THE ROYAL MINT. (continued 5)

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.

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 5s. per ounce and 5s. 2d. per ounce to an artificial value of 5s. 6d. 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 10¾d., but when it is culled from circulation it is often worth only 6d., therefore a loss of 4¾d. 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 15s. 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 17s. 10½d. is as 14·16 is to 1 of silver, which they view as of a value of 5s. 6d. 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.

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 9s. 4d., 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 17s. 6½d. The same allowance must be made for the melting-house account in the table on page 134, when that sum will become £1,375 12s. 4¾d. instead of £1,067 0s. 11¼d. 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 11s. 2¼d., whereas in the next period, between April, 1857, and March, 1860, it fell to £365 15s. 10½d. This reduction then shows that the former loss, taken at its lowest, gives evidence of unnecessary wasteage to the extent of £647 15s. 4d. 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).

Statement showing the Amount of Silver Coined and of the Loss attending it in the Coining Department.

Date—Financial Year. Weight of Coinage. Value of 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 by Coining. Value of the Silver 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 the Sweep Sold. Lost Silver per Million Coined. Sweep per Million 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.)

COINING DEPARTMENT.

A Statement of the Weight and Value of the Silver Moneys coined in each Financial Year from 1851 to 1869 inclusive, exhibiting the Weight and Value of the Loss or Waste sustained in each Year, as well as the Value of Sweep recovered, and the average Proportion of such Loss or Waste and Sweep recovered to each Million Pounds Sterling coined.

Date. Weight of Coinage. Value of Coinage. Amount of Waste.

Ounces. £ s. d. Ounces.

August 1851 to March 1852 314689·050 86,539 9 9 1845·450

April 1852 to March 1853 1088196·550 299,254 1 0

” 1853 ” 1854 2134891·750 587,095 4 8 2943·025

” 1854 ” 1855 501459·800 137,901 8 11 657·362

” 1855 ” 1856 1138355·000 313,047 12 6 1632·957

” 1856 ” 1857 1792800·000 493,020 0 0 2191·367

” 1857 ” 1858 1420560·000 390,654 0 0 910·264

” 1858 ” 1859 1449360·000 398,574 0 0 843·679

” 1859 ” 1860 2052720·000 564,498 0 0 898·837

” 1860 ” 1861 625714·000 172,071 7 0 1032·502

” 1861 ” 1862 769680·000 211,662 0 0

” 1862 ” 1863 532147·610 146,340 11 10 811·466

” 1863 ” 1864 835920·000 229,878 0 0

” 1864 ” 1865 1936800·000 532,620 0 0 1100·169

” 1865 ” 1866 1880640·000 517,176 0 0 906·407

” 1866 ” 1867 1739520·000 478,368 0 0 891·389

” 1867 ” 1868 961200·000 264,330 0 0 473·724

” 1868 ” 1869 597600·000 164,340 0 0 280·764

Date. Value of Waste. Value of Sweep recovered.

£ s. d. £ s. d.

August 1851 to March 1852 507 10 0 121 17 6½

April 1852 to March 1853

” 1853 ” 1854 809 6 8 160 12 4

” 1854 ” 1855 180 15 6 69 19 2¼

” 1855 ” 1856 449 1 3 104 5 7½

” 1856 ” 1857 602 12 6 149 10 9¼

” 1857 ” 1858 250 6 5 98 1 10

” 1858 ” 1859 232 0 3 125 8 4

” 1859 ” 1860 247 3 7 10 18 3

” 1860 ” 1861 283 18 9 46 7 1½

” 1861 ” 1862

” 1862 ” 1863 223 3 1 Nil.

” 1863 ” 1864

” 1864 ” 1865 302 10 11 15 6 7

” 1865 ” 1866 249 5 3 16 9 4

” 1866 ” 1867 245 2 8 Nil.

” 1867 ” 1868 130 5 6 121 3 3½

” 1868 ” 1869 77 4 2 Nil.

Date. Value of Waste. per £1,000,000. Value of Sweep per £1,000,000.

£ s. d. £ s. d.

August 1851 to March 1852 1,315 9 5 315 18 1

April 1852 to March 1853

” 1853 ” 1854 1,378 10 9 273 11 7

” 1854 ” 1855 1,310 18 1 507 6 3

” 1855 ” 1856 1,434 9 8 333 2 3

” 1856 ” 1857 1,222 6 4 303 6 2

” 1857 ” 1858 640 15 4 251 1 11

” 1858 ” 1859 582 2 1 314 13 3

” 1859 ” 1860 437 17 5 19 6 7

” 1860 ” 1861 739 18 8 120 16 0

” 1861 ” 1862

” 1862 ” 1863 593 3 0 Nil.

” 1863 ” 1864

” 1864 ” 1865 568 0 9 28 15 7

” 1865 ” 1866 481 19 4 31 16 9

” 1866 ” 1867 512 8 8 Nil.

” 1867 ” 1868 492 16 11 458 7 8

” 1868 ” 1869 469 16 2 Nil.

C. W. FREMANTLE, Deputy Master and Comptroller.

Royal Mint, 2nd March, 1870.

Statement showing the Amount of Silver Coined and of the Loss attending its Manipulation in the Melting Department.

Date—Financial Year. Weight of Coinage. Value of 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 2052720·000 564,499 0 0

March 1861 to June 1861 650160·000 78,794 0 0

Date—Financial Year. Amount of Loss by Melting Value of the Silver Lost. Value of Sweep Sold.

Ounces. £ s. d. £ s. d.

June 1851 to March 1852 36 0 1

April 1852 to March 1853 1496·945 411 13 2¼ 111 19 4½

” 1853 ” 1854 1814·808 499 1 5¼ 143 2 4

” 1854 ” 1855 882·870 242 15 9½ 187 19 7

” 1855 ” 1856 519·069 142 14 10½ 144 0 2¼

” 1856 ” 1857 2912·149 800 16 9¾ 151 12 4¼

” 1857 ” 1858 1001·676 275 9 2½ 100 13 6¼

” 1858 ” 1859 +733·101 +201 12 0¾ 115 4 11

” 1859 ” 1860 199·288 54 16 1 101 8 8

March 1861 to June 1861 238·495 65 9 10¾ 49 4 4½

Date—Financial Year. Value of Lost Silver per Million Coined. Value of Sweep per Million Coined.

£ s. d. £ s. d.

June 1851 to March 1852

April 1852 to March 1853 1,067 0 11¼ 383 11 1

” 1853 ” 1854 849 19 11¾ 243 15 0

” 1854 ” 1855 1,760 11 11¾ 1,363 2 10

” 1855 ” 1856 456 19 7½ 460 0 5¾

” 1856 ” 1857 1,624 7 1¾ 307 10 6¾

” 1857 ” 1858 705 2 6½ 257 14 2¾

” 1858 ” 1859 +505 16 2½ 289 2 10¾

” 1859 ” 1860 97 1 8¼ 179 13 9

March 1861 to June 1861 366 6 3¼ 275 5 7¼

To obtain the true amount of loss, 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.)

MELTING DEPARTMENT.

A Statement of the Weight and Value of the Silver Moneys coined in each Financial Year from 1851 to 1869 inclusive, exhibiting the Weight and Value of the Loss or Waste sustained in each Year, as well as the Value of Sweep recovered, and the average Proportion of such Loss or Waste and Sweep recovered to each Million Pounds Sterling coined.

Date. Weight of Coinage. Value of Coinage. Amount of Waste.

Ounces. £ s. d. Ounces.

August 1851 to March 1852 314689·050 86,539 9 9 1496·945

April 1852 to March 1853 1088196·550 299,254 1 0

” 1853 ” 1854 2134891·750 587,095 4 8 1814·808

” 1854 ” 1855 501459·800 137,901 8 11 882·870

” 1855 ” 1856 1138355·000 313,047 12 6 519·069

” 1856 ” 1857 1792800·000 493,020 0 0 2912·149

” 1857 ” 1858 1420560·000 390,654 0 0 1001·676

” 1858 ” 1859 1449360·000 398,574 0 0 484·490

” 1859 ” 1860 2052720·000 564,498 0 0 199·288

” 1860 ” 1861 625714·000 172,071 7 0 *+20·516

” 1861 ” 1862 769680·000 211,662 0 0

” 1862 ” 1863 532147·610 146,340 11 10 +48·918

” 1863 ” 1864 835920·000 229,878 0 0

” 1864 ” 1865 1936800·000 532,620 0 0 1516·266

” 1865 ” 1866 1880640·000 517,176 0 0 3296·589

” 1866 ” 1867 1739520·000 478,368 0 0 2923·255

” 1867 ” 1868 961200·000 264,330 0 0 1526·136

” 1868 ” 1869 597600·000 164,340 0 0 599·329

Date. Value of Waste. Value of Sweep recovered.

