By the charge of 1½_d._ on each ounce of gold £1605·100
By the system of absorbing assay fractions 166·666
By the turn of the scale on purchase 71·339
---------
On each million coined £1843·105
Nor is this all; for the Bank exacts from the Mint the last ounce
or fraction of an ounce of all it sends, and besides receives gold
invariably coined on the light side of the standard, to the average
extent of £11·50, and makes an additional profit by the turn of the
scale, which gives them from the Mint £75 on each million, so that
their total gain comes to be £1,929 12_s._ on each million sent to the
Mint for coining, that Department good-naturedly finding alloy into the
bargain. That I do not exceed the facts of the case would seem to be
conclusively proved by Messrs C. W. Fremantle and C. Rivers Wilson, for
those gentlemen in their Reports state the amount at £3,458, and affirm
(see Reports on the Mint, page 4) that on £5,000,000 the Mint would
make a profit of £8,000. How they reconcile their figures I do not
know, for by their own showing it should be £17,290. They had better
accept my figures, which would produce a profit of £9,648 on the same
amount.
I feel that I have produced sufficient evidence to oblige me to
withdraw the opinion I have hitherto held, and which I thus expressed—
“If, as I can clearly show, the Mint can still be
advantageously retained under Government control, it would
appear to be a pity to place the coinage in the hands of
contractors, for it is evident that they must be paid such
a price as will yield them a profit, and this sum had
better be saved to the nation.”
On the contrary, I now think it is the duty of the Government TO AT
ONCE COIN BY CONTRACT, as the cost of such process will be definite,
whereas it is now illimitable. Instead of the tax-payers paying for New
Mint buildings, _which are not required_, contractors would gladly buy
the present Mint just as it stands, and in three years amass colossal
fortunes. If Mr. Lowe were to hand over the coinage of gold, silver,
and bronze—by which the Government now loses so large a sum—for one
year, with proper security, to an unofficial person, who should pay all
the costs and reap all the profit, I am sure the annual vote for the
expenses of the Mint and coinage may be remitted and the work will be
better performed. At a period when the Government has seen fit to send
Commissioners to European Mints to learn the mystery of coining, it
seems a perversion of reason to adopt the opinions of those learners,
and upon their recommendations build new Mint premises. I am aware that
it is thought by the sanguine that the old Mint site will sell for a
vast sum, which will pay for the new site; but is it in the experience
of the public that such transfers are made without loss? Indeed the
probability of vast expense is so great that it becomes a settled
question. The Commissioners—the chief of whom says,
“... While I must not be understood to be in a position to
offer positive recommendations on many points, and more
especially as regards machinery, while the question as to
the future site of the Mint is still pending, yet I trust
that I have shown the importance of the information which
we have acquired, and the possibility of applying it with
advantage to many Mint arrangements in this country”—
recommend machinery and experiments with which two of their number are
admittedly unacquainted, and their Reports show throughout that they
are really writing upon subjects to which their minds have not yet
become accustomed, and which consequently they cannot fully appreciate.
Instead, therefore, of the Legislature building new premises on the
advice of such officers, it will surely be wise to give the contract
system a fair trial, say for a year, in accordance with the suggestion
of Lord Kinnaird. It is not the premises, it is not the machinery, it
is not the workpeople, but the utter want of experience in the chief
officers that gives rise to the state of muddle and dissatisfaction
amongst the officials, and causes loss of bullion, which does not go
into the chimney, and other expenses which will not bear the light of
day.
Mr. Fremantle recommends new premises, on the ground that such should
be built expressly for Mint purposes. The present Mint was so built,
and is now capable, with very limited expenses, of adaptation. It would
be cheaper to burn it down and rebuild the operative departments, than
to remove it to another site, where the same want of experience will
surely give rise to precisely similar evidences of mismanagement as now
exist. It is because the Government prefers to put the wrong man in the
wrong place—square men in round holes—that it is thought necessary to
transfer the Mint, really that those gentlemen may be nearer their own
comfortable homes and friends.
The East End of London is recognised as a disagreeable part to dwell
in; but the Mint is essentially a manufactory, and, as such, is not
fitted for the westerly parts of the metropolis, and those who object
to the neighbourhood should relinquish their offices. Would it be
tolerated, if proposed, to remove the Enfield factory to the Thames
Embankment, so that it “should be more immediately associated with
the Treasury offices?” In its present site the Mint has supplied the
coinage, and could issue multiples of its past productions; economy
being the order of the day, why incur unnecessary expense?
