Hello! I have an 1860s Gold Price/Refining question

[Mint]

I am doing historical research and have found one instance of 'historical gold prices': https://nma.org/wp-content/uploads/2016/09/historic_gold_prices_1833_pres.pdf saying that the 'official US Government gold price" would have been $20.67 in 1863-4. But the US Mint would not be paying out at $20.67/oz. There would be some sort of 'refining fee' and I can not find what it was for Mints, or the San Francisco Mint.

I have been looking at US MINT-San Fran- records from this time frame and see that gold dust (from Idaho 1863), (the instance I am interested in), totaling 435.87 oz, melted down to 419.37 oz (for loss of average loss of 3.8%) resulted in a $7388.55 payment to the depositors in 1864.

It makes sense (?) that the SF Mint would charge a 15% 'refining fee' on the melted gold ($7388.55/419.37oz=$17.62per oz paid, versus using the $20.67/oz which gives only 85.2% pay out- 17.62/20.67 both $ per oz)? Did their 'refining fees' vary by gold source and/or time period? And if they were doing further assaying after melting, I can't find evidence of that. (I am attaching the pages in Mint records I have found for incoming record of ounces and the $ paid out for the same deposit. This is the case I am interested in. There was a 6 month time gap between depositing and paying out by the Mint, in this case.)

Can you direct me to information that shows the US Government 'refining/assaying fees' and/or 'payout prices' for gold over history?

 

[Yggdrasil]

I am doing historical research and have found one instance of 'historical gold prices': https://nma.org/wp-content/uploads/2016/09/historic_gold_prices_1833_pres.pdf saying that the 'official US Government gold price" would have been $20.67 in 1863-4. But the US Mint would not be paying out at $20.67/oz. There would be some sort of 'refining fee' and I can not find what it was for Mints, or the San Francisco Mint.

I have been looking at US MINT-San Fran- records from this time frame and see that gold dust (from Idaho 1863), (the instance I am interested in), totaling 435.87 oz, melted down to 419.37 oz (for loss of average loss of 3.8%) resulted in a $7388.55 payment to the depositors in 1864.

It makes sense (?) that the SF Mint would charge a 15% 'refining fee' on the melted gold ($7388.55/419.37oz=$17.62per oz paid, versus using the $20.67/oz which gives only 85.2% pay out- 17.62/20.67 both $ per oz)? Did their 'refining fees' vary by gold source and/or time period? And if they were doing further assaying after melting, I can't find evidence of that. (I am attaching the pages in Mint records I have found for incoming record of ounces and the $ paid out for the same deposit. This is the case I am interested in. There was a 6 month time gap between depositing and paying out by the Mint, in this case.)

Can you direct me to information that shows the US Government 'refining/assaying fees' and/or 'payout prices' for gold over history?

Welcome to us.
Interesting historical data, I wish you luck.

 

[4metals]

We are all chemists and miners here, our perception of what gold is or was worth is derived from what it takes us to recover it or purify it. Quite possibly back then the government felt all they did was pick it up off the ground combined without an assay the miners would take what they could get.

Seriously the purity of mined doré gold varies by location so it is quite possible up to 10% of the weight turned in was Silver or copper. Plus it was dirty which can account for the 3.8% loss because nuggets often have quartz or rock pieces included in the gold in a way it is difficult to remove without melting.

good luck with your research.

 

[Mint]

Welcome to us.
Interesting historical data, I wish you luck.

Thank you!

 

[Mint]

We are all chemists and miners here, our perception of what gold is or was worth is derived from what it takes us to recover it or purify it. Quite possibly back then the government felt all they did was pick it up off the ground combined without an assay the miners would take what they could get.

Seriously the purity of mined doré gold varies by location so it is quite possible up to 10% of the weight turned in was Silver or copper. Plus it was dirty which can account for the 3.8% loss because nuggets often have quartz or rock pieces included in the gold in a way it is difficult to remove without melting.

good luck with your research.

Thank you 4metals. This was gold dust from now Montana using rudimentary placer mining in those days. Yes it clearly lost roughly 3.8% when melted at San Fran Mint. But I could find no data (it might have been in the hundreds and thousands of pages in the archives?!) on further assaying. I'm pretty sure there was further assaying because in 1875, they built a new Mint in SF because they needed more lab space. But if I use the MELTED weight to calculate using the $7388 they were actually paid, that shows a $17.62per oz paid. Not the $20.67 that the historical pricing said...? Are these historical prices (according to this NMA website, the prices did not change for 100 years!) correct and/or what would have been the US Mint assaying fee-- AFTER melting???