£ s. d. £ s. d.

August 1851 to March 1852 411 13 2 155 19 5½

April 1852 to March 1853

” 1853 ” 1854 499 1 5 143 2 4

” 1854 ” 1855 242 15 9 187 19 7

” 1855 ” 1856 142 14 11 144 0 2¼

” 1856 ” 1857 800 16 10 151 12 4¼

” 1857 ” 1858 275 9 3 100 13 6¼

” 1858 ” 1859 133 4 8 115 4 11

” 1859 ” 1860 54 16 1 101 8 8

” 1860 ” 1861 5 12 10 203 8 10½

” 1861 ” 1862

” 1862 ” 1863 13 9 1 120 6 2

” 1863 ” 1864

” 1864 ” 1865 416 19 6 278 1 1½

” 1865 ” 1866 906 11 3 104 5 8

” 1866 ” 1867 803 17 11 Nil.

” 1867 ” 1868 419 13 9 347 4 3½

” 1868 ” 1869 164 16 3 31 0 11

Date. Value of Waste per £1,000,000. Value of Sweep per £1,000,000.

£ s. d. £ s. d.

August 1851 to March 1852 1,067 0 10 404 5 9

April 1852 to March 1853

” 1853 ” 1854 850 1 4 243 15 4

” 1854 ” 1855 1,760 11 8 1,363 2 10

” 1855 ” 1856 455 19 8 460 0 3

” 1856 ” 1857 1,624 7 2 307 10 6

” 1857 ” 1858 705 2 7 257 14 2

” 1858 ” 1859 334 5 6 289 2 10

” 1859 ” 1860 97 1 8 179 13 9

” 1860 ” 1861 14 14 0 530 3 3

” 1861 ” 1862

” 1862 ” 1863 35 15 2 319 15 7

” 1863 ” 1864

” 1864 ” 1865 782 17 4 522 1 0

” 1865 ” 1866 1,752 18 2 201 12 9

” 1866 ” 1867 1,680 9 11 Nil.

” 1867 ” 1868 1,587 14 9 1,313 11 3

” 1868 ” 1869 1,002 17 6 188 18 2

Note.—The Financial Years 1860/1861 1861/1862 1862/1863 1863/1864 exhibit a gain in the Melting Department.

C. W. FREMANTLE, Deputy Master and Comptroller Royal Mint,

2nd March, 1870.

By similar treatment to that applied to the table on page 132 this will yield an average loss between June, 1851, and March, 1857, of £698 13s. 3d. per million coined; whereas in the period from April, 1857, to March, 1860, there is a gain by melting of £87 13s. 3d. per million pounds sterling coined. To look a little more closely into these figures, it will be observed that in the year 1858-59 there was a positive gain of no less than £505 16s. 2½d. on each million coined; this is not to be explained by any known fact, but it seems probable that in that year a circumstance occurred that had happened many times previously, and from the prevalence of the same folly. At the Mint Office it is the custom to weigh the silver from the coining department to the melting department in drafts of 1,440 ounces, or for occasions of 720 ounces. Now it not unfrequently happens that the weigher leaves the counting of the number of drafts to his scalesman, and so an error creeps in. Some days afterwards the coining department finds itself short, say 720 ounces, and by searching its books finds it has been credited with too little on a specific day; after investigation the error is admitted, and the old receipt altered. Now such an error happened on the 3rd of August, 1858, when 1,440 ounces, or two journeys, were delivered, but not credited; however, on the 16th August this was discovered, and the receipt altered at the Mint Office. It is probable that the melter never made a corresponding alteration in his books, and if that be the case, the gain of 1858-59 will disappear, to be replaced by a loss of £487 0s. 8¼d., which would appear to be more natural. Should these lines meet the eye of the officer concerned, he could at once see if this be the explanation of so large a gain, and which has caused him much anxiety. That a gain can be made by melting is not a fact, although, if the statement be examined for the year 1855-56, it will be seen that a gain of £3 0s. 10¼d. appears to have been made; and once more, in 1859-60 a plus of £82 12s. 0¾d. per million seems to have been realised. These facts, taken as they stand, would mislead, and for reasons which shall now be stated. Sufficient is, however, here shown to prove that the stoppage of the use of oil effected a reduction in the habitual loss of the melting-house, while this fact renders it impossible to show that the stoppage of loss in the coining department was due to the more free use of oil and dirt (see page 131).

In July and August, 1858, the melter being absent on leave, I was directed by written order of the Master to take his duties. Silver being under operation, the following quantities were melted, and with the results recorded:—

Given to Melt.

Ounces.

Ingots and alloy 434,393·548

Scissel 457,032·810

Clean ends 1,440·000

Extra alloy 499·539

Plus on weight charged by Mint Office 51·680

893,417·573

Produced by Melting.

Ounces.

Bars 889,974·690

Ends 2,154·750

Grains 462·050

Assays 114·230

Loss by melting 711·853

893,417·573

To analyse this loss—for by weight it was absolute—will give much information, and the details of proportionate loss were as follows:—

On each Million Ounces Melted.

On ingots of silver (produced from lead by Pattinson’s

process) and alloy for the manufacture of medals 947·91

On ingots, 5-franc pieces, and alloy 263·85

On ingots, 5-franc pieces, scissel, and alloy 418·40

Worn coin (culled from circulation) and scissel 710·06

Scissel melted by itself 1,036·45

Mean Loss 675·34

Thus, then, it appears that upon this weight of silver and alloy there was, when melted, a loss of 711·853 ounces, or a mean loss of 675·34 ounces in standard silver; yet, on two undoubted occasions, the table above given⁠[114] exhibits a gain upon the work of two whole years; why, therefore, should the loss just stated have been permitted to take place, when every atom of metal was weighed in the presence of witnesses before being placed in the pots, and was not lost sight of by the officers concerned until it was returned to the scales to be again weighed? The reply is simple: the gain in 1855-56 and 1859-60 was not made, and its appearance is simply a matter of account, for the melter was not accustomed to, and probably to this day does not, weigh silver into his melting-pots—he is, or was, satisfied with the Mint Office weights, which are so far from accurate that no ironmonger would accept them.

On this melting alone, including 29 days’ receipts from the Mint Office, there were differences to the extent of 82·11 ounces plus their weight, and 30·43 ounces minus their weight, so that if the one be deducted it still leaves an absolute plus on the weight charged by the Mint Office of 51·68 ounces. Here, then, is a means of gain;⁠[115] but if the increase of weight derived from this source be taken on the ingots and five-franc pieces bought, it is at the rate of 203·60 in a million ounces purchased. Besides this, the melter is not charged with the extra alloy he puts into his silver, and this on an ordinary average amounts to 1,126 ounces on each million ounces wrought; so that this work, which, in fact, did yield a loss of 711·853 ounces, or at the rate of £796 on the million pounds sterling, would, by the old system of computation, have lost £201. Since, then, it is thus demonstrable that a difference of £591 arises when it is known that the whole of the day’s work is weighed into as well as from the melting-pot, it is but reasonable to believe that a greater difference may have arisen when it was known by the Mint Office weigher that his weights were not checked, and, therefore, in weighing ingots to the melter, he probably just satisfied himself that they were as heavy as they were charged by the bullion dealer, and allowed the plus weight which is invariably given by that merchant to go to the melting-house not charged into the account. It is a fact that if the weigher finds ingots sent by the bullion dealer lighter than the weight charged, he sends them back, this practice not being rigidly dependent on the actual weight of the ingots as a whole; for unless each one is distinctly heavier than the weight set against it, it is returned, or the dealer must send silver to make up the required weight. And this case has more than once arisen; so that in practice, if an ingot be charged as 1,000 ounces, it must weigh indefinitely beyond that weight up to 0·50 ounce, and is then received as 1,000 ounces; but if it weigh in addition 0·60, then it is received as 1,000·50 ounces. These “drafts,” as they are called, amounted on 402,573 ounces of ingots to 82·11 ounces, or at the rate of 203 per million ounces bought. When calculating the proportion of metal for melting, it is the custom to add 1 part of extra alloy to the thousand ounces of silver, and thus to allow for the loss which takes place by annealing and blanching. The extra alloy is not charged to the melter, as before said, but is weighed to him, and thus goes really to reduce his loss; in practice its proportionate use is increased, for after several re-meltings of scissel (see page 35) the bars become richer in silver than is required by the law, and then again extra alloy is added. In the case of the silver melted in 1858 it must be stated, that if from the loss exhibited the value of the sweep be deducted, that loss will still be too high, because the silver had not yet been recovered from the melting-pots; but with this allowance made, if we divide the total value of the sweep from 1851 to 1857 by the total sum coined, we shall arrive at a fair average price of that sweep, which may be taken at £404 2s.,⁠[116] thus leaving a loss of £392 on each million pounds sterling coined. But if, by the old style of calculation, the melter’s loss be estimated on the weight charged to the melter by the Mint office, it is £201, and this sum deducted from the average value of the sweep will give a gain of £203, where it is perfectly certain, from the extreme care which was taken, that the real loss was £392, which, minus £54 4s. 7d., subsequently explained, becomes an absolute loss, by melting weighed quantities, of £337 15s. 5d. per million pounds sterling melted. Allusion has been made to the silver left in the iron melting-pots: in the case which has been so much dwelt upon cast-iron pots from Glasgow were used, these absorbing an exceptionally large amount of silver. As, however, the object is to arrive at a fair average, it will be wiser to take into consideration the ordinary wrought-iron pot, which, although it costs more at first, is cheaper in the long-run, as it will stand from fifty to sixty meltings, whereas the bulk of the cast-iron pots used in 1858 leaked in the first melting, and no one of them stood a whole day’s work.

