August 23, 2011

Russia, 1828

Russia's Platinum coinage was a very complex monetarist and commodity price debacle.  

Platina had been largely unknown and exceedingly rare in commerce for almost 100 years; its suddenly discovery in the Urals was imagined a reflationary opportunity to alleviate  Russian state finances and currency weakness.

Minting was a disastrous experiment from from the beginning. Coinage production costs were much higher than either Gold or Silver.  Also, vast amounts of the raw ore - and black-market refined metal - came to market erratically, suddenly and consistently depressing the Russian price, so the coined metal was immediately disfavored by local merchants seeking a stable value money.  For this 'mysterious course' in St. Petersburg, European traders could not correctly estimate intrinsic value against Gold, Silver, Copper or Paper Roubles: the arbitrage risks were profoundly negative.

At the source, Platinum profited only the producers and a small group black-market traders. It's no surprise the serf-owning Demidoff Family ultimately endowed the creation of an oligarchic cartel 50 years later, to both manipulate and control the price.

In 1828, the 3-Rouble was estimated at Fr. 11.90

Citation: Revue encyclopédique, Vol. 38 (1828?) p.414

Citation: Money and civilization: or, A history of the monetary laws and systems of ...  Alexander Del Mar p.309

1828: 1 Troy Ounce Platinum (coin rate) = 9.01 руб
33.5634 Ассигнационный рубль

= £ 1.414 (Ag)/ £ 1.4522 (Banco) ~ USD$ 6.87 - 7.05 (1829)
= Fr. 36.49 (Banco) = USD$ 7.21 (1828)

1828 Foreign Exchange.

"With the introduction of platinum coins in 1828, the assumed metallic value was 1.236 руб per Solotnik, or 4,746 Roubles per poudAs a result, this nominal value differs so greatly from the commercial value of the metal;  under such circumstances, in 1843 the Treasury took the question to council whether to continue minting Platinum coinage. In 1844 the difference was already calculated at 137 % (2,004 Roubles per poud?) and in 1845, as  revealed that in the main markets (Paris, London, Hamburg) it was officially retracted that prices were fluctuating between of 2503-2808 Roubles per poud. So instead of 1.236 руб per  Solotnik, the cost was only 0.65- 0.74 руб and the government was induced, following on 9 February 1845 to meet the most supreme confirmed measures:"

Citation: Im Ural und Altai: Briefwechsel zwischen Alexander von Humboldt und Graf ...Alexander von Humboldt, Egor F. Kankrin (1869) p.140

The assumed weight is 10.378 Grams and although Specific Gravity is reduced by impurities, not ~6% as presumed here. The coin was probably ~97.5% Pure Pt = 10.10 g. Fine Pt.

Citation: Bulletin des sciences géographiques, etc: économie publique, voyages

Where 2 Zolotnik 41 Dolya of pure Platinum = 10.3533318 Grams, but verified 3-Rouble Weight as high as ~10.37 g., conservative estimate for lightly circulated coin is 10.35 g.

1828: 1 Troy Oz Platinum (Granville's est. coin rate) = £ 1.5801 (Ag)
Citation: St. Petersburgh, a journal of travels to and from that capital; Augustus Bozzi Granville (1829) p.140

Rounding error, c. 1862:

1 Troy Oz. Gold = Thlr. 29.23456318
1 Troy Oz. Silver = Thlr. 1.860593754
1 Troy Oz. Platinum ~ Thlr. {?}

a) of Gold, 318 Pouds (= 22,256 Cologne Mark; 167,473 Ozt) in Werth of 4,896,000 Rthl. Preuss.
b) to Silver, 1093 Pouds (= 76,498 Cologne Mark; 575,622.7 Ozt) in Werth of 1,071,000 Rthl. Preuss.
c) to Platina, 94 Pouds (= 6,570 Cologne Mark; 49,504.6 Ozt.) in value here is not determined *) 
as a whole so far about 6 Million Rthl. {Excluding Platinum!}

*11,520 Rubles Paper per Poud

The yield of the hereafter was especially from Ural mining 1814-1828: 1551 Pouds (= 108.563 Cologne Mark ) or struck to the value of 23,881,000 Rthl. Preuss.

According to the St. Petersburg trade newspaper from 1831, the Gold Yield from the Urals was now annually about 280 Pouds - 11,200 pounds (ie 20,000 Cologne Mark) and in 1830, the same shall in particular in gold value given for 17,760,000 Rubles Gold, and 1,209,600 R. Platina 

in  the last 10 years, but in general107,700,000 R. Gold, and3,806,52 R. Platina.  In 1831, however, the Urals produced 867 Pouds of Gold and 114 Pouds of Platina.

Citation: Historisch-statistisches Jahrbuch in Bezug auf Nationalindustrie (1831-2), Vol. 1,  Friedrich Benedict Weber (1834) pp.79-80

1828 Platina Yield (at Mint Price, Retail) 5.8623 руб Ag/Ozt
49,412 Ozt : 1,080,854  руб Acc. = 289,699. руб A

.... @ £ 0.1583 руб Ag: £ 45,864 ; @ £ 0.0433 руб Acc. : £ 46,766

1828: 1 Troy Oz. platina  = £ 0.9282 - £ 0.9464

3 Platinum Roubles initially worth Fr. 11.90.

Citation: Narrative of a Visit to the Courts of Russia and Sweden: In the Year 1830 & 1831, Vol. 2;  Charles Colville Frankland (1832)

Correcting the error in forex (Paper, rather than Gold paid) because Producers were paid in Banco Roubles, this account suggests the lessees were paid 0.75 руб Acc. per Zolotnik.

1828: 1 Troy Oz. platina (Govt Rate) = 5.4675 руб Acc. (USD$ 1.1745)

Citation: The Jewelers' Circular, Vol. 77, No 17 11/27/1918

~1828-1843: 1 Troy Ounce platina (SPb: Ore 80%) = 9.028 руб Acc.

The first buyer was the government. From the years 1825-1843 the delivery of the whole platinum gained to the Crown was required. The price paid was initially (1822?) 60 Kopecks per Zolotnik, or {140.66 руб Acc.} per kilogram, with 10 to 12% deducted by the assayer {123.78 руб Acc., net}.  Three years (1825?) later, it rose to {230.31 руб Acc.} per kilogram and finally the coining period (1828-1843) to {290.25 руб Acc.}

Citation: Prometheus: Illustrierte Wochenschrift über die Fortschritte..., Vol. 18, No. 904, p.309 

Citation: Voyage dans l'Oural entrepris en 1828  ; Adolf Th. Kupffer (1833) 

1828: Assay of Nischne Tagilsk ore, 73.6% - 79% Pt

Berzelius' analysis of Goroblagodat ore, 86.5% Pt

Citation: The Encyclopaedia Britannica: Or, Dictionary of Arts..., Vol. 7; Vol. 15 (1842) p.254

Gold Yield:

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