625,502,646 Against this issue of Dols. 387,971,277 in Govern- ment Notes, the United States Treasury held at that date Dollars J^S°^<1 111,543,177 In Notes 22,543,203 So that, deducting the Gold Certificates as above, the Treasury held only Dols. 97,028,977, or about 26 per CUREENCY. 57 cent., in G-old. But this is not all. The Gold is not professedly held as pledged to guarantee the Green- backs; it is used by the Government for general financial operations in the Reduction of the Debt, the semi-annual payments of Interest on the Gold-bearing Bonds and other payments, so that practically the Notes have no Bullion reserve of their own. The Gold, however, is not dormant, but flows rapidly in and out of the Treasury ; the actually existing balance, therefore, in principle at least, represents a reserve. In Austria there are two principal descriptions of Bank Notes, the one issued by the National Bank, against which that Institution is supposed to hold one-third in Bullion, as per statement of the National Bank, 30th November, 1867 :— LIABILITIES. Florins. Capital 110,250,000 Reserve 14,069,029 Notes circnlatijig 249,666,830 Post Bills, &c. ... 1,441,456 Mortgage Letters) 59443560 circulating ... ) Sundries 1,590,927 436,461,902 ASSETS. Florins. BuUion and Coin 105,627,301 Bills disconnted| payable in Coin j Bills discounted . . . Advances State Notes Government Debt against commission Mortgage Loans . . . Stock Sundries ... Profit and Loss ... 43,210,540 76,418,776 25,143,200 3,061,848 80,000,000 69,127,680 14,068,542 16,265,512 3,538,508 436,461,902 The Bullion here represents more than one-third of the Notes issued, and the Bank was then, as other 58 CUKIIENCV. State Banks at that time also were, in a comparatively stronger position than usual. The Bills discounted are not in the same proportion as in other similar Institutions, whilst the advances to the State are larger, and Loans on Mortgages are made, the Bonds for which are circulated. Although the Austrian National Bank is thus much less strong than other similar Insti- tutions, yet so far as Austria is concerned, it is looked upon as the most solid institution in the country, and its Notes command confidence, though they are at a discount. But it is in the other parts and branches of Austria's Financial System that the trouble and the difiiculties of her position principally lie. The Austrian Grovernment, with an enormous Debt (near 3,000 millions florins), and all manner of Habilities and embarrassments, generally finds that the State Expenditure exceeds the Eevenue, and, unable to borrow Money, it has recourse to the expedient of issuing State Notes. These are Forced Currency, but they have no security in Bullion, and no guarantee whatever except the good faith of the Government. These State Notes amount to some three hundred, millions florins and more (the exact total is not known to the public), and this issue is at present stiU on the increase. There is no prospect of the conversion of these Notes into Bullion ; it is possible, however, that should Austria's credit enable her to raise another Loan in addition to the present overwhelming burden, that the Notes may be withdrawn at some future period. Thus, whilst the Notes of the National Bank CUEEENCY. 69 are secured by some reserve in Bullion, approaching our system of the Second Class (it is said that the pubhc "hoard" them on this account), the State Notes, not being secured by any reserve whatever, belong to the lowest category of issues. The uncertainty of this posi- tion necessarily affects all the Austrian Paper Currency. The rouETH class of Notes, in our scale of gra- dation, represents the most extreme position. The first remarkable failure of Paper Money occurred through the celebrated John Law's introduction of Mississippi and other Bonds in Prance in the first half of last cen- tury.* Other countries have also had to pass through their bitter experiences with Paper Money. The com- mercial history of England, before the present better system gained the ascendancy, tells of the suspension, at various times of private Note-issuing Banks. (The Note issue by private Banks and Bankers all over the country is now under the control of the Govern- nent). In America, long before the present State Paper Currency was thought of, there had been many attempts made to introduce a Private Bank Note system, which had, however, mostly resulted in dis- astrous failure. The most noteworthy modem instance of a complete collapse of a State Currency founded on Paper has been furnished quite recently by the late Confederate States of North America. The Government * The disastrous results of the bursting of that gigantic bubble may, as has already been stated, be numbered among the prominent causes ultimately leading to the National Bankruptcy of France and to the French Revolution. 60 CDEEENCY. of these States found itself compelled, at the very out- set of the Secession, to give up payment in Bullion, and to issue Notes to such enormous amounts, that the decline in the value of the latter kept in advance even of the rate of issue. And in the same measure, as the chances lessened of the Grovernment holding its own ground, and acquiring stability, so did Grold rise in value, first from one hundred to five hundred, then to one thousand and more per cent., until at last one dollar in Oold would command one hundred dollars m Notes. A state of inextricable confusion ensued, and aU com- modities rose in price out of aU proportion ; flour, for instance, worth in England at the time thirty-two shillings, or about eight dollars a barrel, rose in Rich- mond to one hundred and fifty and even two hundred dollars ; and laughable and absurd as the statement may appear, we have it upon the authority of the cor- respondents of the Enghsh Press that people going to market required a basket to carry the lawful Money of the land, which basket was quite large enough to carry back to their homes the produce which the purchasing power of this desirable Medium of Exchange enabled them to obtain. When the end came at last, and the would-be new nation fell to pieces, the Confederate Cur- rency became of course absolutely valueless, and all the promises to pay made by Government authority, and confirmed by Government stamp, vanished into nothingness. Misery unspeakable followed in this instance in the train of the experiment ; the rights of property and labour were destroyed alike. Yet, fortunately, the evil CURRENCY. 61 wrought had not leisure ajBbrded it to strike deeper roots, and the restoration of a strong and healthy Government came just in time to check the downward course, and to save the unhappy land from immediate ruin. We have so far confined our discussion here to the issue of Paper Money based on either Bullion or Government Guarantees. We have now to add a few brief remarks on the subject of the many pro- jects started from time to time to create a Paper Currency based upon aU kinds of property and value. Banks may be permitted, to a certain extent, to issue a Circulating Medium in Notes, based upon convertible Securities, Government Stock, BiUs of Exchange, &c. ; but this can only be done in a very limited way, and at the Bank of England, at least, it is not done at aU. Our projectors of schemes for issuing Notes on property are not content, however, with this Umited range, nor does it appear that they have taken a lesson from the past history of exploded Bubbles, for we find them again and again raising the question of a Paper Currency, based on all sorts of Values. We will not discuss this topic here ; a single practical illustra- tion will suffice to demonstrate the utter fallacy of such schemes. Let us, then, for the sake of argument, agree to look upon all kinds of property as an effective basis for the issue of Notes, and to regard the value represented by such Notes as on a par with Coin. To make the illustration the more striking, let us select the 62 CTJEEENCY. most real and substantial kind of property — Land and Houses. A, being possessed of £1,000 in money, in- vests tbis Capital in tbe purchase of a plot of land, or to make tbe matter stiU clearer, of a bouse of tbat value. He tben issues a Note for £1,000, secured on tbe bouse, wbicb Note, upon tbe above assumption, will pass current and circulate as Money. He now buys anotber bouse witb tbis Note, also wortb £1,000, and again issues a £1,000 Note upon tbis second acquisition of bis. Tbis second Note be again invests in tbe purchase of a tbird bouse, and so on; andif tbere were a hundred, or a thousand, or a mUbon of houses in tbe Market, he might go on purchasing in the same way, and might thus ultimately secure tbe entire lot, and enjoy tbe rents thereof. Twenty houses, at £50 rent each, would yield a nice little income of £1,000 a year, and so on in proportion ; and, in addition to tbis, A, would always still retain the power of raising another £1,000 upon the security of bis last purchase. Now, as tbis entire superstructure of wealth rests solely and entirely upon the foundation of the first bouse pur- chased by A, with bis original capital of £1,000, it is self-evident tbat this first bouse must really be worth infinitely more than its nominal value to A, or to any- body else in the same position. Why, the whole thing is a simple absurdity, wbicb cannot stand the test of a moment's serious exa- mination. However, let us again, for the sake of argument, modify tbe assumption, to adapt it more closely to our notions of Collateral Security. Let us give A the power only to raise £750, or even only CUEEENCr. 63 £500, upon a house valued at £1,000. He accordingly issues a Note for £500, with which, he buys another house, but this time of course one worth £500 only. Upon the security of this latter again he issues another Note to half the amount of the nominal value, say £250, with which he buys a third house, and raises upon this last purchase of his again £125. This makes a total of £875 — raised so far upon his original capital of £1,000; he has thus, with his £1,000, pur- chased houses worth £1,875, and he has only raised upon each house half the value, and not a penny yet upon his last purchase. The rentals received wiU, by the end of a year or so, increase the £1875 to £2000, and thenceforth the value will go on increasing at a more rapid rate, like compound interest. The difference between the two forms of our proposition here is accordingly, after all, only one of degree : upon our first assumption, A's property woiild go on increasing, in arithmetical progression ad infinitum, and so would of course also the number of Notes thrown by him on the money market ; whilst, in the second case assumed, the increase would progress at a much slower rate indeed, yet in the end the result would be pretty much the same. And mind, we have not yet touched, in our examination of this question, upon another most im- portant element in it — Competition. There are many other people who would like to do the same thing as A ; and every additional competitor would, of course, accelerate the rate of progression in the increase of the Paper Currency thus easily created. We have selected the most substantial kind of property — Land 64 CURRENCY. and Houses ; how much more impracticable would the proposition appear if aU other kinds of property- were equally made a basis for the issue of Notes ! The foregoing illustration clearly demonstrates the utter impracticability of all attempts to create a per- manent artificial Currency. Simple and natural as the Proposition to found a Paper Currency based on Pro- perty may appear upon a mere superficial view of the matter, yet, if such a system were ever practically introduced, the prices of aU commodities would rise in the most abnormal fashion ; and this must inevitably lead in the end to produce that state which is the greatest dread of all Pohtical Economists — Inflation in its extremest form. The projectors of such schemes as a private Paper Currency never take into account the necessity of providing ultimately for the redemption of the Notes, and their conversion into Cash, and of giving up the Guarantee Property on the original terms, without the least regard to its artificially inflated value ; nor is any provision made in their schemes for deterioration and reduction of value from natural causes. Now, if all this seems sufficiently nonsensical, how much more extravagantly absurd must not the cool proposition appear, which we find so frequently made, of permitting the issue of Private Notes not resting on the security of any property whatever ? We occa- sionally have heard some of our theorists say, " "Why should I not issue my own Promissory Note payable to bearer, and circulate it as Money, pledging my credit for its value ?" There are many ardent free CUBEBNOY. 65 trfders who advocate su.cli a course ; rortunatelj", tlie State Authorities forbid private individuals to issue such Notes payable to bearer. The only legitimate way in which property cpu be made to perform a part in the creation of repre- sentative value is by means of legally executed instruments (Mortgages, Assignments, and Deeds of various kinds), in which it constitutes the basis or security ; and such instruments are unsuitable for the purposes of a Currency. The only legitimate way in which personal credit, with or without the collateral security of property, can be made to serve in the creation of a temporary Medium, is by means of Bills of Exchange, which, in obedience to the dictates of experience, have, for the protection of aU interests, been invested by law with a character distinct from that of Actual Money. But even with the laws, regulations and limitations which govern the issue and circulation of such instruments, it is difficult to guard against inflation, which, as we aU know, lies at the bottom of aU depression, and is apt to bring on mer- cantile distress, and monetary crises and panics. The only eflS-cient safeguard against the bane of inflation is prudent moderation in aU financial and commercial transactions and operations. The Banker must hmit his advances on mortgage or real property; the CapitaHst must not be too liberal in taking shai'es ; the Merchant must avoid granting too many accept- ances on merchandise or credit; for it is by these means that speculation and competition are enabled to force prices beyond their real value, in spite of 5 66 CURRENCY. the sound principles of supply and demand. If these axioms are neglected — and they are neglected or for- gotten occasionally, when a portion of the mercantile community mil foUow the lead of speculation — inflation takes place, which inevitably leads to a crash : the law of supply and demand strongly asserts its ascendancy, and, with a rude and unsparing hand, destroys the fictitious prosperity of the preceding period of over- trading. Thus far then we have stated, as succinctly and clearly as possible, our views on the comparative worth of a Hard Cash and a Paper Currency, and endeavoured to demonstrate that Bullion is truly and legitimately the measure of Value. "We trust that we have succeeded also in estabhshing a proper understanding on the subject of Currency generally, and on the causes which lead to a depreciation of Paper Money, since this has an important bearing upon the question of the Foreign Exchanges, as will be shown hereafter. 67 CHAPTEE IV. BILLS. T3ILLS, in their various forms, are Mediums of -^-^ Exchange, but they are not Currency, which, whether the free or the conditional, has a direct action of its own, not hmited by restrictions. The simple act of tendering and handing over the amount of a debt in legal Currency terminates the liability of payment involved. Currency (in Metal or in Paper) is established and authorised by Government, and Grovernment is respon- sible for its value. This invests Currency with a public character, and makes its universal acceptance a matter of general contract by the consent of all parties. Whereas Bills of Exchange are simply matters of private agree- ment, for which Grovernment is not responsible. The responsibility here attaches solely to individuals, and the acceptance of the instrument as a representative of value is merely a matter o^ private or personal contract. The responsibility of the parties to a BiU remains engaged untU the instrument is converted into actual Currency, in conformity with the terms of this contract. Currency circulates freely by general consent, whilst Bills of Exchange only circulate amongst the parties more immediately concerned, upon private 68 BILLS, terms of understanding, and under certain formalities and restrictions, whicli impart a special and distinct character to these instruments. Bills are Mediums of Exchange, inasmuch as they serve to convey certain definite amounts of value, fixed and expressed in terms of Currency, from one hand to another, and from place to place. Yalue may, indeed, be procured and conveyed from place to place in the shape of aU kinds of moveable property and merchan- dise sold and forwarded in Exchange for Currency. But this involves the questions of bargain and sale, the fluctuations of price, the cost of transport, and the uncertainty attendant upon the conveyance of the articles. State Bonds, Stocks, Shares, and valu- able Securities generally, which are equally move- able representatives of value, are, in their realisation, liable to fluctuations of price, and cannot therefore properly be termed Mediums of Exchange. Now, Bills bear on the face of them, like Currency, a definite declaration of their nominal value, and it is expected that their reahsation will be effected in due time in actual Currency to the exact amount for which they are drawn. They may accordingly serve as real Mediums of Exchange, and in that character as Economisers of Currency. "We have no positive evidence as to the time when BiUs were first invented : the first mention we find made of them does not go further back than the Middle Ages. However, it is very hkely that they were in use long before, in some form or other, and their origin BILLS. 69 may be easily accounted for, say in the following way : For instance, suppose A, living in one town, to have supplied B, living in another town, with goods, for which B would accordingly be indebted to A, and would have to forward payment to him. Now suppose C, living in the same town as B, to have furnished goods to A, who would accordingly have to forward payment for them to him. A would of course find it more convenient to instruct his debtor B to pay the money over to C, to whom he would remit a letter, or receipt, or Bill, empowering him to claim payment from B. This simple arrangement would save the expense and the risk of sending coin backwards and forwards between the several parties to the affair. The same operation would answer equally well for a variety of other mercantile transactions of a more complicated nature. At the time when the German Hanse Towns commanded the trade of the world the use of Letters of Credit and Bills increased considerably ; but it was chiefly in the time of the commercial greatness of the North Itahan trading cities that the system attained a more perfect development. The intelligent Lombards were the first to bring method and order into the management of mercantile matters, which they thereby raised, in a measure, to the dignity of a science. There can be no doubt but that they invented many of the present forms of Bills, and devised the whole- some rules and customs which the proper and con- venient working of commercial intercourse by these Instruments demands. The influence which Bills of Exchange have ex- 70 BILLS. ercised upon tlie trade of tlie world lias been most beneficial ; and it is very questionable wbetlier but for them tlie material prosperity of ciyiHsed nations would have attained tte present bigli development. They serve to facilitate tlie largest and most important trans- actions in Home and International Commerce; and the greater part of the Import and Export Trade between the various countries is conducted by their agency. Eesting as they do on a Currency basis, they serve to balance the Debit and Credit between two countries, and the actual transmission of Bullion is only required when the final Balance is positively declared. From the high social importance of the BiU system ijhe abuses to which it is naturally hable, and the proper means of guarding against them have always occupied the attention of the different Governments, and special laws have been passed to regulate the proper action of the system. Compliance with certain strict forms, rules, and customs, according to law, is absolutely indispensable to establish clear rights of claims in connection with Bills of Exchange. In England we have no special consohdated law on Bills of Exchange ; but the matter is governed by a number of Statute laws, and by certain commercial rules and customs which have acquired a species of legal force.* In France the Code Napoleon contains * The well-known series of Wilson's Legal Handy Books contains an exceedingly useful publication on the law of Bills, Cheques, Notes, &c., by J. W Smith, Esq., LL.D. Effingham Wilson, Royal Exchange. Price Is. BILLS. 71 the legal enactments and provisions in reference to Bills of Exchange. But it is in Grermany that the most complete and satisfactory legislation on the sub- ject is to be found, in the so-called General Oerman Law on -Bills of Exchange (AUgemeine Deutsche Wechsel Ordnung), which has been adopted by aU the German States within the last fifteen years. Most Governments derive a considerable income from taxing Bills of Exchange by means of a compul- sory Stamp, the evasion of which not only divests Bills of Exchange of all legal value, but renders the parties concerned liable to certain penalties. In foreign countries the usual Stamp duty is one-half per mUle on the amount. We give the Schedule of British Bill Stamps at foot.* * Bills AND Peomissoey Notes. s d s d Not exceeding ... £5 1 Exceeding £400 and ") not exceeding £500 . 5 Exc. £5 not exc. 10 2 „ 10 , 25 3 „ 500 „ 750 7 6 „ 25 , 50 6 „ 750 , 1000 10 „ 50 75 9 „ 1000 , 1500 15 „ 75 , 100 1 „ 1600 , 2000 1 „ 100 200 2 „ 2000 , 3000 1 10 „ 200 300 3 „ 3000 , 4000 2 „ 300 400 4 „ 4000 , 5000 2 10 And 10s for every additional £1000, or part thereof. PoEEiGN Bills m Exchange drawn or negotiated in but payable out of the United Kingdom, in sets of three or more, for every Bill of each set one-third of Inland duties. If drawn singly and not in sets, or if drawn out of but payable within the United Kingdom, same as Inland duties. 72 BILLS. The general term " Bills " comprises all Paper Mediums of Exchange, excepting those previously- designated and described here as Paper Currency. There are four principal Classes of them, viz. : Letters of Credit. Bankers' Cheques. Promissory Notes. Bills of Exchange. LETTERS OP CREDIT may be considered the most primitive form of the BiU system. They are generally wiitten on a plain letter sheet, and contain a request from one firm to another to pay over a certain amount of money to a third party ; they are frequently used also as letters of introduction and recommendation at the same time. The following is a common form of a letter of Credit : — London, let May 1866. Messrs. B. B. & Co., Paris. Gentlemen, — 'We have great pleasure in lierewitli introducing to you Mr. N. K"., who visits yoiir city for purposes of business, and we heg to recommend him to your hind attentions. At the same time we herewith open a credit in his favour for One Hundred Pounds, and request you to pay over this a/mount to him at his desire. His signatwe we have forwarded to you in anoth&r letter. We remain, Gentlemen, Your ohedient Servants, A. &A. Now, such a document 'the wording and style of which may of course be varied as may suit the taste of the vnitev) undoubtedly bea.vs on the face of it a certain value. But suppose that it is not honoured ; BILLS. 73 what then is Mr. N. N.'s position in reference to it ? It may be that the writers of the letter simply wished to do an act of kindness to Mr. N. N., and place money at his disposal should he require it, without having previously received money or value from him, or on his account. The result in that case is simply this : N. N. holds a valueless document, as he cannot go back to A. & A. and claim money from them for which he has not given them an equivalent. But supposing even that he did lodge with them £100, the letter itself states nothing of the fact, and is therefore no acknowledgment or proof to him that he has done so; he would therefore have to return to London, and sue A. & A. for his £100 ; and he must bring forward other positive proof than the mere Letter of Credit (which can only serve as collateral evidence) in order to make good his claim. The following is another form of Letter of Credit :— Messrs. "W. R. & C, Faris. Please hold at the disposal of Messrs. D. 0. & C. the sum of Twenty Thousand Fkancs, and charge the same as per ad/vice. We are, yours faithfidly, B. &H. A Letter of Credit of this kind is called a dele- gation. It is a somewhat simpler document than the former, and has more of a business air about it. Such delegations are now frequently used between mer- chants, principally because the stamp duty on Bills is thereby avoided; but there is this drawback about them, on the other hand, that they are of the same 74 BILLS. invalid character in point of law as the first form ; and, in case of non-payment, they can only serve as collateral evidence of the original basis of the transaction. Something more is therefore wanted to make this species of Medium of Exchange fully available, not only as a direct means of payment in the first in- stance, but also as effectively constituting in itself an undoubted claim on the writer in case of non-payment. The so-called Letters of Credit and Circular Notes issued by Bankers belong to this category; but the question as to their validity is not often raised, and as they are not important for purely commercial pur- poses, we may content ourselves here with this bare allusion to them. BANKERS' CHEQUES. — A Cheque is an order drawn upon a Banker to pay a certain sum to the Holder on demand. In this respect it resembles a Letter of Credit. Cheques are payable on demand, and formerly the words on demand were incorporated in the form; they now usually run as foUows : — London, 1st Dec. 1867. To the London and Couuty Bank, Lombard Street. Pay to James Smith, or Bearer, Theeb Hundred Pounds. £300. "William Brown & Co. With this Cheque James Smith, or any one else whom he may make the Bearer, can go to the Bank indicated, and provided that "William Brown & Co. have money there sufficient for the purpose, he will receive the £300 against the surrender of the Cheque. BILLS. 75 If tte Cheque is crossed, i.e. if two lines, with, the name of a Bank or Banker between, or the word Co. in heu thereof, are drawn across the Cheque, custom requires that the document should be presented for payment by the Banker specially named on the face of it, or through some other Banker or Bank. This is a precaution which works well, and protects the owner in case of irregular or illegal possession of the docu- ment by other parties not entitled to it. If the Banker refuses to pay the money, the Holder can go back to the Drawer and demand payment from him, or institute legal proceedings against him. Formerly a Cheque was merely held evidence of debt ; but since the introduction of another form, having the word Order substituted for that of Bearer, an action may be brought at law upon a Cheque, which, so drawn, is very nearly subject to the same regulations, and has very nearly the same effect as a Bill of Exchange. Nevertheless it is not so complete an instrument. Unless it be made payable to Order, and bear Indorsements consequent thereon, the only party hable on a Cheque is the one who has issued it. Its circulation is effectually limited by the necessity on the part of the Holder to present it for payment with all practicable speed. If he waits longer than a day, and if the Bank meanwhile stops payment, he has no claim on the Issuer, or even against the Indorsers (provided the Issuer had at the time funds sufficient at the Bank) ; but he Ms, in that case, to bear the loss himself. In England a Cheque is a most important instru- 1& BILLS. ment in commercial intercourse. In foreign countries (excepting tlie United States) Cheques are in but very- restricted use. But they form an essential feature in our English Banking system, and replace, to a great extent, the employment of actual Money. Many millions worth of accounts are settled daily by Cheques drawn on Bankers. By means of the Clearing House the Bankers in London again exchange accounts between themselves with the Cheques col- lected daily in each hand. This magnificent system serves to greatly facihtate what would otherwise be sure to prove a most laborious settlement of accounts by Money payments. The saving of labour, time and expense effected by it is obviously an advantage which must have an appreciable beneficial influence upon the commercial prosperity of the country. "Wide-spread and important as is the use of Cheques as Economisers of Currency, in the settlement of aU sorts of accounts, the individual career of these instru- ments is necessarily very brief; and in their capacity as Mediums of Exchange they do not bear on the face of them a clear definition of the rights and claims, and the habilities of the several parties concerned, as is the case with Bills of Exchange. PROMISSORY NOTES. — A Promissory Note is a written promise by one party to pay a certain sum to another party. Promissory Notes are usually drawn in the following form : — £20. London, Isi Dee. 1867. On JDemand, I promise to pay to Mr. Samuel Robinson tJie sum of Twenty Pounds. John Williams. BILLS. *^1 THs constitutes a mere obligation to hand £20 to S. Eobinson, whenever demanded.* We have already mentioned that the law forbids the issuing of Promissory Notes payable to Bearer, except under special sanction, as in the case of Bank Notes. The following is another form of a Promissory Note :— £800. London, 1st Dee. 1867. On the 1st Fehruary 1868, I promise to pay to S. Robinson, or Order, the sum of Eight Hundebd Pounds, for Vahte Beaewed. John Williams. In this case the payment is not promised on demand, but on a certain fature day distinctly specified — ^in the instance here before us two months after date; which accordingly imphes a credit to John Wilhams. The Note is made payable to Samuel Robinson, or Order, which means that Robinson can order payment to be made to somebody else. It is also expressly stated that the payment to be made is for Value Received, indicating that a transaction of some kind has taken place between the parties, which has led to the making of the Note. A document of this kind will serve in the same way as a complete BiU of Exchange, and is subject to the same general law as the latter. BILLS OF EXCHANGE. — A Complete Bill of Ex- change, drawn on a proper model, ought to provide * The so called I U's (I Owe Tou) in England are mere acknowledgments of indebtedness to particular persons. 78 BILLS. for all interests involved, and should clearly define the positions, rights and liabilities of all the parties "whose names are attached to it. A complete Bill of Exchange is usually drawn in the following form : — £250 Birmmgham, \st Deo. 1867. Three Months after date please pay this Sill of UxchoAige to Messrs. Eiohaed Ieting & Co., or Order, the svm of Two Hundeed Pounds Sterling, for Value received, and ohavge the same to accovmi, as advised hy Haefokd & Co. To Messrs. Tannee Beothers, London. The Acceptance of the party on whom it is drawn is written across, in this fashion : — Accepted, Payable 4th March 1868,* at the Union Bank op London. Tannee Bbothees. The Bill may bear Indorsements written on the back, as the following, for instance ; — Pay to the Order o/ James Baebee, Esq., /or Valm received. Liverpool, Brd Deo., 1867. Eichaed Ieving & Co. Pay Messrs. Macgkbgoe & Co., or Order, Value in Accownt. London, 10th Deo. 1867. James Baebee. The parties to this Bill are Harford and Co., the Drawers, addressing Tanner Brothers as the Drawees and subsequent Acceptors ; Richard Irving & Co., the Remittees or first Payees, who by their Order, in the first Indorsement on the back of the Bill, constitute James Barber Payee in their stead ; the second Indorse- ment transfers Barber's claim to Macgregor & Co., the * THs due date includes tte three days' grace allowed by tlie Englisli law on all Bills of Exchange. BILLS. 79 actual Holders of tlie Bill, wlio may again Indorse it to other parties. In tlie wording of the document the term Bill of Exchange is introduced; the BiU has been handed by Harford & Co. to Irving & Co., for Value Received, showing thereby that a consideration has passed between them, which may sometimes arise, also, from Value in Account. The relations between the Drawers and Tanner Brothers are expressed by the words, " and charge the same to account." The first Indorsement to James Barber states for Value received; the second one for Value in Account, which makes the difference between the two. Bills so executed are full or complete documents, and the terms here used in the wording are designed to serve as prima facie evidence of the lond fide nature of the business between aU parties ; the use and effect of these terms may be found, more especially, in the event of law suits arising, from some cause or other, in reference to Bills of Exchange. In England this practice is not invariably followed, and a BUI drawn in the following form is often con- sidered sufficient : — £250. BwrningJiam, 1st Deo. 1867. Three months after date pay Richard Ieving & Co., or Order, Two HmSTDEED AND PiFTT POUNDS. HaeFOED & Co. To Messrs. Tannee Beothees. Tanner Brothers may Accept this Bill by writing the word Accepted across the same, and above their signature ; or they may simply affix their signature to any part of the BiU, in order to constitute a valid acceptance. 80 BILLS. Instead of a full Indorsement tlie parties may simply write on the back : — Pay Mr James Babber, or Order. RiCHAED IeVING & Co. witliout stating date or consideration ; this is called an Incomplete Indorsement ; or the name KiCHAKD IeVING and Co. may simply be written across the back, without any directions, when it is called a Blank Indorsement. These departures from the strict form of an original Bill of Exchange are permitted in England, and the Blank Indorsement has become a cuptom extensively adopted, being especially convenient to large Dis- count houses, who can thereby, under a separate guarantee, transfer such Bills as securities. Inordinary practice, where Blanh Indorsements are not necessary, a complete, or, at least, an incomplete Indorsement is always desirable. The finder of a BiQ, Indorsed in Blank, might improperly fiU out the Indorsement to his own name and order, and obtain value for it; in which case, unless the loser can give timely notice to the Payer — and unless he can at the same time prevent third parties from negotiating the BUI in a bond fide manner (a thing scarcely possible), he would finally lose the moiiey. On the Continent generally the regulations are more strict, especially in regard to Indorsements, which must be complete in order to answer aU legal requirements. We mai'k these distinctions here as essential in theory, even if not of such absolute im- portance in practice. BILLS. 81 Bills of Exchange payable at once are used as means of conveying Casli from one person or place to another ; but if payable at some future period, they involve the consideration of Credit. The Acceptor promises to pay at a given date, and if he fails to do so at the appointed time, the Holder can hand back the Bill to the Indorser immediately before him, from whom he has, or is supposed to have, received it, and claim reimbursement. The Indorser can fall back upon the next before him, and so on till the Bill is returned to the party to whom it was first made payable; he, in his turn, can claim upon the Drawer. The Drawer, having satisfied the last claimant, stands in the original position to the Acceptor, who is his debtor, and against whom he can now proceed. The Credit value of the Bill is therefore increased in proportion as Indorsements are added, and this value is reduced again, in case of non-payment, by the successive dis- charges of one Indorsement after another. In cases where the party on whom a Bill is drawn refuses to Accept, he incurs no hability on the Bill, but the liabihties of the Drawers and Indorsers remain, and can be enforced in the way already indicated. If the last Indorser is unable to pay, the Holder may turn upon the next in succession, until he finds one of the parties able to pay; if the whole of them are unable to do so, then he can claim jointly and severally against Drawer, Acceptor (if accepted), Payee, and In- dorsers, until the amount is discharged. No Indorser, however, can claim against another standing below him in the order of succession on the back of the Bill. 6 82 BILLS. The question of Credit involved in this does not here concern us. This is a subject with which the Banker, Merchant, or Trader must deal on separate and special grounds. The various degrees of Solvahility, in the commercial meaning of the term, are determined by experience; and that cannot be taught in this volume.* If the engagement undertaken by the Acceptor be duly fulfilled, the BiU will have run its proper course to the end, and there will be no retrospective disturbance of the several payments, which it may have facilitated and represented in passing from hand to hand. But if, from any cause, the Bill should not be paid at maturity, it becomes the duty of the Holder to Protest it. The term Protest was probably invented by the Lombards, who, in their amazement at so serious a breach of mercantile faith as the non-payment of a Bill of Exchange, felt bound to frotest against it. When a Bill is represented for Acceptance or for Pay- ment", and either is refused, the Holder, in order to protect his right against the Drawer or Indorsers pre- ceding him, is bound to make Protest. He must send the Bill to a Notary, who then presents it once more to the Drawee, and if again dishonored, records the fact, and levies Protest in due form. The Protest then becomes the title by which the Holder can claim upon all the other parties on the Bill, to whom he gives notice in the first instance of the dishonor, as * Mr. Gilbart's Work on Banking, &o., contains the best treatise known on the subject of Credit. BILLS. 83 an intimation of tis intended reclamation. It is clear tliat this Protest is necessary, not as a mere formality for the recording of the several interests concerned, but as a protection to all and each of them. Suppose that the Bill would have been duly honored if it had been duly presented, but that the Holder, from neglect or malice, chooses to return it to the preceding Indorser, falsely alleging that it has been dishonored : he might thereby seriously affect both the Acceptor and the Indorser's interests, and wrongfully cause embarrass- ment. It is only right therefore that his own evidence should not be relied upon in proof of the alleged dis- honor ; and that a Public Officer — a Notary^ — as an in- dependent party not concerned in the Bill, should verify the fact. ' In England, Noting is generally looked upon as a sufficient Protest. Noting a Bill means that the Notary records the non-acceptance or non-payment thereof, and affixes a small notice to it, briefly stating the cause of refusal ; and this has all the necessary legal effect. For business abroad, however, he may after- wards, or at once, be required to extend Protest, and thereupon issue the usual formal document. On the Continent full Protests are generally made at once. BILLS OF EXCHANGE are either Inland Bills, or Foreign BiUs. They are also, according to the time they have to run, either Short Bills, or Long Bills. 84 BILLS. Oteques, Bankers' Drafts at siglit, Bank Post Bills, &c., are Short Bills of Exchange. The following examples need no further ex- planation : — IKLAK-D BILLS OF EXCHANGE. £50. Bcmh of Bristol, 1st Bee. 1867. TJiree days after date pay to the Order of Messrs. Faieman & Co. the sum of Fifty Pounds, as advised. To Messrs. Williams & Co., Wm. Rathbone, London. Manager. This is a usual Bankers' Draft, payable (including the three days grace) on the 7th December, and is a Short Bill. £100. Manchester, 1st Beoember 1867. Two montlis after date please pay this Bill of Exchange to John Bakbee, Esq., or Order, One Hundeed Pounds Sterling, Value in Account, as advised hy Lessing Beothees. To Johnson & Smith, Liverpool. Suppose to-day is the 2nd of Feb. 1868, the above Bill, drawn on the 1st Dec. 1867, at two months, would be due (with three days grace added) on the 4th Feb., the day after to-morrow; it is, therefore, although it was a two months' Bill on the 1st Dec. 1867, a Short BiU now. Bills of less than ten days to run are considered short Bills; those having more than that number of days to run, say twenty days, or one month or two months, belong already to the class called long Bills ; but the term long is specially applied to three months Bills. BILLS. 85 £500. Lmdon, 1st Dee. 1867. Three months after date please pan/ to our Order the Swm of Five HuNDEBD Pounds, for Value Received, as ad/vised hy Messrs. Poestee Beothees, Jbffeey & Beown. Lojidon. This is probably a Trade Bill, drawn by a ware- houseinaii upon a merchant or retail house. It is drawn to our Order, so that Jeffrey & Brown them- selves become the first Indorsers. The following Bill may be by a manufacturer upon a London shipping house : — £1000. Sheffield, 1st Bee. 1867. Six months after date please pay this Sola Bill of BxchoAige to the Order of Hallidat, Sons & Co., One Thousand Pounds Sterling, for Value Received, and charge to account of Messrs. Samson & Co., London. Pinlatson & Hakt. Bills drawn at four, five, or six months, like the above, are subject to special rates of discount. FOBEIGH" BILLS OP EXCHANGE are either : — 1. Bills drawn abroad, but payable in the United Kingdom. 2. Bills drawn in the United Kingdom, but payable abroad. 3. Bills drawn and payable abroad, but nego- tiated in the United Kingdom. Examples of Class 1 : — Paris, SOth Nov. 1867. At sight pay this Sola Bill of Exchange to Mr. Jambs Ryan, Thebb HuNDEED AND TWENTY PouNDS Sterling, as advised ly Lecomtb & Perbz. Messrs. Dolby, Wade & Co., London. 86 BILLS. £35. Cologne, 15th Nov., 1867. Fourteen days after date pay this Bill of Exchange to the Order of our Own, Thibtt-Five Pounds Sterling, Value in Ourselves, and place the same to account as per advice of Your oiediefit Servants, To the Joint Stocli Banlc, London. Schneidee & Co. These are botli short Bills, and so-called Solas, or single BiUs. Their loss, by post or otherwise, may cause inconvenience. £187 10s. Berlin, 12th Oct. 1867. Two months after date pay this first of Exchange {second a/nd third of the same tenor amd date umpaid) to the Order of Messrs. Walter & Co., the sum of One Hundred and Eightt-seven Pounds Ten Shillings Sterling, Value received, cmd charge the same to account. P. Yoss. Messrs. Meert Brothers, Liverpool . In case of need, with Messrs. Pokd & Rilet. This is a first of Exchange ; the second or tJdrd of the same tenor and date are intended to be used in the event of the first being lost. There is also a case of need provided for, perhaps by one of the Indorsers of the Bill, who corresponds with Ford & Riley in London ; should the Bill be dishonored, Messrs. Ford & Eiley, seeing the signature of their friend, will interfere on his behalf, and take up the Bill. £1500. New Yorh, 1st Nov. 1867. Sixty days after sight please pay this second of Exchange {first and third unpaid) to Porster Stevens, Esq., Pifteen Hundred Pounds Sterling, Value of the same, as advised hy Grant, Duncan & Co. Messrs. Thorogood Beothees & Co., Lmidon. First Accepted with Paebridge & Co. This is a second of Exchange, first Accepted ivith BILLS. 87 Farbridge and Co., another house in London, who, having procured the Acceptance to the first, keep this first accepted in their custody, to surrender it to the Holder of the second. Instead of a second or third Bill, a so-called copy may also be used. £2300. Shcmghai, 1st Sept., 1867. Six months after sight please pay this first of Hxchmige {second and third v/npaid) to the Order of the China Banking Co., Two Thousand Theee Hundred Pounds Sterling, for Value received, as per shipments of Tea. W. R. per ' Flymg Cloud.' B. Duekant & Co. Messrs. Fet & Dawson, London. This Bill, drawn " as per shipments of Tea," shows on the face of it why it was made ; the China Bank may hold other documents, i.e., Bills of Lading and In- surance PoHcy, as security, which they will surrender to Fry and Dawson against Acceptance or Payment. Foreign Bills payable in the United Kingdom vary, of course, greatly in the degree of credit they seve- rally command in the market ; those drawn upon Banks, Bankers, and commercial houses of the highest standing, form the so-called _/i?^s^ class foreign Bills, or first class remitted Bills. Then there are good second class foreign Bills, &c. &c., down to inferior paper of aU sorts. Class 2. Bills drawn in the United Kingdom, but payable abroad.* * We give all these forms in English, for the sake of general convenience. 88 BILLS. Examples : — Fs. 3000. London, 30th Nov. 1867. At sight please pay to Monsiewr Victoe Mennoiee, or Order, the swm of Theeb Thousand Feancs, Value Becewed, as ad/vised. J. Baeeon & Co. To the SocrETB du Commbrcb, Paris. This is an ordinary short Bill, drawn at the sight Exchange. Ms. goo. 1500. Lkerpool, 14th Nov. 1867. At ten days date, pay this Sola of Exchange to the Order of Ltall, Sons & Co., Fifteen Hundeed Maecs Banco, Value in Account, owe? charge the same as per advice. B. & C. Tobeens. Messrs. Scheamm & Co., Hqmhurg. This is a short Bill on Hamburg. £400. Sheffield, 1st Dec., 1867. Thvriy days after sight please pay this first Bill of Exchange (second and third umpaid) to the Order of Ourselves, FouE Hundeed Pounds Sterling, Value in Ourselves, as per advice of to-day. Ieonmongee Beothees. To Mr. A. Nicholson, Halifax (Nova Scotia). Although Nova Scotia is an Enghsh Colony, the Bill is Foreign. Dels. 1576. Cts. 55. Manchester, 1st Dec. 1867. Sixty days after sight please pay this first of Exchange (second and third not paid) to the Order of the Bank op Beitish Ameeica, the sum of Fifteen Hundred and Seventy-six Dollaes Fifty-Five Cents, m United States Gold Currency, for Value Beeeived, as per invoice of 15th ultimo, as advised hy Maginn & Sons. Messrs. Valentine & Eobinson, Boston. In this Bill provision is made for payment in United States Gold Currency ; if this were not done, BILLS. 89 tke Remittee might be paid in Paper Currency, wortli so much less than Gold. £64. London, 20th Nov. 1867. Three months after date pay this first of Exchange (second and thwd impaid) to the Order of Messrs. Ringee & Co., the sum of SiXTT-FouE Pounds Steeling, at the rate of Exchange as per Indorse- ment, Value Becewed, and charge the sa/ine to Teowbeidge Nephews. Messrs. Mtnheee & Staats, Amsterdam. This Bill is drawn in Sterling, but must be paid in HoUand in Florins ; the Drawer therefore arranges with the Banker to fix the rate of Exchange by Indorse- ment, which we may suppose to be, for instance, as follows :— Pay to the Order of Messrs Rendsbtjeg & Co., at the Exchange of EtETEN FiOEiNS Ninety-Five Cents, pee Pound Steeling. Lmidon, 22nd November 1867. Ringee & Co. The foregoing Foreign BiQs of Class 2 are called drawn Bills, being usually negotiated from the Drawer direct to a London Foreign Banker ; but where such drafts are made in the Country, and sent up to a correspondent in London, who then negotiates the same with his own Indorsement on them, they are called made Bills. Ps.23,600. London, 20th Oct. 1867. On the SOth April next pay this first of Exchange (second and third being impaid), the sum of Twenty- theee Thousand Six Hundeed Peancs, Value in Ourselves, and charge the same to aecownt as advised. Messrs. Taeemieb & Co., Brussels. J. Peasee. This Bill is due in six months from the SOth Oct., which is longer than the usual period. 90 BILLS. Class 3. Bills drawn abroad and payable abroad, but nego- tiated in the United Kingdom, are also made Bills. Examples :— Fs.14.,000. Billoa, 1st Nov. 1867. Sixty days after date please pa/y this first of Exchange {second and third not paid) to the Order of Saltadob & Peeez, the sum of FoDETEEN Thousand Francs, Value deceived, and charge the same to accownt D. B. & Co. Loeenzo & Co. Messrs. Passavast Feeees, Paris.'' This Bill, on passing through London, would be negotiated there at a rate of Exchange. £100. Zurich, 18th Nov. 1867. Three days after sight please pay this first of Exchange (second and thi/rd not paid) to the Aitstealian Banking Co., or Order, the sum of One Hundeed Pounds Steeling, Yalue Received, as advised. Schonbeeg & Co. Messrs. Boulton, Sons & Co., Melbourne. This also is a Foreign Bill, although drawn on Melbourne. (Even Inland Bills, when sent abroad for negotiation, are, on their return here, looked upon the same as Foreign Bill i) . FL6000. Hamburg, 10th Nov. 1867. Three months after date pay this Bill of Exchange to the Order of Messrs. Homsen & Co. the sum. of Six Thousand Floeins, Austrian Currency, Value of the same, and place to account, as advised by To the Credit Bank, Vienna. T. & C. Jung. Original Accepted with Messrs. Schmidt & Co., where in need. This is not drawn in a set, by first, second or BILLS. 91 third, but is a single Bill. Homsen & Co. send it to Vienna, to Schmidt & Co., wlio procure Acceptance. Homsen and Co. then make a Copy as far as their Indorsement, and send this to London. The Holder of the copy can obtain the Original Accepted at Schmidt and Co.'s ; which firm may also, in case of need, pay the Bill for account of Homsen and Co. A Bill payable in England on demand or at sight realises the full amount of money ■which it professes to convey ; but a Bill falling due only at a future time is subject to Discount if the Holder wants the money at once. Supposing a Bill drawn for £100 — to fall due in three months from this, it will, at a discount of 5 per cent, per annum for interest, equal to £1 5s, be worth to-day only £98 15s. The same applies to Bills payable abroad; only with these it is usual, instead of deducting Interest in this way, to vary the rate of Exchange in accordance with the Interest ruhng at the place upon which the BiU is directed. There are two principal rates of Exchange, viz. : The short Exchange, or sight Exchange rigo- rously speaking, for Bills at sight, but, in practice, applied also to Bills which have only a few days to run ; and The long Exchange, or three months Exchange, for Bills having to run fully three months. The latter rate is the one usually quoted ; with the ex- 92 BILLS. ception of the short rates on Paris and Amsterdam, or sixty days .sight usances on New York, Eio, &c., the London Course of Exchange quotes the three months rates. "With regard to Bills on France, for instance, when the rate of Exchange in London is fs.25'60 per £1 for three ■ months Bills, and Interest in France is 4 per cent, per annum, the short or sight Exchange is only fs.26'25 per £1. If we purchase here three months Bills on France we obtain fs.25'50 per £1 ; but if we buy sight Bills we get only fs.25-25 per £1. We get more in the first case, but then we have to wait three months ; and if we discount the three months Bill in Paris at 4 per cent., to have the money at once, the result is the same as with the short BiU, since fs.25"50 at three months less Interest at 4 per cent, per annum for the three months, equal to 25 centimes, give fs.25"25 per £1, which is the same as for sight Bills. We shall have occasion hereafter to return to the subject of the short and long Exchanges. In the foregoing description and discussion of Bills of Exchange we did not intend to give a complete treatise on all the legal and commercial questions con- nected with the subject ; but our principal object has been to show how these mediums of Exchange differ from Paper Currency, in reference to the laws, usages, and formalities severally governing the two classes, or applying to them. At the same time we have availed ourselves of the opportunity of giving practical models BILLS. 93 whicli will afford tte reader a partial insight into the nature of Inland and Foreign Bills, &c., and teach him the distinctions between the several classes. Foreign Bills are the class which come especially under consi- deration in this book. The three descriptions of Mediums of Exchange : — Metallic Currency | Money, and Paper Currency ) Bills of Exchange have each of them their essential characteristics. Metallic Currency, that is to say, Gold and Silver, in the shape of Coin, is available as value all over the world. Even where the pieces are not available to the fiiU extent of an equivalent of their denominational value they can, at all events, always be sold or melted on the spot for their value in Gold or Silver. MetaUic Currency thus has a direct intrinsic and universal public value. Paper Currency, out of the country where it is used, loses its power of legal tender; and its conver- sion into value can only be effected through the ordi- nary channels of Banking or Trading operations ; the purchaser being obliged to send it back to the parent country to be exchanged for Metal. Paper Currency thus has an indirect and national pubhc value. Inland Bills of Exchange effect the transfer and conveyance of such public value from one person or 94 BILLS. place to another in the country of their origin, and serve us thus as Local Mediums of Exchange. Foreign Bills of Exchange regulate the transmission of the universal public value from one country to another ; this imparts to them the character of Inter- national Mediums of Exchange. 95 CHAPTER Y. GOLD. a OLD is the Noblest of all Metals— the King of the Metals, as the Alchemists of old used to call it. It holds this exalted rank by virtue of its precious physical and chemical properties, among which may be mentioned, more especially, its indestructibility (already previously alluded to) ; its signal power of resisting oxidising influences ; its fusibility ; its pre- eminent ductihty and malleability ; its beautiful colour and splendid lustre. You may expose a pohshed sur- face of pure Gold to the action of the air or of water for any length of time, and at any temperature ; you may place the article in an oven, and heat it short of the fusing point : it will not lose one atom of its sub- stance, and the surface, after removing the deposit of smoke, &c., that may have formed on it, will shine just as brightly as before. It is to aU practical intents and purposes proof against the action of the strongest chemicals ; you may boil it in hot concentrated Nitric, or Sulphuric, or Muriatic Acid, and it wiU come out of the ordeal unscathed. It requires the combination of Nitric Acid and Hydro- chloric Acid to dissolve Gold ; it is the most energetic 96 GOLD. of the chemical elements — ^the Chlorine liberated in tlie process^ — ^wHcli acts as tlie solvent, and the compound resulting is TercMoride of Gold. From this salt spring all other compounds which Gold forms with Chlorine, Oxygen, Sulphur, Cyanogen, &c. One of the most remarkable among these compounds is the so-called Fulminating Gold, a formidable explosive agent, which acts with such suddenness and force that the explosion of a small pinch of it on a glass plate will blow a hole through the plate, or shiver it to atoms. Mercury will dissolve Gold; but, as we have already had occasion to observe, the amalgam formed is simply the result of a mechanical combination. If the quantity of the Gold in the amalgam be gradually increased, a soft yellow mass is formed, which may be rolled into a ball, and the Quicksilver pressed out of it. The malleability of Gold is almost without hmit. Though one of the heaviest metals, its specific gravity being 19"3, Gold can be reduced, by beating with a hammer, to such extreme tenuity that the shghtest breath of air wiU sufl&ce to blow away a sheet of Gold leaf like a feather. Gold leaf can be beaten to the thickness of ~^^ of an inch. It has been calculated that the film of Gold covering some kinds of Silver- gilt wire is so thin that 14 milHons of such films could be compressed to the thickness of one inch, whilst 14 millions sheets of common printing paper would reach a height of 45,000 inches, or nearly three quarters of a mile ! A cubic inch of Gold, which weighs about 10 oz. GOLD. 97 Troy, might accordingly cover 14 millions of square mcnes, or about 97,000 square feet; one gram actually gilding 20-g- square feet ! THs extreme range of the Gilding capacity may be attained by covering a bar of Silver with. Grold, and then drawing it into fine wire. A bar of Silver can thus be covered with one ounce of Gold, and drawn into a wire more than 1,300 miles long, when the surface will still appear gilt. By means of electro-gilding also a golden film of scarcely lesser thinness can be laid on Silver ; usually, however, the coating is much thicker, six to eight square feet to j the grain being the hmit. Gold-leaf of the ordinary kind covers about six square feet per grain. Gilding 1 by the old amalgam and fire process gives a still thicker deposit. One grain of Gold can be drawn into a wire 600 i feet long, which then remains scarcely visible. Another remarkable quality of Gold is its tenacity, which is very considerable, though inferior to that possessed by Iron, Copper, Platinum, and Silver. A Gold wire one-tenth of an inch in diameter will bear a weight of nigh upon 500 pounds, and one 0'078 inch in diameter wiU support a weight of 150"07 lbs. Avoir- dupois without breaking. Gold can be hammered, roUed, and handled almost as easily as Lead, without much efiect upon its structure. It can be alloyed with most of the other metals, some of which, however, as, more especially. Tin, Bismuth, Lead, and Antimony, give it a remarkable hardness and brittleness. Gold melts at a temperature of about 2,016 Fahrenheit (32 degrees of Wedgwood's Pyrometer). 7 98 GOLD. Gold has been found, from time immemorial, in many parts of the world. It is always found iu the metaUio state, partly as native Gold, partly associated with the Ores of other metals. In Europe it is found to the present day in Wales and Cornwall, on the Rhine, in Switzerland, Italy, Hungary, Transylvania, and in the Oural Mountains in Eussia ; the latter dis- tricts, more especially, furnish considerable quantities of this most precious metal. In Asia, there are nume- rous regions where Gold has been found in abundance in ages gone by. It is undoubtedly still found there ; only our information of the exact localities is limited. It is very hkely that large deposits of it are hidden in the remote districts now inhabited by roving tribes ; the spread of civihsation may bring thesie stores of mineral wealth to light many years hence. Africa has always furnished Gold, and still con- tinues to do so ; and if the chmate and other circum- stances should ever permit a population of the European spirit of enterprise to penetrate into the wilds of that Continent, the sources from which the natives at present obtain their comparatively scanty supply might be forced into yielding richer streams of the Precious Metal. America and Austraha now produce the far larger portion of our fresh supphes of Gold. The older coun- tries of the Western World that have furnished, and still continue to yield Gold, are Virginia, North Caro- lina, and other States of the Union ; Mexico ; Central America ; Brazil, Peru, &c. Nova Scotia and British Columbia also now contribute to our store ; but the GOLD. 99 collective yield of all these countries together falls far short of that of California, which, from 1849 to the present date, has given from eight to thirteen milhons pounds sterhng per annum. Australia, whose rich treasures of the Precious Metal were discovered first in 1862, is almost equally productive in Gold as the Western Coast of North America. The probable exhaustion of these rich Gold fields of the New World, within a more or less remote period, is a matter of sei^ious consideration. To say that these fields are inexhaustible, would be evidently wrong; indeed, the so-called surface diggings have been partially exhausted already. Still the yield, with slight variations, continues at about the same rate, owing chiefly to deeper digging, and Quartz mining opera- tions with improved Machinery ; and we believe we are not far out in assuming that for the next fifty or sixty years there will be a pretty constant supply of Gold from these quarters. By the end of that time the Gold deposits existing in the South- Western portion of North America, iu Patagonia, and in the yet unex- plored regions of Austraha, may become available ; not to speak of Asia and Afi"ica, whose hidden mineral wealth may be reserved for future ages. It is a question whether the now more or less exhausted Gold fields of the Old World ever have produced, or whether those hkely to be discovered in future in difierent parts of the earth, ever will produce Gold at so rapid a rate as California and Austraha have done severally since 1849 and 1852. It is true that the Sacred Writings speak of large quantities of 100 GOLD. Gold in the days of King David and King Solomon ; also that the Spaniards for more than three centuries drew considerable quantities of the Precious Metal from Mexico, Peru, and other sources ; but there is no evi- dence to show that the Gold-bearing districts of Asia or New Spain were ever so extensive, or were ever worked in so energetic and systematic a manner as the new Gold regions discovered within the last twenty years. Certain Political Economists, more particularly Michel Chevalier — ^whose work upon the subject has been translated by Eichard Cobden — have endeavoured to prove that Gold has of late been in excessive supply, &c., and that it has accordingly fallen in value. This is a moot point to which we shall have occasion to return hereafter, in a special chapter on the supply, the uses and employment, and the consumption of Gold. As we have already observed. Gold is always found in the Metalhc State. Strictly speaking, then, there are no Gold Ores, though the Gold is often found associated with the Ores of other metals, as Silver, Copper, Tin, Iron, &c. The association here, however, is simply a mechanical one, and the Gold is separated readily enough, according to circumstances, either by the metaUurgic processes of roasting, fusion, re-roast- ing, fusion with Lead, and cupellation ; or, in the case of rich Ores, by direct fusion with Lead, succeeded by Cupellation ; or by the process of amalgamation. To obtain the Gold in a state of purity, the chemical process of Eefining must ultimately be had recourse to. The quantities of Gold obtained from this source are GOLD. 101 comparatively small. The far greater bulk of this most precious of all metals is obtained as native Gold direct from the soil ; or from the auriferous sands of certain rivers. The various Mining and other processes in general use at the Austrahan and CaHfornian Gold diggings, and the machinery employed for crushing the auriferous Quartz, and extracting the Metal from the matter with which it is mixed up in the rock ; also the form and quality of the Gold dust, according to the different localities in which it is found, are pretty generally known from the accounts and descriptions given of them by travellers. We will, therefore, confine our remarks here to the outlines of the several methods pursued, and the pro- cesses employed for the extraction and gathering of the Precious Metal in the Cahfornian and Austrahan diggings. PLACES MINING is the general term apphed to the operations practised at the diggings to get the Gold dust out of the soil. The Gold is found imbedded in the earth — in httle flat flakes, in small roundish grains, and in nuggets varying from the size of a pea up to lumps of several pounds weight. It often occurs that twenty cart-loads of earth contain but a few shillings worth of Gold, whilst at other times a mere panful of soil will yield several pounds worth of the Precious Metal. Washing the soil with water is the principal operation in Placer Mining ; indeed, without the agency of water 102 GOLD. placers would be of comparatively but little value. There are dry Placer Diggings — on tlie sides of hiUs, in ravines, in valleys, and in plains; witb pits many feet deep, and tunnels many yards long, wtere "Water has to be conveyed by canals and ditches. Some of these waterworks are stupendous enterprises of engineering skill. But there are also many others situated close to rivers, where the miners have free access to water; and others still that are actually in the bed of the river, where there is too much water, and where it has to be dammed out to permit profitable working of the auriferous deposit. Water then is the great agent employed to wash away from the am-iferous soil the earth, stones, and rubbish ; the Gold, by reason of its great specific gravity, subsiding to the bottom of the apparatus used in the washing process. A shallow TIN PAN, called at the diggings a pros- pecting pan, is the most primitive instrument in use there ; a few shovelfuls of earth are thrown into this pan, which is then immersed in water, and gently moved about. The contents of the pan are thereby gradually converted into a kind of thick muddy - slush, from which the stones are then picked out, and removed by hand, the Gold subsiding meanwhile to the bottom of the pan. As the process of washing goes on, the dh^t and sand are gradually washed away, until, at last, there remains only about a pint of thin mud in the pan. The washing is now continued with greater caution, until there i-emains ultimately only a small quantity of black sand, with glimmering bits of GOLD. ' 103 Gold disseminated through it. Many a panful of supposed auriferous dirt turns out to contain nothing, or only the colour of Gold, which is the technical term made use of among the diggers to express that only a few paltry grains of Gold have been found in a large mass of dirt. Where, as will also happen, the washer gets hold of some rich auriferous soil, the moment when the Gold makes its appearance, may be with a nugget or two shining out from amidst, is truly a most exciting one. Another Gold-washing instrument in use at the diggings is the Ceadle, a double-bottomed box, into which the dirt and water are thrown to be rocked about. The stones are picked out and ejected, the dirt gradually dissolves, the Gold subsiding to the bottom. The pan and the cradle are used where no flowing water can be had. With a constant supply of flowing water at command, our Californian and Australian Gold seekers use more effective machinery. One of these superior washing apparatus is known as " Long Tom." This consists of a box, about twenty feet long by two feet wide at the top, and three at the bottom, held in an inclined posi- tion. The lower end of the box is made of perforated sheet Iron, and below this is a rifl&e box, which some- times contains Quicksilver (the rifiie bars which this box contains are made of wood, in the grain of which the fine Gold catches). The water enters at the top; one man throws in the dirt, which is washed by the stream; another picks out the stones and the rubbish, and attends to the proper working of the machine 104 ■ GOLD. generally. Tlie Gold is afterwards found at the bottom of the apparatus and in the riflfle box. "Long Tom" has lately been superseded by Sluices. A sluice is a succession of wooden boxes, each ten to fifteen feet long, to from one to five feet wide, through which a continuous stream of water flows. A number of men work together, according to the number of boxes and the length of the Sluice, which varies from 50 to 1000 feet. The Gold remains at the bottom of the sluice boxes, where it is caught by false bottoms or riffle bars and other contrivances. Quicksilver is used very extensively in all Gold mining operations. The larger pieces would be caught without its aid, but the fine particles of Gold — some- times so fine as to swim on water — would escape, if the Quicksilver did not catch or retain them, through the Amalgamation between the two metals. There are several ways of using Quicksilver in this process. It is sometimes thrown in with the dirt, when it will dissolve the Gold on its way through the sluices; or the last washings are made to flow slowly over long Copper plates, coated thickly with Quicksilver ; when the fine Gold will adhere to the Quicksilver, the Copper plate becoming encrusted with the amalgam, which is then removed from time to time, and the Copper plate pre- pared afresh. Every four or five days, the whole sluice is cleaned vp, i. e., the Gold is taken out which has collected during the time in the crevices and riffle boxes. The wooden sluice boxes can be moved about as occasion requires. The supply of water is derived either from a GOLD. 105 stream, or from water works erected for tte purpose by some Water Company. In the latter case, a cliarge of so much, per inch of water is made, calculated on a pecuhar system of measurement. Accordmg to the supply famished, this charge may range from 10s for two men, to £20 per day for a large company of miners working together. Some of the Laegb Sluices are paved with stones, and are of course stationary. There are Tunnel slmces. Ground sl/wices, and other kind of sluices ; and many little contrivances and appliances are made use of in the sluice-washing system. The chief points of this process, however, have now been sufficiently described. The spade, the wheelbarrow, and the cart, are employed to convey the dirt to the sluices. Tunnelling and blast- ing also are often resorted to ; in fact, the proceedings generally, in large undertakings, with a great number of men working together, look very much as if railway or sewerage works on a large scale were being carried on there. But the most prodigious operation in Gold washing is what is called Htdeaulic Mining. An abundant supply of water is brought down from a considerable height, by powerftil pressure, in strong pipe hose, from three to eight inches diameter, and thrown with immense force against the side of an auriferous hill, which is thus, as it were, bodily washed down into the sluices erected for the purpose of receiving these large masses of dirt, and washing the Grold out of them, in much the same way as just now stated. As an auxiliary- operation in Hydrauhc Mining, Blasts are resorted to. 106 GOLD. to tear asunder the earth and rock, and charges of from 10 to 200 barrels of powder are fired at a time. For the eager greed of man for wealth shrinks not from employing the fiercest agencies that fire and water can place at his command to force Mother Earth to yield him her treasures. This gigantic hydraulic process is generally employed on mountainous districts, where water is abim^dant. A large number of men band together to carry on the operations, as the expenses are great, and the work is a work of time, requudng considerable attention, and a most systematic division of labour. The Grold which is thus found in the loose ground at the surface, and down to a depth of several hundred feet, was not there originally. We find that the larger or smaller particles of the Dust, and even the large heavy Nuggets, are more or less rounded off"; their original and sometimes fantastic shape has lost its sharpness of outline. This is no doubt due to the action of water, which, aided perhaps by convulsive disturbances of the surface crust of the earth, has, in flowing over the ground washed by it, torn the Gold from its hidden beds, and, in carrying it away to dis- tant parts, has rolled it about for a considerable time ; until the metal has ultimately subsided, together with the disintegrated rock and rubble of the floating mass, which constitutes the general deposit through which we find the precious metal disseminated more or less copiously or sparingly. This Gold came originally from Quartz, found to exist in veins of varying thickness and extent, in. the GOLD. 107 mountainous and other districts of the auriferous regions. It is evident, from looking at a piece of Gold- bearing Quartz, that the whole mass, at some time or other, must have been in a state of fusion. The Gold lies in streaks and veins, in smaller or larger portions, with jagged ends, between the layers of the stone ; filling, in fact, some of the crevices which the accidents of the fusion and subsequent solidification have caused. In some kinds of auriferous Quartz we find the stone intersected by soft veins of earth, and in a porous state ; whilst other kinds show a very sohd and hard structure. The action of the elements, however, ultimately disintegrates and decomposes the Quartz, gradually reducing the mass to sand; and the Gold originally imbedded in the rock in streaks and veins, and flakes, spangles, and lumps, is washed out and carried away by the water flowing over the ground, which, by rolling it about over considerable distances, and for a long time, wears and rounds it, as just now mentioned, into the shape in which we find it as Gold dust and nuggets. QUARTZ MINING is now the most general, as it is also the most profitable, way of obtaining Gold. Very soon after the first explorations of Placer mines, the Gold-bearing veins of Quartz rock were discovered. Some of these crop up at the surface, and shoio the Gold ; others He hundreds of feet below the surface ; and all the ordinary contrivances of mining — by pits, shafts, and tunnels — have to be resorted to, to raise the Quartz to the surface. Some of the roch is 108 GOLD. very ricli in Gold, a hammer cleverly and vigorously handled being sufficient to separate the lumps or veins of Grold ; the far greater portion, however, is poor in comparison, and in some parts the sharpest eye would be unable to detect the presence of Gold. Yet even these still contain minute quantities of the Precious Metal ; and if a ton of 2000 lbs. will yield even 07ie ounce of Gold, it pays well to work it out. When the Quartz has thus been brought to the surface, the Gold seeker has, in the first place, to per- form an indispensable prehminary work, which in the Placer mines he finds already done for him by Nature. The stone has to be crushed and pulverized. From the sand thus obtained the Gold is then extracted, by washing with water, on pretty much the same prin- ciple as in Placer mining, and by the copious use of Quicksilver. The Ceushing Mills, or Quaetz Mills, as they are called, vary greatly in construction. The Arrastra of the Mexican settler is the most primitive form. The Quartz is first broken with the hammer into small pieces, which are then thrown into the mill — a round trough, measuring ten to twelve feet in diameter — in which four heavy granite blocks- are dragged round by means of an axle driven by a mule. The modern Californian or Australian miU is a very superior afiair. Steam or water power sets in motion mill stones, or heavy iron balls, or sets of stampers. The washing apparatus, the amalgamating contri- vances, and all the rest of the elaborate machinery, are of the most approved construction ; everything GOLD. 109 looks bright and clean and safe, as in some of the best manufactories in England. To see a properly appointed Quartz miU — its working from the first throwing-in of the rochs until the heating of the balls of amalgam, to drive out the superfluous Quicksilver — is a most grati- fying sight. Many of these Quartz miUs are not im- mediately connected with the working of Quartz veins, but work by the'job, or crush Quartz for single Miners or Companies, at a certain charge per ton. Good fortune and bad fortune wiU, as a matter of course, attend Quartz mining as well as Placer mining. A rich vein may suddenly turn poor, or may altogether cease to yield ; whilst a poor vein may suddenly im- prove, and make the owner's fortune in a short time. Quartz is evidently the bed in which the Gold was originally deposited, as far as we can ascertain at present; and we are pretty safe in taking it for granted that for many years to come, long after the Placer mines shall have been exhausted, the supply from this source will continue pretty steadily. In fact, the steady maintenance of the annual supply from California and Australia, although the Placer mines there have already declined in yield, is due to the increasing extension of Quartz mining operations, which, however, require a large capital to carry them on profitably. We have thus far shown the reader how the Miner first extracts the Precious Metal from the auriferous soil or the Gold-bearing Quartz. Where it is the pro- duce of direct washing, it appears in the form of Gold 110 GOLD. dust, in fine flakes and spangles, and grains Kke sand, and in small pieces of tlie size of a pea, and nuggets of larger dimensions, up to lumps weighing several ounces, and even several pounds eact. It is heavy, soft native Grold, of a somewhat dull golden lustre. Where the article has been obtained by the amalga- mation process, employed both in Placer Mining and Quartz Mining, it appears in the form of lumps, from one to six inches diameter, having a greenish lemon colour ; they are hard and brittle, and spongy-looking, which is simply the consequence of the preceding amal- gamation of the Gold with Mercury. In both forms this article is marketable, and the owner can get his price for it from the Dealer and Banker at the diggings, within one-half to one per cent, of the actual value, a deduction to which the Miner or Quartz miller may well cheerfully submit. But this Gold is not yet Bullion in our sense of the word ; its exact value to a penny in a thousand pounds' worth cannot be properly ascertained until it is melted and assayed. These pro- cesses, by which we may ascertaia to a fraction how much Coin the article wiU produce, will be described hereafter. The parcels of Gold dust, &c., or of Amalgam Gold, thus sold to the Dealers and Bankers at the diggings, vary considerably in quality and price, according to the difierent localities that have furnished them. Some descriptions are worth 80s per ounce, whilst others will only fetch 50s per ounce. We shall hereafter take occasion to show the causes of these differences. Ill CHAPTER VI. SILVEE. SILVER ranks next to G-old in the class of Koble Metals, thougli Platinum and its kindred metals are less liable to alteration, and less subject to tlie influence of chemical agents. But Silver, on the other hand, possesses many most valuable properties which the metals of the Platinum group lack altogether; moreover, their great scarcity must always prevent their employment for the principal uses and purposes to which Silver is turned. With the exception of pohshed Steel, perhaps. Silver is positively the brightest of all metals, its dazzhng white brilhancy exceeding even the splendid lustre of Gold, though it must yield to the latter in warmth of colour. A highly-polished surface of Silver will reflect hghts and shades with greater effect than the brightest glass mirror. Although Silver is unalterable in pure air, and not affected by moisture, and refuges to oxidise at any temperature, it is subject more or less to the action of a number of chemical agents that make not the least 112 SILVER. impression upon Gold. Silver has a most powerful attraction for Sulphur ; it will, therefore, speedily tarnish in an atmosphere containing even the shghtest traces only of sulphuretted hydrogen gas, a brown or brownish black film of sulphide forming on its surface, which film, however, protects the Metal from further action of the gas upon it. Vegetable acids leave Silver entirely unafiected, but Nitric, Sulphuric, and Muriatic acids — especially the two former — dissolve it. Nitric acid will do so even when diluted and in the cold ; Sulphuric acid requires the aid of heat to promote its dissolvent action upon the metal. Hydrochloric acid attacks Silver but httle. Silver forms numerous compounds with Oxygen, Chlorine, Iodine, Cyanogen, Sulphur, Mineral Acids, Organic Acids, &c. The well-known lunar Caustic, which is extensively used in Medicine and in Photo- graphy, is simply crystallised Nitrate of Silver. It is its great afl&nity for other bodies which accounts for Silver being so rarely found in the native state. It is obtained chiefly from Ores. The specific gravity of Silver is 10"5. It fuses at a temperature of ^bout 1860-1870 degrees Fahrenheit. Its malleability is very great. It cannot be beaten out so fine as Gold indeed ; still, one grain of it can be flattened to cover a space of fifty square inches, or drawn into a wire 130 yards long. Its tenacity is only inferior to that of Iron, Copper, and Platinum ; a Silver wire 0"078 inch in diameter will bear a weight of 187'13 Avoirdupois without breaking. Pure Silver is a little harder than Gold, but still SILVER. 