In treating of the melting of silver, it has been explained that charcoal is placed in the pot, to prevent the oxidation of the alloy. This, to a measured extent, it effects, but in the process it becomes burned, and its ash forms a slag with the oxide of iron of the pot, and this slag, always floating on the top of the fused silver, gradually covers the inner surface of the pot as the silver is poured out, and in so covering the pot secretes globules of silver in the “pin-holes” of the iron. At the end of the useful existence of the pot this silver is, or rather should be, obtained. The practice is to “sweat the pot,” and to fuse in it some common table salt—chloride of sodium. It would seem that the used-up wrought-iron pots yield by this process, on an average, 12 ounces of silver. But all the silver is not obtained at this operation, for the pots stand out of doors, in a yard to which many persons have free access, for months before they are treated professionally, and the result of the preliminary sweat which they undergo is not a source of profit to the Mint.

In 1858 two wrought-iron pots were locked up when their active period had passed, and these were subsequently treated with great consideration, with a view to ascertain their capacity for retaining silver. They yielded under my hands:—

Ounces.

By simple sweating 20·00

By detaching the slag and oxide from the pot

and fusing it with salt 24·70

By separating the remaining silver from the pin-holes

in the pot by means of diluted acid 4·60

49·30

In the whole period of that melting I used nine wrought-iron pots, of which three were entirely used up, and six cast-iron pots, all of which leaked—some two on one day: it would therefore seem fair to assume that of these fifteen pots eight were worn out. We may then consider that had all the eight pots been carefully treated, and each made to yield its fair proportion of silver, we should have recovered silver at the rate above shown, or 24·65 ounces from each pot, and this weight, multiplied by eight, as proposed, will give 197·20 ounces, which, at 5s. 6d. an ounce, would be worth £54 4s. 7d., and by this amount may that loss of £392 be reduced, when the actual loss will be £337 15s. 5d., as determined by most carefully-conducted operations on weighed quantities. This loss, however, is not final, although absolute, because the sweep was sold for £289 2s. 10¾d.;⁠[117] and, deducting this, the final loss is £48 12s. 6¼d. on each million pounds sterling melted. There can be no doubt but that this is at least one-third in excess of the loss which should take place; yet, between 1851-57, it was, after all deductions for sweep, recoveries from worn-out pots, &c., had been made, no less than £698 13s. 3d. This excess might be accounted for either as wasteage in the melter’s department, or as legitimate loss by melting caused by the excess of oil sent on the scissel; but since the coiners permitted unnecessary loss to accrue, it will be right to charge this sum to their account, because, if they received metal free from oil, and returned it to the melter sustaining too much oil, it is evident that they received from their men bullion and oil in place of bullion. I therefore add £650 0s. 8¾d., the difference between £48 12s. 6¼d. and £698 13s. 3d., to the wasteage previously explained,⁠[118] when that sum will be raised to £1,297 16s. 0¾d. on each million of silver coined.

In all former calculations the value has been determined on the million coined; but now that we approach the necessary considerations as to the loss by melting which should absolutely take place, it becomes necessary to state that, as a rule, 100 parts of silver bars should produce 57 parts of coined money, and in this proportion must the value of the sweep be reduced, that we may obtain its value proportioned to the silver lost by weight in melting. The sweep results, as in the case of gold, from the grinding of the burnt refuse of the melting-house, which consists of the sweepings from the floor, partly-used charcoal, and dirt—“matter in the wrong place,” as Lord Palmerston so aptly designated it. At the end of the coinage this is sold, and its value is applied to the reduction of the apparent loss by melting. In the case now under discussion, we have found that there was an absolute loss by weight of 711·853 ounces on 893,417·573 ounces of bullion given to be melted. By proportion, this weight is equal to 796·764 ounces on each million. The sweep was sold for £289 2s. 10¾d. for each million coined; therefore, to obtain the specific amount that should be deducted by this source from the loss, we must assume that the coined money was 57 per cent. upon the bullion melted, when £164 16s. 3½d. becomes the value of the sweep belonging to each million melted. Since this sum is calculated by value, we will convert it into ounces, which is a simple process; for, as the other sums bear proportion to pounds sterling, we have but to consider it as ounces, when the sum we require will be 164·814. To this sum is to be added the amount of silver due from the melting-pots, as before explained, and which is 220·724 ounces, because it has been assumed that we should obtain 24·65 from each on the average number of pots used in melting, and this, calculated into the million, is as above. The total of these two sums, 385·538, deducted from 796·764, leaves a final loss of 411·126 ounces by weight in melting a million ounces of standard silver.

By experiments made with the utmost care, I arrived at the conclusion that, in melting silver bullion for a complete coinage, the loss by melting should not exceed £100 on each million sterling melted, and in this conclusion I am confirmed in a remarkable manner by Colonel Smith,⁠[119] who, with vast opportunities for careful every-day work and by absolute weighing, found a loss of 200 in each million for dirt and oxygen alone, and this he is willing to consider as 250 on each million of scissel; but he found his loss by melting ingots 30 on the million, and assuming that the total of a coinage would be half ingots and half scissel, this would give an average of 140 when he was “convinced that he was robbed,” and that this was so he proved by compelling the naked workmen, by means of physic, to disgorge the silver they had swallowed. He, however, was probably still robbed, for black men rub pieces of bullion or coins together and secrete the dust obtained by that means in their hair, and thus abstract metal from the works of the Brazilian Mining Association, and probably from the mints in India. To such an extent is robbery by this means carried on that the Association above referred to causes the head of each person to be washed before he leaves work, and thus recovers a large amount of gold dust.

If then, as has been shown, there is a final loss of £411 2s. 6d. on each million of silver melted, we must now determine that this sum amounts to £721 5s. 5½d. on each million pounds sterling coined; and since by coining a loss is sustained equal to £365 15s. 10½d., the total final loss is no less than £1,132 7s. 11½d. per million pounds sterling of silver coined. Such being the facts ascertained by the scales, we find that the loss by ACCOUNT is returned at £365 15s. 10½d. for the coining department, while, at the same period, the melting-house account shows a gain of £87 13s. 3d., which, deducted from the loss of the coining department, gives a final loss equal to £278 2s. 7½d., as against, in the former period, a loss by coining of £1,013 11s. 2½d., and by melting of £698 13s. 3d., or a total final sum of £1,712 4s. 5½d. The difference, then, between these two final sums, or £1,434 1s. 10d., shows the actual loss that the Mint authorities submitted to without explanation on each million of silver coined between June, 1851, and March, 1857. This sum is exactly 8s. 8d. for each £100 coined, while the French contract to coin each £100 for 15s., including loss, wages, salaries, &c. Although, for the sake of accurate demonstration, I have accepted the facts as stated, it is but fair that I should compare the results actually obtained with those stated by the usual methods, and then the contrast will become more apparent; for whereas the proportional loss by melting is shown to have been on weighed quantities £721 5s. 5½d., it is a fact that by the usual methods of account, that of neglecting to charge to the melter the extra weight added to the ingots by the system of purchase, and omitting the weight of the extra alloy, this loss becomes reduced to insignificant proportions, for it was exactly £180 0s. 1d., and as the sweep sold for £164 16s. 0½d. per million melted, the final loss would be but £15 3s. 11½d. Yet, for the sake of truth, I consider it better to charge to each department the metal by weight, and that weight should include every atom, because then, an exceptional loss having taken place, its significance is at once apparent; whereas, when unknown weights are placed in the melting-pot, the losses may vary to a considerable extent, and yet not be detected. By this plan fictitious gain becomes impossible—apparent loss inevitable; but that loss is so determinate that it can be calculated to a nicety, and any figure obtained beyond that calculated exhibits one of two facts,—that the melting or coining, or both, have by too great a degree refined the silver under operation, and this is demonstrated by the final assays, or UNNECESSARY WASTE IS AGAIN PERMITTED, but both result from carelessness; therefore the Mint Master’s duty is perfectly clear. While, then, absolute gain is impossible, and loss inevitable, it is, perhaps, well to exhibit the results of Colonel Smith’s experience in the Indian Mints, because that gentleman states that there can be no loss, and that there must be a gain. Thus, then, he and I are antagonistic on the plainest possible point; yet an examination of his statement will show that his gain, although absolute, is not legitimate, but results from a near approach to obtaining bullion without paying for it.

