TRANSACTIONS OF SECTION F. 767 



Answers to Objections. — (1) There is the fear that the gold withdrawn would, 

 after a time, not be kept in reserye, and that the money market would become more 

 sensitive. But the practical question is, would the security be less than at present ? 

 For at present the gold in circulation is absolutely unavailable for banking; purposes, 

 and to meet a foreign drain. Besides this, the whole force of the objection lies in 

 the assumption that the Act would not be enforced. If, however, the Act were only 

 suspended, as before, in cases of real need the position of the Bank of England 

 would be much strengthened. 



(2) The fear of an internal drain and a run on the bank does not seem war- 

 ranted by the experience of Scotland. In any case, so long as the Act as amended 

 is enforced the issues are safe. 



(3) The danger of forgery is not great, as shown by the fact that in Scotland 

 spurious sovereigns are more common than forged one-pound notes. The art of 

 engraving has made much progress since such notes were used in England. 



Conclusion. — The reform suggested in this paper, though not extreme itself, is a 

 step towards a better system ; but the only practical question ofl'ered for discussion 

 is whether it is worth while adopting one-pound notes on the same footing as other 

 notes, simply on the grounds of convenience and the facilities offered for restoring 

 and maintaining the coinage. 



2. The Causes affecting tlie Beduction in the Cost of Producing Silver. 



By Htde Clarke. 



Mr. Clarke stated his object was to continue the course of his former papers on 

 the depression of prices, and to examine whether there was a reduction in the cost 

 of producing silver. It was very difficult to collect the facts, as several inquirers 

 had found, and thus the subject had remained obscure. He had considered that 

 the fall in the price of quicksilver, consequent on the introduction of the New 

 Almaden quicksilver, to a certain extent afforded a criterion of the influences in 

 operation. Although in later years there had been an occasional spurt, quicksilver 

 rising to 4s. Sd. in 1875 and to 5s. lOd. in 1874, yet during a long period quick- 

 silver which forty years ago was from 10s. 6d.Jo 7s. 6d. had been as low as Is. lOd. 

 To these prices had to be added carriage and local charges, in Mexico for instance, 

 greatly raising the cost in some mining localities. The value of quicksilver with 

 some classes of ore might not be more than ^d. to Id. per oz, of silver, but as com- 

 pared with the former range of prices the difference on some ores was equivalent in 

 some instances to 6d. per oz. of silver, and was to be estimated as an appreciable 

 reduction of charge. Amalgamation with quicksilver only applied to some ores, 

 but other ores, as silver lead ores, were reduced by the ancient processes and by 

 Pattinsonising and other processes for the better extraction of silver. The zinc pro- 

 cess, sodium amalgam and the Agostin process have also been brought to bear on 

 various ores. One of the best proofs of the more economical reduction is the con- 

 version of the desmontes, refuse or slag heaps of South America, and those of the 

 Athenian silver smelters at Laurium. The production of more powerful stamping 

 and milling machinery, and the conveyance of this and of steam engines by rail- 

 way, instead of by mules, llamas or bullocks to the mining districts, had also mate- 

 rially assisted economical working. 



With regard to the quotations for silver a distinction must be made of two 

 markets, one a coin market and the other the jewellery market. So long as the 

 coin market was not overstocked a price of five shillings per ounce could be main- 

 tained, and the fall in the cost of producing silver was masked or concealed ; but 

 now a variety of operations have contributed to bring about a heavy decline in the 

 price of silver and a falling market. With regard to silver mining the cheaper 

 production has allowed a lower class of ores to be raised and worked and thereby 

 augmented the supply. The Indian Government has continued to coin silver, to 

 disturb the market and to disturb prices. The United States Government has 

 coined large amounts of dollars, which remain in stock. While gold was coming 

 into favour in India and the prices of commodities and wages were risino-, the 

 Government did not adopt a gold mohur or sovereign, as was strongly recommended, 