113 sufficiently soft to be easily cut with a knife. Silver can be alloyed with, most of the other metals, some of which tend to render it more tenacious, whilst others make it exceedingly brittle (more especially Tin, Lead, and Mercury). There are many indications found in the most ancient records of History, pointing to the use of Silver, in the earliest times, for monetary or for orna- mental purposes. The Egyptians and the Jews appear to have had plenty of Silver, even at the time of Abraham. The exact localities whence these supplies were drawn are not traceable now ; but in Greece and Syria there are mines known to have been worked long before the Christian Bra commenced. In Europe Silver is found in England and Wales, in Spain, Germany, Hungary, Greece, Sweden, Norway, and Russia ; generally combined with Ores of inferior metals. In Asia we find Persia, India, China, and Siberia producing it. Africa, with the exception of the Northern part, has hitherto furnished but little Silver. The supply from these various sources has been less spasmodic than that of Gold, and continues at a fair rate to this day. The discovery of America, and the exploration of the Silver Mines of the so-called Spanish American dis- tricts, marked a great period in the history of Silver. The Spaniards brought over from New Spain many a ship -load of that Precious Metal, and fabulous are the accounts of the wealth that flowed into the coffers of that nation and of the Portuguese. The Silver Mines 114 SILVER. of Peru, CMli, and other parts of South America are still in working, but they furnish at present only moderate quantities of the Metal. Mexico now holds the first rank for the supply of Silver to the "World. The Mexican Mines are exceed- ingly rich ; their yield was very large, more especially during the last century, when it exceeded occasionally £4,000,000 per annum. The supply declined in the period from 1828 to 1840 ; but it has since then again reached, and even exceeded, the high figures of former times. Within the last five years Mexico has found a rival in California, and in the new North American State called Nevada. Numerous Silver mines, yielding Ores of great richness have been discovered in these quarters, and from three to four millions sterling worth of Silver have been brought to light annually. The supply from these fresh sources is likely to become very considerable. Throughout the range of the Rocky Mountains — from British Columbia down to Cape Horn — Silver is known to exist. Australia also furnishes Silver, and is probably as rich in deposits of it as California has lately turned out to be. This will be made manifest in the next few years. The processes of Mining for Silver are pretty nearly the same as all other Mining operations. The Ore Lies at various depths, and has to be brought to the surface of the ground in much the same way as other minerals. Native Silver Ore occurs occasionally; SILVER. 115 some of the Peruvian Silver, for instance, has been found in that state ; and in the different mining locah- ties specimens of the metal are found, in greater or smaller lumps, or in veins and flakes mechanically combined with the Ore. Silver is also often contained in native Gold; also in Copper, Antimony, Lead, and other metals, extracted from Ores by smelting. The Ores of Silver, from vs^hich, as already stated, the greater quantity of the metal is derived, are very numerous. The Sulphide of Silver Ores are the richest. The i-uby Silver, which is frequently found in the crystallized state, is the most valuable of these, containing from thirty to sixty per cent of the metal. There are also certain Sulphide Ores found in which the Silver is associated with Gold, Copper, Iron, Zinc, Arsenic, Antimony, Lead, Bismuth. Some Ores are very poor indeed, containing perhaps only one-tenth or one-twentieth per cent, of Silver; yet their reduction pays. A description of the roasting, smelting, and other processes and operations practised to procure the pure Bright Metal cannot well be given here. The subject is too extensive; but ample information may be ob- tained from the many valuable works specially devoted to it. In Germany, more particularly, the reduction of poor Silver Ores has become a scientific industry of very high standing. Here the foregoing brief indications will suffice for our purpose, and the reader must imagine himself now in presence of a cake of Silver, — say a jagged piece, measuring about one foot round, and three inches deep 116 SILVER. , in the centre, — or of rougli bars of Silver, about ten inches long, by foiir wide and four deep, turned out of an iron mould; or of lumps of OMnese Sycee Silver, resembling ia form and size the shoe of a Chinese lady. These various pieces may all of them be valued in the rough; but remelting, weighing, assaying, and other manipulations are necessary, to convert them into Bullion proper. 11 H CHAPTER VII. BULLION. rrmE term Bullion, as applied generally by Bankers -^ and Merchants, is used to denote the Precious Metals, Grold and Silver, in the shape of Blocks, Bars Ingots, Pieces, Coins, or in any other form in which they may be brought into the market to be sold for their intrinsic Metallic Value. Foreign Coins, having no legal currency in the country, come accordingly also under this denomination where they are simply held for sale for what they are intrinsically worth ; and so do, strictly speaking, the lawfal Coins of the realm. Grold dust and broken-up Jewelry and Plate, intended for the melting pot, belong to the same category. Gold and Silver thread fabrics are sometimes called Bullion, but they have no right to the name in the sense in which we use it. Gold and Silver Ores and Alloys containing only a small proportion of Gold or Silver are not Bullion. The proper sense and meaning which we attach here to the term " Bankers' BuUion," excludes even its application to Gold dust, and to broken-up Jewelry and Plate. For, although the worth of such articles can be pretty accurately calculated from their weight 118 BULLION. and their known quality, yet to determine their exact Metallic Yalue correct to a fraction it is indispensable to melt tlie material, intermix tte mass by stirring, tlien cast it into Ingots, and assay and weigh these. We accordingly restrict the apphcation of the term Bullion here to Ingots of Gold or Silver of all sizes, and to masses of Gold or Silver Coins, ffom the quahty and weight of which we calculate their value in Pounds, ShilHngs, and Pence, Francs and Centimes, Dollars and Cents, as the case may be. Bullion in Bars weighed, assayed, and with an exact statement of its value affixed, is held by the State Banks or Mints, to be manufactured into Coin, whenever necessary. Bullion is the sohd international Medium of Ex- change ; and the large Exchange transactions arising from the balances of trade between Nations, are settled chiefly by the transmission of uncoined Bullion from the one to the other. It is obvious that BuUion in Bars is the most suitable form for this purpose, and that it is, on the whole, cheaper than Coin, which involves the expenditure of Coinage, — at ah. events to the Nation issuing it ; and which is hable moreover to abrasion, and consequent loss of weight, &c. The Nation receiving the Bulhon cares little for the form in which it is sent, so long as it contains a certain quantity of Gold or Silver charged at the value of these materials in the country where the Bullion is received. Therefore, whether we, in England, receive Gold Coins from a Foreign country — which, as they are not current here, we have to melt down into Bars, BULLION. 119 to coin Sovereigns of them^or wlietlier we receive Bars of Gold, wHcli realise precisely the same value as the melted Coin, the result is the same to us. The Foreigner, who has to furnish us with a specific amount in Pounds Sterling here, may find it cheaper to send us Bars instead of Coin. The great bulk of this international Bullion busi- ness is consequently carried on by Bulhon Bars. The difference of value between Bars and Coin is, however, very small ; and, frequently, when the Coins are quite new, they answer just as well as Bullion in Bars. In some countries, also, Bars are occasionally scarce, and Coins must be sent. The manipulations of melting, weighing, valuing, assaying, refining, and coining Bulhon, wiU be ex- plained hereafter. From the "Weekly Returns published, it appears that the Bank of England generally. holds, at present, say £20,000,000 in Bulhon. This is all in Gold, chiefly in bright yellow Bars. — (The Bank but rarely holds Silver Bullion). Twenty MiUions Sterhng in Gold, if we take the average weight of £1,000 at 21 lbs. Troy, or about 17^ lbs. Avoirdupois, would represent a mass of 350,000 lbs. weight, or 176 tons of 2,000 lbs. each. Taking a four-horse waggon to carry five tons, it would require thirty-five waggons of the kind to cart away the 175 tons of Gold. Supposing each man of them to be able to run away with 100 lbs. weight, or £5,700, it would take 3,500 robbers to carry off the treasure. 120 BULLION. A cubic incli of Gold weiglis about 10 oz. Troy, and, at an averagTprice of £4, ia worth £40. Tbe £20,000,000, therefore, would fill a space of 500,000 cubic inches, or about 290 c ubic feet, which is equivalent to a room six feet square by eight feet wide. A recent estimate values the total amount of Grold now in the hands of man — in Coin, Ornaments, Utensils, and otherwise — at about 1,200 milhons Sterhng, or 300 millions ounces, or thirty millions cubic inches. This would give a block containing some 17,300 cubic feet, measuring about 26 feet each way, and weighing 10,600 tons of 2,000 lbs. each. A Bar one inch thick by one inch wide could be made of it two and-a-half millions feet, or 500 miles long. This Bar might be drawn into a wire, more than one-twentieth of an inch thick, 238,000 miles long, which is the calculated distance from the Earth to the Moon ; and 0'05 inch diameter is a pretty stout thickness for a wire. One grain of Grold can be drawn out into an almost invisible wire some 600 feet long ; one ounce would thus give about 55 miles of wire; and the whole mass, consequently, 16,500 millions miles of wire ; — and the distance from Neptune to the Sun is only 2,900 millions miles ! Supposing the £1,200,000,000 to be cast in a single plate one-twentieth of an inch thick, this plate would measure about 4,200,000 square feet; say 2,100 feet long by 2,000 feet wide. Estimating very thin gilding at two millions films per inch thick of Gold, the quantity in the plate would suffice to cover about 420,000 miUions square feet, about 15,070 square BULLION. 121 miles, or nearly one-fifth, of tte surface of Great Britain ! The estimates of the total quantity of Silver now in the World vary very much. Some authorities give the total at 500 milhons Sterling; others go as high as 2,000 milhons. Taking it, at a venture, at about 1,000 millions Sterling, the quantity would be, say 4,000 millions ounces Troy, equal to about 275 millions pounds Avoirdupois, or 137,500 new tons. A cubic inch of Silver weighing about six ounces, the 1,000 milhons Sterhn^ would give a block containing some 388,000 cubic feet, say 100 feet square by 39 feet high. If a Bar were made of this block, one foot square, it would be nearly 74 miles long ; at one inch square, its length, would be 10,580 miles. A wire made of it, to reach from the Earth to the Sun, a distance of 95 milhons miles, would be about 0'013 inch thick. A single grain of Silver, it is stated, can be drawn into a wire 400 feet long ; which gives for the ounce a length of more than 36 miles. The whole mass of Silver, then, would give a length of 145,000 millions miles, — ^more than sufficient to connect the Sun with the Planets, and leave enough and to spare to link the latter together ! These dimensions are truly astounding and almost inconceivable ; yet how easily conceivable is the bulk of the material, taken as a solid mass ; and how small is this mass compared to the immense bulk of the Earth ! 122 CHAPTER YIII. MELTING OF GOLD AND SILVER. ALTHOUGrH tlie melting, or fusion, of the Precious Metals presents no special features requiring a minute description of the process in aU its parts, yet a few practical details cannot but prove useful to those who have to deal with Bullion. The quality of Gold dust and Amalgam Gold is generally known to a comparatively small fraction ; still the article has to be melted to be assayed in the mass. It is the same with Silver ; moreover, although this metal is generally sent from the farnace at the Mines in a solid state, in some form or other, it has to be cast into a properly-shaped Bar, to suit the machinery used at the Mint. Broken-up Gold Jewelry and broken and battered Silver Plate are collected by dealers, who melt the articles when they have a sufficient quantity, and deter- mine the exact value of the Gold or Silver in the Bar or Ingot cast with the Metal. Foreign Coins of variable and doubtful quahty, when imported as Bullion, have also to go into the melting-pot. Some Foreign Gold Coins (French, American, Russian, &c.) are known to be always of the same quality, and are MELTING OP GOLD AND SILVER. 123 bought by weight, without melting. But where the pieces are intended to be recoined here, they must, of course, also be melted down. Jewellers and others in the Gold and Silver business, who have to deal only with comparatively inconsiderable quantities of metal, do their melting in small ovens or gas furnaces. But where Bullion has to be melted in masses, for Banking and Minting purposes, the furnaces are built in rows, or ranges, generally against a wall of the building, which carries the flues. The lower portion, reaching to a height of about two-and-a-half feet, projects from the wall, and is formed of an iron casing, enclosing the hearth or pit of the furnace — a square prismatic cavity, lined with fire bricks, from twelve to twenty -four inches wide, by about thirty inches deep. Some six to twelve inches from the bottom of the pit are placed strong, moveable fire bars ; underneath them is the ashpit, with a large opening in front of the casing. The top of the casing carries an horizontal iron ledge, from eight to twelve inches wide, on which the moulds are placed, and whence the melting pot is lifted in and out. From the back of this ledge the casing runs upwards at an angle of forty-five degrees, some fifteen to twenty-five inches high, until it touches the waU carrying the flue. A square opening is made in this piece of the casing, of the same width as the furnace pit, and placed right over it ; through this opening the fire is kept up, and the melting pot inserted. It is closed by a moveable iron shutter, provided with a handle, and running in horizontal grooves. 124 MELTING OF GOLD AND SILVEE. The crucibles, or melting pots, now in general use are made of Plumbago (Black Lead) ; the best and most durable arc manufactured in London. They are of a conical sbapc, wide at the rim, and narrowing to a flat bottom. Tbe material to be melted — Gold dust. Coin, Lumps, Bars, or Ingots of Glold or Silver — (of which an account has previously been taken at the Office, and which is sent in to the furnace room accompanied by a ticket giving the marks and the number of the Bars to be produced) — is put into the crucible. Bars or Cakes of Silver requiring remelting, are broken into pieces first with heavy hammers, or with steam hammers and cutters. The melter then proceeds to throw a shovelful of live coke on the bars of the furnace, and places the charged crucible upon them, coveriug it with a Plum- bago top. He then fills the space around with coke, up to the top, and closes the iron shutter. The strong draft and the roar soon give evidence of the rising fire. Meantime the melter cleans the iron mould in which the metal is to be cast. For Gold, the moulds are sis to ten inches long, by two to three inches wide, and about two inches' deep inside ; they are narrower at the bottom, to let the Bar come out easily. The moulds for Silver are larger, measuring from twelve to eighteen inches in length, by four to six inches in width, and six to eight inches in depth. They are also narrower at the bottom, for the same reason as the moulds for Gold. The moulds must be perfectly clean and dry ; they MELTING OP GOLD AND SILVEE. 125 are slightly greased inside, and ought to be warm. The melter, standing before the furn^ice, places the mould on the ledge of it, on his left hand side ; he then examines the fire, poking it with an iron rod, or slightly tapping the moveable bars, to clear away cinders, and adds coke, if necessary. "With a pair of long tongs, he hffcs up the top of the crucible, to see whether the contents are running. If he thinks it advisable, he throws in a little flux (borax, &c.) to clear the surface. A rod of Plumbago, about eight inches long and one inch thick, is also thrown on the coke ; this is afterwards seized with the tongs, and is used for stirring the molten mass. It must be red hot for this purpose. It is most important to stir the mass pro- perly, to insure an equal quality throughout the Bar, so as to obtain a proper assay. The heat is very intense at this stage of the melting, sufficiently so indeed to scorch the faces of lookers-on who may be standing four or five feet ofi". The melter is accustomed to it. To facilitate the handling of the rod, or tongs, close to the fire, he wears on one hand a glove, covered with layers of rags to a thickness of five or six iuches. This glove, although damped, is frequently on fire, and requires continual patching. When the proper moment has come, the pot is lifted out, by means of a large pair of tongs, furnished at the fire, end with two concave, or semicircular, jaws, to embrace the curvature of the crucible. These are thrust into the furnace, and the pot is seized around with them a few inches below the rim, and grasped tightly. The man clasps the long end of the tongs 126 MELTING OP GOLD AND SILVER. "witli his protected hand, close to the glowing mass, and slowly and deliberately lifts out the white-hot crucible with the other hand. With only some 200 ounces or so of Gold this is no difficult task ; but it is a very different affair when a weight of some 1,000 or 2,000 ounces of Silver has to be Hfted in this fashion, in which case the assistance of another man is generally needed ; a crane is also often used. Placing the pot on the ledge, a little away from the side of the mould, the melter holds it until another man grasps it sideways with another pair of tongs with concave jaws. "With his gloved hand again close to the pot, and the other hand holding the longer end of the instrument, iiie melter slowly inclines the ■erucible, and pours the molten mass into the mould, until the last drop is tilted into it. When the cast is set — though still red-hot — the mould is turned over, the bar tumbles out, and is 'hfted or dragged away over the iron floor. The floors of the melting house are made of iron, as an effectual safeguard against the loss of any of the precious metal from spilling, in the event of an accidental cracking or upsetting of a crucible — accidents which vrill occur occasionally, though rarely. Nothing can equal the beautiftd appearance of a molten mass of Grold or Silver. Looking down into the crucible, the liquid Gold appears floating about at a heat near dazzling whiteness. The prevailing hght is that of the heat ; but the eye, after looking at it for some moments, can clearly distinguish the surface of the metal. Now and then its yellow golden nature MELTING OF GOLD AND SILVER. 127 will reveal itself by sudden flashes; streaks of prismatic colours seem to travel over it ; then bright green will show, even through the intense whiteness of the light. Light blue will be seen, streaked with red ; but golden yellow and green are the principal colours that are seen flashing through the white burning rays. "When the golden mass is poured into the mould in a stream, the surface at first seems to heave and dance. As the white heat goes down, the coloured lights become more distinct. When the mass has set hard, and is tumbled out — stiU red-hot — the surface shows changing patches of green and red, which are now and then outshone by the lightning flashes of the metal; a little after this, the Gold coating becomes more distinctly visible ; letting the red rays pass through as through a curtain. The red heat gradually loses its intensity, and shortly after, as the red deepens more and more, and fades away, the brilUant golden sides of the Bar or Ingot shine in all their quiet glory. This efiect is particularly observable in fine Gold, which always sets bright and pure. With Gold rather largely alloyed with inferior metals, the Bar is apt to get tarnished on the surface, by films of oxide forming on it ; steeping in an acid solution will remove this coating, and bring out the Gold. Molten Silver in fusion looks equally beautiful; blue and violet colours show during the melting, pouring out, and cooHng, intersected with Silvery flashes ; and the contrast, towards the end of the process, between the dark red and the bright curtain of Silver through which it shines is still more marked than it is with Gold. 128 MELTING OF GOLD AND SILVEE. When tlie Bars are cold, they are taken to the stamping room, where a mark and number is impressed upon them. We shall hereafter have occasion to see what is done with the Bars after they leave the stamping room. As regards our present purpose, we have now brought Gold and Silver to the stage where these Precious Metals, in the shape of saleable Bars, are Bullion — in our sense of the word. Bars occur of all sizes and shapes. The Cahfomian .and Austrahan Bars resemble square bricks and half bricks of various sizes. The ordinary Bnghsh Bar tapers towards the bottom. As a rule, our Bnghsh Grolden Bars do not exceed 200 ounces in weight; our Silver Bars 1,000 oimces. The fusion of Bulhon is always attended with a small loss of weight, especially where the Alloy is of inferior quahty. The lower Metals are apt to suffer partial oxidation in a state of fusion ; and overheating the mass wiU occasionally lead to sKght evaporation. The decrease of weight arising from these causes may be from one-twentieth per cent, to one per cent.; but as the loss suffered is chiefly confined to the Alloy, it is not actually so great as it appears, the quahty or fineness of the Metal being correspondingly improved thereby. Particles of Gold and Silver will also occasionally adhere to the melting pot. When the pot has cooled, the inside of it is scraped down, and the Plumbago powder washed away from the MetaUic particles, which are then either handed to the owner of the Bar, or MELTING OP GOLD AND SILVEE. 129 bouglit of him by the melter by weight for the few shilhngs they may be worth. The purer the metal is, the smaller is the lossj fine Gold and fine Silver can only lose weight in cases of excessive heating, when the molten mass gets thrown into agitation, and particles are carried off by the draft of the flue. That this wiU happen occasion- ally, has been proved over and over again. When the flues of furnaces which have been in daily use for a number of years are swept, the sweepings are found to contain smaller or larger quantities of Grold and Silver. A story is told of a large melting estabHshment in Paris where the chimneys, on being cleaned one day, after long- continued use, are stated to have yielded about £6,000 in Gold and Silver ! It is also reported that the sweepings of the flues of the San Francisco Mint and the roofs adjoining, on one occasion yielded a clear return of £2,000. We cannot vouch for the truth of these statements. Melters and Refiners are, perhaps, the best authorities as to their probabihty. Be this as it may, however, the loss incurred amounts at aU events only to an imperceptible fraction on the business done. Twenty or thirty furnaces at work every day for ten years may melt, within that time, Bullion to the amount of hundreds of millions sterhng. A first-class melting estabhshment, with its iron floors, ranges of furnaces, and swarthy Welshmen (the melters employed in England are generally Welsh), is a sight well worth seeing. The Chief Melting Establishments in London are those of Messrs. Browne and Wingrove, Wood Street; Messrs. Rothschild, at their Refinery, 9 130 MELTING OF GOLD AND SILVEE. Tower Hill; Messrs. Johnson and Mathey, Hatton Garden, &c. Tlie following are tlie melting points of some of tlie principal metals, according to the best authorities on the subject ; Tin . Degrees of Heat. 442 Fahrenheit. Bismuth 497 Lead . 612 Zinc . 773 Silver 1873 Copper Gold . 1996 2016 Cast Iron 2786 Platinum wiU only fuse before the oxy-hydrogen blow pipe. The London charges for melting BuUion are : For Gold bars cast of Coin, :^d per ounce ; cast of Gold dust, -|d per ounce ; for Silver, 12s 6d for 1,000 ounces, or j%d per ounce. 131 CHAPTER IX. PUEE GOLD AND SILVER, AND ALLOTS OE THEM WITH OTHBB METALS. npHE Gold and Silver wMcli we meet witli in ordi- -*- nary life — in the stape of Ingots, Coins, Utensils, Ornaments, &c. — differ considerably in quality and intrinsic value. Many people apply the term Gold or Silver indiscriminately, and without regard to difference in quality, to all articles made of what is called good Gold or good Silver. Others, who, better informed upon the subject, know that there are different sorts of Gold and Silver, have recourse to certain trials or tests, to ascertain the true quality of the metal. This is the business, more especially, of Jewellers and Goldsmiths. Bankers and Bulhon dealers, and the Masters and Managers of State Mints, have to examine the Precious Metals submitted to them still more closely and accurately, and to determine their true value to the minutest fraction. Absolutely pxu-e Gold and Silver are elementary bodies, belonging to the domain of Chemistry, which cannot possibly present the least difference in quahty, from whatever source they may have been derived, and by whatever process they may have been brought to a 132 PURE GOLD AND SILVEE, AND state of absolute purity. Take Gold dust or nuggets from California, Australia, or the Oural mountains, or from any other part of the Globe where the article is to be found; take Golden Coins of any sort, or broken Jewelry, and extract from these different articles severally the pure metal, by the chemical pro- cess of Refining (which wiU be described hereafter), and you wiU be unable to detect the slightest difference between the produce obtained from the different sources. You will find that aU the samples present identically the same properties. It is the same with Silver. When the scientific chemist speaks of the ele- mentary bodies — Gold and Silver — he refers invariably to the absolutely pure Metal. A Sovereign, for instance, which is Oold to us, is not 2nire Gold in the chemical sense of the word. Pure Gold is not suitable for Coin; it is too soft, and too much liable to loss from wear by friction. It is, therefore, customary to impart to it greater hardness and more power to resist friction (to which money is continually subject), by fusing it together with certain proportions of other and harder metals ; or, as it is technically called, by Alloying it. When thus mixed or Alloyed, it is, as a matter of course, no longer pure Gold. In analysing a Gold Pound Sterling, we find, for instance, that divided into twenty-four equal parts by weight, twenty-two of these fractions consist of pure Gold, and the remaining two of Copper or AUoy. Accordingly, one-twelfth part of the Coin is not Gold. French 20-franc Gold Pieces contain eighteen ALLOTS OP THEM WITH OTHEE, METALS. 133 parts of Gold and two parts of Alloy — or nine-tentlis and one-tenth respectively. These proportions are found to give the requisite hardness. Articles of Jewelry generally contain much less Gold than Gold coins. Wedding rings, however, are frequently made of Sovereign (i.e., standard or twenty- two carat) Gold. Watch cases and chains of the best description are made of eighteen carat Gold — that is to say, eighteen parts are Gold, six are Alloy. Then there is sixteen carat (sixteen Gold, eight Alloy), fourteen carat (fourteen Gold, ten Alloy), twelve carat, and even eight carat Gold. This latter com- pound, which thus contains only eight parts of the Precious Metal, to sixteen of Alloy, scarcely deserves the name of Gold. In fact, where the proportion of Gold is less than one-half, or twelve carats, the article ought not to be called Gold. Some Jewellers manage the colour of their Alloys so cleverly, that the baser descriptions of their goods closely resemble the best Gold ; by subjecting the surface of the articles made to the action of acids and burnishingjiools, or by actually gilding them over, they make the outside appear as good as fine Gold. The prices of articles of Jewelry, even when made of the best Gold, and HaK- marked to prove the quality, are more dependent on the fashion and the workmanship than on the intrinsic value of the metal which they contain ; as the possessors are apt to find out when oflfering them for sale, with a confused notion that they ought to fetch something very near the price paid for them. 134 PUEE GOLD AND SILVER, AND Pure Silver is also too soft for ordinary uses, and requires alloying with other metals in pretty mucli the same manner as Gold. Nov, where does the pure Gold come from? Is the metal ever obtained in a state of purity in California, or in Australia, or in any other of the Gold-producing regions ? To this question, a reply must be given in the negative. True, we hear Califomian and Austrahan Gold dust and nuggets sometimes quahfied as virgin Gold; but if the word virgin is meant here to stand for pure, it is decidedly a misnomer. We have already described how the Gold is worked out from the Mines and Diggings. We may, therefore, at once proceed to inquire here into the respective quahty and value of the different descrip- tions of the metal as found in the Gold-bearing dis- tricts. There we find that the various sorts of the native Metal coming from the Mines or Diggings differ just about as much in quahty as Gold Coin and Jewelry do. The Gold is, in fact, generally found alloyed or associated with other metals, more espe- cially with SUver; but also with Platinum, Iridium, Iron, Antimony, &c. The Austrahan Gold dust is the piu-est. In some locahties it is found to contain as much as ninety -nine per cent, of Gold to one of Silver; in others eighty per cent, of Gold to twenty of Silver. Cahfornian native Gold contains from ninety-six per cent, down to seventy per cent, of pure metal. South American from eighty-five per cent, down to sixty per cent. ALLOTS OF THEM WITH OTHER METALS. 135 We believe a few specimens of pure native Gold have been found in Wales ; but the quantities of these are infinitesimally small compared to the vast bulk of the Metal obtained in other parts of the World. As a matter of course, the value by weight of the several descriptions differs in proportion to the per centage of pure Gold respectively contained in them. Silver, in the metaUic state, supplied from the Mine, or the smelting furnace, is also more or less largely associated with other metals, such as Lead, Tin, Copper, Iron, &c.; also occasionally with small proportions of Gold. We have then to look upon pure Gold and Silver simply as elementary bodies that can be obtained only by chemical agencies from the native Metals, or their Alloys and Compounds. And some people will even maintain that there is no such thing in actual existence as chemically pure Gold or Silver, the Precious Metal always retaining some minute trace of impurity, how- ever repeatedly and carefully it may have been refined. Be this as it may, the purity or fineness of the Gold we have to deal with is sufficiently absolute for all practical intents and purposes, even where the im- purity in the article exceeds one in ten thousand parts. In commerce we say fine in lieu of pure ; when we speak commercially oi jme Gold or Silver, we mean metal of the highest degree of purity attainable by the best processes of refining, and sufficiently pure, at least, for all practical purposes. The reader will please to bear this definition in 136 PURE GOLD AND SILVER, AND mind, as all our valuations of the Precious Metals and their Alloys have reference to the term fineness, as used in the acceptation here defined. We will now give the per centage composition of a few varieties of native Gold : — Gold Silver SPECIMENS Feom Central Ameeioa. . 88-24 87-94 73-38 . 11-76 12-06 26-62 62-42 37-58 Gold Silver 100-00 100-00 100-00 Feom Peetj, Chili, &o. . 81-26 59-72 74-00 . 18-74 40-28 26-00 100-00 91-33 8-67 100-00 100-00 100-00 100-00 Feom the Beazils. Feom Afeioa. Gold .... 98-00 Gold. . . . 98-03 Silver. . . . 6-75 Silver . . . 1-69 Other impurities 0-25 Iron .... 0-28 Gold. Silver Copper Iron . 100-00 100-00 Feom the Oural and Siberia. . . . 97-25 Gold. . . . 90-37 . . . 2-18 SUver . . . 9-10 . . . 0-40 Copper . . . 0-07 . . . 0-17 Other impurities 0-46 Gold. Silver 100-00 Feom Calieoenia. . . . 96-14 Gold. . . . . . . 3-86 Silver . . . Iron .... Silica 100-00 90-36 8-80 0-05 0-80 100-00 100-00 ALLOYS OP THEM WITH OTHEE METALS. 137 Gold. . . . Silver . Oxide of Iron . Feom Calipoenia. 86-85 Gold. . . . 77-40 3-05 Silver . . . 22-05 0-10 Other impurities 0-55 100-00 100-00 Gold. Silver Feom Austbalia. 99-50 96-32 94-13 0-50 3-68 5-87 Gold. . . . 95-78 Gold. SUver . . . 3-90 Silver Iron .... 0-22 Iron . Other impurities O'lO 100-00 90-05 9-95 100-00 100-00 100-00 100-00 88-64 11-30 0-06 100-00 Some samples of Native Silver have been found composed of — Silver . . . . 93-00 Copper . . . 2-13 Lead .... 1-60 Arsenic . . . 1-40 Zinc .... 1-00 Iron .... 0-50 Antimony . . 0-10 Other iTripTU"ities 0-27 100-00 Among the native metallic compounds or Ores of Silver may be mentioned, more especially : — Antimonial Silver, which contains about seventy-five to eighty-five per cent, of Silver, to from fifteen to twenty-five of Antimony ; Arsenial, or Mixed Antimonial Silver, 138 GOLD AND SILVER, AND THEIR ALLOYS. which, contains about fifteen or sixteen per cent, of Silver, to thirty-five of Arsenic, forty-four of Iron, and four of Antimony ; Tellurial Silver, with about sixty per cent. Silver; Silver Amalgam, which contains about thirty-five per cent. Silver, and sixty-five of Quicksilver. The Silver obtained by smelting Silver Ores often contains, as has already been stated, — Grold, Copper, Lead, Antimony, Bismuth, and a variety of other impurities. 139 CHAPTER X. TESTING AND ASSAYING BULLION. nnHE Metals with whicli Bullion and Coinage Gold -■- is generally found Alloyed are Silver and Copper. Silver is tlie natural Alloy ; Copper is melted witli the Gold by the Mints, as it is a harder metal, and renders the Gold more suitable for the purpose of Coinage. Pure Gold is of a peculiar bright yellow colour; its alloyage with Silver gives it a paler greenish tint. Copper deepens and reddens the natural colour of the Gold with which it is Alloyed. Gold intended for Jewelry and Plate is Alloyed with Tin, Aluminium, &c. ; but for Bullion proper and Coinage Gold the only two Alloys coming under our notice here are Silver and Copper. Silver may be Alloyed also with other white Metals; but the only Alloy used for Coinage Silver is Copper. The usual proportion of this latter metal contained in Mint Silver does not affect the white colour of the Silver in any perceptible degree. Now let us suppose that we have ' before us a Bar of Gold, say of about 200 ounces weight — in shape somewhat like a large cake of chocolate — and we want to know its exact value. The first thing to be done. 140 TESTING AND ASSAYING BULLION. is to weigli tlie Bar accurately to a grain, after tHs its fineness lias to be ascertained, and from the data thus obtained, we bave to determine the exact intrinsic value of the Bar to a fraction. The specific weight and the colour of the article show that it is Gold; for confirmation we resort to the application of a simple chemical test : we scrape the surface of the Bar, and apply strong Nitric Acid to it. The fact that no discoloration takes place is a proof that the Metal is Grold. The colour may be nearly like that of pure Gold, or it may look a little pale, showing the presence of Silver; or it may look a little reddish, iudicating the presence of Copper; or both shades may be apparent to the practised eye. If we are certain that the only AUoy in the piece is Silver or Copper, we may make a kind of rough Assay by specific gravity simply. The Bar is weighed for that purpose, first in the ordinary way, then in distilled water. From the specific weight thus ascertained, we calculate the respective quantities of Gold and SUver (or Copper) in it. From the great difierence between the specific gra- vity of Gold and that of Silver and Copper, a rough estimate of this kind is practicable for Gold alloyed with Silver or with Copper, although even the result may be inaccurate to the extent perhaps of several per cent. But where we have to deal with the presence of both Silver and Copper, a rough estimate by this simple means is impracticable, as there is no very great difference between the specific gravity of the one Metal and the other (Silver 10-5=: Copper 8-9). Where TESTING AND ASSAYING BULLION. 141 we do not know whether either of these Alloys is present, the intrinsic value of the Bar cannot be esti- mated in this fashion ; nor will it answer for small quantities. The most ancient Test known is the so-called Touchstone, a hard black basalt stone,* with a rough surface, which is not affected by acids, and on which Grold, rubbed upon it, leaves a distinct mark or stroke. The Touchstone is a few inches long. A broad stroke, one to two inches long, is made upon it with a part of the piece of metal to be tried. The stroke is then wetted with a few drops of Nitric Acid, and the effect is carefully observed. If the line remains entirely unchanged, looking quite as fall and golden as before — and if the Acid drained off the stone looks as clear as before — the Gold may be taken to be very pure. But if the line appears impaired in brilliancy, showing minute breaks here and there over its surface — and if the Acid drained off the stone shows a black tint (indicating the formation of Mtrate of Silver), or a greenish tint (indi- cating the formation of Mtrate of Copper) ; or if it shows both a black and a greenish tint, there can remain no doubt but that the Gold is impure, being alloyed with Silver, or with Copper, or with both. The degree of impurity is measured by the extent to which the j&ne Golden line on the Stone is affected, and by the relative intensity of the discoloration of the Acid. The operation is greatly facilitated by the use of a set of small Golden Bars or Needles (called Touch- * Black flint slate will answer tlie same purpose. 142 TESTING AND ASSAYING BULLION. needles) of known composition, varying in fineness from pure Gold, 23^ carat Gold, &c., down to the lowest sort. The tester selects those which, in his judgment, are of about the same quality as the piece of Metal to be tested, and he makes strokes with them on the Stone, alongside the stroke made by the article under examination. The action of the Acid upon the different strokes enables him to judge of the com- parative degree of fineness of the latter. It is said that the Bullion merchants in the Indian Bazaars are the greatest adepts in this method of testing Gold, seldom failing to ascertain to within one- half per cent, the exact value of the article tested. In Europe Jewellers and others use the Touchstone only for the very widest tests — generally, merely to ascer- tain whether a certain Coin or Ornament is Gold ; but for Bullion operations, in which an exact valuation to jJggth part is required, it is of no use. Silver cannot be tested by the Touch Stone. The surface of a supposed piece of Silver may be tested by applying a drop of Nitric Acid to it ; if the Acid turns black on exposure to light the surface is Silver ; if it turns green, or grey, or white, with evolutions of minute bubbles of air, it is not Silver. "Where articles are merely plated with Silver, the part to be examined must first be scratched or filed before the Acid is apphed. These primitive modes of trying the fineness of the Precious Metal in Gold or Silver articles, do not give results sufl&ciently accurate for business pur- poses. In Bulhon and Coinage operations we have to determine the quality of the Gold or Silver Bars TESTING AND ASSAYING BULLION. 143 to the minutest fraction ; this we eflfect by Assaying the Bar. The business of making Assays is now con- ducted by special Assay Offices, where the operators have aU the necessary apparatus at their command, to ascertain the precise quality of a Bar from a sample piece sent to them for Assay. These Assay Offices form a special branch of industry in connection with the Bullion business. All that the Bullion dealer has to do is to cut off a piece from the Bar he wishes to have Assayed, and to forward it to the Assayer, who, after operating upon it, will return the same, with an exact statement of the fineness of the Metal. The charge for making these Assays varies from one to five shillings, according to the nature of the Assay — whether it is for Silver or for Grold, or whether it is a single, a double, or a treble Assay. A small piece the size (though not the shape) of a pea is, with a chisel and hammer, chipped ofi" the Bar of Gold to be Assayed, which has a letter and number stamped upon it. Gold is a soft metal, which easUy yields to sharp steel. The chip is sent to the Assayer, folded up in a piece of paper, about eight inches long by three wide, which has marked upon it at the top, in writing, the letter and number of the Bar. The Assayer returns the paper ia due time, with the report of the Assay written upon it, showing the exact quality of the Bar. The Assay piece is returned folded up in the paper, not in the same state, of course, in which it was sent, but cut up, and some of it rolled into strips, showing thereby that the article has been sub- jected to the Nitric Acid process. 144 TESTING AND ASSAYING BULLION. Although the pieces Assayed are comparatively so small, so minute and certain are the manipulations, and the scales employed by the Assayer so delicate, that mistakes very rarely occur. StiU, double or treble Assays are frequently made for greater safety, or a second Assayer is employed, to ensure an efl&cient check upon the operation. It is, of course, absolutely indispensable that the Bar to be assayed should be properly and uniformly melted, so as to ensure the same composition through- out. Otherwise it might chance to differ in fineness in different parts of its mass. Frauds might also be committed by dishonest parties ; the interior of the Bar might be Iron, or some other inferior metal, with the Gold or Silver cast around it. Bullion dealers know well how to guard against such contingencies. The Bank of England, for instance, wiU not buy Gold Bars unless melted, or re-melted, by melting houses specially employed by that estabhshment. The seller accord- ingly takes his Gold there to have it melted and cast into a certain shape (Bank of England shape, as it is called), and stamped with the Bank melter's mark, which serves as a guarantee that the Bar is really what it purports to be. There are certain English, French, Australian, Cahfornian, and other foreign melters, whose stamp is known, by experience, to be equally safe ; and between dealers who know each other, purchases and sales are sometimes made on the faith of the same. Persons not acquainted with this business are apt to imagine that many ingenious frauds might be com- TESTING AND ASSATING BULLION. 145 mitted in it ; but, upon the whole, the business is pretty safe from attempts of this nature, in so far as the Bullion dealers are concerned : for their number is not so large but that they can easily control each other ; and, as a matter of course, the very nature of their occupation makes them carefiil. The art of Assaying, as now practised by Assayers of Gold and Silver BuUion, is a triumph of chemical science. Valuable works have been written on this subject. In a subsequent chapter, after we shall have prepared the way for an easier understanding of the matter, by a description of the Process of Refining, we wiU endeavour to give the outlines of the methods of Assaying in general use. 10 146 CHAPTER XI. METHODS OF BXPEESSING AND BEPOETING THE FINENESS OE BULLION. THE manner in whicli the ascertained fineness of Bullion is reported is not universally the same. There are two principal systems in vogue — one, the English and German Carat system; the other, the modern French and American Decimal system. The latter is the better and easier of the two, as arithmeticians well know. The Carat is an old-fashioned weight derived, in olden times, from the average weight of a certain description of beans, but entirely out of use at present, except for Diamonds. (Six carats are equal to nine- teen grains Troy weight.) We do not weigh Gold by the Carat, but the Assay er reports the fineness of the Gold examined by him in Carats. The Carat serves as the Integer or Unit ; it is divided into four grains, subdivided again into fractions of one-eighth each. In fact, the Gold Oarat is simply a nominal weight.* * In Hamburg the Assay weight for Gold is the Mark divided into 24 carats of 12 grains each, with fractions of \ grain. For Silver, it is the mark divided into 16 loths of 18 grains each, vrith THE FINENESS OF BULLION. 147 A piece of Gold reported by the Assayer as twenty- four Carats fine is pure or fine Grold. There can be no Gold twenty-five carats fine, then, as twenty-four is the utmost possible degree of fineness. Supposing the Assayed piece to weigh 120 grains, the report that it is twenty-four Carats fine means that it contains exactly 120 grains of pure Gold. If a piece is found to con- tain 115 grains of Gold and 5 of AUoy (Copper or Silver), it is 23 carats fine; if it contains only 60 grains of Gold and 60 of AUoy, it is 12 carats fine. If it contains 102f grains of Gold in the 120 grains of weight, it is 20 carats and 2 grains fine (the carat being divided into four grains). If 104x6- grains, it is 20 carats 3f grains fine. Now this seems simple enough ; but the British Bullion authorities have complicated the business by having the value reported as below or above Standard. The British Standard metal (of which Sovereigns are coined), is 22 carats fine ; that is to say, a piece of 24 ounces must contain exactly 22 ounces of Gold (equal to 11 in 12, or 22 in 24), to be reported as — British Standard, of 22 carats pure Gold, with 2 carats of AUoy. A piece 23 carats fine is, accordingly — 1 carat better than Standard, and the Assay is reported — (Better). — B 1 carat gr. fractions of ^ grain. The Spanish Assay Mark is 24 quinlates of 4 grains and fractions for Gold, and 12 dineros of 24 grains and fractions for Silver. 148 METHODS OP BXPBESSING AND EEPOETING A piece 21 carats fine is reported — (■Worse). — "W 1 carat gr. One 22 carats 2-| grains fine is reported — B carat 2^ grains. One 18 carats 2^ grains fine, is reported — W 3 carats If gr. To reduce this to tlie simpler form of tlie report in carats, 22 carats are added to the report in the case of Better; as e.g.: B carat 2f grains Add 22 carats Fine 22 carats 2|- grains In the case of Worse the report is subtracted from 22 carats ; as e. g. : 22 carats standard Subtract "Worse 3 ,, If gr. Fine .... 18 ,, 2^ grains This is the so-called Standard system of British Reports for Assays of Qold. In the British Assays for Silver, the Unit or Integer (instead of the carat and its grains as for Gold) is the dwt. (pennyweight), with its fractions of one-fourth. Fine or pure Silver is 240 dwts. (12 ounces of 20 dwts. each ; the Standard Metal for Sterling Silver is 222 pure Silver, 18 Alloy. THE FINENESS OP BULLION. 149 Consequently, jme or 240 dwts. Silver is Better (B) 18 dwts. ; and Silver of 216 fineness is "Worse (W) 6 dwts. Add to the Better the 222 for Standard, or deduct the Worse from the same, and you will get the 240 in the one, and the 216 in the other case. This method of reporting Betterness (Better than Standard), or "Worseness (Worse than Standard), is, indeed, easily understood with a very httle practice ; still it is, for aU that, but a clumsy system, without the shghtest pretence to ingenuity. The Decimal system, such as it is used in France and some other countries, is far more logical and con- venient. Instead of taking for its basis the 24 carats for Grold (which, with the carat divided into four grains, and the grain subdivided into eight Abactions, or half-quarter grains, gives 768 ultimate parts), or the 240 dwts. for Silver (which, with the dwt. divided into quarter-pennyweights, gives 960 ultimate parts), the Decimal system starts both for Grold and Silver with 1000 for its highest figure. A Bar of Gold of 1000 ounces containing 960 ounces pure Gold is called 960 fine. A Bar of 500 ounces reported 960 fine contains accordingly 476 ounces pure Gold, &c. A Bar of Silver of 1000 ounces containing 800 ounces pure metal is called 800 fine. A Bar of 150 ounces reported 990 fine contains 148^^ ounces of pure Silver. 150 METHODS OP EXPEESSING AND RBPOETING We call this Decimal mettod the Milliemes (thou- sandth-parts) system. British reports are easily conTorted into Milh^mes reports : If 24 Carats fine is equal to 1,000 MiUiemes fine, what is British Standard of 22 Carats in Milhemes ? 24 : 1000 : : 22 24)22000(916-6 216 40 24 160 144 160 144 16, &c. or 916f Milliemes. It is generally reported 917, which is near enough for the purpose of ordinary estimates. Again, what is 900 fine in Milhemes in British Reports ? 1.000 : 900 :: 24 900 21 '6 carats. »/ Or 21 carats 2f . Or W carat 1|. (As we reckon in British Reports by fractions of one-eighth, | is substituted for f , which is sufiaciently near enough for the purpose.) THE FINENESS OF BULLION. 151 The British. Standard for Silver of 222 fine is, in MilHemes — 240 : 1000 : : 222 240)222000(925 2160 600 480 1200 1200 Whilst 900 fine in MiLiemes is equal to — 1000 : 900 : : 240 900 216 dwts. or 6 dwts. "worse than Standard. The reader should make himself familiar with these Be/ports, — both with the British, as expressed by Betterness or Worseness than British Standard (22 carats for Gold, 222 pennyweights for Silver) ; and with the more convenient method of Reports in Mihifemes. The subjoiaed comparative Tables of British and French Reports show the British equivalents, upon the Better or Worse Report system, for French MiUiemes, from 1000 fine French=24 carats fine, or Better 2 carats gr. British, to 800 fine French=19 carats Of gr. fine, or Worse 2 carats S^ grs. British, for Gold; and fi:-om 1,000 fine French =240 dwts., or Better 18 dwts. British, to 800 fine French=192 dwts., or Worse 30 dwts. British, for Silver. COMPARATIVE TABLE OF BEITISH AND rEBNCH EEPOETS. GOLD. N.B. — B stands for Better than Standard, W for Worse tlian Standard. B Car. Gr. 2 3i 3i 3f 3| 3i 3| 3i 3i 34 3 2| 2f 2f 9-5. 2i '^2 2t 2J 2i 9i 2 1| If If If If ^ 1 1 o| Of Of Of ol o| Oi oi In Mills. 1000 999 998 997 996 995 994 993 992 991 990 989 988 987 986 985 984 983 982 981 980 979 978 977 976 975 974 973 972 971 970 969 968 967 966 965 9^4 963 962 961 960 950 B Car. Gr. 3J 3| 3J 31 3i 3i •J 8 3 3 01 ^8 2| 2i 2i 2| 2i 2i 2i 2 If 1| If If H If If oii H 1 Of Of oi Of o| Oi Of 01 Oi Oi In Mills. 958 967 956 955 954 963 952 951 950 949 948 947 946 945 944 943 942 941 940 939 938 f'37 938 935 934 933 932 931 930 929 928 927 926 925 924 923 922 921 920 919 918 Car. Gt. In Mi11 a Ejtglish. 917 SlAKDABD. ■w 01 01 Of Of 01 Of Of Of Of Ol' II ■^8 916 915 914 913 912 911 910 909 908 907 906 905 904 903 902 901 1| ]f If 900 St±st>asd. 899 898 897 896 895 894 893 892 891 890 889 2 21 21 2f 2f 21 2f 2f 2f 2f 3 31 31 31 (I .ii 887 886 885 884 883 8H2 Car. Gr. 31 3f 3f 3| 3f 0| Ok Of Oi 0| Of Of of 1 li H li If If If If li 2 21 2i 2i 91 2i 2f oa "4 92. ^8 3 3 ^ Si In MiUs. 881 880 879 878 877 876 875 874 873 872 871 870 869 868 867 866 865 864 863 862 861 860 859 858 857 856 855 854 853 852 851 850 849 848 847 846 845 844 843 842 841 Car. Gr. 1 3f 3f 3f 3| 0| Oi Oi Of 0* Of 0| Of Of 1 1 li li If li If li 91 '■8 2| n 2f ^ 2i 2f 2| ^8 3 3 3i 3i In Mills. 840 839 838 837 836 835 834 833 832 831 830 829 828 827 826 825 824 823 822 821 820 819 818 817 816 815 814 813 812 811 810 809 808 807 806 805 804 803 802 801 800 OOMPAEATIVB TABLE OF BEITISH AND PEENOH EBPOETS. SILVER. N.B. — B stands for Better than Standard, W for Worse than Standard. In DwtB. Mffla. 18 1000 17| 999 17i 998 17i 997 17 996 16i 996 16i 994 16i 993 16 992 15| 991 15| 990 16J 989 15 988 14| 987 14| 986 14.i 985 14 984 13| 983 13i 982 13^ 981 13 980 laf 979 12^ 978 12i 977 12 976 12 975 llf 974 Hi 973 Hi 972 11 971 10| 970 lOJ 969 lOJ 968 10 967 9f 966 9| 965 91 964 9 963 8f 962 8i 961 8i 960 8 959 Dwts. MiUs. 7-1 958 7i 957 7i 956 7 965 6i 954 &\ 953 61 952 4 31 951 960 5| 949 5i 948 5i 5 4- 41 944 4i 943 947 946 945 942 941 31 940 3i 939 938 937 2i 936 2i 935 2 934 933 932 931 930 929 If li 1 Of Oi 928 Of 927 926 British 925 Standaed. ■w Oi 924 Oi 923 922 921 Of "W In Dwts. Mills. 920 H 2i 2i 919 918 917 916 915 914 3* 913 31 912 31 911 3f 910 4 909 41 908 41 907 4| 906 5 905 5i 904 ^ 903 6| 902 6 901 Fbejtch 6 900 Standard. 6i 899 6\ 898 6f 897 7 71 '4, 7i 896 895 894 7i ,893 8 892 8i 891 8| 890 81 889 9 9i 10 lOi lOi 887 886 885 884 883 882 ■W la Dwta. MiUs. lOf 881 11 880 llj 879 111 878 llf 877 12 876 12 875 121 874 121 873 12f 872 13 871 13J 870 131 869 13f 868 14 867 141 866 141 865 14| 864 15 863 151 862 161 861 15f 860 16 859 161 858 161 857 16f 856 17 855 171 854 17i 853 17| 852 18 851 18 850 181 849 181 848 18f 847 19 846 191 845, 191 844 19| 843 20 842 201 841 201 840 ■W In Dwta. Mills. 20| 839 21 838 211 837 211 836 21f 835 22 834 221 833 221 832 22| 831 23 830 23J 829 231 828 23f 827 24 826 24 826 241 824 241 823 24i 822 25 821 251 820 251 819 25f 818 26 817 261 816 261 816 26i 814 27 813 271 812 271 811 27f 810 28 809 28 808 281 807 281 806 28f 805 29 804 291 803 291 802 29| 801 30 800 154 CHAPTER XII. ON THE WEIGHTS USED EOE THE PEECIOUS METALS. THE Bnglisli standard weiglit for Grold and Silver is the so-called Troy pound of 5760 grains. 175 lbs. Troj are equal to 144 lbs. Avoirdupois (the ordinary -weight for common goods). The Troy Pound is divided into 12 ounces The Ounce „ „ 20 dwts. (penny- weights) The Pennyweight ,, „ 24 grains A Bar of Grold weighing, for instance, 17 lbs. 5 ounces 13 dwts. 20 grains, the weight would, up to a recent period, have been returned in this fashion, as was then the invariable custom in the Bulhon Trade and at the Bank of England. We have now, however, so far improved, at least, as to drop the lbs. and give the weight in ounces instead ; the above bar would thus be returned now : — 209 ounces 13 dwts. and 20 grains. Some Bullion brokers, in their account sales of Silver Bars, drop even the dwts. and grains, and give WEIGHTS USED EOE PRECIOUS METALS. 155 the decimals of ounces instead. Thus a Silver Bar returned in the old fashion : — 72 lbs. 3 ounces 10 dwts. (grains are not marked) would, after the new method, be returned 867"5 ounces. The ounce is the weight most in use, with its subdivisions into pennyweights and grains, or into decimals. The weighing of Bulhon demands properly con- structed and accurately poised scales. Small quan- tities, up to a few ounces, are generally weighed in small scales of great dehcacy that will turn with a fraction of a grain. Large quantities, say some 600 or 800 ounces of Grold (50 to 70 lbs. weight), require large and strong scales, yet sufficiently delicate to turn with one-quarter of a grain, even though this is not needed in actual practice, as Gold Bars are not weighed closer than to one-half pennyweight, or twelve grains. The scales for Silver have to bear Bars up to 300 lbs. weight, and are considered sufficiently exact if they turn with a pennyweight. The Bulhon brokers in London weigh up to half-ounces— that is to say, if a Bar weighs, say 951|- or 951f ounces, it is returned as 951 ; if 951f or 951|, as 95H. Foreign Bulhon dealers object to this somewhat loose system ; they would have us weigh our Bullion to closer fractions. But the difference is after all very trifling ; and as it frequently works both ways (except- ing in the case of Silver going to India), it is of no great importance practicaUy. The Bulhon importers are prepared for and know how to take it into account in their operations with large quantities. 156 WEIGHTS USED FOE PEBCIOUS METALS, In France the Kilogramme is used, divided into 1,000 parts or Grammes. The French weigh to much greater exactness and smaller fractions than we do here. The French Kilogramme is equal to 2'679227 Enghsh Troy Pounds, or 32-1607225 English Troy ounces. One Troy ounce consequently weighs " 0311035 kilogrm. or 31 • 1035 grammes. In Germany the Zollpfund (ZoU-Verein pound), or Munzpfund (Mint pound), is used. This is exactly one-half of a kilogramme, and is divided into 500 grammes. In Hamburg the Cologne mark is employed, of 8 Unzen, or 16 Loth, or 64 Quentchen, subdivided into fractions of one-quarter. The Hamburg Cologne mart weighs 233 • 85489 grammes, or 3609 Enghsh Troy grains. In the United States the English Troy Ounce and Decimals are used. The Decimal system, on the basis of the Kilogramme, will, it is to be hoped, shortly be adopted all over the World. 167 CHAPTER XIII. THE PEICES OF GOLD AND SILVER. rpHB Britist Mint gives £3 17s lO^d for every Troy •J- ounce of Britisli Standard Grold. This Standard Grold (twenty-two carats fine) is coined into Sove- reigns and Half-sovereigns. Bj law forty lbs. Troy of -Standard Gold are coined into 1869 Sovereigns. Forty pounds Troy being equal to 480 ounces, the division of 1869 gives — 480 ) 1869 (£3 1440 429x20 17s lOid per ounce. 8580 Shillings 480 3780 3360 420X12 5040 4800 240 480 The Mint makes no charge for Coinage, or Mintage, to the party bringing Gold into it, who is generally 158 PRICES OF GOLD AND SILVEE, called tlie vmporter; but lie has to pay for tlie Assays, and he must bring a certain quantity (not less than £20,000 in value at the time) of Gold to that establish- ment. The importer may also have to wait fourteen days or longer before he obtains the Coin. This makes it somewhat inconvenient to deal direct with the Mint, and it is preferable to take Gold Bars to the Bank of England, which will at once pay for the same at the rate of £3 17s 9d per ounce Standard. This is three-halfpence less than the Mint price; but the Bank takes any quantity at this rate, and pays in full as soon as the Assays are completed, — a day or two after delivery. The Bank clears a profit of three-halfpence per ounce for the trouble which it takes in the business, but to the Bullion Dealer this method of obtaining value for Gold is a convenience of much greater importance than the payment of the small charge for the accommodation. The Bank thus buys Gold of the Public at the 1/ rate of £3 17s 9d per ounce Standard, and sells it again to the Pubhc at the rate of £3 17s lO^d per ounce; and Gold is thus taken into the Bank, or taken away from the Bank, according to the state of the Exchanges. The Bank is now the principal importer of Gold Bullion into the British Mint, and an arrangement exists between the two establishments by which regular periodical Coinages take place. The price of £3 17s 9d per ounce Standard, called the Bank price, must be taken as the ordinary current rate by which the Market is guided. The EEIOBS OP GOLD AND SILVER. 159 Mint price of £3 7s lO^d per ounce otherwise forms the basis for the valuation of foreign Coins, as compared with the British Gold Coins. Sometimes, when Gold is in much demand for Export, Bullion dealers pay £3 17s d^d, or £3 17s lOd per ounce ; and the shipments of Gold coming in from Australia or other parts, instead of going into the Bank of England, are sent Abroad. If the demand still increases, the Exporters buy Gold Bars from the Bank at £3 17s lO^d per ounce ; but so long as the Bank has Gold, which is always the case, the price cannot go beyond this. There is a certain description of Gold called Befinahle Gold, which is in great demand by Refiners, who wiU pay for it at the rate of from £3 17s lid to £3 18s Id per ounce. Of this we shall have to say more hereafter ; but the Bank of England purchasing rate always remains £3 17s 9d per ounce Standard; and the Bank is bound to buy all the Gold offered to it at this price, and equally bound to sell at the Mint price of £3 17s lO^d per ounce Standard. The Gold Coinage of the country, therefore, rests on a fixed basis, and a Bar cast of one thousand new full weight Sovereigns ought, at the price of £3 17s 10-|d per ounce, to be worth exactly £1,000, unless an accidental loss of weight should have taken place in the casting.* * In tlie Chapter on the British Mint it will be shown that this is not always the case. 160 PRICES OF GOLD AND SILVEB. The British Silver Coinage rests on a different basis. Neither the Bank nor the Mint is bound to buy Silver Bars ; but the Mint issues Silver Coins at the price of 6s 6d per ounce Standard. (British Standard for Silver is 222 fine Silver in 240 dwts. metal). In the open Market the price of Standard Silver varies from 5s 0-|d to 6s 2d per oimce. By- law one pound Troy of Standard Silver is coined into sixty- six shillings in Silver; twenty shillings of such Silver consequently weigh 3^- ounces. S^f ounces, at 6s 6d per ounce, are exactly 20s ; but at the average market price of, say 6s Id per ounce, the value would be only 18s 6d. The British Mint, in fact, which coins Grold free of expense, charges heavily for the Silver Coinage, and makes a large profit thereby. The Mint buys Silver (through the Bank) at the market frice of 60^d to 62-^d per ounce Standard, and sells it to the pubhc, in the shape of Coin, at 66d per ounce Standard, the profit thus realised is the seignorage accruing to the Government. This seignorage, or duty, is not only sufficient to pay the expenses of the Mint, but it also enables that estabhshment to undertake the obligation of giving new Silver Coin in ex- change for worn and Hght pieces ; and this is by no means an inconsiderable item, as it amounts to more than one-half per cent, on the Coinage of a year. The reader must bear in mind accordingly, that £1,000 in Gold, whether in the shape of Coins or of Bars, are, as a rule, intrinsically worth £1,000 ; PRICES OF GOLD AND SILYEfi. 161 whereas £1,000 in British Silver Coin are only worth about £925 in Silver Bars. The monetary system of Great Britain invests Gold alone with a fixed or Standard value, whilst Silver is regarded simply in the Hght of a conunercial commodity, varying in price as any other article of commerce ; and, for the difference between the market value and the Mint price of the Metal, Silver Coins serve merely as tokens. The market price of Silver in England is dependent on supply and demand, and oscillates, as we have stated before, between 60|^d and 62-|d per ounce Standard. In France a different system prevails — the so- called double Standard* The Mint in -France pays fs. 3,100-00 for one kilogramme Gold 900 fine (which is the quality of the French Coinage), and fs. 200*00 ■for one kilogramme Silver 900 fine; charging fs. 6' 70 per kilogramme for the Coining of Gold, and fc. 1"50 for the Coining of Silver. This makes the actual Mint price for fine Gold, fs. 3,437-00 ; for fine Silver, fs. 220-55 per kilogramme. * Before 1816 Silver was the chief legal tender and the principal Standard of Value in England. The Silver Cunency was then strnok at the rate of 62d per ounce Standard. Owing to the exportation of full weight Silver Coins, the latter were fast dis- appearing, and the Mintage charges became too heavy. The Silver valuation was therefore abolished at that period, and the Gold valuation substituted for it. 11 162 PEIOES OF GOLD AND SILVEE, (For the so-called Ma/rhet prices see chapter on France.) In other countries., in Germany, HoUand, &c., the position is the reverse of that in England. Silver is the only fixed Standard, and Gold has a variable price. In Prussia, for instance, the Mint Pound (half-kilo- gramme) of pure Silver is taken by the Mint at 30 Thalers, deducting 11^ Silbergroschen for Coinage ; but Grold is bought at an average price of 466 Thalers per Mint Pound, with a discount or premium, varying from i to f per cent. In the Standard of the British Coinage 1 part of Gold is worth 14J of Silver; in the French double Standard, 1 part of Gold is equal to 15^ of Silver; in the countries where the Silver Standard prevails, the proportions vary from 1 to 15^ to 15f . In due course, when we come to the monetary systems of these countries, we shall enter into further particulars respecting Foreign Mint operations. We may also take occasion then to make some passing allusion to the late Monetary Convention, held in Paris in 1867, which seems to have adopted the British plan of the Gold valuation as the most suitable one. The reader will now please to bear in mind the Standard Bates of 77s 9d per ounce as the buying price of the Bnnh of England, and 77s lO^d per ounce as the Mint price for Gold ; and the vatidhle market price of from 60^d to 62-|d per ounce for Standard Silver. PEJCES OF GOLD AND SILVEE. 163 VARIATIONS IN THE PRICES OF BAR SILVER PER OUNCE STANDARD IN LONDON, PROM JANUARY 1860. Date. Price. Date. Price. Date. Price. Date. Price. 1860 1861 1862 1863 Jan. 5 . .621 Mar. 7 . .61 Feb. 7 . .611 Jan. 8 . .611 „ 19. .62i „ 14. .60f „ 14. .611 „ 29. .611 „ 26. .621 „ 21. .601 „ 21. .611 Feb. 12 . .611 Feb. 2. .621 AprUll. .601 Mar. 6 . .611 Mar. 19 . .61| „ 9. .621 „ 18. ..611 „ 20. .611 April 9. .611 Mar. 22 . .62 „ 25. ..61f „ 27. .61 „ 16. .61 „ 29. .611 May 16 . ..60f April 3. .611 „ 23. .611 April 4 . .61i June 6 . •60| May 8. ..611 „ 30. .611 „ 19. .611 „ 20. ..60| „ 15. ..611 May 7. .611 „ 26. .611 July 4 . ..601 „ 22. ..611 „ 21. ..61| May 3. 61| „ 11. ..601 „ 29. ..61| June 18 . ..611 Jtuie 7 . ..61i Aug. 8. ..601 June 12 . ..611 „ 25. .611 July 5 . ..611 „ 15. ..60| „ 26. ..61 July 2. ..61 „ 19. ..61f „ 22. ..601 July 24 . ..611 „ 9. ..611 „ 26. ..611 Sep. 12 . ..60| ■„ 31. ..611 „ 23. ..61 Aug. 2. ..61| „ 26. ..60| Aug. 7. .61 Aug. 6. ..611 „ 9. ..611 Oct. 3 . ..60| „ 14. ..61f Sep. 3 . .611 „ 16. ..61f „ 10. ..60f Sep. 25 . ..611 „ 24. .611 „ 23. ..611 Nov. 7. .601 Oct. 9 . .611 Oct. 8 . .611 „ 30. ..61| „ 20. ..611 „ 16. ..61| „ 15. .611 Oct. 18. .61J Dec. 6. .611 „ 23. .611 „ 22. .611 Nov. 15 . .611 „ 19. . 61 Nov. 6 . .621 „ 29. .611 „ 22. .611 „ 20. .62 Nov. 5. .61f Dec. 20 . .611 1862 „ 27. .611 „ 12. .611 Jan. 2 . .611 Dec. 4 . .61| „ 19. .611 1861 „ 9. .61f „ 24. .611 Dec. 10 . .611 Jan. 10 . .611 „ 16. .61| „ 11. .61f „ 17. .611 Feb. 28 . ..61| „ 30, ..611 „ 31. .611 „ 31. .611 164 PRICES OF GOLD AND SILVER. Vaeiations in the Prices of Bab Siltee — eontiwuedS Date. Price. Date. Price. Date. Price. Date, Price. 1864 1864 1865 1866 Jan. 7 . ..61| Aug. 18 . ..611 Oct. 5 . ..61i Aug. 16 ..60| „ 14. ..62i Sep. 1 . ..61f „ 26. ..611 „ 30 ..60f „ 21. ..621 „ 15. ..611 Nov. 9. ..61f Sep. 6 ..60| „ 28. ..62 „ 29. ..61| „ 30. ..611 „ 13. ..601 Feb. 4. ..61| Oct. 6 . ..61| Dec. 14 . .61f Oct. 1 . ..61 ,, 11. ..611 „ 13. ..611 „ 21- ■611 Nov. 8. ..60| „ 18. ..611 „ 20. ..61| Dec. 20 . ..60i „ 25. ..61f Nov. 3. .60f 1866 Mar. 3 . .611 „ 17. ..611 Jan. 11 . .611 1867 „ 23. .611 „ 24. .611 „ 25. .611 Jan. 3 , -60| AprU 7. .611 Deo. 1 . .611 Feb. 1 . .611 Feb. 7. ..60| „ 14. .61f „ 8. .611 Mar. 21 . ..60| „ 21. .611 1865 „ 15. .60| „ 28. ..60J „ 28. .611 Jan. 5 . .611 „ 22. .61 April 4 . ..611 May 5 . .611 ■Feb. 2. .61| Mar. 1. .601 „ 11. ..60i „ 12. .61 Mar. 1 . .61 „ 22. .61 May 23 . ..60| „ 19. .601 „ 30. .601 April 5 . .611 June 13 , ..601 „ 26. .611 May 4 . .60f „ 19. .611 Aug. 15 . ..60f June 2 . .611 „ 11. .601 May 10 . .611 Sep. 5. ..601 „ 9. .611 June 16 . .601 „ 17. .62 „ 12. ..60| „ 30. .611 „ 29. .601 June 14 . .621 Oct. 17. ..601 Jnly 7. .611 Aug. 31 . .601 „ 28. .61f „ 24. .601 „ 14. .611 Sep. 7 . .601 July 19 . .611 Nov. 28 . .601 Aug. 4 . .611 „ 14. .60f „ 26. .601 Dec. 5. .60f „ 11. .611 „ 21. .601 Aug. 9 . .601 „ 31. .60f 165 CHAPTER XIY. PEAOTICAL DIRECTIONS FOE CALCULATING THE VALUE OE BULLION IN ENGLAND. nnHB three factors — fineness, weight, and price — -*- being thus established, we are now in a condition to determine the Money value of any given piece of Gold. An ounce of pure Gold reported B 2;0, or 24 carats fine, is worth, calculated by rule of three 22 : 77s 9d* : : 24 : a 22) 77s 9d(3s 6-2%dx 24 = 84s 9T^d or £4 4s 9ja-d. An ounce of twenty carats Gold (W 2"0) is worth, £3 10s 8-j^d; Gold of eighteen carats, £3 3s 7^d; of fourteen carats, £2 9s 6^d; of twelve carats, £2 2s 4Yxd, &c. Thus, every degree of fineness can be calculated in value per ounce weight. This method, although it gives awkward Abactions, is convenient enough where a few ounces, without any subdivisions into pennyweights and grains, are to be calculated; but, where, as is usually the case, there are several Bars, of different degrees of fineness, and fractional weights, * We take the Bank price here as the ruling rate. 166 PEACTICAL DIEECTIONS FOE CALCULATING it is mucli too cumbersome. In such cases it is better to Standard the whole, i.e., to reduce each Bar, upon the Assay Report, from its actual weight to the Standard weight, add together the several Standard weights found, and multiply the total by the Standard price to find the value of the parcel. A Bar of 100 ounces reported B 2-0 carats, is worth 84s 9^d per ounce fine, 100 X 84s 9T^d = £424 Is 9i^d. The same Bar, reduced first to the Standard weight : — 100 ounces twenty -four carats fine = 109 ounces 1 dwt. 19^^ grains* twenty-two carats fine, or Standard weight, at 77s 9d,per ounce = £424 Is 9-^d. The following is a convenient rule for Standarding : Multiply the actual weight of the Bar by the Better- ness or Worseness reported, and divide the product by 22. Add the Betterness, or substract the Worseness found, to or from the actual toeight ; the result will be the Standard weight, which, at 77s 9d per ounce Standard, will give the value of the Bar. The shortest way to do this, is to put down for each carat of the Betterness or "Worseness, the actual weight ; for each grain, one-fourth the actual weight ; and for fractions of grains, the corresponding fractions * It is not customary to give fractions of grains, wMcli is done here only to show that the result is exactly the same in both calculations. THE VALUE OF BULLION IN ENGLAND. 167 of the one-fourtli, — add up the total, and divide it by 22 to jfind the difference between the actual and the Standard weight. Example : — Oz. Dwts. Grna. Gold Bar weighing ... 201 15 12 Assay B 1 carat 3^ grains For 1 carat ... 201 15 12 „ 2 grains (i) . . 100 17 18 „ 1 grain (i) . . 50 8 21 1 » 2 grain (i) . . 25 4 10 Divide by 22)378 6 13 Betterness = 17 3 22 Add original weight . . . 201 15 12 Standard weight .... 218 19 10 . At 77s 9d per oz., Standard £851 5 Another Example : — Oz. Dwt. Gms. Gold Bar weighing ... 127 9 12 Assay W 1 carat 2f grains For 1 carat ... 127 9 12 „ 2 grains (i) . . 63 14 18 grain {^) . . 23 18 1 Divide by 22)216~^' Worseness 9 15 13 Actual weight . . . . oz. 127 9 12 Deduct Worseness ... 9 15 13 Standard weight . . . oz. 117 13 23 At77s9dperoz. . . . £457 11 1 168 PEACTIOAL DXEBCTIONS FOE CALCULATING TMrd Example : — Oold Barweighmg : . , Oz. Dwts. 62 10 Gms. Assay B carat If grains For 1 grain {^) „ i grain (|) . . „ i grain ( Jg) • • „ i grain d-^) . . 13 2 6 11 3 6 1 12 12 6 15 19 Divide by 22)24 12 Betterness = 12 9 Add actual weiglit . • - 52 10 Standard weight . . . oz. 53 12 9 At 77s 9d per oz. . . . £208 8 11 Fourth Example :— oz. Dwts. Gms. Oold Bar "weighing . . . 137 6 Assay W 11 carats 2-^ grains For 10 carats . . . 1373 „ 1 carat ... 137 6 „ 2 grains (i) . . 68 13 „ i grain (i) . . 17 3 6 Divide by 22)1596 2 ~6 Worseness = oz. 72 11 Actual weiglit . . . . oz. 137 6 Deduct Worseness . . 72 11 Standard weight . . . oz. 64 16 At 77s 9d per oz. . . . £261 14 4 "With a Httle practice, these calculations become easy enough. It is also proper to state that there are sets of tables pubhshed, giving the value for every THE VALUE 01" BULLION IN ENGLAND. 169 rate of weiglit, computed upon every conceivable Assay- report. These tables serve to facilitate tte calculation of tbe value of BuUion, and to check the results. "We subjoin two Invoices of Gold Bars, viz., an Account Sales of a batch of Bars sold direct to the Bank of England ; the charges for Remelting, Assaying and Porterage are deducted from the total; and an Invoice of a batch of Bars bought through a firm of Bullion brokers ; the sellers pay the charges for Re- melting and Assaying, but a Brokerage of ye^^ P^r cent, is charged to the purchaser. ACCOUNT SALES OF FIVE BARS OF GOLD SOLD TO THE BAJSTK OF ENGLAND. Gold Baes. Weight. ASSAT. Standard. 