In the meantime, the old rule holds good—a bad workman complains of
his tools; and those who demonstrate their inability to conduct the
Mint in such manner as to derive the revenue which they admit should
accrue and which they profess themselves unable to secure, should
gracefully assent to place the matter in the hands of contractors till
the Government shall see fit to put the department in the charge of
some person who will practically develope the truth, instead of hunting
in the chambers of the chimneys for that which they must know full well
has left the Mint by another means.
The Commissioners seem to have gone out of their way to show their
want of knowledge on vital points in the manufacture of money. Thus
Mr. Fremantle recommends the substitution of graphite for iron pots
in silver melting, on the authority of Mr. Roberts, whose experience
is expressed in these words—“Graphite crucibles permit of the total
contents being poured into moulds, and this enables the accounts to be
adjusted daily.” Truly the accounts may be _adjusted_ daily; but most
commercial people object to _adjustment_, as that process commonly
leads to a minus account, and frequently an employment of the detective
police. To balance an account is a very different proceeding; but is
it true that graphite crucibles expedite the process? No, it is not
true, as witnessed by the table on page 102, where it will be seen that
the amount of gold which is _not “poured into the moulds”_ varies from
£1,132 down to £161, and has, at the last return, risen steadily to
£461, although the gold referred to was MELTED IN GRAPHITE CRUCIBLES.
At a later period I will show these facts in greater detail.[107]
So much interest does not attach to the coining of silver as to the
coining of gold; yet, as the amount of profit to be made by this
coinage depends on the length of time which silver coins can be kept
in circulation, it is necessary to consider whether the Royal Mint has
at any time made, or does now make, so much profit as it should, and
whether the coins when made are so manufactured as to be fit in the
highest degree to bear the wear and tear to which it is intended that
they shall be submitted. These questions, although they may appear
to be of little interest, are really important, because the Mint, if
properly managed, should, by its silver coinage, pay all its expenses,
and by its bronze coinage, if the latter be discreetly conducted,
render an actual profit to the Government. I propose presently[108] to
touch upon the bronze coinage, when inquiry will demonstrate that this
is conducted in such a manner as that a large per-centage of the fair
profit is sacrificed annually.
[Footnote 107: See page 136.]
[Footnote 108: See page 162.]
In those countries where silver is legally the standard of value the
coins contain the amount of silver which is equivalent to a fixed sum
of gold, and in all such cases, if silver should happen to rise in
price, bullion merchants buy large quantities of new silver _coins_
and export them, because these remain at a fixed price, although all
other silver has risen in value. In England this contingency is avoided
by giving to coined silver an _extrinsic value_; that is to say, by
raising silver whose natural market price varies[109] between 5_s._ per
ounce and 5_s._ 2_d._ per ounce to an artificial value of 5_s._ 6_d._
per ounce when it is coined into money. It is the practice of the Mint
to buy silver only when it is at its lowest market price, and then in
parcels of the value of £50,000. Upon an average of years it is found
that the profit thus accruing[110] should amount to about 8 per cent.
Even with perfect management the whole of this 8 per cent. would not
be secured, because all worn and light silver culled from circulation
is returned to the Mint by the Bank of England for recoinage into new
money, piece for piece, and many of the worn[111] pieces represent
only half their original extrinsic value. What we call a shilling is
intrinsically worth, when coined, about 10¾_d._, but when it is culled
from circulation it is often worth only 6_d._, therefore a loss of
4¾_d._ is incurred by re-coining it, quite independently of the labour
and loss of metal. It should, however, be stated that the Mint makes
a small profit by receiving the unreported fractions as well as the
excess of weight[112] invariably given when ingots are purchased. In
France the five-franc piece is coined so that it contains its intrinsic
value, the importer paying 75 centimes for each 100 francs in value.
