August 10, 2012

Colombia, 1801

Contraband platina came to market at coastal ports like Cartagena and Guayaquil from slaves, creole traders, local capitalists and perhaps even Crown employees at local Spanish Mints.  Where sporadic smuggling from such diverse sources/networks supplied varying quantities (from small lots to bulk) to English merchants, it's impossible to reconstruct with any certainty an accurate chronological price record in Chocó, Cartagena, etc.  

The true average Spot-Price for Colombian platina would be the weighted average of platina transactions over a month or season or year, at the source and Cartagena. This unknown price fluctuated in months, seasons and years on a variety of supply/demand factorsBut in any market, small lots of best-grade ore probably cost more than bulk lots of low-quality, iron-rich, smaller granules.  It is also possible platina was used as currency for town-merchants' goods; this qualitative or intrinsic differential (monetary platina value, in what is now Colombia) remains likewise unknown, without any accurate base price.
The famous explorer and scientist Alexander von Humboldt visited Chocó in October 1801 and purchased specimen platina.  His visit to the platina district was well-publicized and reported in Europe by Dutch journals in August 1803.  In 1809 and later manuscripts, von Humboldt's spott-preis was commonly mis-stated as a 'Chocó spot-price' for at least two decades ("in 1823" etc.) thereafter  

It's worth noting that von Humboldt subsequently (1826) revised this data, recording a much lower spott-preis when demand and local prices were record-high (1825: S$10./libra @ Chocó;  S$16.-20. @ Cartagena) and during the 1825 Price-Spike in Europe.  

The [1801] price of this metal in grain on the spot is 8 piastres or 40 Francs to the pound, while at Paris [1809?] is it generally 130 to 150 Francs" 

The "piastre" or "dollar" is the globally traded silver coin known locally as the peso fuerte or peso of 8 reals (374.87 English Troy grains, 24.29 grams of Fine Silver.)  For merchants, the Colombian "pound" is the Spanish libra (460 grams = 14.792 English Troy Ounces, close to the standard English Pound avoirdupois) whereas in France a different standard-weight persisted for precious metals, the Poid du Marc (489.5 grams = 15.74 English Troy Ounces.) 

Beyond an obvious weight discrepancy, von Humboldt's comparative price entails certain problematic elements.  The German scientist purchased small amounts of specimen platina at a much higher cost than professional traders actually purchased bulk ore.   Wholesale-, or trader's spot-price at Chocó was an (unknown) average price at which platina was forward-traded by area miners to Cartagena merchants to cover debts, as with Gold dust.  Hypothetically, the Spot-Price Gold-dust was ~25% less than the Mint-price or market-rate at the port; bulk platina may have been discounted more. The true average price is unknown, by Colombian sources (1803) report the stockpiling of platina in Chocó.

Obviously, von Humboldt's spott-preis is too high. How else could British merchants have sold platina at lower prices in Jamaica, or at cost in London?  This is readily understood since platina was sold in London at nearly the same price (in Silver.)  Less than a year earlier Dr. William Hyde Wollaston paid the same rate in bulk to dealers in London.  If British merchants paid von Humboldt's price for small lots, they'd have suffered a ruinous trade-loss, after all expenses (portage, shipping and insurance, bribes, middle-man fees, profit margins, etc.) to European markets.  The price given by von Humboldt was therefore the 'known foreigner money price' for better platina at Cartagena.  

The question remains how to estimate the bulk Spot-Price at Chocó, given various reported numbers in proximate years.  (Incidentally, it's reasonable to surmise that Dr. Wollaston's first lot of platina was Spanish booty seized in the Summer of 1797 and sold at auction in England: that particular lot may have entailed no transatlantic costs whatsoever to any Caribbean British merchants.)  If the following is correct, platina in 1800 was sold at bulk to the English for 1/25th the Price of Fine Gold.

December, 1800: 1 Troy Ounce platina (@ London, bulk) = £ 0.1344 (S$ 0.593)

October, 1801: 1 Troy Ounce platina (specimen rate @ Choco)  = S$ 0.5408
October, 1801: 1 Troy Oz. platina (specimen rate @ Choco)  =  Fr 2.704

1801: 1 Troy Oz. platina (presumed Choco Spot) ~ S$ 0.270 (£ 0.0456)
1801: 1 Troy Oz. platina (Cartagena Mkt) ~ S$ 0.4731  0.0774)

Furthermore, a time-discrepancy distorts the comparison intended: von Humboldt's 'spottpreis' is from 1801 yet his retail Paris ore price appears to be from 1807-09 (the writing of his ms.) Circa 1805-09, the export price from Cartagena was $S 6./libra on average; average Chocó prices must have been significantly lower, not higher. 

Conflating 'specimen' and retail versus wholesale or import (bulk) prices, it's difficult to presume a stable, range-bound Paris retail price for ore at the same time the Colombian spot-price declined dramatically.  (Incidentally, the Paris platina price appears to have collapsed over 50% around 1811, the year the ms. was first published.)   Against (low) refined French Platinum prices in 1811, von Humboldt's platina prices are suspect, inconclusive.  At a premium of "Spanish Dollars" (Pesos Duro, Plate = and the local weight (not avoirdupois), 'retail' Chocó price is 26% - 31% (one-quarter to one-third) retail Paris price.   

In London (December 1800) William Hyde Wollaston  paid almost the same rate as von Humboldt's alleged Chocó Spot-Price just ten months later.  The English scientist's notebook consistently identifies a much lower English price: bulk prices paid fluctuating 50%, between 1802-11.  Much later, Wollaston also calculated the import mercants' ~100% profit, from 1800-1816; his own platina purchases (after shipping, middlemen profit, other costs, etc.) required lower spot-prices at Chocó for the period in question. 