1 2 3 4 6 Ozs. Dwts. Gi^ns. 190 10 201 3 12 187 16 12 159 11 195 14 12 Carat Gms. B 1 3i „ li W 2 3i „ 1 Of BIO Ozs. Dwts. Grs. 206 14 17 204 15 163 16 7 151 3 7 204 12 10 Standard . . OzB. DwtB. Gms, 930 7 8 at 77s 9d per oz. Five Assays, at 3s 6d . £0 17 Melting . . £0 19 4 Less scrapings 5 ozs. 930 7 8 £3,616 16 6 Porterage 14 4 3 1 14 10 £3,615 1 2 170 PEAOTICAL DIEECTIONS FOR CALCULATING In a transaction of this kind the Bank would at once, upon the receipt of the Gold, make a large advance upon it to the seller, say £3,000 in the case before us ; j)aying him the balance, less charge for Assays, two days after, when the Assay report had come in. iisrvoiCE or gold bars to messes, m. n. & co. Gold Bars. Weight. Assay. Standard. Ounces. Carats Oauoes 1 45-625 B 4i 47-828 2 65-850 „ 6| 70-807 3 4 175-725 175-325 „ 4i 5) 4-3- 1 367-505 6 78-225 W If 77-003 6 205-725 B 4f 216-829 7 44-050 » 7f 47-867 8 93-575 „ 4f 98-626 9 229-900 „ 3f 238-717 10 207-250 55 3-|- 215-498 11 142-700 J5 ^~S 148-984 12 59-800 „ 3| 62-263 13 65-750 „ 3i 68-178 14 26-000 „ 4 27-182 Standard 1687-282 1687-282 ozs. at 77s d^d per oz. £6,562 16 6 Chaeges — Packing cases, &c. . £0 11 6 Cartage 8 Brokerage, reth ..420 6 16 £6,567 18 THE VALUE OF BULLION IN ENGLAND. 171 In this invoice the weights are given in ounces and decimal fractions of ounces; the Assays in grains simply, instead of in carats and grains. The Gold is sold at 77s 9^d per ounce Standard (probably because there was at the time a demand for Gold for ex- portation) ; and one-sixteenth per cent. Brokerage is charged. The Bars are generally weighed before the Assay pieces are cut off, which, with the Assay papers, belong to the purchaser. The calculation for Silver Bullion is less compKcated than that for Gold. The weights are given in ounces and half ounces only ; the Assays in pennyweights and quarter-pennyweights. Taking the price of Standard Silver (222 fine in 240 dwts.) at 61d, what is the value of one ounce pure Silver, or B 18 dwts. ? By the rule of three — 222 : 61 : : 240 240x61dH-222 The value of one ounce fine Silver at 61^d per ounce Standard is GG^^d. The same as for Gold, so for Silver, it is more convenient to reduce the actual weight of the Bars to the Standard weight. Multiply the actual weight by the Report, and divide the product by 222; add the Betterness to, or Substract the Worseness from, the actual weight. 172 PEAOTICAL DIRECTIONS FOE CALCULATING Example : — Ounces. Silver Bar weigHng .... 1000 Assay B 10 dwts. 10 dwts. = 10,000 Divide by 222 Betterness 45 "1 Add actual weight .... lOOO'O Standard weiglit .... 1045*1 At 61d per oz £265 12 4 Another Example : — Ounces. Silver Bar weighing . . . 835-50* Assay W 28^ dwts. 28ix835-50=23811-75 Divided by 222 gives "Worseness 107'25 Actual weight 835-50 Deduct "Worseness .... 107-25 728-25 At 61d per oz. ... £185 2 "We subjoin two Invoices of Silver Bars, viz., an Account Sales of Bars sold to a Bullion dealer; and an Invoice of a batch of Bars bought through a Broker for India. The fractions of ounces are in decimals. * The decimal is here used. THE VALUE OE BULLION IN ENGLAND. 173 IJSrVOICE OP SILVER BARS TO BE SHIPPED TO INDIA:— Silver Bars. "Weight. Assays. Standard. OZB. Carats Ozs. 1 817-0 ] B 17 879-563 2 850-5 , m 3 757-5 , m 4 909-5 , m 2715-951 5 662-0 , 17 712-694 6 913-5 , 16i 981-395 7 699-5 , 17 8 423-0 , 17 1208-457 9 311-5 , 17i 10 573-0 , m 954-224 11 935-5 , 17 12 893-0 , 17 13 890-0 , 17 14 1010-0 , 17 4014-015 15 913-5 , 16i 981-395 12447-694 At 62d per oz £3,215 13 1 Packing 15 cases, &c. £1 17 6 Cartage to Station, &c. 10 6 Brokerage, ^th per cent. 4 4 6 8 4 £3,222 1 5 Ttis Silver, we may incidentally remark here, is very fine, as it is required for India. 174 PRACTICAL DIRECTIONS FOR CALCULATING ACCOUNT SALES OF SILVER BARS SOLD TO MESSRS. M. K & CO.:— SiLTEK Babs. WEiaHT. Assays. Stahdaed. 0Z3. Carats Ozs. 1 903-5 B 14 960.477 2 871-0 W 29i 766-259 3 967-6 B 161 1028-665 4 642-0 „ 15 686-378 5 779-0 W 7 764-436 6 934-6 „ 8 900-824 Total standard 6085-039 At 61d per oz £1,292 8 11 Melting .£326 Less grains 17 6 £2 6 Six Assays, at Is 6d 9 Cartage, &c. ... 7 6 Brokerage, ^th per cent. 1 12 3 4 13 9 Net proceeds £1,287 15 2 Tlie market price here is 61d per oz. We have so far described the Enghsh method of calculating Bullion ; — it is cumbersome and old- fashioned. The French method, entirely based on the decimal system, is much more convenient, as we shall in due course have occasion to see. . THE VALUE OF BULLION IN ENGLAND. 176 Foreign Gold and Silver Coins, wliich a number of Assays have shown to be always of tbe same fineness, are often bonght at so mucli per ounce, without being first remelted into Bars. French 20 franc pieces, for instance, of 900 fine, British Eeport "W" O'lf, are worth about 76s 3|-d per ounce. The Bank of England purchases them at 76s 2-|d per ounce weight. Account Sales of Fs. 200,000, in ounces. 20 Franc pieces, weighing . 2074*4 At 76s 2id per oz., . £7904 6 7 Sold to the Bank of England. Mexican Silver DoUars are also bought by the ounce (Assay about 900). Account Sales of 100,000 Mexican ounces. Dollars, weighing 86,876 At 69d per oz. . . £21,366 15 6 Brokerage, -Ith per cent. 26 13 11 £21,330 1 6 The price of Mexican Dollars varies in the market according to the greater or lesser demand for the Continent or for India. 176 CHAPTER XV. parting" bullion. rr^HB Assays and calculations in the last chapter J- have reference to Gold and Silver alone, the value of the AUoy in the Bullion being left altogether out of account. Copper is the Metal most in use for Alloying Gold and Silver. Other base Metals are rarely employed for the purpose, and need not be considered here. The Copper Alloy contained in Gold or Silver Bulhon is of such insignificant value that it is not paid for. A Bar of Gold, for instance, of 120 ounces of Standard fineness is worth £466 10s ; the Copper contained in it, 10 ounces in weight, at the price of Is per pound, would be worth lOd, or less than jj^th part of the value. In a Bar of Silver of the same weight and fine- ness, which is worth £28 6s 3d — the Copper is worth 9d, or y^th part. Moreover, the Alloy is not even available as Copper. It is not customary, therefore, nor is it practicable, to allow for the value of the Copper in Gold or Silver Bullion. In cases where the amount of Copper in a Bar very largely exceeds that of the Gold or the Silver, the Bar likely containing only a few per cent, of either, PARTING BULLION. 177 the Copper may be paid for ; but then a Bar of this kiiid. is not a Gold or Silver Bar AUotjed with Copper, but a Copper Bar containing small quantities of Grold or Silver ; and as such, it is not Bullion that a Banker "would have to deal with. The Metallurgist, or the Eefiner, may purchase such Metal upon suitable terms. But Bankers' Bullion must always have a preponderating proportion of the Precious Metals in it ; indeed, as a rule. Bars are of about the same fineness as Coin, or as pure as they can be obtained, ranging from 600 to 998 fine, for both Gold and Silver ; and the value of the Copper in such Bars is not taken into account. So-called Parting Bullion is either Gold containing Silver, or Silver containing Gold. Whenever the respective quantities of the two Precious Metals in such mixtures stand in certain proportions to each other, it is worth while to part them, so that both the Gold and the Silver can be made separately available. "We have already stated that Native Gold is always found alloyed with Silver j and, according to the dif- ferent localities whence it is obtained, the Assay may run from 600 to 990 fine,* the balance being Silver. Again, Silver Bars frequently contain Gold; some of the Californian Silver holds 20 or 30 Milliemes Gold, or about half the value of the mixed Metal ; and other * We shall in future always use the Milliemes system of ex- pressing fineness, as it is tte more convenient of the two, 12 178 PAETING BULLION. countries fiimisli Silver witli from 1 to 5 per cent, in value of Grold in it. Old Silver Coins, certain descrip- tions of Dollars, and Plate melted down, are occasion- ally assayed for traces of Gold. Tlie parting of Gold and Silver is effected by the process of Refining, which, will be described in the next chapter. A Refinery is generally a large estabhsh- ment ; and it may well be imagined that the business of Refining cannot be done free of charge. The process of Refining, Hke all other operations of this kind, involves a certain expenditure of time, labour, and materials, and a charge is consequently made for Refining. In London the charges for Refining Bullion are as follows : — For Gold containing Silver they amount to 5 s 6d per 12 ounces of Metal (or b^d per ounce). For SUver, to 10|-d per 12 ounces of metal (or less than Id per ounce.) The question now resolves itself into this : Is there sufficient Silver in a Bar of Gold, or enough Gold in a Bar of Silver, to make it worth while to part the two Metals ? For, where this is not the case, the Bullion had better be sent on to the Mint at once, to be alloyed there with Copper to the Standard of Coinage. Let us see, then, what proportionate amount of Gold in a Bar of Silver, or of Silver in a Bar of Gold, constitutes a " sufficiency" to offer a fair margin for the process of parting. PARTING BULLION. 179 Take the case of a Bar of Gold, weighing 120 ounces Assayed W 2-00 (834 fine), The balance (166 parts) being Silver. We thus have 100 ounces fine Gold, equal to 109'091 ounces Standard at 77s 9d . . £424 1 10 20 ounces fine Silver, worth at 5s 6d per ounce fine . . . . 5 10 The charge for Refining is 5^d per ounce, which comes to £2 15s for the 120 ounces — The SUver is worth . £5 10 "We have to deduct . 2 15 for Refining, which leaves a margin of . £2 15 or rather more than f per cent, over and above the value of the Gold. A Bar of this description conse- quently pays for Refining. Now take another Bar, weighing also 120 ounces, but assayed as Standard (917 fine). Silver 83 parts ; thus containing 110 oz. fine Gold, equal to 120 oz. Stan- dard Gold, at 778 9d . . . £466 10 and 10 oz. Silver, at 5s 6d peroz. fine . . 2 15 The charge for Refining 120 ounces of Metal is, as before, at 5^d per ounce, £2 15s ; which is the exact sum we get for the Silver. There is thus no profit 180 PARTING BULLION. made here, and the Refining may accordingly just as well be left alone. Prom these results we may deduce the following rules respecting the Refining of Gold in England, viz. : — If the Gold in the mixed Bar is of the fineness of British Standard — or finer — ^it does not pay for Refining ; if it is below Standard, it wiU bear the charge, and leave a margin — in which case it is called JRefinable Gold. Thus we know at a glance that Gold reported Worse is Befinable, and that the excess of Silver in the mixed Bar will pay the expenses of the process and leave a clear profit. By saying that Standard Gold will not pay for Refining we mean that it will not pay for the pubhc. The Refiners charge the pubhc at the rates stated, and they make their profit out of these rates of course; so that where they refine for their own a,ccount they can work with a much closer margin. They will, there- fore, frequently buy Gold above Standard, and yet the Refining will pay them. Refinable Gold is accordingly sought by them; and whilst the Bank of England pays but 77s 9d per ounce Standard, Refiners will pay 77s 9-|d to 78s per ounce, according to the greater or lesser proportion of Silver m the mixed Bar.* The cost of Refining Silver is 10-|d for 12 ounces. What per centage of Gold in the Bar will pay the cost of Refining, and leave a fair margin ? Suppose we have a Bar of 1000 ounces, which contains 950 ounces * The Eefining charge in France is much less than in England. PARTING BULLION. 181 of pure Silver, 1 ounce of Gold, and 49 of baser AUoy. 950 ounces of fine Silver are 1027 ounces Standard at 61d . . £261 7 1 ounce of fine Gold. . . . . 4 4 Refining, at the rate of lO^d for 12 ounces, is (for the 1000 ounces) . 3 11 2 ■wMcli leaves accordingly a margin of 12s lOd on the Bar. It pays then to refine Silver containing 1 per miU. by weight of Gold in the Bar. Bar Silver of this kind — which is called Bore Silver in the Market — ^is accordingly in request for Refining purposes, and is sold at a somewhat higher price than ordinary Bar Silver. The large Refiners are not in the habit of Refining for other people ; they prefer purchasing the Refin- able Bullion, according to Assay, deducting the charge for Refining, which is — For Gold — 1 ounce of Silver for every lb. of Metal, equal to 6s 6d per lb. For Silver — 6 grains of Gold for every 12 ounces of Metal, equal to about lOJd per oz. The subjoined Account Sales of Gold Bars, and Invoice of Silver Bars, will show the way in which the calculation is made. ACCOUNT SALES OP 18 BARS OF OALIFORNIAN GOLD SOLD FOR MESSRS. M. N. & CO.:— WEIGHT. ASSAY. STAND AED. Pennyweights of Silver per 12 ozs. Pennyweights of Silver in the Bar, less 20 dwts. for ■ each 12 ozB. 21 Ozs. 251-000 V Carats f 2-2f Ozs. 221-408 44i 512 22 252-300 , , 2-3i 220-046 47 567 23 60-025 , , 3-1 51-158 501 162 24 71-775 , , 6-0| 51-691 791 355 25 37-300 , , 4-li 30-042 61 127 26 37-275 , , 4-11 29-969 601 125 27 40-075 , , 3-3| 32-847 58 126 28 40-360 , , 4-0 33-014 58 127 29 102-475 , , 3-l| 87-192 51 264 30 106-975 , , 2-li 95-884 381 165 31 34-050 , , 4-3 26-699 64 124 32 54-275 , , 1-2| 50-035 341 66 33 55-700 , , 3-Oi 48-026 481 132 34 56-575 , , 0-2i 55-209 241 21 35 20-775 , , 1-li 19-665 32 20 36 26-375 , , 0-lf 25-963 22 4 37 31-725 , , 3-Oi 27-084 51 82 38 88-150 , , 2-2 78-134 40 147 1367-175 1183-966 3115 1183-966Standardozs. at 77s lOid £4,610 1 4 3115 pennyweiglits fine Silver at 5s 6d per oz 42 16 7 Brokerage, ^th per cent. £5 16 Eighteen Assays at 4s . 8 ' " £4,643 9 7 The Eefiner in this case has paid 77s lO^d per oz. Standard for Gold. The Assayer reports the Assay for Gold, stating, at the same time, the Pennyweights of Silver present in each 12 ounces of the Bar; the last column gives the total number of pennyweights, Jess 20 pennyweights per lb. for Refining. £4,652 17 11 . 16 4 } 12 8 4 y INVOICE OP TWENTY BARS DORB SILVER, BOUGHT FOR MESSRS. M. K & 00. WEIGHT. ASSAY. STAND AED. GraiTiB of Gold per 12 ounces. Grains of Gold in the Bar, less 5 grains of Gold for every 12 ounces. Ozs. Dwts. Ozs. 48 916-0 W 14 857-30 424 31,949 49 869-5 „ 7 842-10 16 797 60 867-6 „ 7 840-15 10 361 51 868-0 „ 7 840-65 16 796 62 867-0 „ 61 841-60 12 506 63 870-0 „ 7\ 840-60 16 725 64 866-0 „ 6 841-60 16 793 66 867-0 „ 7 839-65 16 796 66 866-6 „ 7 839-20 17 866 67 869-6 „ 7 842-10 16 797 68 864-5 „ 7\ 835-30 16 792 69 868-5 „ 7 841-10 16 796 60 869-0 „ 7 841-60 15 724 61 706-6 ,A7i 660-80 26 1236 62 733-5 „20 667-40 28 1406 63 773-5 „l7i 712-66 33 1806 64 697-0 „24 621-66 6 58 65 798-0 B 51 817-76 9 266 66 814-0 „m 859-86 12 475 67 972-0 »11 1020-15 14 729 16821-6 L6293-10 46,672 At 61d per oz. 72 grains Gold at fine Boxes and Packing . Brokerage, ^ per cent l^dper oz. £4,141 3 411 6 3 4 £10 6 13 9 4,562 9 6 13 7 9 £4,559 3 4 The Assayer states the grains of Gold for every 12 ounces of metal, and gives in the last colnmn the total number of grains of Gold contained in each Bar,- /e.s.s 6 grains per 12 nuvres for Refining. 184 PARTING BULLION. Incidentally, we call attention to tlie exceptional richness in Gold of the first of the Bars in this invoice. When G-old is supposed to contain Silver, the Assay Paper in which the Assay piece is wrapped up is marked Oold double Pa/rting. Which is meant as an instruction to the Assayer to make a double Assay, and assay also for Silver present. For Silver, the Assay Paper states Silver double Parting. Instructing the Assayer to make a double Assay, and assay also for Gold. Acting upon these instructions, the Assayer reports the quantities found of both the Gold and the Silver. Refiners generally seek to buy both Befinable Gold and Dare Silver at the same time, that they may melt them together, which, as we shall see in the next chapter, proves of considerable advantage in the sub- sequent process of Refining. 185 CHAPTER XVI. GENERAL DESCEIPTION OF THE REFINING OP BULLION. rriHB business of Eefining Bullion, where it is carried -*- on on a large scale, requires spacious and weU- appointed premises. Tall chimneys must be erected, to carry off the smoke of .the furnaces, and the fames of the Acids used in the process. On the outside a Refinery looks very much Hke an ordinary manu- factory. There are four or five large Refineries in London, which almost exclusively share between them the Refining of Bankers' Bullion. Two of these estabhsh- ments are worked in connection with eminent Foreign Banking Firms. A number of smaller Refiners also carry on the business ; but their operations are mostly confined to the purchasing and re-melting of old Jewelry and Plate. We beheve that only a few of these actually Refine even their own meltings, as it is more con- venient to sell the Bars to the larger Refiners, accord- ing to Assay. The proportion of BuUion coming into the market from these sources is but small ; the great bulk of the material is derived direct from the Gold and Silver 186 EEPINING OP BULLION. producing districts, or from tte large Bullion centres, where the article is dealt in for Banking purposes. The object of Eefining is to obtain Gold and Silver in a state of purity. So, besides the parting of Gold from Silver, provision has to be made also for the removal of the baser Alloys, especially Copper, which is so often found in Bulhon. The Refiner may be able to utilise, to a certain extent, the product furnished by the baser Alloys ; but this is a matter which does not enter into our calculations here, where we have to deal simply with the parting of Gold from Silver. This parting is effected either by Nitric Acid or by Sulphuric Acid. Gold, as we have already had occa- sion to state, resists the action of all Acids, except the Nitro-Muriatic ; neither Nitric nor Sulphuric Acid, cold or boiling, has the shghtest effect upon it. But Silver is easily attacked by these two Acids. Nitric Acid will dissolve it even in the cold. Hot Nitric or hot Sulphuric Acid will very quickly convert it into Nitrate or Sulphate of Silver, which both are soluble Salts. A piece of pure Gold may be put into Nitric Acid, and boiled in it for hours, without tarnishing, or losing one atom of its weight ; whereas a piece of Silver put into cold Nitric Acid becomes instantly discoloured, and turns black ; the Acid around it becoming turbid and agitated; and, when heat is applied, the Silver piece is speedily dissolved ; the hquid acquiriag a dark muddy colour, and turning quite black upon exposure to the hght of the Sun It is upon this well-known different deportment of EEFINING OF BULLION. 187 the two Metals witli Acids that the process of parting is founded. The Eefiner purchases the Eefinable Gold and the Dore Silver upon invoices, as shown in the last chapter. On entering the Refinery, a due account is taken of the several quantities of Gold and SUver in the Bars before the latter are allowed to pass into the hands of the workinen. It is indispensable for the success of the operation that the weight of the Silver in the Bars should be at least double that of the Gold ; and it is even expedient that it should be stiU much larger. Where the pro- portion of Gold in a Bar is greater than one to two as compared to the Silver, the Bar cannot be refined by this process, as the particles of the former Metal will so envelop and protect those of the latter that the Acid cannot get at them to act upon them. Whereas, with a large excess of Silver, the Gold particles are more disseminated through the mass so that the Acid can act freely upon the Silver. The larger the proportion of Silver in a mixed Bar, the more rapid is the action of the Acid upon it; however, the most suitable proportions for the purpose are about four parts of Silver to one part of Gold. It is for this reason that the Eefiner always seeks to buy Eefinable Gold (Gold containing Silver), and Dore Silver (Silver containing Gold), in such quantities as wiU make up these proportions as nearly as possible. He thus manages to effect two partings at one and the same time. At present the supply in the BulKon market is pretty regular ; occasionally, however, there 188 REPINING OP BULLION. is a scarcity of either Refinable Grold or Refinable Silver, and slightly higher prices than usual are offered for the scarcer article of the two. In Australia and in other parts, where there is much Gold, with no con- tinuous supply of Silver, the Eefiners are obhged to keep on hand a large stock of Silver, to melt and refine with the Gold over and over again. The subjoined illustrations wiU show the advantage of operating jointly on Refinable Gold and Dore Silver Bars, A Bar of Cahfornian Gold, weighing 200 oz. 850 fine, containing accordingly . 170 oz. of Gold to 30 oz. of Silver And A Bar of Dore Silver, weighing 800 oz. 900 fine, with 10 oz. of Gold, and 70 ounces baser Alloy, containing accordingly . 720 oz. of Silver 10 oz. of Gold melted and refined to- gether, wiU yield for prodxict 180 oz. of pure Gold 750 oz. of pure Silver The complete parting of the Gold from the Silver in the Cahfornian Gold Bar is entirely due here to the presence of the large proportion of Silver in the Dore Silver Bar. Were it not for this great excess of the latter Metal in the mixed Bar cast of the two, EEFINING OP BULLION, 189 the parting of tlie Gold from tlie Silver in the CaU- fornian Bar could not be aocomplished. When the Refiner has suceeeded in mixing his Refinable Gold and Silver Bullion as nearly as pos- sible in these proportions, batches of Bars, to the value of £25,000 to £50,000 at a time, are given out to the foreman of the operative department. The Bars are first sent into the melting house, ■where about 800 ounces of Silver and 200 of Gold are placed in a crucible, melted down, and well stirred together. Instead of casting the mixed metals again into Bars, the melter proceeds to ladle out the fased Mass, and let it drop, in a thin stream, from a height of three or four feet, into a tub of cold water, which is kept cool by means of a running tap. The fiery Gold and Silvery stream enters the water with a spurting and hissing noise, attended with the rise of steam from the fluid, and the Metal instantly hardens, and splits into fragments ; which — white-hot at the surface, red-hot an inch below it — a moment afterwards shine with a bright, silvery glitter, and cool at the bottom of the water, where they are finally found collected in a heap. This process is called Granulation, and the object of converting the Bars into Grains is to give the Acid as much surface of Metal to work upon as possible. A solid Bar, even with the most suitable proportions of Silver and Gold in it, would take a much longer time to dissolve than these grains, which present all sorts of jagged and fantastic shapes, not unlike bits of tinfoil melted in a candle flame. 190 EEFINING OF BULLION. The metal grains, dried and weighed, are now ready for the chemical Refining process. The Parting may be effected either by Nitric Acid, or by SulpJmric Acid. NITRIC ACID METHOD. — The granulated Gold and Silver Alloy, or garble, as it is technically termed, is put into large stone-ware vessels, and the proper quantity of Nitric Acid is poured over it. A dozen or more of these vessels are ranged closely together, upon a sand-bath furnace. A wooden dome, or hood surrounds them, with an opening at the top, leading into the flue of a tail chimney, so as to carry off the pungent nitrous red fumes, which are copiously dis- charged from the hot Acid. After a few hours' boiling some of the fluid, which is then heavily charged with Silver, is drawn off into a vessel, and put aside ; a fresh supply of Acid being added to the residuary mass in the vessels. The same process is repeated until aU the Silver is dissolved; when the vessels are cold enough to be handled the remaining liquid is ppured off into the same vessel which has received the first portions of the solution. At the bottom of each stone vessel a dark brown, muddy deposit is found. This is pure Gold, in a pulverulent state, wet with the remains of the Nitrate of Silver solution. Water is then poured into the vessel, and the mass stirred about ; when the Deposit settles again, the fluid is poured off, and added to the other portion of the solution. A number of washings, with careful draining each time, are required to EEPINING OF BULLION. 191 remove to the last traces of Silver remaining. The wasMngs are of course also added to the Mtrate of Silver Solution. The brown powder is then taken out of the vessel, dried by heat, and carefully weighed. People who have never seen Gold in the pulverulent condition would hardly take this brown stuff to be the King of the Metals ; strong compression, however, will force its particles into cohesion, when the surface will shine here and there in patches with a yellow ghmmer. A pinch of the powder, rubbed between the finger ends, will give a shght coating of a duU Gold colour. Rub a few grains of it against a sheet of glass or some other polished surface, and the side rubbed with it will ghsten with Virgin Gold, The dry powder is then melted in a crucible ; shortly after it is turned out in the shape of a Bar, which is unmistakeably Gold; heavy, smooth, soft, brilhant, and fine. There remains now the Silver to be reduced from the Nitrate to the MetalHc state. The solution of Nitrate of Silver collected from the stone vessels requires dilution before it can be pro- perly acted upon. Water is, therefore, added to it copiously, and the diluted fluid is then poured into a large vat, called the precipitating vat. A solution of common Salt is added to it there, when a thick white mass, hke clotted cream, instantly forms, which in- creases in bulk as more of the Solution of Salt is added, and settles finally at the bottom of the vat. The deposit formed is Chloride of Silver. 192 REPINING OF BULLION. The combination of the Nitric Acid with the Silver had in this process, in the first instance, formed Mtrate of Silver in Solution. Nitrate of Silver, or Lunar Caustic, as it is often called, is one of the Salts of Silver. It is well known to Chemists and Photographers. Common Salt is Chloride of Sodium. The afl&nity of Silver for Chlorine is so strong that it will leave any other substance with which it is alHed in a Solution to combine vsdth Chlorine. Sodium has an equally strong affinity for Nitric Acid. Therefore, so soon as a Nitrate of Silver solution comes into contact with a Chloride of Sodium solution, the two metals — so to speak — exchange partners; the one combining with the Chlorine to Chloride of Silver, the other, after previous oxidisation to Soda, with the Nitric Acid to Nitrate of Soda. The white preci- pitate forming in the mixed solution is so charac- teristic of this reaction, that very slight traces of Silver may be easily detected in a solution by the simple addition of common Salt. After the addition of the solution of Salt, the fluid in the vat is well stirred, and the white Chloride of Silver precipitate is allowed to subside to the bottom. The supernatant liquid above it is then tested, by further additions of Salt water, to see whether it still contains Silver. So long as white flakes continue to form. Salt is added, until further addition ceases to produce a precipitate. An excess of Salt is finally thrown in, to make aU sure. After stirring, the mass is left at rest, to let the precipitate fairly settle. The clear supernatant Hquid is then drawn ofi", and the Chloride of Silver REPINING OP BULLION. 193 Deposit repeatedly washed, to remove the excess of the Salt. It is then collected, and transferred to a suitable receptacle, to let the water drain off. The drained Chloride of -Silver is, by the next process, reduced to the metallic state. The Chloride is transferred to large shallow pans, and diluted Sulphuric Acid is poured over it. A quantity of Zinc grains (granulated by pouring melted Zinc into cold water) are distributed over it. Hydrogen G-as begins to bubble up, — the Chlorine leaves the Silver, — and around the pieces of Zinc the white precipitate begins to show discoloration, and to crumble away into a dirty grey powder. The Zinc grains are slowly moved about, when the reducing action becomes general ; and, after a while, the Chloride of Silver is all con- verted into what seems to be grey mud. The fluid portion is then removed, and the residuary fragments of Zinc are carefully washed, to detach the last particles of Silver adhering to them. The grey mud remaining is simply — -Silver. This is then collected and washed ; when thoroughly dried, it will show its silvery nature on being rubbed upon a pohshed surface. It is now pressed into cakes by strong hydraulic pressure. The dried cakes are melted in crucibles, and cast into solid glistening Bars of Fine Silver. It is proper here to remark that this process is, in- deed, the quickest, but certainly not the cheapest. Nitric Acid is much more expensive than Sulphuric, Acid. Still, the Nitric Acid process is very convenient, where 13 194 EEPINING OF BULLION. large buildings cannot be erected, and where there is an inadequate supply of Silver, compelling the Refiner to keep a stock of that Metal specially on hand ; and where the Refiner has Jbo deal with Gold and SUver alone in the Refinable Bars. But where other Alloys — Copper, &c. — are present in the Bullion, which, as a matter of course, will dissolve together with the SUver, the method is less suitable. The Copper, for instance, is entirely lost ; which, though the value of that metal may be but small, is yet a matter of some moment at least. The Mints of Philadelphia, San Francisco, South America, and some other countries, stiU use the Nitric Acid process. One of the more important London Refineries, being cramped for space, also parts Bulhon still by this method ; but aU large estabhsh- ments in London, France, and Germany have now adopted the new French or Sulphuric Acid method. SULPHURIC ACID METHOD. — The granulated Gold and Silver Alloy or garble is boiled in Sulphuric Acid in iron vessels fined with Lead (this latter metal not being much affected by Sulphuric Acid). A somewhat greater degree of heat is required, and a longer time. The Sulphurous Acid fumes, which are copiously disengaged during the ebullition, must be carried off, through proper openings ia weU closed hoods, into the flues. When the whole of the Silver is dissolved to Sulphate, the Gold is found at the bottom of the vessel in the same state as in the Nitric Acid REFINING OF BULLION. 195 process. The supernatant Silver solution is care- fully decanted off, and the pulverulent Grold deposit is washed, dried, and finally melted into Bars of Fine Gold. The decanted Solution, to which the washings of the Gold powder are added, contains the Silver in the form of Sulphate. It must be kept hot to prevent the crystallisation of this Salt. It is dUuted with water, and drawn off into large elongated holders hned with Lead, and a number of pieces or plates of Copper are suspended in it. In obedience to the general chemical law — that a baser Metal, by reason of its greater afl&nity for Oxygen, will reduce a nobler Metal from its solution in an Acid — the Copper com- bines gradually into the Acid, forming Sulphate of Copper, or blue Vitriol, whilst the reduced Silver in the pulverulent form subsides to the bottom. When all the Silver has thus been ehminated — which is ascertained by testing from time to time a sample of the blue liquid, in a suitable glass, with Copper, to see whether further precipitation takes place or not — the blue solution is drained off. The Water Silver, or Silver lime (as the precipitate is called by the English; Ghaux df argent by the French), is washed, pressed, dried, and melted into Bars. The blue solution afterwards passes through a process of evaporation, effected by heating and atmospheric action combined, which requires ■ very extensive arrangements of holders and vats ; it is ultimately refined, and crystalhsed into that well- known substance, blue Vitriol, or Sulphate of 196 REFINING OF BULLION. Copper. Wliere the mixed Bullion operated upon contains Copper as an Alloy, the latter Metal is dis- solved along with the Silver in the process of ebul- lition, and passes with the Silver solution into the precipitating apparatus, where it is left behind in the fluid as Sulphate, after the precipitation and removal of the Silver, increasing thus to the quantity of Blue Vitriol ultimately obtained. A great portion of the Sulphuric Acid is also regained, which, after purification, is fit for further use ; whereas in the Nitric Acid process the solutions of Nitrate of Soda and Sulphate of Zinc are lost, as well as all the Nitric Acid. , In the Sulphuric Acid process nearly all the material can be utilised; the last produce — the crystallised Sulphate of Copper — has a market value, varying according to supply and demand. Although it would appear almost a matter of cer- tainty that Bullion — ^parted on such strictly defined laws of chemistry — should turn out entirely pure, it is, nevertheless, almost impossible to attain that result. Slight traces of Iron, Lead, and other metals win persistently remain, but in such infinitesimal quantities that we need not care about them. Eepeated Refining, at the hands of a scientific chemist, will reduce these impurities to the lowest minimum ; but at an expense incompatible with the economical requirements of business. The Assayer will never consent to find Gold 1000 fine. He wUl insist upon some allowance for Alloy EEFINING OP BULLION. 197 remaining under any circumstances ; so that 999^ is considered fine, and even 999 fairly fine. Some of the Frencli Refiners, however, do not scruple to boldly stamp their Silver Bars 1000 fine ; whilst English Assayers will caU them only 999 to 999^ fine. The practical Refiner, who may read this account of Refining operations, may not be quite satisfied with our description of them. Let it be taken into consideration, however, that our principal object here was to give the general reader an outhne sketch of the process, and to endeavour to convey to his mind an idea of the principles upon which it is based. There are many differences and deviations fi'om the operations here described, some of them important, others insignificant; and there are advantages and secrets in the business, which the Refiner jealously and carefully keeps to himself. It forms part of the Refiner's business to turn to profitable account the baser Alloys separated from the Noble Metals. For Banking purposes, however, the baser Metals in Bulhon have no value ; and it is unnecessary that we should do more here than passingly aUude to their elimination from Refinable Bullion. Silver or Copper may be called the legitimate Alloys of Grold. Unless they be present in undue excess, they cannot, for Minting purposes, properly be termed vmpurities ; whereas Platinum, Iridium, Iron, Quicksilver, Lead, Antimony, Arsenic, &c., which are sometimes contained in Gold, either disseminates 198 EBFINTN6 OF BULLION. througli the mass in solid .particles, or more closely combined with the noble Metal, decidedly are so. The Quicksilver can be driven ojff by moderate heat; Lead and the other base Metals are removed by Cupellation, as, at the high temperature of the fasing point of Gold, the base metals are, in presence of Lead, or with the aid of fluxes, converted into highly fusible oxides, which are readily absorbed by the Cupel. Platinum and Iridium are sepairated from Grold by mechanical means. A great deal of the Silver extracted from Lead Ores contains traces of Lead, which make the metal brittle and unsuitable for coining. The Refining of masses of metal consisting chiefly of the baser metals, and of inferior ores, belongs to the province of the Miner and the Metallurgist : we have already had occasion to remark that metaUic niixtures of this kind are not Bullion. ., The presence of Iridium in Grold, and the Brittle^ ness in Silver BuUiOn, are subjects reserved for treatment in a subsequent chapter. The uninitiated might be led to think that the workmen in a Refinery, where such large masses of BuUion are under their hands, could pilfer without detection. The exact quantities of Grold and Silver present are, however, known with almost mathematical accuracy, and the Precious Metals pass from hand to hand, or in the charge of foremen, in such a way that robbery becomes almost impossible, or is, at least, at once detected. The managers of Refining estabhsh^ REFINING OP BULLION. 199 ments fully understand tow to guard against such mishaps. The Profits made by large Refining estabhshments are variously estimated. The two largest Eefiners of Biillion in London (who refine on the cheaper French plan, and yet charge as much as the Refiners by the old process) are working in the interest of two Banking firms. That there is a dvrect profit upon the operation itself scarcely admits of a doubt. As a rule, more Pure Metal is obtained than the Assay states, because BngHsh Assayers underrate actual fineness by one-half to one Millieme; and there may be other httle advan- tages, which, on large sums, make up a fair direct profit per annum. Where large Refineries are carried on in connection with Banking and Bulhon operations, they have an influence on the supply and demand of the Precious Metals in the market, and thereby yield indirect profits. To those of our readers who have some knowledge of chemistry, or who, by chance, possess a few apparatus and utensils for chemical experiments, we can suggest a simple and amusing process, completely demonstrating the theory of Parting Gold and Silver. The things required for this purpose are, a small piece of Silver, weighing about 2 pennyweights (say a sixpence) ; and a small piece of Gold, weighing about 1 pennyweight (say a bit of old Jewelry, Gold of about 14 to 18 carats fine). Upon the supposed degree of fineness of the two Metals here the proportion which 200 BEPINING OF BULLION. the Silver bears to the Gold is as about 2^ parts of the former to 1 part of the latter. A piece of Charcoal, for blow pipe experiments (sold, in square pieces, by Chemical Apparatus makers); a blow pipe and a spirit lamp. A small globular glass bottle, of about 4 ounces capacity, such as are sold as suitable for boUing Acid over a spirit lamp ; or a large test tube. A couple of ounces of Nitric Acid; a Httle Sulphuric Acid, and a few pieces of Zinc ; a glass vessel or tumbler, and a small flat dish, or common saucer. Our first object is to produce a piece of parting Tnetal, which is done by means of the blow pipe. Hollow out a small portion of the charcoal, and place the sixpence with the bit of Gold on it in the httle cavity made. Then, with the blowpipe, direct the flame on to the charcoal support under it. When, after a few seconds, the coal begins to burn brightly, blow more strongly, so as to get it to a white heat. If you are no great adept at the blow pipe, endeavour to get somebody else to assist you, with a second spirit lamp and another blow pipe. As soon as the right heat is reached, say in one or two minutes, the Coin, &c. will fuse and drop into the hollow burnt into the charcoal; keep up the heat a little longer, until the molten drop begins to be sUghtly agitated ; then let it cool. Now it is very hkely that with so small a quantity of metal an equal distribution of the Gold with the Silver has not taken place. Therefore, when the piece is cool, beat it out with a hammer, boldly flattening it down to as thin a piece as you can. Break or fold up EEPINING OP BULLION. 201 this flat piece, beating it again, as mucli as you like, into flats or splinters ; collect the fragments, and put them once more on the charcoal, melting them down a second time. You may then assume that the Gold is better distributed through the mass, and that you have now a lump fairly representing parting metal. Instead of granulating it, as is done in large masses, beat it out again as flat as possible, and break or cut it up into as many little bits as you can, — which wiU represent grains. Place the bits into the little glass vessel or test tube, and pour an ounce of Mtric Acid over them. Holding the bottle or test tube by the neck, gently swing it over the spirit flame, to prevent its breaking by a too sudden application of heat, until you can bring it into closer contact with the flame. The Acid wiU soon become agitated, and emit pungent reddish brown fumes ; continue the boiKng until you see that the pieces are dissolved, leaving only a few dark grains at the bottom. The Acid has probably become dirty blue, through the Copper in the sixpence. Pour it ofl" carefully into a glass, and if the pieces do not appear suflBciently dissolved, after the bottle has cooled, pour in a little more Acid, and boil again, afterwards adding the second Acid to the first portion already put aside. The bottle, with the dark grains and the remaining traces of Acid at the bottom, having cooled, introduce water copiously several times, so as to wash the grains. Then turn them out on a piece of blotting paper, pick them up with the blade of a knife, upon which you 202 EEIINING OF BULLION. may gently dry them over the spirit flame. They are pure Gold. The Acid containing the Silver you. may then dilute with four times its volume of water, in a large tumbler. Make about half a tumbler fall of solution of salt in water, and gradually introduce this into the Acid. The thick cream-hke deposit of the Chloride of Silver wiU instantly form, and will only cease to form when you have poured in the right quantity of salt water. Then stir the fluid with a glass rod, and leave it to settle. When the upper part of the fluid has become clear, introduce a few more drops of the salt water, and watch whether they will stiU produce traces of slowly subsiding white flakes ; if not, then all the Silver is already precipitated. Decant the supernatant fluid, and wash the Chloride of Silver repeatedly, by filling up the glass several times with water, always taking care to let the Chloride settle down well before you pour ofi" the water. Then turn the Chloride out into the flat dish or saucer, cover it with a mixture of Sulphuric Acid and Water (say fifteen parts Water and one part Acid), and distribute some chips of Zinc (cut off from Zinc sheeting) over it. The action commences at once, and the Chloride turns dirty and grey. When aU the white has disappeared, which you can accelerate by stirring the pieces of Zinc about with a glass rod, you may pour off the solution, and wash the residue in several waters, taking finally the Zinc away. The residuary greyish powder is pure Silver, which may be drained on blotting paper, and dried upon the blade of a large REPINING OP BULLION. 203 knife, or on a piece of Zinc plate held over the spirit flame. The grains of Gold, mixed with a stiff paste of Gum Arabic to keep them together, may be fused by the blow pipe in a cavity of the Charcoal. The Silver powder, also mixed with a httle wet Starch or stiff Gum for better adhesion, and rolled into a small lump, may, in the same manner, be melted down into a small button. Afterwards the bit of Gold, and the button of Silver, may be shghtly flattened with a hammer, and rubbed bright to show their virgin colours. "We have often, in the space of half an hour, per- formed this experiment for the amusement of our friends. When larger quantities, say four ounces (20s) worth of Silver, and three or four pounds worth of Gold are thus to be operated upon, the melting can be done in small crucibles, either in a jeweller's furnace, or, at a pinch, in a well-built coke fire in a common grate, with the dihgent use of a pair of bellows to get the heat white. The metal may then be stirred with a hot iron wire or rod, and granulated in water. All the other apparatus for the Eefining process must then be larger in proportion. A small experiment with Sulphuric Acid may also be made upon a similar plan, following the general directions given in our description of Refining on a, large scale, 204 CHAPTER XVII. METHODS OP ASSATING. IN the regular order this chapter should have preceded the last. But, as Refining is simply Assaying on the largest scale, it was thought the better course to give, in the first place, a description of the outhnes of the Process of Refining, as the most suit- able introduction to the general description of the Methods of Assaying. In fact, if the reader has per- formed the httle experiment just now described at the end of the last chapter, he has been truly making a kind of Assay; although, from want of experience, and in the absence of proper appliances, he has pro- bably not been quite accurate enough in his manipula- tions. Modern Science has brought the art of Assaying to a degree of perfection more than sufficient for aU purposes of Bullion operations. It can readily be imagined that a subject involving so many nice and delicate operations has warmly engaged the attention of men of science, by whom it has been brought to its present high state of theoretical development; and that it has received also the best practical treatment at the hands of scientifically educated working Assayers. METHODS OP ASSAYING. 205 Our readers will not expect, of course, to find here a complete and exhaustive scientific treatise on this subject ; they will be satisfied, probably, if we succeed in making clear to them the leading points and features of Assaying. We have already had occasion to state that, when Bars are to be Assayed, a small piece — one or two pennyweights for Gold, two to five pennyweights for Silver — is chipped ofi" a corner, or cut from any part of the Bar ; and that the pieces so taken from the different Bars are wrapped up separately in papers, which are marked each with the respective letter and number of the Bar, and sent to the Assay Office, where the fineness of the Metal is deter- mined. These small bits of Gold or Silver, weighing from one to five pennyweights each, are given to the Assayer as samples of blocks of Metal of 50 to 2,000 ounces weight. (Here we clearly see. how indispensable it is that the Metals in the Bar should be most intimately and uniformly intermixed by careful remelting, so that a sample taken from any part of the Bar shall reaUy and truly represent the entire Mass). The Assay pieces, therefore, represent only the f^th to ^t'^ part of the actual weight of the block ; yet the value of the entire Mass, almost to a penny exact, has to be ascertained by a chemical analysis of these very small fractions. Now, one of the first things to occur to us, under these circumstances, is how desirable it must be to be able to weigh these very small pieces accurately to the 206 METHODS OF ASSAYING. mimitest fraction. TMs is accomplislied by that triumph, of the mechanical art, — the Assay Scales, which enable the Assayer to weigh to the twenty- thousandth part of the Assay piece. A true Assay scale will carry a maximum of about 100 grains, and will turn distinctly with the j-^oth part of a grain. This beautiful instrument, looking like the ghost of a scale, so slender and dehcately constructed is its framework, upon which a particle of dust would make an impression, is kept in a glass-case, one side of which hfts up, to enable the Assayer to introduce the objects to be weighed. For fear of getting trouble- some specks of dust inside, the case, the opening side is hffced but rarely, and even then only just sufficiently high to permit the introduction of the fine pincers, with which the weights and the objects to be weighed are passed into the pans of the scale. The Assay Balance is a beam scale, supported by a brass pillar ; the pans are suspended from the ends by almost in- visible pieces of wire. The beam is a pointed bar of Metal, very fight, yet strong enough not to bend undeT the maximum load which the balance is constructed to carry. The tiny hard tempered steel points turn on Agate plates. A lever, affixed outside, enables the Assayer to raise and to lower the beam with the pans suspended from it ; the pans, when in a state of rest, are supported on nicely arranged cushions. The weights used in Assay weighing are little bits of rouiid or square metal ; or short pieces of fine Pla- tinum wire, bent into various shapes ; these pieces are METHODS OF ASSAYING. 207 SO small ttat it requires a magnifying glass to see them with, any degree of distinctness. Two small wire hooks, weighing the too^^ P*^^ of a grain each, are suspended on graduated slides, affixed to the beam ; by means of rods so arranged that they can be worked from outside the case. These riders, as they are called, can be shifted backwards and forwards on the beam, and, acting on the principle of the lever scale, they may thus between them show to the j^th, or even j^jpth part of a grain. The arrangement for working the rods from the outside enables the weigher to obtain this high degree of accuracy without hfting the glass shade; so that neither dust, nor even the movement of the air caused by his breathing, can affect the balance. Other balances are without this arrangement; yet they are, practically perhaps, just as serviceable. To give a notion of the wonderful accuracy of an Assay Balance provided with riders as just now described, we may mention that a Balance of this kind will enable us to detect a difference in weight between two sovereigns to a fraction of 5-go^th part of the value of a penny; so that, in calculating by weight one 1000 sovereigns worth of Gold against another 1000, this balance will give a return exact to -|d, which is far beyond what is necessary in the Bulhon trade. In ordinary Assaying operations an indication of the 1000th part of a grain gives an accuracy of weighing to the minute fraction of the j^^th part; which is amply sufficient for all practical purposes. 208 METHODS OF ASSAYING. The Assay pieces sent in for analysis weigh, from 24 to 48 grains for Gold, and from 48 to 120 grains for Silver. For a single Assay the Assayer uses only 12 grains of the metal; but the excess is required to enable him to make double or treble Assays when needed ; also to give him an extra supply of substance in case of error. As the whole of the small pieces are afterwards returned to the owner, with the Assay paper, there is not, or there ought not to be, any loss of the more valuable part of the material. The Assayer accordingly takes 12 grains Troy weight of the metal sent him to operate upon. His first business is to find out how much of these 12 grains is pure Gold, and how much Alloy. Supposing he 'finds, for instance, that out of 12 grains 11 are Gold, and one AUoy, he reports the fineness of the examined Assay piece as 22 carats out of 24, which, as we know, is the fineness of British Standard Gold. If the 12 grains hold 11-| grains of Gold to ^ grain of Alloy, the proportions are 23 in 24 ; or, as the Assay would report. Better 1 carat gr. than Standard. If there are 10 grains of Gold, and 2 of Alloy, which makes 20 in 24, the Assay would report Worse 2 carats gr. than Standard. The 12 grains Troy are called the British Assa,y Pound; and each of the 12 grains represent 2 carats in the 24 carats. The grains of the Assay pound, for Gold, are divided into fractions, up to ^th of a grain. This gives the following corresponding pro- portions : — METHODS OF ASSAYING. 209 Assay Pound. Fineness. 12 grains = 24 carats 11 ,5 55 22 „ 10 „ 55 20 „ 2i „ 55 5 „ 1 grain 55 2 „ 1 a 55 55 1 carat i 4 55 55 2 grains 1 "8 55 55 1 grain T6 55 55 X a 55 3 2 55 55 1 4 55 1 64 55 55 1 8" 55 Thus, -^tli of an Assay grain corresponds in fine- ness to a fraction of -g^tli carat grain, whicli is our smallest fraction in reporting Assays ; "whilst we are able to attain to — tli strain in the actual weisfhinsf lOOO ° o o of an Assay, or to X2'2'id P^^^ of a carat grain. For Silver the decimals of the Assay grains corres- pond to the number of pennyweights, as, e.g. Assay Pound. Fineness. 12 grains = 240 dwts. 11-100 „ 222 5 100 0-600 „ 10 0-250 „ 5 0-050 „ 1 0-025 „ 1 a 0-0121, i The latter is the smallest fraction expressed in an 14 210 METHODS OP ASSAYING. Englisli Assay for Silver ; but theoretically we may weigli to -^tli dwt., or 0-001 fine.* Wlien we come to Assays of Silver containing traces of Gold, reported, say 5 or 10 or more grains of Gold per lb. Troy, we can weigb to balf a grain. Thus, 1 lb. Troy is 12 oz., or 5760 grains or parts. The 12 grains of the Assay pound may be divided accordingly into 12,000 parts. This would give a less accurate result than the former; however, for such parting Assays of Silver the Assayers generally use a larger quantity than 12 grains of metal, so as to increase the chances of a more accurate result. There are some Bnghsh Assayers who do not bind themselves to the Assay pound and its sub-divisions. They use weights of their own ; and they will make their Assay also upon pieces of more or less weight than twelve grains. In fact, it is much more con- venient entirely to follow the decimal system, rather than deal with fractions of grains ; and we beHeve that a great many Enghsh Assayers do so now. The weights and sub-divisions of weights which they use * The French Assayers report to joojjoth fine, and state the Assay in Milliemes and tenth of Milliemes. British Standard, for instance, is 916'6 in France. English Assayers only allow the |fch grain for Gold, or the ^ dwt. for Silver, where the Assay weighs it full, or over ; if it weighs only | or f ths, or |ths of it, they ignore it. For these reasons, the average of EngHsh Assays is below that of French Assays. The EngUsh method may appear safe ; but it is neither mathematically nor logically correct ; and in the present advanced state of the science we ought not to lag behind other nations. METHODS OF ASSAYING. 211 are of secondary importance, in so far as we are concerned; and in tlie Assayer's hands sucli weights, no matter what they happen to be, will answer every purpose, so long as they represent units and their minutest practicable sub-diyisions. From this description of the weighing system pursued in Assaying the reader may gather an idea of the minute accuracy of the method, which enables the Assayer to estimate from a small sample the exact value, or, at least, very nearly so, of a heavy Bar of Grold or Silver. The Assayer also uses a larger balance, in which he can weigh heavier pieces to xo^^l'^ of a grain exact. "With these larger scales he weighs off, in the first place, the several parts of twelve grains each which he requires for his Assays. It now remains for us to describe the Chemical processes. In ordinary Bulhon Assays (for we here leave out of consideration aU Assays of Ores, as properly belonging to the province of Metallurgy) the pieces of Metal to be analysed may consist of : — Gold containing only Silver. Silver containing only Gold. Gold containing only Copper or other inferior Alloys. Silver containing only Copper or other inferior Alloys. Gold containing both Silver and Copper or other inferior Alloys instead of or in conjunction with the latter. 212 METHODS OP ASSAYING. Silver containing both. Gold and Copper or other inferior Alloys instead of or in con- junction with the latter. There are two methods of Assaying, which, according to circumstances, are employed singly or jointly, viz. : — The Assay bt Acid, and The Assay bt Cupellation. Assays by Acid, are made : — For Gold containing only Silver. For Silver containing only Gold. Assays by Cupellation are made : — For Silver containing only Copper or other inferior Alloys. Assays, by Cupellation first, and Acid after, are made : — For Gold containing only Copper or other inferior Alloys. For Gold containing Silver and Copper or other inferior Alloys instead of or in conjunction with the latter. For Silver containing Gold and Copper or other inferior Alloys instead of or in conjunction ii:ith the latter. And in this order we shall describe them.* * Silver Assays can also be' made in another way, quite distinct from the above, viz., by the so-called French or Wet Method of Assaying Silver ; a comparatively new process, of which we shall speak at the end of this chapter. METHODS OP ASSAYING. 213 ASSAY BY ACID. — Our description of Refining (see last Chapter) states tte principles upon wWcli Gold and Silver can be parted, whether in large or in small quantities. Nitric Acid is the agent usually employed in Assaying by the humid way. The process of Refining (Assaying) small or minute quantities of the Precious Metals by this agent demands certain modifi- cations of the apparatus and in the general mani- pulation, to suit the delicacy of the operation, and to ensure the utmost accuracy of the result. For Gold contaming Silver. — The Acid method is resorted to where it is positively known that the Assay piece contains only Gold and Silver. This is almost invariably the case with Bars melted from native Gold ; the Assayer may derive his conviction on this point from the indications afibrded by the known origin of the Bar. The Assay piece, before being subjected to the Acid, has first to pass through certain preli- minary operations, similar to those required in Refining. The same as in Refining, in order to secure the efficacious working of the Acid, it is essen- tial that there should be more Silver than Gold in the piece, in the proportion of three to one. This propor- tion is not found in native Gold ; and it is accordingly necessary that Silver should be added to the Assay pieces to bring them up to the required standard. The Assayer first determines, as nearly as prac- ticable, the quahty or fineness of the piece, either bv the Touchstone, or by a rough preliminary Assay. Practised Assayers, who are in the habit of making a number of Assays every day, are frequently able to 214 METHODS OF ASSATING. judge pretty closely by the mere look of an Assay piece. Upon the Assayer's estimate of this, which may be taken to be pretty correct to twenty or thirty milhemes, he calculates the quantity of Silver required to be added. The process is conducted as follows : — Twelve grains (the Assay pound) are taken off the Assay piece, and weighed in the balance as accurately as it can possibly be done. A prehminary Assay shows the 12 grains to consist of Say about 10 of Grold, and 2 of Snver. Consequently, 28 grains of pure Silver must be added to the Assay piece, to bring the weight of the whole up to 40, being 30 of Silver, and 10 of Gold. This addition of Silver to the Assay piece of Gold is called Quartation. The forty grains of mixed metal are melted together ; the inquartated Button obtained is flattened on an anvil, and annealed once or twice to soften it ; it is then passed between rollers, so as to reduce it to a thin plate or ribbon, about 1^ to If inches long, and about ^ inch wide. In the rougher ivholesale Refining process, as it may be termed, the Metal is granulated. In the Assay this rolling out into a fine ribbon has exactly the same effect, in so far as the exposing of a larger surface to the action of the Acid is concerned. The ribbon is rolled up upon a quill, which gives it the shape of a short watch spring; the small spiral piece of Metal — the Cornet, as it is termed, is placed in a glass matrass, or retort, standing METHODS OP ASSAYING. 215 on a hot sand bath, where pure Nitric Acid is then poured over it. It is now boiled for a quarter of an hour; after which the Acid is cautiously decanted, and fresh Acid poured over the Cornet in the Matrass, untU all the Silver is dissolved. Three ounces of Acid are necessary for the first boiling ; less afterwards, as the quantity of the Silver diminishes. The Acid is not used in its fall strength ; the first boihng is done with a mixture of 30 per cent, of pure Acid and 70 of Water (about 1"15 specific gravity, con- centrated Nitric Acid being 1"50). The second boiling is efiected in stronger Acid, about half concentrated Acid and half water : this really dissolves out the remaining Silver. Different Assayers have different ways, both as to the strength of the Acid and the time of boiling. A trace of Silver, from 1 to 1^ Milliemes, is said always to remain with the Gold. As this is known to be the rule, allowance is made for the Silver remaining, which is called Surcharge. It is said, however, that a third boiling, conducted upon the plan of the French Assayers, clears off all the Silver. When the whole of the Silver present has been removed as far as practicable, the Cornet, or spiral — which now appears of a red brown colour, and is very brittle from its honeycombed structure, resulting from the removal of the intersecting atoms of Silver, so that it requires the most delicate handling to guard against its breaking — is washed successively in hot and in cold distilled* water, and then heated in a small oven, to * Distilled water must be used, as common river or pump water would precipitate small traces of OUoride of Silver in the cellular structure of the Cornet, and would thus render the Assay inaccurate. 216 METHODS OF ASSAYING. anneal it. This operation causes it to contract slightly, and imparts to it a dead golden colour ; but it still remains brittle, and an attempt to unwind it will break it to pieces. However, the Cornet is now pure Gold. Now, to make our calculation of the result of the Assay. We must remember that 12 grains were taken from the Assay piece, to which 28 grains of Silver were added, making in all 40 grains. Suppose the pure cornet, carefuUy weighed in the Assay balance, is found to weigh, say 9ffth grains. In this case SOgVth grains of Silver have been dissolved by the Acid ; substracting from this the 28 grains Silver added, we find that there were 26Vth grains of Silver in the 12 grains of the original metal. In the Assay pound 9ffth grains are equal to 19 carats 3f grains in fineness : or Worse 2'0^ than Standard of 22, or 833 fine in Milliemss. The propor- tions assumed at starting were 10 Gold and 2 Silver ; or W 2'0, or 834 ; the actual Assay has, therefore, turned out -^th grain, or 1 MilUeme worse than the estimate. The SUver of 2g^4th grains in the 12 is equi- valent to 962 gr. per pound Troy, or 40 pennyweights; and the Assay, as a parting Assay, would be reported. Gold W 2-01 gr. Silver 40 pennyweights per 12 oz. of metal. On comparing the process of Refining with this method of Assaying, it will be seen that, essentially, the chemical action is the same ; but that in the Assaying the process is modified to suit the delicate nature of the operation. METHODS OF ASSAYING. 217 Again, in Assaying, the same as in Refining, it is almost impossible to get completely rid of all the Silver ; slight traces of it will remain, and there will accordingly always be a surcharge of Silver as stated before (which it is asserted, however, might be avoided by a third boiling with Acid). It is also found that the Gold is apt to waste a httle. Sometimes the surcharge of Silver and the loss of Grold balance each other. These difierences, no doubt, arise either from slight variations in the temperature, and from the actual condition of the Acid ; or, perhaps, from atmos- pheric influences. Scientific men are not certain as to the true causes of these differences. In order to make an Assay as perfect as possible when these conditions prevail, so-called. Check Assays are made : a piece of 12 -grains of Gold, known to be exactly Standard (22 carats), is melted together with the due proportion of Silver, and the cornet made with the mixed Metal is Assayed at precisely the same time, and with the same mixtures of Acid, and under the same temperature, as the Assay or Assays of the pieces to be examined.* It is fair to assume, and practice has proved it to be a fact, that, whatever may cause the discrepancies mentioned, they wiU be the same in the several Assays thus conjunctly and simultaneously made. The Stan- dard Cornet becomes in this case the actual Standard * At the official trial of the English Gold Coinage, the so-caUed " trial of the Pyx," Assay pieces of certain " Standard plates of Gold" are used. These Standard plates are kept in Westmiaster Palace. 218 METHODS OF ASSAYING. "weight for the rest ; which, being placed in one of the pans of the Assay scale, the other Cornets may be weighed against it, by simply adding or subtracting the grains and fractions of grains required to estabhsh a perfect equilibrium between the two pans. The grains and fractions of grains so added or subtracted give at once the Worseness below or the Betterness above Standard. Say the Standard piece Assayed is found to weigh 11 Assay grains (exactly 22 fineness) ; one of the Assays is found to weigh 11|- grains = B 0"2 grains ; another 8^ grains = W 5 •2^. In this case the Stan- dard piece has lost nothing. But let us suppose it is found to weigh only lOffths, showing a loss of eV^h Assay grain, or -^th carat grain ; the other two pieces (if weighing the same as before) would be -^th carat grain better, or B 0'2|-th ; or "W" 5"2fth grains. For Silver containing Gold. — In Assays of this kind the Silver is generally much in excess of the Gold, and there is, consequently, no necessity for further addition of Silver. For the rest the process is the same as in the Assay just now described. The Silver will dissolve very readily, and leave traces of Gold behind in the glass matrass. Instead of taking only 12 grains to be operated upon, the Assayer may use 4 times that quantity. With forty- eight grains of Metal, and a balance weighing to j^th of a grain, he ought to be able to weigh to ^^^^th exact ; and to discover accord- ingly to -|th part of a Troy grain of Gold in the Troy pound. It is by no means necessary, however, to METHODS OF ASSAYING. 219 carry the Assay to sucli minute fractions ; such. Assays are sufficiently accurate if showing full grains of Gold per Troy pound of metal. Fine Oold may also be Assayed without Quartation; and this may sometimes even be necessary. The Assay piece, having first been accurately weighed, is dissolved in Nitro-Muriatic Acid (the only Acid which dissolves Gold). The Chloride of Gold is then pre- cipitated by Sulphate of Protoxide of Iron ; the preci- pitated Pure Gold dried, annealed, and weighed again. It is, however, a tedious process, and, if Silver be pre- sent, the Chloride of the latter metal will be found very much in the way. The process is rarely made use of. ASSAY BY CUPELLATIOW. — In cases where Gold or Silver, either separately or jointly, are Alloyed with Copper, Lead and other impurities, they are first separated from these base Alloys by Gupellation. The process of Assaying Gold and Silver by the Cupel has been known for centuries, and still remains to this day one of the most wonderful and interesting chemical operations. It is totally different in its nature from the Assay by Acids. It is based upon the feeble affinity which the Precious Metals have for Oxygen, and on the strong tendency of Copper, Tin, &c. to oxidise rapidly in contact with Lead at a high temperature, forming a readily fusible Oxide, which drains off" through the Cupel (a porous earthy vessel) as through a sieve, whilst the Precious Metals are left behind, the Cupel being impermeable to Metallic par- ticles, even in a state of complete fusion. 220 METHODS OF ASSAYING. The strong affinity wliicli all the baser metals have for Oxygen distinguishes them from the Precious Metals. Lead, notably, is soon converted into an Oxide. Melt a small quantity of Lead in an iron ladle until the metal runs, and continue the heating until it is red hot. You will find that a dark yellow scum soon begins to form, especially at the sides of the ladle ; if you remove this, the bright surface exposed for an instant at once becomes covered again with another coating, which floats to the sides ; and at last the whole of the metal wiU be converted into the yellow Oxide, or Protoxide of Lead, or Litharge. Upon continued application of heat, raised to a higher degree, more Oxygen is taken up by the Protoxide, which is thus converted into the Red Oxide (a mixture of Protoxide and Binoxide of Lead) . Zinc, Tin, and other metals which fuse at a com- paratively low temperature, are readily oxidised by intense heat with free access of air (which gives up its Oxygen to the Metals) ; even Copper, which requires a higher temperature to fuse, is soon oxidised by intense heat with free access of air. Whereas Grold refuses to oxidise at any temperature ; and Silver oxidises only to a very limited extent in the most intense heat, such as is never reached in Assaying. A slight consideration of these characteristic pro- perties of the different metals will naturally lead to the supposition that where a mixture of these several metals is exposed to the action of a proper degree of heat, with free access of atmospheric air to the molten mass, the baser metals will be converted into METHODS OF ASSAYING. 221 Oxide. And sucli is, indeed, tlie case witli certain of ttese metals, even where they are present only in smaU proportions ; others, however, such as Copper, for instance, will not so readily oxidise, especially where Gold is present in excess, enveloping and protecting the Copper from contact with the air. So-caUed Oxidising agents are, therefore, employed to assist in the conversion of Copper into Oxide. A number of these oxidising agents are known in chemistry as, e. g.. Peroxide of Manganese, Salt- petre, Borax, the caustic Alkahs, Oxide of Copper, Sesqmoxide of Iron, and others ; but our most effective oxidising agent, and the most convenient for BuUion Assays, is the Yellow Oxide of Lead, or Litharge, to which we have just now had occasion to allude. Litharge will powerfully assist in the oxi- disation of most metals, except Gold, Mercury, Silver, Platinum, Palladium, and a few more of the same class. Lead plays, consequently, a most important part in Cupellation. Its use in this operation is twofold. In the first place, when melted together with the other metals, in the proportion of from five to thirty times the weight of the latter, it dilutes, if the expression may be allowed to pass, the metalHc structure, and weakens the resistance of the mass to heat and air ; at a subsequent stage of the process it is the first to oxidise, and the yellow oxide formed (Litharge) then aids in the oxidisation of the other base metals present, by giving up to them part of its own Oxygen ; after which it absorbs a fresh supply of Oxygen from the air, to part again with it to the still unoxidised 222 METHODS OP ASSAYING. portion of the other base metals ; and this action goes on until complete oxidisation of the Alloys is effected, and pure Silver and G-old alone are left. Now comes the question, — -" How are the Oxidised Alloys removed, so as to leave the noble metals in a state of purity?" Here the so-called Cupel performs its office. The Cwpel is a small vessel, about two inches in diameter and one and a half inch high, con- cave inside, and in shape not unlike certain kinds of salt cellars. It looks as if it were made of earthen- ware. It is, however, made of bone ash (previously purified). Though of porous structure, it is a strong, fire-proof vessel, which has the remarkable property of allowiag fused Litharge (and other Oxides in a state of fusion) to soak into its substance as water wiU into blotting paper, whilst it is impermeable to metallic particles. Suppose we have the following mixture heating in a Cupel : — - Lead . . . . .22 parts Copper .... 2 parts Tin ..... 1 part Not alone will the Lead, converted into Litharge ui a state of fusion, sink into the Cupel, but it wiU assist also in forming the fusible Oxides of Copper and Tin, which will equally soak into the substance of the Cupel. If, in addition to the Lead, Copper, and Tin, Silver and Gold are present, say in the proportion of three of the former to one of the latter, these two Precious Metals, resisting the Oxidising influences to which the baser Alloys have to yield, will not sink into METHODS OP ASSAYING. 223 the Cupel, but remain behind, in a state of fusion, at the bottom of the Cupel. For Silver containing only Copper or other base Alloys. — In these Assays it is taken for granted that no Gold is present. The Silver may contain Copper, or Lead, or other metals, in larger or smaller proportions. The process remains pretty much the same, whether the SHver is 600, 700, 800, or nearly 1,000 fine. A sample of 12 Troy grains (equal to the Assay pound) of the MetalHc Alloy is accurately weighed. Let us suppose this sample to be about 950 fine, and the 50 parts remaining to be partly Copper, partly Lead. To make the Cupellation succeed properly, a quantity of pure Lead, at least five times the weight of the Assay piece, must be added to it. The quantity of Lead to be added varies according to the presumed fineness of the Silver, and the propor- tion of Copper present in the Alloy. Copper has a great afl&nity for Silver, which protects it, in a measure, against the action of Oxygen ; and, as a rule, it requires 15 parts of Lead to carry off one part of Copper. An expert Assayer knows by experience what is required, according to the supposed fineness of the Silver Alloy ; a moderate excess of Lead is not prejudicial to the success of the Assay. The process is conducted as follows : — The twelve grains of the Silver AJloy, carefully weighed in the Assay scales, are charged into the Cupel, and sixty grains of pure Lead added. Frequently the Lead is put in first, and allowed to melt in the 224 METHODS OF ASSAYING. Cupel, and the Silver AUoy, wrapped up in a slip of Lead foil, is dropped into the molten Lead bath after. The Cupel is placed inside a Muffle. This is made of fire clay, in the form of an arch, with a flat bottom ; it is about six inches long, by four wide, and four inches high; it is open at both ends, and the arch over the Cupel is perforated so as to let the atmospheric air circulate freely inside. The Muffle stands in the Furnace. Assay Furnaces are made of aU sizes, capable of holding from one to twenty MuflO^es or more. They are heated with coke or charcoal, and a strong draught is required, both for the bright burning of the fael and the current of air, which, when the formation of the Litharge begins, is required to play upon the molten metal bath in the Cupel. The Muffle, with the Cupel in it, is gradually heated to redness in the closed furnace, which is then opened, and the Assay is charged into the Cupel. As soon as the Metal is in fuU fusion, presenting a smooth convex STU-face to the eye, air is freely admitted, which, getting heated on its passage to the Cupel, at once begins to oxidise the Lead. The metallic bath shines very brightly, a scum forms on the surface, where it flits about, apparently moving towards the sides of the Cupel. This is the fused Litharge. As the temperature increases to white heat, fumes of Lead rise ; and the movements on the surface increase in rapidity, the molten metal presenting a continual succession and alternation of films of Oxide forming on the surface, clearing away and forming afresh. These films con- METHODS OP ASSAYING. 225 sist of the Litharge, and tlie Oxides of the baser Alloys formed under the Oxidising influence of the latter. The quantity of the metal in the Cupel now begins to diminish fast, until at last all the Lead and the other base Alloys are gone. At the moment of the final dis- appearance of the last traces of the Lead, the Silver button seems to make a rapid movement : it brightens for an instant, shining very lustrously, after which it settles down quietly at the bottom of the Cupel, — a head or button of pure Silver. The Cupel is now allowed to cool, the hard button of Silver is taken out with a pair of pincers, cleaned from any traces of glassy Oxides occasionally adhering to it, and then weighed. Li this case we have presumed the SUver to be about 950 fine. Suppose the button is found to weigh 11 "35 grains Troy. The original weight before Assaying being twelve grains, the result is reported, in the British Assay, 227 dwts., or B 5 dwts. — equal to 945'833 in milhemes. The Assay consequently has turned out below the estimate. Although the principle upon which these Assays are based — the oxidation of the baser metals, and the non-oxidation of the Silver — is quite correct, yet it will nevertheless frequently occur — from overheating, or from other causes over which the Assayer has seemingly no control — that traces of Silver are carried off with the Litharge. This, of course, leads to inac- curacy in the result of the Assay. In order to adjust errors arising from these causes, Gheclc Assays are 15 226 METHODS OF ASSAYING. made, on tte same system as explained under tlie tead of Assays of Grold by Acid. A piece of Standard Silver, of twelve grains weight, is Cupelled, in the ordinary way, in the same Muffle, and simultaneously with the Assay piece or pieces ; it is thus exposed to exactly the same degree of heat as the latter, and operated upon under the same conditions. If the Standard piece, after Oupellation, weighs exactly 11*1 grains (or 222 dwts. fine), then no loss has taken place in the Assay; but if it weighs 11"075, or 11'026, then it is fair to assume that the same fractions have been lost in all the other pieces, and the fineness of the latter can be computed accordingly. For Gold containing only Copper or other base Alloys. — Gold which contains Copper can be Cupelled in the same manner as Silver ; it can bear a much higher degree of heat than the latter Metal. Very large quan- tities of Lead are required in the process, to overcome the resistance of the Copper to oxidation, as that Metal has a very strong affinity for Gold. But even with large quantities of Lead the process is uncertain. It has been found that Silver lessens the affinity between Copper and Gold, and that the addition of Silver to the Assay piece, in the proportion of three parts to one part of Gold, will bring about the ready removal of the Copper by Cupellation. This pro- portion of three of Silver to one of Gold is the same as used in Refining and in Quartation in Assays by Acid. Besides, Gold, unless specially composed of only METHODS OP ASSAYING. 