Since this sum yields a profit to the contractor, we may be certain
that it covers every possible expense of production. If this cost be
proportioned to our money, it will appear to be at the rate of 15_s._
for each £100. Let us see, then, if the silver coinage of Great Britain
is produced at so cheap a rate as is that of France, and this shall be
determined by discussing the unnecessary losses which are permitted, in
a similar manner to, but less elaborately than, that adopted for the
gold coinage. The tables which will be exhibited are those given me by
the late Master of the Mint, under precisely the same circumstances as
described when speaking of the tables relating to gold. I will then
briefly treat of these losses as they were, as they are, and as they
should be. Those who are habituated to the working of gold feel, when
that work ceases, a kind of relief, which is perhaps natural if the
relative value be considered. The Mint, then, suddenly changes from
this metal to one of just about a fourteenth of its value, for to the
Mint people gold at £3 17_s._ 10½_d._ is as 14·16 is to 1 of silver,
which they view as of a value of 5_s._ 6_d._ per ounce; again, it
is more bulky and unmanageable. These causes are to be admitted to
their full share of importance, but should not induce us to accept
them in explanation of facts which are not otherwise reasonable, and
such seems to be the case with silver in the Royal Mint. Mr. Seyd, in
his admirable work on Bullion and Exchanges, at page 560 says, “We
should like to see a return moved for in Parliament of the wasteage
of gold at the British Mint from 1850 to the present year; it might
show whether there has not been at certain periods of the management
of the operative department much less loss than at others, and whether
there has not been occasionally a small gain even, as there certainly
ought to be with proper management.” Mr. Seyd has shown himself a
master of the subject he has undertaken, and perhaps the facts stated
in the earlier pages of this book may reply to some of his questions.
He then proceeds to say, “A return of the wasteage of silver might
also prove interesting, as well as an account of the imperfect work
returned to the melting-pot during each year.” When an author who has
so successfully studied a subject invites such information, one can
but feel that it is wise to give some details. I propose, however, to
give only such facts as will bring us up to the year 1861, because the
following years vary but little, and if I were to give another eight
years it would require more space than it is deemed wise to occupy.
[Footnote 109: See page 152.]
[Footnote 110: See pages 146, 152.]
[Footnote 111: See pages 65-67, 152, 155, 156.]
[Footnote 112: See pages 127, 137-138.]
In the following tabular statements will be found every particular
relating to silver arranged in a precisely similar manner to the facts
regarding gold, and it is hoped that they are given with sufficient
clearness to render unnecessary a lengthy explanation. I have given
other details at pages 136-142.
In explaining the table on page 132 it should be noted that the £1,315
9_s._ 4_d._, given as the value of the loss per million in 1852-53,
is not the true value, for, as in the case of gold, the account of
the loss was not kept. The loss of those years is, therefore, reduced
by sharing it with the coined money of the financial years, June,
1851, to March, 1853; if this sum be, as it should be, excluded, the
loss will be £1,695 17_s._ 6½_d._ The same allowance must be made for
the melting-house account in the table on page 134, when that sum
will become £1,375 12_s._ 4¾_d._ instead of £1,067 0_s._ 11¼_d._ It
is deemed fair to reduce this loss as far as possible; therefore the
whole sum coined between June, 1851, and March, 1853, has been made
to bear the one loss of these 1845·449 ounces. The same test being
applied to these tables as was applied to that relating to gold,[113]
it will be found that the average loss by coining silver between June,
1851, and March, 1857, was £1,013 11_s._ 2¼_d._, whereas in the next
period, between April, 1857, and March, 1860, it fell to £365 15_s._
10½_d._ This reduction then shows that the former loss, taken at its
lowest, gives evidence of _unnecessary_ wasteage to the extent of
£647 15_s._ 4_d._ on each million coined; but this sum is not that
shown by the Mint books, for, as above stated, it is below the truth.
Great, then, as were the amounts missed, we shall find them far greater
if the state of the melting-house be considered, and to do this is
necessary, because it was asserted that the loss was arrested in the
coining department by sending more oil and dirt to the melting-house.
Let us then see how this stands in regard to the truth, for while in
the period 1851 to 1857 the oil literally _dropped from the scissel
and drained through the trucks on to the floor_, in the latter period
the trucks were not soiled, and the use of oil in the rolling room was
rigidly prohibited, while in the drag room only so much as was required
to lubricate the fillets at the drag bench was permitted to be used,
and this was as far as possible removed by careful wiping with cotton
waste. It is also a fact that whereas there had been an HABITUAL LOSS
in the rolling and drag rooms when oil was used very largely, there
was now a GAIN IN BOTH ROOMS; in the former to the extent of one in
ten thousand ounces wrought, and in the latter to the extent of two in
ten thousand. These facts must be of importance while considering the
following statement (see page 134).