It must, then, be explained that in England, and in the Indian Mints, it is not the custom to assay bullion with a view to the determination of its actual value, but only to the nearest part of a pennyweight. Thus, standard silver is composed of 222 parts of silver and 18 of copper in 240. Assuming that it is the custom to determine the amount of silver to within half a pennyweight; and that, the assay showed 23 pennyweights and 11 grains, the silver ingot would be reported as containing 23 pennyweights, and the owner would lose the 11 grains, whereas it should be the custom to determine absolutely the real value of the ingot. Now, in India, Colonel Smith found these “unreported fractions,” when alloyed with copper, amounted to 1,230 parts on each million purchased, so that if he paid for a million ounces, he received 1,001,230 ounces. Here, then, was part of his profit. In addition to this gain he made another by the customary turn of the scale,⁠[120] but he has not told us its amount; yet his final result, from the receipt of the bullion to its return to the merchants as coined money, is at the rate of £1,165 gain on each million pounds sterling coined. Now it is clear that if so large a sum as £1,230 per million is obtained without purchase from the merchant, either that merchant should himself saturate those unreported fractions with alloy, or make Colonel Smith’s mints pay for them. It is asserted that this practice “exists in the Royal Mint, but not to so large an extent;” yet Colonel Smith states it to be at the rate of £932 per million coined. If this be the case, the Mint books should show for its official accounts a vast gain, instead of, as is the case represented by its purely manufacturing accounts, a loss. This may possibly be the case, but, so far as my experience goes, it is against the practice; for the bullion received is invariably greater in weight than that returned in coined money.

Colonel Smith has determined with great precision that from dirt alone there is a loss by melting of 1 part in each thousand melted. Before he paid for bullion he invariably insisted on its being pre-melted, because the Mint thus saved the loss occasioned by adhering dirt and extraneous matter; this was wise if the merchants would submit to it, but it is doubtful if English bullion dealers would first melt dollars and five-franc pieces before selling them to the Royal Mint.

With bullion thus manipulated I have shown that the Royal Mint also made a gain, but such gain is not real (see pages 136, 137, 138), for it is evident that the silver having been bought with the intention of being converted into standard silver, each grain should be alloyed, and the whole amount of fine silver being thus alloyed should produce its calculated weight of standard silver; therefore in each department every atom should be weighed, and the total weight charged to any particular operation returned or accounted for, and under these circumstances no gain can result.

Colonel Smith, however, has determined with great care the following facts from every-day work, and these are so valuable that it is deemed wise to quote them. He found, then, that he made an actual gain by coining from the above circumstances of 1,230 ounces on each million ounces of rupees produced as coin. In the blanching of the blanks that were used for the making of that coined money the loss by blanching was at the rate of 966 ounces per million blanched, and from the acid used in blanching he obtained 726 ounces of metallic copper, so that of the 966 ounces which disappeared only 240 ounces were a real loss, which resulted from oxygen and dirt. Here, then, are reliable figures; and, as he sold his sweep for a sum equal to 140 ounces of silver for each million ounces coined, it is clear that his real loss was just 826 on each million ounces coined. It must be seen that although the copper was recovered, it should in these calculations be neglected, because in the Royal Mint it is not in practice deemed wise (nor, indeed, is it the every-day custom in India) to separate this copper; therefore we will consider the whole matter lost to the Mint. Since, then, he has demonstrated that he received in his clean ingots more silver by 1,230 ounces than he paid for, it is only necessary to add this sum to the weight he charges to himself, which will then be 1,001,230 ounces; in manipulating this total weight he shows that he lost 554 ounces by melting and 826 ounces by blanching, or a total loss of £1,380 per million pounds sterling. This, compared with the practice in the Royal Mint, shows, as Colonel Smith says, that the Mints of India do not obtain their legitimate amount of profit; and he, in his own words, attributes the loss to what he considers its only fit cause—“peculation.” For even in the Royal Mint—ill-managed institution that it is—the average annual loss, taken by the system of weighing, is only £721 5s. 5½d. Still, as showing the fluctuations, it is curious to observe that in the last period given, viz., from March to June, 1861, the recorded loss by melting is £91 0s. 8d., while that by coining is £1,949 9s. 6d.,⁠[121] or a final loss of no less than £2,040 10s. 2d.

Having given the returns relating to gold ordered by the House of Lords, I also give those exhibiting similar details for silver, and place that relating to coining on page 133, while that demonstrating the facts as regards melting will be found on page 135.

Mr. Fremantle assures us in his Report that “the ‘waste’ shown to have existed of late years has not been excessive,” while Mr. Roberts tells us, “The apparent loss on silver melting is two grains on the troy pound, or 0·346 per mille, much of the metal being recoverable from sweep.” 0·346 per mille is 346 per million, so we will take these two statements into consideration as regards the returns now to be noticed.

I propose to submit the following abstract from the return on page 135, and thus bring into view facts recorded by the Mint Officials, that they may be contrasted with opinions expressed by those gentlemen, and for this purpose I deduct the value of the sweep from that of the waste, and thus arrive at the amount of the latter, and as “of late years” may fairly be taken to express the five last past, I will operate on those periods only.

Value of Waste per £1,000,000. Value of Sweep per £1,000,000. Final Loss by Melting Silver.

£ s. d. £ s. d. £ s. d.

782 17 4 Deduct Value of Sweep. 522 1 10 The Result is a 260 15 6

1,752 18 2 211 12 9 1,541 5 5

1,680 9 11 Nil. 1,680 9 11

1,587 14 9 1,313 11 3 274 3 6

1,002 17 6 188 18 2 813 19 4

Total Loss divided by 5 years 4,570 13 8

Gives the Average Loss by Melting Silver 916 2 8¾

In other words, the loss which actually accrues is practically three times as great as Mr. Roberts finds necessary, and yet Mr. Fremantle approvingly says it is not excessive. I should advise Mr. Roberts to return to the use of wrought-iron pots and pay proper attention to the melting, for I have proved that £100 on a million sterling is as much waste as should LEGITIMATELY arise, and Colonel Smith confirms my determinations, as will be seen at pages 140-141. If these officers will pay sufficient attention to their business, they need not fear the variations of assay pointed out by Levol. These arise, it is true, but to an imperceptible extent only when melting is properly conducted, as I proved to the entire satisfaction of Mr. Graham in August, 1858, and who, in consequence, relinquished his intention of adopting the then proposed mode of taking silver for assay from the fluid metal by ladles. It is not by hunting hopeless hobbies that losses are to be stopped, nor will the silver be found in the chimneys—if so, some of it should be in those of the present Mint. Will Mr. Fremantle or Mr. Roberts state what has become of £916 worth of silver from each million coined in the past five years? The actual value lost is £4,580 14s. 6d., sufficient to make four immense ingots, which would surely stop the draught of any chimney in the Mint.

As this return has yielded matter for comment, I will refer briefly to that which exhibits the additional loss by coining, and shown on page 133, the following abstract for the past five years will suffice.

Value of Waste per £1,000,000. Value of Sweep per £1,000,000. Final Loss by Coining Silver.

£ s. d. £ s. d. £ s. d.