227 fine G-old and fine Copper, generally contains Silver, whicli cannot be parted from it by Cupellation. It is therefore expedient in cases wtere Gold alloyed with baser Metals is to be Assayed, to Quartate the twelve grains of the Assay piece at once with thirty-six grains of pure Silver (or thereabout, accord- ing to the supposed quahty of the Gold). This gives a total of forty-eight grains, with three- fourths of Silver in it. The mixture is Cupelled in the same way as just now described; the button finally resulting consists of Silver and Gold alone. Let us sxippose the Gold in the Assay piece to be about 760 fine, the balance consisting of 84 parts of Silver and 166 of baser Alloy ; to the 12 grains of this Assay piece 36 grains of Silver are added, making in all 48 grains. After Cupellation the button ought to weigh 46 grains. Namely — For the Gold in the Assay piece . 9 grains For the 84 parts of Silver . . 1 „ For the Silver added . . . 36 „ 46 „ The two grains wanting to make up the original weight of the Quartated Assay piece are accounted for by the 166 parts of baser Alloy, oxidised in the Cupellation. The bead or button of the 46 grains of Gold and Silver is then Assayed by Acid. The piece is flat- tened, and laminated into a thin plate or ribbon, which is rolled into a cornet, and boiled in Nitric 228 METHODS OF ASSAYING. Acid, in tte same way as previously described. When all the Silver has been dissolved ont, there should be left nine grains of pure Gold ; which corresponds to a fineness of 750 in Millifemes in the original Assay piece. Thus we have here Assays by CupeUation and by Acid combined. For Gold containing Silver and Copper or other base Alloys. — Alloys of this kind are Assayed in precisely the same way as just described, by CupeUa- tion first and by Acid after. We know in such cases that Silver is present, and our object is not only to ascertain the fineness of the Gold, but also the quantity of Silver in the Assay piece. The Assay piece of twelve grains is accordingly at once Quartated with Silver, the Mixture Cupelled, and the Silver and Gold Cornet treated with Mtric Acid. Let us suppose the Gold in the Assay piece to be 800 fine, with 140 parts of Silver and 60 of Copper or other Alloy. To twelve grains of it, accurately weighed, 36 grains of Silver are added, making 48 grains in all. After CupeUation, the piece should weigh 47 '28 grains, namely : — For the Gold in the Assay piece . 9 '60 For the Silver added . . .36-00 For the Silver originally present . 1-68 47"28 grains The 0-72 grain wanted to make up the original weight of the Quartated Assay piece being the baser Alloy oxidised and absorbed into the Cupel. METHODS OF ASSAYING. 229 Assayed by Acid the piece of 47"28 grains ought to give For tlie Gold . . 9-60 grains For the Silver . . 37-68 „ Less Silver added . 36-00 „ 1-68 grain for the Silver originally present in the Assay piece. The report for 9-60 grains Gold in 12 grains is 800 in miUiemes ; for 1-68 grains SLlver= 140 miUi^mes. The British Assay would therefore be For the Gold W 2 3^ For the Silver 33^ dwts. per lb. Troy. For Silver containing Gold and Copper or other base Alloys. — The process is again the same ; only in these cases there is no need for Quartation, the Silver being already present largely in excess. Heavier Assay pieces are taken, say 48 grains instead of 12, that the traces of Gold left in the matrass may be more clearly perceptible. Supposing a Silver Assay of this kind to be 600 fine, the balance being 12 parts of Gold and 388 parts of base Alloy. Forty-eight grains ought then to weigh, after OupeUation . . . .29-376 grains viz.. For 600 fine SHver . . . 28-800 „ For 12 Gold .... 00-576 „ which is, in British Eeport, Silver W 78 dwts. Gold 69|- grains per lb. Troy. 230 METHODS 01' ASSAYING. Assays made solely to ascertain tte fine weiglit of Gold, or tlie fine weiglit of Silver, are called ordi- nary Assays. Assays made for the purpose of determining the relative proportions of Grold and Silver, or of Silver and Gold, are called parting Assays. The liability to error in Assays of all kinds may be very much lessened by making double or treble Assays. The Assayer is generally instructed to make double Assays ; for the Bank of England treble Assays are made. One Assayer may be effectively checked by another, to whom a second piece of the same Bar is sent. If the two Assays difier, which is, however, very seldom the case, another set of Assays can be made. Should these differ again, the faxilt may be in the bad melting, and in the irregular distribution of the metals in the Bar ; in which case the Bar should be remelted and Assayed again. Finally, if this does not answer, the whole Bar should be Refined, to obtain the correct quantities. Such difficulties occur very seldom indeed ; we simply allude to them here in order to show that the principle of correctness can be carried out in any case. THE WET METHOD OP ASSAYING SILVER (Process of Assaying Silver by the Humid Way). — In France a method of assaying Silver has been per- fected of late years, altogether distinct from the process of OupeUation. French Assayers use it extensively. English Assayers do not as yet seem to favour it much. METHODS OF ASSAYING. 231 Silver alone (including as a matter of course Dore Silver) is Assayed by this method. The principle upbn which the Assay is based is this : — The Assay piece is dissolved in Nitric Acid, which converts the Silver in it into Nitrate of Silver in solution. The solution is precipitated by common Salt (Chloride of Sodium), which throws down the Silver as Chloride, thus enabling the Assayer to determine, from the quantity of the precipitate ob- tained, the fineness of the Silver in the Assay piece. We have before this had occasion to state that Nitrate of Silver in contact with Chloride of Sodium (Common Salt) is converted into Chloride of Silver, and the Salt into Nitrate of Soda. It might be suggested here that the Chloride of Silver precipitate produced from, say twelve grains of Assay, might be separated, reduced to pure Silver by Zinc and diluted Sulphuric Acid, and weighed. This might indeed be done, although not with all desirable accuracy; but, as will be seen a little further on, there is no necessity for this somewhat complicated course of proceeding. The Salts of the Metals in a state of purity always consist of certain fixed proportions of an Oxide of the Metal and an Acid ; there is never the shghtest varia- tion in the per cental proportion of each element present. A certain fixed quantity of pure Nitric Acid will take up a corresponding weight of pure Silver ; if there is less Acid than required, some of the Silver wiU remain undissolved. If there is too much Acid, the surplus will remain uncharged with Silver. In 232 METHODS OF ASSAYING. tlie same way Chlorine combines witli Silver in pro- portions always rigorously the same. A certain fixed quantity of Nitrate of Silver wiU thus be decomposed by its equivalent proportion of Common Salt. Where the proportions of the Nitrate and Chloride are strictly equivalent, there is neither Nitrate of Silver nor Chlo- ride of Sodium left in the mixed solution of the two ; but where this is not the case, the excess of the pre- ponderating salt remains in the solution, and its quan- tity may be accurately determined by a simple chemical process. The reader may make an experiment. Dissolve a piece of SUver in Nitric Acid ; or, better still, purchase from a chemist a quarter of an ounce of crystallised Nitrate of Silver. Place this in a tumbler, and pour distilled water over it; when dissolved, put about one- third or one-fourth of the contents into a second tum- bler, to be kept in reserve. Dissolve half an ounce of Common Salt in a third tumbler, reserving a portion of this Salt solution also in a fourth tumbler. Place tumblers numbers one and three alongside each other, and gradually add some of the Salt solution to the Silver solution. A thick white precipitate of Chloride of Silver will form at once. Agitate the contents of the first tumbler, then allow them to settle down. As soon as the supernatant hquid is clear again, add a fresh portion of the Salt solution; the same white Deposit wUl probably form again, though not so copi- ously as before. .Further additions of Salt solution may produce but a slight result, until finally no more white flakes are formed. METHODS OF ASSAYING. 233 Now, to try whetlier the Nitrate of Silver and tlie Chloride of Sodium have really been mixed together in exactly corresponding combining proportions you need only throw a few drops of the clear supernatant liquid into tumblers numbers two and four, which hold the reserved Silver and Salt solutions ; no precipitate ought to be produced in either. But if in tumbler number two — holding the reserved Silver solution — a precipitate is formed, this is a proof that the solution in the first tumbler contains an excess of Salt, and accordingly that too much Salt has been used ; if the deposit takes place in tumbler number four, holding the Salt solution — this is a proof that there remains still undecomposed Nitrate of Silver in the original mixture. This little experiment illustrates the principle upon which Silver Assays may be made by volumetrical analysis, with a Normal or Standard Solution of Salt, and controlled by means of a Normal or Standard Silver Solution. The apparatus used in the process must be con- structed with the utmost nicety, so as to meet all requirements of convenience and accuracy. The Salt must be chemically pure Chloride of Sodium ; the Water used pure distilled Water. The temperature must remain uniform throughout, or where there are variations in it, the results of the Assay must be corrected for these variations. The process is conducted as follows : — One gramme* of the Silver Assay piece is accurately * As the process is Frenoli, it is only proper that we should use French weights and terms in our description of it. 234 METHODS OF ASSAYING. weighed off; whicli is the only weighing operation required in the process. This is dissolved in pure Nitric Acid, and the Solution — diluted with distilled water, so as to give exactly one litre, or 1,000 cubic centimetres of liquid — is put into a suitable white glass bottle, which it fiUs about half. The neck of the bottle is placed under the Pipette, suspended above it, supported by a stand. The Pipette is a hoUow glass cylinder, terminating at both ends in elongated necks with fine orifices or openings. Both ends are furnished with stop cocks ; but the flow of the solution with which the Pipette is charged can also be stopped or regulated, drop by drop, by closing the upper orifice with the fore finger. The Pipette contains the Decime Standard Solution of pure Salt. The Salt Solution is carefully made beforehand, and kept in weU-stoppered flasks, to guard it from loss by evaporation. The solution is made accurately of such strength that 1,000 cubic centimetres of it will pre- cipitate exactly one gramme of pure Silver, neither more nor less. The Salt Solution, like the Silver Solution, thus measures exactly one Htre (equal to 1,000 cubic centimetres). The original volume of the two so-called Standard or Normal Solutions is only 100 cubic centimetres each; but when they are wanted for use, they are first turned into so-called Decime Solutions, by the addition of nine parts of water. When required for an Assay, the Decime Salt Solution is put into the Pipette, which has engraved upon it a graduated scale, divided into 1,000 centi- METHODS OF ASSAYING. 235 metres (witli decimals indicating to — th part); so that when full, the surface of the Uquid touches on the scale ; when half full, 500, &c. The operator can thus read off" to a small fraction how much of the Salt Solution he has discharged from the Pipette. Now, if the one gramme of Silver contained in the 1,000 centimetres of the Decime Silver Solution is pure Metal, it will exactly take the 1,000 centimetres of the Decime Salt Solution to precipitate the Silver ; if the Metal is only 950 fine, it will take 950 parts of Salt Solution; if 600 fine, only 600 parts of the Salt Solution will be necessary ; and, provided the neutral- isation point can be fixed with unerring certainty, nothing can be more simple than this operation. Supposing it is known, fi^om a preliminary. Assay, or from experience, that the piece of Silver is from 800 to 850 fine. The operator may then at once discharge into the flask which holds the Assay piece in Nitric Acid Solution 800 parts of Salt Solution from the Pipette. The Chloride of Silver forms copiously, the flask is well shaken, and when the Deposit has settled, and the supernatant liquid is clear and at rest again, a further addition of Salt Solution is made, but this time cautiously, and drop by drop, so long as a precipitate continues to form; the bottle is occasionally shaken during the progress of this operation. Suppose the Assayer has thus discharged from the Pipette twenty-four centimetres more, the precipitate forming upon the addition of every fresh drop getting fainter and fainter, and failing altogether to make its appearance upon the addition of 236 METHODS OF ASSAYING. the twenty-fiffcli centimetre : in ttat case the Pipette will show that 825 parts of the Solution originally contained in it are gone ; the Silver is, consequently, 825 fine. . The Assayer may, however, in order to make sure that there is really no more Silver left to precipitate, have discharged 826 or 828 centimetres of the Salt Solution, and he may thus have created an error, in which case there will be a sHght excess of Salt in the Silver bottle which has to be removed. This is effected by placing the bottle under another Pipette, which, instead of a Decime Standard Solution of Salt, contains a Decime Standard Solution of Nitrate of Silver. This Silver Solution, being added very cautiously, drop by drop, will now in its turn form a precipitate with the Excess of the Salt ; two or three centimetres wiU, of course, under the circumstances here assumed, suffice to throw down the Excess of the Salt, and thus to correct the error created by the over-addition of Salt Solution. If the Assayer has found, accordingly, in the first instance, that 825 Cubic Centimetres of his Salt Solution were gone from the Pipette when the for- mation of a precipitate ceased, and had continued, nevertheless, to discharge two or three Cubic Cen- timetres more, he should now again at 825 find neither Nitrate of Silver nor Chloride of Sodium in the Assay Solution. A higher degree of accuracy may be attained, and a more efficient check applied, by double or treble Assays, as in Cupellation. A second Assay, for instance, may be made by discharging the 1,000 METHODS OF ASSAYING. 237 centimetres of Salt water at once from the Pipette into the Assay Solution. The Silver being 825 fine, there ought to be an excess of 175 Salt. This can be tested by the Standard Solution of Silver, and re- tested by the Standard Solution of Salt. The operation in this case is the reverse from the former ; it ought to give accurate results, as the estimate can actually be made exact to -^th part. The base Alloys — Copper, &c. — present in such Silver Assays cause no inconvenience, except in so far as they tinge the Nitrate of Silver Solution; but they are not precipitated by Solution of Salt. Mercury, however, is precipitated by Chlorine ; therefore, if this Metal is present, the mercurial precipitate has, of course, to be separated afterwards from the Chloride of Silver ; which is a great drawback. For Dore Silver the process answers very well; the Gold being of course left behind, as usual, upon the Solution of the Silver Assay in Nitric Acid. The practical Assayer will, no doubt, find our description of the process of Assaying insuflBcient, as there are many technical points which require special instruction ; the ordinary reader, however, may be satisfied with the outhnes which we have given of this simple and ingenious method of Assaying Silver. 238 CHAPTER XVIII. lEIDIUM, AND BEITTLENESS IN BULLION. A GOLD Assay may at times come back from tlie Assay Ofl&ce, marked Iridiwrn; or a Silver Assay? with the word Brittle written across it. This is a very annoying result to the Bullion dealer, for he loses \di per ounce on the Gold, and f d per ounce on the Silver ; these being the Refiner's charges for purifying the Gold, and rendering the Silver malleable. Besides this, the Bars so marked are thrown out of the batch, and have to be sold separately by the Bullion broker. Iridium is found mostly in crude Platinum, either in alligation with the latter Metal, or as a native Alloy of Iridium and Osmium, another Metal of the same group ; it is occasionally found also in native Gold. Iridium is the most refractory Metal known, fusing only with great difficulty before the oxy-hydrogen blowpipe ; it resists the action of all Acids, even of Aqua Begia, except in Alloys with a large excess of Platinum. It is oxidised, however, by fusion with Nitre, and by ignition to redness in the air. It is a white or Steel grey, brittle Metal ; in hardness it almost equals the Diamond. "Where native Gold lEIDirM, AND BEITTLENBSS IN BULLION. 239 happens to be Alloyed with Iridium, tlie latter will not fuse with the Gold ; but its hard, sharp, occasionally crystalline grains will be found mechanically dissemi- nated through the Bar. Its presence in Gold is a great inconvenience to the Mint, as its hard sharp points injure the Steel dies (though made of the hardest Steel) to such an extent as to render them useless in a short time. The Mint and the Bank of England are therefore compelled to reject all Bars reported as containing Iridium. Gold is freed from Iridium generally in the following way: — The Gold and Iridium Alloy is melted together with the proper quantity of Silver (the usual Refining proportion), to reduce the specific gravity of the Gold sufficiently to cause the unfused particles of Iridium to subside to the bottom of the molten mass. Iridium has a specific gravity of 18*6, nearly approaching that of Gold, which is 19"3 ; so that it requires the addition of three parts of Silver (sp. gr. 10' 5) to one of the Gold and Iridium Alloy, to reduce the specific gravity of the mass to about 13, which will permit the Iridium particles to subside to the bottom. When the mass is in fusion, the melter stirs the liquid Metal ; after which he lets it rest awhile, then pours the greater part of the contents of the crucible ofi" into Bars, and puts aside the residue left at the bottom of the crucible. This residue contains the grains of Iridium. The residues of several meltings may afterwards be remelted together, to remove an additional quantity of Gold from the Iridium. The last residue is dissolved in 240 IRIDIUM, AND BEITTLENESS IN BULLION. Nitro-Muriatic Acid, which forms with the Grold the Chloride of that Metal, leaving the insoluble Iridium behind. The Gold is then finally precipitated from this solution by Sulphate of Protoxide of Iron. The charge for removing Iridium from Gold is Jd per ounce in London ; that is to say, the Refiner buys Gold Bars containing Iridium with an allowance of ^d on the price per ounce. We beheve that, owing to the irregular dissemina- tion of the Iridium, Assayers are not in a position to pronounce an authoritative opinion respecting the proportion in which that impurity may be present in a Gold Assay ; they stop short at its detection in the Assay Cornet ; and small traces of it in a Gold Bar will often altogether escape detection. Brittleness in Silver renders that Metal, as the term clearly expresses, too hard and brittle for coining purposes. A blow with a hammer will shiver a brittle bit of Silver into pieces, whilst the soft Metal can be beaten out easily into a thin plate. This brit- tleness is caused by the presence of Lead, Antimony, Arsenic and Mercury. The Mercury, however, will generally evaporate during the re-melting ; but Lead and the other base Metals can only be got rid of by a process similar to Cupellation, which has been described in the Chapter on Assaying. The Bar is melted together with an additional quantity of Lead, in a reverberatory furnace, in a large Cupel made of bone ash ; upon the free admission of air the Litharge forms, oxidising and carrying off at the same IRIDIUM, AND BEITTLENBSS OF BULLION. 241 time the obnoxioiis Alloys, and leaving the Silver pure and soft. The reduction of Brittle into Soft Silver, in London, costs fd per ounce, or about fths per cent, on the value of the Silver. Considering that Bullion shippers are content with from -gd or Jd gain per ounce, a few Brittle Bars in a shipment will take a large slice out of the profits of the transaction. Sometimes Gold of very low title is Brittle. Presence of Mercury also will impart this most un- desirable defect to Grold; this, however, matters but httle, as the Mercury is driven off by the heat of the melting process. 16 242 CHAPTER XIX. THE BULLION OEFIOE AT THE BANK OP ENGLAND. mSB Bullion Office at the Bank of England is -'- situated in the glass-covered court, entered from tlie Lotlibury side. Several strong gates guard tlie entrance; and a couple of Bank Porters, in tteir official gowns and hats, keep watch over it. The words "Bullion Office" are wi'itten over an unpretending - looking doorway. Entering through this, there is a compartment to the left, specially appointed for Gold, another to the right, specially appointed for Silver. The interior of the Bullion Office, with its vaulted roof, is very plain, and looks rather bare ; scales, weights, and a few desks, being the only articles of furniture in it. At the rear there are frowning arches, into which Porters may, now and then, be seen to enter with hand-trucks, laden with shining Gold Bars, or bags of coin, or heavy boxes containing Silver; or they may emerge from thence carrying bars, for which a recipient is waiting at the counter. These arches lead to the vaults of the Bank, where the great store of Bullion is kept. The gentlemen employed in the BuUion Office attend to all this in-coming and out-going treasure, BULLION OFFICE AT THE BANK OF ENGLAND. 243 witliout the least signs of exaltation or excitement ; on the contrary, they look perfectly cool, collected, and unconcerned, and are most prompt and business- like in their acts and proceedings. They take good care of King Mammon, with whom they are evidently on quite a familiar footing ; whilst, at the same time, in their own quiet manner, they are pohte, attentive, and obHging to their customers. The number of Houses dealing with the Bank regularly is not large ; and the names of the principal Refiners, BulKon Merchants, and Bulhon Brokers, are as Household "Words in the Bullion Court. It does not often happen that strangers do business direct with the Ofl&ce. Suppose a stranger unacquainted with the modus operandi comes to the Bank, and offers Gold Bars for sale ; he wiU be told, at the Bullion Office, that these Bars must first be re-melted, by the authorised Bank melters. The addresses of these being given him, he must proceed to one of them, to have the Bars re- melted. The Bars are there cast into what is called the Banh of England shape — as near to 200 ounces weight as practicable, but not above that weight ; they are then marked with the melter's stamp, and such letters or numbers as the seller may desire. They may now be taken back to the Bullion Office. Here they are weighed in the Gold scales, the mark and weight of each Bar being called out for mutual noting. The Porters then cut off the Assay pieces, after which the Bars are trucked into the vaults. If an advance of money be there and then required, the chief 244 THE BULLION OFFICE AT of the ofl&ce, roughly estimating the fineness and value of the Grold from the appearance of the Bars, will authorise a payment on account, to within 5 to 10 per cent, of such estimated value, and issue his order, which is paid in Notes in the Issue Department, A day or a couple of days after the Assays come in, and the account is got ready. The calculations are verified, the balance due is settled and paid, and the transaction is closed. The seller pays for the Assays (always treble Assays), but the Bank takes the Bars at their fall weight before the Assays are cut off, which the Bank keeps, of course. When the Bank is asked to sell Gold, the amount wanted by the purchaser is stated, and Bars, to as near the amount required as is practicable, are selected. As these are all Assayed, the account is made out at once, and the Bars, together with the Assay pieces and papers, are handed over against payment in Notes, which must first be taken to the Issue Department to be verified and marked as good. The actual weight of the Bars is then less than stated, the Assay pieces being cut offj but as these are given up with the Bars, there is no loss upon the purchases. The Bank, at all events, does not make any profit on the Assay pieces, as has been erroneously stated by Mr. Nicholson in his remarks on the Bank of England. The Bank of England buys the following descrip- tions of Foreign Coin without re-melting : — Russian Imperials, United States Eagles, and French Napoleons d'Or. THE BANK OF ENGLAND. 245 The ascertained uniform quality of these Coins enables the Bank to purchase them per ounce, at the following rates : — Imperials ... 77s 7^d per ounce (917 fine). Eagles .... 76s 2fd „ „ (900 fine). Napoleons . . 76s 2^d „ „ (900 fine). The Bank resells these pieces (provided they are in stock) at — 77s lid for Imperials, per ounce. 76s 6|^d „ Eagles „ „ 76s 7d „ Napoleons „ „ It has already been stated that the Bank of England does not buy Silver Bulhon ; but we believe that advances can be obtained upon the deposit of Silver Bars or Specie. The Bullion Office of the Bank of England renders other important services to the Bankers and Mer- chants of London. The shipments of Bullion arriving in this country from the West Indies, America, Aus- traha, &c., in the ports of London, Liverpool, South- ampton, &c. are aU dehvered, conformably to a general direction in the Bills of Lading, at the Bank of England.* Before this arrangement was made the delivery of Bullion on the crowded docks and wharves to a number of different consignees was very inconvenient and dangerous. * The only exceptions to this rule are the Bullion shipments from the Continent, which are generally delivered at once by the respective Shipping Agents or Carriers, according to the directions given by the Consignees. 246 THE BULLION OFFICE AT Now these shipments, some of them of many hundreds of heavy packages, are taken at once for safety to the Bulhon Office, where they are assorted; a day or two after, they are delivered to the holders of the Bills of Lading. Thus, when a West India Mail Steam Ship arrives, with a cargo worth some two or three millions Dollars on board, consisting of a few small packages of Precious Stones, a number of Grold boxes, of all sizes and shapes, and a large quantity of Mexican Bultos, containing Silver Dollars, Lothbury may at times be seen hned, on the Bank side, with a number of vans waiting to enter the Court. These vans do not look as if they were heavily laden — at least, their loads are not hkely to attract attention by their bulkiness ; but those who know what is under the tarpauHn are aware that there Hes heavy treasure at the bottom of the van, though scarcely rising a foot high above it ; and the efforts of the horses when the vehicle is to be moved show that there must be some four or five tons weight in each van. The arrival of the West India Packet makes it a busy time at the Bullion Office, twice a month. The gentlemen of the Department have to bestir themselves to brisk action at these periods ; as the Bank under- takes, for a small consideration, the verification and the weighing of the Silver; and many houses avail themselves of this facility. The weighing of many hundred thousands of Dollars is not a pleasant task. The continual rattle of the Coins, as the porters shoot them from their original packing into the Copper THE BANK OF ENGLAND. 247 pans of the scales and put them back again ; the steadiness required in the operation, combined with the rapidity with which it has to be conducted — for money cannot afford to wait long — are trying. The Dust raised — partly consisting of atoms of Silver — covers the coats and irritates the throat ; and altogether, although Silver Dollars must certainly be a most respectable and pleasing article to handle, the duty is severe. To the right of the entrance to the BuUion Office, the Packing Eooms are situated. A store of strong iron-bound boxes is kept on hand here ; and the porters at the Bank undertake, for a small charge, the packing of the Bulhon and the marking of the boxes for the Pubhc. The marks and numbers are cut into the hd or the side of the boxes by a chisel, so that they cannot be altered on the way without detection. Over the joints of the boxes round holes are counter- sunk, into which sealing wax is poured, to receive the impression of the sender's seal. The arrangements altogether are thoroughly practical, and deserve the highest commendation ; and, on the whole, there are few things more satisfactory in business than dealing with the Bulhon Office of the Bank of England. On the other side we give a copy of the Annual Return pubhshed by the Bank of England of the movements of Bullion. The year in question, 1865, was not a very brilliant one for commerce ; but 1866 was worse ; whilst 1867 was rather above the average of imports of Gold Bullion to the Bank. Cm O cq OS "^ eft 1 oTto" 1 N^" 1 1 1 1 m" 1 to_ ccT o u T-H w MS 1— 1 H ■S| 05 M ffj 00 ■* « 1> o M 1> IM O O rH to iH 1-i Ph °i s w lo lo o m o 00 ■^ pq 11 ^g i 1 s 1 1 g"§s §s 1 g s r-^ 00 -^ lO iH 05 M ■* H|2 iH i-Ti-T CO p^ H t> '=1^ I 1 1 1 M 1 1 1 M 1 1 1-3 ' 1 1 1 1 1 1 1 1 1 1 1 1 1— t oa 00 t- CO W3 QO Oi CD iHJ>rH in P wainwsoincoco oooooo 00 1 O^oq^i> CD^irs co^i> ^ o^co j> -^^ j:^ ^ 1 ;^-i> of co'of oTco j i>ocD in O iH m B iH -^ rH 00 CD ^ rH O 1 — 1 .g J>-^ OS CO -* 00 in 1^ n o (^a 1-1 00 ^ O o 00 O 00 03 iH OS 00 i> CO h^ ^ a ^ 1 1 1 « ^" 1 fe II s"s cq CD p:i dj o th eq CO 00 i> CD i-H 00 O CO iH CO CO o in W3 (M 05 W5 uo cq m x i> o O (M 05 to W3 i-H 00 05 »0 O rH a 8ft ^t-lOi-lNNN l>COiO co" m iH CO rH CD in (M r-i p^ ^ '=^ 1 1 1 J M 1 1 1 1 1 1 1 h^ 1 1 1 ' 1 1 1 1 1 1 I 1 1 M CC Q cc COWSCO-^lONCDlCCOOONCD \a i>QOoOi-i(Moqaicoi>coooco IM <^ g i>CDXOia)-^CDe0rHC0C0rH i> H ■^ B C}3 in in-*" 00 -rft oT '*" cm" 00 00 i>-^" V o Q000Q0O05i-lrHC0Q0i-IC0 o H CO oq -* r-1 lo CD CO cq rH P rH"i-H co" Ph .g Oi ic uM>. CO cq t* CD i> rH ^ fi O CD CO CO i> O) 00 t-H -<# CsU> r-1 OS in 00 (M 00 ■#! CO o o o 3 ij 1^ o o Crt 1 1 f^fiC 1 coc^co-^tn oq" ^" g f^ C0lf5-*OSlCl>OSCq-^rHCDOS ■^ l>00l>'^cq00lCOSQ0lOCDrH CD 1 J> CD CD iH^OS cq 1> I> CM O lO t> cq_ Cfiinincq'r-r-'^'cor-rQOcoiccDr-r n ^QOQOQOOOSt-It-ICMQOOCD CO (M Cq i> ■* rH lO CD CO (M rH^iH • co" U - _ ~=ft 1865 January February March - April - May June July . August - Septembe October November December i a 249 T CHAPTER XX. BULLION BROKERS AND SHIPPING OF BULLION. HE Bullion brokers in London do not confine their operations to the purchase and sale of BulUon ; but they undertake also the weighing, packing, and shipping of the same, and the making out the accounts. When we speak of the Bullion Market, we use the term " Market " in the same commercial sense as ap- plied to Grold and Silver as to any other commodity. The Bullion Market is ruled by Supply and Demand, especially as regards Silver ; and the business between the parties dealing in Bankers' Bulhon is negotiated through Certain highly respectable firms of Bullion Brokers. The usual commission charged by them is ■Jth per cent.; but on certain special descriptions of Bulhon less than that is charged. The question whether the commission is to be paid by the buyer or the seller, or by both, depends upon circumstances. We subjoin here a copy of a Bulhon Market Report, issued by one of these firms ; also a statement of the Import and Export of Bullion into and from London, during six months, ending 31st December 1867. 250 REPORT ON THE BULLION MARKET. For week ending 23rd January 1868. GOLD. — The demand for export continues unabated, and all the arrivals of the past week, mentioned below, have been taken for the Continent. The supplies from America have somewhat fallen off, and will still further decrease, owing to the lower exchanges reported from New York ; the amount stated, by the Overland Mail, as having been shipped during December, is also very small, only £102,000 ; but this may be in acme measure accounted for by the fact that the only remaining duty, of 6d per ounce on the export of Gold, was to be removed on the 1st January this year, and the Banks would therefore hold back all this Gold until after that date. The " Massilia '' has brought £80,500 from Melbourne. "Kent" „ 130,000 „ "Scotia" „ 270,000 from New York. " Deutschland " „ 42,000 „ „ "Sidou" „ 32,000 „ Total £554,500 The exports have been £2,500 to the West Indies, and £36,000 to Alexandria ; and the only transactions at the Bank have been a with- drawal of £57,000, and a sending iu of £17,000, both these amounts being Sovereigns. SILVER. — Our Silver Market has been quiet ; we have no arrivals of Fine Bars to report — the price consequently remains as last quoted — 60f d per ounce standard. The " Deutschland" brought about £40,000 from New York ; this consisted of Dore Silver, which was placed at the last rate of 60|d. per oz. standard. The demand is almost entirely for the Con- tinent. MEXICAN DOLLARS.— The "Scotia" brought about £16,000 from New York, and these, together with those brought by the W. I. steamer, have been taken at 58|d per ounce ; with the exception of a very small amount sent to China, the whole has been taken for refining purposes. EXCHANGE on India for Banks' Drafts at 60 days' sight is lower, and may be quoted Is lOid per Rupee for all three Presidencies. Transac- tions are very limited. INDIA GOVERNMENT LOAN NOTES show no alteration from our last quotations ; the prices are, 108 to 108i for the 54 per Cents ; 103 to 103i for the 5 per Cents ; and 87 to 87i for the 4 per Cents. 251 QUOTATIONS FOR BULLION. GOLD. Bar Gold .... Bar Gold, Fine Bar Gold, Refmable Spanish Doubloons - . . . 76 to 77/0 )South American Doubloona United States Gold Coin SILVER. Bar Silver . - . 5 Of Bar Silver, containing 5 grains Gold 5 0| Fine Cake Silver 5 5i Mexican Dollars . 4 lOf Spanish Dollars (Carolus) . - — Five Franc Pieces . - — Quicksilver £6 l7s per Bottle; Discount 3 per cent. EXPORT of SILVER from SOUTHAMPTON to INDIA, CHINA and the STRAITS. s d 77 9 77 9 78 76 73 9 76 3 per oz. Std. per oz. Std. per oz. Std. per oz. last price per oz. last price per oz. last price per oz. Std. flat per oz. Std. last price per oz. last price per oz. per oz. none here per oz. none here Tear. India. China. Straits. Total. £ £ £ £ 1859 11,163,384 3,374,250 290,887 14,828,521 (a) 1860 4,385,966 3,657,443 435,330 8,478,739 (6) 1861 5,682,645 1,052,240 89,922 6,824,807 (c) 1862 6,890,810 2,530,663 669,987 10,091,460 (d) 1863 5,971,632 1,995,909 295,470 8,263,011 (e) 1864 5,008,291 891,338 354,375 6,254,004 (/) 1865 2,738,762 560,026 299,270 3,598,058 1866 2,009,580 303,196 52,850 2,365,626 1867 370,231 265,766 6,915 642,912 1868] to Date j 145 11,115 — 11,260 For "Week ending 23rd Jan. 1868. A. B. & Co., Sworn Brokers. (a) Including Govt, Remittance about £6,173,124. (6) Including Govt. Remittance of £808 106. (c) Including Govt. Remittance of £1,070,908, (tZ) Including Govt. Remittance of £129,063. («) Including Govt. Remittance of £105,833. (/) Including Government Remittance of £55,860. 252 ANNUAL REPORT ON For the Year ending BY MESSRS. A. B. & CO. STATEMENT or IMPORT of BULLION into LoNDOlf pkom Impoete nuElirO C0EEE8- trWDEKMENTIOlfED PLiCES, DUEING SiX Months Ewnirra EOWDIITG PESIOD 1866. 3lBT Deoembee, 1867. 1867. GOLD. SILVER. TOTAL. GOLD. SILVER. TOTAL. £ £ £ £ £ £ BBLarUM 7,080 416 7,495 96,900 — 96,900 FHANOB 48,190 283,960 332,150 1,813,670 706,502 2,619,072 HANSB TOWNS 19,260 — 19,260 290,400 3,900 294,300 HOLLAND — — — 74,630 — 74,630 COPENHAGEN — — — — 8,100 8,100 RUSSIA 28,000 — 25,000 69,580 11,814 81,394 SPAIN AHD PORTUGAL 277,040 14,100 291,140 257,118 24,034 281,152 GIBRALTAR 16,750 23,976 39,725 7,260 17,000 24,260 MALTA 14,230 1,000 16,230 — 1,600 1,600 CONSTANTINOPLE — — — — — — ALEXANDRIA 66,799 66,799 183,100 — 183,100 ADEN . — — — — — — CEYLON 47,000 — 47,000 329,600 — 329,600 BOMBAY — — — 468,700 — 468,700 MADRAS — — — 20,000 — 20,000 CALCUTTA — — — 336,480 730,000 1,066,480 SINGAPORE — — — — — — PENANG — — — — — — MANILLA — — — — — — HONG KONG — — — — — — SHANGHAE — — — — — — FOO-CHOW-FOO — — — — — — CAPE OP GOOD HOPE ... -) CAPE VERD AjfD SIERRA > 92,780 122 92,902 88,686 6,831 95,617 LEONE J UNITED STATES 2,712,866 863,945 3,666,800 1,004,835 1,193.936 2,198,770 MEXICO, CENTRAL AME- ■) RICA, "WEST INDIES, Sea. j 1,613,280 3,623,211 6,036,491 1,183,902 3,391,050 4,574,952 BRAZILS 1,005,800 66,166 1,061,966 256,902 26,264 282,156 BRITISH NORTH AMERICA 70,142 2,200 72,342 61,800 — 61,800 AUSTRALIA 3,428,620 — 3,428,620 .4,029,720 — 4,029,720 tNBW ZEALAND 126,600 — 126,600 68,000 — 68,000 Total £ 9,469,316 4,769,093 14,228,409 10,621,183 6,119,020 16,740,203 AmourLt Imported during tlie Six ■) MontliB ending 30tli June 1867 ) 6,420,840 4,363,947 10,774,787 13,414,667 §3,870,784 17,286,451 TOTAL IMPORTS, 1867, £ 16,890,166 9,113,040 26,003,196 24,035,850 9,939,804 34,026,654 TOTAL IMPORTS, 1866, £ 24,036,860 9,989,804 34,026,664 §Jan. to June 1866 t The produce of the New Zealand Gold Fields is very much larger than the amount stated above, but the greater part is at present sent to AustraUa for Shipment elsewhere. The sum stated by us is the total received iu England du-ect from New Zealand. 253 THE BULLION MARKET. 31st December 1867. London, 1st Jcmuary 1868. STATEMENT ot BXPOET or BULLION FKOM liOSTlON TO EXPOBTS DUEIH-& COEHEB- msBEEMmraioKBD Places, DirEiira Six Moitths ekbisg POlfDIHa PEEIOD 1866. 31st Decsmbeb, 1867. 1867. GOLD. SILVER. TOTAL. GOLD. SILVER. TOTAL. £ £ £ £ £ £ BELGIUM 6,600 804,505 811,105 88,360 966,843 1,044,203 FRANCE 3,962,990 1,658,820 5,621,810 3,269,220 1,468,652 4,727,772 HANSB TOWNS 46,160 491,651 537,811 231,660 1,304,143 1,636,703 HOLLAND 13,362 127,810 141,162 44,400 1,169,094 1,213,494 COPENHAGEN — — , — . — 10,000 10,000 RUSSIA — 10,000 10,000 — SPAIN AHD PORTUGAL — — — 81,300 2,380 83,680 GIBRALTAR — — . — 7,500 — 7,600 MALTA 40,000 40,000 740 740 CONSTANTINOPLE — — — — — ♦ALEXANDRIA 103,970 103,970 119,768 2,450 122,218 •ADEN 60,000 — 50,000 6,500 ; 6,500 •MAURITIUS — — — — — •CEYLON — — — — — •BOMBAY 45,000 13,769 68,769 600 3,330 3,930 •MADRAS 4,927 — 4,927 1,889 542 2,431 •CALCUTTA 22,000 — 22,000 — 26,160 26,150 •SINGAPORE — — — — 5,940 6,940 •PENANG — — — — — •MANILLA — — — — — •HONG-KONG 160,802 150,802 — 67,772 67,772 •SHANGHAE — 41,146 41,146 — 8,626 8,625 •EOO-CHOW-FOO — — — — — — CAPE OF GOOD HOPE ... -) CAPE VBRD AND SIERRA [ 116,500 8,270 124,770 79,900 7,514 87,414 LEONE ) UNITED STATES 15,500 — 16,600 1,262,300 1,262,300 MEXICO, CENTRAL AME- I RICA, WEST INDIES, &0. i 10,600 1,400 12,000 - 31,200 31,200 BRAZILS 353,620 48,110 401,630 943,070 41,100 984,170 BRITISH NORTH AMERICA . 61,400 — 51,400 96,600 — 95,600 AUSTRALIA __ — 6,000 6,000 NEW ZEALAND — — — — — — TOTAI ... £ 4,842,519 3,368,272 8,198,791 6,212,707 •5,099,636 11,312,342 Amount Exported during theSix \ Montlis ending 30th June 1867 i 3,099,880 3,066,794 6,166,674 7,761,042 •3,299,273 11,060,315 TOTAL EXPORTS, 1867 £ 7,942,399 6,412,066 14,354,465 13,973,749 8,398,908 22,372,657 TOTAL EXPORTS, 1866 £ 13,973,749 8,398,908 22,372,667 •Jan. to June 1866 ♦ Tlie following amounts have been exported from Marseilles^ gold, 0.,^ £2 SILVEE, £469,820 TOTAL, £697,929 to Alexandria, India, China, Reunion, Mauritius, &c., >■ £228,109 between July 1st to December 19th 1867 ) A. B. & Co., BulUon Brokers, 254 BULLION BEOKBES AND The Custom-House Statistics are not reliable. We quote here passages from the Annual Circular of another brokering firm, alluding to this subject, 2nd January 1868. " Taking the Imports and Exports from the Custom House records for the past twelve monthSj and comparin^r them with former years, we find the following results : — Total Imports, 23 millions ; total Exports, 14 millions ; balance in favour of this country, 9 miUiona, of which 2J is in the Bank of England, and 64 miUloua unaccounted for. From America, large as our Imports have been, viz., 64 mlUiona, the total is less by £3,700,000 than last year. Australia has also sent less by nearly a miUion. On the other hand, our Exports show a deficiency chiefly to India and China, the Exports to Egypt showing this year, as compared with former ones, £890,000, against £2,995,000 in 1866, £4,300,000 in 1865, £8,300,000 in 1864, and £12,200,000 in 1863. With respect to the Continent, there is a great falling off apparently, but, as we said before, we have no confidence in the accuracy of the returns furnished to the Custom House." After a general discussion on mercantile disasters, over-trading, borrowed capital, unfair competition, plethora of money, and want of commercial morahty, the writer proceeds as follows : — " Capital and labour, which ought to have been harmonious, are utterly antagonistic ; class is against class ; whilst corruption, immorality, and downright theft, are openly laid, by our leading newspapers, to the charge of the whole community. If this be true, it may, in some measure, account for what may have appeared to others an anomaly in the Bullion trade, viz., the large quantities of Gold annually unaccounted for, — for example, from the 1st January 1869, to the 30th November 1867, the records of the Board of Trade inform us that our Imports of Gold exceed our Exports by £37,505,313. Of these 374 millions, probably two are in the Bank of England in excess of what it held at that date, and the other 354 are unaccounted for. We do not iind the same discrepancy in the returns of Silver, the exports for the same period being about three millions in excess, which fact is not without its sign i ficance." ^ What the writer hints at here is the well-known practice of some shippers of Bullion to omit declaring the value of the Gold shipped by them ; the Gold is frequently packed with and declared as Silver, in order to save freight, a practice, which though no doubt well paying to those Avho undertake the risk, is not in accordance with the sound principles of com- SHIPPING OF BULLION. 255 mercial honesty and prudence. The deficit of the 35^ millions of Gold is thus accountfed for by the excess of the three milhons of Silver. Bankers and Mercantile Houses having to receive or to ship Bullion generally entrust the management of these matters to the Bullion Brokers, who will also make advances of money if required. "Without proper appliances and suitable arrange- ments for the purpose, a Merchant cannot well himself receive or ship BulHon; the packages are heavy, and shake the floors of the offices ; they are apt also to damage the fingers and toes of persons not accus- tomed to handle them. Spacious strong rooms are required for the safe keeping of Bulhon. Assay pieces must be cut off by a practised hand; proper scales and weights have to be kept. Moreover, the many techni- calities involved in the melting, the Assay returns, the calculations and other matters, require a special train- ing which is not hkely to be found or got in an ordinary counting-house. Now a Bullion broker has all the necessary ap- pointments and appHances for his business ; so he can readily undertake, for a moderate charge, in addition to the receiving of Bulhon and the management of the accounts, the proper packing of tbe parcels, and their delivery at the Railway or Shipping stations de- signated.* * Bullion should always be packed in stout iron-clamped boxes, well secured against attempts to open them on the way. Robberies 256 BULLION BROKEES AND The Banker or Merchant has simply to receive or to pay the money, and to verify the accounts made out by the Broker. There are many Houses in London who in the course of their career, have dealt in many millions' worth of Bullion through the agency of brokers, without ever having seen any of their pro- perty. The confidence reposed by them in the parties entrusted with the management of this business for them is, therefore, surely not of a light character. "We subjoin here a list of the current rates of freight and insurance on Bulhon to or from the prin- cipal Ports. Large shippers may be in a position to make arrangements for cheaper rates; some of the more important Houses have established an Insurance Fund of their own, the rates at Lloyds being too high in comparison to the risk. have occasionally occurred througli indifferent packing. Biillion boxes slioidd not carry more than 3,000 ounces, which is already a pretty heavy weight in a small compass. The Silver Bars shipped to the East Indies are generally packed one in a box ; and the Peninsular and Oriental Steam Ship Com- pany instruct Shippers as follows : — " Boxes should be strongly made, with elm ends, lined with tin, and they must be sealed over tape in countersunk holes. Hoe's Safety Bullion Box is recommended, which may be procured at No. 44, Leadenhall Street." The delivery of BuUion at thb Railway Station always takes place under the care and supervision of one or several Clerks specially entrusted with the business. Where Bullion is brought alongside a ship in the river, in lighters receiving it from a wharf, great responsi- bility attaches to the parties in charge of the treasure. There are special Carmen and Lightermen employed for the conveyance of Bullion. SHIPPING OF BULLION, 257 RATES OP FREIGHT and INSURANCE for BULLION from or to LONDON. Insurance. Freight. PARIS - By S. E. Railway or Messageries Imperialea For sums between £800 and £4000— for every £100 - 4s 7d For snms above £4000 - 43 T5 o/o BOULOGNE -"^ CALAIS - ANTWERP ROTTERDAM - HAMBURG By General Steam Navigation Company For sums up to £5000 „ above „ * o/o 1 10 >» ST. PETERSBURG r By Steamer i )> 4 ,. MADRAS BOMBAT CALCUTTA By Peninsular and Oriental Steamships - 2 o/o i ,, HONG KONG - Do. 2i )) i „ SHANGHAI Do. 2i »» 1 ., AUSTEALLA Do. By Sailing Vessel 2 2d a2id 1 per oz. NEW YORK Per Canard Steamers, up to 10,000 i „ 30,000 i „ 50,000 ^ „ Above 50,000 i „ Other Steamers may charge lower rates. i o/o in summer J „ in winter CALIFORNIA* By Pacific Mail Steamers to Panama | o/o „ Royal Mail Steamers from Panama to England fo/o 11 }J 1 „ PANAMA VALPARAISO RIO JANEIRO CAPE OP GOOD ) HOPE - -j MAURITIUS By Royal Mail Steamers For Gold - - li „ „ Silver - . - If „ By Pacific Steamers and Royal Mail For Gold - 2i „ „ Silver - 2i Per Steamers to Southampton 1 „ Delivered in London - li „ Per Union Steamship Com- pany from Southampton IJ a 2 o/o Do. 2a2i f a f o/o f a I o/o The rates of freight are exclusive of the usual Primages ; the rates of Insurance include discount and commission. * The competition between rival Steamer Lines sometimes reduces the rates of freight on the Pacific side to \ o/o. 17 269 CHAPTEE XXI. COINING. ri^HB earliest records of history inform us that the -*- Precious Metals were used as standards of value, being given in exchange or payment for other com- modities. With regard to Gold, its employment in the capacity of money originated first, in all probability, in its use in the form of portable ornaments. The smaller or larger nuggets found often present curious and fantastic shapes, suggestive of their suitableness for personal adornment. After a while the aid of Art was called in to fashion the native article into more grace- ful forms ; and firom the remotest known ages jewelry, the joint production of Nature and Art, has consti- tuted, as it continues to constitute to the present day, an important element in the social economy of man. The primitive rude Gold ornaments of early ages were no doubt soon made to serve, in some way, as mediums of exchange. The discoverers of America met with Gold ornaments subserving the purpose of money in the hands of the natives. Some of the Indian tribes in Central and South America still pay in Gold and Silver ornaments ; and curiously-twisted sohd ear-rings, arm- lets, and other trinkets pass into the possession of 260 COINING. traders, and find their way finally to the melting establishments in London. The ancient Jews dealt in Gold and Silver by weight, and there are numerous records speaking of " shekels " of Silver and " talents " of Grold and Silver. Even to our own day the Precious Metals are, in cer- tain parts of the world, more especially in the far East, still used as money by weight. In China, for instance, Sycee Silver circulates as money, in lumps of several pounds weight, cast roughly into bowl-shaped moulds, and marked with a few Chinese characters, stating weight, fineness, and value. The Chinese are so much accustomed to these pieces that they actually remelt the Mexican Dollars imported from abroad into tSycee. The first introduction of Coins, or pieces of the Precious Metals impressed with a stamp declaring the character and value of each piece, marked, most likely, an important era in civilisation. We have no positive evidence, however, as to the period when Coins were first introduced, or the nation which first made use of them. Herodotus gives the credit of the introduc- tion of Coined Money to the Lydians; other ancient authors place the invention of the Art of Coining in the reign of Sa,turn and Janus, in Italy, before the beginning of authentic history. Many learned and interesting books have been written on the Coins of the Egyptians, Hebrews, Eomans, Grreeks, and other nations. The study of ancient Coins and of the history connected with them is a most interesting pursuit. The patient researches of a number of devoted students COINING. 261 have raised Numismatics to the rank and dignity of a science. It is a remarkable feature in ancient Coins that most of them have impressed on the obverse the effigies of the Emperor, King, or Ruler of the State ; whilst the reverse often shows the denomination or value of the piece ; a custom which stiU prevails to the present day. This fact, in connection with some others of a similar nature, tends to prove that the ruling powers, in all more or less civilised countries, have at aU times, from a very early period, been fuUy ahve to the advan- tages of a properly regulated system of Coinage, and that they have accordingly always striven to keep the manufacture and issue of Coined Money in their own hands, or at least under their strictest control. The Art of manufacturing Coin improved in suc- cessive ages, with the advance of civilisation. It must be acknowledged, however, that some of the ancient Grreek and Roman Coins, for beauty of design, fullness and sharpness of reliefs, and in other respects, are quite equal, if not even superior, to the Coins of later periods. In the Middle Ages some splendid specimens of Medals were produced, and some finely executed Coins, which deserve to rank high as objects of Art. The general Coinage, however, remained, up to a comparatively recent period, more or less crude in design and imperfect in execution. The invention of steam has caused quite a revolution in Mint operations, having imparted to our Coining Machinery a power and regularity of action previously altogether unattainable. No great wonder, then, that the Coins struck at the 262 COINING. present time shoiild differ so vastly, and so greatly for the better, from those of former ages. Compare an Bnglish Guinea or a Shilling of the last century with a Sovereign or Shilling of the Coinage of the last thirty or forty years, and the difference in the regularity of shape and in the sharpness and neatness of impression will be at once apparent. Before the use of machinery was introduced into it, the process of Coining was a very simple, but also necessarily a very laborious one. The Touchstone, or some other imperfect mode of Assaying, had to be resorted to, to get an idea of the fineness of the metal. A certain quantity of Alloy or fine Metal, as the case might be, had to be added in order to attain, as near as practicable, to something hke uniform quality in the Coinage. The Bars or pieces had to be melted next and cast into flat blocks, which had then to be further flattened into slabs or plates of the required thickness. Disks of certain sizes had then to be cut, to suit the Coin intended to be struck. These disks were also made in another way : circular bars or rods, of the diameter of the intended Coin, were cast, and disks of the required thickness successively chopped or sawn off the ends. These pieces had then to be adjusted to the exact weights required, by fihng the excess off the heavier ones, and throwing aside the lighter pieces for remelting. The adjusted pieces were then at last ready for the final process of stamping. The dies were made of hardened iron or steel, and the impression intended to be stamped on the Coin was graved into their inside. They consisted of two loose moveable halves fitted COINING. 263 together. One of these was laid on a suitable strong support, and the Coin disk placed on top of it; the other half was then reversed on the disk, and sharp blows were dealt on it with a hammer, until the softer metal of the disk was thus driven in to fill the graved parts of both dies, and thus to receive the intended impression. The edge of the Coin was then ribbed or milled in some equally clumsy way, and the piece of money was ready at last for circulation. We are told that some of the Austrian ducats and Spanish doubloons were made in this primitive fashion as late as last century. In the East, in Japan, Coins are still struck by a similar process, as the following account, taken from a London newspaper a few weeks ago, will show. (Japanese Silver money is made in oblong square-shaped pieces, called Itziboos, — an Itziboo is worth about Is 4d of our money). " The Silveb Mint op Japan. — If we could gain admission to the Silver Mint at Teddo, we should see the following process con- timially going on. A lump of Silver of the necessary fineness, obtained either from the Government Mines or by melting down Mexican dollars, is placed in an iron ladle and reduced to a molten state by means of a charcoal fire and a pair of blacksmith's bellows. It is then poured into a m.ould, from which it is taken out in the shape of thin rectangular bars, which are immediately thrown into a tub of cold watpr. On being taken out, a man, seated on the ground, shears ofi" with a pair of large fixed scissors all jagged pieces adhering to the angles. They are now handed to another man, who weighs them one by one, and a piece is out off, if necessary, to reduce the bar to its proper weight. The next process is that of dividing the bar by a fixed pair of shears into eight equal portions of the size of itziboos ; this is done by a workman cutting it as accu- rately as his practised eye will enable him, and his work is tested 264 COINING. by weighing, light pieces being rejected, and the heavy ones reduced to their proper weight by the scissors. The pieces are now heated white-hot in a charcoal fire, plunged into water, boiled, and washed in a kind of brine, from which they come out with a moderately bright surface. They are next very slightly milled on the two sides, and more deeply on the edges, by means of a milled hammer. They are now ready for stamping. A man places one of the pieces on a stationary die, and lays on the top the other die; a second man, armed with a huge hammer, gives one blow on the upper die, and the coin is struck. The blows are dealt in rapid succession, and the whole scene reminds one of a blacksmith's shop. Boys now punch small stars on the edges by means of chisels and hammers. The coins are weighed one by one for the last time, and the Hght ones rejected. The Imperial stamp is added by means of another stamped chisel and mallet, and the coins are complete. They are rolled up in paper packets of 100 ; each packet is weighed, and marked with a seal, which serves as a guarantee of its contents, and gives it cur- rency as 100 itziboos. While every operation is performed in this primitive manner, perfect order prevails in the establishment ; every man goes through his portion of the work in silence, and with the regularity of clock-work, and many evince considerable skill. There are about 300 hands employed in the building. When the men enter in the morning they are made to divest themselves of their own clothes, and put on others belonging to the Mint. At the end of the day's work a gong sounds, when the somewhat curious spectacle is presented of 300 men springing from the ground, on which they had been seated, throwing off their clothes, and rushing, a naked throng, to one end of a yard. Here they pass through the following ordeal in order to prove that they have no silver on them : — Their back hair is pulled down and examined, they wash their hands and hold them up to view, they drink water, and then holloa, and, lastly, they run to the other end of the yard clearing two or three hurdles on their way ; after which performance they are allowed to put on their own clothes and depart. Mr. Sidney Locook, Her Majesty's Secretary of Legation, from whose report of this year these state- ments are taken, believes that the Mint has been only twice entered by foreigners, and states that the apparent absence of all restrictions. COINING. 265 with regard to toucliiiig and handling the coins points to the pro- bability that it is not often open to the public ; but he remarks that even if it were the manners and cnstoms of the country are not such as would preclude a mixed assemblage of visitors from going over it and remaining to the end. The quantity of silver being coined daily at the beginning of this year was 50,000 momme, which at the rate of 2'3 momme to the itziboo would give a daily total issue of over 21,000 boos, or about £1,500. The whole of these are produced by the simplest manual labour, unaided by a single piece of machinery." At the beginnmg of tte 17tli century the Frencli made a great improvement in their Mint by the intro- duction of the Rolhng Mill and the Screw Press. The former served to flatten the Metal Blocks between iron or steel rollers ; whilst the Screw Press gave much greater regularity and power to the process of stamp- ing the Coin. The Screw Press is made very much upon the plan of an ordinary letter-copying press without the flat plate, only it is very much larger. The screw has a greater diameter, and the arms or knobs some three or more feet long, and even longer, carry at both ends heavy balls or weights. These heavily weighted arms are swung round by hand ; and, after a few fast revolutions, the lower end of the screw necessarily acquires an enormous force. One of the dies, with the metal disk laid on it, being placed right underneath the screw; the other fastened under the end of the, screw, so that the two meeting will exactly fit together; the screw with the powerful impetus acquired by it comes suddenly down upon the disk, and drives it with irresistible force into the dies. The Coin is thus stamped with one single blow. Although the Screw Press is simply worked by hand, it natur- 266 COINING. ally performs its functions witli greater regularity and expedition than could possibly be achieved with the hammer. Screw Presses are still in use in some of the South American Mints. Some of these are of considerable size ; a very large specimen was shown at the Exhibition of 1862 ; and there is now one at work, we believe, in the Crystal Palace at Sydenham. For striking large medals, where speed is of less im- portance than careful manipulation and deep and clear impression, the Screw Press answers the purpose exceedingly well. Before the invention of Steam, the machinery of the Mints was driven by Water or by Horse-Power. The Prench Mint had a large Horse-Mill, in which shafts were turned by horses harnessed to them. Since that greatest revolutionist of the age, Steam, has come to the aid of our Mints, the production of Coin is no longer the slow and laborious process it was in former times. A Modern Mint is an estabhshment worth seeing. To give a full and lucid description of the Coining processes as now conducted, would require the aid of illustrations and elaborate technical explanations. We will, however, endeavour to give a cursory account of the ways and means by which the British mint turns out as current Coin of the realm the Gold and Silver Bars sent into it. It has been stated already, in Chapter XIII, that any one sending a certain quantity of Gold into the Mint has a right to have it returned to him in British COINING. 267 Gold Currency, free of cliarge for Mintage. We liave explained also in tlie same place how it comes that, notwithstanding this general facility afforded, the Bank of England is practically the only importer of Gold Bullion into the Mint. Whenever the Bank of England finds that large exports of Gold Coin, or an undue accumulation of light pieces from abrasion, make a fresh issue of Sovereigns, &c. desirable, the authorities of that Institution give notice to the Master of the Mint that Gold Bars will be sent in. The Mint Officials make their preparations accordingly ; and at the time appointed several hundred Gold Bars, of about 200 ounces each, are received from the Bank, to be con- verted into Coin. These Bars have been duly Assayed at the time of their purchase by the Bank; the Assay Report is sent in with them. The Mint authorities control the Bank Assay by a fresh Assay of their own, which generally gives corresponding results, or pretty nearly so. On these Assays the exact value of the Bar is fixed. These preliminaries settled, the Bars are taken into the Operative Department of the Mint, where they pass through the following processes : — STAWDABDINGr.— The Gold furnished to the Mint is of different degrees of fineness. The Bank, no doubt, may select, from its large stock. Bars as nearly as possible of equal quality. Whether this is done or not we cannot say; however, as the extensive Refineries in London supply the Bullion Market with an abund- ance of fine Gold, the greater number of the Bars 268 COINING. sent by the Bank to the Mint consist of the finer titles of Gold. Formerly the Mint did their own Refining ; but that branch of the Estabhshment was sold in 1861 to Sir Anthony Rothschild, and is now one of the large private Refineries alluded to in Chapter XYI. AH the fine Gold required by the Mint can be got readily from the Bank. The British Standard for Gold being 22 carats in the 24, it follows that Bars reported Worse than Standard have to be brought to Standard by the addition of pure Gold ; and Bars reported Better than Standard have to be reduced to Standard by the addition of Alloy. The Alloy used for this purpose is Copper. Pure Gold and pure Copper, in about the British and Trench Mint proportions, give the best metal for Coin, and the best colour. Many of the finer Bars, however, contain Silver in proportions of much less than 83 parts in a thousand, so that it wiU not pay to Refine them. If such Bars are reduced to Standard by the addition of Copper, the Alloy in them consists partly of Silver and partly of Copper, which imparts a lighter colour to the Coin. The Sovereigns struck in Australia, where Refining is an expensive process frequently contain Silver for their sole Alloy, which gives them a pale straw-coloured appearance. A practised eye wiU at once detect these differences in the colour of Gold Coin. The greater bulk of the Gold Bars sent to the British Mint for Coinage is finer than Standard, and has accordingly to be reduced by the addition of Copper. COINING. 269 As the Assay of every Bar is known, it is easy to determine tlie quantity of Gold or Copper required to make it Standard. If a Bar weighing 165 ounces is 1000 fine, 15 ounces of Copper must be added to it, making the total weight 180 ounces Standard. For 22 carats Gold . . 165 Gold. J, 2 „ Copper . 15 Copper. Standard 180 ounces. If the Bar weighs 170 ounces, and is 962 fine (B 1 carat OJ grain), there are present in it 163 "640 ounces pure Gold, which requires for Standarding the addition of one-eleventh of its own weight of Alloy, say 14"867 ounces; but as the Bar weighs 170 ounces, there are already contained in it 6 '460 of Alloy, consequently 8*407 Copper have to be added, making the total weight 178-407 Standard. If a Bar weighing 200 ounces is reported Worse, say W 0"lf grain, or 900 fine, the fine weight being accordingly 180 ounces, the Standarding of the Bar will require the addition of 40 ounces of fine Gold, raising the total weight to 240 ounces Standard Gold. A Silver Bar of 1,000 ounces weight of pure Silver (1,000* fine) win require the addition of 81'081 ounces of Copper to reduce it to the Standard; which will raise the total weight accordingly to 1081"081 ounces. The Standarding of a Silver Bar of 500 ounces * Practically there is no such thing as 1,000 fine Silver, as there always remains a trace of Alloy in the Precious Meial. 270 COINING. weight, reported W 22, will take 611'11 ounces of pure Silver, raising tlie total weight to llll'll ounces Standard. The MELTING of the Gold or Silver with the Copper requires care, the latter Metal being apt to suffer oxidation at a high temperature, which, if not duly guarded against, will cause the mixed Metal to turn out above Standard. In ordinary Melting the loss of the baser Metal from Oxidation or Evaporation is a matter of no consequence ; but the case is different with Mintage Meltings. The process is therefore conducted here in a somewhat different manner from what we have previously described ; the heating pro- ceeds more gradually. The melting pot is heated to redness, and a lump of Charcoal is placed at the bottom; the Gold is then introduced first, and the Copper added after through a metal funnel. When the mass is in fusion, the lump of Charcoal rises to the top, where it absorbs the Oxygen which might otherwise combine with part of the Copper. The molten mass is properly stirred from time to time, to insure the most complete intermixture of the Metals, till it has reached a certain temperature which the Melter knows by experience to be the most suitable for casting soft bars ; the pot is hfted out of the furnace by a crane. Each pot holds about 1,300 ounces of Metal. A number of upright moulds, warmed previously in a stove, and anointed inside with a cloth dipped in oil, are fixed in a suitable iron framework placed on wheels. These moulds receive the molten metal. COINING. 271. wHcli, after cooling, is turned out in Bars or Ingots, about 24 inches long by If inch broad, and one inch, thick for Sovereigns. (For half-sovereigns the Ingots are only 1-| inch broad, and for the Silver Coinage they differ in breadth according to the pieces intended to be struck.) Each Sovereign Bar weighs about 320 ounces. Assays are taken of each series of Bars, to prove the Standard. If the Assay pieces turn out above or below Standard, the Bars have to be re-melted. But if the Assays turn out correct, the Ingots pass on to the next stage, in the ROLLING ROOM, v^rhere they are flattened out between sets of highly pohshed Cast Iron Rollers. The Rolling Mill is so constructed that the Upper Roller can be raised and depressed at will. The JBars, which, as just stated, are one inch thick, by If inch wide, have to be reduced to about -^ inch thick, and widened to about 1^ inch broad. The first set of Rollers in the Mill is set pretty wide apart, reduciag the thick- ness of the Ingot from one inch to about f inch. The space between the Rollers is then successively and gradually narrowed, until after passing six or seven times through them, the Bars are flattened out into ribbons of about -g- inch thick by If inch broad. This gradual RolHng is necessary in order to secure the greatest practicable uniformity in the thickness of the Bar throughout, and to guard against its gaining overmuch in breadth, as the principal object is to lengthen it out. Originally two feet long, the Bars are now ribbons seven or eight feet long. They are then 272 COINING. cut up into pieces 18 inches long. The repeated Rolling having made the Metal by this time hard and brittle, these pieces have to be softened again by "Annealing" before they can be further reduced in thickness. THE ANNEALING ROOM is fitted up with fiirnaces. The pieces or clips of Metal are placed in copper tubes hermetically closed; and after being heated to the proper temperature, the copper tubes vrith their con- tents are rapidly cooled in vrater. Slow coohng would render the metal too soft for working; whilst the quick cooling imparts to both Gold and Silver the desirable degree of malleability. The Annealed pieces are now called "fillets." They are returned to the Rolling Mill, where they are passed again several times througJi the Rollers, to reduce them in thickness. Several so-called " Spring Finches" are given them, which simply means that they are passed repeatedly through the Rollers remaining set at the same dis- tance. This is done with a view to insure uniform thickness. The flattened fillets are now successively passed through four other sets of RoUers, with gradu- ally decreasing space between them ; after which they are passed through the "Gauge Mill" when they are found to have a thickness of 0'050 in. by 1"829 in. broad. It is extremely difl&cult to get the fillets of uniform thickness throughout, and frequent gauging is neces- sary to ascertain the result of the rolling. Uniform thickness is of the greatest importance; since, when the round disks come to be cut out of the fillets after- ward^, varying thickness, although scarcely perceptible COINING. 273 at first, will cause very appreciable differences in the weight. The fillets are after this taken to the DRAG ROOM, where they are passed through the Steel EoUers of the so-called " Flatting Mill," and are then finally pulled through what is called the " Draw Bench." This machine is fitted with a pair of fixed non- revolving steel cylinders, between which the fillets are dragged, to receive their final adjustment. The fillets are then tried, that is to say, a disk is cut or punched out of each, and weighed; if the weight is found correct, the fillet is passed; if not, it is either subjected again to the Rolling process, or sent back to the melting room for re-melting. The fillets that have been duly passed are now taken to the CtrTTiNG-OUT ROOM, where the disks are punched out. This is done by the " Gtdting-out Presses," of which there are about a dozen in the room, for the different sizes of coin. These presses are constructed on the screw principle, the screw is worked by cams or wipers, turned by a steam engine, and the fillets are guided underneath the punch by hand. The disks thus cut out are called- " Blanks" or " Planchets." The perforated ribbons or fillets, called Scissel, go back to the Melting Room, to be re-cast into Bars. The Blanks are to all practical intents and purposes Coin of the value intended, except in this, that they are not yet impressed with the stamp on the obverse and reverse. Before they are sent 18 274 COINING. to the Coining Presses, however, they are carefully examined and accurately weighed in the WEIGHING BOOM. — The weighing is done by the wonderful scales, called " Cotton's Automaton Weigh- ing Machines." As we cannot give here an elaborate description of these highly ingenious instruments (of which a large number are in use, costing about £250 each), we will simply state that each one of these self-acting scales weighs Sovereigns at the rate of 60 per minute. The Blanks are supplied by hand ; they are piled on their edges in the lane of a slanting gutter tube, projecting over the Machine ; as they descend they drop one by one into the scale, which not only instantly determines their weight, but actually assorts them, separating the full weight Blanks from the light and over -weight, by sending them severally, with unerring certainty, through three different sHts underneath, into separate compartments. The light pieces are re-melted, the over-weight blanks are generally reduced to the proper weight by filing by hand, or by a filing machine, an ingenious invention, for which the Mint is indebted to one of its own Officers. The full weight Blanks are then passed on to the MARKING OH. MILLING MACHINE. — The object of the Marking or Milling process, is to raise a slight rim round the edge of the disk ; which serves to facilitate the subsequent ribbing of the edge. The Milling Machine is also self-acting; the Blanks are thrown by the handful into a copper pan, whence they drop upon the machine, which turns them in a vertical COINING. 276 position between rollers, pressing the edge, slightly rough from the cutting out, into a smooth and raised rim. The Machine can mill 600 Blanks in a minute. By this time the Rolling, Cutting-out, and Milhng have again imparted a certain degree of hardness to the metal, which therefore now requires another Annealing before it goes to the Coining Press. A few thousands of the Blanks are placed in Iron receptacles, which are then heated to redness, and after this cooled again by immersion in cold water. The Annealed Blanks are now boiled for a few minutes in a weak solution of Sulphuric Acid (Piclcle). This serves to remove the slight film of Oxide of Copper, which has formed on the surface in the Annealing. The pickled Blanks are then washed in a stream of cold water, to clear away the acid ; after which they are taken to the DRYING BOOM. — Here they are put into a kind of Iron Roasting Cylinder, which contains sawdust. The Cylinder being pushed into the chamber of an oven, constructed for the purpose, is turned by means of a long handle. The sawdust, dried by the heat, serves as a kind of pohshing powder, the required friction being supplied by the revolutions of the Cylinder. The brightly -polished Blanks are now ready for the Coining Press. The coiWlNa boom of the British Mint contains a number of " Botdton's Screw Coining Presses,'" which, as has already been stated, resemble, in their main features, large-sized Copying Presses without 276 COINING. Press plates. Boulton's Presses have long arms, with very heavy square weights at the ends; the shaft of the screw stretches through the floor into the apart- ment above, where the requisite motion is supplied by a suitable mechanism. This motion consists in lifting the screw by turning, then sending it back for the descending blow with considerable velocity and force. A comprehensive and lucid description of the construction and working of the apparatus cannot well be given without the aid of illustrations; but we may mention that the shaft is connected, in the apartment above, through a system of arms, beams, and rods, with cyhnders, whose pistons are worked on the pneumatic principle, the requisite vacuum being created in a kind of boiler, through air-pumps driven by a steam engine in another part of the premises. Boulton's Presses are therefore known also by the name of "Pneumatic Bcreio Presses.'''* The attendant on the Press, generally a boy, has with him a supply of Blanks, which he places pile upon pile into a vertical tube. By an ingenious feeding mechanism the Blanks are taken one by one from the bottom of this column in the tube, placed true on the die, and, after the stroke, thrown out into the proper case intended to receive them. All that the boy attending to the Press has to do, is to feed the tube with Blanks, and to watch the proper descent of the * The so-called "Lever Press," now in general use in the Trench, American, and other Foreign Mints, is greatly superior to Boulton's Press. COINING. 