Polynesian. [volume] (Honolulu [Oahu], Hawaii) 1844-1864, 1862-11-22
HoLsTEIS.
Explanation of our Gold Quotations,

The question is often asked" What is the
meaning of our gold quOtations-S2O fine par, (or
whatever the rate may be,) and how is the calcH-
lation made? " We sometimes receive cOmmuni-
cations on this subject requesting information-one
is now lying before US.
1t is well known that the alloy in California gold
bars is composed almost entirely of silver-seldom
more than lO-I0OOths being of baser metal. The
value stamped upon them however, by the assayer,
has reference to the gold alone. Thus a bar may
be stamped as 500 fine; weight, leo ounces troy
and value, Sl.757 IL. The figures Sl,757 III re-
late only to the value of the pure gold which the
bar contains and which is estimate at the rate of
$40 67 and fraction per ounce. If the bar were
pure gold it would be worth 8, ,O57 10; but in
reality there only S5 ounces of pure gold in
1.-THE residue, with the above allowance 10
l000ths for base metal, is pure silver. worth 81 %
and fraction per ounce. 1t is hardly necessary
to say that the term $50 fine $50 l0O0hs; or
in other words, supposing the bar to be reduced to
its separate elements and then divided into 1000
parts of equal weight, $50 of them would be pure
gold. The number 900 indicates pure metal.
To determine the intrinsic value of the bar it
must be regarded, first, bar of gold $50 fine;
secondly, as bar of alrer, $50 6ne-or I4O allow
ing for base metal. Multiply the weight of the
bar by the finencsS, and the product will show the
weight of pure metal, thus 100 o. y S59 fine
ness-S5 ounces of pure gold. Again: 100 o. X
I40 fineness=l4 ounces of pure silver. Now null
tpy the weight Oi each, respectively. by the value
Of the pure metal, and the product will show the
true value of the bar-thus S5 gold at $50
81 IS per OF. is l,757 ii and IA OF. silver at
81 2029 per OF. is SlS 10; together, being the
value of the bar, Sl,775 2l.
This would be the result in its conversion into
cOn less the expense of refining and cOinage but
if placed the market and sold at $50 fine par -
nothing whatever is received for the silver; the
bar brings 81 757 H. the value of its goId and no
more. Suppose, however, it is sold at the present
ruling of the market, say, at 800 fine par.'
This does not that this bar is to be regarded
as really but 500 fine, in which it would con-
tain only Sl,653 IS in pure gold, and that would
be its market value. But at 800 fine it would con-
tain more silver than ut $50 fine which goes for
nothing and is the advantage sought by the pur-
chaser. He therefore claims deduction from the
value of the gold approxlmating this difference in
amount of silver. The rule in use is not exact but
| its simplicity and convenience have given it cur
rency. 1t is this: For the number of thousand.hs
above or below the par rate, deduct add equal
number of hundreths of per cent In the case
before us, the difference between the par rate and
the actual fneness of the bar is 5O-I000ths. De-
duct therefore 50-lO0ths of l per cent, Tor in
other words l-2 per cent? from Sl,757 II and
you have the market value at ''S00 fine par; :"
thus: 81 ,757 ll-$9 79=sl,748 30. The amount
IS 19 is greater than the difference in silver, but
| the rule operates for premium well as dis
count. Suppose the bar of the market to be 900
| fine this is 50 100Oths above the actual 6neness
and the result is as follows 81 ,757 III X 50 79
I=SI ,765 80 market value. The difference in sill
yer either way is just OF. or SO 46.
At 900 the value of the silver would be sII 81
/ At $50 fine the value Of the silver is SIS OIL.
At 500 fine the value Of the silver would be t24 S.
$50 fine the value of the silver would s3I G3.
At 200 fine the value Of the silver would be sS7 40.
In the operations of this rule it is evident that
low bars or such as are below the par of the mar
ket, less desirable to the purchaser than those
| of higher grade, inasmuch the premium upon
the gold in them amounts to more than the differ
ence in the value of the silver. Thus Suppose
the bar referred to in the foregoing remarks to be
700 fine and the 4" par - of the market to be $50,
the premium upon the gold Isl Az 03) would be
S2l 20, while the actual difference or gain of sill
yer would be only Sl9 39-s owing loss of more
than 18th per cent. On the contrary, suppose the
bar to be 900 fine, at $50 fine par, the discount
would be 50 30, while the actual difference in sill
yer is only SO 46. This would show a gain over
the low bar of more than l-4th per cent.
The skillful assayer of bullion dealer may
smile at the number of words we have employed in
calculating this to them simple subject. We are
not writing for their benefit, however, but for the
information of unprOfessonal readers San Fran
| ciSco Bulletin.