 

[4metals]

From a historical perspective I do not know what the assay of the final product produced by the mint was back in the 1860's but I do know the refined gold was of higher purity from the US Mints by as much as 1/2% because unbeknown to them at the time, their flux contained manganese dioxide which actually removed silver in the alloy and left it in the slags. So their gold ounce was theoretically worth more per ounce than ounce coins from other mints.

What I do not see from the ledgers you posted was a column for assay. I assume back in the day miners came in with a bag of nuggets or dust (which was typically placer gold back then) and they (the mint) had a typical figure they paid per ounce based on averages. It would have cost a lot of time and effort to melt and assay each little bag and, unlike today, there were no point and shoot XRF guns to give a good idea of an assay instantly. I am guessing they did some assay work to come up with an average assay and paid out along those lines. Otherwise there would be a weight times assay column before the $ paid. When all of the bags purchased were melted together they surely did an assay but not every little. bag. It would be interesting to see if you could come up with lists of master melts and assay results, that would tell you a lot. And, in the same way todays refiners are commonly accused of, they probably made their pay out price for the little bag of dust a bit lower so they had wiggle room. Those old banking barons had to make their fortunes one way or the other.

I doubt you will ever find sheets to correlate a quantity of dust or nuggets melted into large melts for assay and the value which could be compared to the pay outs the miners received.

 

[haveagojoe]

I wonder if it could have been a fluctuation in price in the interim between deposit and payout? There was a certain amount of of skullduggery going on with gold pricing around that time and I think the price moved around quite a bit- the infamous Black Friday event was in 1869, just a few years later.
Also I think @4metals is right; what they meant by gold "dust" is likely not what we would understand as pure gold "powder" today, it would have been lower purity placer straight from the ground so they would have factored that into the buy price.

 

[Mint]

From a historical perspective I do not know what the assay of the final product produced by the mint was back in the 1860's but I do know the refined gold was of higher purity from the US Mints by as much as 1/2% because unbeknown to them at the time, their flux contained manganese dioxide which actually removed silver in the alloy and left it in the slags. So their gold ounce was theoretically worth more per ounce than ounce coins from other mints.

What I do not see from the ledgers you posted was a column for assay. I assume back in the day miners came in with a bag of nuggets or dust (which was typically placer gold back then) and they (the mint) had a typical figure they paid per ounce based on averages. It would have cost a lot of time and effort to melt and assay each little bag and, unlike today, there were no point and shoot XRF guns to give a good idea of an assay instantly. I am guessing they did some assay work to come up with an average assay and paid out along those lines. Otherwise there would be a weight times assay column before the $ paid. When all of the bags purchased were melted together they surely did an assay but not every little. bag. It would be interesting to see if you could come up with lists of master melts and assay results, that would tell you a lot. And, in the same way todays refiners are commonly accused of, they probably made their pay out price for the little bag of dust a bit lower so they had wiggle room. Those old banking barons had to make their fortunes one way or the other.

I doubt you will ever find sheets to correlate a quantity of dust or nuggets melted into large melts for assay and the value which could be compared to the pay outs the miners received.

Thank you!! Yes, exactly, I had hoped to find another table or a column with the 'assayed' results showing the figure they used to calculate the $. Yes, there should be a 'weight times assay column before the $ paid'! I did not find one. And unfortunately this payout took 6 months-- which was unusually long-from the time of depositing. Therefore I cannot compare anyone else's ounces to dollars pay out, to see if it varied by source... I think they did melt each little bag separately. My 'depositors'-of-interest split their gold into two different line-items (I don't know why- they were the same source) and each received a slightly different 'melted weight' and loss percentage.
The only other ledger from the SF US Mint I found, simply had the number, name and where the depositor was staying... Attaching that for fun.
Well, and there were no barons at the US Mint, there was actually a Secretary of Treasury (called an Asst Sec) who was appointed by US President, and he was the hold-out in this case--- for other reasons--long story. But they did record the 'source' of the gold, which was actually wrong in this case-- because the 'depositors' were murderers trying to cover their tracks. I have seen comments and the comment I was told when I tried to call the US Treasury was that there were no fees assessed. I am assuming that would mean on top of the melting/assaying fees charged....
I am also a chemist-although I worked in an entirely different industry. So I do follow your interesting comments. Thank you!