277 screw; lie can at any time stop the machine by touching a lever. The Dies used for stamping coin are produced from Punches struck in a Matrice. The Matrice, or Matrix, is the original die. A cyhnder of fine steel, about two inches in diameter and two and a-half inches high, is turned ofi" into a truncated flat-headed cone, measuring at the top the exact diameter of the Coin to be struck. The design of the stamp is cut by hand into the top surface of the cyhnder, the highest art and skill of the Engraver being brought to bear upon the proper execution of the design, which, though comparatively but a small object, it takes the labour of many months to complete. The lettering must be absolutely accu- rate; and the features of Her Majesty, when viewed under a microscope of great magnifying power, must present the appearance of a perfectly smooth mould for a Bass-rehef considerably larger than hfe size. The very name Matrix given to the original die suggests the necessity 'for extreme care and delicacy in the execution of the Stamp Design cut into it. When the design is finished, the Matrice, hardened by a pecuhar process of coohng, serves to produce the Punches, which in their turn serve to produce the Dies. The Punches are also Cylinders of fine steel, of the same shape as the Matrice Cylinder. The flat tops of these are pressed by a powerful Machine against the graved surface of the Matrice, and the still soft steel is, by a succession of steady blows, driven into the hollows of the design, which thus. 278 COINING. being concave on the Matrice, is reproduced con- vex on the Punches. When a number of Punches have thus been taken from the Matrice, they are properly hardened, and then serve in their turn for the production of the Dies, on which the design appears again concave, as it is on the Matrice. As a very great number of Punches have to be produced from the Matrice, and a very great number of Dies from each Punch, it naturally follows that the Matrice, or the original Die, and the parent of all the others, must be the most perfect attainable model to ensure perfection equally in the Punches taken from it, and in the Dies struck from the latter. This accounts for the extreme care, attention, and labour which have to be bestowed upon the production of a proper Matrice. A weU-made Matrice will remain in use for about fifteen years before shewing signs of wear; the Punches made from it will last for many months ; but the Dies, which have to perform the actual work of Coining, will rarely last longer than a day. However, during this one day of their working existence, they will strike ofi" many thousand impressions on Coins — as many, in fact, as 5,000 per hour. As a matter of course, there must be two Matrices for each Coin, one for the Obverse, and another for the Reverse; and Punches and Dies have to be taken from each. Besides the Dies, of which the lower one is fixed on a suitable bed beneath the screw, whilst the upper one rises and descends with the latter, there is another essential part of the Coining apparatus, viz., the coiNiJsrG. 279 so-called Collar, — a flat steel ring about three inctes in diameter, with, a hole in the centre, exactly fitting the neck of the lower Die, above the face of which it rises at the moment of the stroke. This ring or collar is grained inside, or crenated, i.e., ribbed vertically. The Blank, under the pressure of the two Dies, expands slightly, which drives the milled edge into the ribs of the eoUar, thereby producing the usual crenated or ribbed edge of the Coin. The process of thus ribbing the edge of the Coin (which is done to prevent the dishonest from chpping the piece) was formerly called Milling, and was done by a separate machine, not unlike the Milling Machine described. Bach Mint had formerly its own way of Milling Coins, which it looked upon as a secret to be jealously guarded. But since the introduction of the Collar, the Stamping and the Orenating are done at one stroke. The Coins are now ready, and they are dehvered to the Bank of England at the rate of 1869 bright new sovereigns, or double that number of half-sove- reigns, for every forty pounds of Standard Gold sent into the Mint.* * In 1849, a Royal Commission was appointed to inquire into the constitution and management of tte Mint. This Commission issued an excellent and elaborate Report. At that time the Mint management was a strange mixture of Government Officialism with "private rights " of the Mint Melter and the Corporation of Monsters, who made extra profits out of it. Since 1851 all this has been reformed, and the Mint is now entirely under the control of officers appointed and paid by the Crown, 280 COINING. The Mint makes no charge for Coining Gold ; . but, as we have already explained, it charges a heavy seignorage on the Silver Coinage. Here the question arises, whether the Mint does not, after all, make a profit on the Coining of Gold. The Assay Eeports in England are always shghtly below the true fineness of the Metal; and it is just possible that, with very careful manipulation, the Mint may realise a small fraction of profit on the Gold Coinage," although we believe the reverse to be the case. However, the suggestion of the possibility of a profit leads on to another question, viz. this : Is it possible always to attain a mathematically correct Standard and absolutely accurate weights? The reply to this can be no other but that it is not possible, as slight variations will always occur, even with the very best machinery, and the most careful manipulatioja. The Law, acknowledging the difficulty arising from this circumstance, grants the Mint an allowance within certain limits. This allowance is called The Bemedium or Remedy. If the Coinage on trial is found correct within the limits of the Remedy, it is declared lawful money. The Remedy allowed for the fineness of Gold Coin is YB'th carat, equal to 3-5-2 or about 3 per miUe, or f penny per £1. The Remedy for weight allows a variation of 12 grains in the lb. Troy, or ^ grain, equal to |^d per Sove- reign. For Silver, the Remedy for fineness is 1 penny- weight = to 4^ per mille, or xg- penny per Shilling; for iveight it is 24 grains per lb. Troy, or 4 per mille. COINING. 281 equal to -^otli of a penny per sMUing. The Mint is supposed to work considerably within these limits. The Coining of crowns, half-crowns, and fourpenny bits has been abandoned, and the British Mint now only turns out as current Coin the following : — Soyereigns_ | ^^^^^ Halt-sovereigns ) Florins ■^ Shilhngs / g.^^^^_ bixpences l Threepences J Pennies ") Halfpennies >• Bronze. Farthings j The Coining of Gold pieces takes place only from time to time, as the Bank requires it ; but the Mint is almost always busy in Coining Silver or Bronze. The new British Bronze Coinage was first made for the Mint by Messrs. Ealph Heaton and Sons, of Birming- ham, whose superior machinery is well known, and who have also executed the Copper Coinage of some Foreign States. The Mint, however, now strikes the Bronze Coinage necessary to keep up the first large supply made by Heaton and Sons. The British Bronze Coins consist of 95 parts of Copper, 4 of Tin, and 1 of Zinc. The Government exercises some check on the operations of the Master of the Mint, as far as weight and fineness are concerned, by the so-called "Trial of the Pyx." The Master reserves certain pieces of " each journey" and puts them apart into boxes. 282 COINING. When the Trial of the Pyx is ordered, these boxes are taken to the Treasury Ofl&ce, where, under the presidency of the Lord Chancellor, a great ceremony takes place. A jury of experts is impannelled, who afterwards proceed to Goldsmiths' Hall, where sam- ples of the coins are weighed, melted and assayed. The jury reports the results, and if they are satis- factory, .as they are expected to be, the Master is discharged from aU further liability in the matter. The last Trial of the Pyx took place in 1861. To this subject, as well as to the British Mint gene- rally, the author will have occasion to revert again in the Appendix of this Book. An order for the inspection of the British Mint can be obtained by forwarding a request to that effect in writing to the Master of the Mint, who appoints a day and hour for the visit, and instructs a special ofl&cer to be in attendance to conduct the parties over the Operative Department of the Bstabhshment. An agreeable and instructive half-hour may thus be spent, under the guidance of a most courteous gentleman. PART II. 285 CHAPTEE I. PARS OP EXCHANGE. TN the following Pages we shall describe the different -*- Monetary Systems of the "World, and compare the same to the British Coinage, in order to arrive at the so-called Pars of Exchange. The Par of Exchange is the fixed and unalterable rate at which the value of one Monetary Unit or Integer can be determined by the numbers or parts of another, and vice versa. As regards this Par of Exchange, erroneous popular impressions are frequently found to prevail. Thus, the ordinary reader may be under the impression that the £1 is worth 25 francs, and the 20 franc piece accordingly 16 shillings. The G-erman thaler is sup- posed to be worth exactly three shiOings, making the £1 therefore 6f thalers. This idea of the Par would seem due, in a measure, to the fact that these are simple round figures. In reality, however, the £1 is worth more than 25 francs, the thaler less than three shilhngs ; for if the proportions of fine metal in the respective pieces be determined, it will be found that the £1 is worth about 2d more than 25 francs. It may be suggested, then, that by simply ascer- 286 PARS OP EXCHANGE. taining the weight and fineness of foreign Coin by actual trial here, we may readily determine its value in ' British sterhng, which value must naturally be the Par of Exchange. This principle is correct enough, with the exception of the clause, " by actual trial here ;" for if foreign Coin be brought over here, to be tried, it may turn out, 1, That the Coin has suffered from abrasion ; 2, That although carefully coined, it may not be quite so fine in quahty, and quite so fuU- weighted (even though it should have undergone no loss from abra- sion) as it is presumed to be ; also, that our method of testing BuUion, and paying for it, differs a httle from that of other countries. These same chances to which foreign Coin is liable are equally inherent also in the British Coinage. We have already had occasion to mention the Remedies allowed to the British Mint for slight deviations from the strict letter of the law in the matter of the weight and fineness of the Coin. The foreigner who imports British sovereigns into his country, and tries them there, will consequently most likely find the same differences. Supposing, for instance, that a new 20 franc piece, tested here, even officially, turns out to be worth 15s 9fd in Gold at the Bank price of 77s 9d per ounce Standard, giving accordingly francs 25-30 as the Par made in England ; whilst the sovereign may turn out, by French valuation, worth only francs 25* 15 as the Par made in France — neither of these two rates can be called the Par, for the true Par must PARS OF EXCHANGE. 287 be fixed and unalterable. The necessity of this rule may be shown more clearly in a matter of account. By way of illustration, say an English merchant owes francs 2522*50 to a French merchant ; in order to remit this amount in sovereigns at francs 25"15 he must send (independ- ently of the charges of forwarding) £100 3s lOd; the French merchant may in his turn also owe £100 to the English merchant ; to transmit this he must for- ward francs 2530. But if they settle the account between them at the Exchange of 26"22-J francs (the intermediate point between the two supposed pars), the Englishman gives and receives exactly £100, and the Frenchman exactly francs 2522*50, just as the accounts stand between them. This medium point, freed on both sides from the chances affecting Coin, in consequence of the want of absolute accuracy in the Coinage, results, as the only true and fixed Par, from the Mintage values, as fixed by law. The Mint law of England says that 1869 sovereigns shall be coined from 40 Troy lbs. Standard Gold (22 carats, or 916-67 fine); the law in France orders francs 3100, equal to 155 Napoleons, to be coined out of the kilogramme weight of Gold 900 fine. From these proportions, independent of all accidental differences in the Coin, and of the charges of forwarding, which act in both directions, the true Par has to be calculated. Now let us suppose a transaction of this kind to be effected between three different places : say London, Paris, and New York. If each of these were to follow its own one-sided way of deducting the Par from the actual Coin, as tried by them, six different rates of 288 PAES OF EXCHANGE. Bxchange would be the result ; whilst taking the Mintage values fixed by law for the basis of the calcu- lation, any two of the true Pars wlU give the true Par between them and the third. The true Pars of Ex- change must be fixed in such manner as to agree correctly for all Coinage Systems, whether they be calculated direct from the legal Standards, or arhi- trated from the Gross Pars between foreign countries. "We are induced to point out this principle, because in other works on Exchanges we find considerable looseness in this respect. Mr. Tate, for instance, adopts our system in regard to the French Exchange ; but for other Exchanges he takes the "value as found in England" of certain Coin as his basis for the Par. In following out this principle in the comparative valuation of English and Foreign Gold Coin another consideration arises. In England we have the Gold valuation, and our Mintage rate of 77s lO^d per oz. Standard gives us a fixed rate for Gold; Silver, however, has a variable price, ranging from 60|-d to 62-|^d per oz. In certain other countries — Prussia for instance, India, &c. — the Silver valuation prevails, and Gold has a variable price. Between England and these countries it would therefore seem impossible to establish a fix;ed rate of Exchange. However, it so happens that in France and some other countries the so-called Double Valuation exists, both Gold and Silver having a fixed price by law. In France this price stands at one part of Gold to 15|- parts of Silver, and it is this rate which must serve us as a guide in valuing between Gold and Silver generally. And this principle will PARS OF EXCHANGE. 289 indeed practically be found correct; for, with, the exception of England — where Gold stands as 1 to 14^ Silver (which latter Metal, however, has only a most limited range of circulation assigned to it by the law of legal tender) this proportion — 1 to 15^ — is found to exist universally, within small fractions. Our rate for Silver will therefore be : if 1 oz. Standard Grold (22 carats) is 77s 10-^d, then 1 oz. Standard Silver 222 dwts. fine = 60"8384 pence, or about GOfd per oz. Standard. This price, when the Exchanges generally are level, will also form the average of the market price here ; for at 60;^d Silver goes to the Continent, and it speedily rises to 61^d or more, when there is a demand for India. We find that in other books on Exchanges th.e writers give different rates, ranging from 60d to 62d. We beheve, however, that our plan is the more correct one, founded as it is upon the average universal price, and the point of neutrality between supply and demand generally. In our Review of the Coinages of the World we shall limit our attention to the present issues. A description of aU the old Coinages would swell the present volume far beyond its legitimate Kmits, and moreover would be of no real practical use in the matter of the pre- sent Exchanges. To the old Coins stiU in circulation, including some that were struck only a few years back, we shall only passingly allude when necessary. The present issues of Coin alone, as made by the several Mints of the World, claim our particular attention here, as the basis for the Pars of Exchange. 19 290 PARS OP EXCHANGE. GREAT BRITAIN. The Monetary Unit of Great Britain is The Gold Pound Sterling, divided into 20 Shillings, of 12 Pence each. The Coinage is represented by 6 Pounds pieces 2 J) )) 1 „ „ Sovereign ^ „ „ Half Sovereign Gold. 5 Shillings pieces Crown 2| „ „ Half Crown 2 „ „ Florin 1 Shilling „ Shilling I „ „ Sixpence J „ „ Fonrpence J „ „ Threepence 1 Penny pieces Penny Halfpenny Farthing Silver. Bronze. The Five pounds and the Two pottnds Gold pieces are rarely seen in circulation, as the Mint only strikes a few specimen pieces, which are not intended to be used as part of the Currency. The Crown, Half Crown, and the Fourpenny piece in Silver are no longer coiued now, and those still in circulation will gra- dually be withdrawn. The following are the Coins actually struck and issued by the Mint at present, with their supposed fall weight and fineness : — GOLD. Sovereign . . oz. 0-25682 Standard 22 carats, or 916-666 fine. Half Sovereign „ 0-12841 GEEAT BEITAIN. 291 Florin . . Shilling . Sixpence . Threepence Penny . . Halfpenny . Farthing . cz. 0-3636 „ 0-1818 „ 0-0909 „ 0-0454 SILVER. Standard 222 dwts., or 926 fine. BEONZE. oz. 0-3038 -) „ 0-1822 C Bronze of 96 Copper, 4 Tin, 1 Zinc. „ 0-0911) The Gold valuation prevails in England, and Gold Coin is accordingly legal tender to any amount. The full weight of a new Sovereign ought to be 128-274 grains. If by abrasion or otherwise it is found to weigh less than 122f grains, it becomes "light," and ceases to have legal currency. Silver Coin is legal tender only to the amount of 40 Shillings sterling. Copper or Bronze Coin is legal tender only in Penny pieces to the amount of one Shilling, in Hal^enny pieces and Farthings to the amount of Sixpence. The Gold Coinage is issued at the Mintage rate of 77s 10|d per oz., which corresponds to the universal market price of Gold. The Silver Coinage is issued at a rate much higher than the universal market price of Silver, viz. 66d per oz. Standard, which makes Silver stand to Gold in the proportion of 14| to 1. The universal price, upon the basis of 1 of Gold to 16| of Silver, is 60|d per oz. Standard. The several Coins are worth accordingly : — GOLD. Nominally Actually Sovereign . . . 20 Shillings. 20 Shillings. Half Sovereign . . 10 ?) 10 » SILVEE. Crown .... . 5 )j 4 Shillings n Half Crown . . • 2| jj 2 )» H Florin .... . 2 n 1 )» IOt^ Shilling . . . . 1 JJ jj ilA Sixpence . . . 1 2 )> >> 5| Fourpence . . ■ i )) TJ 3| Threepence . 1 4 )) )J 2f 5 pence. 292 PARS OP EXCHANGE. At the present average price of Copper, Tin, and Ziac, Bronze is wortb. lOd. per lb. Troy ; consequently the actual metallic value of the Bronze Coinage is — Penny . . about i penny. Halfpenny . „ i >, Tarthiug . . „ ts" » The Old Guinea ia circulation before 1816 was worth exactly 21s, at the rate of 77s 10|d per oz. Standard. The Silver Coins struck before that period were coined at the rate of 62d per oz. Standard. The relative value of the Gold and Silver Coinage accordingly stood at that period as 1 of Gold to 15j of Silver. The prices of Gold at the Bank of England (the only importer of Bullion into the Mint) are — Buying price . . . . 77s 9d per oz. Standard. Selling price .... 77s lOjd ,, „ At these rates the Bank is bound to deal. The Bank makes no allowance for Silver contained ia Refinable Gold. In the open Market the Bank Rates serve for guidance, subject to the fluctuations of supply and demand. Refinable Gold sells at 77s lOd to 78s per oz. Neither the Bank nor the Mint is obliged to buy or sell Silver. Silver, beyond the Hmited quantity bought by the Mint for coinage, is altogether a mere article of mer- chandize ; the price of SUver Bullion fluctuates between 60Jd to 62|d per oz. Standard, according to the supply coming in, and the demand for the Continent or for India. Paper Currency. — The Paper Currency is on a Par with the Gold Coinage. The Bank of England issues Notes of £5 ... 10 ... .20 50 100 200 500 1000 The Provincial, Scotch, and Irish Banks issue Notes of £1, £2, and upwards. GEEAT BEITATN AND AUSTRALIA. 293 The £ s d, or British Monetary System, prevails in the Colonies of Australia,* and at the Cape of Good Hope, &c. Exchange transactions in Sterling money have their own Par at 100, as usually stated. If, for instance, a Banker in Glasgow be applied to to grant a Draft at sight upon London, he is Kkelyto make a small charge upon it, say J per cent. For the £100 to be paid in London he wOl charge lOOj in Glasgow, consequently the Exchange on London in Glasgow stands at lOOj, or j per cent. Premium. The same will be the case if a Banker in. London be required to give a draft on Glasgow : he is also likely to charge J per cent. Premium. In both these cases it is assumed that this 5 per cent, reimburses the Banker for the trouble and expense of having to remit £100 to his correspondent, to pay the draft given upon him. But it may so happen that drafts from London on Glasgow are not required, whilst Glasgow draws largely on London, and becomes thus indebted to the London firm in excess. Under such circumstances the Glasgow Banker will hesitate to seU more drafts on London, except at an advanced premium, say f per cent. ; whilst the London Banker, having money to receive from Glasgow, will gladly draw on the latter place, even without premium. So the Exchange in Glasgow upon London may become quoted at 100|, or -J above Par ; whilst that on Glasgow in London wiU be at 100, or Par. We give this example here, not as one of frequent actual occurrence, but as an illustration simply of the working of the Par of Exchange. Where the distances between the two places are very great, as between England and Austraha, for instance, these differences become more marked. Australia is always indebted to England, and is compelled to send Bullion here. The transmission, by sailing vessel, takes about six months, and the charges for Freight and Insurance amount to about 1| per cent. Now, supposing that an Australian is indebted to an English Merchant, and has * The Gold Coinage of the Sydney Mint is now legal tender in Great Britain. 294 PAES OF EXCHANGE. promised to send his Creditor in England £100 by the 1st July, he must ship to him £100 in Gold, say on the 1st January preceding, and the charges of forwarding, &c. will cost him £1|. For the £100 he has accordingly to pay £101^. Instead of shipping Gold, he may go to a Bank for a draft, and pay his £101| there. The Exchange on England is therefore 101| in Australia. The English Merchant, however, or the Austrahan Bani: Agency in London, may be applied to for a Bill on Australia. A draft may then be made on the parties in Australia for £101| — ^the same amount which they would have to pay if they were to send Gold or a Bill for £100 to England. Or, if the draft on Australia be made exactly for £100, the Creditor or Seller here might tate £98| for it ; thus the Exchange on Australia in London would stand at 98f , or £1| per cent, discount. And, if the question turned on payment by the Australian on the 1st January 18G9, such payment being due here on the 1st July 1869, the Creditor here might draw his draft on the 1st July 1868, arriving for payment in Australia on the 1st January 1869. He would thus gain a fiiU year's interest in the bargain, discount being, say 3 per cent, per annum. He could then actually afford to sell his bill at 95^ per cent., or 4f per cent, discount. In the current trade transactions this is not done, as the interest on the whole is balanced otherwise. The variations in freight and charges, supply and demand, &c., may occasionally alter the rate of Ex- change ; but upon the basis of If per cent., so long as Austraha is indebted to us, the Exchange in Australia on London stands at 101| ; Exchange in London on Australia at 98J. the Actual Par of Exch.auge being nevertheless 100. FEANCB. 295 PEANCE. The Monetary Unit of France is The Franc, divided into 100 Centimes. The Coinage is represented by !- Gold. 100 Francs pieces 50 „ „ 40 „ „ 20 „ „ Napoleon 10 „ „ J Napoleon 5 „ „ 5 Napoleon 5 Francs pieces 2 „ 1 „ 1 2 »» »» J „ 1 ■5 " ») J- Silver. 10 Centimes pieces Decime 5 „ „ Sou i Copper. The 100 francs and 50 francs Gold pieces have been coined iii con- siderable ntunbers lately, and are very often met with in circulation ; a coin of 25 francs has also been made by way of trial. The coining of the 40 francs pieces and the one-fifth franc pieces has been discontinued. The double valuation prevails in France : both Gold and Silver are legal tender in that Country. In Silver, however, the five francs piece alone continues still as legal tender to any amount; the fractional Silver Coin below the value of five francs are, since 1867, legal tender only to the amount of fcs. 50. Hitherto, all the Coins of France, both Gold and Silver, were struck 900 fine ; but with regard to two francs pieces and the fractions below, the Government, under 296 PAES OF EXCHANGE. a Convention with Belgium, Switzerland, and Italy, has reduced the fineness to 835, without increasing the weight of the Coin. These smaller Silver Coins therefore are no longer of fuU intrinsic value, and are simply forced Currency, standing on the same footing as the Enghsh Silver Coinage. The only difference between the French and the English system, is that, whereas the latter has no Silver Coin of fuU intrinsic value, Erance maiutaius the five francs piece at its fall standard fineness and weight. The five francs piece thus forms the connecting link between the two Coinages, by which the relative value of Gold and Silver is maintained at one of the former to 15| of the latter, and the double valuation by both Gold .and Silver is upheld. The Monetary Convention which lately met in Paris decided in favour of the single Gold Standard. It is therefore possible that at some future time the five francs Silver piece may also become debased, and cease to be legal tender. (Upon this subject generally we refer the reader to the Chapter on the Defence of the Double Standard, in the Appendix.) According to the French Mint Law, One Kilogramme* of Gold of 900 fine (French Standard) is to be coined into fcs. 3100. One Kilogramme of Silver of 900 fine is to be coined into fcs. 200. This gives exactly one part of Gold for 15| parts of Silver. Up to 1867 all the Coins were made in conformity with this Law ; but, as already stated, the smaller Silver Coinage from two francs down- wards, is now made 835 fine ; so that the above regulation, in so far as SUver is concerned, now only applies to five francs pieces. The two francs, one franc, half franc, quarter franc, and one-fifth franc pieces, struck before 1867, are being called in; and, in spite of their abraded state, they yield a good profit to the State, which issues the new debased pieces instead. * Ouo Kilogramme equal 32150725 oz. Troy ; 1 oz. Troy equal 31-1035 gi-ammes. - ~J. — ^ Gold Silver FRANCE. 297 TKe subjoined Table sliows tbe legal weight and fineness of tlie several Coins now issued by the French Mint :* — Grammes. Millifemes. -100 Francs pieces 32-258 900 50 „ „ 16-129 20 „ „ 6-451 10 „ „ 3-225 . 5 „ „ 1-612 ' 5 Francs pieces 25-000 900 2 „ „ 10-000 835 1 Franc „ 5-000 „ ^ 2 » ;> 2-500 „ The Coppee oe Bbonzb Coinage. 10 Centimes piece 10 Grrammes ( „„ Bronze. ■j 95 Copper, 4 Tin, ° " n ^ ,, ( I Zinc. The subjoined Table shows the nominal value and the actual value of the present French Coins at the Mintage Rates of fcs. 3,100 per kilo- gramme for Gold ; fs. 200 per kilogramme for Silver, both 900 fine : — GOLD. 100 Francs pieces. Nominal Value. 100 Francs. Actual Value. 100 Francs. 50 „ J) 50 . » 50 )5 20 „ » 20 )) 20 55 10 „ n 10 )) 10 JJ 5 „ )» 5 )J 5 JJ SILVEB. 5 Francs pieces. 5 )) 5 5) 2 „ )j 2 )) 1-851 )J 1 Franc )) 1 ); 0-921 J5 1 2 J) )? 1 2 )j 0-46 )) * We must remind the reader that we give here the supposed full weight and fineness, as theoretically fixed by law. Practically there are slight deviations from the exact legal Standard, at least with regard to fineness ; for in this respect all Mints alike work more or less with the Bemednj allowed. With regard to weight, it may be observed that, although the aggregate weight of a number of new pieces just issued by the Mint may be correct, yet abrasion will soon reduce that of single pieces. 298 PARS OP EXCHANGE. The Paris Mint, whose operative department is worked by Moneyers tinder contract, charges at the rate of fcs. 6' 70 per kilogramme of Gold 900 fine, coined into fcs. 3,100, which makes the actual Mint price for Gold 900 fine, fcs. 3093-30. The Mint price of pure Gold, or 1000 fine, consequently is fcs. 3437 per kilogramme. For Silver coined into 200 francs the kilogramme 900 fine the Mint charges fcs. I'SO for coinage ; the actual Mint price for 900 fine Silver is accordingly fcs. 198'60, and the price for pure Siver fcs. 220'56 per kilogramme. The Mint coins five francs pieces only when specially demanded. There are Branch Mints at Bordeaux and Strasbourg. The Coius struck in Paris bear- the initial letter A ; at Bordeaux the letter K ; and at Strasbourg the letters BB. The Bank of Prance is the largest importer of Biillion into the Prench Miats ; but the public are also at liberty to import. The Mint gives, ia return for the Bullion sent in. Mint certificates, payable usually in ten days, or at longer dates if the supply exceeds the capacity of the working department. The Bemedy allowed to the Moneyers is, for Gold Coin, two per mille in fineness, and two per mUle in weight ; for Silver coin, three per mille in fineness and weight. It is proposed, however, to reduce the Remedy for Gold in fature to one per mUle. The Moneyers do not profit by the Remedy. Their Coinage is regularly assayed by the Government to ^p^op exact, and they are debited with any deficiency under 900 fine, or credited with the surplus over 900 fine, provided neither difference do exceed two per mille. As a rule, they work under 900 fine. For Coin 899'6 fine, or 898'0 fine, they accordingly are debited 0'4 per mille, and 2 per mUle respectively. The State thus obtains all the profit that may result from the Bemedy, but the State does not seek to make this profit ; on the contrary, everything is done to ensure the greatest attainable correctness of the Coin. In the open Bullion market Bullion is still quoted according to a now obsolete Mint Tariff (abolished in 1835), which made fine Gold worth fcs. 34:?4'44 per kilogramme ; fine Silver worth 218-89 FEANOB. 299 per kilogramme. These prices are subject to Premium or Discount, according to supply and demand. In dealing in Gold it is always first agreed whether the price shall be fixed by the Tarif de la Mormaie, meaning the present rates of the Mint, or by the Ta/rif du, Oommeree, as the old Tarifi" is now termed. For Silver the latter is generally taken. The Decimal System appears to great advantage in the French method of valuing Bxdlion, simple multiplication being all that is required to get the result. The price of the difierent degrees of fineness from 1000 down- wards (if such a table is at hand) need only be multipUed by the kilogramme to find the amotint in francs ; or the price of fine gold may first be multiplied by the fineness, and the result by the weight Thus kilos. 10'155, of 921 fine, at fs. 3437 per kilogramme fine, by the Tarif de la Monnaie, are worth 3437 X 921 = 3165-47 X 10-155 = fs. 32145-35 or for SUver (by the Tarif du Commerce price) kilos. 31-735 — 863 fine, at fcs. 218-89 per kilogramme .fine, 218-89 X 863 = 188-90 X 61-735 = fs. 9772-74 Additional examples of calculations on this system, and invoices, by way of illustration, will be given hereafter in the chapter on Arbitrations im Bullion. French Assays are made and reported to ^o^op exact ; thus we find Gold and Silver reported, for instance, as 850-5, 913-2, 995-7, &c., British Assays reporting only to one-eighth grain or yig- part exact. The French Assays are thus much more accurately reported than English Assays. The charge for refining Gold amounts to five franes per kilo- gramme, equal to 22| milliemes of fine Silver (the charge in England is 83 milliemes) ; and the French Mint buys Refinable Gold at this rate. For Silver the charge is one millieme of Gold, or about 15f per mille on the value ; but, on the other hand, a Premium, ranging from 14 to 18 per mille, is paid for Dore Silver, according to the market price of Silver and the quality of the Bar. 300 PAES OF EXCHANGE. Paper Ciirrency. — The Bank of France issues Notes of 50 francs. 100 „ 200 „ 500 „ 1000 „ It is the only Institution in France allowed to issue Paper Money. The Bank of France Notes are on a full par with the Gold Coinage. We now come to our first transaction in Exchanges. What is the true Par of Exchange between England and France ? We have told the reader before that this Par has to be established upon the full weight and fineness of the Coin fixed by the Mintage Law, and independently of charge for coinage and of allowance for remedy, abrasion, freight, &c. We give our calculations here in decimals, carrying the decimal as far as practicable, in order to prove the true Par with the utmost attainable correctness : A Napoleon of 20 francs weighs 6"45161 grammes, equal to oz. 0-207424 Troy, of 900 or carats 21 '6 decimal fine ; which, at 22 carats, gives 0'203653 ozs. Standard ; this, at 77s 10|d, or £3-89375 decimal per oz., makes the value of the 20 francs piece £0-792974, or 15s lOT^d, and gives an Exchange of fs. 25-2215 per £. A Sovereign, of which 1869 go to 40 lbs. Troy, or 480 ozs. Standard Gold, by the chain rule, as follows : How many francs ^ 1 Sovereign ? If Sovereigns 1869 = 480 oz. Standard If ozs. Standard 24 = 22 fine Gold If ozs. 1 = 31"1035 grammes And fine 900 = 3100 francs per kilogramme 403704 : 1018204176 = fs. 25-2215 BELGIUM. 301 Or, by BuUion — 1 kilogramme 900 Gold gives 3100 francs ; 1 kilogramme weighs oz. 32'150725 Troy; accordingly, How many ozs. Standard are = 32'150725 ozs. Troy, 900 or carats 21 '6 fine If 1000 = 900 fine Gold If fine Gold 22 = 24 oz. Standard 22 : : 69446566 = oz. 31'566166 Standard At 77s lO^d per oz. = £122-911 decimals Divided into 3100 francs = fs. 25-2215 It is almost needless to add that the commonly accepted Par of fcs. 25 per £1 is altogether a popular error. The Actual Mintage Par of Exchange between London and Paris is — £1 = fcs. 25-2215 or fcs. 25-22-^ centimes. For all practical purposes, however, we may caU the Par of Exchange fcs. 25-22| centimes. BELGIUM. The Monetary Unit of Belgium is The Franc, divided into 100 Centimes. According to the Monetary Convention concluded in 1865 between Prance, Belgium, Italy ,"and Switzerland, the new Coinages of the four States are precisely identical^in weight, fineness, and legal value, and the Coins struck by aU and either of the States of the Convention have free circulation -within the limits of the Union. (The Belgium 2| francs pieces and the Nickel Coins (250 Nickel, 302 PAES OF EXCHANGE. 750 Copper) are no longer issued. The old Coinages of Sonverains. Crowns, Ducats, Guilders, Shillings, &o., have entirely disappeared from circulation.) The Paper Currency is on a full par of value with the Gold Coinage. The issue is made by the Banque Rationale. The Mint Par of Exchange between London and Brussels is— £1 = fcs. 252215, or fs. 25-22i. SWITZERLAND. The Monetary Unit of Switzerland is The Franc, divided into 100 Centimes. The present Coinage is in every way identical with that of the other members of the French Monetary Union. Switzerland does not coin Gold pieces, and the principal supply of them comes from France. (Before the final adoption of the Franc throughout Switzerland generally (1850), the different Cantons coined Thalers, Neuthalers, Guilders, Francs, and smaller Coins, which are now withdrawn from circulation.) The Paper Currency is on a par of value with the Coinage. The issue is made by several Banks, and is quite local. The Mint Par of Exchange with England is £1 = fcs. 25-2215, or fs. 25-22i. ITALY. ■ 303 ITALY. The Monetary Unit of the Kingdom of Italy is The Franc or Lira Italiana, divided into 100 Centesimi. The Coinage is identically the same as in France, Belgium, and Switzerland. (Before the unification of the present Kingdom was accom- plished, all the petty States of Italy issued their own Coinages. Thus in Venice, for instance, the Lira Austriaca (value about 85| French Centimes) was in use ; in Tuscany, the Lira Toscana (value about 82 French Centimes) ; in Naples, the Ducat (value fcs. 4'33,) as money of account, the Gold ounce (fcs. 129'44), the Scudo, in SUver (fcs. 5"10) ; in Palermo, the Sicilian ounce (fcs. 12"75), with smaller divisionary Coins for each.) The confusion in the Coinages of Italy before the unification of that Country was only exceeded by that reigning formerly in the other still much larger disunited political body, Germany. The old Italian Coinages are now obsolete, and the Lira Italiana, which is the exact equivalent of the franc, is the practical Unit for all pur- poses of Exchange. In Eome alone, under the Papal Government, the Unit is still the old Roman Scudo, divided into 100 Bajoohi. The other Roman Coins are GOLD. SILVEE. 10 Scudi pieces 1 Scudo 5 » J) 1 2 JJ = 50 Bajochi '^^ )) )) 1 "5 )J = 20 „ 1 Scudo „ To >i = 10 „ 'TU " = 5 „ with Copper Coins of smaller value. The value of the Scudo of account is 51 '2 pence, and the Par of Exchange is accordingly 4.6'875 Paoli (Paolo ^s^th Scudo) per £ ster- 304 PAES OF EXCHANGE. ling ; and the same result is arrived at if we compute tlie Par by the Mint value of the Papal Gold Coinage. The Roman Government is taking steps now for the issue of a Coinage in accordance with the rest of Italy. Paper Currency. — The Paper Currency of Italy is much depreciated, Gold is at a premium varying (1868) from 12 to 18 per cent. This makes the Excha-nge for the Paper Currency per £1 from fos. 28 to fcs. 29'75; for, unless bills drawn on Italy bear upon them the express direction that they are to be paid in Gold or Silver, they will be paid in Paper Currency. The Italian Government has not only been compelled, by pressing political cir- cumstances, and by wars, to incur an enormous debt ; but, as the revenue of the State falls much short of the expendiinire, and as there is great want of money, the Italian Government has been driven to the expedient of creating a forced Paper Currency. This is an illustration in point of what we have characterised, in one of the earlier chapters of this work, as a thwA class Bank Note issue. The exact amount in circulation of this forced note issue is not known ; but the Finance Minister of the Kingdom of Italy lately stated that 528 millions francs in Gold would be necessary to withdraw the notes. This leads us to infer that from 600 to 650 millions of francs have been issued. It is to be hoped that the increasing prosperity of the Country, and the good management of the Government will soon succeed in relieving this depreciated Paper Money. The Mint Par of Exchange between Italy and England is £1 = fcs. 25-2215 ; but owing to the forced Paper Currency, which is at present legal tender in the country, the actual Par varies with the premium on MetaUio Money. All the valuations of Italian Money computed in Paper Currency are as much higher as this premium per cent., and with it rises the Paper Par of Exchange with London, which in the early part of 1868, stood — Fcs. 28-50 to 28-75 per £1. GBEMANY. 305 GERMANY. In Germany there are several systems of Monetary Valuation. Tte North. German Valuation. The Thaler, divided into 30 Grosohen, of 12 Pfenninge each, the Currency of the greater part of North Germany, with BerlLa for its Chief City. The South German Valuation. The Florin (Gulden), divided into 60 Kreutzer, the Currency of the whole of South Germany, with Frankfort- on-the-Maine for its chief representative Town. The Valuation of the Hanse Towns. The Mark Banco, divided into 16 SchiUinge, constitutes the Money of Account in the free Cities of Hamburg and Liibeok. The Louis d'Or Thaler, divided into 72 Grroten, constitutes the Money of Account of the free City of Bremen. We win consider these several systems of valuation in succession, as represented by Berhn, Frankfort-on-the-Maine, Hamburg, and Bremen. 20 306 PAES OF EXCHANGE. Before 1866 the Austrian Florin constituted tlie basis of a fifth system of valuation in Germany; bnt as Austria forms now no longer a part of the political organisation of Germany, we shall devote a separate chapter to the Austrian Exchange. Previously to the recent energetic and practical movement for unity, Germany, divided into a number of small States, under the almost absolute sway of a variety of Governments, was par excellence the land of the most bewildering confasion of Coinages. Each State struck its own Coin ; every petty prince figured upon the Metal Currency of his dominion. Some of these small potentates struck Thalers, and even these not always upon the same standard of Coinage ; others struck Gulden, of different descriptions, with odd subdividuary pieces, to make confasion worse confounded. There were also a variety of Gold Coins of different denominations. Side by side with this array of indigenous Coins there circulated also Foreign Coins from nearly every part of the World. Indeed, the circulation of Foreign Coins continues in Germany to the present day. Napoleons, Imperials, Sovereigns, Eagles, Ducats, Five Francs Pieces, and smaller French Silver Coin, DoUars, and Roubles ; in short, anything in the shape of Gold or Silver Coin may be passed in Germany without trouble, at the hotels, shops, or banks, at certain understood rates of Exchange. The EngUsh shop keeper or the French restaurateur generally looks upon foreign Coins as something not much better than counterfeit money, only fit to be ranked with counters ; and nothing but the Coin of his own country will suit him. The German's greater appre- ciation of the character of foreign Coinages is no doubt highly creditable to his intelhgence ; but, from a national point of view, it must be admitted it looks hke a sign of great poKtical weakness. The English traveller in Germany must be sorely puzzled even now with the different Coinages still having " course " there, and changing at nearly every frontier between the several States, and with the singular and worn appearance of the small change which he gets, and the numerous dirty notes, representing insignificant amounts of money. This is not to be wondered at, since even the native German, to the manner born, is hardly able to thoroughly master and command the Coinage Babel of his country. GEEMANY. 307 As a matter of record, it may be stated here that the Cologue Mark, equal 3609 Troy grains, was formerly the principal weight for Grold and Silver. (Even this weight was not the same through- out Germany, the Hamburg Cologne Mark, for instance, weighing only 3608 Troy grains.) Upon this weight a number of so-called Mimzfusse, or Standards of Coinage, were based ; to wit : The Leipzig Miinzfass, of 12 Thaler, or 18 Gulden or Gmlders, to the Mark of fine Silver (the Saxon Species Thaler.) The Berlin Miinzfass of 14 Thaler, or 21 Guilders per Mark of fine Silver. The Conventionsfuss of 13| Thaler, or 20 Florins per Mark of fine Silver. The 24 Guldenfiiss of 24 Florins per Mark (abolished in 1837). The 24J Guldenfuss of South-West Germany. The Schleswig Holstein Courantfuss of 11^ Thaler per Mark of fine Silver. The Liibeck Miinzfuss of llf Thaler, or 34 Marks Courant. The Hamburg Mark Banco valuation, at the rate of 27| Marks Banco per Mark for Silver (still in use). The Bremen Louis d'Or valuation (still ia use). From this formidable hst of Coinage Standards some notion may be gathered of the confusion which prevailed in the monetary arrangenaents of the country. Under the Zollvereia several attempts were made to bring the Thaler and Gulden Coinage more into unison. These attempts met with some, though but indifierent success, until, in 1857, a Convention of the German States met at Vienna, at which it was agreed : — To adopt as the Standard weight for Bullion the new Mimzpfund (Mint Pound). This Miinzpfund is exactly one-half of a French kilogramme, and is divided into 600 grammes (oz. Troy 16'0753625). This was a great advance. 308 PARS OF EXCHANGE. The next dMciilty was to establish a better and more manage- able proportion between the three principal Coinages, viz. : The Thaler ..... ,,, ™, , „ "i ' of which 14 made a Mark fine. 20 The Austrian Gulden . ) (20 Guldenfuss) y The South German ~. (^^Iden „ 241 (24i Guldenfuss) J This proved a task of considerable difficulty ; however, it was finally agreed to coin, from the Mint Pound Fine Silver, 30 Thaler (Norddeutsche Wahrung, or North German valuation) . 45 Austrian Gulden (Ostreichische Wahrung, or Austrian valuation. 62| South German (Siiddeutsche Wahrung, or South German valuation. Thus making 2 Thaler equal to 3 Austrian and d^ South German Gulden. Pieces of this value were struck as Vereinsmiinze (Union Coinage), with 1 Thaler pieces, Guilder pieces, &c.,allof them900 fine. Hamburg and Bremen, however, continued their money of account. The Silver valuation is the ruling Standard in Germa,ny ; but the Convention agreed also to coin 50 Gold Crowns, or 100 Gold Half Crovms (Deutsche Kronen and Halbe Kronen), from the Mint Pound fine Gold; the value of these in Silver Thaler being about 9 Thaler 10 Groschen, varying with the greater or lesser demand for Gold. These Gold pieces have been coined in fair quantities, but they are not much used as yet, the old Gold Coins still keeping their place. Upon the whole. Silver remains as yet the great staple of the German Coinage. Austria, since the separation from Germany, is now no longer bound by the Convention ; still there seems to be no reason why she should depart from the actual system. She has, however, declared that she considers herself no longer bound by the Convention of 1852. After this brief abstract of the recent History of the German Coinage, given here by way of introduction, we will now proceed to the consideration of the four descriptions of Coinage to which the former chaos is now reduced. NORTH GEEMANY, 309 NORTH GERMANY. Represented by Berlin. The Monetary Unit is The Silver Thaler, divided into 30 Groschen, of 12 Pfenninge each. The Thaler is coined at the rate of 30 per Miat Pound fine Silver as the NOED DEUTSCHE WAHRUNG, OR NORTH GERMAN VALUATION. The Coinage of Prussia is represented by llj Thaler pieces Double Frederick 5f „ „ Single About 9,^^ „ 43J- 2 Thaler pieces 1 „ Half Gold Crown Gold Half Crown Gold. 1 4 Pfenninge pieces " » )> Silver. Copper. The same system of Coinage prevailed more or less in the other North German States ; the Gold Coins were generally of the same value, but they bore a variety of denominations, such as Augustus 310 PARS OP EXCHANGE. d'Or, WiLhelm d'Or, Louis d'Or, &c., derived from the name of fclie reigning Sovereign. Tlie Frederick d'Or now no longer issued, was originally coined as worth Thaler 5 in Gold, equal to Thaler 5 20 Groschen in SUver ; and at this latter rate the Prussian Government now receives it; the other German Louis d'Or, or Pistoles, are very nearly the same value, varying simply to the extent of a few Groschen Coinage. The only Gold pieces that are coined at present are the Gold Krone, of which 60, and the Gold Halbe Krone, of which 100 make a Mint Pound fine. These Coins are Handelsmiinze, or Commercial money, and they vary in value with the greater or lesser demand for Gold ; Silver alone is the fixed Standard, or legal Currency (Goitrant Miinze). Taking the proportion of 1 Gold to 16f Silver, the Krone is worth 9^ Thaler ; but it is frequently quoted a trifle below this rate. The numerous old Silver Coins of aU sorts of weights and fineness we need not mention here. The subjoined Table gives the weight and fineness of the actual Coinage of the present day : — GOLD. Weight in Grammes Krone 11111 900 fine. Halbe Krone 6-556 SILVER. 900 „ 2 Thaler pieces 37-0370 900 fine. 1 „ 18-5186 900 „ 1 "6 5J " 5-3419 620 „ TZ " 55 3-2206 375 „ SO J) 55 1-2882 2ao „ rO 55 55 0-6441 220 „ And Copper Coins of 1 Pfenning, and 2, 3, and 4 Pfenninge. The lower description of the Silver Coin, the small change pieces (Scheidemiinze), from one- twelfth Thaler downward, are, it will be seen, of very low metallic quality. The Groschen actually contains more than three-fourths Copper. NOETH GERMANY. 311 The value of these several Coins in Thaler is : — As computed upon the rate of 1 Gold to 16i Silver, but varying in the Market with the greater or lesser demand for Gold. GOLD. Gold Grown Gold Half Crown SILVER. Thl. 9 lOGroschen „ 4 20 „ 2 Thaler pieces 1 Nominal Value. 2 Thaler Real Value. 2 Thaler 1 „ 5 Groschen 2 Gr. 2|Pf 6| Pfenninge 1 „ 5 Groschen 2 Groschen 6 Pfenninge 1 Groschen or 12 Pfenninge 6 Pfenninge Gold Coin is not legal tender ia the North of Germany. The Silver Thaler is legal tender to any amount. The small change below the one-sixth Thaler is limited to that amount as legal tender. North Germany, with her Silver Valuation, affords us then an illustration of a State the reverse of that of England, where the Gold Standard rules. There is this difference, however, that the Prussian Gold Coinage is struck in strict conformity with the universal price of Gold, without profit to the State ; which certainly is not the case with the Silver Coinage in England. The Prussian Mint buys Silver at prices varying from 29f to 30 Thaler per Mint Pound fine. The Mint is not bound to buy Silver, but makes its purchases at its own discretion, and according to the quantity and quality of the Silver offered. In buying Silver the Mint always seeks to include in the price its own charge for Coinage, and, accordingly, being bound to strike 30 Thaler from the Mint Pound weight of fine Silver, it endeavoui-s to purchase its Silver as much as possible under this rate. The Prussian Mint does not buy Gold, but it coins Bars, or re- coins old Gold pieces into 60 Crowns per Mint Pound fine, charging two-fifths per cent, for Coinage. Payment in Gold Crowns is made at once, without previous issue of Mint Certificates. Computing the value of the Gold Crown at 9| Thaler on the average, the price of the Mint Pound fine Gold is Thl. 466'20 SgT. Less % per cent, for Coinage 1'26 Sgr. Thl. 46424 Sgr. It is about this figure that the Market price turns. Thus on 12th 312 PARS OP EXCHANGE. August 1867, the Market price of fine Gold was quoted at TU. 464-11, and the Gold Grown at Thl. 9-8 Sgr. On the 4th January 1868, the price was Thl. 469|, the Gold Crown being quoted at Thl. 9'lOj Sgr. (Gold seems to have risen in value in Berhn siace the Monetary Convention in Paris). The Remedy allowed for Gold Coins is 2| per mille for weight, and 2 per mille for fineness ; for the larger Silver Coins 3 per mille for weight, and 3 per mOle for fineness ; for the Divisionary Coinage the allowance must be larger. Paper Currency. — The Paper Money of the North German Confederation is on a Par with Metallic Coin. The issue is made by the State Banks and Treasuries, in Notes from 1 Thaler up to 600 Thaler. The Mint Par of Exchange between Berlin and London cannot be made direct from Gold Coin, because Gold, which has a fixed value in England, has a variable price in BerHn ; nor from Silver Coin, because Silver has a fixed price in Berlin, but a variable price in London. The rate must therefore be arbitrated through the Coinage of another country, say France, where both Gold and Silver have fixed prices. This arbitration is made on the basis of 1 part of Gold to 15^ parts of Silver, and wiU be found to answer correctly in practice ; for, excepting the slight variations in Berlin in the Kurs (price) of Gold Crowns, the practical proportion of value between Gold and Silver in Prussia is as 1 to 15|, consequently by chain rule — How many Thaler ^ £1 If £3-89875 = 1 oz. Standard Gold Standard Gold oz. 24 ^= 22 oz. fine Fine Gold oz. 1 = 31-1036 grammes fine Fine Gold gramme 1 = 16-6 grammes fine Silver Fine Silver grammes 600 = 30 Thaler = 6-8098 Thaler making the Thaler equal to 35-243 pence, or 2s lljd. The true Mint Par of Exchange bet-ween London and Berlin is therefore £1 = Thl. e-24i Siltaergroschen. SOUTH GBEMANT. 313 SOUTH GERMANY, Represented by Frankfort-on-tlie-Maiiie. The Monetary Unit is The Silver Florin or Gulden, divided into 60 Krenzer, of 4 Heller each. Tte EJorin beiag coined at tlie rate of 62| per Mint Pound fine Silver as tbe SUD DEUTSCHE WAHRTHSTG, or SOUTH GERMAN VALUATION. The States of Bavaria, Wiirtemberg, Baden, Nassau, Frankfort- on-the-Maiae, Hessen Darmstadt, &c., have always endeavoured to assimilate their Coinage as much as possible, even before the Treaty of 1857. The Coinage is represented by 10 Gulden pieces o „ „ 7 (Struck by Baden, Hessen ~' 5 and Wiirtemberg.) /-I ij -rv J. ( ("Struck by most of the Gulden Ducats ^ g-^^^^^^^ 54 umaen uucats < 16i Gulden Gold Crown 8i 3| 2 ^4: Half Crown Gold. Gulden pieces Silver. 6 Kreuzer 3 „ 1 .. J And in Copper, 1 Kreuzer, | Kreuzer, ") ^ and 5 Kreuzer (Heller) pieces 5 314 PAES OF EXCHANGE. Of the Gold Coins, the 10 and 5 Grulden pieces and the Ducats are now no longer struck ; the Gold Crowns alone are issued. However, only a few of these are in actual circulation, and they have a variable Kurs (price). Foreign Gold Coins, such as Sovereigns, Napoleons, &c., are much used. Of the Silver Coins, the 3| and If G-ulden pieces correspond to the North German 2 Thaler and 1 Thaler pieces, in accordance with the Monetary Convention of 1867, and are called Vereinsrrmnze (Union Coin). The old Kronen Thaler and other Coins formerly in use are now almost entirely withdrawn from circulation. The wretched small change of the South German States, repre- sented by worn and coppery looking Kreuzer pieces, must have struck every English traveller. The subjoined Table shows the legal weight and fineness of the actual Coinage of the present day : — GOLD. WeigM in Grammes. Krone ll'lll 900 fine Halbe Krone 6'556 „ SILVER. 3i Gulden piece 37-0370 900 fine 2 „ 21-1640 If „ 18-5185 1 „ 10-5820 I „ 6-2910 tV „ (6 Kreuzer) 2-698 333 fine Jo „ (3 „ ) 1-299 Jg „ (1 „ ) 0-779 156 fine The value of these Coins, expressed in Gulden, is GOLD. Nominal Value. Actual Value. Gold Krone 16| Gulden | Varying in Kurs or Gold Halbe Krone 8,^ „ 3 price from 16 to 161 Gulden. SOUTH GERMANY. 315 SILVER. Nominal Value. Actual Value. 3i Gulden pieces 3| Gulden 3-30 Kreuzer 2 2 II 2 If li ij 1'45 Kreuzer 1 1 11 1 1 a ji 30 Kreuzer 30 Kreuzer. A 6 1) 5i II ^ 3 11 2f „ ^ 1 II i II Paper Currency. — Tlie Bank Notes of Frankfort and the South German States are on a Par of value with, the Coinage. The Mints of South Germany (for every State has a Mint of its own), buy Silver per Mint Pound fine at the best rates they can, varying from 52 to 62| Gulden. They are not compelled to pur- chase. Gold they coin and re-coin, giving 50 Gold Crowns per Mint Pound fine, the same as in Berlin ; the price of Gold iu the Market varies from 805 to 812 Gulden per Mint Pound fine. Frankfort is not a large Market for Bnlhon. The Silver valuation ruling iu South Germany, the Par of Exchange must again be arbitrated upon the basis of 1 part Gold to 15| parts Silver, calculated for the Miut Pound fine of 62f Gulden. How much in £ is 1 Mint pound =: 500 grammes. If 31-1035 = 1 oz. If fine Silver 15| = 1 fine Gold. If fine Gold 22 = 24 Standard. If Standard oz. 1 = £3-89375. = £4-4054. According to the Union Coin valuation (30 Thaler equal to 52| Florins) the Florin is worth 20-139d (Is SJ-d) ; but there are in reality only 52-3828 Florins to the Mint Pound fine, so that the full weight Forin is worth 20-182 pence (Is S^d). The Par of Exchange must, however, be taken upon the basis of 52| Gulden per Mint Pound, and is between Iiondon and Frankfort £10 = PI. 119-171 or PI. 119-10 Kreuzer. 316 PARS OF EXCHANGE. HANSE TOWNS. HAMBURG. The Monetary Unit of the Town of Hamburg is The Mark Banco, divided into 16 Schilhnge, of 12 Pfenninge each. But this Unit does not exist in the shape of Coin ; it constitutes simply the money of account between Merchants, in which is recorded the respective owner- ship of each in a large Stock of Silver Bullion lying in the Vaults of the Bank of Hamburg. The circulating metallic money is called Mark Courant, in contradistinction to tlie Mark Banco. The Bank of Ham.biirg is the great Central depository for the bankers and traders of that town. This Bank is boimd (since 1846) to purchase and sell SHver in Bars, from or to those firms who keep an account there, at the rate of 27f Marks per Cologne Mark of fine Silver (3608 English Troy grains). A banker or merchant may briag Bar Silver to the Bank, where he gets credited for the same at the rate of 27f Marks per Cologne Mark. He may transfer part or the whole of the sum thus placed to his credit to another merchant who keeps an accoTont there, and he may also receive payments by transfer in the same manner. Or, if he requires Silver for exporta- tion, he may withdraw from the Bank part or the whole of the Bullion standing to his credit, at the rate of one Cologne Mark fine for every 27f Marks Banco. The Bank charges 1 per mille commission on paying in. It does not follow that every trader in Hamburg must be a dealer in Bar Silver; there are only certain bankers or Bullion merchants who supply or take the actual Silver Bars against the Exchanges in Bills or other values ; but the entire stock is the property of the customers of the Bank, which passes from HAMBUEG. 317 hand to hand by transfer in the books, whilst the Bullion remains as security in the vaults. This system, -which resembles our so-called first-class Bank- note system (see chapter on Paper Currency), differing from it only in this most important particular that there is no actual issue of notes connected with it, is a most solid system, and Hamburg may well be proud of it. It has this drawback, howeyer, that a rise in Silver in England, for exportation to India, will oooasionally rapidly absorb the stock in Hamburg, causing thereby inconvenience and alarm. It may also become necessary, in course of time, in view of the general changes in the monetary systems of the world, tending to the establishment of the universal supremacy of &old, to modify the system. The Hamburg Bank has already commenced making advances on Gold and Gold Coia. The Courant, or current money of Hamburg, is founded upon the Mark Courant, of 16 Sohillinge and 12 Pfenninge each, of which 34 formerly made a Cologne Mark fine Silver ; 27| Marks Banco equal to 34> Marks Current; but since 1866 the so-called Thaler Courant has been introduced, by which the Prussian Thaler is recognized as equal to 2^ Marks Current, which gives 35 Marks Current to the Cologne Mark of fine Silver. The Coinage is represented by GOLD. Ducats, about 6 Marks Banco, or 6| Marks Curreiit. There are only very few of these in circulation. SILVER. 2 Thaler, or 5 Mark Courant pieces. 1 Thaler, or 2| „ „ 2 Mark Courant pieces. 4 )S 1 ^ " . . ■ 1 Schilling |- also in Copper. The Thaler pieces are of the same fineness and weight as the Prussian Coinage, and the sub- divisionary pieces are 625 to 250 fine. 318 PARS OP EXCHANGE. ■ There is no doubt that the old Coins, called Liibeck Courant, mil soon be withdrawn altogether, and that the North Grerman system will be substituted for the present system, which is somewhat vague and confused as to weight and fineness. Almost aU other German Gold and Silver Coins, and many Foreign Coins, are current in Hamburg. Paper Currency. — The Paper Currency (issued by the North German Bank is on a Par of value with the Coinage. Prussian Notes are also Current. The price of Gold in Hamburg varies from 427 to 430| Marks Banco per Cologne Mark fine Gold, according to the state of the Market. Taking the proportion of value between Gold and Silver at 1 Gold to 16f Silver, the price should be 430|-. On 6th September, 1867, the price was quoted at 427 ; 9th November 1867,430; 25th January 1868, 428. The Silver Valuation rules in Hamburg. The price of fine Silver being 27| Marks Banco per Cologne Mark fine Silver, the arbitrated rate of Exchange is How much in Marks Banco = £1 K £3-89375 = 480 grains Standard. If Standard 24 = 22 grains fine. If Gold 1 = 15| Silver. Grains 3608 = 27-75 Marks Banco. = Marks 13-4714 This makes the value of the Mark Banco 1-4846 Shilling English, or Is 5fd, the Mark Courant is therefore Is 2|d, and the Par of Exchange between London and Hambiirg, £1 = Marks Banco 13-7i ScMllinge. BREMEN. 319 HANSE TOWNS. BREMEN. The Monetary Unit of tte Free Town of Bremen is The Louis d'Or Thaler, divided into 72 Groten. of 5 Scli-waren each. The Bremen Lotus d'Or Thaler is, like the Hamburg Mark Banco, simply a money of aocoimt ; but, unlike the Mark Banco, it has no connection with a stock of Bullion in the vaults of the Bank, to which it serves as an imginary integer ; but it is entirely ideal Money. The Louis d'Or Thaler, or Reichsthaler, is the fifth part of the so-called Louis d'Or (comprisiug Hanoverian, Brunswick, Hessen, Danish Gold Coins, called George d'Or, "WiLhelm d'Or, &c., after the Sovereigns of these States. They differ iu quahty and weight, and are on the average about J per cent, less in value than the Prussian Frederick d'Or ; so that the fifth part of a Louis d'Or, the so-called Louis d'Or Thaler, is worth so much more in proportion than the Prussian Thaler. Calculated upon the average value of the Louis d'Or, the Bremen Gold Thaler is worth 1 Jg- Prussian Thaler, or 33 SUber- groschen. These Louis d'Or are worth, in Prussian Thalers, Thl. 5| to Thl. 5,^ ; 84 Louis d'Or of 5 Gold Thaler each are valued to make 1 Mint Pound fine Gold; this gives 420 Gold Thaler per Mint Pound, or 8f Thaler per German Crown (50 to the Mint Pound). At the price of Thl. 466f Prussian money, the Crown is worth 9^ Thaler, and the Bremen Gold Thaler is accordingly worth 33j Silbergroschen. "We have no doubt the North German Confederation will induce Bremen before long to abandon this ideal Money system for a more practical one. It has this advantage for Bremen, that the town need not strike Gold or large Silver Coin, as the Coins of other nations are freely used, especially Louis d'Or, Crowns, and British Sovereigns. 320 PARS OF EXCHANGE. The only Coins which the Bremen Mint strikes are i Gold Thaler = 37 Groten i „ 12 „ -1- 6 _!_ 1 7 2 »> -^ »» 986i fine. ^ 739^ )» )) ?> 281 1 J) J Silver. and I Groten, or 2| Schwaren pieces in Copper. These Coias are simply used for small change, their nominal value is shghtly higher than their actual metallic value. Paper Currency. — The Bremen Bank issues a limited amount of Notes, on a Par of value with Metallic Coin. The Par of Exchange between Bremen and London is difficult to determine, although the Gold valuation rules at both places. The reason is that the Gold valuation of Bremen rests on a loose basis (the varying value of old and odd Gold Coins). The value of the Hanoverian double Wilhelm d'Or of 1835, which weighs 13'310 grammes, 895'83 fine, is 16s 4<16. sterhng, which makes the Louis d'Or Thaler worth 3s 3-3^d. But we cannot take this for the basis of our calculation of the value of the Louis d'Or Thaler, as the various Louis d'Or, &c., pieces vary greatly in weight and fineness. Since 1857 Bremen has determined to adopt the German Crown at the value of 8|- Gold Thaler, and taking the average price of Gold Crowns in Berlin at 9^ Thaler, we arrive at the rate of 100 Louis d'Or Thaler = 111-111 Prussian Thaler. The Louis d'Or Thaler is accordingly worth 39'159 pence, or 3s S^d. The Par of Exchange between London and Bremen, con- sequently is £100 = 612-^^ Louis d'Or Thaler. AUSTRIA. 321 AUSTRIA. The Monetary Unit of the Empire of Austria is The Silver Florin, divided into 100 Kreutzer or Cents. The Florin is coined at the rate of 46 per Mint Poimd fine Silver as the OESTREICHISCHB WAHRinSTG, OR AUSTRIAJST VALUATION. The present Floria has been adopted since 1868, in order to bring the coinage of the Empire into a more accurate agreement with the other German coinages, as provided by the resolutions of the Vienna Monetary Convention of 1867, according to which 30 Prussian Thaler, 46 Austrian Elorius, and 62| South German Florins were to be severally coined from the Miat Pound fine Silver. Before 1868 the Florin was coined at the rate of 20 per Cologne Mark fine Silver, and was divided into 60 Kreutzer of 4 Pfenninge each. The pieces so coined before 1868 were called Conventions Mmize, or the 20 Guldenfuss (at the rate of 20 Gulden per Cologne Mark fine Silver) . The Conventions Miinze valuation is still retained in certain Austrian State Obligations, but the new Florin of 46 to the Mint Pound fine Silver is now the legal coin of the Empire. The change made a difference of about 5 per cent, between the value of the Conventions Gulden and the present Gulden, 100 pieces of the former being valued equal to 105 of the latter. The present Coinage is represented by 13^^ Florins pieces, or Crowns . . ) 6ii „ „ Half Crowns. ^ Gold. 4^ „ „ Ducats . . ) 4 or 2 Ducats Pieces have also been coined. 21 322 PAES OP EXCHANGE. 3 Florins pieces (equal to 2 Thaler) li Florin 2 1 1 4 1 10 1 TB^ Silver. and Copper coins of |, 1, and 3 Krentzer, Austria having left the Germanic Confederation, has already declared that she ceases to be bound by the German Mint Con- vention of 1867. It remains to be seen whether she will continue to adhere to the present system. The subjoined Table shows the weight and fineness of the pieces and their respective value : — ■ WEIGHT AND FINENESS. GOLD. Weight In Grammes. ■Fineness. Crown . 1-111 100 Half Crown . 5-656 900 Ducat . 3-4904 980 SILYBE.. 3 Gulden piece . 37-0870 • 900 H „ . 18-5185 900 2 „ . 24-6914 900 1 „ . 12-3457 900 1 4 JJ )> . 5-3419 520 1^0 „ . 2-0000 500 ^ „ . 1-5000 375 GOLD. Gold Crown, about „ Half Crown . „ Ducat SILVER. 3 Gulden or Double Thaler piece Fl, 2 If „ Thaler 1 1 i 1 Ttf VALUE. Nominal Value. Beal Value. Fl. 13-90 ^Varying in the Market according to 6-95 ^'^PP^y ^"^ demand. In Paper Currency J their value is of course much higher, 4- 60 (.rising with the Premium on G«ld. Nominal Value. Heal Value. iece Fl. 3 FJ. 3 2 2 1-50 1-50 1 1 „ 25 Kreutzer 25 Krentzer 10 )) 8f „ 5 )) ^ „ AUSTEIA. ' 323 TKese figures show the Metallic value of the Coin ; computed in Paper Currency the value is of course so much higher, rising with the Premium on Silver as against Paper. The Silver Valuation rules in Austria, and- the Gold Coin must be considered simply as Commercial Coin, the same as in Germany and Holland. The Remedy for the Coinage is 2 per mille for fineness, and 2| per mUle for weight. The Mint Pound being worth 45 Florins, the Mint buys at from Fl. 44-90, and coins and re-coins Gold at the rate of 50 Crowns per Mint Pound fine, charging f ths per cent, for Mintage. Paper Ciirreney. — The Mint in Austria is not a very busy Institution. The Metallic Coin has almost disappeared from cir- culation, and the State is deluged with Paper Money, as we have already had occasion to remark in the Chapter on Currency, at the beginning of the Book. The Premium, on Metallic Money varies from 12| to 30 per cent., and Coin is an article in Austria in which people will speculate. As the Austrian Paper Currency is legal tender in the Enapire, the respective value of the several descrip- tions of Metallic Coinage must be computed at a so much higher rate, according to this Premium, on it. The National Bank of Austria issues Notes of ten, hundred, and thousand Florins ; but the State issues a much larger number of imsecured Notes, from 100 Florins downward, even to the most insignificant amounts. At the rate of 45 Gulden per Mint Pound, the Austrian Metallic Par of Exchange is 60 per cent, above the Prussian Par, so that the new Austrian SUver Florin is worth f Prussian Thaler, or 23-495 Pence (Is ll|d) ; and the Metallic or Mint Par of Ex- change between London and Vienna is £1 = P1. 10-215, or Fl. 10-21i Cents. But the Par upon the Paper Currency varies according to the Premium on Gold or Silver ; in February 1868 it stood at £1 = Florins 11-80. 324 PARS OF EXCHAJSTGE. HOLLAND. The Monetary Unit of Holland is The Silver Florin, divided into 100 Cents. The Florin is also divided into 20 Stiver, which latter division is used in the quotation of the Exchange with London. The Coinage of tlie present day is represented by 20 Florins pieces Double WiHiam 10 „ „ William . . i William . Double Ducat Ducat . . Ryksdaalder Florin . . . Half Florin . 5 111 5* 2i 1 Florin r Gold. J Silver. and 1 Cent, and | Cent, pieces in Copper. The older Coinage of tie Netherlands included Austrian- Dutch Sovereigns, Brabant Ducats, Eyders, Crown Dollars, Thaler, and other Coins. The subjoined Tables show the weight and fineness of the pieces according to law, and their value : — WEIGHT AND FINENESS. GOLD. Weight in Grammes. Fineness. Double Gold William . . . 13-458 . . 900 Gold William 6729 . . 900 Half „ 3-345 . . 900 Double Ducat 6-988 . . 983 Ducat 3-494 . . 983 HOLLAND. 325 SILVER. Ryksdaalder 25-000 . . 945 Florin 10-000 . . 945 Half Florin 5-000 . . 945 Quarter Florin 3-575 . . 640 One-tenth Florin .... 1-400 . . • 640 One-twentietli Florin . . . 0-685 . . 640 Tlie Silver Valuation rules in Holland, the Florin and Half Florin being full legal tender, wMlst the Gold Coinage is considered Commercial Coin, varying in price in the market according to supply and demand. QOLD. Nominal value Eeal value Double William FL20 Fl. 19-867 • WiUiam . . . Half William . . 10 5 9-931 4-96f I Yarying"in pric( Market. Double Ducat . . 11* ll-26f Ducat .... H 5-631 . SILVEE. Nominal value Real value. 21 Florins pieces Fl. 2-50 Fl. 2-50 1 Florin 1-00 . 1-00 1 2 " 0-50 Cer its . 0-50 Cents 1 4 " 0-25 „ . 0-25 „ To " 0-10 „ . 0-09 „ 1 0-05 „ . 0-05 „ The Dutch use the French Kilogramme for their weight, and express the fineness of BuUion in MiUiemes, upon the French system. The price of Bar Gold is quoted in the market at Fl. 1442-60 per Kilogramme 1000 fine, with a premium varying from about 12| to 13^ per cent. ; raising the price to between Fl. 1623 and Fl. 1637. The legal weight of the Florin in Silver of 945 fine is exactly 10 grammes ; the Florin accordingly contains 9-450 grammes fine Silver. This makes the Kilogramme of fine Silver worth Fl, 105-80 ; but the price in the market varies from Fl. 104 to Fl. 106. The 326 PAES OF EXCHANGE. Mint buys Silver at its own discretion. The Remedies allowed for the Coinage are 2| per miUe for weight and fineness. Paper Currency. — The Dutch Paper Currency — in Notes of 5, 10, 20, 60, 100, 500, and 1000 Morins— is on a Par of value with the Coinage. The Dutch Florin or GnUder containing d'ib grammes fine Silver, How many Pence = 9'45 grammes If 31-1036 = 1 oz. Troy Fine Silver 16| = 1 fine Gold Pine Gold 22 = 24 Standard oz. British Oz. British Standard 1 = 9345 Pence (77s 10|d) = 19-983 Pence or Is 8d The Par of Exchange between London and Holland therefore is £1 = 12-010 Florins. or, with the fraction expressed in Stiver, £1 = Florins 12-Oi Stiver. SWEDEN AND NORWAY. STOCKHOLM. The Monetary Unit of Sweden is The Riksdaler Eiksmynt, divided into 100 Ore, coined at the rate of 50 pieces from the Swedish Skal- pund (=6558-9 Grains Troy) 750 fine. This Unit was introduced in 1856, and became compulsory in 1863. Up to that time the Riksdaler Banco was in use as Money SWEDEN AND NORWAY. 327 of Account, based on Paper Cnrrency, and the Speciesdaler was the Chief Silver Coin; the relative proportions of value between the three descriptions of Money being 1 Speciesdaler = 2f Riks- daler Banco = 4 Eiksdaler Eiksmynt, the new Unit or Integer. The Species and the Bancodaler were each divided into 48 Skil- ling, of 4 Stiiver each, or 12 Runstyken. The new Riksdaler Riksmynt is divided into 100 Ore, and the decimal system has also been adopted with regard to the weights of the precious metals. The Coinage is now represented by 8^ Riksdaler pieces (Ducats) in Gold. (There are also double and quadruple Ducats.) 4 Riksdaler pieces, called Speciesdaler - 2 „ „ or half Speciesdaler Riksdaler Riksmynt Silver. and Copper pieces of 5, 2, 1, and ^ Ore, which are legal tender up to the amount of 1 Riksdaler. The old Skimng pieces are still largely in circulation, and 25 Ore are reckoned equal to 12 Skilling, and so on iu proportion. The subjoined Table shows the weight and fineness of the pieces : — Gold, Ducat Silver, Speciesdaler Riksdaler 50 Ore 25 „ 10 „ Weiglit in Grammes. 3-486 34-007 17-003 8-502 4-251 2-125 0-850 • Fineness in MiUi^mes. 976-61 750 760 750 750 750 750 The nominal value of the Silver Coinage is strictly iu accordance with the Metalhc Value, even down to the -^ Riksdaler. The Remedy allowed is three per mille for both Gold and Silver ; for the smaller denomiaation the Remedy for weight is larger. The Paper Currency issued by the Bank of Stockholm, 328 PAES OP EXCHANGE. in ]Srotes of 1, 3, 10, 15, 26, 60, and ?60 Riksdaler, is on a Par of value with the Coinage. The Silver Valuation rules in Sweden, the price of Gold Coin varying with the supply and demand. The Mint buys Silver at its own discretion at 60 Riksdaler Riksmynt per Skalpund, charging I per cent, for Mintage. Taking the weight of the present Riksmynt Riksdaler as legally established at 8'602 grammes, 750 fine, its value is (calculated by the usual rule) 13-4:83 Pence (Is l|-|d), and the Metallic Par of Exchange between London and Stockholm is accordingly, £1 = 17-80 Eiksdaler Riksmynt. CHEISTIANIA. The Monetary Unit -of Norway is The Riksdaler Species, divided into 5 Orts or 120 Skilling. This Unit is held equivalent to the Swedish Speciesdaler, though it is Coined of Silver 9 per mille less fine than the Swedish Coin ; however, as a general rule 4 Riksdaler Riksmynt Swedish may be reckoned 1 Riksdaler Species Norwegian. The Coinage is represented by (No Gold Coins are struck.) 1 Speciesdaler ^ 10 1 1 s 1 30 y Silver. and Copper Coins of 2, 1, and ^ SkUlinger. SWEDEN AND NORWAY. 329 The subjoined Table shows the weight and fineness of these pieces : — Weight in Grammes. Fineness in Milli^mes. Speciesdaler 28-893 875 1 2 !i 14-447 875 i „ 5-779 875 To " 2-889 875 1 1-926 875 The MetaUio value of the Silver Coinage is the same as the Nominal value. There are old 24, 8, 4, and 2 SMUing pieces respec- tively 68 7|, 600, and 250 fine, which are not of the proper Metallic value. The Coinage Remedy allowed is the same as in Sweden. The Paper Ciirreney issued by the Bank at Drontheim in Notes of i, ^, 1, 5, 10, 50, and 100 Speciesdaler, is on a Par of value with the Coinage. The weight of the Speciesdaler being legally 28-893 grammes 875 fine, its value in British Money is 58-46 Pence (4s 5i-i-d), and the Par of Exchange between London and Christiania is £1 = 4*489 Speciesdaler, or Speciesdaler 4"58f Skilling. DENMARK. The Monetary Unit of Denmark is The Eigsdaler, divided into 96 Skilling, or 6 Marks subdivided into 16 Skilling of 5 Penning each.. This Unit is the exact half of the Norwegian Speciesdaler, and 2 Danish Rigsdaler are equal to 1 Danish or 1 Norwegian Speciesdaler. (As the reader is likely to get confused with this variety of Riks- daler, we repeat that 4 Riksdaler Riksmynt Swedish or 2 Riksdaler Danish are equal to 1 Swedish, Norwegian or Danish Speciesdaler). 330 PAES OF EXCHANGE. Ttie Coinage is represented by 14f Rigsdaler pieces, Double Frederick d'Or ") p ■,-, 71 „ „ Frederick d'Or j ^°'''- 2 1 1 2 1 S Speciesdaler Daler Silver. and Copper Coins of 2, 1, |, and -i- SkUliag. Gold Ducats were also formerly coined. The subjoined Table stows tlie legal weight and fineness of the pieces : — Weight in FinenesB in GOLD. Grammea MillifeineB. Double Frederick d'Or IS'284 895-833 Frederick d'Or 6-642 895-833 SILTEK. Speciesdaler 28-893 875 Rigsdaler 14-447 876 i „ 7-223 875 i „ 6-129 687-6 i 4-214 600 A " 2-809 876 ^\ „ 4 Sldlling 1-866 250 A » 3 „ 1-591 218-75 so that, with the exception of the 4 and 3 SkiUing pieces, which are below the mark, the Metallic value of the Silver Coinage is the same as the Nominal value. The Silver Valuation rules, and the Gold Coins are Commercial Coin, varying in price with the supply and demand. The Mint Remedies are the same as in Sweden. Paper Currency. — The Notes of the National Bank, of 6, 50, and 100 Rigsdalers, are on a Par of value with the Coinage. The Rigsdaler in Silver weighing 14-447 grammes of 876 fine, its value in British Money is 26-730 Pence (2s 2f d), and the Par of Exchange between London and Copenhagen is £1 = 8-078 Rigsdaler, or Rigsdaler 8-94 SkiUing. RUSSIA. 331 KUSSIA. The Monetary Unit of the Empire of Russia is The Silver Eouble, divided into 100 Copeks. The former Banco Rouble, an ideal money, resting on a Copper and •worth, about ^ Silver Rouble is now no longer in use. The Russian Coinage is represented by 10-^ Rouble pieces Imperials 7 n i.^ 6^ „ „ Half Imperials 3 1 Rouble piece Silver. And Copper pieces of 5, 3, 2, J, and j Copeks. Silver Coins for Poland of 11 Rouble, or 10 Pohsh Florins, i >, or 5 „ „ 16 Copek pieces, or 1 Polish Florin (Zloty), with I Zloty and i Zloty pieces. The Russian Government used to coin Ducats (of the same weight and quahty as the Dutch) ; Platina Coins of 12, 6, and 3 Roubles were also coined ; but since 1845 they have been with- drawn from circulation, the experiment having entirely failed. The Russian Half Imperials are 22 carats fine, the same as British Standard. The Mint has a Remedy of 2 per mille for weight, but none for fineness. It is of course almost impossible to make the Alloy exactly Standard, nevertheless the Russian Gold Coins are the most regular of all Coins with regard to quality, which shows what proper care can accomplish. They are a favorite Coin in the British Mint for Re-coining into Sovereigns. The 332 PARS OF EXCHANGE. weight of the Half Imperial is legally 6-644 ; at 77s lOJd per oz. it is worth 16-384 Shillings. The Half Imperial was originally issued as 5 Roubles, but it is actually worth 5-^ Silver Roubles. The subjoined Table shows the weight and fineness of the Silver Coinages:— weight Fineness in Grammes. in Millifemes. Rouble 20-7315 868-056 i „ ■ 10-3660 868-056 i „ 5-1830 868-056 i „ 4-1460 868-056 ■^ „ 2-0730 868-056 Jo „ 1-0370 868-066 The actual MetalHe value of these pieces, down to the smallest of them is exactly the same as their Nominal value. In this respect Russia presents a very favourable exception from almost all other countries. Some of the older smaU. Silver Coins are, however, only 750 fine. Paper Ciirrency. — Russia has an excessive Paper Currency, the Empire being deluged with Bank Notes. Gold and Sdver are at a Premium varying from 12|^ to 26 per cent. The exportation of Silver has for a long time been prohibited ; that of Gold is periodically allowed, but just now it is also prohibited. The Metallic Money, expressed in this forced legal Paper Currency, is of proportionately higher value, rising with this Premium. According to the Russian Mint Law, 100 Russian Silver Roubles weigh 5-3^5- Russian Pounds. (The Russian Pound is 6319-733 Troy Grains.) One hundred Silver Roubles, less Mintage Charges, wiU accordingly be about the price paid by the Russian Mint for that weight of Silver. The value of the Silver Rouble (computed by Chain Rule) is 38-02 Pence, but the Half Imperial, which is worth in Gold 16-384 Shillings, taken at 6-^ Roubles, gives an Exchange between St. Petersburg and London of 1 Rouble = 38-175 Pence or 3s Z^d. and at 77s 7|d per ounce, the Bank price here, it is 38-055. But, as a Paper Currency now reigns in Russia, and the Premium on Coin in Exchange on London is large, the Paper Par mus.t be regulated accordingly. The Exchange lately stood at 32 Pence per Rouble. GEEECE. 