Tellingly, von Humboldt suggested 25% of the Gold trade was contraband.  It's conceivable the illicit platina trade was higher, but if Wollaston was the major global producer (25%) of refined Platinum, total platina exports should be diminished accordingly.  (By assumption, there wasn't much market demand nor recorded production proving otherwise.) Chaldecott (1983) insists that no one but Wollaston was refining Platinum on a truly commercial scale in the UK.  If so, +85% of British-shipped platina from Jamaica went to Continental consumers, mostly French producers.

 "... as no one else in England at that time was able to emulate Wollaston’s success, the extent of the demand for crude platinum in England was governed almost entirely by the quantities which Wollaston alone required in order to meet the needs of his customers for malleable platinum,whether in ingot or sheet form. Much of the crude platinum used by Wollaston was obtained by John Johnson, a commercial assayer of ores and metals in London, who presumably placed orders on Wollaston’s behalf with merchants in Jamaica(3)."

Although not a well-informed calculation:
a) 8 piastres [1.08*$8.] = USD$ 8.64 at the prevailing premium on Spanish Dollars (S$)

b) 1 Colombian “pound” = 100 castellanos (1 castellano = 71 grains troy) = 7100 grains = 14.792 troy ounces,

The Chocó price 24.25-24.33 gr of 'pure' silver per Spanish Piastre: 
1 troy oz. .999 fine silver = 2.354 - 2.371 troy oz. of Chocó platina, or
(at 86.16% purity) ~ 2.028 - 2.043 troy oz. Platinum (pure ore)

1 troy oz. .999 fine gold = 35.45 - 35.7 troy oz. of Chocó platina
1 troy oz. .999 fine gold = 30.75 - 32. troy oz. Platinum (intrinsic)

1 troy oz. .999 fine gold = 30.54 - 30.76 troy oz. 'pure' Platinum, in ore
@ 7 Piastres
1 Troy Ounce platina (raw ore, in Colombia) ~ $ 0.51
1 Troy Ounce platina (raw ore, in Colombia) ~ £ 0.10
1 Troy Ounce platina (raw ore, in Colombia) ~ Fr. 2.37

@ 6 Piastres
1 Troy Ounce platina (raw ore, in Colombia) ~ $ 0.44
1 Troy Ounce platina (raw ore, in Colombia) ~ £ 0.060
1 Troy Ounce platina (raw ore, in Colombia) ~ Fr. 2.03

Where the marc of Gold (50 castellanos = 7.402 Troy Ounces) was bought at S$ 100. and valued at market, S$ 136.  Auro-platinum was probably treated as a nuisance, if not feared by merchants. The discount was likely in excess of 25%; platinum treated as waste.

1801: 1 Troy Ounce Gold (Colombia: 23 carat) = S$ 13.52
1801: 1 Troy Ounce Gold (Colombia: 10 carat?) = S$ 6.30
1801: 1 Troy Ounce Gold (Colombia: pure) = S$ 15.45

1801: 1 Troy Ounce Gold (Colombia: 21 carat) = S$ 10.14
1801: 1 Troy Ounce Gold (Colombia: pure) = S$ 11.59
1801: 1 Troy Ounce Gold (Value: pure) = S$ 18.39
1801: 1 Troy Ounce Silver (Colombia: intrinsic) = S$ 1.15

1801: 1 Troy Ounce Silver (Colombia: ore, intrinsic) = S$ 0.97

Citation: A study of the gold & silver mines of Colombia ; Vicente Restrepo

1798 FA Spanish 8 Escudos. Madrid mint. Contemporary counterfeit in platinum. EF-40. 414.2 Grains Troy, 26.83 g.

Boussingault (repeating von Humboldt) presumed one-third the Colombian Gold yield was exported as contraband.
Citation: Mémoires de J.-B. Boussingault, Vol. 5 ; Jean Baptiste Boussingault, Alexander von Humboldt

Citation: Estudio sobre las minas de oro y plata de Colombia ; Vicente Restrepo p.24

1814: Theoretical intrinsic value does not precisely reflect market rates, where real money traded at a premium in some periods.  In the USA throughout the period 1800 -1815, the peso fuerte was worth at least a Dollar.

The French Franc appears consistently  Fr. 5 = S$ 1.
Citation: An exposition of the commerce of Spanish America, with some observations ...   Manuel Torres (1817)

Citation: The British Critic, Vol. 40 ; Sept 1812 p.275

From his correspondence, von Humboldt was evidently in Chocó during October 1801.

Added in 1826 Edition: 1825 information

1807: The Specimen-Platinum purchased by von Humboldt in 1801 was so noteworthy to be cited in definitive English-language geographies. (Also, Pinkerton's 1804 French edition lacked this factoid.)

Citation: Modern Geography: A Description of the Empires, Kingdoms, States ..., Vol. 3 ; John Pinkerton (1807)

Citation: Journal of a residence and travels in Colombia, Vol.2 ; Charles Stuart Cochrane

Purity of platina (1905):

In 1824, free negros were paid 6 reals (S$ 0.75; £ 0.1625) per day to pan for Gold & platina; presumably, 156 reals per month (S$ 19.50).

Estimated daily wage  was ~ S$ 0.33 - 0.40 for these porters.

Colombian Weights:
1 castellano = 0.1479 English Troy Ounces
1 marco (50 castellanos; 400 tomines) = 7.3958 English Troy Ounces

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