568 0 9 Deduct Value of Sweep. 28 15 7 The Result is a 539 5 2

481 19 4 31 16 9 450 2 7

512 8 8 Nil. 512 8 8

492 16 11 458 7 8 34 9 3

469 16 2 Nil. 469 16 2

Total Loss divided by 5 years 2,006 1 10

Gives the Average Loss by Coining Silver 401 4 4¾

Whereas then the loss from 1851 to 1857 averaged, as I have shown on page 131, £1,013 11s. 2¼d., and fell under my management in the period between 1857 and 1860 to £365 15s. 10½d., it has now again risen to £401 4s. 4d.—a steady increase at the rate of 10 per cent., which seems unreasonable.

A rigid Parliamentary inquiry into the circumstances of the Mint is as great a necessity at this time as it was shown to be in 1856; and such an inquiry might demonstrate not only a want of ability, but also whether all the officers are satisfied; whether there be not great heart-burnings, tending to a not very complacent style of performing their duty.

I quote the following from Hansard’s Debates, as having occurred in the House of Lords, to show that the Government steadily resists inquiry into the affairs of the Mint; yet I hope the time will arrive when Parliament will assert its right and induce Ministers to yield an inquiry, however much “Mr. Lowe may deprecate it.” On the 22nd March,1870,

“Lord Kinnaird said: I stated the other night that great robberies have notoriously taken place, and I maintain that these peculations and robberies still continue. If I had an opportunity before a Committee, I could prove this, but the returns which I have obtained will show the correctness of what I am stating. I was not surprised the other evening at a particular return being refused, for the officials of the Mint naturally dislike further exposure; but the returns before us clearly show that under the term ‘waste,’ which should rather be ‘stolen,’ large sums are lost in coinage. There ought to be no loss in coinage if the Mint was properly conducted. There might, indeed, be a small loss of £100 on the million in the melting department; but in the coining there should be a gain of at least £59, making the net loss £41. Instead of this, however, there was a loss, as those returns show, of £460 on every million coined. What becomes of that sum? It must go into some one’s pocket, and in point of fact it is abstracted. Look, too, at the large sums which are paid to the Bank of England for loss every time there is a coinage; at one time there was a loss of £1,132 on every million for loss of gold abstracted and not returned in coinage. From 1851 to 1857 there was a loss; in the next two years there was a gain; the next two years there was a loss and the following year there was a gain, and after that losses. Now why should not the gain continue? Why was there a gain? Because the men were properly looked after, and could not abstract the precious metal.... I hope your Lordships will agree to refer this bill to a Select Committee, or will hereafter agree to an independent inquiry into the Mint, conducted by other gentlemen than the Chancellor of the Exchequer’s Private Secretary and the Deputy Master.... I move that the Bill be referred to a Select Committee.”

I again quote Hansard’s Debates, 24th March, 1870:—

“Lord Kinnaird said: The noble Marquess, (the Marquess of Lansdowne) stated on Tuesday night that there was a considerable profit on silver, which no doubt ought to be the case; but the returns obtained by an Honourable Member in the House of Commons showed that, though in some years there was a gain, in nine years the total loss on the coinage of silver was £5,373. Bad workmanship, he might remark, made the coins much less durable, and therefore caused expense by rendering earlier repair of the coinage necessary. He hoped that, later in the session, the Government would concede an inquiry into the management of the Mint, when he would undertake to prove his allegations of mismanagement and peculation, and indeed the returns proved this....

“The Marquess of Lansdowne thought that the noble Lord confounded two things. There was a loss incurred by the public in keeping the silver coinage up to its proper standard; but in its manufacture into coin, there was a considerable gain, amounting to something like £20,000.”

Again, on the 18th July, I also quote from Hansard’s Debates:—

The Management of the Mint.—Motion for a select Committee.

“Lord Kinnaird: I rise to move for a Select Committee to inquire into the past and present management of the Mint, and although I very much regret that it is the intention of the Government not to assent to my Motion, I feel bound, nevertheless, to call your Lordships’ attention to the mismanagement of the Department to which my Motion refers. It will be in your Lordships’ recollection that when the Coinage Bill was under consideration I moved for certain returns connected with the gold coinage, my object being to show that considerable loss occurred in the process of coining. Some of those returns were granted, but others were refused on the plea that they were too voluminous to lay on your Lordships’ table. But I have made inquiries, and find that refusal was made because the officials of the Mint did not wish for any searching inquiry, and because the returns would have exposed certain malpractices connected with the coinage. I also moved, when the Bill was in Committee, for certain returns connected with the coinage of silver and the transactions between the Bank of England and the Mint. I was informed on that occasion that no record was kept of those transactions; I saw at the time that was a subterfuge, and that the officials knew these returns would disclose certain malpractices at the Mint which they would prefer were not made public, for not only is a record of these transactions kept, but the returns could be granted with ease. I have found, however, that a return has been presented to the House of Commons, which gives me the principal part of the information I desired to obtain by the returns for which I moved. That return, I have heard said, is not strictly correct; but it is a return presented to Parliament, and, as far as the figures to which I wish to refer are concerned, I have reason to believe they must be correct. The noble Marquess (the Marquess of Lansdowne) who answered me on that occasion, admitted that as regards the gold there was great loss in coinage. He said that although the Government was not supposed to make money by the gold coinage, they made a considerable sum by the silver; and at another time (on the 24th March) he said that although there was a loss resulting from keeping the silver up to the proper standard, through wear and tear, yet on the manufacture there was a profit of something like £20,000 a year. Now, I am not going to hold the noble Marquess to any statement he made on that occasion, because not being himself connected with the Mint he must have been dependent on the officials; but I can assure him that statement is entirely erroneous. It is quite true that a profit was made in the Mint in the year 1859 of £27,032 on the coinage of silver, and this arose from the large quantity coined and the very small purchase of worn coin. £647,064 worth of silver was coined in that year as against a yearly average of £341,018, and the purchase of worn coin amounted to only £8,096 as against the average of £14,633. But although this profit of £27,032 was made in this year, there was a loss of £5,373 during the next nine years. Now, my Lords, as regards the coinage of silver, there should be an uniform profit. The price of silver is 5s. 1d. or 5s. 1⅜d. per ounce, so that there should be a profit of 7½ per cent. upon the silver coin. In 1868 the sum purchased was £312,252, which should have yielded a profit of £23,368, but the return showed a loss of £10,896; so that, adding the loss on to what the profit should have been, we find that the Mint was £34,265 on the wrong side that year in its silver coinage; but inasmuch as the loss on the purchase of worn silver was £18,058 in that year, the net loss to the Mint through mismanagement was £16,207. Now, what became of that sum of money? How has it disappeared? The noble Lord admits gold was abstracted during the process of coining, and I say that the loss now arises from peculation. The Chancellor of the Exchequer himself contradicts the noble Lord, and admits that there is a loss on silver, for in the estimates I find he asked the House of Commons to vote £1,000 to make good the loss on silver, in addition to £15,000 for the loss occasioned by repairing that coinage for the coming year, which has to be paid out of the pockets of the people instead of the Exchequer being replenished by the legitimate profit of £20,000. But the most extraordinary loss is in the coinage of copper. One ton of copper costs about £100, and when converted into coin it is worth £358, giving an actual gross profit of £258; yet I find the Chancellor of the Exchequer asked for £1,000 last year to make good the loss on the copper coinage. I have been rather amused to find the Chancellor of the Exchequer speaking slightingly of the loss on the gold coinage, saying in all probability it went up the chimney. I think it is more likely to have gone up “the spout.” Now, I find another item in the estimates of £1,800 for the expenses of an inquiry into foreign Mints. This represents the expenses of three gentlemen who are going to inquire into the method of coining adopted on the Continent; but, on inquiry, I find that nearly all the machinery in use in foreign Mints went from this country, so that we could ascertain all that we want to know about the practice in foreign Mints, by making inquiries of certain engineering firms in this country. I may be told that the foreign Mints may have improved on the machinery supplied to them, but even this may be ascertained without going to this enormous expense. Moreover, most of the coining on the Continent is done by contract, and it is not likely that contractors will give a Government Commissioner, who is competing with them by advertisement, much information as to the way in which they carry on their work; so that altogether this £1,800 will be completely thrown away. And who are the gentlemen commissioned to make this inquiry? The Deputy Master is one of them—a most excellent, financial man; but, unfortunately, he knows nothing of the practical part of the business, and will gain very little by his trip. Then there is Mr. Roberts, lately appointed chemist to the Mint; ... and the third gentleman is Mr. Napier, one qualified in every respect for the duty. In 1858 a sum of £1,100 was set apart for the purchase of a filing machine in accordance with an estimate sent in by Mr. Napier for the purpose; but, before the order was executed, an officer in the Mint made a machine answering every purpose, which cost only £60, and nobody knows what became of this £1,100. I believe this Commission is going to Spain, but Mr. Napier manufactured the machinery in use there, so he is going to Spain to see how his own machines work, and he is to receive £2,000 for doing it. Perhaps, however, as the war has broken out the trip will be postponed. Now, my Lords, what I say I am prepared to substantiate before a Committee, and I challenge contradiction. That an inquiry is needed even at this late period of the session is patent, for the House of Commons has only recently voted no less than £18,000 to make up the losses in the Mint. Mr. Fremantle and Mr. Rivers Wilson have made a Report on the subject of some of these complaints, and have suggested improvements; but these improvements would have no effect upon the working of the establishment, and would not touch the main defects in the system. One of the alterations made in consequence of that Report was a revision of the scale of wages. Formerly the workmen had a retaining fee varying from 6s. to 10s. per week when unemployed, and a certain wage beside when at work. But the pay was very small, and it was thought this might lead to peculation. The scale has accordingly been revised by the payment of £1 per week as retaining fee, but the revision is calculated to give the men a little less on the whole, a result to be expected when the arrangement was made by so skilful a financier as the Chancellor of the Exchequer, and the country saves £100 a year out of the workmen’s wages. But the most extraordinary part of the revision is to come; and this affords another instance with the sugar duties, hawkers’ licenses, and the gun tax, of the readiness with which the Chancellor of the Exchequer jumps to conclusions, without being at the trouble to inform himself upon the subject in hand. The workmen are by this new scale to receive less when coining gold than when coining silver, although the temptation to peculation is greater, so that at the time when their honesty should be secured by good payment, they are to be treated with a niggardly hand, and who can be surprised if they help themselves? The noble Marquess says there has been only one case of dismissal for peculation; but, if he inquires further, he will find there have been twelve. No prosecution has followed these dismissals, nor even an inquiry. Prosecutions would not be palatable to the Mint authorities, because they would expose the system. Now, I can assure your Lordships, that these statements I have made are true in every respect, and I challenge contradiction; and I trust the Government will think the facts really demand a searching inquiry. More than a year since, I brought the subject before the Chancellor of the Exchequer, but it was pooh-poohed, and I was told that a private inquiry would be made: but no inquiry has been made, and the system remains unamended. I therefore move for a Select Committee, to inquire into the past and present management of the Mint.