333 GBEECE. The Monetary Unit of Greece is the Drachme, divided into 100 Lepta. (Formerly there was the Phoenix of 100 Lepta = 93 Lepta of the present valuation.) The Coinage is represented, since 1833, hy 40 Drachmes pieces 20 Gold. 1 Drachme Silver. and Copper Pieces of 10, 5 and 2 Lepta, and 1 Lepton. The subjoined Table shows the legal weight and fineness of these pieces : — GOLD. Weight in Grammea. Fineness in MUU^mes. 40 Drachmes pieces 11-553 900 20 5-776 900 SILVIE. 5 J, „ 22-385 900 1 Drachme „ 4-477 900 1 2 " J? 2-2385 900 1 4 »J )) 1-1119 900 The intrinsic Metahc value of the pieces being thus on a Par with their Nominal value. The proportionate value between Gold and Silver is as 1 to 15|, the same as in France, the French system of weights, &c., having been adopted. 334 PAES OF EXCHANGE. Paper Currency. — The National Bant issnes Notes of 25, 60, 100, and 500 Draohmes, which form the principal circulating medium. The value of the Drachme in Sterling Money is 8-620 Pence. The Par of Exchange between London and Athens is accordingly £1 = 28-170 Drachmes. SPAIN". The Monetary Unit of Spain is The Real de VeUon, divided into 10 Decimes, or 100 Centimes. 20 Reales = 1 Dollar or Duro. In former times nearly every Spanish Province had a different system of Coinage, all more or less connected with the Dollar ; there was the Castilian, the Aragonian, the Valentian, the Catalonian valuation ; that of Navarra, Mallorca, the Canary Islands, &c., and under these dififerent systems the Real had different values and denominations. Since 1848 the new system has been substituted all over the country, and the present Real is called Real de VeUon. The Spanish Coiaage is represented by 320 Reals, or 16 DoUars pieces, Onza de Or, or Quadruple, or Doubloon 160 Reals, or 8 Dollars pieces, | Onza deOr,or I Quadruple, or i Doubloon „ ,, y vjrolu. 100 Reals Isabella Doubloon 80 „ i Onza *0 „ 8 1) ^0 ,, Tir ,, SPAIN. 335 20 Reals, Piastre or Duro 10 „ Escudo 4 „ Peseta . . . . !■ Silver. 9 i. 1 „ Real de Vellon And Copper pieces of 26, 10, and 5 Centimes, or 2|, 1, and J Decimes. (The Escudo, divided into 10 Reals or 100 Decimes, is practically the most useful Unit.) The Quadruple, or Onza de Oro, with its divisions into ^, J, |, and "Teth pieces is now no longer coined. The days of the old Spanish Doubloons are gone by ; but these Coins are dealt in in London, Paris, and elsewhere, for trading with Spanish and other settlements. In London they fetch 76s to 76s per oz. The old Doubloons ranged in fineness from 850 to 917 fine; those struck until 1848 weighed 27'064 grammes, and were 876 fine. Their real quahty generally turns out a little below the legal fineness. The modern Doubloon of Isabella, equal to 100 Reals or 6 Dollars, now replaces the former Doubloon of 16 Dollars. The old Silver Coins, differing more or less in value, are almost entirely withdrawn from circulation. The subjoined Table shows the weight and fineness of the Spanish Coins in actual circulation : — GOLD. Weight in (Jrammea. Fineness in Milli6nies. Isabella Doubloon 8-3865 900 SILVEE. Duro 25-960 900 Escudo 12-980 900 Peseta 6-192 900 1 2 » 2-696 900 Real 1-298 900 The intrinsic Metallic value of the pieces is on a Par with their Nominal value. The proportion of value between Gold and Silver is as 1 to 16-477, so that practically the Double Standard prevails. 336 PARS OF EXCHANGE. The Mint Remedies are 2 per mille for Gold and 3 per mille for large Silver pieces, both for weight and fineness. Paper Currency. — Spain is an over-issuing State, and Paper reigns paramount all over the land, subject to a variable discount. A large number of Banks, under supervision bj Grovemment Inspectors, issue Notes based upon State and other securities. It is impossible to determine the actual value of Coin as against Paper. Each Bank has a district, in which its Notes are current ; when out of this district, they cease to be current, or are taJcen only at a discount. Thus, Notes of the South will not pass in the Centre, West, East, or North of the country, and vice versa. A revolution breaking out, or threatening to break out, in a part of Spain, the Notes current in that part fall at once in value, the depreciation keeping pace with the prospects of the success of the movement. Adding to this the discredit which the treatment of the Spanish Bondholders abroad has brought upon the country, the international value which this Paper Currency is likely to com- mand may readily be imagined. However, this does not much afiect Foreign Exchanges ; for in Bills drawn in England on Spain, good care is always taken to stipulate expressly on . the BiU that the amount stated is to he paid in Gold or Silver Goin — Reals de Vellon, or Dnros fortes — Hard Cash. The Par calculated from Silver will give about the same as that from Gold. The five Dollar Doubloon of Isabella weighing 8"3865 grammes 900 fine, its value in English Gold Coin is 247-389 Pence, or £1 Os 7|d, which makes the Real worth about 2'4:74! Pence ; and the Metallic Par of Exchange between Iiondon and Madrid is accordingly 49-478 Pence = 1 Spanisli Dollar, Or about 49^ Pence. POETUGAL. 337 PORTUGAL. The Monetary Unit, of Portugal is Tlie Milreis of 1000 Reis. This division of a Coin of abont 50 British Pence in value is an abnormal one ; the Eei, representing about -i-th FartMng in value, is a mere nominal insignificant fraction, which is very embarrassing in accounts, requiring the use of a long string of figures. The Portuguese Coinage is represented by 10 Milreis pieces Coroa (Crown) 5 2 1 „ 5 Tostoes, 500 Re'is 2 „ 200 „ 1 „ 100 „ 50 „ and Copper pieces of 20, 10, and 5 Reis. Siace 1865 Portugal has adopted the Gold Valuation, and, fol- lowing the example of Great Britain, has debased her Silver Coinage, Hmiting consequently its capacity as legal tender to 5 Milreis. One Milreis pieces in Silver are no longer Coined. The subjoined Table shows the weight and fineness of the pieces : — GOLD. Gold. >■ Silver. Crown Weigiit Kneness in MilUtoes. 17-735 916-667 8-867 916-667 3-547 916-667 1-773 916-667 22 338 PARS OF EXCHANGE. SILVEE. Weight in Grrammes. Fineness, in MiUi^mes. 600 Milreis 12-500 916-667 200 „ 5-000 916-667 100 „ 2-500 916-667 60 „ 1-250 916-667 whicli gives the following Table of values, Nominal Value. Real Value. Gold 10 Milreis 10 Milreis 10 Milreis 6 J) 6 „ 5 „ 2 J) 2 „ 2 „ 1 5» 1 „ 1 „ Silver 500 Eeis 500 Reis 454 Reis „ 200 J» 200 „ 181 „ „ 100 )J 100 „ 90 „ „ 50 J) 50 „ 45 „ The Mint has not Coined much Gold Money as yet. British Sovereigns, being of the same fineness as the Portugese Gold Coia, are largely used ; their current value is 4500 Reis. The Paper Currency was formerly much depreciated, but is now generally on a Par of Value with the Metallic Coinage. The Crown of 10 Milreis weighing 17-735 grammes of British Standard fineness, its value in British Money is 532-84 Pence or £2 4s 4|d; and the Mint Par of Exchange between London and Lisbon accordingly 53-284 Pence = 1 Milreis Gold, whilst calculated upon the British Sovereign at 4500 Milreis it is 53-333, or exactly 53| Pence per Milreis. TURKISH EMPIRE. 339 TUBKISH EMPIRE. The Monetary Unit of Turkey is Tlie Piastre, divided into 100 Aspres for Money of Account, and into 40 Paras, of 3 Aspres each, for Currency purposes. The history of the Turkish Piastre is a ciorious one. Originally the Turkish Coin of this denomination was of about the same value as the Spanish Piastre ; ia 1750 it stood at about 36 Pence, whilst at present it is worth only Q-ji^ Pence. This decline in the valu? of the piece arose simply from the progressire debasement of its fineness and weight by successive Governments, until at last the intrinsic value of the Coin in fine Silver was reduced to aV^li part of the original value. The despotic Governments of the State had not much trouble in forcing the continued circulation of the debased Coin upon their subjects, and they were blind to the disastrous effects of such arbitrary measures upon the Home and Foreign Trade of the Empire. But this was not all : an enormous amount of Paper Currency, un.der the denomination of Oaime, was forced into circu- lation besides ; and what with the depreciated value of this Paper Currency, the fearfully debased, and even counterfeit Coinage, circulating in an immense variety of larger and smaller pieces, to the total amount of some 900 millions Piastres, and what with the incessant and violent fluctuations in the price of Foreign Coin, there surely never was a greater state of confusion in a Monetary System. The stoic submission of the Moslem to Kismet, and his beHef in the infallibility of the Prophet's Successor, alone preserved the State from the dreadful revolution which, with a much smaller share of grievances, would inevitably have burst out in a civilised Christian community. The influence of international intercourse, however, compelled the Government of Turkey to devise some reform, and in 1844, under the Sultan Abdul Medjid, an attempt was made to re-establish the 340 PAES OF EXOHANGE. Monetary System of the Empire upon a more solid basis, by the issue of a new Coinage, taking for its Unit or Integer the latest edition of the debased Piastre. At a subsequent period the Imperial Ottoman Bank was established, whose functions comprised also the gradual reorganisation of the Turkish Mediums of Exchange. This Institution has succeeded so far in regulating and funding the wretched Paper Currency known hitherto as Gaime (now a Turkish 6 per cent. Stock). The Coinage is also being regulated, and a contract for a new Copper Coinage is now being executed for the Turkish Government at Birmingham. But the task of entirely withdrawing from circulation the miserable old Coinage, and substi- tuting for it a healthier and more stable system of Currency, is a most difficult one, which it will take years to accomplish. The new .Coinage of 1844, for instance, was no sooner in circulation than it began to be exported abroad, and, in spite of an absurd law, passed some years ago, forbidding its rise in value (since repealed), it has so far served scarcely any other purpose than that of satisfying the demands of foreign creditors. The country is therefore still suffering from the plague of a debased Coinage, and from the variable rates of many sorts of good foreign Coin (English Sovereigns among the number), to which the merchants are compelled to have recourse. The Metallic Monies of Turkey are accordingly represented by the general medley of these old and debased Coins (the so-called Beshlik, with its divisions), a description of which would take too much space, besides beiag of but little use here ; and by the Medjidie Coinage (issued by Abdul Medjid in 1844), which, although it has so far been of less importance in the Turkish home trade, will yet, under the influence of the monetary reforms, gradually work its way, and which serves, at all events, as a practical basis for the foreign Exchanges with Turkey. The Medjidie Coinage of Turkey is represented by 100 Piastres pieces Medjidie, or Turkish Pound or Lira ■ I n 1^1 oO ,, ,, ,, ,, ) 20 10 5 2 1 Silver Medjidie "2 5J " 1 2 Piastres . . 1 Piastre . . Silver Coin, bearing each ■ of them several Turkish and Copper Pieces of 5 Paras and 1 Para. THE TUEKISH EMPIKB. 341 The subjoined Table shows the legal weight and fineness of these pieces : — Weight in Fineness in (jOLD. Grammes, MiUiSmes. GoldMedjidie 7-216 . 916 Half Gold Medjidie 3-608 . 916 The older Turkish Gold Coins ranged from 106 to 875 fine. The Zecchino, or Sequin, of the 18th Century being 106, 145, 305, 425, and 626 fine, with other variations; the 40 Piastres piece of 1830, weighing 3-598 grammes, being 795 fine ; the 5 Piastres piece of 1835, weighing 410 grammes 835 fine, &c. &o. SILVER. Silver Medjidie 24-055 830 10 Piastres pieces 12-027 830 6 „ „ 6-013 8.30 2 „ „ 2-406 830 1 „ „ 1-202 830 The Metallic value being accordingly on a Par with the Nominal. (The old 6 Piastres piece, the Beshlik, weighed 16-200 grammes 216 fine, the smaller pieces were 165 fine. The quality of other Piastres ranged from 220 to 480 fine). The Gold Coinage seems intended to serve as the Standard of value in future. The proportions of fine metal between the Gold and Silver Coinage stands at 1 to IS^g^. The Remedy for the Gold Coinage is 2 per mille, and for the Silver Coinage 3 per mDle, for weight and fineness. Paper CTirrency. — The Gavme have been withdrawn, and converted into an Interest-bearing State Debt. The Imperial Ottoman Bank now issues Notes. This Bank may succeed in improving the financial and commercial condition of Turkey, pro- vided the orthodox Moslem do not rebel against the Christian system of State Loans and Monetary matters generally. For the Exchange with England the Medjidie or Turkish Lira in. Gold serves for basis of calculation. Taking its weight, as fixed 342 PARS OP EXCHANGE. by law, at 7'216 grammes 916 fine, it is worth, at the British Mint price of 77s 10|d per oz. Standard, 216-645 Pence, or 18s Ofd; and tlie Par of Exchange between London and Constantinople is accordingly £1 = 110-780 Piastres Turkish. The actual Exchange, however, varies according to the Premium on Gold as against Paper Currency. EGYPT. The Turkish Piastre is also the Unit for the Viceroyalty of Egypt ; but upon the Tariff fixed by the Egyptian Government for Foreign Gold Coin, 11 Turkish Piastres are held equal to 10 Piastres in Egypt. The British Sovereign, which is the favorite Coin in Egypt, is reckoned at about 100 Piastres (Tarifi' 97-20). The Par of Exchange between London and Alexandria is £1 = 100-71 Piastres. UNITED STATES OP AMERICA. The Monetary Unit of the United States is the Dollar, divided into 100 Cents. The Coinage is represented by 20 Dollars pieces Double Eagle 10 „ Eagle . 6 „ Half Eagle . )■ Gold. 2 1 „ Quarter Eagle 1 Dollar piece AMERICA. 343 1 Dollar piece r Silver T& .. Dime -1- „ Half Dime 3 Cents pieces . . .J and in Copper 1 and | Cent pieces, in Nickel 1 Cent pieces. The Silver DoUar was tlie original full legal tender in the United States up to 1853, the Gold Coinage being also full legal tender ; so that in fact the Double Standard prevailed ; the Silver Dollar weighing 26'?295 grammes, and the Ten Dollars Gold piece weighing 16' 718 grammes both 900 fine, the proportion of value between Gold and Silver was as 1 to 16. As the proportion stood in other countries at say 1 to 15f , Silver in the United States was cheaper, and the consequence was that it was largely exported. In 1863, therefore, a Law was passed, reducing the weight of the Half Dollar and its sub-divisions to the extent required to alter the proportionate value of Gold and SHver from 1 to 16 to about 1 to 14|, debasing thus the Half DoUar below the general rate of 1 to 16|, the same as is done in England and Portugal. But this law does not include the Silver whole Dollar piece, of which the weight remains unaltered. The Miat, however, has gradually ceased coining Dollar pieces, and now issues very few of them. Theo- retically, therefore, the Double Standard still prevails, until Congress shall pass an Act reducing the Dollar to the same level as the Half Dollar ; but practically the Gold valuation rules. The subjoined Table shows the weight and fineness of these pieces : — GOLD. Double Eagle Eagle i Eagle 3 Dollars pieces f Eagle 1 Dollar piece Weigiit in Grammes, Fineness in Milli6nies. 33-436 900 16-718 900 8-359 900 5-0154 900 4-1795 900 1-6718 900 344 PAES OF EXCHANGE. SILTEE. Weight in Grammes. rineness in MllliJmes. 1 Dollar piece 26-7295 900 1 2 3) » 12-441 900 i „ „ 6-221 900 To " J> 2-488 900 5" ') >> 1-244 900 3 Cents „ • 0-802 750 their respective value being — GOLD. Nominal Actual MetalHc Value. Value. Double Eagle 20 Dollars 20 Dollars Eagle 10 >j 10 „ 1 Eagle 6 J). 5 „ 3 Dollar piece 3 )5 3 „ i Eagle 2-50 „ 2-50 „ ^ Eagle 1-00 „ 1 33 Tbe 3 Dollars piece is no long er coined. SILVEB. Dollar 1 Dollar 1 DoUar 2| Cents 1 a " 60 Cents 48 Cents 1 4 » 25 37 24 „ To )» 10 J3 "2^ ») 1 5" )) 5 33 4i ,3 3 Cents pieces 3 33 31 „ (It is unnecessary here to give an account of the early Califomian Coinage, especially the Octagon 50 Dollar pieces, ■wMoh were issued by private parties. Since the establiskment of a regular United States Miat in San Francisco they have been withdrawn from circulation.) The Eemedy for the Gold Coinage is 2 per mille, for the Silver Coinage 3 per mille for fineness ; for weight 1 to 3 per mille is allowed in the Gold Coinage, according to the size of the piece ; and 5 per mille in the Silver Coinage, with a stQl larger allowance for the smaller Silver Coin. The weight used for Bullion in the United States is the English Troy ounce, divided into 100 parts ; but the fineness is reported in Milliemes, to | Millieme exact. AMEEICA. 345 The Eagle weiglis by law 258 grains 900 fine, whicli makes the price of the ounce fine 20-67183 DoUars. One-half per cent, is charged for Mintage. The United States Mints and the State Assay Office in New York furnish also Gold Bars 900 fine, at a charge of | per cent. ; and Bars of fine Gold, at a charge of only 6 Gents per 100 Dolls. or I per mille, if the Bar exceeds 10 oz. in weight. The Bars so issued have their value stamped on them, and afford a very convenient means of remittance. For fine Silver Bars, melted, assayed, and stamped at the Mint, I per cent, is charged. The price of 1000 fine Silver may be taken at Dolls. 1-293 per oz. The Miut also parts Bullion for the pubhc, at a charge of about 3 per miUe for Gold, and about 1 per cent, for Silver, as by the following rule. CHAEGES FOE PARTING GOLD AND SILVER. Proportion of Gold. 1 to 200 thousands 1| Cents per oz. gross after melting. 200 to 600 „ 2 „ 601 to 700 „ 8 „ 701 to 800 „ 4 „ 801 to 946 „ 5 „ The Mints in the United States have the reputation of being the best constructed and best appointed Establishments of the kind, as regards building, machinery, and management. The Managers of European Mints do not consider the United States Coinage to be as perfect as it is represented to be, still there can be no doubt but that the United States Gold Coin is, as a rule, superior to all others, except that of Russia. Paper Currency— The Greenback Currency of the United States is much depreciated* The subjoined Table shows the rise and faU of the Gold Dollar as against the United States Paper Currency, from 1860 to 1868. It shows how it stood at Par before the outbreak of the Civil War ; how it began to rise in price after, until 1865, when it attained the * See pp. 49 and 56. 346 PAES OF EXCHANGE. maxinmm ; and how it Las declined again since tten to its present value, which, however, still stands at 33| per Cent. Preminm. Date. Gtold. Value in Paper lary 1, 1860 Dols. 1 Dols 1-00 1861 1-00 1862 1-00 1863 1-331 1864 1-62 1865 2-37 1866 1-441 1867 1-33 1868 1-331 The foUowing Statement of the expenses of the mannfactnre of Paper Money may also prove interesting : — The Expense of FurnishiTig Currency to National Banks. — It appears from official data tliat the expense of Printing and Furnishing Currency for circulation to National Banks, the amount paid for engraving plates and special dies, and for printing circulating notes for National Banks, from the organisation of the Bureau to 18th Jan., amount to 1,679,356 Dollars, and paid for paper during the same period 63,980 Dollars, making a, total of 1,743,336 Dollars. These items do not cover the entire expense, such as transportation, clerical labour, sealing, numbering, &c. — New York Serald, 29th JomMwry 1868. The Eagle or 10 Dollars piece, weighing by law 258 grains 900 fine, is worth, at 77s 10|d per oz. British Standard, How many pence are = 258 grains 900 fine If 900 fine 1000 = 9TF0^e'metal If 22 carats fine = 24 Standard Standard grains 480 = 9345 Pence = 493-1613636 or £2 Is lid. The & Sterling is worth Dols. 4-8665, but it is taken at Dols. 4-84, according to Tariff. The Mint Par of Exchange is therefore in London — 1 Dollar = 49-316 Pence. T /• >'7 AMERICA. 347 But, except in San Francisco, it is not npon this basis that the Exchange on London is reckoned in the United States. According to an old United States Coinage the Dollar was formerly valued at 54 Pence, so that 40 Dollars were worth £9, and 100 Dollars = £22-600 but in the present Coinage 100 Dollars are worth only £20-5483 which makes a difference of 9-4981 or 9| per cent. ; so, instead of adopting the new form of Exchange, the old yaluation of Dels. 100 = £22 10s has been retained, and the difiference is quoted by way of Prem/mn on the 100. The Exchange between New York and London is thus quoted at New York either at a Premium varying from 8f to 10| per cent., or it is quoted simply — London at 108| or llOf. The actual Mint Par being, according to this system, Exchange on London 10 9i Dollars Gold (for £22 10s). Where the Exchange is expressed in Paper Ctirrency, the Premium on Gold is added. BRITISH NORTH AMERICA. The Monetary Unit for Canada and the other British Provinces in North America is The Dollar, divided into 100 Cents ; besides which The"£ Halifax Currency and The £ Sterling British Currency are in use. 348 PARS OP EXCHANGE. Neither of these valuations is represented by a Canadian Coinage ; for, with the exception of i DoL, or 20 cents pieces, weighing 76'85 gr. 900 fine. 10 1 20 c " " fin proportion. ^11 yi ) coined in England to a limited amount, Canada has no Coinage of her own ; in fact she has no Mint establishment. The Metallic Cir- culating Mediums of the Colony consist of all sorts of Foreign Coins, principally of the DoUar class. The Dollar Unit of Canada is only represented by the Paper Currency issued by the Banks ; it is worth 60 Pence British. The Halifax Currency Pound, divided into 20 Shillings of 12 Pence each, is simply money of account. It is founded upon the valuation of the above Dollar, at the rate of four to the Halifax Pound, making the Dollar worth 6 Shillings, or 60 Pence, as Halifax Currency ; whereas, calculated in British Sterling, at 60 Pence per Dollar, it takes 4!'80 Dollars to make £1 English ; which makes a difference of 20 per cent. The actual British Sterling Money is used only by the Govern- ment and the Custom House. For the Exchange Valuation another sort of ideal money is introduced, viz. : the Halifax Sterling, at 4s 6d per Dollar. The Halifax Currency being 5s per DoUar, or 60 Pence, whilstthe Sterling Dollar is 4s 6d only, or 64 Pence, it follows that £100 in Halifax Currency are equal to £90 in Halifax SterHng ; which makes a difference of 10 per cent. This Halifax SterUng is used in the same way for computing the Exchange with Great Britain, as the old New York Sterling valuation, which takes £9 to equal 40 Dols., or 4s 6d per DoUar, and quotes the difference between this and British Sterling by way of a Premium. The value of the Canadian Dollar being 4s 2d British, as fixed by law, this Premium (4d upon 50d) amounts to 8 per cent., and in the fluctuations of this Premium the state of the Exchange is expressed. If, therefore, the value of the Dollar is to be considered in actual Sterling, we have to arrive at the result through four different elements, in the following roundabout way : — How many Canada Dollars are equal to £1 Hahfax Currency ? Answer : 4 Dols. AMERICA. 349 How miicli Halifax Currency goes to the Halifax Sterling ? Answer : £100 Currency, equal to £90 Halifax Sterling. How much Halifax Sterling goes to the actual British SterHng ? Ajiswer : £108 Halifax SterHng, when the Exchange is at Par, equal to £100 British Sterhng ; and the calculation accordingly is : ? = 1 Dol. Halifax Currency. If 4 Dols. = £1 HaUfax Currency. If Halifax Currency £100 = £90 Halifax Sterling. If Halifax SterHng £108 = £100 British SterHng. If £1 = 240 pence. 432 =2160 = 50d British, or 4s 2d. Accordingly 1 Dollar Hahfax Currency= £0 5s Od, or 60 Pence HaHfax Pounds. = £0 4s 6d „ 64 „ „ SterHng. = £0 4s 2d „ 50 „ British SterHng. £1 in Halifax Currency = Dols. 4 in Dollars. = £0 18s in HaHfax SterHng. = £0 16s in British SterHng. £1 in Halifax SterHng = Dols. 4'444 ct. in Dollars. = £1'111 ct. in Halifax Currency. = £0 18s 6J^d in British SterHng. £1 in British SterHng = Dols. 4'80 in DoUars. = £1 4s in Halifax Currency. = £1 Is 7id in HaHfax StirHng. The Dollar is worth 50 Pence British, or Dols. 100 = £20 16s 4d British Since Dols. 100 = £25 HaHfax Currency. HaHfax Currency £25 = £22 10s Halifax SterHng. Dols. 100 are £22 10s Halifax SterHng (the same as the New York valuation) ; but, as upon the Dols. 100 we have to pay the Exchange Premium of 8 per cent, between Halifax SterHng and British SterHng, which raises the amount To Dolls. 108 = £22 10s | British Sterling. So Dols. 100 are = £20 16s 4d-> 350 PAES OP EXCHANGE. The Par of Exchange from London on Canada is ac- cordingly Dol. 1 = 4s 2d, and from Quebec to London Dol. 108 = £22 lOs or 8 per cent. Premium. MEXICO. The Monetary Unit of Mexico is The Peso or Dollar, divided into 8 Reales of 4 Cuartillos each, or 100 Cents, in accounts. The Coinage is represented by 16 Dollars pieces Doubloon 4 J) )) 1 4 2 J) )) 1 8 1 DoUai piece tV 1 Peso or Dollar 1 2 1 4 1 ^ 1 "32" Gold. Y Silver. J and Copper pieces, Cuartillos (-^ Dollar), and Tlacos (^th Dollar). Tlie subjoined Table slio"vrs the legal "weiglit and fineness of tie pieces : — Weight in GOLD. ' Grammes. Doubloon 27-067 ■o" )) J-O'OOO k „ 6-767 i „ 3-383 ^ „ 1-692 Fineness in Milli&nies. 876 875 875 875 875 AMBEICA. 351 Weight SILVER. in Grammes. DoUar 27-067 ■g jj Lo'Ooo k „ G-767 i ;> 3'383 ^ „ 1-691 A- „ 0-846 Fineness in Mini Ames. 900 Tlie Gold Coinage, thougli the Doubloon is nominally worth 16 Dollars, varies in price. It is foimd to be inferior in quality by 4 to 10 Milliemes, like the Spanish Donbloons. The price in the London Market ranges between 73s and 74s 8d per oz., according to supply and demand. The Metallic valne of the Silver Currency is on a Par with the nominal value. The Copper Coins are simply tokens ; they are much below their nominal value. The Coinage of Mexico has always been rather uncertain in quaUty and weight. Many of the older Mexican DoUars contain traces of Gold, and were worth 1 to 2 per cent, more than others. The Coinage is now somewhat more accurate in quaHty and weight, though it is stiU. very rough. Mexico is one of the great sources of the "World's supply of Silver. It is estimated that, since the discovery of the land, nearly 4,000 millions Dollars, or 800 millions Sterling in Silver have been drawn from its Mines, of which about one-half has been coined in Mexican Dollars. The Mexican Dollar exercises a vast influence in the Bullion and Monetary transactions of a very considerable part of the "World. It arrives here in England in large masses, to be re-shipped abroad, where it is either employed as Coin in its unaltered shape, or re-melted and re-coined. The Mexican Dollar is known in China, India, Central and South America, and in the remotest corners of the East. The weight of the Mexican Dollar is 27-067 grammes (0-868 oz. Troy) 900 fine ; its value in British Sterling is accordingly 51| Pence. The Mint Par between London and Mexico is Dol. 1 = 51i Pence. 352 PARS OF EXCHANGE. WEST INDIES. The Monetary Unit in the West Indies is The DoUar, divided into 100 Cents for accounts. In the British "West Indies, in Jamaica, Barbadoes, the Bahamas, &c. both the Dollar and British Sterling Money are nsed, the Dollar being valued at 4s 2d Sterling ; American, Mexican, Spanish, and other good Silver Coins are also current. For Jamaica Half Dollars were formerly Coined ; for Demerara and British Guiana three, two, and one Guilder pieces and fractions ; but the Dollar is now everywhere the recognised Standard; in Exchange with England the DoUar may be taken at 4s 2d. The British Sterling Money is also used, subject to the usual charges for remittance. In the Spanish West Indies, i. e., Havannah, Porto Rico, &c., the same Monetary System prevails as in Spain ; but the quotation of the Exchange on London is often made upon the same basis as in New York, viz., by a Premium on the old valuation of Dols. 100 = £22 10s; and this Premium is subject to about the same fluctuations. In Martinique the French system prevails. Tn Hayti the Monetary Unit may be said to be the Gourde, or Haytian Piastre, divided into 100 Centimes or Sous, but only divisionary Coins in Silver have been struck. The country suffers from an over issue of Paper Money, and the Gourde varies in value from 2| Pence upwards. An attempt to introduce the French Coinage system has been made, but without success, for want of Bullion. In the Republic of St. Domingo Monetary matters are in about the same unsatisfactory state ; the value of the Dominican Piastre having been down so low as 8 Farthings. For Exchange transactions with other States hard Dollars are required. In other parts of the West Indies the Moneys of the respective Mother Countries are used side by side with the DoUar. In the Island of St. Thomas, which now belongs to the United States, the American system will probably be introduced. OENTBAL AMElilCA. 353 CENTBAL AMERICA. The Monetary Unit of tlie States of Guatemala, San Salvador, Honduras, Nicaragua, and Costa Rica, is the Peso, or Dollar, divided into 8 Eeales of 16 Cuartos, or 34 Maravedis each, or into 100 Centavos. The Gold Coinage consists of the Doubloon and its sub- divisions, the Silver Coinage of the DoUar and its subdivisions. These Coin differ in quality from the Mexican pieces. The j Doubloon issued by Costa Rica weighs 6'205 grammes 846 fine. Foreign Coins, notably South Anaerican, Mexican and Spanish Dollars, and 5 francs pieces are the principal currency. It is very likely that a re- organisation of the Monetary System will take place before long. The 6 Francs piece is at present the representative piece, it is valued at a Dollar ; computed upon this basis, the Central American Dollar of account is worth 47-680 Pence, or 3s lli^d. The Exchange in Guatemala on London is generally taken at 5 Dollars per &, with a premium to make up the difference. Accordingly a premium of about 1 per Cent, makes the Par. 23 354 PARS OF EXCHANGE. SOUTH AMERICAN REPUBLICS NEW GEANADA, EOUADOB, PERU, BOLIVIA, CHILI, VENEZUELA, AND UBUGUAT. The Monetary Unit of the South American Republics is also The Dollar, divided into 100 Cents, or 8 Reales. The Spanish, Mexican, and other Dollars, and 5 Francs pieces form the larger part of the CiuTenoy throughout the States. NEW GRANADA. The Coining of the Doubloon and its subdivisions has been abandoned, there being issued instead : — 10 Pesos pieces Condor 1 5 „ „ I „ Gold- 1 Peso, or Dollar. f ,, -f „ (Peso Macuquiaa) i „ 2 Reals. (The Peso = 10 Reals.) The Condor weighs 16'400 grammes 900 fine, and the Silver Peso 25 grammes 900 fine (the same as the French 6 Francs piece). The proportion of value between Gold and SUver is thus 1 to 16|, and the Peso being of the same value as the 6 Francs piece, its Par in British Sterling is 47-680 Pence, or 3s lly^d. In Peso Macuquina, or 8 Real pieces (worth 20 per cent, less than the Peso of 6 Francs), the Exchange is quoted' at 6 Pesos Macuquina per £1 Sterling, with the usiial Premium. SOUTH AMEEICAN REPUBLICS. 355 In. ECUADOR Doubloons of the same value as the Mexican pieces were formerly issued ; but in 1866 the same system as in New Granada was introduced. We have not yet received an account of this new Coinage ; but there has been coiued in Ecuador, since 1858, a Silver Peso of precisely the same value as the 5 Francs piece, divided into 5 Reales, or 10 Decimos. The Macuquiaa Piastre of 4 Reales, or 10 Decimos, is also coined in Ecuador. In PEE.it the old Doubloon Coinage has also been abandoned (although the Coin is still current at 17 Dollars). A new Coinage Law of 1857 ordered the coining of Gold Sols (28'406 grammes 900 fine) to be worth 20 Dollars or Pesos of 23' 7 grammes 900 fine, both with subdivisions. Very few of these Coins were made, for in 1864 a new system was introduced ; the name of Sol for the Gold piece was given up, and applied instead to the Dollar, the fol- lowing Coins being issued : — Grammea, Gold 1 Silver Sol piece 25-000 i „ „ 12-600 „ i „ „ 5-000 „ . . !> in SUver ,. 2-500 „ . „ 1-125 „ . thus establishing the exact proportion of 1 to 15| between Gold and Silver. Copper Coins of 1 and 2 Centimes are also issued. The old Boli-vian Dollars, which circulated largely, are now worth only fths of a Sol, and the new Coinage promises to be a healthy one. The SUver Sol is thus precisely of the same weight and fineness as the 5 Francs piece, and upon both the Gold and Silver valuation the Par of Exchange between London and Lima is 47t'3 Pence per Sol. In BOLIVIA Doubloons of the same fineness as the Mexican Doubloon have been coined ; before 1866 the Silver Dollars were also of the same weight and fineness as the Mexican. Since that period a new Dollar has been issued, weighing only 19-830 grammes. 20 Sols piece 32-268 10 „ 16-129 5 „ 8-640 2 3-226 1 Sol 1-613 10 1 zo 356 PAES OF EXCHANGE. and of course is so much inferior in value. This debased Coinage ' •will probably be supplemented by a new system similar to that adopted by the neighbouruig South American States. In CHILI the old system of Doubloons and Piastres has also been set aside, and since 1851 the new Couiage consists of GOLD. 10 Pesos pieces Condor. •K i. " )) J) 2 )» 2 „ „ . . . Escudo. SILVER. ^ Peso piece 50 Centavos. •5 » >j 20 „ J- 10 aU" jj J) • • • ' " )) and Copper pieces of 1 and J Centavo. The Condor weighs 15 '25 grammes 900 fine, and the Peso 25 grammes 900 fine (the same as the 5 Francs piece). Until 1860 the Silver Peso was the Standard valuation, but since then the Government, in order to stop the export of SUver (which in the old Coinage stood in the proportion of 16"4 to 1 of Gold) has issued the new Silver Coinage as above of lesser weight by 8 per cent, (thus reducing the proportion to about 15 to 1), and has adopted the Gold valuation. The Condor weighing 15'26 grammes 900 fine, its value in Sterling is 449-85 Pence, or £1 17s 5|d. and the Peso is worth 45 Pence. Upon this basis the S'ar of Sxchauge between Valparaiso and London is therefore 1 Peso Gold = 45 Pence. In VENEZUELA the Gold Doubloon and the Silver DoUar are current, side by side with the American Eagle and the British Sovereign. The Macuquina Piastre, worth 20 per cent, less than the Mexican Dollar, which was formerly divided into 8 Reales, is now divided Luto 10 Reales of 10 Centavos each ; and in 1858 pieces SOUTH AMERICAN BEPUBLICS. 357 of 5 and 2 Reales, and of 1 and | Reale were stmck. The Monetary- System of this State is on the point of undergoing an alteration. For Exchange transactions the Mexican Dollar forms the basis. In URTTGUAY the Peso Corriente was formerly coined, and, although it has now disappeared from circulation, it continues still to serve as the Unit of Account. Foreign Gold Coins and Dollars are much used ; but, in con- formity with the Law of 1854, a new Coinage ia issued, con- sisting of GOLD, Based upon the old Spanish Dollar or Pataoon, divided into 1000 Centesimos. 4 Patacon pieces or 5 Pesos Corrientes. 9 9i 1 „ „ 1^ Peso Corriente.' SILTEE, On the Peso Corriente basis. \ Peso Corriente pieces = 5 Reales. i 91 8 )J ») 5J -^4 »> And Copper pieces of 40, 20, and 6 Centesimos. This Coinage fixed the value of the Peso Corriente at fths of the Patacon, or at 800 Centesimos or Reis. The 4 Patacon piece weighs 6' 730 grammes 875 fine, and is worth in British Sterhng 193 Pence. The 5 Real Corriente Silver piece weighs IS'OIO grammes 833'3 fine, and is worth 22-927 Pence. Calculated on the value of the four Patacon piece, the Spanish Dollar, the fourth part of it, is worth 48 i Pence, as a basis for the Par of Exchange between Monte Video and London. 358 PARS OF EXCHANGE. BRAZIL. Tte Monetary Unit of tlie Brazils is The Milreis, divided into 1000 Eeis. This Milreis was formerly of the same value as the Portuguese Milreis, the Coinage consisting, up to 1833, of GOLD. Dobras of 12800 Reis. i „ „ 6400 „ Moedas „ 4000 „ SILVER. Double Crusadoof 960 „ ,, Patacon „ 640 „ Patacon ,, 320 ,, &c., &c. These Coins were gradually raised in value, untQ it was settled, in 1846, that the Dobra should be held worth 82000 Milreis (160 per cent, more than its original value), and the Double Crusado 1920 Milreis (double its origiual value). This woeful depreciation had its origia in the Over-issue of Paper Currency, foisted upon the people by the Government. In 1849 Brazil definitely adopted the Gold Standard, and the Coiaage now consists of GOLD. 20 Milreis pieces 10 „ SILVER. 2 Milreis pieces And Copper pieces of 40 and 20 Reis. The weight and fineness of these pieces are GOLD. Grammes Milliomes. 20 Milreis 17-927 916-667 10 „ 8-9(3^ BRAZIL. 369 SILYER. Gramiues. Milli^mes. 2 Milreis 26'600 916-67 1 „ 12-750 2 I) 6-375 „ The proportionate yalue of Silver to Gold is accordingly as 14-06 to 1 ; and as tlie price of Silver is thus raised beyond its universal Market value, a special law has been passed, limiting its use as a legal tender to the amount of 20 Milreis. Coin is rare in the Brazils ; British Sovereigns and Dollars are much used ; but Paper Currency is most abundant, at excessively depreciated rates. The legal weight of the 20 Milreis piece being 17-927 grammes of British Standard fineness, the value of the Coin is 638-614 Pence, or £2 4s 10|d, making the £1 Sterling = 8-911 Reis. The Mint Par of Exchange bet-ween Rio Janeiro and London is accordingly 1 Gold Milfeis = 26-93 Pence; but computed upon the basis of Paper Currency value, in February 1868 the 1 Paper Milreis was worth only 15 Pence. LA PLATA STATES. The Monetary Unit is The Dollar or Peso, divided, for accounts, into '100 Centesimos, or into 8 Eeales or 80 Decimos ; but in actual Currency this Unit is represented chiefly by Paper Money, with which the country is deluged. Originally the Peso Duro or Hard Dollar was worth about 52 Pence ; but the Paper 360 PABS OF EXCHANGE. Currency founded upon it is excessively depreciated; at present the Paper Piastre has actually dwindled down to 2 Pence, the Government paying 1 Dollar Metallic Currency for 25 Paper Dollars. Of course, a Paper Currency of this nature is altogether out of the question as a basis for International Valuation. The Metallic Money current in the country consists chiefly of the old Doubloons, which legally should be of the same weight and fineness as the Mexican Doubloons, and of Silver Dollars of the same value as the Mexican, (We need not note here the actual discrepancies existing between these Coin and their Mexican proto- types.) Side by side with the Doubloon and the DoUar all sorts of Foreign Coias circulate, and a Tariff has been laid down regulating their value in Paper Currency. This Tariff, however, is altogether ineffective, as the fluctuations in the value of the Paper Currency are too violent. The British Sovereign is taken at Dols. 4'96 in SUver Piastres, and the Exchange on London is regulated by the Gold Doubloon or Onza, weighing 27 grammes 876 fine.* The Onza is worth in British Gold 64'528 Shillings, giving the Par of Exchange fjetween London and Buenos Ayres as 48i Pence per Peso. AmiCA. BAEBAEY STATES. In TKIPOLI, the same as in Egypt, the Unit of Account is The Turkish Piastre, divided into 40 Paras. 20 Piastres make 1 Mahbub. * The Onza, however, is not really up to this Standard fineness. AFRICA. 361 The old Tripoli Piastre is counted as 2| Turkieli Piastres ; but this is only money of account in the interior. Of actual native coins the " Gersch " alone, with its divisions into half and quarter pieces, deserves notice. This coin weighs 12'182 grammes, and is 354 fine. It is taken for 140 Paras (3| Turkish Piastres). But the far larger portion of the metaUic circulating medium consists of Foreign Coin, chiefly Spanish Doubloons, Ducats, Napoleons, Maria Theresa and Spanish Dollars, and 5 Francs pieces. French Coin in fact is much increasing in favor in the Regency of Tripoli. The Mahbub of 20 Piastres is taken as the basis for Exchange transactions, beiug valued at 4J Francs, equivalent to about 3s Id. In TUNIS the Unit of the Money of Account is The Piastre, divided into 16 Caroubs, of 3j- Aspres, or 39 Bourbines each. The native coins are the old Zechins or Sequins of last Century, and the Gold Mahbub, which passes for about 6 to 7 Piastres, and is worth in Gold about 3s lOd, and old Silver Piastres (with subdivisions) of different weight and fineness (270 to 406) ; the more modern SUver Piastre weighs 11 '400 grammes 815 fine, which gives a metalUc value in Sterling of about Gjd. "Foreign Coin, such as Dollars, and especially French money, are much used. Paper Currency. — Notes of the State Bank for 1, 2 and 8 Piastres circulate as forced currency. They are taken in payment at the Bank at a discount of 4 per cent. The Tunis Piastre is valued at 75 French Centimes in Exchange with France ; this makes the English equivalent about 7^ Pence, the actual Exchange varying as a matter of course. In ALGERIA the French Monetary System prevails. In MOROCCO the Export Traders keep Accounts in Spanish Dollars, divided into 100 Cents. 362 PAES OP EXCHANGE. The Unit of Account of the Empire is the Mitskal, divided into 10 Uckias, or Ounzes, of 4^ Mazunas, of 6 Quartols, of 4 Fins each. The Coinage consists of quaint, rougli, gold pieces, called Madridia of about 10 Dollars in value. Benky „ 2 „ „ Half do. „ 1 Dollar „ Mitskal pieces a !> » Tlie quality of these pieces is very low, even down to 255 fine. In Silver, rougli, round or square Mitskals are in circulation, also Ounzes (yo^^ Mitskal), with pieces of 6 and 4 Mazunas, and 1 Mazuna (called Barbary Penny). There is an extensive amount of Copper Coin in circulation, of various kinds and denominations, down to the most insignificant pieces, as worthless as Chinese cash. The Gold Benky istaken at 32 ounces. Foreign Coins, especially Spanish Dollars, are current in the Empire, the Dollar being taken at 16 ounces. From this the value of the Mitskal may be computed at about 32 Pence Sterling. The Exchanges are made in Spanish Dollars, at 50d per Dollar, more or less. "WEST COAST OF AFRICA. The DoUar constitutes again the general recognized Mone- tary Unit and Standard of value all along the Western Coast of Africa. In SIERRA LEONE the Dollar and its divisions AFEICA. 363 (Coin stnick for tlie Colony in England), and Danish Coin are current. Danish, French, and Dutch Coin circrdate in the Danish, French, and Dutch Settlements on the Coast. The principal business all along the Coast is done by barter, the natives paying in OHve Oil and other produce. The Cowrie shells, bo much valued for ornament by the blacks, serve still as a medium of Exchange in trading with them. At the trading ports the Spanish Dollar remains the basis for Exchanges with Europe. THE EAST COAST OP APRICA. In the Portugese Settlements on the East Coast of Africa, the trade is chiefly carried on by barter. The Portugese MUreis, with its subdivisions, serves as Money of Account. In Madagascar the Spanish Dollar cut into halves and quarters is used. ABYSSINIA. The Maria Theresa Dollar is the favourite Coin in Abyssinia. The Gold Wakih* is estimated of the value of 5|- Sequins, equal to about 56s Sterliag. Cotton Cloth and Salt also pass as mediums of Exchange. 11 yards of Cotton Cloth being held equal to 30 pieces of Salt, worth about 3s British Money. The Enghsh invasion of the country is Hkely to work important changes in the Abyssinian Currency. * The Wakih is the 12th part of the Abyssinian Pound, or Eotolo, equal to about 635 Grammes. The Wakih is equal to about 52-916 Grammes ; it is subdivided into 10 Drachmes. 364 PAES OP EXCHANGE, PERSIA. The Monetary Unit of Persia is The Gold Toman, divided into 10 Sahibkiran or Zabkran, of 2 Penebats each, subdivided into 10 Shahis, of 10 Kasbegg each, or 1 Toman = 200 Shahis or 2000 Kasbegg. Accounts are carried to the Dinar, which is the tooo^Ii part of the Toman. The Coinage is represented by The Gold Toman and Half Toman. The Toman is a rough Coin, made of nearly fine Gold ; older issues differ in weight and quality, but the Toman of 1839 weighs 3"6 grammes about 970 fine. It is intended to issue a new Gold Coinage, of the fineness of British Standard. The Silver Coinage also is made of nearly fine Metal. The Sahibkiran or Zabkran (^ Toman) weighs 5'380 grammes 962'5 fine. (The new Coins are to be 880 fine.) The Penebat (-Jj Toman) weighs 2'610 grammes 962'5 fine. There are also Persian Rupees of different weights and quality. The Rupee of the latest Coinage weighs 9'156 grammes 945 fine. (The new Silver Coinage is to be 880 fine.) The Copper Coinage consists of the Shahi and its subdivisions, down to the Kasbegg, or -^ Shahi. The Persian Coinage, as a rule, consists of rough and irregular pieces ; the statement of the weight and fineness given here of the different pieces is taken from Assays made, and not derived from the supposed prescriptions of a Mint Law. PBESIA. 365 The fuU-weight Toman is said to be equal to tlie European Ducat. It is worth in British Sterling 9s 3jd ; this corresponds relatively with the value of the Russian Half Imperial, which is current in the Country at If Toman. The SUver Zabkran, or J^th Toman, is worth about ll|d, which gives the proportionate value of Gold and Silver very nearly as 1 to 151 Tomans, it should be stated, are frequently found " cHpped," and they are generally dealt in by weight. Russian, Turkish and Austrian Gold Coins also circulate in the country. Exchange transactions direct with England are very limited ; but the Toman at 9s 3id may be taken as the Par of Exchange. INDIA. The Monetary Unit of Britisli India is the so-called Company's Silver Rupee, sub-divided into 16 Annas, of 12 Pice each ; the Rupee is divided also into 4 Quarters, and each Quarter into 100 Reas. In former times Rupees of different values were current in India, such as the Sicca, the Sonat, the Bombay, the Arcot Rupee, &c., but since 1835 the Company's Rupee has superseded all others, and forms now the principal legal medium of Exchange. The Sicca Rupee, however, is still used as valuation for certain descrip- tions of merchandize. 366 PARS OP EXCHANGE. The present Coinage of India, is represented by GOLD. 30 Rupees pieces Double Gold Mohur. 15 „ Gold Mohur u JJ t 5 J? 1 3 51 SILTEE. 1 Rupee Piece and Copper pieces of 3 Pice, 1 Pice and | Pice. f Pice being equal to 20 Cash (the minute fractional change of the Asiatics in the East). The subjoined table shows the weight and fineness of these pieces. GOLD. Weigtt in Fineness in Grammes MiUifemes. Mohur ... 11-664 (180 Grains Troy) 916-667 The Double Mohur and the divisions in proportion. SILVEK. Rupee ... 11-664 (180 Grains Troy) 916-667 i „ ... 6-832 (90 „ ) 1 „ ... 2-916 (45 „ ) The Silver Coins are accordingly of equal proportionate value. The Gold Mohur is precisely the same weight and fineness as the Silver Rupee, and the proportionate value of Gold to SUver is 1 to 15, but, although attempts have been made to fix this value legally upon the Gold Mohur, they have been abandoned, and the Gold Coiaage is at present " Commercial Money" in India. Still, the Gold Mohur is making its way into piiblic favour, and is now often valued above 16 Rupees ; sometimes even as high as 16f Rupees. We hear, however, that but few Mohurs are coined at the Mint. The Silver valuation is emphatically the Standard in British India, and Silver is so far the only legal tender. Indeed India is the great store-house for Silver. Many Millions Sterling a year have gone from Europe and elsewhere to India and. INDIA. 367 the East, to pay for cotton, tea, seeds, and tlie manifold productions of Eastern Asia, the balance of trade being so largely against Europe. From 1855 to 1865 alone 200 Millions Sterling Silver have been shipped from^ England, from Marseilles, and elsewhere. In fact, it is the demand for Silver in India which has so greatly disturbed the Silver Coinage of France, and other parts of Enrope, and given rise to the wish to demonetise Silver to a certain extent. In consequence of the Crisis of 1866 there has been no Silver sent to India for the last three years ; indeed it is said that Silver is about to be returned to England; but, with the recovery of trade, we must expect that, so soon as shipments of goods on a larger scale shall again be effected from India, Silver remittances to that quarter will have to be resumed. The greater bulk of the Silver sent to India is said to be hoarded by the Natives. The Mint of Calcutta Coins Gold pieces for private persons at a charge of 1 per cent. On Rupees in Silver there is a seignorage of about 2 per cent, and -jig-th for melting. The Remedy of the Calcutta Mint is, — for Gold 2| per mille, for Silver 3 per mille, both for weight and fineness. The Unit of British India weights is the Tola = 180 grains Troy. The legal weight of the Rupee is 1 Tola, the legal fi.neness 916|. The Tola, if fine metal (B 17| dwts.), should accordingly be worth 1-0886 Rupee. The Mint actually pays 106^ Rupees for 100 Tolas fine Metal, which shows a Mintage charge, including probably the loss by melting, of about 2j per cent. The greater portion of the Bar Silver arriving in India, is sold to the Merchants in the Bazaars, where from 106| to 107 Rupees are paid for 100 Tolas of fine Silver. The Rupee weighing 180 grains, 916-667 or 220 dwts. fine, the value of the piece is 22-60886 Pence, and the Mint Par between Calcutta and London is accordingly 1 Rupee = Is lOfd. 368 PARS OF EXCHANGE. SINGAPORE. The Monetary Unit is The Dollar, divided into 100 Cents. Spanish, Mexican and other Dollars and Rupees are the divisional fractions of the several Coins circulated in Singapore. The Exchange on London is computed on the Dollar basis. BURMAH. In the Burman Empire and in the Bazaars of Rangoon the natives stiQ make and receive payments in Metal by weight, — Lead for small payments. Gold and Silver for larger payments. The usual weight for Silver is the Tical = 258 English Troy grains. There are three different descriptions of Silver, of varying fineness, sold by the Tical weight. La the Port of Rangoon, which is now British, the Company's Rupee is the Unit for dealings between Merchants, and for Exchange. SIAM. The Monetary Unit is The Bat or Tical, divided into 4 Salungs, of 2 Fuangs each. (The Fu^ng is reckoned equal to 800 Cowrie shells). 80 Bats are equal to 1 Cattie, and 100 Catties are equal to 1 Pical Silver. With the exception of the small change in Cowries, the Siamese currency consists entirely of Silver, the coin being irregular pieces, or little bent bars, stamped with figures. From assays made, it appears that the Bat is worth about 30d Sterling, 5 Bats being equal to 3 Mexican Dollars, which forms the only basis to be depended upon for computing the Exchange. COCHIN CHINA, ETC. 369 COCHIN CHINA. The Monetary Unit is the Kwan, divided into 10 Mas, of 60 Sapeks each ; But tiiere is no actual Gold or Silver CoiQage, the Kwan and its divisions being simply pieces of Silver and small Coins made of a Copper and Zinc Alloy like the Chinese cash. A Kwan is reckoned equal to about f rds of a Dollar, but the price is said to vary greatly. Gold and Silver in Lumps or small Bars are dealt in by the Tael, which is about the same weight as the Chinese Tael. The invasion by the French wiU no doubt tend to introduce the 5 Francs piece, and the French system generally. DUTCH POSSESSIONS IN THE EAST INDIES: JAVA, SUMATRA, BORNEO, &e. The Dutch Monetary System is in force in the Dutch Possessions in the East Indies. The Unit is The Guilder, or Florin, divided into 100 Cents, which is now coined expressly for India. There is, however, a former valuation of the old Dutch Indian Company, which still maintains its position. A low kind of Copper or Brass Money, similar to Chinese cash, is also in circulation. The Batavia Bank issues Paper Money. Spanish and Mexican Dollars form a large portion of the Medium of Exchange. Exchanges on London are computed on the basis of th.e Florin, the same as in Holland. 24 370 PAES OF EXCHANGE. PHILIPPINE ISLANDS. The Monetary Unit is the Spanish Dollar, divided into 8 Eeales, of 20 Cuartos each ; or into 100 Cents. The Par of Exchange is the same as in Spain. CHINA. The Monetary Unit of China is The Tael, divided into 10 Mace, of 10 Candareens each. A Money of Account fonnded on weight, the Tael being simply this -weight of Sycee SHver. Gold and SHver are dealt in by this weight ia Bars and Lumps and other shapes. The Coinage proper of China consists of the so-called Gash (lie in Chinese), of which 1000 were formerly held equal to the Tael ; but it takes now about 1400 to make up a Tael. This Coinage is made of 6 parts of Copper and 4 of Ziuc ; it is stamped with Chinese characters. The Cash pieces have each a square hole in the centre, so that they may be strung together in rows of 50 or 100. OrigiaaUy these pieces were worth about a Farthing each ; but their value has since considerably decreased, and such large quantities of them are manufactured by private parties, that they are worth at present (at the rate of 1400 per Tael) only -i-th Farthing. This curious money is used between the Chinese chiefly for retail busiuess ; but from its fluctuating price and want of metallic value it cannot afford a basis for Exchange transactions. CHINA. 371 The Chinese Tael weight, or Canton weight, as it is called, is equal to 580 Grains Troy (679-84) ; but there is another Tael weight in use besides the Canton weight, viz., the Government, or Haikwan weight, of which 98 Taels are equal to 100 Taels Canton weight. Both weights are used for BulUon. Small oblong Bars or Ingots of Gold are dealt in, weighing from 9 Taels upwards ; they are generally 98 touch (about 980 fine) ; they differ much in fineness, but the quotation is made at 98 touch. Silver is generally cast iuto small shoe-shaped Bars, called Sycee. There are three different kinds of Sycee, viz : Haikwan Sycee, assayed and marked by the Government, varying in fineness, but on the average about 980 fine. Canton Sycee, not marked by the Government, but of about the same fineness as the Haikwan Sycee. The Shanghai Sycee or Currency, which is either cast of melted- down Mexican Dollars, or consists simply of Mexican Dollars, which are sold by weight. The Shanghai Sycee Bars are from 896 to 902 fine. The Assays, on the whole, are not much to be depended upon, except as regards the latter Currency, made from Foreign Coiu. If the Haikwan weight Tael or Haikwan Sycee be taken as 980 fine, and the Canton weight Tael of Shanghai Sycee as 898 fine, it will be found that 111'4 Taels Shanghai Currency are equal to 100 Canton weight Taels of Haikwan Sycee ; and as the Canton weight Tael of 680 graias of Shanghai Currency constitutes the type which represents the Tael for Exchanges, and the full Mexican DoUar weighs 417'7 graias, 1 Tael of Shanghai Currency is = 1-3886 Dollars or 1 DoUar = 0-7202 Tael As a rule 720 Taels are reckoned equal to 1,000 Dollars. The value of the Tael Shanghai currency is therefore exactly 71| Pence, or 6s llfd. The Canton Sycee being 980 fine, there is the same weight of fine Silver in 100 Taels Canton, as in about 109-2 Taels Shanghai Currency; and fine EngHsh Bar Silver being 996 Touch (B 17), there is the same amount of fine Silver in 100 Taels of it as in 111 Taels of Shanghai Currency. 372 PAES QP EXCHANGE. Some of the Chinese Sycee Silver (tliat obtained from Chinese Mines) contains Gold, in the proportion of from 10 to 15 grains per 12 oz., which the Chinese do not know how to extract; this makes a difference of 1| to 2 per cent, in the value of this Dore Sycee. Grold Bars we find quoted, at the end of 1867, 98 Touch = 168'5 Taels Shanghai Currency per Bar of Taels 9-72 Haikwan weight This is equal to 9'91 Canton weight, and equal to Taels 10'81 Canton weight of 898 fine; which gives, at 168'5 Taels Silver Currency of Shanghai, a proportionate value of 1 part of Gold to 15'58 of Silver. A Mint was established at Hong Kong some years ago, which has coined some very pretty Dollars, stamped with Enghsh as well as Chinese characters. From some cause or other — ^perhaps that the supply of Silver by merchants is not constant enough — this Mint has not as yet done much good. Paper Currency.— The Chinese Government issues no Bank Notes ; but certain native Bankers and Merchants of great credit, carrying on business in the interior of the country, issue Pro- missory Notes from small amounts up to 100 Taels, which circulate in the localities in which the issuing EstabHshments are situated. The Par of Exchange between London and Shanghai is 1 Tael = 5s llid. JAPAN. The Monetary Unit of Japan is the Japan Tael, divided into 10 Mas= 100 Candareens=1000 Leni, or Cash. Upon the same system as in China. But this is only a Money of Account, represented solely by the small and almost valueless Cash, JAPAN. 373 or Leni pieces, which, are strung together, the same as in China. The more suitable Unit for our purpose is the Silver Itziboo, divided into half and quarter pieces, with a new Copper Coinage to match, and represented also by a Gold Coinage. The Japanese Coins are very curious. The Gold pieces are flat oblong plates, rounded at the ends, and stamped with characters ; some of them, of oblong shapes with square comers, are thicker than these, and made of very inferior metal, simply gilt over. The Silver Coinage is also square cornered ; that of recent date bears Japanese figures, impressed partly with concave and partly with convex stamps. When, after long seclusion from the rest of the world, some of the Japanese Ports were opened to Foreigners, it was found that Gold stood at a much lower valuation in Japan than in other parts of the World. The chief Gold Coin, the Cobang, weighed about 13 grammes (200 grains Troy), and was about 650 fine (though the Coins difiered greatly in fineness). It was worth accordingly about 23 Shillings. The principal Silver Coin, the Boo, or Itzi Boo (i.e. one Boo), weighed nearly 9'350 grammes, of about 900 fine, and was worth accordingly Is 6f d, and as 4 Itzi- boos Silver were counted as equal to 1 Gold Cobang, the propor- tionate value of fine Gold to that of fine Silver stood accordingly at about 1 to 4. It followed naturally that the American and European traders, giving Dollars for Itziboos, speedily exchanged the latter for Gold Cobangs, drawing Gold away from Japan, at an enormous profit to themselves. The Japanese, of course, soon became aware of this, and a Revolution in their Monetary Valuation followed. The Gold Cobang was, after a period during which its circulation was forbidden on pain of death, reduced to Jth of its previous size, and instead of weighing 200 grains Troy, it now weighs only 60 grains, and is worth about 6s 7d. The Itziboo weighs now 8'700 grammes or 184j Troy grains, and is of the same fineness as the Mexican Dollar; 100 Dollars being reckoned equal to 3122- Itziboos. This makes the value of the Itziboo Is SJd. The former disproportion in the value of Gold and Silver has 374 PAES OF EXCHANGE. thus been effectively removed, and Gold and Silver bear now the same proportionate value in Japan as in the rest of the World, — 1 to 15 j. The Japanese Coinage is now represented by — GOLD, 650 FINE. 100 Boo pieces, the Obang (rarely seen) '} oblong, with 4 „ „ the Cobang ) rounded ends. GOLD AND SILVER ALLOY, ABOOT 300 FINE, GILT OVEE. 2 Boo pieces, the Niboo ^ i ,, „ the Nishi SILVER, 900 FINE. the Itziboo I „ „ the Ishi oblong, with square comers. and Copper Coins. The quotation of the Itziboo varies at from 312 to 313 per 100 Dollars. In Exchange transactions the Mexican Dollar is used, giving the Par of 51i Pence per DoUar. SANDWICH ISLANDS. The Monetary Unit is The DoUar, divided into 100 Cents, principally represented by American Gold and Silver Coin, but also by Mexican, Spanish, and other Dollars, and 5 Francs pieces. Exchange Par 51i Pence per Dollar. 375 TABLE OF THE VALUE OP THE PEINCIPAL COINS. We subjoin a Table of the value of tlie principal Coins. The first colunm shows the full nominal value of the Coin as per Mint valuation made at the place of issue, without any deductions whatsoever for Mint Remedies or abrasion. Some of the Gold Coins have a variable price at the place where they are issued, which must be borne in mind. The second colunm gives the full equivalent, to ^ Penny exact, in Enghsh Money, at the Par of Exchange. Some of the Gold Coins having a variable price at the place where they are issued, cannot be valued by the Par ; in such cases the actual Gold value is given. The third column gives the Metallic value of the Coin, with due allowance made for Mint Remedies and loss of weight by abrasion. As regards abrasion in Gold Coin, we follow the EngHsh rule as to light Sovereigns, which is rather above the average for older Coin. For Silver we take a fairly worn Shilling as a guide. Excessive abrasion, tending to flatten or obhterate the impression, must be taken into separate account. When the Exchanges are high, that is to say against England, the Coin is worth more than Par. The 20 Francs piece, for instance, at the Exchange of 25'22| (the Par), is worth 16s 10-j^d; but, at the dearer Exchange of 26'10, it is worth 15s lljd ; and at the Exchange of 25, it is worth 16s, always less the charges of transmission. When the Exchanges are low and favourable to England, the Coin is worth less than Par. Thus the 20 Francs piece at 25'30 is worth IBs 9fd; and at 26'40, 15s 8^d, less charges of transmission. In this case there is no demand for Gold for France ; on the contrary. Gold is due to England, so that if 20 Francs pieces be melted down here, or sold as Gold, they will, if quite new and supplied in large quantities, fetch about 15s 9|d, and making due allowance for Mint Remedies and fair abrasion, single pieces will be worth 15s 9d. The same rules apply to all other Gold pieces ; the charges for transmission are a separate item to be deducted. 376 TABLE OP THE VALUE OP In small Silver Coins Mint Remedies and loss by abrasion form a considerable item ; when sucb pieces come to be melted down, there is a loss of from 5 to 15 per cent, npon them. Gold and Silver Coin, mnch worn, should be melted and assayed whenever there is a sufficient quantity at hand for the purpose. We take GOLD at 77s 10|d per oz. Standard, and SILVER at 60|d Full Nominal Value. Fun Value in Exchange. MetaUio Value, wltli due aUow- ance for Mint Eemedies and fair abrasion. ENGLISH B d s d Gold Sovereign .... 20 — 19 10 Half Sovereign 10 — 9 lOf SiLVEB Florin .... 2 , 1 9f Shilling .... 1 — - lOJ Sixpence .... — 6 - 5i Threepence — 3 - 2i Crowns, Half Crowns, and Four- penny bits are no longer coined. PEENCH, BELGIAN, ITALIAN & SWISS Frs. Cts. Gold 100 Pranos piece 100 — 79 3i 78 Hi 50 „ ... 50 — 39 7f 39 5i 20 „ ... 20 — 15 lOi 15 9i 10 „ ... 10 — 7 111 7 lOi 5 „ ... 5 — 3 Hi 3 lOf SiLVEB 5 Pranos piece 5 — 3 Hi 3 10 2 „ 1 The new 2 — 1 7 1 4| 1 Franc pieces are 1 — — 9i - 8i i „ only 835 — 50 — 4* — 4, i .. -i fine. — 20 — 11 - li Up to 1866 these pieces were all 900 fine of the same weight. GERMAN & AUSTRIAN Thai. Gros. Gold Crowns ■j Varying 9 10 27 5 27 3i Half Crowns } in price 4 20 13 8i 13 7 THE PRINCIPAL COINS. 377 FuU Nominal VaJue. Full Value in Exchange. MetalUo Value, with due allow- ance for Mint Eemedies and fair abrasion. NORTH GERMAN Thai. Gros. s d B d SiLTEH 2 Thaler pieces 2 — 5 lOi 5 9i 1 » ... 1 — 2 Hi 2 lOi i „ ... — 5 — 5f - 5i A „ ... — 2i — 2f — 2 ^ „ ... — 1 — li - 4 ■eo J) ... — i — i - i SOUTH GERMAN Glden . Kr. SiLVEB 3i Gulden pieces 3 30 5 lOi 5 9i 2 „ „ . . 1 45 3 4i 3 3 11 „ „ . . 2 — 2 Hi 2 lOi 1 „ ,. • • 1 — 1 8* 1 7f i „ „ ■ ■ — 30 — 10 - 9i ^ „ -. — 6 — 2 - If ^ ,, ,. • • — 3 — 1 - * TO » " • ■ — 1 — i - i AUSTRIAN Elm. Gets. Silver 3 Florin pieces 3 — 5 lOi 5 9i 2 „ „ . . . 2 — 3 11 3 10 li „ „ ■ ■ ■ 1 50 2 Hi 2 lOi 1 „ „ . . . 1 — 1 Hi 1 11 i „ „ . . . — 25 — H - 5i T& " » • • • — 10 — 21 - 2i ^ » „ . . . — 5 — li — 1 DUTCH Gold Double William" 19 86 33 1 32 10 William i „ Varying in 9 98 96 16 8 6i 3i 16 4i 8 1 Double Ducat price. 11 26 18 9 18 4 Ducat 5 63 9 4i 9 Oi Silver Ryksdaaler 2 50 4 2 4 Oi Guilder .... 1 — 1 8 1 7i i » .... — 50 — 10 - 9i 4 » .... — 25 — 5 - 4f 10 5 — 2i li — 2 — 1 378 TABLE OP THE VALUE OP Full Nominal Value. Full Value in Exchange. Metallic Value, with, due allow- ance for Mint Kemedies and fair abrasion. SWEDISH Rikad. Ore. B d B d Gold Ducat — (varying in price). 8 50 9 3i 8 Hi SiLTEK Speciesdaler 4 — 4 6 4 Si i Speciesdaler 2 — 2 3 2 li 1 Eiksdaler 1 — 1 li 1 Of i „ ... — 50 — 6i - 6i i „ ... — 25 — 3f — 3 T5 J» ... — 10 — If - li NORWEGIAN Spes. Skg. SiLVEE Speoieedaler . 1 — 4 5i 4 3 * „ ... — 60 2 21 2 1 1 r >• ... — 24 1 If 1 Oi 1^ „ ... — 12 — 6i — 6 tV .. -, • • — 8 — 3 - 2f Tff » ... — 4 — 14 - li ^ „ ... — 2 — Of - Of DANISH Gold Double Fredericks Vary. d'Or i ™g.'" Dler. 14 Skg. 64 32 6 31 11 L price Frederick d'Or ) about 7 32 16 3 15 11 SiLVEE Speciesdaler 2 — 4 5i 4 3 Kigsdaler .... 1 — 2 2f 2 1 i „ . . . . — 48 1 11 1 Oi i „ . . . . — 32 — 8i - 8i 1 6 » • • • • — 16 — 4f — 4 ^ „ . . . . — 8 — 2i - IJ ^ „ . . . . — 4 — 1 - oj 1 Tj I) ■ — 3 — Oi — 01 RUSSIAN Rbls. Cpks. Gold Half-Imperial . 5 15 16 4i 16 3i SiLTEE Rouble .... 1 — 3 2 8 1 2 , — 50 1 7 1 6i i „ .... — 25 — 9i — 9 i „ .... — 20 — n - 7i To » .... — 10 — 3| - 3i ■So )> .... — 5 — n - li THE PEINCIPAL COINS. 379 FuU Nominal Talue. Full Value in Exchange. MetaUio Value, ■with due allow- ance for Mint Remedies and fair abrasion. GREEK Dnuai. Lepta. s d s d Gold 40 Draohmai piece . 40 — 28 4i 28 li 20 „ . . . 20 — 14 2i 14 1 Silver 5 Draohmai piece . 5 — 3 6* 3 44 1 „ . . . 1 — — 8i — 8 i „ . . . — 50 — 4i - H i „ . . . — 25 ■ — 2i - If SPANISH Dolls. Cts. Gold Isabella .... 5 — 20 74 20 5 SiLVBE Dollar .... 1 — 4 11 3 llj Escudo .... — 50 2 oi 2 — Peseta .... — 20 — lOi - 9f Half Peseta — 10 — 5i - 4f Real de Vellon — 5 — 2i - H PORTUGUESE Milreis Eels. Gold Coroa .... 10 — 44 41 44, 1 i , 5 — 22 2f 22 — 1 T » 2 — 8 m 8 9 To » • 1 — 4 5i 4 4i SiLVEB i Milreis .... — 500 2 2i 1 lli i „ .... — 200 — lOf — 9 To » .... — 100 — 5f - 4f ^0 » • ■ • — 50 — 2f - 2i TURKISH Pias. Paras. Gold Medjidi^ .... 100 — 18 Of 17 9 i „ .... 50 — 9 0* 8 10 SiLVEU Medjidi^ .... 20 — 3 7* 3 5i i „ .... 10 — 1 94 1 n i 5 — — lOf — 10 To )■) .... 2 — — 4i - 3f ■5I) j> • • ■ • 1 — — 2J — If 380 TABLE OF THE VALUE OP Metallic Value, Full Nominal Value. Pull Value in Bxctange. with due allow- anoe for Mint Remedies and fair abrasion. AMERICAN Dolls. Cts. s d s d Gold Double Eagle . 20 — 82 2i 81 6 Eagle 10 — 41 1 40 9 i „ 5 — 20 6J- 20 3 i „ 2 50 10 3i 10 1 To " 1 — 4 li 4 — SiLVEK Dollar 1 — 4 li 4 1 i „ — 50 2 Of 1 lOi i „ — 25 1 Ok — 11 To » — 10 — ^ - 4i 1 "20 » — 5 — 2f — 2 MEXICAN DoUs. Cts. Gold Doubloon 16 64 8 63 — i „ Varying 8 — 32 4 31 6 i „ . in price. 4 16 2 15 6 i „ Gold 2 8 1 7 6i Td " -^ value. 1 — 4 Oi 3 9 SiLTEK DoUar .... 1 — 4 3i 4 1 ' i ,. — 50 2 li 2 Oi X 4 )) ■ ■ — 25 1 Oi 1 — i „ ■ ■ — 12i — 61 - 5i 1 — Si — 3i - 2i ^ ,. ■ ■ — H — li - li NEW GRANADA Dolls. Cts. Gold Condor ^ q^^^ 10 — 40 3i 39 11 * " f value. 5 — 20 H 19 11 * » ; 2 — 8 Oi 7 OJ Silver Peao .... 1 — 3 Hi 3 10 Peso Macuquina — 80 •3 2 3 — i Peso .... — 20 — 9i - 8i PERUVIAN Sola. Cts. Gold 20 Sols Pieces . 20 — 79 3i 78 Hi 10 „ ... 10 ~ 39 n 39 5i 5 „ ... 5 — 19 9f 15 9i 2 „ . . 2 — 7 4i 7 lOi 1 Sol . 1 — 3 Hi 3 lOf THE PEINOIPAL COINS. 381 Full Nominal Value. Full Value in Exchange. Metallic Value wltli due allow- n.Tnnft fnv Minh Bemediea and fair abrasion. Sols. eta. s d s d Silver Sol .... 1 — 3 Hi 3 10 i„ .... — 50 1 llf 1 11 i„ .... — 20 • — 9i — 9 CHILIAiT Gold Condor i „ .... 1 Pesos. Cts. 10 — 37 5* 37 — 5 — 18 81 18 4i T ,. • • ■ . 2 — 7 5J 7 2 SiLVEE i Peso .... — 50 1 91 1 8 i „ .... — 20 — 7f - 6f t'o „ ■ ■ ■ • — 10 — 3f - 3i URUGUAY Pesos. Cts. Gold 4 Pataoon piece 5 — 16 1 15 9i 2 „ .... 2 50 8 Oi 7 lOi 1 „ .... 1 25 4 Oi 3 11 SiLVBE 5 Real piece — 50 1 m 1 9i 2i „ ... — 25 — m - lOJ u — 122 — Sf - 5* BRAZILIAN Gold 20 Milreis Milreis. Reis 20 — 44, lOi 44 6 10 „ . SiLVEB 2 Milreis . 10 — 2 — 22 4 5i 5i 22 2i 4 — !„.... 1 — 2 2J 1 llf i „ ■ • — 500 1 H - llf INDIAN Rups. Ans. Gold Mohur (varying in value) . 15 — 29 2i 28 6 SiLVEK Rupee .... 1 — 1 lOf 1 9J i „ .... — 8 — Hi - lOS i „ .... — 4 — 5f — 5 JAPANESE Itziboos. Gold Cobang .... 4 — 5 7 5 5 i „ Niboo 2 — 2 9i 2 8 i „ Nishi . Oi - — 8f - 71 SiLVEK Itziboo .... 1 — 1 5i 1 4f Ishi or i Itziboo Oi - — 4i — 4 382 CHAPTEE II. SHIPMENTS AND ARBITRATIONS IN BULLION. TTTB now propose to give a series of Invoices and ^ * Account Sales in connection witb. Shipments of Bullion between England and other Countries. They will serve to show, in the first place, how instruments of this kind are made out; and, in the second place, how the Practical Par of Exchange deviates in one direction or the other from the True Mint Par of Ex- change. Whenever the Balance of Trade between two countries turns decidedly in favour of one of them against the other, shipments of Bullion from the latter to the former become necessary. So long as the Ex- change of Commodities and other values remains on a pretty equal footing between two Countries, the supply of accounts of indebtedness, transferable from one to the other, by way of Bills of Exchange, furnishes the means of balancing their mutual liabilities. But if one country, by trade or otherwise, obtains more value from another country than it returns, it becomes the Debtor in want of Exchange, whilst the other country, the Cre- ditor, has a surplus of Exchange. The balance between the two must then be settled by Bullion. Thus, accord- ing to Demand and Supply, a rise or fall in the Rates SHIPMENTS AND ARBITRATIONS IN BULLION. 383 of Exchange takes place, until the so-called Bullion points are reached, at whicli, under ordinary cir- cumstances, a fortlier rise or fall is checked, upon the settled limits of the respective value of Gold or Silver in the two countries. Under extraordinary circumstances, in times of war or revolution, the Bullion points may be passed ; but these are exceptional contingencies out of the regular course of Commerce. In reference to the case of indebtedness of one Country to another, we have used the term " by trade or otherwise." This " otherwise " means that the indebtedness of one country to another may not always arise from the direct balance of trade between the two ; but that it may be owing to the influence of the trade of one or several other countries, with either of the two. Austraha, for instance, is generally indebted to England by the direct trade between the two countries, and so are other Colonies, and many Eoreign Coun- tries, importing commodities from England ; and the Exchanges with these are accordingly in favour of England. India and China, on the other hand, are generally England's creditors, for the same reason that they supply her with an excess of goods ; and the Exchanges with these are accordingly unfavourable to England. But, as regards France, the case happens frequently that, although the direct balance of trade is not against England, yet the Exchange is so, and that we have to ship Bullion to Paris. This arises, in the first place. 384 . SHIPMENTS AND AEBITEATIONS IN BULLION. from the simple fact that England, through her im- mense commercial fleet, is the largest carrier of Bullion, which comes to her shores partly for her own account, and partly for account of other European Nations ; and this makes the Exchange, as a rule, appear unfavorable to her. It may, in the second place,, arise from Banking and Exchange operations, in which French Capitalists are interested. At the present time, for instance, the French Bankers are large holders of English BiUs, whilst Enghsh Bankers rarely hold French Bills. Operations on the Stock Exchange may also con- tribute to create an inequality in this respect. Thus, if a Foreign Loan is to be brought out in London, the parties interested wiU take care to buy up suitable Exchanges for remittance, which wiU thus influence the rates " otherwise " than by the direct balance of trade. In these remarks we have touched upon a few only of the manifold and incessantly varying circumstances and influences bearing upon the question of Eates of Exchange, and the Theory of the Exchanges. In the subjoined Invoices and Account Sales of BulUon shipped between England and other countries the full rates of freight and insurance are charged. For the manner of shipping and insuring Bullion we refer to Chapter on " Bullion Brokers and Shipping of BulHon." The restdts of such shipments are not always ahke ; but the examples chosen for illustration here have been selected with a view of giving the nearest possible average results. 385 GOLD SHIPMENTS. FROM LONDON TO PARIS. Intoice op Ten Baes Fine Gold, bought of the Bank of England, and Sold to the Mint in Paris. Weight. Assays. Standaed oz. Oza. Dwts. Grns. 1 192 3 12 B l-3f 208 16 12 2 191 1 „ 1-3| 3 184 15 12 „ 1-3| 408 3 15 4 195 12 ■ „ 1-3| 5 193 16 „ 1-3| 6 197 ., 1-3| 7 164 5 „ l-3i 816 2 15 8 190 1 12 „ l-3f 9 189 17 ,. 1'3| 10 156 2 „ 1-3| 582 9 10 Standard oz. 2015 12 4 Standard oz. at 77s 10|d Case and Packing . Porterage Freight 4s per cent. Insurance x&th per cent. . Cost in London. £7848 £0 7 16 15 14 7 17 23 19 £7872 25 386 GOLD SHIPMENTS. Account Sales in Paeis. No. Kilos. Fineness. Taeiep Rates. Value pee Bae. Fs. Fs. 1 5-973-750 997-5 3,428-40 20,480-40 2 5-948-560 996-2 3,423-93 20,367-42 3 5-744-820 996-1 3,423-59 19,667-91 4 6-063-010 998-3 3,431-16 20,803-10 6 6-026-090 998-5 8,431-84 20,677-14 6 6-123-960 998-0 3,430-12 21,006-91 ■ 7 6-105-020 998-2 3,430-81 17,614-35 8 5-909-995 997-0 3,426-68 20,251-67 9 6-900-960 997-4 3,428-06 20,228-84 10 4-874-215 997-7 3,429-09 16,714-10 197,710-84 Essais, frais de fonte et divers. 46-60 Fs. 197,666-34 (The first nine Bars -weigh less in the French Account Sales than the Invoice weight given in the Enghsh Invoice ; this is 0"wing simply to the fact that the English Assay pieces of all the Bars have been melted with Bar No. 10, which is accordingly heavier in proportion, barring the slight loss incurred in the melting. The Exchange resulting from this shipment is fs. 25-109 per £1 SterUng ; but, deducting ten days' interest at 3 per cent, for Mint Certificate, it is fs. 26-089. Shipments of fine Gold from the Bank to France are made when the supply of Bars in the Market runs short, and when the Exchange is at 25-07| to 26-12| ; although some shippers always commence exporting Bank of England Gold when the Exchange is 25-10 to 25-15. Gold at 77s 9d, or l|d per oz. cheaper than the selling price of the Bank is frequently obtainable in the Market (with a Brokerage GOLD SHIPMENTS. 387 of Ith per cent., which brings the price ap to 77s lOgd per oz. ; the Brokerage, however, is often reduced to j^th per cent.); 77s 9|d to 77s lOd is paid occasionally for suitable parcels in the Market. Each jd saved in the prime cost iu London improves the rate of Exchange by frds of a Centime per £. American Gold Coiu, being 900 fine, sells at the Tarifi" rate in Paris. Invoice op United States Gold Coin sent feom London TO Paris. 2 Kegs containing each 11 Bags with 260 Double Eagles, together Dols. 110,000 weigh- ing 6,908-425 ozs. at 76s 4d - - - - £22,560 9 9 Brokerage |th per cent. - - £28 3 9 Packing, &c. - - - - 16 6 Freight and Insurance - - 67 13 96 13 3 £22,647 3 Account Sales in Paris. Double Eagles— KUos 183-772-500 at Fs. 8,093-30 for 900 fine ... - - Ps. 668,468-47 Charges 12-47 Fs. 568,451-00 Gi-ving an Exchange of Fs. 26-10. The Refining of Gold BuUion in France being so much cheaper than in England (6 francs per Kilo. = 22| MiUiemes, the cost in England being = 83 MiUiemes), exporters seek to purchase Refinable Gold, and pay a correspondingly higher price for it, ranging from 77s 10|d to 78s per oz. 388 GOLD SHIPMENTS. Invoice op 18 Baes Refinablb Gold sent to Paeis. NO. WEIGHT. ASSAY. STANDARD. Pennyweights of Silver per 12 oza. Pennyweights of Silver in the Bar, less 20 dwts. for each 12 ozs. Oza. Carats 02S. 1 251-000 W2-2f 221-408 441 612 2 252-300 „ 2-3i 220-046 47 567 3 60-025 „ 3-1 61-158 601 162 4 71-775 „ 6-0| 51-691 791 366 5 37-300 „ 4-li 30-042 61 127 6 37-275 „ 4-li 29-969 601 126 7 40-075 „ 3-3| 32-847 58 126 8 40-350 „4-0 33-014 68 127 9 102-476 » 3-l| 87-192 61 264 10 106-975 „ 2-11 95-884 381 166 11 34-050 „4-3 26-699 64 124 12 54-275 „ 1-2| 50-036 341 65 13 65-700 „ 3-01 48-026 481 132 14 56-675 „ 0-21 65-209 241 21 15 20-775 „ 1-1| 19-565 32 20 16 26-375 „ 0-lf 26-963 22 4 17 31-726 „ 3-0| 27-084 51 82 18 88-160 „ 2-2 78-134 40 147 1367-176 1183-966 3115 1,183-966 ozs. Standard at 78s - 3,116 dwts. Silver fine at 6s 6d per oz. Case and Packing - - - £ 6 Porterage ----- 036 Freight and Insurance 3 per mille 13 19 6 Brokerage |tli per cent. - - 5 16 6 £4,617 9 4 42 16 7 £4,660 5 11 20 5 6 Cost in London £4,680 11 6 GOLD SHIPMENTS. 