[Footnote 113: See page 88.]
STATEMENT SHOWING THE AMOUNT OF SILVER COINED AND OF THE LOSS ATTENDING
IT IN THE COINING DEPARTMENT.
+--------------------------+-------------+-------------------+
| Date—Financial Year. | Weight of | Value of Coinage. |
| | Coinage. | |
| | | |
+--------------------------+-------------+-------------------+
| | Ounces. | £ _s. d._ |
| June 1851 to March 1852 | 314689·050 | 86,539 9 9¼ |
| April 1852 to March 1853 | 1088196·550 | 299,254 1 0¼ |
| ” 1853 ” 1854 | 2135071·750 | 587,144 14 7½ |
| ” 1854 ” 1855 | 501459·800 | 137,901 8 10¾ |
| ” 1855 ” 1856 | 1138355·000 | 313,047 12 6 |
| ” 1856 ” 1857 | 1792800·000 | 493,020 0 0 |
| ” 1857 ” 1858 | 1420560·000 | 390,654 0 0 |
| ” 1858 ” 1859 | 1449360·000 | 398,574 0 0 |
| ” 1859 ” 1860 | 2052720·000 | 564,498 0 0 |
| March 1861 to June 1861 | 650160·000 | 178,794 0 0 |
+--------------------------+-------------+-------------------+
+--------------------------+----------------+---------------------+
| Date—Financial Year. | Amount of Loss | Value of the Silver |
| | by Coining. | Lost. |
| | | |
+--------------------------+----------------+---------------------+
| | Ounces. | £ _s. d._ |
| June 1851 to March 1852 | | |
| April 1852 to March 1853 | 1845·449 | 507 9 11½ |
| ” 1853 ” 1854 | 2943·025 | 809 6 7½ |
| ” 1854 ” 1855 | 657·362 | 180 15 5¾ |
| ” 1855 ” 1856 | 1632·957 | 449 1 3¼ |
| ” 1856 ” 1857 | 2191·367 | 602 12 6¼ |
| ” 1857 ” 1858 | 910·264 | 250 6 5½ |
| ” 1858 ” 1859 | 834·679 | 232 0 2¾ |
| ” 1859 ” 1860 | 898·837 | 247 3 7¼ |
| March 1861 to June 1861 | 1357·375 | 373 5 5½ |
+--------------------------+----------------+---------------------+
+--------------------------+-----------+-------------+-------------+
| Date—Financial Year. | Value of |Lost Silver | Sweep |
| |Sweep Sold.|per Million | per Million |
| | | Coined. | Coined. |
+--------------------------+-----------+-------------+-------------+
| | £ _s. d._| £ _s. d._| £ _s. d._ |
| June 1851 to March 1852 | 31 12 8 | | |
| April 1852 to March 1853 | 90 4 10½ |1,315 9 4 | 315 18 3 |
| ” 1853 ” 1854 |160 12 4 |1,378 8 4¾ | 273 11 1¼ |
| ” 1854 ” 1855 | 69 19 2¼ |1,310 17 11 | 507 6 3¼ |
| ” 1855 ” 1856 |104 5 7½ |1,434 9 9¼ | 333 3 3¾ |
| ” 1856 ” 1857 |149 10 9¼ |1,223 6 3¾ | 303 6 2¾ |
| ” 1857 ” 1858 | 98 1 10 | 640 15 6¾ | 251 1 11 |
| ” 1858 ” 1859 |125 8 4 | 582 2 1 | 314 13 3¼ |
| ” 1859 ” 1860 | 10 18 3 | 437 17 6¼ | 19 6 7¼ |
| March 1861 to June 1861 | 24 14 4½ |2,087 14 6¼ | 138 5 0½ |
+--------------------------+-----------+-------------+-------------+
To obtain the true amount of loss or waste, deduct the value of the
sweep from the value of the silver lost.
RETURN FROM THE ROYAL MINT TO AN ORDER OF THE HOUSE OF LORDS, DATED
17TH FEBRUARY, 1870. (THE LORD ROSSIE.)