The Marquess of Lansdowne: I regret that it is my duty to decline to accede to the motion of the noble Lord, but I feel sure your Lordships will admit, when I have made a brief statement of the facts of the case, that the Government is warranted in refusing the Committee. I must admit that two cases of peculation have occurred at the Mint; but the persons concerned were dismissed, and there has been no reason to suspect a recurrence of the practice; I am sure therefore, the noble Lord is under a misapprehension⁠[122] when he says there have been twelve cases of dismissal for peculation during the last few years. As regards the charge of wasteful management, I must repeat the statement I made on a previous occasion. The noble Lord, I fear, confuses two things—namely, the loss occurring from the necessity of keeping the silver coinage up to the proper standard, and the gain which accrues from the coining; and, on the whole, there is a distinct gain, although I may, on a previous occasion, have overstated the amount. There is, notwithstanding the information of which the noble Lord appears to be possessed, a gain of £5,000 a year on the silver coinage. The amount of waste on the gold coinage has, within the last few years, been extremely moderate: it is at present, 1s. per £100; and an eminent firm of refiners in the city has given an opinion that this is very satisfactory. So much for the past. With regard to the present, I must say that as the department has recently been reorganised, it would be hardly fair, before it had got into full working order, to institute an inquiry. The staff has been reduced, thus effecting a saving on this year’s estimates of £5,000; the system of the payment of wages has been altered, resulting in a small saving and in a marked effect on the staff; and the melting and coining departments have been united, avoiding that apparent confusion between the accounts of the two departments, which has, in some respects, misled the noble Lord. Lastly, I come to the Commission of Inquiry, which has been travelling on the Continent. Now, if the machines in use on the Continent have been mostly made at Birmingham, much may be learnt, as to their application and the character of the metals used, by the proposed inquiry. As regards the members of that Commission, Mr. Roberts is a very eminent chemist, and has proved his capabilities by devising a system for depriving gold of the obnoxious properties on which the noble Lord recently commented. The noble Lord did not fail to admit that Mr. Napier was eminently qualified for a post on the Commission; and, as regards the Deputy Master, he has exhibited great abilities in discharging the duties of his office, and I do not think the noble Lord has said a single word to show he has forfeited our good opinion.

Since I am desirous of drawing attention to the affairs of a Public Department, and to that only, I have omitted some passages in the foregoing debates because they did not affect the subject under discussion; still, I quote the remainder of the debate in so far as it was personal to myself in the Appendix at pages 197-198. It will have been seen that in these debates in the House of Lords, Lord Lansdowne, on the part of the Government, made statements to which Lord Kinnaird, in his honoured letter to me, alludes, I therefore proceed to offer a few remarks.

That Lord Kinnaird does not confound loss on the coinage with loss occasioned by the repair or “keeping of the coinage up to standard,” is demonstrated by his lordship’s speeches, and by the return No. 157, 1869, presented to the House of Commons by Mr. Ayrton, which shows that, in 1859, £647,064 of coined money was obtained by coining £620,031 of silver purchased for coining, giving £27,033 as a clear profit for that especial year.

If, however, the circumstances be examined, it will be found that in 1859 only £8,096 was lost by the purchase of worn silver coin, as against the yearly average (shown on page 5 in the return, but not inserted by me) of £14,633. Yet even this exceptional gain is not creditable, for, at the rate of 7½ per cent., it should have been £46,502 instead of £27,033.

The remaining nine years on the return—No. 157, 1869—show an average loss by the silver coinage as exhibited in the next table compiled from it. The Mint returns as presented to Parliament require explanation. I have therefore added two columns to demonstrate the profit and loss.

Date. Total Value of Silver Coined. Real Cost or Value of Metal. Profit Realised. Loss Sustained.

£ £ £ £

1860 218,403 222,981 4,577

1861 209,484 215,029 5,545

1862 148,518 159,948 11,429

1863 161,172 171,855 10,688

1864 535,194 521,003 14,190

1865 501,732 483,861 17,870

1866 493,416 486,113 7,302

1867 193,842 195,445 1,603

1868 301,356 312,252 10,896

2,763,117 2,768,487 39,362 44,733

Deducting the Profit, £39,362, the Final Loss becomes £5,371

Such final loss is indefensible. Yet Lord Lansdowne is led to believe that the seigniorage on silver yields a profit of £5,000 a year (modified from his first statement of £20,000), whereas this return, inclusive of the £27,033 before explained, exhibits a profit of £21,659 in ten years, or of an average of £2,165 per annum. This statement will, however, deceive those who rely on it, for two reasons. The year 1859, as already pointed out, is exceptional; and another return, No. 67, 1870, made to the House of Commons (see page 150) shows that, inclusive of this anomalous gain, the silver coinage has been a source of loss to the country to the exact average amount of 17s. 6d. on each £100 purchased for coinage. In printing this return I have made it up to 1868, omitting the year 1869, which alone shows a loss of £120,000, and must therefore be an incomplete return. It is to be regretted that the Government refused on two occasions a return of the account of losses on silver manufacture, because such a return would have included loss by assay as well as loss by coining and melting. The refusals were undoubtedly based on fear of exposure, because the return can be given readily—that they can be given, is proved by the fact that I have read the accounts in the bill books at the Mint, and have copies of such entries. Lord Lansdowne was instructed to state that no such accounts are kept. The subterfuge of the Mint Authorities consists in the fact that Lord Kinnaird has not asked for the return in the precise words in which the account is kept; it cannot, however, be again refused if moved for as “transferred from the account of the Mint expenses, for the satisfaction of the Audit Office to account for the waste or loss by coining silver.” If the Mint Authorities will place the bill book of the Royal Mint before me for a few hours, I will compile the table. Such a return would exhibit the fact that in the five years last past, the loss by misplacement and mismanagement exceeds £1,867 3s. 10¾d. per million coined; it would show that the average amount of loss reaches 3s. 9¾d. for each £100 coined, such sum being in fact about one-third of the total sum charged by the contractors who conduct the coinage in Paris for France. The contractor for the Paris Mint, in his charge, includes loss of silver by coining, melting, and assay, wear and tear of machinery, wages to workmen for labour, salaries and contingent expenses; and while bearing these charges, he makes a handsome

An Account of the Sums Advanced in Each Year from the Consolidated Fund for the Purchase of Bullion for Coinage; and of the Sums Paid in Each Year to the Account of Her Majesty’s Exchequer at the Bank of England, in Repayment thereof.—(Pursuant to Act 7 Will. 4, c. 9.)