389 Account Sales in Paeis. No. Kilos. Or Argent. Or Fin. Argent Fin. 1 7-806-980 809 185 6-315-847 1-444 2 7'847-410 800 196 6-277-928 1-538 3 1-866-885 782 204 1-459-904 0-400 4 2-232-450 660 333 1-473-417 0-743 5 1-160'160 738 257 0-856198 0-298 6 1-159-380 737 257 0-854-463 0-298 7 1-246-470 751 246 0-936099 0-307 8 1-255-025 750 244 0-941 -269 0-306 9 3-187-330 780 215 2-486-133 0-685 10 3-327-290 822 174 2-735-032 0-579 11 1-059-075 719 275 0-761-475 0-291 12 1-688-140 846 150 1-428166 0-253 13 1-732-460 790 206 1-368-643 0-357 14 1-759-680 895 100 1-574-914 0-176 15 0'646-175 864 132 0-558-295 0085 16 0'820-355 903 92 0-740-781 0-075 17 0-986-755 783 209 0'772-629 0-206 18 2-741-770 813 184 2-229-059 0-504 42-523-790 33-770-252 8-545 4 3434-44 fs. 115,981-90 Argent fin 8-545 k fs. 218-89 fs. 1870-42 Prime 10 per mille 18-70 fcs. 117,871-02 Affinage 5 fs. per kilo. 212-62 18 Essais i 3-90 - - 70-20 Frais divers - - - 3-50 Net result '- - - - fs.117,584-70 This parcel has been valued at the Tariff du Commerce of 390 GOLD SHIPMENTS. fs. 3434-44 per kilo, fine Gold without Premium, and fs. 218-89 per kilo, fine Silver, with 10 per mille Premium. The Shipment is presumed to be made between two regular correspondents, free of Melting Charges and Brokerage in Paris. The Exchange resulting is fs. 25-1218. These examples of Shipments of Gold from London to Paris show fair average results. Variations in price, conditions of Brokerage, &c., will necessarily affect these rates, and so will, of course, also discrepancies in the weight and Assays of the Bars, and differences in the Shipping and in the Insurance. At certaia times, when Paris happens to be full of Gold, a discount on the Tariff du Commerce is demanded, at other times a premium may be made. Invoice of 10,000 British Sovereigns (New). £10,000 Case and Packing -£076 Cab - - - 2 6 Freight and Insurance 30 ■ 30 10 £10,030 10 Sold in Paris weighing Kilos 79-837-800 at the Mint Tariff rate for 916 fine Fs. 3,148-29 - - Fs. 251,3S2-54 Charges - - 10-25 Fs. 251,342-29 Giving an Exchange of Fs. 25-06 per £. It is therefore, not profitable to send British Gold to Paris, even when the Coin turns out, as here found by French weight, to within I per mille of the full legal British Mint weight. GOLD SHIPMENTS. 391 FROM PAKIS TO LONDON. Shipment of Gold Baes bought in Feance, at the Maeket Peice of Fs. 3434-44! with 1 pee Mille Peemium. 12 Baes Gold. No. Kilos. Oe Kilos. Fin. 1 6-316-770 998 6-303-138 2 9012-395 995 8-967-333 3 5-779-620 996 6-756-402 4 11-167-690 995 11-101-902 5 4-990-666 998 4-980-684 6 4-987-035 992 4-947-139 7 13-006-620 988 12-850'540 8 8-853-445 993 8-791-471 9 10-227-375 975 9-971-691 10 6-478-880 992 6-427-049 11 12 5-931-430 3-070-915 996. 996J 8-966-335 89-811-740 89-063-684 a Fs. 3,434-44 Fs. 305,883-88 1 per cent, prime 305-88 Fs. 306,189-76 Caisse - - ... Porterage Transport and Assurance Courtage, i^^tli per cent. Fs. 16- 3-50 918- 306-19 1,242-69 Fs. 307,432-45 These Bars, in order to be sold to tlie Bank of England, require re-melting, and each. Bar must not exceed 200 oz. in weight. There are several among these weighing more than 6 kilos. In order to save Assays, the Melter is directed to melt No. 1 and Nos. 5, both 998 fine, together, and to cast the mass into two fresh Bars ; to cast Nos. 2, 4, 8 and 9, into two Bars each ; No. 7 into three Bars ; Nos. 6 and 10 together into two ; 892 GOLD SHIPMENTS. Nos. 3, 11 and 12, into one Bar each. TLns 18 Bars are obtained, weigliiag 2886"375 oz., equal to 89'745'261 kilos (wMcli shows a loss by melting of 66| grammes, or rather more than 2 ozs., 9 dwts. being recovered in the scrapings). The English Assays, in two instances, yield |th grain less. Account Sales in England. Weight. Assays. Standard. Ozs. Ozs. 1 181-025 B 1-3| 2 182-275 „ 1-3| 395-295 3 138-426 „ l-3f 4 151-250 „ l-3f 313-952 5 186-750 „ 1-31 6 196-425 „ 1-3| 7 162-150 „ 1-3^ 690-716 8 183-200 „ 1-3| 9 185-250 ij 1'3| 398-282 10 137-025 „ l-2f 11 142-426 „ 1-2| 12 138-300 „ l-2f 449-793 13 144-526 „ l-3i 14 139-850 „ l-3i 307-803 16 162-425 „ I'll 172-576 16 165-826 )J 176-426 17 190-660 „ l-3i 18 98-700 „ 1-34 313-902 2,886-375 3,118-744 At 77s 9d per oz. £3 1 1 16 Melting 2,885 ozs. at Jd Less Scrapings 9 dwts. at ■ 18 Assays at 4s 6d Porterage Giving an Exchange of Fs. 25-368 per £ Sterling. £12,124 2 8 £1 4 1 4 1 5 5 10 1 £12,118 12 7 GOLD SHIPMENTS. 393 In this case again, the same as in the preceding ones, the Premiums on Gold in Paris, and other incidental matters, may alter the rate. NAPOLEONS FROM PARIS TO LONDON. Invoice of 20 Feancs Pieces (New) in 10 Bags op 1,000 Napoleons Each. Fs. 200,000'0 Packing Fs. lO'O Porterage, &c. .... 8'0 Freight and Insurance ... 600-0 618-0 Fs. 200,618-0 Sold to the Bank of England, found to weigh j No. W eight. 1 Ozs. 207 Dwts. Grns. 6 2 207 7 3 207 6 12 4 207 7 5 207 6 12 6 207 6 7 207 6 12 8 207 6 9 207 6 12 10 207 7 2,073 5 At 76s 2id per oz. . . £7,899 18 11 Cab and Porter ... 36 £7,899 15 6 Giving an Exchange of Fs. 25-396 per £. The shipment of Gold Bars to London is therefore cheaper than that of Napoleons, even when of the full weight here found. 394 GOLD SHIPMENTS. Comparing the two sets of Shipments of fine Gold, we find that the one from London to Paris gives an Exchange of fcs. 25'109, the other from Paris to London an Exchange of fcs. 25'368 ; whilst the trne Mint Par of Exchange between the two places (see page 301) is 25'2215 ; so that when the Exchange on France rises 11 J centimes below Par (the difference between 25 '221 5 and 26 '109) Gold is sent from London to Paris, and when it gets cheaper, say 14| centimes above Par (the difference between 25'2215 and 25'368), London receives Gold from Paris. The fact that Gold is rather sent from London to Paris than vice versa, is attributable, in a measure, to the circumstance that Bullion is better valued in France than here, and also that the Bank of England's fixed purchasing price is 77s 9d per oz. Standard. This accounts for the 3j Centimes difference against England. Bearing in mind, however, that different shipments may turn out to yield different rates, we may set this consideration aside, and assume, as a general rule. That when the French Exchange is at 25'10, it pays to send Gold from England to France ; And, when the Exchange is at 25'35, it pays to send Gold from France to England. The Mint Par being taken at 25'22i^. we have thus a m.argin of 12i Centimes, or i per cent, either way, and 25 Centimes, or 1 per cent., between the two extreme points. The I per cent, either way being absorbed by charges of Brokerage, transporting, realisation and incidental costs, constitutes a natural bar to the more frequent interchange of shipments of Bullion betwen the two countries. Although, so soon as the Actual Par of Exchange with Prance changes from the Mint Par of 26-22| to 25-20, or 25-17|, or 25-15, there is a tendency to take Gold from us, the Exchange then being what is called unfavourable to England ; yet to iuduce actual withdrawals of Gold from our shores to France requires that the Exchange -with that country should fall to 25-10 or 25-12|. And, oh the other hand, so long as the Exchange from Paris on London does not rise GOLD SHIPMENTS. 395 higher above the Mint Par than 25'27| or 25-30, it will not pay to send ns Gold over here ; but so soon as the Exchange rises to 25-35, we receive shipments of Gold Bullion from Paris. Mean- while, before these so-called Bullion points are reached, the rates floating between them and the Mint Par are sustained by a cor- responding influence on other Exchanges. England, for instance, whilst a Debtor to France, and unable to obtain a cheap direct Exchange in Paris, may be a Creditor of Holland, Italy, Spain, or other countries, with which Prance may be able to exchange advan- tageously. English Drafts on these places then go to France for remittance, and uphold the rate of Exchange either temporarily or until the balance of trade turns the other way. But if the supply of both French and other Foreign Bills falls short, the Bullion point is reached nevertheless. The margin between the two Bulhon points of 1 per cent, is sufiBciently large to allow considerable play to the numerous con- tingencies connected with International Commerce and Credit, as dependent on Industry, Harvests, and Political and Social Events ; and the balance oscillates pretty steadily between the two extreme points. Revolutions, Wars, or other startling Political Events alone will widely disturb the working of this balance beyond the natural limits. People who are not versed in commercial and financial afiairs, when they hear of the absolute sway of the rule of the Exchanges, cannot understand that the matter is governed by a natural law, to which the Banker has to submit just the same as everybody else. GOLD FROM NEW YORK TO LONDON. The following is a shipment of fine Gold Bars, melted, assayed, and stamped by the United States Assay Office. These Bars form a convenient remittance. In the Account Sales in England it may be noticed that the Assays show slight difierences; thus the first Bar, invoiced at 995^, is returned of the same Bettemess as the Bars of 997, namely B 7f grains, which in Milliemes is only 996-09, whilst two Bars of 997 are returned as B 7f or 997-40. The Bars are sold at 77s 9d (not to the Bank) with | per cent. Brokerage ; but then the cost of re-melting has been saved. 396 GOLD SHIPMENTS. Invoice of One Keg Fine Gold Baks feom New York TO London. Nos. Ozs. Fine. Stamped Value. Dols. 1 249-74 995i 5,139-35 2 48-31 996 994-66 3 48-21 996 992-60 4 43-72 996 900-15 5 39-94 996 822-31 6 239-58 997 4,937-70 7 238-18 997 4,908-85 8 182-52 997 2,731-21 9 75-78 997 1,561-81 10 76-85 997 1,683-86 11 70-78 997 1,458-77 12 71-41 997 1,471-76 13 73-79 997 1,620-80 14 72-85 997 1,501-42 15 67-92 997 1,399-82 16 73-06 997 1,505-76 17 68-93 997 1,420-63 18 67-46 997 1,184-24 19 62-93 997 1,090-88 20 62-17 997 1,075-21 21 64-38 997 1,120-76 22 50-45 997 1,039-77 23 51-04 997 1,051-92 24 54-75 997 1,128-39 25 47-60 997 981-03 2,112-35 43,523-64 Keg and Packing for Shipment - Dols. 2-50 Drayage to Steamer - - - 1-76 4-25 Dols. 43,527-89 GOLD SHIPMENTS. 397 Account Sales One Keg Pine Gold Bars in London. Nos. Ozs. Assay. Ozs. Standard. Grs. 1 249725 I 3. 7| — 2 48-300 )) ' 8 — 3 48-200 7-5- JJ '8 — 4 43-725 5) * 8 — 6 89-950 |75 ?) '8 — 6 239-575 ) '"8 — 7 238-175 , n — 8 132-600 ■75 ) ' 8 — 9 75-775 <7A J ' 8 — 10 76-860 , n — 11 70-775 > n — 12 71-400 7^ J ' 8 — 13 73-775 176 J ' 8 1,530-788 14 72-850 , n — 15 67-900 . n 16 73-060 . n — 17 68-925 , n — 18 57-450 , n 369-660 19 52-925 > n 57-586 20 52-176 , n 56-696 21 54-375 , n 69-164 22 50-450 , n — 23 61-025 - n — 24 54-750 , n — 25 47-600 , n 221-486 2,112-200 2,295-370 398 GOLD SHIPMENTS. At 77s 9d per oz. £8923 5 CHAEGBS. Freight |tli per cent. Insurance 5s 3d per cent. (New York £11 3 1 to London) ..... Charges in Liverpool and Freight to London ...... 23 8 1 10 6 Bags and Delivery Brokerage |th per cent. 2 11 3 6 1 47 7 2 £8876 17 10 PEOCEEDS. Griving an Exchange of 48'939 Pence per Dollar, or 110| in New York. Reversing this Shipment as made from London to New York, under the same conditions as to price (corresponding to 77s lO^^d in London), The cost here would be £8923 6 Add charges- - - 47 17 10 £8971 2 10 Shipped to New York the Bars (unless United States Bars) require re-melting, which would cost 6 cents, per 100 Dollars ; allowing also for a small loss of weight. The Bars would reahse Dels. 43627'89 Less melting and loss of weight - - 40'00 Dels. 43487-89 Which would give an Exchange of 49'509 Pence per DoUar, or in New York, 109. The next is an Invoice of United States Eagles, new from the Mint in Philadelphia, sent from New York to London, sold in London at 76s 4d (free of Brokerage). The Bank Price is 76s 2|d. GOLD SHIPMENTS. 399 Invoice of Two Kegs containing 110,000 Dols. United States Gold Coin. No. 38. 1 Keg containing U. S. Double Eagles Dols. 55,000-00 „ 39. 1 Keg containing U. S. Double Eagles 65,000-00 Kegs Drayage, &c. Dols. 3-00 1-75 Dols. 110,000-00 4-75 Dols. 110,004-75 Account Sales or same in London. Dols. Ozs. Dols. Ozs. 5,000 268-550 6,000 268-600 5,000 268-550 5,000 268-575 5,000 268-575 5,000 268-675 5,000 268-560 6,000 268-650 5,000 268-660 6,000 268-525 5,000 268-525 5,000 268-560 5,000 268-625 6,000 268-576 5,000 268-600 5,000 268-525 5,000 268-650 5,000 268-550 5,000 268-600 5,000 268-650 5,000 268-650 5,000 268-625 2,964-225 2,954-200 6,908-426 ozs. at 76s 4d (Bank price is 76s 2|d) Freight New York to Liverpool ^th per cent. - - - - £28 3 9 Insurance New York to London 6s 3d per cent. - - - 59 3 10 Charges in, and from Liverpool - 3 4 4 Bags and delivery - - - 6 6 Brokerage (None) - - - Proceeds £22,550 9 9 90 18 6 £22,459 11 4 Giving an Exchange of 49 Pence per Dollar, and in New York IIO3. 400 GOLD SHIPMENTS. The Bank of England will sometimes have a stock of Eagles on hand, for sale at 76s 6|d per oz. ; or Eagles may be in the Market at 76s 3d or 76s 5d, which latter rate, with Brokerage, comes to about the same price. It is advisable, if possible, to avoid buying Coins quite new from the Mint. Selecting an average parcel, we ship to New York as per Invoice subjoined. Invoice of Eagles feom London to New Toee. 1 Case, containing 10 Bags United States Gold Coin, weighing, Dols. 6000 each, oz. 2684750 at 76s 6id - - Case and packing Charges to Liverpool Insurance 5s 6d per cent. Realising in New York Gold Coin Less freight gth per cent. Charges .... - £10,274 15 3 . 17 6 1 12 9 - 28 4 3 30 14 6 £10,305 9 9 . . Dls. 50,000-00 - Dls. 62-50 . 3-00 65-50 Dls. 49,934-50 Giving an Exchange of 49-631 per Dollar, or 109 in New York. The Par of Exchange between New York and London is 109|.* SMpments of Gold from New York to London therefore can be made wten the Exchange for Bills on London at sight is 110; and -w^hen it stands at 109 Gold can be sent from London to New York, which again proves the rule as stated before. f * See Page 347. t It must be borne in mind that the London Exchange here taken is the sight Exchange, whilst that quoted in New York is meant for the so-called 60 days' Exchange on London, to which London interest must be added for short. GOLD SHIPMENTS, 401 GOLD FROM CALIJTORISriA. The Calif ornian Gold is generally Eefinable Gold, and in San Francisco a premium of | to | per cent, is paid on that account. In the Invoice here given the premium is -f per cent., but, per contra, the Silver is given in. In London the Silver is accounted for, and a higher price is paid for the Gold; in this case 77s 10|d. Invoice of Eighteen Gold Baes Shipped from San Feancisco TO London. Gold Bae. Fine. Weight. Value. Ozs. Dols. 1 808 251-00 4,192-40 2 798 252-31 4,162-13 3 780 60-03 967-92 4 659 71-85 978-79 5 738 37-30 569-04 6 736 37-29 667-34 7 750 40-08 621-39 8 749 40-37 625-06 9 780 102-66 1,653-51 10 823 107-00 1,820-38 11 718 34-00 504-64 12 843 64-28 946-90 13 789 65-72 908-79 14 892 66-57 1,043-11 15 862 20-79 370-45 16 903 26-36 492-05 17 782 31-74 613-08 18 813i 88-19 1,483-04 1,367-43 22,419-01 Premium ^ per cent. - . - Chaeges -. — Freight to Panama I percent. Dols. 196-17 Primage - - - 9-80 Cartage - - - 0-75 Bills of Lading Stamps - 0-50 Dols. 134-62 Dols. 22,553-53 207-22 Dols. 22,760-75 402 GOLD AND SILVEE SHIPMENTS. The Account Sales in London of this Invoice -will be found at page 182. The same realised - ... £4,643 9 7 Which, deducting Freight from Panama f per cent. 40 14 1 Grave nett proceeds ... - £ 4,602 15 6 Or an Exchange of 48' 534 Pence per Dollar. We have thus given examples of Gold Shipments bet-ween England, on the one hand, and France and the United States, on the other. With the exception of Australia, these are the principal parts dealing ia Gold with England. Shipments of Imperials from or to Russia have almost ceased, and with other countries England deals principally in her own Gold Coins. RUSSIAN HALF IMPERIALS FROM ST. PETERSBURG. 7,174 Half Imperials .... Rbls. 86,946-10 Shipping Charges and Insurance - - 45 '00 Rbls. 36,991-10 Weighing in London — 1,508-3 ozs. at Bank price 77s 7Jd - - £5,853 17 8 Landing Charges, Freight, &c. ... 15 2 £ 5,838 15~~8 Giving an Exchange of 37| Pence per Rouble. SILVER SHIPMENTS. Silver is shipped for the Continent -nrhenever there is no demand here for India. At 60J to 60| Pence per ounce it pays to be sent to Hamburg, Amsterdam, Prance, &c., according to the state of the Exchanges. But when the demand for India arises, and the stock in the market here is exhausted, the stores of Silver on the Conti- nent supply what is required, and Silver returns to England at prices varying from 61 to 62j Pence. SILVER SHIPMENTS. 403 SILVER BARS TO HAMBURG. Bt Gbnbeal Steam Natigation Boats. Nos. Weight. i ^lSSAT. Standard. Ozs. Ozs. 1 1,027-50 I 5 16i — 2 1,104-00 , 16i — 3 1,116-50 , 164 — - 4 1,059-00 , 16| 4,627-115 6 1,024-00 , 17 — 6 1,203-00 , 15' — 7 1,012-60 , I!' — 8 1,008-50 , 17 — 9 998-00 , 17 5,642-338 10 1,091-00 , 17- — 11 1,094-00 , 17- — 12 981-50 , 17- 13 873-60 , 17- — 14 1,060-00 , 17- — 15 992-00 , 17- 16 1,061-00 , 17- 17 1,102-00 , 17- — 18 965-50 , 17- — 19 964-00 , 17- 20 837-00 , 172 21 959-60 , 17- — 22 781-50 , 17- 13,703-867 23 1,069-50 , 17 — 24 1,026-00 , 17 . — . 25 951-00 , 17 26 1,001-50 , 17 27 1,117-50 , 17 5,561-056 28 872-60 , 16- 937-348 29 936-00 , 17- — 30 923-50 , 17^ — 31 1,045-00 , 17i — 32 1,012-50 , 17^ — 33 923-00 , 17^ — 34 907-50 ,17^ — 35 1,012-00 ,17^ — 36 1,120-00 , 17^ — 37 879-50 , 17^ 9,449-462 39,921-186 404 SILVER SHIPMENTS. Ounces Standard 39,921-186, at 60id per oz. . . £10,021 17 8 Brokerage, J per cent. . . . £12 10 6 Packing and Oases . . . . . 1 17 6 Oartage, Lighterage, Oustom House Oharges 2 3 4 Insurance 10 26 11 4 £10,048 9 Account Sales in Hamburg. Cologne Marks 6 Bars weighing 709 6 22 4 851 2,846 621 Loth 10* 5* Fineness 994 995 996 997 Cologne Marks fine Lotli 704 847 2,835 519 4^ At Bco. Mk. 27| = Bco. Mk. Total Marks fine Assays and Charges . Freight | per cent, on £5,000 ) „ 1^ on Balance . . \ 32-8 126-7 15* 4 12* 7i •2 136,182-25 158-15 136024-10 Gi-vdng an Exchange of £1 = 13-536 Bco. Mks. or 13-8| This is exclusive of Bank Commission. The Assays in Hamburg, it will be noticed, are rather below the English Assays. BAR SILVER FROM HAMBURG TO LONDON. 4 Bars 992 fine, making iy ,, vvo ,, ,, 1 ,, 994 ,, ,, 7 ,, 99/ ,, ,, 4 ,, 999 ,, „ 35 Bars At Bco. Mks. 27f Shipping Oharges Loth Grrs. Mks. fine 515 10 2,448 12 5 133 3 2 925 7 17 613 15 5 Mks. fine 4536 7 3 Bco. Mks. 126,886 6 37 6 Bco. Mks. 125,923 12 SILVER SHIPMENTS. 405 Account Sales in London. 2 Bars . B 15i . Standard oz. 2147-12 13 „ . „ 16 . „ 13608-50 9 „ . „ 161 . ^^ 9401-94 1^ „ . „ 171 . „ 11699-35 35 Bars Standard oz. 36851-91 at 62d per oz. £9,520 1 6 Assays £2 12 6 Freight 8 18 Insurance . 9 10 Landing Cha: pges and Cartage . . 2 10 23 1 6 (Brokerage paid by the Buyer.) £9,497 Giving an Exchange of . . Mrks. Bco, 13-260 or £1 = 13-41S. As Silver is both bought and sold in Hamburg at a fixed price, these Shipments have an immediate effect upon the Exchange, which at Par stands at 13 Mks. 7|s. When Shipments come from London, vrhich must be paid for either by remittances of Bills on England from Hamburg, or by Drafts ia London upon Hamburg, the former paper is iu demand, and rises in value to 13 Mks. 8s. or 13 Mks. 9s., as the case may be, whilst the latter becomes abundant in London, and the seller of it here must give more Banco Marks than before per £1 in the same proportion. On the other hand, when Silver is withdrawn from Hamburg, Bills on London become cheap there, and BiUs on Hamburg ia London are dearer. The price of London Bills in Hamburg consequently gives the price of Silver from there when wanted for India. By the following rule a factor can be established, showing the price of Standard Silver according to the Hamburg Exchange : How much are = 480 grains Standard ? If Standard 240 = 222 fine. If grains 3608 = 1 Cologne Mark fine. If Cologne Mark 1 = 27-76 Marks Banco. If Exchange Marks Banco — ? = 240 Pence, or £1. The factor resulting is -. 819579, 406 SILVER SHIPMENTS. ■which divided by the Hanabnrg short Exchange will give the price of Silver, as by the following Table : Short Price per oz. From Hamburg To Hamburg Exchange at Standard. In Fractions to id. In Fractions to Jd § fe S .2 • i-( CS 13-4 13-41 13-5 13-61 61-856 61-709 61-664 61-421 il'^d 62 ■i«ii 6if ^■Us 611 n — 13-6 61-277 11 — 13-61 61-134 t^il 61* |H.g 60| 13-7 13-71 60-992 60-850 lo^'S 611 IIH 611 60f 601 13-8 60-709 h 5 ' t^^i 60| 13-81 60-569 601 13-9 60-430 l«1i - Its 601 13-91 60-290 ^^1 59| So that, the Exchange being at 13-7|, Silver will cost 61|d when shipped here from Hamburg, and when shipped from London thence it must be bought here at 60|d, in order to balance the account. Amsterdam is another important market for Silver, the price of which varies at from 104 to 106 Florins per kilogramme fine, according to the supply coming in from or the demand for England. BAR 16 Bars 17 „ - 3 „ - SILVER '] Weight. 16705-0 17582-5 3165-5 CO AMSTERDJ* Assay. BI71 - „ 17 • „ 16| - Standard oz. £10,129 16 18 15 6 lM. Standard 18021-81 18928-85 3400-76 36 37453-0 At 60jd per oz. Packing, &c. - £1 Shipping Charges Brokerage - 12 Insurance 10 40351-42 17 9 9 6 £10,155 7 3 SILVER SHIPMENTS. 407 Account Sales in Amsterdam. Kilos. Kiloe fine. 45-182 - B 998 45-092 34-669 - „ 997 34-465 26-895 - „ 996 - 26-787 9-846 - „ 995 9-797 116-492 116-141 At 104-65 Fl. 121,541-55 Less Freight, Landing Charges - - Fl. 118-50 Assays, &c. - - 38-50 167-00 FL 121,384-55 Giving an Exchange of Fl. 11-95. The same shipment, returned from Amsterdam at 106 Florins per kilo fine, and sold here at 62d per oz. Standard, -would cost : KUos fine 116-141 at 106 - Fl. 123,109-46 Charges, Insurance, &c. 140-00 Fl. 123,249-46 In London, oz. Standard 40351-42 at 62d - - £10,424 2 Freight and Landing Charges - - £10 6 6 Assays ... - 2 14 . 12 19 £10,411 2 10 Giving an Exchange of Fl. 11-84 per £. The variations in the Exchange are not so decisive in this case, because the price of Silver in Amsterdam is not fixed, as it is in Hamburg, but fluctuates according to supply and demand. 408 SILVEE SHIPMENTS. SILVER TO INDIA via SOUTHAMPTON. Invoice op 52 Boxes containing 52 Bars of Silver Bullion, Shipped per P. & 0. Company's Steamer from Southampton to Calcutta. No. of Bars. Ozs. Assay. Ozs. 1 1,002 B 17 1,078-72 2 986 „ 17i 1,063-72 3 992-5 ,, 17 — 4 929 » 17 — 5 933-5 „ 17 3,073-62 6 933 „ 174 1,006-54 1 936-5 ., 17 — 8 966-5 „ 17 — 9 963-5 >, 17 — 10 934-5 „ 17 — 11 935 „ 17 5,098-66 12 949-5 „ 16i 1,020-06 13 956 ,. 17 1,029-19 14 970-5 „ 174 1,047 IS 972-5 „ 17 — 16 970 ., 17 2,091-24 17 973 ,. 174 1,049-69 18 955 ,, 17 — 19 988-5 „ 17 — 20 987 „ 17 3,154-90 21 991 ,. 174 1,069-11 22 981 „ 17 — 23 986 ., 17 — 24 990-5 „ 17 — 25 953 ., 17 4,209-95 26 971-5 „ 174 — 27 972-5 „ 174 2,097-23 28 1,017-5 >. 17 — 29 986 ., 17 2,156-91 30 994 „ 164 1,067-87 31 980 „ 17 1,055-05 32 1,010-5 „ 174 1,090-14 33 1,005 „ 17 1,081-95 34 1,031 „ 174 — 35 982 „ 174 — 36 1,025 „ 174 — 37 1,054 „ 174 — 38 1,006-5 „ 174 — 39 1,043-5 „ 174 — 40 1,013 „ 174 — 41 1,016 „ 174 — 42 988-5 „ 174 — 43 1,040-5 „ 174 -_ 44 1,024 „ 174 — 45 1,023-5 „ 174 — 46 1,042 „ 174 47 1,015-5 „ 174 48 1,006-5 „ 174 — 49 1,014 „ 174 — 50 1,014 „ 174 51 709-5 ., 174 — 52 1,135 „ 174 20,696-25 51,256-5 55,237-80 SILVER SHIPMENTS. 409 55,237-80 ounces, at 5s IJd per ounce CHABGES. Treiglit at 2 per cent, on £14,000 £280 Fifty- two Boxes, Packing, Cartage, Bills of Lading, &c. . . 11 19 6 Brokerage | per cent. . . 17 12 5 Insurance Premium on £15,600 at 78 6d per cent. . . . 68 10 Duty 1 19 £14,097 2 10 309 11 11 60 9 £ 14,467 3 9 This shipment is sold to the Calcutta Mint, the Bars requiring re-melting. Statement op Out-tuen. Mark and Number. Bar saver. ■STeight before Melting. ■Weight after Melting. Ab ay • Amount. SW 1/52 Ozs. 51256-5 136664-2 13120-1 13479-9 13558-1 13861-8 16041-0 12042-5 13108-7 12958-8 12810-0 10469-4 5184-1 997 998 996 )) it *» 994 Spillage Rs. An. P. 13970 3 8 14353 5 6 14451 1 5 14774 12 8 17097 8 5 12809 15 2 13944 1 5 13784 10 3 13626 5 7 11136 9 6 5503 6 5 Oz. 51256-5 136664-2 136634-4 136664-2 145452 Loss in weight in Melting, &o. 29-8 16 5 9 145468 5 9 Two days after being received at the Mint a Mint Certificate is given, which is paid four days afterwards. 410 SILVER SHIPMENTS. OuT-TUEN of 52 Boxes Bar Silver ex Peninsular and Oriental Steam Navigation Company's Steamer from Southampton, received from London. SW 52 Boxes Bar Silver, containing oz. 51256-5, 1/52 or Tolas 136664-2, sent to Calcutta Mint, proceeds of Out-turn as per annexed state- ment, equal to about Rs. 106-442 per 100 Tolas - ... Rs. 145,468 5 9 CHARGES. Landing and Conveying to Mint, &c. 22 14 Rs. 145,445 7 9 Thus giving an Exchange of Is lljd per Rupee. Invoice of Silvee Baes Sent to Calcutta by Peninsular and Oriental Steam Navigation Co. 190 boxes containing 190 Bars fine SUver, OfwliiclilSS B m JI 44 „ 17 )) 6 „ 16i ») 5 „ 16 )) 2 „ 15i Weighing together 183,384-6 oz. = 197,674-06 Standard oz. At 61|d per oz. £50,448 1 CHAE6ES. Freight, 2 per cent, on £50,400 . £1008 190 Boxes, Packing, &c. . . 42 18 6 Brokerage, f per cent. . . . 63 1 3 1,113 19 9 Insurance' 12s 6d, and duty . 370 10 £ 51,932 11 This shipment is sold ia the Bazaar in Calcutta without re-melt- ing the Bars. The Merchants buy the same according to the fineness found. SILVER SHIPMENTS. 411 OUT-TDEN OF 190 BoXES Bak SiLTEB, Sent per Peninsular and Oriental Steamer of 20tli January 1861, from Soutliampton to Calcutta, sold in the Bazaar. PAETICULAES. AMOinST. vv eigning as p 3r invoice. Per 100 Tolas. Dwts. Ozs. Tolas. Es. Es. A. P. 62Barsl7iB 59,310 or 168,160 at 106/1 167,748 7 4 76 „ m „ 70,596 „ 188,266 „ 106/ 199,551 6 10 20 „ 17 „ 19,624-6 „ 62,332 „ 106/16 55,439 3 6 22 „ 17 „ 22,574 „ 60,197-06-4 „ 105/14 63,733 14 10 1 „ 16| „ 1,038 „ 2,768 „ 106/18 2,928 14 3 3 „ 16i „ 3,016 „ 8,042-10-8,, 105/12 8,606 2 1 „ 16 „ 1,077 „ 2,872 „ 105/11 3,035 5 6 4 „ 16 „ 4,149 „ 11,064 „ 106/10 11,686 5 7 1 „ 16i „ l,065-6 „ 2,814-10-8,, 105/9 2,971 3 9 1 „ 164 „ 944-5 „ 2,518-10-8,, 105/8 489,025-05-4 Tls. B,s. 2,667 3 1 190 Bars in aU, 183384-5 oz. 518,257 1 7 OHAEGES TO DEDTTCT. Break hire (carriage) . . . . Rs. 60 Landing, &c. 51 14 9 111 14 9 Total . . Es. 518,145 2 10 Griviag an Exchange of 2s 0-065d per Rupee. A convenient rule can be established to calculate the average out-turn of Bar Silver in India upon the price per oz. Standard here. Freight and Insurance and Petty Charges Seignorage at Calcutta ... Melting Charge . . . . - Average Loss on Melting* ... 4-90 „ . * The Insurance is occasionally a little higher, the loss on melting less or more up to 1 per mille, but on the whole the figures giren represent the average experience. - *2-75 per cent. 2-00 0-10 0- 6 2-15 per cent. 412 SILVER SHIPMENTS. Indian Standard is - - 220 British Standard is - - 222 So tlie former is Txith part, or 9 per mille cheaper than British Standard — Deduct this - - 0-90 Leaves - - - 4-00 per cent. to be added to the price per oz. Standard here, as the price per oz. Indian Standard laid down in the Calcutta Mint, and as the Tola or Rupee weighs 180 grains or f of an ounce ; this fraction gives the Exchange of Rapees. Thus Standard oz. in England - 61-250 Pence Add 4 per cent. - - 2-450 63-700 Multiply by f : = Is llfd. Silver at 60 : Pence per oz. here gives Exchange at Calcutta Pence per Hupees. 23-400 60| J? ») )) 23-448 60J >) )) )) 23-497 60f >5 ti J? 23-546 60| J) »» 55 23-596 60f )) >j ») 23-644 eof )) 55 )) 23-692 60| )) )) JJ 23-741 61 )J »> )J 23-790 6H »T )) J? 23-839 61i )) » )) 23-888 61| ») >J 7J 23-936 611 >> 5) )) 23-986 61| »» J) 24-033 61| )7 24-082 61| iJ 24-131 62 )J 24-180 62i )> 24-229 62i )) 24-278 62f )) 24-327 62i )J 24-375 SILVER SHIPMENTS. 413 Shipiaents of Silver are frequently made from Paris and Marseilles to India and the East for account of English Indian Banks or Merchants. The shipping frojn the Port of Marseilles saves time, and to the Exchange with France this method of supplying Silver to the East is sometimes more profitable than shipments via Southampton. The freights from Marseilles are — To India 1| o/o ; to Singapore and Hong Kong If o/o ; ■ to Batavia and Shanghai 2 o/o ; to Japan 2| o/o ; — (from Southampton the freight to India is 2 o/o.) Invoice op Silvbb Baes feom Maeseilles to Calcutta. Nos. Kilos. 1 21-168 2 21-810 3 22-118 4 21-580 6 21-185 6 21-040 7 20-230 8 21-245 9 21-180 10 19-312 11 21-160 12 20-983 13 21-245 14 20-925 15 22-272 16 22-060 Tariff rate Assay. per KUo. Fs. 210-818 998 at Fs. 218-45 46,053-20 128-645 997 at Fs. 218-23 28,074-20 74,127-40 Premium 24 per mille - - - 1,779-05 Cases, &c. .... Fs. 24-00 Shipping charges ... 12-55 (Freight of 1\ o/o is also paid at Marseilles.) Fs. 75,906-45 36-55 Fs. 75,943-00 414 SILVER SHIPMENTS. Taking the Exchange at 25'15, the cost of the Shipment in England is £3019 12s 3d ; whilst Kilos 210-818 998 fine, and ) goo «.« tt-i « ,„^„,„ „„- f or 388-666 Kilos fine „ 128-645 997 „ ) are equal to Kilos 366-114 of 925 British Standard fine, or at the customary rate of 81-100 grammes per oz. = 11,772122 oz., so that the price per ounce Standard is equal to 61-66 Pence. The factors to be considered in this case are, the Premium on the Silver to be paid ia France upon the Tarif du Commerce price of fs. 218-89 per Kilo. 1,000 fine, which amounts here to 24 per mille, or 2|- per cent., and the rate of Exchange between England and France. How many Pence = 1 ounce Standard. If Standard oz. 240 = 222 fine. 1 = 31-10 grammes. Grammes 1,000 = 218-89 fs., with Premium to be added after. Exchange per ? = 240 pence. Giving a factor of 161126 to be divided by the Exchange, and the premium per mille to be added to the dividend ; thus at 26-15)151126(60-09 add 20 per mille Premium . . 1-20 61-29 or 61^ Pence. Upon this plan a convenient table of equivalents for reference may be constructed, as shown on next page. SILVEE SHIPMENTS. 415 Short Exchange with Fbance. Premium per MUle on Price of 2512i 25-15 25-174 25-20 25-224 25-25 25-274 25-30 218-89 ftCB. Per MiUe 12 60 1 601f 60 J 60H 601 60* 60 4 60* 13 60^ 60 1 60if 60 f 60ii 60 f 60* 60 4 14 61 60i| 60 f 60if 60 i 60H 60 1 60* 15 ei-h 61 eon 60 f eoif 60 i 60H 601 16 61 i 61tV 61 601f 60 f 60if 60 J 60H 17 61i^ 61 i eii^e 61 60« 60 1 60iA 601 18 61 i 61A 6U 61t^ 61 60H 60 1 60il 19 61tV 61 i 61t^ 614 61* 61 60ii 60 4 20 611 61tV 61 i 61* 614 61* 61 60iA 21 61i^ 61 f 61tV 61 i 61* 614 61* 61 22 61 i 61,V 61 1 61* 61 i 61* 614 61* 23 614 614 61^ 611 61* 614 61* 614 24 61^ 614 614 61* 61 f 61* 614 61* 25 61 i 61A 614 614 61* 61 f 61* 614 26 61ii 61 f 61* 614 614 61* 61 i 61* 27 61 f 61H 61 f 61* 614 614 61* 611 28 em 61 J 61ii 61 f 61* 614 614 61* 29 61 f 61i| 61 i 61ii 614 61* 614 614 30 eiH 61 f 641 61 J 61^ 61 f 61* 614 31 62 61if 61 1 61-il 61 i 61H 61 i 61* 32 62A 62 61+1 61 J 61il 611 61i4 61 i The Table shows the net price of Silver at Marseilles, as com- pared with the Market price in London. The shipping via Marseilles saves time it is true, but an allowance must be made for Banking Commission of |th per cent., probably also for BUI Broker- age of 1 per cent. ; farther it turns out, by experience, that the French Assays are often from 1 to 2 per mille higher than English or Indian Assays — at all events English shippers allege this to be the case, and charge the French with the fact. The French method of Assaying is nevertheless better than our o-wn, and we know it is acknowledged that English Assays, according to the present fashion of reporting them, are always under the mark, so that the real cause of the difference arises on this side.* * Tables of equivalents, such as we have given them here, by way of illus- tration, can be made equally with all other Exchanges, either in a single set, without allowance for charges, which may be added to the quotients or deducted therefrom, according to the way the shipment goes ; or in a double set, adding charges in the case of exportation, and deducting them in the case of impor- tation, from the rates of Exchange resulting. Practical experience will now and then show results differing from the strict rule ; the average, however, may serve as a guide to shippers. 416 SILVER SHIPMENTS. SHIPMENT OF FIVB FRANCS PIECES FROM MARSEILLES TO INDIA. 125 Cases contaiaing 6,000 Francs m 5 Francs pieces— Fs. 750,000, weighing Kilos. 3728-075, at Fs. 202-30 per Kilo ... Fs. 754,189-'56 Cases and Packing . . _ Fs. 393-75 Shipping Charges, &c. - . . 99-50 493-25 Fs. 754,682-80 Drawn for at Fs. 25 '20 nett (without Brokerage) £29,947 14s 6d. The 5 Francs pieces, whose Tariff value is 200Fs. per Kilograniine, are here invoiced at Fs. 202-30 or 11| per mille Premiirm. Some, times the Franc value is taken, and according to the weight found, a premium is added. Shipped to Calcutta, as 900 fine (they are occasionally not quite up to this quality), they realise, less 2 per cent. Seignorage, 1 per cent, melting charge, and 1 per cent, loss on melting, per Tola of 180 grains, 0-9602 Rupees or 2-6605 Rupees per oz. Troy weight. The above 8728-075 Kilos, at the customary rate of conversion of 81-1 grammes per oz., are equal to 119,874 oz., costing £29,947 14 6 Add— Freight to India at IJ per cent. Insurance f per cent. Petty Charges £449 149 15 3 601 15 £30,549 9 6 Total cost at Calcutta, 61-168 Pence per oz. 900 fine, or 62- Pence per oz. British Standard, giving an Exchange of 23-887 Pence per Rupee, or Is ll|^d. The results of the Shipments are dependent again upon the Premium on the Coin paid in France, and upon the rate of Exchange between Marseilles or Paris and London. SILVEE SHIPMENTS. 417 SILVER DOLLARS TO SHANGHAI, Per Pbninsulae and Oriental Steamers via Southampton. Pifty Oases, contaiaiag each 2,000 Mexican Dollars, 100,000 Dollars in all, weighing 86,722 oz., at 60d per oz. Packing and Cases . Cartage, &c. Brokerage \ per cent. Freight 2^ per cent. Insurance 1 per cent. £21,680 10 £8 10 1 17 6 27 540 216 Account Sales in Shanghai. 100,000 Dols., at 760 Taels per 1000 DoUars . Less Landing Charges, &c. . ... 793 7 6 £22,473 17 6 76,000 15 Taels 76,985 Giving an Exchange of 71 Pence per Tael. Mexican Dollars are subject to great fluctuations in price at Shanghai. At their equivalent in Silver they are worth 72 '7 Taels ; when the shipping of goods to Europe is limited, and Dollars are abundant in the market, they fall below Par ; the price has been as low as 65 Taels per 100 ; when they are down to this low rate it is profitable to melt them into Sycee. But when Shipping is active, and Exchange on Europe ofiered, they rise in value, occa- sionally so high as 80 Taels per 100. Dollars are an article of considerable speculation with the Chinese, and also with European traders. The price realised for the above shipment was *?& Taels per 100, which is a fair rate for times of moderate business opera- tions. The Exchange resulting is dependent on the rate per oz. in London, and on the price per 100 Dollars in Shanghai. SILVER PROM CALIPORlSriA TO HONG KONG. The rich Silver mines opened in 1860 in California furnish many millions of SUver per annum ; and, as the Port of San Francisco, 27 418 SILVER SHIPMENTS. on tlie opposite side of the Pacific Ocean, is witliin 50 to 70 days sail by clipper ship, or 30 to 35 days by steamer to Hong Kong, California is now a convenient market for the supply of Silver to China for European account. Shippers in San Francisco are accordingly furnished with Credits from Anglo-Indian Banks, to draw 60 days' sight or short Bills on London, and invest the proceeds in the purchase of Silver for China. Btit most of the Califomian Silver is Dore Silver, or not fine enough for China, where B 17 to 17| is required. The arrangements for Refining Silver in Cahfomia are not ample enough as yet to refine the whole production; and, as the charge for Refining is higher over there than it is in Europe, the Silver which is actually refined on the spot has to be bought at a premium varying from 2 to 6 per cent., according to the demand for China. We subjoin an actual operation of this kind. Invoice op Eight Boxes Refined Silvee Bars, shipped from San Eeancisco to Hong Kong. Silver Bar. Fine. Weight. Vaiue. Ozs. Dols. 997 751-50 968-76 998 1,084-20 1,398-98 997 977-80 1,260-43 997 653-20 842-01 997 990-55 1,276-86 997 810-16 1,044-32 996| 677-00 872-24 997 598-90 765-56 997 1,429-84 1,842-56 996| 624-35 804-41 997i 896-00 1,155-56 9961 782-35 943-56 997 708-00 906-19 997 664-59 856-72 997 710-60 915-99 12,298-53 15,854-15 SILVBE SHIPMENTS. 419 Premium about 2| per cent. - - 413"1J' Dols. 16,267-32 CHAEGBS. Custom House Clearance . 1-00 8 New Boxes at 2 Dols. . 16-00 Cartage - 3-00 Insurance f per cent. - 81-00 Bill of Lading Stamp - - 0-50- 101-50 Dols. 16,868-82 Drawn for upon London at the Exchange of 49^ Pence per Dollar (including Californian BUI Stamp), 16,368-82 = £3,376 1 4 OUT-TTJEN OP SAME, 8 BOXES ReFINED SiLVEE BaeS, IN HONG KONG. 8 Boxes refined Silver Bars, weighing 12,298-53 oz. or Taels 10,180-902 Sold at 11 per cent, premium for the Betterness - - 1,119-899 11,300-801 At 717 Taels per Dols. 1000 Dols. 16,761-23 CHAEGBS TO DEDUCT. Freight | per cent, on Dols. 15,854-15 . . 79-27 Primage at 5 per cent 3-95 Landing Charges 2-25 Brokerage at | per cent, on Dols. 15,761-23 . 19-70 105-17 Dols. 15,656-06 thus giving an Exchange of 51| Pence per Dollar. 420 SILVER SHIPMENTS. The Silver arrives in Hong Kong, say in 60 days, wMlst tlie Drafts on London, taking 30 days' transit, and due in 60 days, matiare one month later. If the shipment had been made from London, it would have taken, say three months to arrive at Hong Kong ; so the London firm saves in all four months' interest at 6 per cent, per annum, equivalent to -i-|d on the price, making the Exchange SOifd per Dollar. The same shipment made from England represents 13,256 oz. Standard, at 61id .... £3,396 17 Freight and Insurance 3| per cent. £119 Packing Charges, &c. and Brokerage 6 19 giving an Exchange of about 54d. 125 19 £3,522 16 The Shipment from California is therefore cheaper than that from England. The factors upon which the result depends are, the Premium on fine Silver to be paid in San Francisco, the Exchange there for sixty days' sight Bills on London, the price of Silver at Hong Kong, and finally the rate of Exchange at Hong Kong on London. In the case here before us, the Dols. 15,666'06, which the parcel reahsed, were invested in Bills on London at six months' sight, at 53i Pence, giving £3,473 13 8 3 months to London . ") 6 months in London . J ^ ^o^^'i^^- Deduct 4 months gained 4 „ Interest . . .5 months, at 5 per cent. £72 7 Bill Stamp 3 10 75 17 £3,397 16 8 SILVER SHIPMENTS. 421 giving tttis a direct profit of £21 ISs 4d on the transaction, and as compared to the London Shipment, costing £3,622 16 Adding Interest for three months going out at 6 per cent, per annum . Do. for nine months on Bills returned Bill Stamps £3,702 7 A total advantage of £304s 10 4d, or about 9 per cent, is gained. This transaction was exceptionally profitable. California will in fature supply the greater portion of SUver required for China. 44 8 132 9 3 10 422 CHAPTER III. THE SHOET EXCHANGE. rriHE Stort Exchanges, or Casli Exchanges, as we -■- have estabhshed them, on the basis of the " Mint Pars" of Exchange, in the chapters preceding, are theoretically the neutral points or rates, indicating that the commercial relations between England and the other parts concerned are properly balanced, and that there is no caU for Bullion shipments in either direction. A departure from these neutral rates, in one direction or the other, turns the Exchange favor- able to one and unfavorable to the other country ; and if the difference is sufficiently large to cover the expenditure of forwarding Bullion, shipments of that commodity are made, provided always, of course, the article can be procured ; which is not always the case in countries where a forced Paper Currency prevails. The annexed table gives, in the first column, the Mint Pars of Exchange ; in the second column, the Rates of Exchange when they have become so favorable to England as to bring Bullion over here; and in the third column the Rates of Exchange when they are so unfavorable to us as to compel us in our turn to part with Bullion. But this rule of Bulhon shipments holds good only with respect to certain countries in easy communi- THE SHORT EXCHANGE, 423 cation with us — sucli as France, Holland, Hamburg, Spain, America, India, Cliina, and some others ; but Austria, South. Germany, Italy, Switzerland, and other States, are not so conveniently placed. The charges of forwarding Bulhon between them and England are heavier. Instead of dealing direct with these countiues, other Bulh'on centres — Hamburg, Amsterdam, Paris, Marseilles — ship or receive Bullion for Enghsh account, whereby time and charges are saved. Thus, if Gold is wanted for Genoa, instead of sending Bars or Sovereigns from London across the Channel, then through France by land, and from Marseilles again by sea, it comes much cheaper to order a shipment of Napoleons at once direct from Marseilles to Genoa, and to reimburse MarseiQes either by Draft from there or by remitted Bills. The debit or credit thus accruing between England and these intermediate places is settled in the usual way. The favorable or unfavorable state of the Ex- change may also be balanced by Drafts or Remittances through other intermediate places, where the Enghsh or Foreign Exchange holds a reversed position; a favorable Exchange upon Italy may thus be used to cover an unfavorable Exchange with France, and so forth. Costs of conveyance, and charges for risk, and other contingencies, compel us to be sparing of the actual transmission of hard money ; but the tendency of the favorable or unfavorable Exchange has the same effect upon the international account as actual ship- ments of Bullion. 424 Table of Pabs of Exchange compaeed to Shoet Exchanges, pavoeable oe unfavoeable to england. Metallic Par of Exchange, Short Exchange favorable to us to Bullion point. Short Exchange unfavorable to us to Bullion point. FRANCE & BEL- GIUM £ l=Es. 2S-22i Fs. 25-35 Ps. 25-10 SWITZERLAND & ITALY* „ 1= „ 25-22i „ 25-37i „ 25-07i NORTH GERMANY „ l = Tlir. 6-244 Th. 6-25i Th. 6-22i SOUTH GERMANY „ 10=P1. 11910 Kr. PI. 120-00 PI. 118-20 HAMBURG . „ 1=B. M. 13-7i Sch. B.M.13-9 B.M. 13-5 BREMEN „100=L.Th.612-f L.T. 619- L.T. 607- AUSTRIA* . „ 1 = E1. 10-21i PI. 10-30 El. 10-12i HOLLAND . „ 1= „ 12 „ 12-05 „ 11-90 SWEDEN „ l=R.Dlr. 17-80 R.D 17-95 R.D 17-65 NORWAY . „ l = S.Dlr. 4-58 Skg. S.D. 4-64 Skg- S.D. 4-52 Skg. DENMARK . „ l=R.Dr. 8-94, „ R.D. 904 „ R.D. 8-88 RUSSIA* Rble. 1= 38 S Pence 37i Pence 38i Pence GREECE £ l=Dracli.28-l7 Dr. -28-35 Dr. 28-00 SPAIN ... . Dolr. 1= 49i Pence 49 Pence 50 Pence PORTUGAL . Milrs.l= 53i „ 52i „ 53i „ TURKEY £ l=Pstrs.llOJ Pstr. 112 Pstr. 109i EGYPT ... . „ 1= lOOf „ 102 „ 99i UNITED STATES £22-10 =DIr. 109i Dols. 110 109 BRITISH NORTH AMERICA... ... Dolr. 1= 50 Pence 49i.Pence 50i Pence MEXICO „ 1= 51i „ 50i „ 52i „ GNTRL. AMERICA, NEW GRANADA, and PERU „ 1= m „ 46i „ m „ CHILI „ 1= 45 „ 44 „ 46 „ URUGUAY „ 1= m „ m „ 49 „ BRAZILS* Milrs.l= 26-93,, 261 „ 27J „ LAPLATA STATES Dolr. 1= 48i „ m „ 49i „ INDIA Riip. 1= 22i „ 211 „ 23i „ CHINA Tael 1= 7li „ 69 „ 73i „ JAPAN Dolr. 1= 51i „ m „ 53i „ In the Countries marked * the actual quotations of the day are in Paper Money, and vary accordingly from the Cash basis here adopted. THE SHOET BXCHANQB. 425 The subjoined Table shows the variations in the Short Exchange with France during the last ten years. "We select the French Exchange as the one most im- portant to us. For each month in each year we give the two principal rates prevailing. At 25 •22-^ the balance may be said to be complete, when the Ex- change rises to 26'17^, or 25"15 it is unfavorable, when it falls to 25"27-| or 25"30 it is favorable to England. At the rate of 25-12^ Bullion begins to leave England for France, at 25-10 or 25-07^ or 25-05 the shipments increase in activity. At the rate of 25-32-|- BulHon comes from France to England, at 25-35 or 25-40 at an increased ratio. DATE. PRICE. DATE. PRICE. DATE. PEICB. DATE. PRICE. 1858. Deoemter 25-07i November 25-07i October 25-25 January 25-22i )j 25-12i fi 25-10 it 25-20 »> 25-174 1859. December 25-07i November 25-10 February 25-12i January 25-15 » 25-10 91 25-25 J) 25-07i „ 25-10 1860. December 25- 20 March. 25-10 February 25-12i January 25-10 J, 25-15 )3 25-07i J) 25-12i J) 25-07i 1861. April 25-10 March 25-12i February 25-10 January 25-l7i )9 25-05 j> 25-07i t) 25-12i »» 25-25 May 25-07i April 25-05 March 25-08i February 25-22i n 25-05 it 25-05 yi 25-121 it 25-37i June 25-05 May 25-07i April 25-15 March 25-40 >i 25-07i t) 25-10 J) 25-20 it 25-37i July 25-05 June 25-10 May 25-10 April 25-35 „ 25-07i it 25-07i )) 25-15 „ 25-15 August 25-12i July 25-07i June 25-l7i May 25-20 }) 25-22i )) 25-10 „ 25-12i tt 25-374 September 25-20 August 25-10 July 25-12i June 25-37i >f 25-17i jj 25-12i 25-15i tt 25-324 October 25-15 September 25-12i August 25-12i July 25-35 a 25-071 " 25-15 )» 25-17i „ 25-424 November 25 '05 October 25-12i Soptembor25l7i August 25-374 )) 25-10 „ 25-10 )j 25-12i tt 25-45 426 THE SHOUT EXCHANGE. DATE. PEICB. DATE. PEICB. DATE. PRICE. DATE. PEICE. September 25-45 April 25-25 1865. September 25- 25 n 25-40 May 25-22J January 25-15 a 25-21 October 25-37i }> 25-22i ij 25-174 October 25-25 t> 25-32i June 25-22i February 2515 )» 25-15 November 25-30 » 25-22i )) 25-124 November 25-174 » 25-25 July 25-25 March 25-174 it 25-15 December 25-30 tt 25-30 'J 25-224 December 25-174 )i 25-27i August 25-27i April 25-20 a 25-184 1862. Janaary 25-25 25-32i September 25-271 26-22i May J) 25-15 25-174 25-224 1867. Janoaiy 25-15 J) February 25-15 25-17i 25-l7i 25-30 25-27i 25-25 25-25 October 25-25 25-17i June it 25-174 25-20 February 25-14 25-11 i) March November 25-22i 25-30 July 25-20 25-15 March 25-15 25-14 April December 25-25 25-30 August 25-174 25-224 April 25-18 25-15 May 1864. September25-224 ti 25-12 25-20 January 25-22i » 25-25 May 25-12 June 25-22i 25-27i 25-25 25-20 February 25-274 25-27i October it 25-25 25-274 June 25-18 25-15 July »» 25-35 November 25-224 a 25-14 Marcli 25-27i a 25-124 July 25-17 August 25-25i 25-22i r25-m 25*20 April 25-15 25-15 December 25-10 25-124 August 25-15 25-15 )3 Septembe May 25.20 25-274 1866. January 25-124 25-20 September 25-21 October 25-20 9K-T7i June 25-37i 25-274 Februaiy 25-174 25-174 October 25-17 25-174 November 25-17i 25-15 July 25-174 25-20 a March 25-25 25-274 25-12 November 25-14 December 25-17i • August 25-25 25-25 it April 25-224 25-20 25-12 December 25-12 7) 25-324 it 25-10 it 25-15 1863. September 25-25 May 25-124 January 25-15 >i 25-35 )) 25-05 I860. jj 25-20 October 27-374 June 25-14 January 25-15 February 25-22i „ 25-224 >i 25-09 jj 25-12 )) 25-25 November 25-25 July 25-10 February 25-13 Marcb. 25-20 )y 25-174 it 25-124 " 25-15 •) 25-25 December 25-20 August 25-15 March 25-124 April 25-17i „ 25-15 ); 25-30 „ 2515 427 CHAPTER IV. THE LONG EXCHANGE, "TN tte preceding pages our business has been with -L Hard Cash, either in Coin or in BviUion. The Rates of Exchange resulting from the transactions discussed there are called the shoet ea.tes of exchange, in contradistinction to the long bates of exchange. Bills drawn and paid on demand or at sight, sent from one place to another, have, as a rule, practically the same effect as shipments of Coin or BiilLion : the holder receiving money on presentation. As a matter of theory, shipments of Metal, if properly insured and otherwise guarded against acci- dents, must be regarded as still better than sight BlEs, as they at once secure absolute possession. Bills at sight are, after aU, but pieces of paper, liable to be dishonoured; and, however small this risk may be with Bills issued by the resident Bank or or Banker, the theoretical inferiority to hard Cash remains nevertheless. They are, however, more con- venient to the merchant than BuDion; they are generally cheaper, according to the state of the Exchanges, especially for small amounts. Resting, as they do, on the basis of hard cash, as a rule, they do not involve the consideration of credit in the same manner as Bills drawn at the so-called Long Exchange. 428 THE LONG EXCHANGE. The Long Exchange. — A Bill drawn by one firm on another departs from the Cash basis at once if not made payable at sight or on demand, no matter whether the stipulation be that it should be paid one day or two days, or eight days, or ten days afterwards. Still, in ordinary Commerce a Bill is considered short when it is payable a few days after arrival in the place on which it is drawn. The Banker, however, who must have interest for his money, takes these days into account in fixing a Rate of Exchange. When Bills are longer, say when they are due in twenty, thirty, or forty-five days, they are no longer short Bills, but they fall within the intermediate class between the short and the long Exchange, by which latter term Bills at three months are generally desig- nated. The three months' Exchange is the full long Exchange as generally understood. When a Bill is thus drawn, the credit of the Drawers, Acceptors, and Endorsers upholds its value until it falls due and is cancelled by payment. The custom of drawing Bills at dates longer than short, up to three months or more, has its origin in mercantile transactions, where it becomes necessary to combine the granting of a Credit to the Debtor or Acceptor with the Exchange operation. In former times, before we enjoyed the present rapid means of international commimication, goods sent fi:'om one part to another took a much longer time to arrive, and even conveyance by post required as many days as it now does hours ; the laws on mercantile proceedings generally were also more stringent than they are now, THE LONG EXCHANGE. 429 SO that it became customary in the greater part of busi- ness transactions to have recourse to reimbursement by Bills of Exchange drawn at usance from one place upon another. Thus the usance from London upon most of the Continental towns is three months, on Spain and Por- tugal 90 days', date or sight ; on American ports 60 days' sight. Again, for certain descriptions of goods, it is customary to draw at 30 days, for others 45 days, or two months, &c. From and upon India the usance is six months. Although the more rapid means of communication now existing have already much modified the strict adherence to the usance, the custom, with the excep- tion of ports at a great distance, having become ahnost unnecessary, yet a larger proportion of mercantile international transactions is still conducted upon the basis of the three months' Exchange, and in most courses of Exchange the three months' rate is the one principally quoted. The question of credit, as such, involved in a three months' Bill, is a matter for separate and distinct con- sideration. The Banker or the Holder of a BiU of this kind must estimate the credit value according to the principles current in the business, and according to his own individual method. In so far as the subject falls under our consideration here, the difierence between a short and a three months' Bill is purely arithmetical. The difference between Short and Long Bills depends on the varying Rates of yearly Interest for money at different times and in different localities. 430 THE LONG EXCHANGE. An order for the payment of the amount of £100 to-day is worth £100. An order for the payment of the same amount three months afterwards, if the rate of interest is four per cent per annum, or £1 for three months, is worth to-day only £99 ; so that to make it also worth £100 to-day it ought to be drawn for the amount of £101. The same principle applies to the rates of Exchange. A Draft on Paris, payable at sight, for Fs. 2522"50, would at the Exchange of Fs. 25*22^ give exactly £100 here ; but if the BiU is at three months, and exactly £100 here are required, with the Rate of Interest in Paris ruling at 4 per cent, per annum (or 1 per cent., or about 25 Centimes per £ for three months), the amount drawn must be . . Fs. 2547'60 to realise, less interest • . . 25 Fs. 2522-50 orFs. 25-22|per£. It must, therefore, be drawn at the Exchange of Fs. 25'47-J, called the Long Exchange in this case. If the Interest is only 2 per cent, per annum, 12|^ Centimes will constitute the difference, and so forth ; if the Short Exchange, here taken at 25*22^, varies above or below that figure, the Long Exchange wiU vary with it. Now, if a Draft on London be required in Paris, the Short Exchange being the same there, the £100 would cost also Fs. 2522'50; but if the draft be made at three months, interest in London being also 4 per cent., the Banker in Paris might afibrd to give £101 for the same amount of Francs, which would THE LONG EXCHANGE. 431 make the rate of Exchange Fs. 24"97-|- Centimes ; so that at the three months' rate he would give £100 for Fs. 2497^. This illustrates the proportionate Exchanges (In- terest in both places being 4 per cent.) Three Months' Bills in London upon Paris Exchange Fs. 25-47| Sight Bills in London on Paris, or in Paris on London . Short Exchange Ps. 25'22| Three Months' Bills in Paris upon London Exchange Fs. 24-97| the 1 per cent, interest for three months, equal to 25 Centimes, being in the first case added to, and in the third case subtracted from, the short rate of Exchange. The Rate of Interest ruhng at the place upon which the Exchange is made thus enables the inquirer to make out the Short Exchange from the Long, and vice versa The French Exchange being, say, SHORT. LONG. 25'15 — Interest in France at 2 per Cent. = 26-27| 3 per Cent. = 25-33f 4 per Cent. = 25-40 5 per Cent. = 25-46J 6 per Cent. = 26-621 8 per Cent. = 25-65 Sue. If the Short Exchange is at 25"22-|-, 7^ Centimes must be added to the rates for three months ; if at 26-35, 20 Centimes must be added. Supposing the case to be reversed, the same short 432 THE LONG EXCHANGE. rates being taken as tte Exchange in Paris on London, tlie Long Exchange will be found, by deducting the number of Centimes representing the Interest. The Long Exchange in either place is dependent therefore 1st. — Upon the rise and fall of the Short Exchange, and 2nd. — Upon the variations of the Interest ruhng in the place upon which Draft is made, to be added or subtracted from the rate. This rule applies to aU the Exchanges .quoted in the same manner as the French Exchange in England, where the £1 is taken as the Unit to start from, viz.: The Exchanges so quoted are The Dutch £1 = 12'00 Florins -| Belgian = 25-22| Erancs Trencli = 25-22i „ Hambiu-g = 13-07|MksBaiico ItaUan = 25-22i Lire N. German = 6 -241 Thaler Austrian = 10-21i Florins S.German£10= IIQIO &c. The £ Sterlmg in these cases is the fixed rate, the foreign monies given constitute the variable rate. In certain other Exchanges custom has reversed the' position ; the Foreign money is made the Unit to start from as the fixed rate, and the British equivalent is made variable. The Exchanges so quoted are — The Spanish 1 Dollar = 49i Pence British. „ Portugese 1 Milreis = 63|- „ „ „ Russian 1 Rouble = 38^ „ „ (as short metalhc pars) THE LONG EXCHANGE. 433 Tlius, if the Sliort Bxctange on Madrid is wortli 5 Pence per Dollar, and Interest at Madrid rules at 8 per cent, per annum, or 2 per cent, for three rQonths, equal to Id on the above rate, the three months' Exchange is worth only 49 Pence. And if the Short Exchange in Madrid on London stands at 49|- Pence, interest in London being at 4 per cent, per annum, or 1 per cent, for three months, making -^d per Dollar, the Long Exchange in Madrid on London is 50 Pence per Dollar. By way of introduction to the understanding of the Course of Exchange, the reader should make himself familiar with the simple arithmetical working of the system of Short and Long Exchanges as dependent upon the former rate, and the interest per annum prevaiUng at the time being. 28 434 CHAPTER V. THE LOKDON COTJESE OF EXCHANGE. rriHE Foreign Bankers and Merchants of London -L meet in the open Court of tlie Royal Exchange every Tuesday and Friday, between the hours of two and three in the afternoon, to transact business in the purchase and sale of Foreign Bills. The majority of the firms represented are sellers of Bills that have come to them as remittances from abroad or from the country, which are technically called Made Bills; or of so-called Drawn Sills, which are simply their own Drafts upon houses abroad against shipments made or orders given. A large number of the firms present on 'Change are foreign Bankers, and Exchange dealers, who purchase such made or drawn paper, or who sell to Merchants or others drafts on places abroad for such specific amounts as may be required. The interchange of this business is effected chiefly through third parties, the Exchange Brokers, who have either certain Bills to sell for houses not other- wise represented on 'Change, or who negotiate the buying and selling between the houses dealing on 'Change. THE LONDON COUESE OF EXCHANGE. 435 The rates being agreed upon, the Broker hands a note to the Buyer, which is called the Contract, and which generally runs as follows : Bought— Fs. 26,000, 3 Months Brussels at 25'35, of Messrs. N. N". & Co. A. & B., April lOth, 1868 • Sworn Brokers. The figures are filled in on the spot in pencil. And to the Seller a similar note or contract : Sold- Fs. 26,000, 3 Months Brussels at 25'35, Order of W. S. & 0. value of the same. A. & B., April 10th, 1868. Sworn Brokers. These notes serve as a memorandum to Seller and Buyer; they are binding at the same time on both parties as contracts made and accepted. After 'Change the Seller prepares and indorses his Bills, and sends them to the Buyer, with the account, and this account is paid for by the passing of a Receipt Draft on the 'Change-day following. Thus Bills bought on Tuesday are paid for on Friday, and those bought on Friday on the Tuesday following. The Brokerage amounts to xoth per cent., which is invariably paid by the Seller ; but in a great many cases the Broker also receives a commission from the Buyer, unless it be agreed beforehand 436 THE LONDON COURSE OF EXCHANGE. with tlie Bx'oker that the Buyer should go free, or unless free is endorsed on the contract. The Brokerage accounts are paid at the end of each year. After the business is over the Brokers note the rates of Exchange made, and issue their Courses of Exchange, which are generally found or made to agree. LONDON COURSE OF EXCHANGE.— rEBEUAEY 28th, 1868. Amstebdam ... 3 montlis 11 : 19i 12 : JJ ... sliort 11 : 18 11 : 18i ROTTEEDAM ... 3 months 11 : 19f 12 : 1 4 Beussels and Antweep ?) 25 : 32| 26 : 37i Hambueg jj 13 : 9 13 : 10 Paeis „ 25 : 30 25 : 35 )J ... short 25 12i 25 20 Maeseillbs ... 3 months 25 30 25 35 Peankfoet-on-the-Mainb jj 120 1 4 120 1 2 Vienna )) 11 85 11 90 Teieste )) 11 : 85 11 90 Beelin )) 6 : 26| 6 27 St. Peteesbueq )) 32 . 1 • 4 32 1 2 Copenhagen )) 9 : 18 9 : 22 Genoa jj 29 : 25 29 : 35 Leghoen ... }j 29 : 25 29 : 35 Naples 29 ■ 26 29 : 35 Paleemo and Messina ii 29 26 29 : 35 Madeid 48 1 48 . 5 8 Baecelona 48 f 48 . X 8 Cadiz 48 I 2 48 : f Lisbon 90 days' date 61 1 61 1 2 Opoeto „ 51 f 51 ■ 1 New Yobk 60 days' sight Rio DE Janeieo ,, THE LONDON COURSE OP EXCHANGE. 437 Tkese figures are understood to mean that for Bills on — Amsterdam, at 3 months : are given for Ms. H-19i Stiver to Fls. 12-00 Stiver = £1 „ at short date : Fls. 11-18 Stiver to Ms. 11-18| Stiver = £1 EoTTEEDAM, at 3 months : Ms. ll-19f Stiver to Ms. 12-0^ Stiver = £1 Beussels and Antwerp, at 3 months : Fes. 26-321 Cents to Fos. 25-37| Cents = £1 Hambdeq, at 3 months : Bco. Mks. 13-9 Schge. to Bco. IVIks. 13-10 Schge. = £1 Paris, at 3 months : Fes. 25-30 Cents to Fes. 25-35 Cents = £1 „ at short date : Fes. 25-12i Cents to Fes. 25-20 Cents = £1 Marseilles, at 3 months : Francs 25-30 to Francs 25-35 . . = £1 Frankport-on-thb-Mainb, at 3 months : Florins 120J to Florins 120| . . = £10 Vienna and Trieste, at 3 months : Florins 11-85 to Florins 11-90 . = £1 Berlin, at 3 months : Thl. 6-261 SUbg. to Thl. 6-27 Silbg. . . = £1 St. Petersburg, at 3 months : 32i Pence to 32| Pence . . = 1 Rouble Copenhagen, at 3 months : Ekdlr. 9-18 Sk. to Rkdlr. 9-22 Sk. . = £1 Genoa, Leghorn, Naples, ) 3 j^ Messina, Palermo . . j '^'' "^ iuuuuuo Tnre 29-25 Cents to Lire 29-35 Cents . = £1 Madrid, at 3 months : 48f Pence to 48| Pence . . = 1 Dollar Barcelona, at 3 months : 48f Pence to 48| Pence . . = 1 DoUar Cadiz, at 3 months : 48| Pence to 48f Pence . . = 1 Dollar Lisbon, at 90 days : 61f Pence to 51| Pence . . = 1 Milreis Oporto, at 90 days : 51| Pence to 51| Pence . . = 1 Milreis New York, at 60 days' sight : — Pence to — Pence . . = 1 Dollar 438 THE LONDON COUESE OP EXCHANGE. Eto DE Janbieo, at 60 days' sigM : — Pence to — Pence . . . . = 1 Milreis (For tlie two last no prices were made on the 28th Feb.) The places in this list are those usually given in the London Course of Exchange. Calcutta, Bombay, &c. are quoted in some of the Courses of Exchange. The first thing likely to strike the reader is the incongruity in the system of taking the £1 in some cases, the 1 Rouble, the 1 Dollar, the 1 MHreis in others, and in one case the £10, as the fixed Unit. Why not adopt the £1 as the Unit for all Exchanges ? There can be no doubt but this would be the more consistent and more convenient plan; however, custom has established the present system, and although aU are agreed upon the necessity for doing away with the anomaly, yet custom is too strong in favour of its maintenance. It might further be suggested that all the Exchanges should be quoted as Short, and that the rates of Interest should be given upon which the Long Exchanges might be computed. Custom again stands in the way of this simple and reasonable reform. The three months' Exchange is still considered the ruhng rate, and only the Amsterdam and the Paris Exchange are also quoted Short. However, short in these cases does not mean sight, but three, four, or ten days' paper. We will now reduce this Course of Exchange as it stood on the 28th February 1868 to the short rates, the Interest at the respective places being given in the leading column. THE LONDON COURSE 01" EXCHANGE. 439 The two other columns give, the first the Short Rates, the second the Mint Pars as found in Part II., Chapter I. A comparison between these and the present Short Exchange will then enable us to judge of the actual position of each Exchange. We take the dearest Exchange as the one from which to make the Short ; thus, if Paris is quoted 25'30 to 25'35, we take 25'30 as the fairest quotation, considering that BiU Stamps, Brokerages, &c., have to be taken into account. COURSE OP BXCHAJS'GE, on 28th PBBRUART 1868, Bed/uced to Short Exchanges. Interest. Short Rate. Mint Par. 3| per Cent. Amstbedam n-m 12-00 3| „ BOTTBKDAM 11-171 12-00 2| „ Betjssbls . 25-164 25-221 3 „ Hambtjeg . 13-7i 13-71 ^2 n Paeis 25-14 25-221 91 Marseilles 25-14 25-221 3 „ Feankpoet 119* 1191 4 „ Vienna ll-72i 10-21 4 „ Teibstb ll-72i 10-21 4 „ Berlin 6-24 6-241 6 „ St. Petbesbueg 0-33 0-381 4 „ Copenhagen 9-8 8-94 5 „ Genoa and Leghoen , 28-871 25-221 5 „ Naples and Messina 28-871 25-221 5 „ Madrid 0-491 0-491 5 „ Barcelona 0-491 0-491 5 ,, Cadiz 0-49| 0-491 5 „ Lisbon 0-621 0-531 6 „ Opoeto 0-521 0-531 440 THE LONDON COUESE OE EXCHANGE, This comparison sliOTVS : — That the Exchanges between London and Hamburg .... Prankfort .... Berlin ..... Barcelona ... Were balanced within small fractions. That the Exchanges between London and Amsterdam Eotterdam Brussels Paris . . Marseilles . Cadiz . . Were nnfaTorable to England to the extent shown. That the Exchanges between London and Copenhagen. . . Madrid . . . Lisbon .... Oporto .... Were favorable to England. And finally that the Exchanges between Vienna .... Trieste .... St. Petersburg . Genoa and Leghorn Naples and Messiaa Were exceptionally in favor of this Country. THs exceptionally favourable proportion does not arise from the Mint Par; it is simply due again to the great financial evil, the forced Paper Currency, in which Bills drawn upon these places are supposed to be paid. The extent of the Premium on Hard Coin can be estimated by these departures from the Mint THE LONDON COURSE OF EXCHANGE. 441 Pars of Europe, and by the rates liere resulting; it "was at tlie time being In St. Petersburg . . about 16 per cent. In Vienna and Trieste . „ 15 „ In Genoa, Naples, Leghorn, &c. „ U^ „ We here refer the reader back to Part I, Chapter III, on Currency ; and to Part II, Chapter I, under the respective headings of Austria, Eussia, and Italy. The indications here giren will enable the reader to understand the London Course of Exchange ; and, to establish the Short Exchanges, all that it is necessary to know, is the respective Eate of Interest at which the Long Eates of Exchange can be thus severally discounted. 442 CHAPTER VI. rOEEIGN COUESES OP EXCHANGE. IN England we have two classes of Bankers, — the so-called local Bankers, to which, our powerful Joint Stock Banks and the great private Banking firms belong ; and the so-called foreign Bankers. The local Banker, or English Banker proper, principally deals in British Money, and is supposed, both as keeper of cash accounts and deposits, and as dis- counter of Bills or dealer in Money, to confine his operations chiefly to Bills payable in England, and to local matters generally. Such Foreign Exchanges as come into his hands are disposed of at once through Brokers. The Foreign Banker in London, in his turn, buys such Bills of Exchange ; his business lies chiefly with abroad ; he maintains a large correspondence with Bankers and Merchants all over the world, and fre- quently combines Foreign Banking with certain other mercantile operations. The distinction between the English Banker and the Foreign Banker in London, and between their respective lines of business, is well recognised. On the Continent this is different. The Bankers in France, Germany, and other parts, com- bine the functions of both classes of Bankers in FOREIGN OOUESBS OP EXCHANGE. 443 England. They not only keep accounts with the local merchants, manufacturers, or private individuals, but they deal largely also in all sorts of securities, whether home or foreign, amongst which Bills on other countries play an important part. The Portfolio of an BngUsh Banker contains only Enghsh local BiUs, but the Portfolio of Bankers abroad contains, besides local Bills, also Bills on England, France, Germany, Russia, Spain, Italy, &c. The fact is that the requirements of business in England, where so vast an amount of enterprise con- tinually extends the boundaries of commerce, fully engage the Enghsh Banker, and that he is thus under no necessity of seeking investment for his funds in Foreign securities of this kind. Whereas the Bankers abroad, proceeding altogether upon a plan different from the English Banking system, do not so readily find convenient investment for large sums of money, and are therefore driven to deal in a variety of Bills. This comparative greater scarcity of home business, however, finds its counterpoise in the very large field opened to the Banker abroad; the peculiar nature of his business compels him to adapt his knowledge to the more universal character of his operations. A Foreign Banker, therefore, is generally a good hnguist; he is acquainted with the commerce of other countries ; he is bound, in fact, to educate himself for his business. Thus armed and prepared, he finds himself enabled to deal profitably with ah sorts of Foreign Exchanges ; to enter into arbitrations, and other business, which the English Banker has no inclination to embark upon. 444 FOREIGN COURSES OP EXCHANGE. In most of tlie large Continental cities there is consequently almost always a stock (if we may use this term) of Foreign BiUs, in whicli the Bankers deal with their customers, or among themselves. The English BiU Exchange, which takes place Tuesdays and Fridays, is essentially held for the hond fide consumption of Paper offering, and is compara- tively a small one : the Foreign Bourses generally take place every day, and speculative dealings in Exchanges, as well as absorption of Bills, give them the character of larger and closer markets of Exchange. The conditions of Brokerage, &c., abroad are gene- rally the same as in England. We now give the Courses of Exchange as issued at the principal towns, showing the systems pursued. PARIS. Paris, Vendvedi, 28 F&vri&r 1868. Escompte. Changes. A 3 moig. A oonrte ^oheanoe. VAIiEUES I !B NBGOOIAOT X TROIS MOIS. 3| pr Ot. Amsterdam 209f I 210 209| h. 209f et 4 pel Cent. 3 „ FAMBOTIEa 185| „ 185| 184J „ 184f et 4 )) 4 „ Bbblin . 3641 ,^ 365i 364 „ 365 et 4 )» 6 „ Madrid . 509 „510 610 ,,511 et 4 }} 5 „ Cadix J> 5J et 4 ?> 5 » Baecelonb 611 ,,512 612 ,,613 et 4 )J 5 „ LiSBONNB 640 ,,541 640 ,,541 et 4 )) 5 „ POETO 640 ,,541 640 ,,541 et 4 ?J 4 „ ViBNNB . 211 ,,212 211 ,,212 et 4 J) 4 „ Teiestb . 210 ,,211 210 ,,211 et 4 )) 3 „ Pkancfoet 209 „209i 208 „ 208i et 4 JJ 6 „ PilTERSBOURG . 339 ,,340 340 ,,341 et 4 )) rOEEIGN COURSES OF EXCHANGE. 445 PARIS {continued). Escompte. Changes. A 3 mois. A coorte echeanoe. VALETJES SE NBGOOIiNT A VtJB. 2 per Ct. LONDEES . 25-14a25-19 25-111 a 25-161 ni2prCent. 2^ „ Belgique iVba^VP 1 p a pair m2i „ 5 „ Italie . 13p k 12|p 13pal2ip m5 „ L'Escompte, a la Banque de Prance, est k 2^ per Cent, (siir avances 3 pour Cent). COTJES DES MONNAIES, MATIERES ' Or en barre, a i%%% le Ml. 3434 Fr. Lotdsd'or, a T^-Oi. le kil. 3094 Fr. a o .•CB 1000 Pieces de 20 a 40 Pr., agio ijgent en barre a \%%% le kil 218 Fr. ■ Quadruples espagnols Quadruples independants . Souverains anglais . Ducats de Hollande . Ducats d'Autriclie . Piastres a colonne . Piastres mexicaines de poids Bank Notes Post Bills D'OB, ET D'ARGBNT. 44 C. pr. Of50 a pair 43 C. pr. 3£ . pair 89 0. pr. 9f „ lOf . 83 60 „ 84 . 80 75 „ 81 . 25 ,07i „ 25 10 . 11 70 „ 11 75 . 11 75 „ 11 80 . 5 35 „ 5 40 . 5 35 „ 5 40 . 25 07i „ 25 10 . 25 12i „ 25 15 The places standing under the head of " Valeurs se Negociant a Trois Mois" are quoted at the Three Months' Exchange, and the rate paid for every 100 of the foreign monetary units is expressed in Francs. For Spanish, Portuguese and Eussian paper the quotation gives also the rate in Centimes for the 1 DoUar, 1 Milreis, and 1 Rouble, which of course amounts to the same thing as the quotation in Francs for the 100 Dollars, Milreis, or Roubles. Under the head of " Valeurs se Negociant a Vue" the Exchange 446 FOREIGN COUBSES OP EXCHANGE. taken is tlie absolute short, and for London the £1 Sterling is taken as the Unit. For Belgiiun and Italy, where the same monetary- system as in France prevails, a preminm. or discotint is qnoted. The first coliunn in the table gives the rates of discount current in the towns in the second column ; the third column states the prices made for three months' paper, and the fourth column the rates for short paper, computed upon the three months' Exchange, with the rates of interest added, which Paris Bankers are supposed to allow or to charge for short. But these are only nominal rates of Interest ; in actual bargains the rates of discount are more closely followed. Thus three months' Amsterdam, at the three months' Exchange, is Fs. 209| h 210 per 100 Florins, but sight Amsterdam at the three months' quotation of 209^ a 209f , say 209-25 With 4 per cent. Interest for three months 2'09 Fs. 211-34 per 100 Florins. The Interest is subtracted from the rates given under the " Valeurs se Negociant h Yue." Thus London three months, at the quoted sight Exchange of 26-14. a 25-19, say Fs. 25-16i Less Interest at 2 per cent, for three months .... 0-12^ Making three months' London Fs. 25.04 The rate quoted in the fourth column, "A courte echeance" for London, is the guiding rate for cash payments between the two places. The quotations for Coins and Bullion, " Cours des Monnaies, Matieres d'Or et d' Argent," show that Or en barre "i 1^ Kilo ^ ^* * P'"" ^^^ (Gold bars) 5 1,000 '' '• ^^'^"^^ ^ ^""^ ^° { Premium to Par. Argent en barre 7 1,000 . -p m o □„ „., f at 9 a 10 per 7c-, n N C -TT^?:?, IS Fs. 218-89 per Kjlo ] ,^.„ „ f (Silver bars) ) 1,000 ^ ( MUle Premium. The rates being those of the "Tariff du Commerce." POEEIGN COURSES OP EXCHANGE, 447 Comparing now the rates of Exchange in London with those at Paris, selecting, for instance, Amsterdam, quoted at the cheaper rate : In London, £1 = Fl. 12 In Paris, M. 100 = Fs. 209f An Exchange of Fs. 25-17 restdts between London and Paris. The Exchange qnoted for London is 26'12^ to 16| or, taking the mean, Fs. 25'14 ; thus showing a margin or profit of 3 Centimes per £, which, however, is not enough to cover Bill, Brokerage, Stamps, &c. Italy at three months is quoted in London 29'25 a 29"35, say Fs. 29'30. In Paris it is 13 per cent, perte or loss, or 100 Lire for 8? Francs. Interest being at 5 per cent., 100 Lire at sight are = Lire 101'26 at three months ; consequently ? = £1 If £1 = 25-14 Francs. Fs. 87-00 - 101-25 Lire Italiane. = 29-25 These examples lead the way to arbitrations of Exchanges. BRUSSELS. Bruxelles, Mercredi, 26 Fhrier 1868. CHANGES. Amsteedam . 211 50 LONDEES . 25 15 k 26 V?\ Berlin 368 50 Paeis 100 Feaucpoet s/M . 210 ROTTEEDAM 211 25 Hamboueg . 186 ViENNE 213 With the exception of London, which is here quoted per £1, all the other rates are quoted on the basis of 100 Foreign Units for the rates in Francs stated, and aU of them are for short. The Brussels Course of Exchange is thus one of the simplest and easiest under- stood ; for the three months' Exchanges the respective Interest has to be deducted. 448 rOEEIGN COUESES OF EXCHANGE. TURIN. Torino, 27 Felhraio 1868. CAMBJ. A 30 GIOENI A 3 MESI denaro lettera lettera Feancofoete s/M. — — 238 90 239 25 LioNE (Lyons) — — 113 90 114 — LoNDEA (London). — — 28 70 28 75 Paeigi (Paeis) . — — 118 90 114 ... EOMA — — — denaro lettera Pezzi da 20 FEANCHi (20 Feancs Gold pieces) 22 87 22 89 „ DA 5 FEANCHI AeGENTO (5 PeANCS PIECES) 5 71J *•. Spezzati in Aegbnto (Specie) 114 30 ... Again 100 Poreign Units ^ the Rates in Lire quoted, except London, which is quoted per £1. The Rates are for three months. The expression "denaro" signifies the buyer's rate, "lettera" the seller's rate. The prices are aU for Paper money, Paris and Lyons therefore are at 13'90 to 14 premium, and Specie at 14'80 premium. Rome, for which no quotations are given here, is at present at about 625 Lire per 100 Scudi. In Grenoa and other Italian Towns Amsterdam, Hamburg, and Spanish places are sometimes quoted ; but the principal business in now done iu Exchange on Paris, Lyons, London, and Frankfort. FOREIGN COTJESBS OP EXCHANGE. 449 BERLIN. Berlm, 19 Fehruar 1868. WECHSEL-COtmSE. BANKDISCONTO 4 PEO CENT. Amsterdam Hambueq London Paeis WiEN . Augsburg FRANErURT Leipzig . )3 PETEESBUE8 )) Bremen Waeschau 250 Fl. 10 T. „ 2M. 300 Mk. 8 T. „ 2M. 1 Lstr. 3 M. 300 Fr. 2M. 150 Fl. 8 T. „ 2M. 100 Fl. 2 M. 100 Fl. 2 M. 100 TM. 8 T. 2M. 100 S.R. 3 W. „ 3M. 100 TU. 8 T. 90 S.R. 8 T.. Zf. 3 3 3 3 2 4 4 4 3 4 4 7 7 3-i Corns, v. 18. 143f bz. 143| bz. 151| 151i bz. bz. 6 24f bz. 81i bz. 86| bz. 86i bz. 56 26 G 56 28 G 99AG 99^ G bz. 92i bz. 111| G 84| bz. 931 Conrs. T. 19. 1431 bz. 143J bz. 151i bz. 151i bz. 6 24| bz. Bli bz. 86| bz. 86i bz. 56 26 G 56 28 G 99f G 99tV G 93| bz. 92| bz. iiii 84| G bz. GOLD SILBBE UND PAPIEEGELD. Cours. V. 18. Cours. V. 19. Fbiedeichs d'Or . 113| G 113| G Gold Keonen 9. lOJ G 9. lOi G Louis d'Oe . 112i G 112f G SOVEEBIGNS . 6. 24| G 6. 24| bz. Napoleons d'Oe . 5. 13f bz. 5. 13| bz. Impeeialb per Zpfd. 469 G 469 G Dollars 1. 12i bz. 1. 12i B SiLBEE per Zpfd. . 29Tlil.25Sgr.G 29 Thl. 25 Sgr. G Oeste. Banknoten 86| bz. 86i| bz. RUSSISCHB ,j 84| bz. 85| bz. Tbe maimer of quoting is fully set fortb in this Exchange List. The quotations are given in Thaler with fractions, or in Thaler and Groschen. 29 450 FOJIEIGN , COUESES OF EXCHANGE. The time is expressed by M (months), W (weeks), T (days), Zf. in the second oolumn means " Zinsfass" (Rate of Interest). The letters " bz." after a quotation mean "bezahlt" or paid, indicating that these prices are currently paid ; whilst the capital letter "G" stands for "Geld" (Money), meaning that at the quotation in question Money can easily be had for the Exchange. This Course of Exchange dates from the 19th February, the rates in the third column being those of the 18th, the day before. FRANKFORT ON THE MAINE. FranJifurt am Mam, 28 Fehruar 1868. WECHSEL IN SUDDBUTSCHEE ■WAHRUNG. Amsterdam Fl. 100 . k.S. lOOi G. Ditto Fl. 100 . LS. AntwerpenFrs. 200 . k.S. 95 G. Ditto Frs. 200 . IS. Augsburg Fl. 100 . k.S. 99f G. Ditto Fl. 100 l.S. Berlia Thlr. 60 . k.S. 105 B. Ditto Thh-. 