 

[Mint]

I wonder if it could have been a fluctuation in price in the interim between deposit and payout? There was a certain amount of of skullduggery going on with gold pricing around that time and I think the price moved around quite a bit- the infamous Black Friday event was in 1869, just a few years later.
Also I think @4metals is right; what they meant by gold "dust" is likely not what we would understand as pure gold "powder" today, it would have been lower purity placer straight from the ground so they would have factored that into the buy price.

Well, there SHOULD have been a fluctuation in price because during 1863 (Civil War) there was 24% inflation! But according to that link from first post, the price was set by law in 1834 and did not change until 1935 when Roosevelt was dealing with Depression.
And yes, the dust was directly from the ground (although the miners did do mercury and other separations at the site) but that is why the Mint melted it and gave a 3.8% loss... (only) I have done the calculations based on the MELTED price. There appeared to be 15% decrease AFTER melting-- due to assaying or.... something else....(price used, etc)
Thank you!

 

[4metals]

If they melted the lots separately it is not as monumental a task as melting and assaying. The reason for melting separately could be the non gold fraction of dirt, rock and pyrite varied significantly enough that it was necessary to have what we call a settlement weight today at the time of the transaction.

In a way it is good that they didn't have XRF guns back then, I could imagine the buyer pulling his XRF gun and the seller, not liking the result, pulling his six shooter and depositing some lead. Would have gone through a lot of buyers.

The 6 month delay could have been the time delay between the melting and assaying of the bars and the shipment of those bars back east to the banks before a price could be established. Back in the late 1850's the Central America sank off north Carolina carrying gold from the San Francisco mint. It was called the ship of gold and it shut down the banks in the east for a while because of the loss. Those type ships made the journey routinely carrying the gold. The gold sailed to Panama, was unloaded to, I guess, horse wagons and hauled overland to a ship waiting to sail north. The Central America didn't plan on a hurricane. Can't blame climate change for that one!

 

[4metals]

AI just explained it.

It took about six months to travel from the San Francisco Mint to New York during the California Gold Rush:

Which means the value wasn't assigned until the coins were put into circulation.

 

[Mint]

If they melted the lots separately it is not as monumental a task as melting and assaying. The reason for melting separately could be the non gold fraction of dirt, rock and pyrite varied significantly enough that it was necessary to have what we call a settlement weight today at the time of the transaction.

In a way it is good that they didn't have XRF guns back then, I could imagine the buyer pulling his XRF gun and the seller, not liking the result, pulling his six shooter and depositing some lead. Would have gone through a lot of buyers.

The 6 month delay could have been the time delay between the melting and assaying of the bars and the shipment of those bars back east to the banks before a price could be established. Back in the late 1850's the Central America sank off north Carolina carrying gold from the San Francisco mint. It was called the ship of gold and it shut down the banks in the east for a while because of the loss. Those type ships made the journey routinely carrying the gold. The gold sailed to Panama, was unloaded to, I guess, horse wagons and hauled overland to a ship waiting to sail north. The Central America didn't plan on a hurricane. Can't blame climate change for that one!

HA on the 'deposit' of lead!

No.... the 6 month delay was special to this case.. The Treasury Secy delayed paying out for 6 months waiting for the murdered heirs to prove. Most payouts happened in less than a month, but NOT right away.

I haven't seen anything about a 'settlement' weight. But if they were using the $20.67-- they didn't use the MELTED WEIGHT' as the settlement weight. I assume that all the 'intake' info was entered and the depositor left and later an employee entered a 'melted weight'. Which is why it is weird not to have a ledger book showing an assayed weight somewhere.
Keep thoughts coming! Thankye all!

 

[Mint]

AI just explained it.

It took about six months to travel from the San Francisco Mint to New York during the California Gold Rush:

Which means the value wasn't assigned until the coins were put into circulation.

No most payouts happened in less than a month even in 1863 San Fran. The Treasury Secy would not pay out when the families asked-- he held out for some reason that really isn't clear. But finally he did 6 months later. The 6 month problem is only mine, because I don't have other examples of deposits and payouts to compare to. And if there was a standard US Govern payout which didn't change for 100 years, no, nobody was waiting on anything to determine payout rate. Except to finish the assaying?
Thankyou!

 

[goldshark]

HA on the 'deposit' of lead!

No.... the 6 month delay was special to this case.. The Treasury Secy delayed paying out for 6 months waiting for the murdered heirs to prove. Most payouts happened in less than a month, but NOT right away.

