Thomas Tooke

Archive for the ‘Bullion and Mining’ Category

Monetary depreciation due to the Aquileia mine in the Noric Taurisci

In Bullion and Mining, Monetary depreciations on April 23, 2012 at 11:47 pm

Examples are abundant of expansion of the monetary standard and the resulting effect on its own price.  One of the earliest is Polybius. In his “histories”, in Book XXXIV, he writes the following:


Near Aquileia, in the territory of the Noric Taurisci, in my own time a gold mine was discovered, so easy to work, that by scraping away the surface soil for two feet, gold could be found immediately. The seam of gold was not more than fifteen feet; in some it was found unmixed with alloy in nuggets of the size of a bean or lupine, only an eighth of it disappearing in the furnace; and some wanted more elaborate smelting, but would still pay thoroughly well. Accordingly, on the Romans joining the barbarians in working this mine, in two months the price gold went down a third thought Italy; and when the Taurisci found out that, they expelled their roman fellow workers and kept the monopoly themselves.


This raises obviously the question about what is the price of a currency when the quantity is rapidly expanded.


Early Mining of Silver in Spain, price of a Calf in Silver 200 BC.

In Bullion and Mining, Commodities on April 23, 2012 at 11:24 pm

In his book “Histories” Polybius  reports a while ago (220–146 BC) the following:


There are very large silver mines about twenty stades from New Carthage, extending to a circuit of four hundred stades, in which forty thousand men are continually employed, who produce for the benefit of the Roman people twenty-five thousand drachmae a day. It would take too long to describe the whole process of working them, but I may mention that the alluvial soil containing the silver ore is first broken up, and sifted in sieves held in water; that then the deposit is again broken, and being again filtered with running water, is broken a third time. This is done five times; the fifth deposit is smelted, and, the lead having been run off, pure silver remains…


The translation dates back from 1889, and the author had the intelligence to translate the series of weight to the weight at the time to have an idea of  the prices.

Our blogger Polybius writes:

“In Lusitania (roughly today´s portugal), both animals and man are extraordinarily productive, owing to the excellent temperature of the air; the fruits never wither; there is not more than three months in the year in which roses, white violets (or gilly-flowers), and aspargus do not grow; while the fish caught in its sea is far superior to what is found in our waters (Mediterranean Sea) for quantity, quality and beauty. There, too of a Sicilian medimmus of barley is sold for a drachma, and one of wheat for nine Alexandrine obols. A metreta of wine costs a drachma, and a good kid or hare an obol, and a lamb from three to four obols; a fat pig weighing a hundred minae costs five drachmae, and sheep two. A talent of figs is sold for three obols, a calf for five drachmae, a draught-ox for ten. The flesh of wild animals is not thought worth fixing a price upon at all, but the people give it to each other for nothing and as a present…

A price of a Calf was about 3/4 of oz of Silver. Today the price of Calf Received according to this source, is 185 USD.

1803-1848 Gold and Silver increase in Supply. Was Gold or Silver more stable?

In Bullion and Mining on April 22, 2012 at 10:27 pm

Here we have more data about the increase in Gold and Silver during the period from 1803 to 1848 from William Newmarch using the data from John Towne Danson.

As the author writes at the time: ” The leading points of the comparison are: – that while the annual supplies of silver had only increased only 10 per cent.; the annual supplies of gold had increased by more than 200 per cent. It may be admitted that, during the interval, some changes had taken place in the value of gold as compared to silver; but the constancy of the relative value of gold and commodities justifies us in concluding, that an increase in the annual supply of that metal, from 3 1/4 millions sterling in 1800 to 10 millions sterling in 1848; had not been greeter than was required by the wants of the expanding commerce, and growing population of the world.

One of our bloggers of those days (1833) , Lord Overstone wrote:

” It may be true, though there is no evidence of the fact, that gold fluctuates more in value than silver; but there does not appear to be any difficulty in maintaining it as our standard, subject at times to some temporary inconvenience in relation to the currencies of other countries provided the issue of paper-money be duly regulated. ”

Evidently it seems to imply that there is nothing superior in using Gold as a standard versus Silver in Asia as it was the case in the XIX century.




World Gold and Silver production 1803-1848 and the following years.

In Bullion and Mining on April 22, 2012 at 3:21 pm

Here is some interesting historical account of the discoveries of Gold post 1848.  As new discovery in California and New South Wales were impacting the price structure, several economists tried to compile the proper data.

The context of 1848-1953 in England was of rapid accumulation of bullion, followed by decrease and change in the rate of discount, which was a cause of concern at the time for those living out of capital. At the time the general consensus was that this rapid accumulation of capital would be an inconvenience due to the produce of the Gold colonies, this opinion however changed rather radically in a short period of time. There was at the time a palpable rise of wages and prices as a result.  In 1853 William Nemarch writes: ” During the present year, we have begun to trace a palpable rise in the Wages of Labour ; and we have witnessed a rise ; or a tendency to rise ; in tne market value of classes of commodities which are important either from the magnitude, or the multiplicity, of the articles which compose them.”

It is supposed by the same author, that the new Gold discoveries, while just transient, might have a profund impact on society.

“These are a few of the reasons which appear to authorise the supposition that what may be called the purely transient consequences of the Gold Discoveries:—that is to say, the early and incidental disturbances, moral and material, arising from the first shock which they occasioned :—have in a great measure passed away : and have been replaced by a commencement of those greater, and more fundamental changes, by means of which the New Gold will, more or lessrapidly, modify the commercial and social relations of the world.”

Evidently a derangement of the price structure is known historically to lead to societal changes.

In the Statistical Journal (see vol. xiv. 1861), John Towne Danson has done a remarkable work of compiling the quantities of existing Gold and Silver and the quantities mined since 1500.

The periods taken, therefore, will be from 1492 to 1803 (or 311 years) ; and from 1492 to 1848 (or 356 years). It will he seen also that, from the total quantities obtained, certain deductions are made ; so as to show the quantities of gold and silver, the produce of America, existing in various forms in Europe and America in 1 803, and also in 1848.

The Statement is as follows :

Note: In this table piastres and dollars are converted into sterlings at an approximate rate of 5 per Pound.

Further data shows the following total with other regions included:

Table II. Estimate of the value of the Total Quantity of Gold and Silver existing in various forms in Europe and America at the commencement of the Year 1848.

After adjusting for the large exports to Asia, wear and tear of coins, ornaments, shipwrecks, the final estimate in 1848 was:

Now that we have the stock, next we will inquire in the increase in supply by country.