London Silver Market: 1600-2000

Silver price: 0.27 per t.oz. 1600

1601 First voyage of the East India Company
takes 80,000 t.oz/2.48 m.t from London to
India.
1602 United Dutch East India Company founded in
Amsterdam, then London's rival for
shipments to India.
1618 East India Company authorised to ship
400,000 t.oz/12.44 m.t annually.
1660 Official silver imports into Spain from the
Americas since 1600 had totalled 303.7
million t.oz/9,446 m.t. Spanish rials or pieces
of eight were preferred coins in Amsterdam
and London markets.
1661 East India Company got exclusive trading
rights in the east, making it the largest
silver buyer in London for the next two
centuries.
1671 Moses Mocatta set up in London, founding
the firm that later became Mocatta &
Goldsmid, the oldest members of the market.
Nine generations of the family worked in the
market. He shipped silver and gold to India
to pay for diamonds.
1694 Bank of England founded.
1696/7 The Great Re-coinage in England during
which the Royal Mint issued 15 million
t.oz/466.56 m.t of silver coin, much of which
was remelted and shipped to India.
1700 Silver price: 0.29 per t.oz.
1703 East India Company shipped 3.9 million
t.oz/121 m.t.
1707 Mocatta opened silver account at Bank of
England and soon became the Bank's
exclusive silver broker until 1840.
1717 Failed attempt to corner the silver market by
unknown speculator wrongly anticipating the
official price of gold to be reduced. Left with
position of 1.1 million t.oz/34.21 m.t in Bank
of England's vault, which Mocatta unwound
over seven months.
1721 Mocatta confirmed exclusive silver broker
to Bank of England and, in 1732, to East
India Company.
1732 Bank of England opened its Bullion
Warehouse (later Bullion Office) which
became crossroads of precious metal for
over a century.
1733 Mexican silver output rising fast to 9 million
t.oz/280 m.t annually, later to over 15
million t.oz/466.56 m.t.
1779 Abraham Mocatta took Asher Goldsmid as
partner. Lowndes London Directory recorded:
Mocatta & Goldsmid (Brokers), Grigsby's
Coffee House.
1785 Bank of England's Warehouse changed its
name to the Bullion Office.
1789 Bank of England opened special account for
silver crowns brought by French fleeing the
Revolution. Mocatta & Goldsmid bought
33,000 in crowns for the Bank.
1797 Bank of England suspended cash payments in
gold due to drain on reserves in Napoleonic
wars and instead issued Spanish silver rials
overstamped with head of George III, and
silver tokens.
1800 Silver price: London 0.27 per t.oz/New
York: $1.80.
1805 Nathan Mayer Rothschild opened his banking
house in London and became involved in
silver and gold transactions.
1810 House of Commons Select Committee on
the High Price of Bullion was told the Bank
of England's Bullion Office handled up to 6
million t.oz/186.6 m.t of silver, and Assay
Office at Goldsmiths' Hall hallmarked 1.5
million t.oz of silver annually.
1811 Sharp & Kirkup, auctioneers since 1796,
started as brokers in gold and silver, but were
refused Bank of England accreditation.
1816 Coinage Act made gold the sole standard of
value, but silver legal tender for up to 2.00.
First major silver recoinage since 1697
used 15.7 million t.oz/488.34 m.t.
1822 Invention of photography by Nicphore Nicpe
in France; became the major use for silver in
the 20th century.
1835 Silver standard introduced in India, with one
rupee coin of 0.34 t.oz/10.6 grams.
1840 Bank of England's Bullion Office opened to
'any sworn broker' because of increase in gold
and silver entering the Port of London, thus
ending Mocatta's exclusive arrangement.
1850 Crisis for silver unfolded after US and
Australian gold discoveries. Over next 50
years silver largely replaced by gold in
international coinage. London price fell
from 0.27 per t.oz/New York $1.42 to low
of 0.11/$0.62 by 1900.
1852 Scale of gold discoveries transformed the
London market. Stewart Pixley set up as a
bullion broker, the first of four generations in
the market, with William Haggard as partner.
The firm later became Pixley & Abell.
1853 Samuel Montagu founded his bullion and
exchange business (today part of HSBC).
London market comprised: Brokers: Mocatta
& Goldsmid, Sharps & Wilkins, Pixley &
Haggard (soon Abell), Samuel Montagu & Co.
Approved refiners: J ohnson & Matthey,
Browne & Wingrove, Rothschild's Royal Mint
Refinery, H L. Raphael's Refinery.
1855
1856 Record 116 million t.oz/3,608 m.t sent by
London market to India.
1859 Silver discoveries in Nevada turn the US into
major producer of over 55 million t.oz/16,923
m.t. annually by 1895.