I haven't seen anything about a 'settlement' weight. But if they were using the $20.67-- they didn't use the MELTED WEIGHT' as the settlement weight. I assume that all the 'intake' info was entered and the depositor left and later an employee entered a 'melted weight'. Which is why it is weird not to have a ledger book showing an assayed weight somewhere.
Keep thoughts coming! Thankye all!

Also have to remember Au/Ag ratios varied from mine to mine. 85% could be the average Au content of the alloy, not uncommon to have at least 15% Ag. Mines did not bother refining to 4-9s in the day, just cons which could have?. Stamp milling and Hg was the go to recovery method in that time frame.

 

[4metals]

I haven't seen anything about a 'settlement' weight.

In the modern world a customer brings in a lot to melt. It is weighed before and after, then if the customer takes a sample for analysis, the settlement weight is the weight of the bar plus any extra weight left over from sampling. If the customer doesn't take a sample the bar weight is the settlement weight plus the weight of the sample. Knowing a settlement weight simplifies payment because it is weight of sample times the assay times the gold price.

It wasn't as complicated back in the day.

The 6 month problem is only mine, because I don't have other examples of deposits and payouts to compare to.

Was this claim for a single deposit or a bunch of deposits over time? If it was a large deposit it may have been assayed separately as one lot, maybe that would have been the only way to see the assay result.

 

[4metals]

Stamp milling and Hg was the go to recovery method in that time frame.

So no separation of Silver from Gold?

 

[Mint]

Also have to remember Au/Ag ratios varied from mine to mine. 85% could be the average Au content of the alloy, not uncommon to have at least 15% Ag. Mines did not bother refining to 4-9s in the day, just cons which could have?. Stamp milling and Hg was the go to recovery method in that time frame.

I get 'cha, goldshark. The 'mines' at that time consisted of a stream. The dust was weighed with balance scales. (And that was used for payment of almost everything in early Idaho.) There very well could have been some silver mixed in, although it wasn't noted at that time. I believe they were just using mercury still. The problem I have, is I can speculate all kinds of things.. but I would like to find the actual payout per ounce used by the US Mint, and some info on how they dealt with varying assays...?

 

[Mint]

So no separation of Silver from Gold?

No separation at the location of obtaining the dust... Mercury was about all they had. The location where this gold dust came from was not known for silver, but the 15% payment delta had to be due to something... It was either an assaying fee- determined somehow by the US Mint, or I have the wrong $/ounce used.....OR THE US Treasury SEcry took a cut!

I'm trying to get a handle on which...........

 

[Mint]

In the modern world a customer brings in a lot to melt. It is weighed before and after, then if the customer takes a sample for analysis, the settlement weight is the weight of the bar plus any extra weight left over from sampling. If the customer doesn't take a sample the bar weight is the settlement weight plus the weight of the sample. Knowing a settlement weight simplifies payment because it is weight of sample times the assay times the gold price.

It wasn't as complicated back in the day.


Was this claim for a single deposit or a bunch of deposits over time? If it was a large deposit it may have been assayed separately as one lot, maybe that would have been the only way to see the assay result.

There were 2 deposits claimed to be from the same place made at the same time by the same man. You can see them in the image I posted "G Clark" . It seemed like an average amount to be brought in on that day. But apparently the Mint melted them separately because they got 2 separate % losses. That is why I say they melted each one separately. Also the photos I've seen show a bunch of small devices all sitting in a row in the same room.
I get the settlement weight in principle, but I have not seen that term used anywhere in these contemporaneous records. It sounds like what you are calling a settlement weight-- would be what they called the weight after melting.?
I am assuming they took the whole line item gold dust and melted it... not just a sample... that is what the record looks like. Then they calculated and wrote the % loss
And the customer at the Mint did not take a sample, he got a receipt so when he went back later, they knew what deposit was his, had the number etc.

 

[4metals]

It sounds like what you are calling a settlement weight-- would be what they called the weight after melting.?

Yes because the customer left without a sample, it is the weight they would multiply by the assay value to figure the payout.

And the customer at the Mint did not take a sample, he got a receipt so when he went back later, they knew what deposit was his, had the number etc.

Somewhere in the mix they needed to disclose the assay unless you can find somewhere where they pay the same thing per ounce after melt weight. If it was run this way there is a considerable mechanism to make an exceptional amount of money or gold for whomever was in charge and it would explain making it difficult if not impossible too connect weights and assays. I guess times change but people don't.