60 . l.S. Bremen Thlr. 60 Lsd. k.S. 97|B. Ditto Thlr. 50 Lsd. l.S. Briissel Frs. 200 . k.S. 95 G. Ditto Frs. 200 . l.S. Coin Thlr. 60 . k.S. 105 B. Ditto Thlr. 60 . l.S. • • • Genua Frs. 200 . Hamburg M.B. 100 . k.S. 88|G. Ditto M.B. 100 . l.S. Iieipzig Thb. 60 . k.S. 105 B. Ditto Thlr 60 . l.S. Xiondon Lst. 10 . k.S. 119|, f bez Ditto 2 a 3 Monat . l.S. Lyon Frs. 200 . k.S. Miviland Fr.- 900 . k.S. .,, POEEIGN COURSES OF EXCHANGE. 451 FRAN KPORT (^agntinued) . Mailand Frs. 200 l.S. Munclien PI. 100 . k.S. 99f G. Ditto PI. 100 . l.S. Paris Frs. 200 . k.S. 95fB. IG. Ditto Prs. 200 . l.S. . . . Petersburg 60 S.-Rbl. Triest PI. in ost. W. k.S. Ditto PI. in ost. W. l.S. Turin Prs. 200 . ... Wien PL in ostr. W k.S. lOli, i bez. Ditto . PI. in ostr. W ni.S. lOlJ, 1 bez. mit 4 pro cent. Ditto . PI. m ostr. W l.S. lOlj, J bez. mit 4 pro cent. Disconto 3 pro cent. G. GELD 30RTEN. Preussische Cassen-Sclt. (Prussian Notes) . Fl. Kr. 1 44i-45i Preussiscbe Priedriclis d'Or . 9 67i-58| Pistolen .... 9 49 -51 „ Doppelte . HoUandische 10 Plorin Stiicke 9 60 -52 9 54 -66 Ducaten .... 5 37 -39 „ al marco . 5 38 -40 20 Pranken Stiicke 9 32 -33 Engliscbe Sovereigns . Russische Imperiale Gold per lb. fein . 11 54 -68 9 50 -52 6 Pranken Thaler • • . HocKhaltig Silber per lb. feia Dollars in Gold . 27i-28i The Excbanges are quoted in Plorins, the fixed rates being placed agaiust them. K S means Kurze Sicht (Short.) L S means Lange Sicht (Long.) The letter B means " Briefe," that is to say, the Seller's rate ; G designates the Buyer's rate ; Bez (Paid) the actual prices made. 452 FOREIGN COURSES OF EXCHANGE. HAMBURG. Hamburg, 24 Februar 1868. "Wechsbl. (Notiz Tom 21 Februar.) Z.F. OEPICIELLE yOTlZ Bezahlt Briefe. Geld. (heute.) Paris . . . per 100 Bco. M. 3Mt. 2 187 1871 1871 5) )) » JJ kurz 186 1861 186i Bordeaux J3 JJ )) 3Mt. 2 187| 187| 1871 Antwerpen J) )) )J 3 „ 2 187i 187i 1871 3) JJ J) )) kurz 1861 1861 186f Genua )) S) J) 3Mt. 5 215 217 Livomo . )) )J )J 3„ 6 215 217 St. Petersbi: irg. „ Rub. SUb. 3„ 6 29i 29 29A London . . „ £ Sterling 3 „ H 13-7i 13-7 13 -71 :j JJ )) )) kurz 13-81 13-7f 13 -8 Madrid . . „ Pes. f. 20 r.d.v. 3Mt. 431 43 Cadix . >j a )) 3 „ 431 43 Bilbao . SJ )) )) 3 „ 431 43 Lissabon . „ Mille Rees 3 „ 461 461 Porto . jj j: J) 3 „ 461 461 Amsterdam . „ 40 Bco. M. 3 „ 3 35-42 35-62 35 -48-60 )) )J )) J) kurz 35-18 36-28 35 -25-27 Prankfurt a M. „ 100 „ 3Mt. 2 88f 89 89 Brief Augsburg 3J ?) )J 3 „ 88| 891 Wien . J) J) )) 3 „ 4 88 881 871-88 Prag . . )) )) JJ 3 „ 4 881 88| 871-88 Triest . J) S) ?) 3„ 4 881 88i 87|-88 Berlin . • „ 300 „ 3 „ 2| 1621 163 1521-153 Breslau . ' )> )) jj 3 „ 2i 1521 153 1521-153 Leipzig . jj J) jj 3„ 21 1621 153 152|-163 Bremen . )) 5) J) 3 „ 3 137 1371 1371 Copenhagen )) J) )J kurz FOREIGN COUESES OP EXCHANGE. 453 HAMBURG {contiwmd). Gbldsoeten. Silber in Barren, mindestens "^ 10 ^tilll * Gold al Marco Kronen Loma d'Or Ducaten (HoUandisclie) . . Do (Hambgr. nnd diverse) Dan. f Eeichs-TU. (Species) . Do. i do Thaler im 14 u. 30 TH. Fizss . i-u. I-Thl. do. do. Napoleons d'Or (20 Francs) . SoTereigns (£1) Eagles (5 Dollars) . . . . Preuss .Bknot .u. Cassenscheine Diverse do. do. Do. do. do. (wilde) Dan. National-Bank-Zettel . Mark f. Stiick 300 M.B. Stuck. 300 M.B. 27 M. 12 Sch. fester Bank- [Preis. 429 „ „ 18 „ 85 „ 11 „ 2 „ 101| Set. 101| „ 200| Rigsdaler 201 151| Thlr. 151f » 10 M. lli-12| Sch. 13 M. n- 81 „ 18 M. 14 -15 „ 151|-161| TUr. 1611-1621 ,, 1521-1521 „ 200|— 201 Rigsdaler o Here again the expressions "Briefe," " Geld," and "Bezahlt," wiU be noticed, and Z. P. (Rate of Interest.) This Exchange List is issued by one of the largest and most active Banking Firms in Hamburg. 454 FOEEIGN OOUESBS OP EXCHANGE. BREMEN. 28 Felrua/r 1868. ■Weohael Course. Z. F. pro cent. Briefe. Geld. Hamburg . fiir 300 Mk. Bco. 6T. ... 136 135f jj • )) )) )j 3Mt. 2 1S4| Amsterdam . „ 250 Fl. 8T. 128| 128i )) • 5J )) )J 3Mt. 3 1271 127i London. . . „ £100 . . 8T. 613i 613 5? -•?)?» • • SMt. 2 609| Paris . . . „ 1 Franc . 8T. 17^ 1?« »•■•?) )j SMt. 2i 17M Brussels ■ ■') „ „ • i '8T. im Ant-werpen f „ „ . i 3Mt. ^ 171 Wien (2 TH.| „ 100 L. d'Or - Unt. 4 130 equal3Fl.)j TU. Gold Augsburg . „ 100 Fl. . 3Mt. 3 50| Frankfurt . „ „ „ 3Mt. 2 50| C „ 100 L. d'Or) Berlin. . .| tH. Gold ] SMt. 2| 112f 112f Leipzig . . „ 100 „ SMt. 3 112| 112| New Tork . „ 100 3T.S. 78| 80i Disconto 3J a 3| per cen t. 418 L. d'Or Thaler lOOf 4-62i 6-7 l-18i „ nil GELD SOETEN. Geld ia Sorten und Barren per Mpfd. fein Pistolen, per 100 Thaler 20 Francs Stiioke Sovereigns Eagles, per Dollar Thaler, Silber, per 100 L. d'Or Thaler. The quotations for Hamburg, Amsterdam, London, Augsburg, and Frankfort, are in L. d'Or Thaler Gold; for Vienna Thaler (upon the basis of 2 Thaler Prussian = 3 Guilders Austrian), for Berlin and Leipzig Prussian Thaler, for New Tork Dollars are quoted as against 100 L. d'Or Thaler; for Paris 1 Franc is the fixed rate, quoted in Groten, with fractions to Jj Groten. The reader will probably agree with us ia opinion that the Bremen Course of Exchange is very confusedly constructed. FOREIGN COURSES OF EXCHANGE. 455 VIENNA. Wim, 24 Fehruar 1868. Wechsel Couese. 3 Monate. Z.F pro Ce nt. Amsterdam 100 li. Fl. Augsbiirg 100 Fl. Berlin 100 Thaler 3 4 4 99-50 99 100 99-50 Breslau 100 Thaler . Frankfurt 100 Florin Genua, 100 Lire 4 3 5 99-25 9975 Hamburg 100 Mark Leipzig 100 Thaler , Livomo 100 Lire 3 4 5 87-60 88 London £10 Lyon 100 Francs Mailand 100 Lire Marseille 100 Francs 2 5 2| 118-75 119-75 Paris 100 Francs Venedig 100 Lire 2i 5 47-10 47-60 Valuten. K. Kronen 16-45 K. Miinz-Dukaten . 5-70 5-75 K. Eand-Dukaten . 5-69 5-74 Gold al marco . 5-67 Napoleons d'Or Sonverains d'Or 9-49 16-45 9-54 Friedrichs d'Or 9-90 10 Louis d'Or (dentsche) Enghsche Sovereigns B-ussische Imperial^ Silber in J fl. 9-80 11-90 9-80 116-75 9-90 12 9-90 117-75 Ditto 1 fl. . 116-75 117-75 Ditto Coupons . Preuss. Kassa^Anweisung Buss. Papier Rubel . 116-75 l-74i 1-61 117-75 l-75i 1-64 The quotations are in Florins ; but, as must be borne in mind, in Paper Money for the present. The premium on Silber (1 Florin piece) being 16| to 17| per Cent. 456 FOEEIGN COURSES OF EXCHANGE. AMSTERDAM. Amsterdam, 18 FSvrier 1868. COUBS DE Changes. Paeis 2 m. 66| Livouenb 2 m. 40i Id. a court. 66 Napels . )> 40i BOEDEAUX 2 m. 56i ViENNB . 6Bem. 99 Id. 15 J. 66i Atjgtjste )> 98i Madeid . 3 m. 238 Fkanctokt-s-M JJ 98f Cadix . 238 Petbesbodkg . 3 m. 158| Seville . 3 m. 238 ROTTEEDAM . 1 s Bilbao . J) 238 Londees 2 m. 11-83 LiSBONNE jj ' 40i DiTO a court 11-87 POETE A P. J? 40| Hambodeg 2 m. 34if Genes . 2 m. 401 DiTO a court 35,^ ROTTERDAM. Botterdam, 22 Feb. 1868. WiSSEL KOEESEN. LONDEN . 3 m. P 11-83 Beelijn . kort. P 173-65 Id. . 2 m. 11-841 St. Petbesb. 3 m. 159- Id. . kort. 11-88 Peankf. a/M. 3 m. 98-75 Parus . 3 m. 46-971 Id. . kort. 99-30 Id. . 2 m. 47-05 AUGSBUEG 3 m. 98-50 Id. . kort. 47-25 Weenen 3 m. 98- Antwerp 3 m. 46-90 Tbiest . 3 m. 97-75 Id. . kort. 47-15 Venetie . 3 m. 40-25 Hamburg . 3 m. 34-95 LiVOENO . 2 m. 40-25 Id. . 2 m. 35- Genua . 2 m. 40-25 Id. . kort. 35-15 Napels . 2 m. 40-25 Bremen . 3 m. 190- LiSSABON 3 m. 41- Berlijn . . 3 m. 172-40 POEBIGN COUKSES OP EXCHANGE. 457 The fixed Rates are, for London £1. For Paris and . Bordeaiix For Spain . For Portugal For Italy . For Hamburg . For Bremen For Berlin For Frankfort and Augsburg . For Vienna and Trieste For Petersburg . The official Amsterdam (120 Francs in Amsterdam. llOO Francs in Rotterdam. 100 Dollars. 40 Crusades (400 Reis). 100 Lire. 40 Mark Banco. 100 Louis d'Or Thaler. 100 Thaler. j 100 Florins. I 100 Florins. 100 SHver Roubles. Course is printed in French. STOCKHOLM. Stoclcholm, 14 Fehruwri 1868. Saljare. (Sellers.) Kopare. (Buyers.) Betalt. Paid.) Amsterdam 3 m. d. 150-25 150-15 Ditto K. S. 152-26 152-25 Berlin 3 m. d. • . • Ditto K. S. 268- 268- Christiania 3 m. d. Ditto K. S. Hamburg ... Ditto 3 m. d. K. S. 133-33 134-40 133-20 134-25 133-25 134-35 Kopenhamn Ditto 3 m. d. K. S. London 3 m. d. 18-02i 18- 18-021 Ditto K. S. 18-20 18-20 Paris 3 m. d. 71-60 71-55 Ditto K. S. 72-10 72-10 St, Petersburg ... Ditto 3 m. d. K. S. ... Diskonto 5 a 5| pro cent, for 3 m. d. Vexlar (Bills) . The fixed rates are 100 foreign money quoted in Riksdaler, except London, -which is quoted at so many Riksdaler per £1. 458 FOREIGN COUESES OP EXCHANGE. In Cheistiania the quotations on the 28th Febrnary were London . . 3 months, Speciesdaler 4-67 per £. Hamburg . 3 days' sight, lOlj for 300 Marks Banco. Amsterdam 95f per 260 Florins. COPENHAGEN. Kjdhenhavn, den 31 Jaivaar 1868. Hamborg k. S. 200| for 300 Mark Banco. London 3 M. 8 Rdlr. 93 Sk. per £1. „ ii-. to. y ,, 4 ,, ,, Amsterdam 3 M. 189| for 250 Florin. Paris 3 M. 34| SkilHng for 1 Franc. Disconto af Hamb. Banco 8^-4 pro cent. „ af Rigsmont-Vexler 4 — 4| pro cent. „ af do. i Privatbanken 4 - 4| pro cent. Hamburg and London are the principal Exchanges for Copen- ST. PETERSBURG. 8t. Fetersbourg, 22 Fevrier 1868. CHANGES. LONDEBS 3 mois 33tV, T^ Amstbedam . 3 „ 164 i i Hamboueg . 3 „ 29 i, a Paris . 3 „ 34.5i 346i Oe: Demi-Impeeialb achat. 5-98 J) ,, ..... vend. — EscOMPTE : a la Banque de I'Etat 8| pour cent, a la Bourse 7 a 7| pour cent. For London, the quotation means so many Pence per Rouble. „ Amsterdam „ „ „ Florins per 100 Roubles. „ Hamburg „ „ „ Schillinge Banco per Rble, „ Paris „ „ „ Francs per 100 Roubles. The Roubles are at present " Paper," and the depreciation of this forced Currency is shown by the quotation of the Half Imperial at 5'98 (its Metallic Value is 6'15), equal to about 14 per cent, pre- mium, as the buyer's price. POEEIGN COURSES OF EXCHANGE. 459 MADRID. Madrid, 17 de Mwzo de 1868. Loadres Paris Bayona Marsella Francos Francos A 8 diae Vista. 5-17 5-17 90 dias feoha. 49, 60 J 70 Alicante Barcelona Bilbao Badajoz Cindad-Real Caceres Cadiz Cordova Comfia Granada Logrono Malaga Murcia Oviedo Palencia PontcTcdra Salamanca Santander Santiago SsTilla San Sebastian Valencia Valladolid Vigo. Zaragoza Beneficio. Dafio. par. par. 1. 2 1 2 4 par. 2 7 par. f y 4 i 4 1 4 ly 1 2 par. 2 iy par. par. par. \ 2 par. 8 The differences in the Exchanges on the various Spanish Towns show how imperfect the interior intercourse must be. 460 FOEEIGN COUESES OF EXCHANGE. LISBON. Lisbonne, le 15 Jarwier 1868. CHANGES. FAR. PAPIBB. ARGENT. LONDEES 90 j/d 1 dol. 000 reis 52| 52|, 1 „ 60 j/d . jj ») " ) „ 30 j/d . )) )? „ ^+2o/o „ court j> J) „ ) Paeis 100 j/d . 8 francs 545 544-45 8 j/vue . j» 549-50 — Hamboueg 3 m/d . 1 dol. 000 reis — 47i Amsteedam id. 16 dis. 000 reis — 42i Genes id. 3 Lire en or. 528 Mad KID 8 j/vue peso faerte 945 940-42 London is quoted ia Pence ; Paris, Genoa, and Madrid ia Reis ; Hamburg ia SchUlinge Banco ; Amsterdam in. Florins. CONSTANTINOPLE. Constantinople, le 3 Fevrier 1868. COUES DES CHANGES. contra Livre Turque d'Or a PI 00. LONDEES 3/md . 108| a 1091 par £1. Paeis „ . . . 23-15 a par Livre Turque Marseille „ . . . 23-20 a 23-25 9f Naples „ . . . 27-00 a 27-50 )) Genes „ . . . 27-10 a 27-30 )) Vienne „ ^ . . 11-05 a 11-20 )j MONNAIES. Livre Anglaise 109| a 109f Napoleon .... 87 Medjidie d' Argent 106f| escompte pour Metalliques . • . . 104 1 Livre Turq. Piastres for the £1 ; Prancs for Paris and Marseilles ; Lire for Naples and Genoa ; and Florins for Vienna per Turkish Pound. FOREIGN OOTJBSES OP EXCHANGE. In ALEXANDRIA the quotations were :— 461 London . . 3 days' sight 96f a 96| Piastres per £1. 5) . 3 months 96f a 96 „ „ Paris . 3 days' sight 5-20 a 5-18 Frs. per 20 Piastres. 9J . 3 months 6-28 a 5-26 NEW YORK. New YorJc, 22nd Februarry 1868. London . 60 days' sight, Commercial Bills Dls. 109f a 109| ?) „ „ Bankers' Bills . „ 109f a 110 ij Short sight „ ,, „ llOi a llOf Paris . . 60 days' sight .... Fes. 5-171 a 5-13| J) Short sight „ 5-121 a 5-lli Antwerp . 60 days' sight . „ 5-17i a 5-13f Hamburg 5) ?J ■ • Cents 35| a 36| Amsterdam )) 5) • * „ 40| a 41i Frankfort 3J J) • • „ 40| a 411 Bremen . )) 7) • • „ 79 a 791 Berlin 53 J) • ' „ 71| a 72 The fixed rate for London is £22 10s for the Dollars quoted (100, with premium of 9 to 9f ), for Paris and Antwerp so many Francs for 1 DoUar. For Hamburg 1 Mark Banco „ Amsterdam 1 Guilder Quoted in ^ Cents. „ Frankfort 1 Florin „ Bremen 1 Gold Thaler „ Berlin 1 Thaler These Exchanges are aU on the Gold basis, i. e. paid for ia Gold Coin, which as against Paper Money stood at 41| premium at the date of this Exchange List. 462 FOEEIGN COURSES OP EXCHANGE. In SAJSr FRANCISCO the quotations were on tlae SOfch January 1868, London 60 days' sigtt, Commercial Bills 49 a 4i9j Pence per Dol. „ Bankers ,, 48i „ Short sigM .... 4,'7i Paris 60 days' sight . . . . 5'05 Francs ,, New York : Short, payable in Currency, 136 to 137 for 100 Dls. Gold. Payable in Gold . . 1 „ Ij Premium. By Telegraph in Gold . IJ „ 1| Premium. Fiue Gold Bars at Par ; 900 fine and under, J per Cent. Premium. Silver Bars, par to J Premium. MEXICO. 25t]i Janua/ry 1868. Havana 30 days' sight . 8 to 9 Premium for 100 Dollars, New York 30 days' sight 10 „ 12 Paris 60 days' sight . Francs. 4-66 to 4-67| per Dollar. London „ . • • Pence 44| „ 45 per Dollar. Madrid ,, . . .16 Premium for 100 Dollars. In LIMA quotations were on the \^th February 1868, London 90 days' sight 36| Pence per Dollar. Paris „ „ Fs. 3-80 In VALPARAISO on the 1st February 1868, London 90 days' sight 46| Pence per Dollar. Paris ,, „ Fs. 4-85 FOREIGN COUESES OP EXCHANGE, 463 In BUENOS AYRES the quota-tions were on tte 25th January 1868. London 60 days' sight . 48j a 48| Pence - Paris „ . 6-03 „ 5-10 Francs. Per Hard Antwerp „ . 5'05 „ 6'12 „ Dollar. Hamburg „ . 43| ScMUinge ^ In MONTEVIDEO on the 22m(i Jmma/ry 1868. London 60 days' sight . 46| Pence per Patacon. Paris „ „ . 5 Francs „ In RIO JANEIRO Fehrua/ry 1868. London 60 days' sight . 16 J a 15 Pence per Milreis. Paris „ „ . Reis 600 a 620 per 1 Franc. Hamburg ,, „ Rs 1040 a 1060 per 1 Mark Banco. Gold 87 per Cent Premium. The quotations are in Paper Money. CALCUTTA. London — 6 months' sight, Bank Bills 22^ Pence per Rupee. „ „ „ 1st Class Credits 22f Pence „ „ „ „ with Documents 22| Pence „ Paeis — 6 months' sight, Bank Bills 2'35 Francs per Rupee. „ „ „ with Documents 2'37| Francs per Rup. Hong Kong — 30 days' sight, 220 Rupees per 100 Dollars. Shanghai — 60 days' sight, 316 Rupees per 100 Taels. In BOMBAY the quotations were — London, 6 months' sight, 22f Pence per Rupee. In MADRAS- LONDON, 6 months' sight, 22| Pence per Rupee. 464 POEETQN COUESES OF EXCHANGE. SHANGHAI. 24,th Decemher 1868. CLOSINO BATES OP EXCHANGE. On London On Paeis On Calcutta On Bomeay On Hong Kong Bank Bills . . Credits .... Bills with Dootiments Bank Credits .... Bills witli Documents Bank Bills . . . Private Bills . . sight . . . 6 months' sight 3 days! sight . )» J) On demand 15 days' sight . Tael SslOdaSslOJd 6sOd a.6sOid 6s Old 6s Id Pes. 7-57i Pes. 7-65 a 7-70 Pes. 7-65 a 7-70 Rs. 302 per Tls. 100 Rs. 300i „ „ 27i per cent, discount 28 „ „ Interest. — 12 per cent, per annum on best securities. PKICES OF BULLION. Mexican Dollars . 73-3-0 Taels per 100 Dollars Caeolus Dollars . 75-50 „ „ „ Pekin Gold Bars . 98 Touch, 16900 Taels Shanghai Currency per Bar of Tls. 9-72, Haikwan weight HAIK.WAN Stcee . . 111-4-0 Taels Shanghai Currency per 100 Taels Haikwan weight Canton Syoee . . 109-5-0 Taels Shanghai Currency per 100 Taels Canton weight Bar Silver . . . 996 Touch or 17 Betterness, Tls. 111-4-0 Shanghai Cur- rency, per 100 Taels Canton weight Copper Cash . . . 1,470 per Tael In HONG KONG tlie quotations were at the same time. EXCHANGES. On London, Bank paper, 6 months', 4s 4d. First-class Credits, 6 months, 4s 4jd a 4s 4|d. On Bombay Rs. 218|, and on Calcutta Rs. 218f , for 3 days' Bank biUs. On Shanghai, Taels 72 for Bank bUls, and Taels 72| for Private paper, at 30 days'. BULLION. Bar Silver, llj per cent, premium; Sycee, 9J per cent, premium ; Gold Bars, Dols. 23-16 ; Gold Leaf, Dols. 2340 ; Double Eagles, Dols. 18-40 to 18-60 ; Sovereigns, Dols. 4-65 to 4-70 ; Clean Dollars, 1| per cent, premium. FOREIGN COUESES OF EXCHANGE. 466 YOKOHAMA. Yohohama, 3rd Jcmmary 1868. EXCHANGE AND BULLION. Steeling . Bank Bills. 4 months' sight 4s 4id. i> j> )) • 6 48 4id. ») Private Paper . 4 4s 5d. J) I) )j 6 4s 5id. Paeis . Bank Bills 4 „ 6-49 » » » • 6 5-50 jj Private Paper . 4 5-57 )j » >i 6 6-60 Shanghai , Bank Bills 10 days' sight 72| nom. »? Private Paper . 10 „ „ 73 to 73J. Hongkong . Ba,TiV Bills 10 „ 1 per cent, disct. )) Private Paper . 10 „ „ •■■4 » IJ Bullion — Boos. — ^After advancing to 278, they have again declined, and close at 285 to 290. The Rates on London and Paris are per Dollar. Shanghai 100 Dollars per Tael quoted Boos vary mnch in price ; they are here much above par. On the 28th May 1868 they stood at 330. 30 466 CHAPTER VII. CALCULATION OF EXCHANGES. WHERE tlie £ sterling is the fixed rate, and tte foreign money the variable rate, to find the value of a given sterling sum in tlie foreign money, tlie simple rule is to multiply the sterling sum by the variable rate, or rate of Exchange ; e.g. the value in francs of £100, at the Exchange of fs. 25-32^, is £100 X 25-321 = fs.2532-50 To change a given sum of foreign money into sterHng, the rule is to divide the foreign sum by the rate of Exchange ; e.g., the value in sterHng of fs.l275, at the Exchange of 2o"50, is 25'5) 1275 (£50. Where the foreign money forms the fixed Unit, and the sterling in Pence the variable rate, the rule is simply reversed. The British sterling, reduced first to Pence, is divided by the rate of Exchange ; the quo- tient gives the equivalent in the foreign money ; e. g. £200, exchanged at 48d per Dollar Spanish, are 1000 Spanish Dollars. To change the foreign money into sterHng, the foreign sum is multipHed by the rate of Exchange in Pence ; e. g., Roubles 5000, at 30d per Rouble, are £625. These are simple and easy calculations ; but with CALCULATION OF EXCHANGES. 467 odd sums and fractional Exchanges they are some- what more compHcated, and may occasionally seem tedious to people not quite familiar with them. There are sets of Tables published which greatly facilitate the work. There are, however, many little artifices which a good calculator may find it useful to adopt. When, for instance, the French Exchange stands exactly at- fs. 25, and £1632 12s 7d are to be converted into Francs, instead of multiplying the sum by 26, simple division of it by 4 — having reduced it first to decimals, with the separating point removed two places towards the right hand — ^will work quicker ; e. g — £1632 by 25 8160 3264 40800-— 128 X 25 = 300 Divided by 20 = IS-— 7d X 25 = 175 Divided by 240 ° 0-72i Fs. 40815-721 By reducing the £1632 12s 7d to decimals— 1632-629, witb the sepa- rating point shifted two places towards the right hand = 163262-9, and dividing this by 4, the same result is obtained much quicker. K the Exchange is 25-05, add ith per cent, of the amount. Ps. 40815-72i 81-63 Makiag "^ Fs. 40897-35 2 For every 2| Centimes add ^th per cent., which makes | per cent, for 12| Centimes, 1 per cent, for 25 Centimes, 2 per cent, for 50 Centimes, &c. 468 CALCULATION OF EXCHANGES. Convert £335 14s 8d into Francs, at the Exchange of 25-38|, in the nsual way and by the method here suggested, yon certainly will find the latter much more expeditious. £336 14s 8d = 33571-25. Divide by 4 Fs. 8392-81 Add 1 per cent, for 25 Centimes - 83-93 -L 1i - 4.-1 <)i Fs. 8522-90 To convert Francs into Sterling, divide the amount by the rate of Exchange ; e.g. — Fs. 18,395-60 -=- 25-121 = £732-163 or £782 3s 3d. This is in the ordinary way. A somewhat more convenient way is to multiply the Exchange rate by 4, divide the sum by the product, and multiply the quotient again by 4 ; e. g. — 26-121 X 4 = 1005 18,395-6 -^ 1006 = 183-0408 x 4 = 782-1632 or £732 3s 3d. The French Rates of Exchange all give more convenient figures for divisors when multipUed by 4 — thus 25-02| becomes 1001 ; 25-171 = 1007; 25-23| = 10095; 25-25 = 101; 25-50 = 102. There is this slight drawback, of course, that an additional process of calculation is required, viz., the multiplication of the quotient by 4. In calculating the Hamburg Exchange the conversion of the sterhng Money iuto Mark Banco may be effected by multiplying the sterling sum, reduced to decimals in the first place, by 13 Mark 8 SchilHnge, or 18-5, then by what the rate of Exchange falls short of or exceeds 13 Mark 8 SchiUinge, substracting the last product from the first in the former case, and adding it in the latter. To convert Banco Mark into sterling, reduce the rate of Exchange to Schillinge, or Half or Quarter Schillinge, as the case may be, divide the Hamburg Money by the resulting figure, and multiply the quotient by 16, 82, or 64, as the case may be. CALCULATION OF EXCHANGES. 469 Other Methods of facilitating the work may easily be devised upon the plan of the examples here given. With rates quoted in Pence the calculation is naturally much more simple. There are also certaiu charges on Exchanges which must be taken into account in the calculation. Thus, in the French Exchange 1 per mille Brokerage is charged, making 2| Centimes on the Exchange ; then there is the BiQ Stamp of f per mille = Ij Centime ; Interest 1 per cent, for three m.onths ^ about 25 Centimes (1 per cent, for three months equal 4 per cent, per annum ; at 3 per cent, per aimum the Interest is accordingly 18f Centimes for three months, or 6 j Centimes per month, or 3| for 14 days) . Upon this plan French Exchanges may easily be computed for all sorts of dates and for varying rates of Interest, simply deducting the latter from the long or adding it to the short Exchange. In the Dutch Exchange 1 per mille is equal to H Cent, or about J Stiver ; 1 per cent, is equal to 2|- Stiver. In the Portu- guese Exchange 1 per miUe is equal to -^th Penny, or 1 per cent, equal to |d, &c. &c. EXAMPLES OF EXCHANGE NOTES. SIMPLE ACCOUNTS. Fes. 42,661-10 due 22nd March 1868 on Paris @ 25-30 = . . . £1686 4 3 22nd December 1867. Fes. 6420-10 due 26th March. Paris. 7321-30 12741-40 @ 25-32i = . . £603 2 4 25th December 1867. Lire 10450-30. Genoa. Due 8th June 1867, @ 26-82i = . . . . £389 11 6 8th March 1867. 470 OALOTJLATION OP EXCHANGES. lit. 6725-00 Naples. Due 8th Jtme. 7078-75 Leghorn. Lit. 13803-75 @ 26-85 = . . . £514 2 1 8tli March 1867. n. 12975. Vienna. Due 10th June, @12-97i= £1000 8th March 1867. Fl. 1805-32. Amsterdam. Due 10th March, @ 12/01 Stiver = . • £108 6 6 10th December 1867. Fes. 1000. Paris. 10 days' date, @ 25-221 = 39 12 10 Lit. 8784-10. Leghorn, 3 months, @ 26-871 = 326 17 £366 9 10 19th March 1867. PI. 3639-20. PranMbrt. Due 11th June, @ 1201 = £294 12 6 11th March 1867. This. 3000. Berhn. Due 13th December, @ 6 Thl. 27 Sg. = . . . £434 15 8 13th September 1868. Rbles. 5743-60. St. Petersburg. Due 15th June, @ 311 = . . . . £747 17 15th March 1867. Reals 13350. Madrid. Due 15th June, @ 48i = £134 3 11 15th March 1867. CALCULATION OF EXCHANGES. 471 ACCOmSTTS OP BILLS Bought at 3 Months' Exchange, allowing Interest. Bought on 17th Decemher 1867, Fr. 6000 Paris, due 30th March 1868, @ 25-32|, less Interest at 3 per Cent. The Account is made out as follo-vrs : — Fs. 6000 Paris for 30th March 1868, @ 25-321 = £236 18 6 Less thirteen days' Interest at 3 per Cent. 5 1 £236 13 4 This Bill having to run 13 days longer than 3 months, the Interest is deducted from the product calculated at the three months' Exchange. Bought 10th December 1867, Fs. 6608-00 @ 25-31| and 2 per Cent. Interest. Fs. 6608-00 for 28th December, Paris. 26-43 Interest @ 2 per Cent., 28th ' ■ December to 10th March. Fs. 6634-43 @ 25-31^ = . . £262 2 The Interest for time below 3 months is here added to the amount. Bought Reals 34484 Barcelona. Due 11th April. 8730 „ 16th „ 43214 101 Interest at 5 per Cent. Reals 43315 at 48* . . . . £438 15 9 29th January 1867. Bought Fl. 10,000. Amsterdam. Due 20th May, at 11 PI. 19 Stiver = . . . £836 16 5 Interest at 2^ per Cent., 20th May to 16th June 1 9 10 £838 6 3 15th March 1867. The Interest may be added to or subtracted from either the foreign money or the sterHng. 472 OALOULATION OF EXCHANGES. ACCOUNTS OF REMITTAJSTCBS Of Bills Purchased on 'Change, showing the Net proceeds. Purchased in London on 5th March, and remitted to Paris same day. Ps. 12635 on Paris for 16th March at 25-23i £500 12 9 2500 „ „ 25-23f 99 1 2 699 13 11 1 per mille Brokerage . 12 £ 600 5 11 Credit Note received from Paris for the above. Days. Nos. Stamps. 2635 Paris, 16th March ) „ ,,,, f 6-50 2500 „ „ ! 11 ^''' [ 1-50 1665 15135 Interest at 2| per Cent. . . . 11-60 19-60 19-60 F s. 15115-40 Value 5th March. Interest in this Account is calculated on the Continental principle, with numbers. The amount is multiplied by the number of days the Bill has to run, so as to give the equivalent sum for 1 day's Interest. Thus a number of Bills may be reduced to 1 day's Interest, and the total, multiplied by the rate per Cent., and divided by 360 days (it is customary to take 360 days) gives the Interest for the whole. PUECHASE ACCOUNTS. Purchased in London on 28th October 1867, and remitted to Paris. Ps. 2303-82 Paris. For 28th Dec. 25-271 £91 3 3101-49 Boulogne 2nd „ 25-25 122 16 8 8230-15 Marseilles 28th „ 25-30 325 6 100-00 Paris 15th Nov. " 885-00 25-20 39 1 9 Fs. 14620-46 „ „ £578 7 5 1 per miUe- Brokerage . . 11 7 £578 19 CALCULATION OP EXCHANGES. 473 Credit Note returned from Paris. Fs. 2303-82 Paris. For 28th Dec. "eT 1382 iTo' 3101-49 Boulogne 2iid „ 34 1054 2-00 8230-15 Marseffles 28th „ 60 4938 4-50 100-00 Paris (stamped) 15th Nov.") 885-00 „ „ Jl? 167 14620-46 7541 8-00 60-36 at 2| per Cent. . 52-36 14560-10 Ps. 60-36 14-56 1 per mille Brokerage. Ps. 14545-54 Value 29th October. The Paris] Banker "may cover this remittance by a draft at sight on London, For £578 7a @ 25-15 Fs. 14,545-54, or he may send BiUb, of various dates, on this Country for discount, say:— £100 for 12th December 43 days £0 4 9 240 16th „ 46 „ 12 3 129 5 7 3rd January 65 „ 9 6 110 30th „ 92 „ 11 3 579 5 7 @ 2 per cent. £1 17 9 1 17 9. less Discoxmt. 577 7 10 19 2 demand Draft on London. £578 7 @ 25-16 = - - Fs. 14,545-64 Thus balancing the Account of the London remittance, and showing a small loss on the transaction. It will be observed here that the Paris Banker, wishing to settle the account, draws a small draft for the balance at sight on the London Agents, and adds it to the Bills. Banking Commission is not taken into account here. 474 CALCULATION OF EXCHANGES. Ptircliased in London 28th January 1868. M. 4208-28 on Amsterdam for 28th April, @ 12 Fl. OJ Stiver = £350 6 6 - 1 per mille Brokerage . . 7 £ 350 13 7 Credit note returned ffom Amsterdam for the ahove. Amsterdam, SOth Jwrnmry 1868. M. 4208-28 28th April, 91 days, 3829. 3829 @ 3| per cent. M. 37-23 40-34 Stamp . . . 3-11 PI. 4167-94 value 30th January. PL 40-34 As with Paris, the Dutch Banker may remit a sight draft on London, for — £350 19s 8d @ 11/17| = Fl. 4167-94, or he may cover by remitting several long Bills to his credit under discount, say : — £123 4 2 due 3rd March 31 days @ 2 pr cut. £0 4 3 80 20th „ 48 J) 11 4 2 141 15 10th April 69 )j 33 10 9 67 5 4 15th „ 74 i; 11 5 5 412 4 6 14 7 Stamp . . . 5 9 I per cent. Commission 10 4 2 8 £2 8 £410 3 10 at ll/17i = PI. 4871-03 value 1st February 1868. As the amounts are usually placed to credit in account, it is not of course necessary or even customary to remit the exact amount ; in the case here before us, for instance, more is remitted than wUl cover what has been received from London. CALCULATION OP EXCHANGES. 475 Purcliased in London llth December 1867, Of B.M. 1638/12 Hamburg, 11th March at 13/10| £120. Credit note received from Hamburg, B.M. 1638/12 11th March, 86 days, 1410 Discount at 2| per cent. . . 9/12 Stamp and Postages . . . 2/10 Commission .... 0/11 13/01 13/01 B.M. 1625/11 value 17th December 1867. Account of remittance from Hamburg for discount and credit. No. dei20 for 20th February, 25 days, 3000 2 6 Discount at 1| per cent. £120 2 6 at 13/7 = . . . . B.M. 1614/3 Commission . 1/5 Value 17th December 1867. B.^- 1615/8 Purchased ia London, 21st January 1868. Rbls. 980-40 St. Petersburg, 21st April, at 32| = £131 4s 7d. Account of reahsation of the above ia St. Petersburg on 31st January. Rbls. 980-40 31st January, 81 days, No. 794 Discount at 6 per cent. . 13'23 Stamp .... 0-90 14-13 1413 Rbls. 966-27 Value 31st January. 476 CALCULATION OF EXCHANGES. Return remittance from St. Petersburg. £130 on London, 12tli April. 14 9 days at 2 per cent 130 1 4 Stamp ... £0 1 per mine Brokerage Postages ... 7 7 £129 13 9 at 32 = Rbls. 972-62. £0 7 Yalue 12th February 1868. Account showing proceeds in Vienna of a Bank Post Bill of £100, remitted from London. Purchased of Bank of England, 18th January, Bank Post BUI. £100 due 25th January. Note of proceeds of same in Vienna : — £100 for 25th January at 119-55 = . . M. 1195-50 Interest at 2 per cent. 5-84 Commission 1201-34 •60 Value 22nd January 1868 . PI. 1200-74 PURCHASE ACCOUNT OF REMITTANCES, London, 25th Februcury 1868. PI. 267-58 Frankfort due 4th May 21 days 186-00 „ 10th 19200 „ 11th 100-00 „ 12th 198-46 Augsburg due 9th 1321-48 610-56 2766^ 1-42 15th 31st 15 14 13 16 10 64 28 27 13 32 132 "286 31 "255 255 at 2 per cent. Fl. 2767-45 a 120^ = £230 2s lOd. OALCTTLATION OP EXCHANGES. 477 The above has been pTirchased at the 3 months' Exchange of 120j, adding interest at 2 per cent, for the Bills shorter than 3 months, and deducting same for the one longer. Credit Note returned from Frankfort. Feaukfoet-on-the-Mainb, 29th Februa/ry 1868. Days No8. Fl. 257-53 . . for 4th May . . 61 173 186 . . 10th „ . .73 186 192 . . 11th „ . .74 142 100 . . 12th „ . .75 75 735-53 Frankfort 526 3-29 discoimt 526 interest at 2| per cent. . Fl. 732-24 Fl. 198-46 . . for 9th May . . 72 148 1321-48 . . 15th „ . . 78 1081 510-56 . . 31st „ . . 94 480 2030-60 on Angsbnrg 1654 13-78 1654 at 3 per cent. 16-32 2-54 \ per cent, perte de 1 place . Fl. 2014-18 Value 29th February 1868 . . Fl. 2746-42 Against this the Frankfort House may either remit sight or long drafts, as we have sho-wn in the case of Paris and Amsterdam, or •we may draw at sight upon Frankfort, and sell the draft here on 'Change ; thus, a draft for Fl. 2746-42 at sight on Frankfort may be drawn and sold at 119i = £230 6s 2d. 478 CHAPTEE VIII. AEBITEATION OF EXCHANGES. rr^HB operations known as Arbitrations of Ex- -*- changes are, like aE other legitimate commercial transactions, based upon the simple maxim — to buy in the cheapest and to sell in the dea/rest marhet. To arbitrate means to decide, to judge of, &c. ; in the commercial sense the best definition of the meaning would be to choose, to select, to make a choice or option from among a number of diSerent things or chances. The most primitive proceeding in business is per- haps that of the ordinary hawker or retail dealer, who purchases certain descriptions of goods, in greater or lesser quantities, and, putting his profit per cent, upon the price, sells them in retail, in exchange for the universal medium — Money. The wholesale dealer, who merely buys goods from the merchant or importer, and seUs them to the retailer, can scarcely be held to act in a higher capacity, or to perform a superior ofl&ce, except in so far that his transactions are larger. The dealer compelled to do a Barter trade, whether retail or wholesale, — to exchange a certain commodity of an estimated settled value, against another, of which AEBITEATION OF EXCHANGES. 479 the value has to be determined — departs already from this primitive mode of doing business, and is called upon to make greater use of his judgment in comparing and selecting. The operations of the merchant, or international trader, who imports and exports goods from and to other countries, are to a certain extent akin to Barter ; and the elements of calculation that have to be taken into account in such operations are more numerous and varied. One of these elements is the state of the Exchanges, the fluctuations of which exercise a favor- able or prejudicial influence as the case may be, upon the success of the operation, and the gain expected to be derived therefrom. The ever- varying chances and contingencies of commerce cause these fluctuations; and these chances and contingencies again are depen- dent on many causes — ordinary and extraordinary, foreseen and unforeseen, natural and artificial. Abun- dant harvests or failures of crops, accidents of various kinds, wars and revolutions, will materially influence the Markets and the Exchanges. Speculation and over-trading are often the most efiective agents in causing disproportion between the supply and the demand of commodities ; and the supply of and de- mand for Exchange again obeys the impulse of the latter. Over-supply of goods causes a scarcity of Exchange in the place suppHed, and an abundance of it in the place supplying ; a strong demand for goods has the opposite effect. Thus, when India or China have shipped goods to Europe in great excess of what we have shipped to them, Exchange upon London 480 ARBITEATION OF EXCHANGES. becomes abundant there. The Indian Bankers at first may take Bills upon England, giving 1 Rupee for 23^ Pence ; when their stock of cash gets short, and they are compelled to import Bullion from Europe at an enhanced cost, they have to ask perhaps 24 or 25 Pence to be paid in London for each Rupee given by them in Calcutta. The goods shipped to England against these BiUs, may have cost exactly the same price in Calcutta, and there may not be the least difference in their selling price in England ; but it is obvious that at 25 Pence per Rupee a larger payment must be made in Sterling money here to the holder of the Bill than at 23^ Pence per Rupee. The difference in this case is more than 6 per cent. ; which may be sufl&cient not only to cancel the supposed profit, but to leave an actual loss on the transaction. The merchant therefore must take the Exchange into account. His chief factors for calculating the chances of his operations are — The price of goods at the shipping port ; The price of the same goods at the receiving port; The state of the Exchange ; and if between these he sees his profit, he operates ; if he sees the contrary, and wishes to conduct his business on legitimate principles, he ceases operations until the Markets or the Exchange, or both, turn more in his favor. He decides or arbitrates according to these indi- cations. The Exchanges with India and distant ports generally are naturally more subject to important flue- AEBITEATION OF EXCHANGES. 481 tuations than is usually the case with the Exchanges "with places nearer by — with the Continental towns, for instance ; in respect to which moreover the more rapid interchange of intelligence exercises a modifying influence on oyer-trading. The other manifold causes, however, which act upon the Exchanges in all places, bring about oscillations in the rates of Exchange generally. The Banker in his turn deals with these differences in the Exchanges, and adjusts them by his operations. In the first place, his regard for his own resources and for his ability to procure money compels him pas- sively to follow the rules of supply and demand, by the lowering or raising of the rates of Exchange ; but he may also become a more active agent in these opera- tions, in seeking his profit in buying the cheapest and seUing the dearest description of Exchange ; it is this latter class of operations, technically termed Arbitrations of Exchanges, which we have here to consider. Arbitrations of Exchanges finally regulate the results of commerce, and have a most important bearing on the balances of trade. As an illustration of the principle let us assume the case that London has shipped goods largely — say to Holland — and that by the indebtedness thus created Holland owes us money. Exchange on London in Amsterdam rises accordingly, whilst Exchange on Amsterdam in London becomes cheaper. Let us further assume that England is at the same time in debt to France, which will give rise in London and Paris to a position the reverse of that between London and Amsterdam. 31 482 AEBITBATION OF EXCHANGES. France in its turn may be indebted to Holland, and may thus be in want of remittances on Amsterdam. Now, if actual money were to be employed in settling tlie accounts, Holland ougbt to send Bullion to England, England Bullion to France, and France BuUion to Holland. But if the relative indebtedness between the three countries, for argument's sake, be alike in amount, no such shipments, with their atten- dant risks and charges, wiU be required. For England may draw Bills on Holland, and send these Bills to Paris as payment for her own indebt- edness to France, and Paris again may remit them to Amsterdam as a settlement of the Dutch claim. These operations will serve to adjust the Exchanges between the three countries, and to restore the balance of trade. That convenient instrument, the legally- executed Bin of Exchange, already acknowledged as the great economiser of metallic currency in the home and in the direct international trade, has its sphere of usefulness thus farther enlarged here in an iadirect manner. It is upon this principle, somewbat forcibly illustrated by the example here given, that Arbitra- tions of Exchanges are based; these Arbitrations have been organised into a complete system of oper- ations, extending over the general field of commerce. Although every commercial operation, from the humblest Hawker's to the highest Banker's, which in- volves option, decision, and jtvdgment, may be looked upon as a species of Arbitration, still we Hmit the apphcation of the term here to the operations of Merchants and Bankers, as indicative of something ARBITRATION OF EXCHANGES. 483 above the ordinary transactions of trade. The foreign Merchant makes Arbitrations of Commodities,* in which he must have regard to the Rates of Exchange. The Foreign Banker makes it part of his business to profit generally by the differences and fluctuations of the Exchanges. The operations relating to Arbitrations of Exchanges may be classed under three different heads, viz. : — 1st. Operations in direct Exchange. 2nd. Operations in mdirect Exchange. 3rd. Bankers' Arbitrations, or Operations in direct or indirect Exchange, connected more or less with other Banking operations. The Merchant has an occasional interest in the operations of the first and second class, as wiU be shown in the course of this chapter ; the operations of the third class belong more exclusively to the province of the Foreign Banker. The direct Exchanges are those which result im- mediately from the balance of trade between two countries, and which are quoted in the several Courses * Arbitrations of goods can be reduced to as complete a system as Arbitration of Exchanges. We recommend to the reader a splendid work, full of Practical Illustrations, in the shape of Invoices and Account Sales for all sorts of Export and Import transactions, with Tables of Equivalents computed from comparison with the Exchanges, and full of other useful information, compiled by Mr. Louis WeUer, and published by H. Greenwood, Liverpool. 484 AEBITEATION OP EXCHANGES. of Exchange. The direct (Short) Exchange between London and Paris (seethe London Course of Exchange, page 439) was on the 28th February 1868, fs. 25-14 ; that between London and Amsterdam was on the 28th February 1868, 11 Fl. 17^ Stiver per £. The direct Exchange between Paris and Amsterdam (see page 444) on the 28th February 1868, was 209^ to 209f ; between Paris and Madrid, 510 to 511. The rates between Paris and Amsterdam, or between any other two foreign places are the direct Exchanges in so far as the places themselves are con- cerned, but in regard to England they are also called the Cross Exchanges. The indirect rate of Exchange between London and a foreign place is the result of the cross Exchange as compared with our direct Exchange. Thus, if a BiU on Paris is bought in London, and remitted to Paris, this is an operation in direct Exchange ; but if, as we have assumed in the illustration given on page 481, biUs on Amsterdam are remitted from London to Paris, and sent thence to Amsterdam, in discharge of the debt owing by France to Holland, this is an operation in indirect Exchange. An intermediate Ex- change has been made use of here, and the rate of Exchange resulting from the sale of the bills for a certain amount of Francs, as compared with the amount of Sterling which they have cost in London, is called the indirect rate. ARBITRATION OF EXCHANGES. 485 OPERATIONS IN DIRECT EXCHANGE. In commercial dealings between England and Continental countries tlie case of simple indebtedness between two individuals is of the most frequent occurrence. Suppose a mercliant in London owes thus, say the sum of Fs. 50,000 to a correspondent in Paris. There are three ways open to him to settle this account ; he may — 1. Send over Bullion. 2. Remit Bills of Exchange at sight or short or long date. 3. Authorise his correspondent in Paris to draw upon him in London. The amount which he has to pay in Paris is exactly Ps. 50,000 ; which sum, or rather its equivalent in Sterling, he holds ready here for the settlement of the account. Now, the question is, which of the three ways is the most advantageous for him, that is to say, which wUl take the smallest amount of Sterling here ? Suppose the quotation in London is : — Paris short 25-17|. The quotation in Paris : — Londres a vue 25'20. Bullion shipments, as we know by calculation and from ex- perience, realise in Paris — For Sovereigns ........ Fs. 25'05 „ Gold Bars „ 25-10 The equivalents in Sterling would therefore be — For Sovereigns . . . Fs. 50,000 a 25-05 = £1,996 2 „ Gold Bars . . . „ 50,000 a 25-10 1,992 8 „ Remittance to Paris . „ 50,000 a 25-17^ 1,986 1 11 „ Draft from Paris on London „ 50,000 a 25-20 1,984 2 6 It appears, therefore, in this case, that the shipments of Bullion are much dearer than the Bills, and that of the latter the Paris correspondent's draft on London will take the least Sterling here. 486 AEBITEATION OF EXCHANGES. In making this comparison we have left out of account Brokerages and Bill Stamps, whicli have, however, to be paid for Bills of Exchange. We will now assume that the house in Paris can discount paper at Three Months at 4 per cent., and that the debtor here, in addition to Bills at sight, has also the choice of good Three Months' Bills at 25'47f per £. We account for Brokerages and Bill Stamps by adding these items to the Francs or the Sterhng, so as to make the net payment in Paris Fs. 50,000 in all three cases. Sight Remittance fkom London to Paeis. Fs. 50,000 a 25-17i ■ • • £1,986 1 11 (No allowance is made for the Stamp in Paris here, because such sight remittances are frequently made by Delegations, which require no Stamp ; but if the remittance is a regular Bill of Exchange, a Stamp of | per mille, or Fs. 25 is required. Brokerage is not paid ia this case, but this charge is also often made.) Draft made from Paris on London :: — Fs. 50,000- 25' for Stamp 62'50 for I per cent. Brokerage Fs. 50,085'-50 a 25-20 £1,987 11 11 Remittance of Three Months' Bill from London to Paris :- Fs. 50,630-55 a 25-47* Stamp . .Fs. 25-30 Dis.4 o/o per arm. for 8 months . 605-25 ■ . 630-56 Nett in Paris Fs. 50,000-00 £1,983 10 8 Brokerage -^ °l . 1 19 8 £1,986 10 4 The Three Months' remittance would thus prove the cheapest ; ABBITBATION OF BSOHANGES. 487 the Exchange, in fact, at which it is bought in this case is very favourable. The practised calculator need not make out this fuU statement in order to arrive at the results ; he simply calculates the charges on the rates of Exchange. Thus the Sight BUI on Paris is at . . . . 25-171 net The Sight BiU on London, at . . . 25-20 Less Stamp | per mille . . . O-OIJ „ Brokerage a per cent. . . O'OS^ 0-04|. 25-151 „ The Three Months' BiU on Paris, at . . 25-47^ Less Stamp O-Olj „ Discount 1 per cent. . . 0-25 „ Brokerage here -jL per cent. . 0-02f 0-28i 25-18i The last of the three (the Three Months' rate) is consequently the most favourable. This latter method of calculating the value is not so exact as the former, because the Centimes on the Exchange are not taken into account, but it answers the purpose of a pretty near estimate. Remittance feom Paris to London. Suppose the Paris correspondent owes Fs. 60,000 to the house in London, what should be done ia order to give the largest sum in Sterling here if demand Drafts on Paris are at 25-25 ? In London : — • Demand Remittance on London at 25-26j. In Paris : — Three Months' BUls in Paris at 25-25| and 3 per cent. (Discount in London 3 per cent.) The Draft from London on Paris sold at 25-25 Brokerage 1 per mille . . . 2| Fs. 25-27i net. The Demand Draft may be drawn on Stamp of Id. 488 AEBITEATION OF EXCHANGES. Demand Remittance on London bought in Paris, free of Brokerage, at net . . ... 26'265 (Stamp in London Id.) Three Months' Remittance bought ia Paris, with Brokerage and 3 per cent, interest 26"23f Brokerage ^ per cent. . . 0"03J Stamp on London . . . O'OIJ 0'04| rs.26-28i (The 3 per cent, interest is deducted from the rate in Paris, but must be added again when the Bill is discounted in London.) The Demand Remittance bought ia Paris is therefore the cheapest, giving the most £ Sterling here. Remittance to Holland. Suppose the Exchange for short London in Holland is PI. 11"87|^ Cents. Three Months' Amsterdam in London PL 12/1 Stiver (5 Cents = 1 Stiver), the Dutch Interest at 5 per cent. Shall Holland draw Short on London, or shall London remit a Three Months' BiU. Draft from HoUand £1000 Short at 11-87| Cents. PI. 11875-00 Brokerage 1 per mdUe 11-87|^ PL 11863-12i Remittance from London £1000, Three Months' Amsterdam, at PL 12/1 Stiver (free of Brokerage) . 12060-00 Stamp 6-02i Discount, 6 per cent. . . . 150-62^ 156-65 PL 11893-35 The remittance is therefore the best in this case. In Holland the quotation is made in Plorins and Cents, in London in Plorins AEBITEATION OP EXCHANGES. 489 and Stiver (1 Stiver = -J^th Florin). In reckoning by the Ex- change the Stiver had better be rednced to Cents, thus — Fl. 12/1 Stiver Fl. 12-05 Stamp ..... 0-00| Interest for 3 months at 5 per cent. 0'15 0-164 Fl . 11-891 Near enough to the above amount. Ebmittance feom Bbelin. The sum of £500 is due by BerUn to London. Shall London draw on BerHu at 3 Months, the Exchange being Thlr. 6/271 Sg. ; or Shall Berlin buy a BUI on London at 3 Months, and remit it here at Thlr. 6/24| Sg. Interest iu Berlin being at 4 per Cent., in London at 3 per Cent. Draft on Berlin at 3 Months. £500 to be received here net. 5 BiUStamp.)^^^^^^^^^^j3^^_ 10 Brokerage ) £500 15 at Thlr. 6/27| Sg. Thlr. 3463 15 8 The Berlin correspondent receiving this 3 Months' Credit at the rate of 4 per cent, per annum, the Interest to be deducted is 34 19 2 Thlr. 3428 26 6 Now, if this sum be invested instead in a BiU at 3 Months on London at Thlr. 6/24|, with 1 per mille Bro- kerage . . Thb. 3428 26 6 Less Brokerage . . 3 12 9 Thlr. 3 425 13 9 at6/24|Sg.=£502 10 3 Bm Stamp 5 Discount 3 per cent, per annum for 3 Months 3 15 3 4 3 £ 498 10 It is better therefore to make a Draft on Berlin. 490 ARBITRATION OF EXCHANGES. Remittance to Lisbon. The sum of £200 is due from London to Lisbon. Shall Lisbon draw on London at 3 Months at the Exchange of 62 J (Discount here being 2 per cent, per annum), or shall a BiU at 3 Months be sent to Lisbon, bought here at the rate of 51|d (Interest at Lisbon being 5 per cent). 'Deaft peom Lisbon. Sum due- - - - £200 Add Interest for 3 months at 2 per cent. 1 £201 at 62Jd = Milreis 923-263 Bill Stamp 0-600 Brokerage ith per cent. . - - 1-150 ^ ' ^ 1-660 Milreis 921-603 Remittance from London. £200 to be paid here at 51fd per Milreis - Milreis 934,306 Bill Stamp 0-500 Discount 6 per cent, per annum - - 11-679 12-179 Milreis 922-127 The latter transaction thus giving a slight advantage. Calculations of this kind can as readily be made for all other descriptions of Exchanges, the factors being the Rates of Ex- change, Rates of Interest, Charges for BiU Stamps and Brokerage in eittier of the two places. The calculations may be made either in full, or simply upon the Rates of Exchange ; the comparison of the results wiU show the course most favorable to pursue. ARBITRATION OF EXCHANGES. 491 OPERATIONS IN INDIRECT EXCHANGE. The indirect rate of Exchange, as explained before, is the rate which results from the remittance from one place to another of a Bill of Exchange payable in a third place. Thus, if London has to receive a remittance from Paris, and Paris, instead of being drawn upon, or instead of remitting to London, closing the transaction by a direct operation, remits to London a Bill on Amsterdam, the rate resulting from, between the Francs in Paris at which such Bill is bought, and the Sterling in London at which it is sold, represents the indirect Exchange. Suppose Paris quotes Amsterdam at 3 Months at Fs. 210 for 100 Florins, and the rate in London is 12 Florins per £ Sterling. The question is, if Fs. 210 are thus laid out in Paris for 100 Florins, and 100 Florins sell here 12 per £, what is the Exchange resultiag therefrom between Paris and London ? By the chain rule : How many Francs is = £1 Sterling. If SterKng 1 = 12 Florins. If Florins 100 = 210 Francs. Answer £1 = Fs. 25-20. Now, if Paris owes to London a certain amount of money, and if a direct Bill on London costs Fs. 25-25 per £ Sterling, it is obviously cheaper to send one on Amsterdam instead ; or if London is the debtor of Paris, and direct remittances to Paris give only Fs. 25-15 per £, the BiU on Amsterdam at the indirect Exchange of 25-20 is clearly the more profitable. Charges of Brokerage are presumed to be the same in the place where either direct or indirect Bills are bought, and also the Stamps ; but on indirect Bills there is generally the additional Bro- kerage for the sale abroad. Suppose a merchant having to make remittance to Paris receives the following instructions : Remit us direct Bills on Paris if you can get them at an Exchange resulting at Fs. 25-20 here, or you may send indirect Bills, our quotations here being 492 AEBITEATION OP EXCHANGES. Amsterdam, 3 Months - 209f per 100 Florins. Hamburg J) - 185i „ Mark. Berlin )) - 366 „ Thaler. Vienna » - 211i „ Florins. Frankfort j» - 209 )j )) Madrid J) - 609 „ Dollars. Lisbon J) - 541 „ Milreis. Petersburg » - 341 „ Roubles. Belgium >? ■j^ per cent. perte, and 3 p Italy J) 12 •„ 5 Fiuding that the quotations ia London for the same Ex- changes are Amsterdam, 3 Months Hamburg Berlin Vienna Frankfort Madrid Lisbon Petersburg Belgium Italy He calculates severally the results, and compares them, to see which of these Exchanges will give a more profitable rate than the direct one, viz : 25 '20. The Formulas of calculation are as follows : — Foe Austeedam. How many Francs is = £1. If £1 = 12 Florins. - Fl. 12 per £1. - B.M. 13/9 Sch. per £1. - ThJ. 6/271 Sg. „ - Fl. ll-92i „ - Fl. 120| per £10. - 48f Pence per Dollar. - 61^ „ „ Milreis. - 32| „ „ Rble. - Fs. 25-40 per £1. Lire 29-10 „ Florins 100 = 209| Answer Fs. 25-17 Fob Hambueg. ? = £L £1 = 13/9 SchiUinge. Mk. B. 100 = 185i Francs. Answer Fs. 25-16 AKBITBATION OP EXCHANGES. 493 Foe Berlin. We need not reset the chain rule, the calcnlation being a simple process of multiplication. Thaler 6/27i S. Groschen. Francs 366 Foe Vienna. Florins 11-92| Francs ail^ Answer Fs. 26-24i 25-22 Foe Feankfoet. 3 120| Francs 209 Florins 120| 25-23i Foe Madeid. The formula must here be altered. ? = 240 Pence £1. If Pence 48^ = 1 Dollar. Dollars 100 = 509 Francs. 26-19 Foe Lisbon. ? = 240 Pence. 61i = 1 Mibeis. 100 = 541 Francs. 25-21 Foe St. Peteesbueg. ? = 240 Pence. 32f = 1 Rouble. 100 = 341 25-28 Foe Belgium. This is simply a calculation of discount. Fs. 25-40 Interest 3 per cent, per ) fl-1Q ammm, for 3 Mouths 26-21 Jj per cent, perte - - 1^ 25-19i 494 AEBITEATION OF EXCHANGES. Foe Italy. Lire 29-10 Interest 5 per cent, per) annum for 3 months, j 12 per cent, perte 36 28-74 3-49 25-25 Tlie Exchanges on Amsterdam, Hamburg, Madrid, and Belgium are therefore worse than the direct Exchange ; those on Berlin, Vienna, Frankfort, Lisbon, Italy, and Petersburg, are better, the last of all giving the most favorable return. Suppose a merchant in London is in expectation of a remit- tance from Berlin. The Exchange for 3 Months, London, is quoted at the time in Berlin at .... Thl. 6/24| Sg. which, with Interest at, say 3 per cent, per ann. 1| „ Makes the Short - - - - Thl. 6/26 „ The Quotations in Berhn of Bills on other Towns are at the time — Amsterdam, 2 Months, Thlr. 143| per 250 Florins. Hamburg „ „ 151i per 300 Mark. Paris „ „ 81-| per 300 Francs. Frankfort „ „ 56/25 per 100 Florins. Petersburg, 3 "Weeks „ 93| per 100 Roubles. Contemporary quotations in London are — Amsterdam . 3 Months 12-00 Hamburg !J 13/91 sch Paris 5) 25-321 Frankfort J) 120| Petersburg . )) 321 A direct comparison of the Exchanges cannot be made here, for the rates in London are at 3 Months, and those given at Berlin are at 2 Months for the first four places, and at 3 Weeks for St. Petersburg. The difference of Interest thus arising must first be balanced, in order to give the right factors for calculation. This can be done AEBITEATION OF .EXCHANGES. 496 either by reducing all the rates to short, or by bringing them to level time. In the case here before us, it is better to reduce the Berlin Course of Exchange to 3 Months' prices, by deducting the proportion due upon the respective rates of Interest in each place, thus 2 Months' rate less Interest =^ 3 Months' rate. Amsterdam 143| less 3 percent. ^ 143'14 decimals Hamburg ISIJ >) 3a )» = 160-81 Paris 811 j; 2| J) = 81-33 Fra,nkfort, 56f „ 3 )J = 66-69 3 Weeks' rate. St. Petersburg 93f „ 6 )5 = 92-70 When the folio-wing comparisons can be made : — POE Amstbedam. Ho-w many Thaler is = £1. If £1 = 12 Florins. Florins 250 = 143-14 AnsTver Thl. 6/26|Sg. Foe Hambtjeg. ? = £!. £1 = 13/91 Sch. 300 = 150-81 Answer Thl. 6/25 Sg. For Paeis. ? = £1. £1 = 25-321 300 = 81-33 ■ Answer Thlr. 6/26 Sg. Foe Feankfoet. ? = £1. £10 = 120| 100 = 56-69 Answer Thlr. 6/26 Sg. 496 Arbitration of exchanges. FoK St. Petersbueg. ? = 240 Pence. If Pence 32J = 1 Rouble. Roubles 100 = 92-70 . ■ Ajiswer THr. 6/27 Sg. He bad tberefore better order tbe remitting of Bills on Ham- burg or Frankfort, which are cheaper than the others, and which sell better in London. Suppose a correspondent in Hamburg authorises a London house to draw 3 Months' Bills either upon Paris, quoted in Hamburg . 187 Francs per 100 Mark. Amsterdam „ „ „ . 35'45 Florias „ 40 „ Frankfort „ „ „ . 35-30 „ „ „ „ Or upon Hamburg, direct quotations in London being — Paris, 3 Months 25-30 Amsterdam „ ..... 12/0| Stiver. Frankfort „ 1200 Hamburg „ 13/10 Sch. Upon which place ought the Draft to be made to come cheapest to the Hamburg friend. Foe Paeis. ? = £1 £1 = 26-30 187 = 100 Answer — Banco Mark 13/8 J Sch. Fob Amsteedam. ? = £1 £1 = 12-025 35-45 = 40 ■ . Answer Markl3/9i Sch. Foe Feankfoet. ? = £1 £10 = 120 35-30= 40 Answer Mark 18/9| Sch. ARBITRATION OF EXCHANGES. 497 Hambueg being at 3 months £1 = Banco Mark 13/10 Sch. Interest at 3 per- Cent. . . 1| Short . . . . = 13/8f Sch. It is therefore cheapest to draw on Hamburg direct. Upon the principle illnstrated by these examples comparisons can be made between other Gonraes of Exchange. Operations of this kind are called " Simple Arbitrations." Merchants and Bankers have frequent occasion to receive or to give orders for Remittances or Drafts. In the cases here illustrated we have assumed that the operations are designed to effect payments for goods or accounts. Banking Commissions are therefore not taken into consideration. BANKERS' ARBITRATIONS. The advantages to be gained by the operations illustrated in the preceding paragraph seem to be very small, amounting, as they do occasionally, to as httle as J^th per cent., or -J^th per cent., and, under exceptionally favourable circumstances, to j or ^ per cent. ; as a rule they are much below J per cent. The Trader or Merchant accustomed to profits of 2, 5, 10, and even up to 50 per cent., may perhaps despise these small profits made by Bankers in their transac- tions. But it must be borne in mind, that the Merchant has to invest his funds in the purchase of goods, which, according to circumstances, it may take a comparatively long time to realise. He may turn over his capital twice or three times a year; and, supposing that all works well, as in the good old times, he may thus — realising an average profit of 5 per cent, each time — make 10 or 15 per cent, per annum. The Banker can turn over his capital much more rapidly, and if he does so fifty or a hundred times in the course of the year, it is clear that a profit of ^-th or -j^th per cent, each time will give him a fair aggregate iaterest per annum. 32 498 AEBITEATION OF EXCHANGES. The risk of the merchant is, as a rule, limited to single credit transactions, and to the amount involved in these, whereas the Banker, compelled to indorse a great number of Bills ia the course of his operations, undertakes risks seemingly quite disproportionate to the amount involved and to the profit made. But this is only a theoretical drawback ; for in actual practice the character of these risks is quite different from that of ordinary single credits. In the first place, a very large proportion of Bankers' Arbitrations are carried on in Bullion or Bills at sight, or in other marketable Banking securities ; in the second place, the long Paper in which operations are made is considered first-class Paper, and the credit risks involved therein are almost nom.inal. The local English Banker, who discounts many millions Sterling per annum, under- takes the same class of liabiUty, and in both cases the question of risk incurred and security held rests upon clear, well-understood principles. On the whole, the character of foreign Bills, often bearing, as they do, a number of first-class indorsements, is superior to that of local Bills ; at any rate, such foreign Paper, when payable in London, is the favourite security of discounters here. Operations in Exchanges are in reality ordinary discount trans- actions, foreign Bills being used instead of local Bills, and Arbitra- tions are combined with these operations. As in the local Discount business, so in the foreign Discount or Exchange business, risks in credits will arise, which, as a- question of Insurance, have to be provided for in the average of profits expected. With these remarks we will here again dismiss the consideration of credit value, as a matter quite distinct from the subject of Arbitrations. Arbitrations of Exchanges then constitute a rather importajit part of the foreign Banker's business, both here and abroad. He watches the rates of Exchange, the prices of Bullion, and of Market- able Banking Securities in the different large commercial and financial centres. If on comparing the rates he finds that a certain description of Exchange is dearer in one place than in another, he buys in the cheaper and sells in the dearer of the two. The business is ARBITEATION OF EXCHANGES. 499 promptly done, and a small profit realised on it. The operation has this important effect, moreover, that it tends to adjust the differ- ences in the Rates of Exchange resulting from the balance of trade, and to even the variations in the prices of all sorts of monetary values and 'securities arising from ordinary or extra- ordinary causes. The Banker's indispensable requisities for conducting opera- tions of this kind successfully are — A fair Capital, and first-class credit ; the latter being even of still higher importance to him than the former. Proper arrangements with correspondents of equally good financial standing in the great commercial and finan- cial centres. A well-digested general plan of action devised to effec- tually maintain and control, with the least expenditure of time and trouble, the intricate teohnicahties in- volved in the endless considerations and ever- varying figures attendant upon such complicated operations as Compound Arbitrations arte. The command of a sufficient Capital is necessary, to enable the Banker to make purchases for Cash at the shortest notice ; but a first-class credit is still more important, as Short or Long Drafts by one correspondent on another play the most prominent part in the Banker's Exchange and Arbitration business, and it is indis- pensable that the financial position of the operator — ^both for the jpurchase and sale of Bills — should be such as to enable him to command the most favorable Exchanges. The arrangements with correspondents in the leading com- mercial and financial centres must be based upon most economical principles. The usual banking commission of | to f per Cent, is too heavy to admit of more than occasional and exceptional transactions. It is therefore customary, between large houses which have agreed upon Arbitrations, to charge no com- mission to each other, but to work on joint account for profit. All the charges attendant on business of this kind are cut down as low as possible, as the watchful and energetic competition from all sides tends to reduce the margin to a very narrow compass, and 500 AEBITRATION OF EXCHANGES. tlie utmost economy has to be practised, to leave a small profit on the transaction. This same competition compels also the ntmost vigilance in looking out for business, and the greatest promptness of action in conducting it. The telegraph now-a-days flashes news and quo- tations with lightning speed iu all directions, and where operations promise to leave a profit margia those whose orders arrive first reap the benefit of that margin. So we clearly see that high personal intelhgence and prompt action are elements as necessary to the success of financial operations as capital and credit are. In a work of this kind we can do httle more than give some practical hints in reference to the technical part of the business. In a former part of this chapter it has been shown how comparisons of direct Exchanges are made. To the 3anker these are familiar matters. He deals with them by a system of rapid mental calcula- tion of per centages, by which he at once reduces the several rates to "short," to see which of the Exchanges will best suit his purpose. For indirect rates, or so called simple arbitrations, tables are compated, ranging between practicable limits, from which the indirect Exchange maybe picked out at a glance. The method of computing and using such tables varies according to convenience and fancy. Between London and Paeis. The best course to pursue is to draw up a general Hst headed by the short rates of Exchange between London and Paris, except the leading column, which gives the Paris rates of Exchange on the third place. The Arbitration between these rates gives the net price of the Exchange in Paris, expressed in the way in which they are quoted in London. The whole of the Paris Course of Exchange may be reduced in this manner. We select the Amsterdam and the Madrid Exchanges as samples of the system. Amsterdam is quoted ; — In Paris ? Francs per 100 Florins. In London £1 = ? Florins. Madrid : — In Paris 100 Dollars = ? Francs. In London 1 Dollar = ? Pence. ARBITRATION OF EXCHANGES. 501 FoK Amstekdam. — Shokt Bate between London and Pams. 25-10 25-12i 25-15 25-l7i 25-20 25-22i 2525 25-27i 25-30 208i 12,038 12,050 12,062 12,074 12,086 12,098 12,110 12,122 12,134 2081 12,031 12,043 12,055 12,067 12,079 12,091 12,103 12,115 12,127 208i 12,024, 12,036 12,048 12,060 12,072 12,084 12,096 12,108 12,120 2081 12,017 12,029 12,041 12,053 12,065 12,077 12,089 12,100 12,112 209 12,010 12,022 12,034 12,045 12,057 12,069 12,081 12,093 12,105 209i 12,003 12,015 12,027 12,038 12,050 12,062 12,074 12,086 12,098 209i 11,995 12,007 12,019 12,031 12,043 12,055 12,067 12,079 12,091 2091 11,988 12,000 12,012 12,024 12,036 12,048 12,060 12,072 12,084 209i 11,981 11,993 12,005 12,017 12,029 12,041 12,053 12,064 12,076 2091 11,973 11,985 11,998 12,010 12,021 12,033 12,045 12,057 12,069 209i 11,966 11,978 11,990 12,002 12,014 12,026 12,038 12,050 12,062 2091 11,960 11,971 11,983 11,995 12,007 12,019 12,031 12,043 12,055 210 11,952 11,964 11,976 11,988 12,000 12,012 12,024 12,036 12,048 210i 11,945 11,957 11,969 11,981 11,993 12,005 12,017 12,029 12,040 210i 11,938 11,950 11,962 11,974 11,986 11,998 12,010 12,022 12,033 2101 11,931 11,943 11,955 11,967 11,979 11,990 12,002 12,014 12,026 210i 11,924 11,936 11,948 11,959 11,971 11,983 11,995 12,007 12,019 210f 11,917 11,929 11,941 11,952 •11,964 11,976 11,988 12,000 12,012 210f 11,910 11,922 11,934 11,945 11,957 11,969 11,981 11,993 12,005 2101 11,903 11,915 11,926 11,938 11,950 11,262 11,974 11,986 11,998 211 11,896 11,907 11,919 11,931 11,943 11,955 11,967 11,979 11,991 211^ 11,889 11,900 11,912 11,924 11,936 11,948 11,960 11,972 11,984 211i 11,882 11,893 11,905 11,917 11,929 11,941 11,953 11,965 11,977 2111 11,875 11,886 11,898 11,910 11,922 11,934 11,946 11,957 11,969 211i 11,867 11,879 11,891 11,903 11,915 11,927 11,939 11,950 11,962 The rule for the calculation has already been given. Sf^ in FOK Madrid. — Shokt Rate between London and Paeis. 25-10 25-12i 25-15 25-17i 2520 25-22i 25-25 25-27i 25-30 25-32i 2535 515 49-24 4919 4915 4910 4905 49-00 48-95 48-90 48-85 48-81 48-76 514i 49-20 49-15 49-10 49-05 4900 48-95 48-90 48-85 48-81 48-76 48-71 514 49-15 49-10 4905 49-00 48-95 48-90 48-86 48-81 48-76 48-71 48-66 513i 4910 49-05 4900 48-95 48-90 48-86 48-81 48-76 48-71 48-66 48-62 513 49-05 4900 48-95 48-91 48-86 48-81 48-76 48-71 48-66 48-62 48-57 512i 49-00 48-96 48-91 48-86 48-81 48-76 48-71 48-66 48-62 48-5,7 48-52 512 48-96 48-91 48-86 48-81 48-76 48-71 48-67 48-62 48-57 48-52 48-47 511i 48-91 48-86 48-81 48-76 48-71 48-67 48-62 48-57 48-52 48-47 48-43 511 48-86 48-81 48-76 48-71 48-67 48-62 48-57 48-52 48-47 48-43 48-38 510i 4«-81 48-76 48-72 48-67 48-62 48-57 48-52 48-47 48-43 48-38 48-33 510 48-76 48-72 48-67 48-62 48-57 48-52 48-48 48-43 48-38 48-33 48-28 509i 48-72 48-67 48^62 48-57 48-52 48-48 48-43 48-38 48-33 48-28 48-24 509 48-67 48-62 48-57 48-52 48-48 48-43 48-38 48-33 48-28 48-24 48-19 508i 48-62 48-57 48-52 48-48 48-43 48-38 48-33 48-28 48-24 48-19 48-14 508 48-57 48-53 48-48 48-43 48-38 48-33 48-29 48-24 48-19 48-14 48-09 The rule for the calculation has already been given 502 AEBITEATION OP EXCHANGES. Now if the price of three months' Amsterdam in London is ri. 11/19| Stiver — in Decimals 11-975 — the price of the same Exchange in Paris 211|, the short rate between London and Paris 25'15, a glance at the table will at once show that the arbitrated net rate in Paris is 11'912. Amsterdam is consequently cheaper in London than in Paris by '063 Cents, equal to 5 per mille. Again, if the ?hort rate between London and Paris js 25'25, Amsterdam being" quoted in London at 12-00, in Paris at 209f, the table wUl give thp arbitrated net rate in Paris as 12-06, which is \ per cent, cheaper than in Londpn. But we have to take into account the fluctuations of the Exchanges and the charges upon the transaction. The quotations are not made at fixed rate3, as assumed in the table TT-the rate for Ajnsterdam, for instance, may be given as 11/19^ St. to 12/00, and the quotation in Paris may be 211 a 211|-. The selec- tion of the rates that may be fairly depended upon for profitable , business transactions is a matter in which the operator must be guided by experience, and by his knowledge of the customs and practice severally obtaining at the respective places, assisted by such special facilities as the position of his house may afibrd him. As a matter of theory, the so-called Medium rate — that which Hes between the two extremes of quotation r- may frequently be taken as the one at which bupiness can safely be done, with a fair prospect of profit. The charges generally are^^ To P^i" cent. Brokerage in London ; ^ per cent. Brokerage in Paris, for sale of Bills 5 ■|- per cent. Brokerage in Paris, for return Remittance ; ■^ per cent. Bill Stamp in London— niaking in all 4 per mille on the transaction ; if the margin shown in the table does not afibrd more than ample allowance for this aggregate of charges, the opera- tion is not practicable. We have assumed here that the business is carried on by firms operating on joint account, without charge of Banking Com mission. Such firms are often in a position to remit to each other without Brokerages, and to reduce the charges to be taken into account to 3 or 2^ per miUe and les§ ; however, 4 per mille may be taken as the full aggregate of charges on Arbitrations. If the price of Three Months' Bills on Madrid is 48j Pence in AEBITKATION OF EXCHANGES. 503 London, 514 IVancs m. Paris, and Short between Londoii and Paris 26'12J, the table gives the rates for Madrid in Paris — At . . . . ^ . , 49-100 Deductiag charges, 4 per mille '. , '196 ■ 48-904 The London rate being 48-750 A Profit of 0-154 Penny, or abont 6s 4d per cent., woTild be the result of remitting Madrid to Paris, Madrid quoted in Paris at 511, in London at 48f Pence, and Shoyt Paris at 25-32-|, the rate restdting would be 48-430 Add charges, 4 per miUe . . . 0-194 — 48-624 Which, compared to the price of Madrid in London, = 48-750 Leaves a margin of . . . , . . 0-126 Penny, or about 2| (2-jL.) per mUle, Table op Peices qf Amsterdam between London and Berlin. London and Berlin. — Shokt Bate between LoNDO^ r and Bekmn, 6/23i 6/24 6/24i 6/25 6/25i 6/26 6/26i 6/27 143 11,859 11,888 11,917 11,946 11,975 12,005 12,034 12,063 143i 11,849 11,878 11,907 11,936 11,965 11,994 12,023 12,052 143i 11,838 11,867 11,896 11,925 11,955 11,984 12,013 12,042 143f 11,828 11,857 11,886 11,915 11,944 11,978 12,002 12,031 U3i 11,818 11,847 11,876 11,905 11,934 11,963 11,992 12,021 143f 11,807 11,836 11,865 11,894 11,923 11,952 11,981 12,010 143f 11,797 11,826 11,855 11,884 11,913 11,942 11,971 12,000 im 11,787 11,816 11,845 11,874 11,903 11,932 11,961 11,989 144 11,777 11,805 11,834 11,863 11,892 11,921 11,950 11,979 im 11,766 11,795 11,824 11,853 11,882 11,911 11,940 11,969 1444 11,756 11,785 11,814 11,843 11,872 11,901 11,929 11,958 1441 11,746 11,775 11,804 11,833 11,861 11,890 11,919 11,948 144i 11,736 11,765 11,793 11,822 11,851 11,880 11,909 11,938 504 AEEITEATION OP EXCHANGES. The rule for the calculation is — ? Florins = £1 Sterling. If £1 Sterling is = 6/23| Sg. Thaler 143 = 250 Florins. Answer 11'859 Florins. In this Table the 2 months' Exchange on Amsterdani is quoted in Berlin, whilst London quotes the 3 months' rate. To adjust the London to the Berlin price, 1 month's interest has to be taken into account ; and as this additional month makes Amsterdam cheaper, this interest must be added to the London Exchange ; which makes. At 2 per cent, per annum, an addition of 0'020 „ 2i „ „ „ 0-025 „ 3 „ „ „ 0-030 „ 3| ,, „ „ 0-035 „ 4 „ „ „ 0-040 „ 5 „ „ „ 0-050 &c., &C. Charges for Brokerage, &c., are the same as before. A complete set of Tables, embracing all the different Courses of Exchange, may thus be constructed for comparison with the London Course, The operations contemplated in these Tables are usually called Simple Arbitrations. In Compound Arbitrations the opera- tion embraces more than three places of Exchange. Thus, finding that Amsterdam is cheaper in Paris than in London, the London house may order from Paris a supply of Amsterdam for its own market, and, instead of remitting BUIs on . Paris in return, or authorising drafts, it may, finding that Bills on Paris are cheaper in Hamburg than in London, cause Hamburg to cover Paris by a remittance from there ; Hamburg may be covered in its turn by a direct remittance. These operations constitute a Compound Arbitration. Or, should the price of Bills on St. Petersburg be more favorable (higher) in Hamburg than in London, the London firm may cover Hamburg by a remittance on St. Peters- burg, which would change this operation from Compound Arbitra- tion, to what is technically called " Circuitous Arbitration," . ARBITEATION OP EXCHANGES. 505 Similar Tables may be constructed upon the same plan for com- parison with the Course in other important Centres of Exchange. By way of illustration we give the subjoined Table, showing the price between Hamburg and Paris of Bills on Amsterdam. Shoet Hate between AambOkg and Paeis. 185* 185i 1851 186 186* 186i 1861 186i ^ tJ ^ 35-40 209J 209| 210 2101 210J 210i 210| 210| 35-42 2091 209f 209| 210 210i 210f 210i 210f 35-44 209i 209f 209f 209| 21 OJ 210i 210| 210i 35-46 2091 209i 2091 209f 210 210J 210i 210f 35-48 209i 2091 209J 209J 209| 210 210i 210i 35-50 209i 209i 209| 2091 209f 209J 210 210^ 35-52 209 209i 209i 209i 209f 209i 209| 210 35-54 209 2091 209i 209i 209i 209t' 2091 2091 35-56 2081 209 2091 209i 209f 2091 2091 209i 35-58 208i 2081 209 2091 209i 209f 2091 209| 35-60 2081 2081 2081 209 2091 209i 2091 2091 The rule for the calculation is — ? Francs = 100 Florins. If Florins 35-40 = 40 Mark Banco. If Mark Banco 100 = 1864 Francs. Answer 209f Francs. In reaUty, however, Compound or Circuitous Arbitrations are only two or more Simple Arbitrations strung together ; the oppor- tunities for effecting operations of this kind are rare, for the plain reason that there is no possible monopoly of information in the matter, and that the resident firms in the several foreign Centres of Exchange know the opportunities offering for profitable speculation in arbitration as soon and sooner even than any one given firm in another place can know them ; and so the chances generally are that the temporary differences in the rates will be adjusted before the operation can be carried to a successful and profitable end. It may indeed be easily conceived that temporary differences in the rates, dependent as they are upon supply and demand, cannot be taken advantage of to an unlimited extent. A remittance of £10,000, and its sale on the market of a small Exchange town, will 606 AEBITRA.TION OP EXCHANGES. lower the price at once ; even in London pnrchases or sales to the amoimt of £20,000 or £30,000 have a sensible effect upon certain Exchanges. Occasionally, however, when there is a current of BnUion floating, the differences in the rates will keep np some-, what longer, so as to permit larger and more important operations. Arbitrations of Exchanges may be combined with Stock Ex-, change operations, i.e. purchase and sale of Stock, Securities, &c. The variations in the prices of Foreign Funds, Railways, &c., between two places are taken advantage of for either selHng or buying, upon the same general principle upon which Arbitrations of Exchanges are based. As an niustration of the system we select, for instance, the Lombard Railway Shares (called in England the South Austrian and Lombardo- Venetian). These Shares are nominally worth Fs. 500 or £20 ; but at the present time (March 1868) the price in London ranges from £14| to £14|, in Paris from Fs. 373 toFs. 376. Transactions in selling and buying in both Cities are effected for the settlmg days in the middle and at the end of each month. At the Exchange of Fs. 25-1 7| per £, Fs. 373 are equal to £14 16s 4d, so that £14 10s or £14 12s 6d would leave a margin for sale in Paris. To facilitate calculation, a Table may be constructed upon the plan here subjoined : — Price in Paris. 367 368 369 370 371 372 373 374 375 376 377 Price in London. 14i 25-31 25-38 25-45 25-52 25-59 14f 25-09 25-16 25-23 25-30 2537 25-44 25-50 25-57 14f 24-88 24-95 25-02 2509 25-16 25-23 25-30 25-37 25-44 25-50 25-57 14J 24-87 24-94 25-01 25-08 25-15 25-21 25-28 25-35 15 24-87 24-94 25-01 25-08 2515 This Table can of course be extended to suit aU possible fluctua- tions in the price of the shares. The Charges for Brokerage here and in Paris, and the Bro- kerage on the Exchange must be taien into account ; also the Cost of forwarding the Stock, unless the latter item be avoided through AEBITEATION OE EXCHANGES. 607 a counter operation. These charges may in the aggregate make a difference of -^ths per cent, or about 10 Centimes on the Exchange. (Operators always endeavour to economise charges by special arrangements.) Differences in the manner of Taluing and quoting Stock in two different places tend to complicate Arbitration operations in such Stock. The United States -^ Bonds, for instance, are valued in London at the old American Exchange — 4s 6d per Dollar. The dividends of 6 per cent, per annum, which are paid half-yearly, faU due on the 1st May and 1st November, and the price in London rises or falls with the apcruing of these dividends, standing highest just before, and lowest just after the 1st May and 1st November. In Frankfort-on-the-Maiae, on the other hand, the Dollar is taken at 2| Florins, which at £10 = 120 Florins, gives 4s 2d per DoUar; when sales are effected, the actual interest due on the Coupon up to the date of delivery is added to the amount. To compare, therefore, the London price with the Frankfort price, this interest has first to be added to the latter. Thus, supposing the price in Frankfort to be, on the 15th June 75 There has accrued one-and-a-half months' interest at 6 per cent, per annum, which makes on 100 Dollars 0'75 Dollar to be paid extra, or 1 DoUar upon the price of 75 .1 The actual value being thus _ . . .76 per 100 Dollars The price in London at the same time may be 70f , at 4s 6d per Dollar. The calculation on the Exchange would therefore stand : — ? Florins = 200 ShiUings (£10.) If ShiUiQgs(4/6)4-5 = 1 Dollar. London Dollars 70 '5 = 100 nominal. Nominal „ 100 = 76 in Frankfort. Frankfort Dollar 1 = 2-5 Florins. Answer 119| Florins. Two sets of Tables are accordingly required here — viz., one Table giving the price at Frankfort, with the interest added thereto, as here subjoined : — Value at different peuiobs, including Inteeest. ■ ■" fefc 9.: is toj ■I'a M„- ^4 -eg 'i.is ..-3 £fi tet; &■& So is bg ^i yifl §•■§ tt fs ^1 ^1 i^ M ^^ lp '^•^ II ^'^ Is ^^