1870 London market now had direct telegraph links
with New York and Bombay, making the daily
price available internationally. Silver bars of
1,000 t.oz at 996 fine (or "17 betterness", a
scale which related to whether the metal was
"better" or "worse" than 925 standard silver)
were shipped by P&O line through newly-
opened Suez Canal to the east. P&O charged
2% freight and % insurance on silver to India
and 2% plus 1% to China.
1871 Germany switched from silver to gold
standard, triggering sales of 26 million
t.oz/808.7 m.t of melted coin by Deutsche
Bank through London market. During
1870s most of Europe forsook silver for
gold coinage.
1876 House of Commons Select Committee on
Depreciation of Silver took expert evidence
from representatives of Mocatta & Goldsmid,
Pixley & Abell and Sharps & Wilkins. Their
advice was that European sales from coin
depressed the market, but that India was
taking 85% of all new silver and could sustain
price.
1878 Strong silver lobby in the US secured the
Bland Allison Act, requiring government to
buy 20 million t.oz/622 m.t annually for
silver coinage.
1886 Royal Commission on Gold and Silver
investigated changed relationship between the
metals and revealed the only significant silver
coinage left was in the US, India and China.
Samuel Montagu sat on the commission,
Steward Pixley and Sir Hector Hay of Mocatta
gave statistical information. India still the
cornerstone, but photography taking 10% of
output.
1890 Sherman Silver Purchase Act required US
government to buy 54 million t.oz/1,679 m.t
annually; repealed in 1893.
1896 US presidential election had bimetallism as the
key issue, with William J ennings Bryan
campaigning for it. He was defeated and US
went onto gold standard in 1900.
1897 Official start of the London Silver Fixing in
the offices of Sharps & Wilkins, with
Mocatta & Goldsmid, Pixley & Abell, and
Samuel Montagu in attendance. Fixing at
1.45 pm on weekdays and 11.45 am on
Saturdays.
1900 Silver price: London 0.11/New York $0.62.
China only major nation still on silver standard.
1914 At outbreak of World War I Britain and
France withdrew gold coin, but issued more
silver.
1916 Silver Purchase Committee, supervised by
Mocatta & Goldsmid, set up to buy secretly for
Britain, France and India. Bought over 300
million t.oz/9,331 m.t.
1919 Silver price revival to 0.33/$1.73 on strong
China buying for coin.
1926 India began 400 million t.oz/12,442 m.t
silver sale from reserves, depressing price.
1931 With onset of depression and collapse of gold
standard, silver price fell to 0.05/$0.24, the
lowest on record.
1934 US Silver Purchase Act required silver as
25% of official reserves, making US only
effective buyer at home and abroad.
London Silver Fixing often put on hold,
waiting for US Treasury buyer to start work.
The patient brokers were dubbed "Rulers
of Silver".
1935 China forced off silver standard by arbitrary
price dictated by US purchases.
1939 Outbreak of World War II. Silver under
exclusive control of Bank of England, with
limited allocations for industry.
London Silver Market partially re-opened.
Price quoted for fine silver, not for 925 fine as
earlier.
1946
1953 London silver market fully re-opened.
1957 Mocatta & Goldsmid acquired by Hambros
Bank; Sharps & Wilkins and Pixley & Abell
merged as Sharps Pixley.
1961 World silver fabrication exceeded mine
supply, causing US Treasury to sell from
stocks to keep price down.
1963 New York Commodity Exchange started silver
futures contracts. Silver price rose to $1.29
obliging US Treasury to redeem silver
certificates issued under 1934 Silver
Purchase Act; Act then repealed.
1964 US one dollar bills ceased to be silver
certificates.
1965 Higher silver price triggered smuggling out of
India; 245 million t.oz/7,620 m.t shipped in
next ten years via Dubai, but mostly handled
by London market.
1968 US Treasury stopped redeeming silver
certificates at $1.29 per t.oz, leading to
rush to buy up 300 million which could be
cashed for silver at $1.29 and sold
immediately in market at over $1.50.
1979/80 Bunker Hunt attempted to corner the silver
market, pushing price to $49.45 (21.65) on
21 J anuary 1980. Hunt swamped by margin
calls and price collapsed to $4.90 (2.85) by
1982.
1986 Silver smuggling into India on large scale
began.
1993 Official silver imports into India permitted for
first time since 1947; India absorbed almost
1,000 million t.oz/31,000 m.t of silver in the
1990s.
1999 London Silver Fixing became a telephone
process at 12 noon; fixing members, Bank
of Nova Scotia (Mocatta), HSBC (Montagu)
and Deutsche Bank (Sharps Pixley).