Date. Amounts Advanced from the Consolidated Fund. Amounts Paid into the Exchequer, in Repayment of Advances. Remarks.

£ s. d. £ s. d.

1837 22,000 0 0 As given in detail in previous Returns.

1838 196,029 19 4 168,029 19 4

1839 400,000 0 0 350,000 0 0

1840 170,000 0 0 175,000 0 0

1841 100,000 0 0 135,000 0 0

1842 180,000 0 0 162,120 4 0

1843 350,000 0 0 265,000 0 0

1844 550,000 0 0 501,389 17 0

1845 850,000 0 0 678,772 2 9

1846 300,000 0 0 429,937 1 11

1847 100,000 0 0 217,033 10 2

1848 18,534 3 1

1849 150,000 0 0 120,000 0 0

1850 150,000 0 0 120,000 0 0

1851 100,000 0 0 187,213 1 1

1852 391,970 0 8 191,970 0 0

1853 508,029 19 4 550,000 0 0

1854 100,000 0 0 200,000 0 0

1855 250,000 0 0 300,000 0 0

1856 450,000 0 0 450,000 0 0

1857 420,000 0 0 350,000 0 0

1858 400,000 0 0 400,000 0 0

1859 550,000 0 0 650,000 0 0

1860 270,000 0 0 150,000 0 0

1861 400,000 0 0 550,000 0 0

1862 400,000 0 0 350,000 0 0

1863 250,000 0 0 250,000 0 0

1864 600,000 0 0 0 0

1865 520,000 0 0 460,000 0 0

1866 410,000 0 0 510,000 0 0

1867 300,000 0 0 250,000 0 0

1868 220,000 0 0 200,000 0 0

32 Years 10,058,029 19 4 9,970,000 0 0 0 0 Loss, £88,029 19s. 4d. 17/6 on the £100

C. W. FREMANTLE, Deputy Master of the Mint.

Royal Mint, 18th February, 1870.

profit, his total sum for all being 15s. for each £100 coined. Is it probable that the contractor would tolerate a charge of 3s. 9¾d. for loss alone out of a total of 15s. Since the Government refuses figures, imagination alone can tell what is the loss in the Royal Mint; yet in the face of such facts Mr. Lowe accepts contracts as against the French contractor to whom he sends Commissioners—one of whom experienced “great difficulty in obtaining accurate information with regard to the amount of loss that accrues” on gold and silver—that he may instruct them in the cost of manufacture. Does a banker make known his secrets? He may permit you to stand at his counter and see cheques paid, but “thus far and no farther” is the guiding principle. Mr. Lowe’s contract notions have been already noticed.

To return, then, to facts admitted by the Government, and presented to the House of Lords in obedience to Lord Kinnaird’s motion; the return numbered 30, 1870, clearly demonstrates that there is, under the management of the present officers, and has been for the last five years (see pages 144-145), an average loss by coining of £401, and by melting, of £916, or a total of £1,317 on each million of silver coined. By way of contrast, it should be noticed that this return exhibits the fact that, when the Mint was under my management—between April 1857 and March 1860—the total average loss, under circumstances every way similar, was but £395 4s., inclusive of “melting and the losing operations,” for each million of silver coined. Well may the Government refuse a return which, at the smallest possible computation, would EXHIBIT AN UNNECESSARY WASTE TO THE EXTENT OF £922 ON EACH MILLION OF SILVER COINED, OR EXACTLY £3,144 ON THE SILVER CONCERNED IN THE RETURN No. 157, 1869, quoted at page 149.

The unnecessary waste here displayed is not the only reason why silver yields no final profit or seigniorage—and the foregoing statements clearly demonstrate that Lord Kinnaird has not misunderstood the accounts. The great reason of the loss occasioned by the silver coinage, both by manufacture and by seigniorage, is want of knowledge on the part of the Mint officials, for it can require but little argument to show that that which costs 61d. and sells for 66d., must, if properly manufactured, yield an absolute profit. So, to demonstrate more clearly the exact case, we will take the real cost of the silver for 1868 and see what profit this should have afforded, and then Lord Lansdowne will perhaps explain why the loss arises, for this return (see page 154) is perfectly free from all manufacturing details, and does not include wages, officers’ salaries, or contingent expenses; it simply states the bald fact that so much silver was bought and converted into coined money, and by deducting one from the other there is demonstrated an actual loss of £10,896 12s. Now the amount bought was in real intrinsic value £312,252 12s., and this produced in coined silver money £301,356. It has been shown in the return now under comment that silver fetched at that period (1859-1868) 61⅜d. per ounce, which, expressed in decimals, will be 61·375d., and silver, by the Act of Parliament, is so coined as that each ounce is converted into money of a nominal value of 66d., such extrinsic value being given to silver because it is a token currency, and as such is a legal tender to the limited extent of £2. The difference, then, between 66d. and 61·375d. is 4·625; if, therefore, 61·375 gives a profit of 4·625, it follows that 100 should give 7·535; but for the sake of simplicity we will consider this profit as at the rate of 7½ per cent.; then £312,252 12s. at 7½ per cent., should yield £23,418 18s. 10¾d., yet not only was the profit lost, but, in addition, there is a recorded—admitted—loss of £10,896 12s., which, added to the loss of profit, brings that total to £34,315 10s. 10¾d.; but that Lord Lansdowne may not be unfairly pressed, Lord Kinnaird expressed willingness to deduct from this sum the amount of loss entailed that year by recoinage (see * below) and which was £18,058 9s. 6d., leaving thereby an irretrievable loss of exactly £16,257 1s. 4¾d., on that year alone.

No. 262.—Return to an Order of the Honourable the House of Commons, dated 30th May, 1870.

(Mr. AYRTON, page 5.)

Worn Silver Coin Purchased for Re-coinage.

Date Weight. Nominal Value. Mint Value at 5/6 per Ounce. Loss by Re-Coinage.

Ounces. £ s. d. £ s. d. £ s. d.

1860 357902·538 113,000 0 0 98,423 3 9 14,576 16 3

1861 308873·077 97,600 0 0 84,940 1 10 12,659 18 2

1862 425591·682 135,000 0 0 117,037 14 3 17,962 5 9

1863 324674·838 102,800 0 0 89,285 11 5 13,514 8 7

1864 388388·152 123,500 0 0 106,806 14 10 16,693 5 2

1865 292496·983 93,000 0 0 80,436 13 4 12,563 6 8

1866 361280·187 115,000 0 0 99,352 1 0 15,647 19 0

1867 376142·927 120,000 0 0 103,439 6 0 16,560 14 0

1868 388878·297 125,000 0 0 106,941 10 6 18,058 9 6

1869 325976·928 105,000 0 0 89,643 13 0 15,356 7 0

3550205·609 1,129,900 0 0 976,306 9 11 153,593 10 1

The Yearly Average Price paid per Ounce for Silver Bullion purchased in the Market for Coinage in the Years 1860 to 1869, both inclusive, was as follows:—

1860 1861 1862 1863 1864 1865 1866 1867 1868 1869

d. d. d. d. d. d. d. d. d. d.

61¾ 61½ 61½ 61½ 61¼ 61 61⅞ 60¾ 60⅞ 60⁶/₁₆

The amount of Seigniorage paid into the Exchequer in the years 1860 to 1869, has been,—

1860 1861 1862 1863 1864

£ s. d. £ s. d. £ s. d. £ s. d. £ s. d.

27,134 1 8 4,961 7 5 11,227 6 2 211 13 4 6,160 6 8

1865 1866 1867 1868 1869 Total 1860-69

£ s. d. £ s. d. £ s. d. £ s. d. £ s. d. £ s. d.

57,645 17 9 28,630 0 5 4,331 10 7 18,622 7 4 12,345 4 10 171,269 16 2

C. W. FREMANTLE, Deputy Master of the Mint.

Royal Mint, 31st. May, 1870.

Would Lord Lansdowne like to live on a profit of such a description? Should his lordship still maintain his statement that there is a gain from seigniorage by coining silver, perhaps he will be so good as to explain why the Chancellor of the Exchequer asked last year for £1,000 to “defray the anticipated loss,” as well as £15,000 to pay the expenses of the recoinage, or “keeping the silver up to the required standard.” It has been stated that this return is false—it is surely a grave matter to make a false return to Parliament, in itself a crime which should be inquired into and punished.

The loss thus exhibited is entailed solely because the Master of the Mint habitually wishing to keep things quiet, refuses all Parliamentary enquiry, and contents himself with so-called retrenchment because he deducts £100 a year from the Mint workmen.

A continuation of the return to which Lord Kinnaird drew attention has been presented, No. 262, 1869, signed by Mr. Fremantle. Singular to relate, this is not merely a continuation, for it gives information in regard to seigniorage, and Mr. Fremantle has amended the account made by Mr. Graham; thus a return presented to Parliament has been altered by Mr. Fremantle without comment, and now exhibits results directly opposed to those shown for the same years by Mr. Graham. The words at the head of the column are, for some reason which does not appear, also altered, but the “real cost” of metal must mean the same as the “total amount paid” for it. I have, therefore, compiled from each a statement of the profit and loss; but I reproduce the figures presented in the one case by Mr. Thomas Graham, and in the other by Mr. C. W. Fremantle, BOTH RELATING TO THE SAME ACCOUNT, and both supposed to be accurate (see page 154).

It is necessary that I should state that Mr. Graham had been dead more than a year when his accounts were altered, in the manner now to be explained. If his returns were correct, Mr. Fremantle’s must be incorrect, or, “adjusted,” as Mr. Roberts would style it. If reference be made to the table on page 154, it will be seen that by the return No. 157, Mr. Graham showed a loss to the extent of £5,373 4s. 6d. on nine years’ (1860-1868) silver coinage. Now, Lord Kinnaird explained that return fully to the House, and, to prove his accuracy, produced the return No. 30, which will be found on page 150. Considerable astonishment was caused by such facts, but no reply was given. However, it now appears by the return No. 262, which I print under No. 157, and on the same page, that Mr. Fremantle has found the means to convert Mr. Graham’s loss into an absolute GAIN of so large an amount as £1,011,668 2s. 0d., and that without any word of explanation. The returns thus placed together are so contradictory, that I confess I utterly failed to unravel them, and therefore submitted them to more than one banker, several merchants, and, finally, to a professional accountant, not one of whom could suggest a key to the extraordinary process which has been adopted.

No. 157.—Return to an Order of the Honourable the House of Commons, dated 21st April, 1869, for Account “of all Gold, Silver, and Copper Moneys of the Realm Coined at the Mint, for each Year from the 1st January, 1859, to the 31st of December, 1868, &c.,” in continuation of No. 340, 1867-68.

(Mr. AYRTON, page 3)

Total Value of Silver Coined. Real Cost or Value of Metal. Profit on Coinage. Loss on Coinage.

Date £ s. d. £ s. d. £ s. d. £ s. d.

1860 218,403 7 0 222,981 1 6 4,577 14 6

1861 209,484 0 0 215,029 0 10 5,545 0 10

1862 148,518 11 10 159,948 2 6 11,429 10 8

1863 161,172 0 0 171,855 15 0 10,683 15 0

1864 535,194 0 0 521,003 5 0 14,190 15 0

1865 501,732 0 0 483,861 13 6 17,870 6 6

1866 493,416 0 0 486,113 15 2 7,302 4 10

1867 193,842 0 0 195,445 17 10 1,603 17 10

1868 301,356 0 0 312,252 12 0 10,896 12 0

2,763,117 18 10 2,768,491 3 4 39,363 6 4 44,736 4 6

Deduct Profit, when there remains Absolute Loss 5,373 4 6

THO. GRAHAM, Master of the Mint.

Royal Mint, 19th April, 1869.

No. 262.—Return to an Order, &c., dated 30th May, 1870, &c., in Continuation of Paper No. 157, of Session 1868-9.

(Mr. STANSFELD, page 3.)

Total Value of Silver Coined. Total Amount Paid for Silver Bullion Profit on Coinage. Loss on Coinage.

Date £ s. d. £ s. d. £ s. d. £ s. d.

1860 218,403 7 0 141,112 7 11 77,290 19 1

1861 209,484 0 0 100,327 11 0 109,156 9 0

1862 148,518 11 10 51,165 19 11 97,352 11 11

1863 161,172 0 0 53,134 12 7 108,037 7 5

1864 535,194 0 0 445,191 11 9 90,002 8 3

1865 501,732 0 0 416,524 6 9 85,207 13 3

1866 493,416 0 0 282,247 12 6 211,168 7 6

1867 193,842 0 0 181,000 17 11 12,841 2 1

1868 301,356 0 0 80,744 16 6 220,611 3 6

1869 76,428 0 0 135,083 0 11 58,655 0 11

2,839,545 18 10 1,886,532 17 9 1,011,668 2 0 (‡‡) 58,655 0 11

C. W. FREMANTLE, Deputy Master of the Mint.

Royal Mint, 31st May, 1870.

The return contains another enigma. For, whereas Mr. Fremantle, on page 3 of the return in which he has amended Mr. Graham’s figures, exhibits profit to the extent of £1,011,668 2s. 0d. in place of Mr. Graham’s loss of £5,373 4s. 6d.—but there being a loss of £58,655 0s. 11d. on his own year’s coinage, the substituted profit(‡‡) must be reduced by that amount, when it will be £953,013 1s. 1d. Again, page 5, he gives a tabular statement (see page 152), by which he shows that £171,269 16s. 2d. went to the Exchequer as seigniorage, while the loss by recoinage amounted to £153,593 10s. 1d., leaving a total profit of £17,676 6s. 1d. What has become of the difference between this profit and that in the amended return?—a small matter perhaps, but which yet amounts to £917,659 8s. 11d. in ten years. If it were made it can be shown to have been legitimately disposed of, or is it simply an “official statement,” such as those which public companies have of late so frequently exhibited. If, however, that sum has been realised, why does Mr. Fremantle show separately the amount of seigniorage? There lies below a grave matter for inquiry why a Public Department should place before Parliament an altered account without one word of explanation. If Mr. Graham has put forward a false return, one greatly against himself, it is right that the matter should be investigated. If, on the other hand, Mr. Fremantle has placed figures on paper which have no representatives in coin, it is indeed a grave matter. In either case it goes to prove the necessity for a searching inquiry into the affairs of the Royal Mint.

Lord Kinnaird does not stand alone in his view of the loss by the silver coinage, for Mr. William Miller, late Chief Cashier in the Bank of England, had, years since, arrived at the same conclusion, and produced at that time evidence to prove his statement. By the courtesy of Mr. George Forbes, at present Chief Cashier in the Bank of England, I am in possession of Mr. Miller’s statement (see p. 156): its perusal induces me to wish that Government officials would put forward statements as lucid. Mr. William Miller, in this table, adopts a process which I am assured is entirely legitimate, and by it educes the fact that “the Government owes the silver coinage a million and a half, and not as an account.” It is perfectly true that the profit, if made, is not supposed to be placed at interest; but it is also the fact that the profit has never been realised, hence the loss of both capital and interest. His calculations are those of an accountant, and by them he argues that if the £6,493,000 of silver coinage had produced its legitimate gain, there would have accrued by it, and the interest thereon, a sum of £3,880,000 clear profit: he then proceeds to show how that profit has been disposed of. Being himself aware of the amount of loss by worn coins culled from circulation, he states it at £255,000; and estimating the loss on that which remains current, to be eliminated in its turn, at £910,000, shows a loss by wear and tear of £1,165,000. The details for the complete study of this table will be found in page 65, where every information is given in precise figures, while in this he adopts whole numbers, and proceeds to reason out the entire matter. That he may not press the Government, he assumes an extreme rate for the expense of coinage—varying from 2¼ to 3½ per cent., while the real cost is about O·75 per cent.—and adds to that amount the interest thereon, then deducting the total of these sums from the £3,880,000 which should have arisen, he shows a balance £1,411,000 which the Government owes to the silver coinage. While Mr. Miller’s table on page 65 shows an average loss by wear on the silver coinage current since 1816, at the rate of 24·31 per cent. in a hundred years, and on that of George III.—the most worn—of 98·34 per cent., the Mint—receiving its culled coin from the Bank of England—states its loss at the rate of 135·93 per cent. in the same period (see return, p. 152).