A dark, flinty schist, called by the ancients Lapis Lydius; called touchstone because gold is tried by it, thus: A series of needles are formed (1) of pure gold; (2) of 23 gold and 1 copper; (3) of 22 gold and 2 copper, and so on. The assayer selects one of these and rubs it on the touchstone, when it leaves a reddish mark in proportion to the quantity of copper alloy. Dr. Ure says: “In such small work as cannot be assayed ... the assayers; ... ascertain its quality by `touch.' They then compare the colour left behind, and form their judgment accordingly.”
The fable is, that Battus saw Mercury steal Apollo's oxen, and Mercury gave him a cow to secure his silence on the theft. Mercury, distrustful of the man, changed himself into a peasant, and offered Battus a cow and an ox if he would tell him the secret. Battus, caught in the trap, told the secret, and Mercury changed him into a touchstone. (Ovid: Metamorphoses, ii.)
“Gold is tried by the touchstone, and men by gold.” —Bacon.
Touchstone. A clown whose mouth is filled with quips and cranks and witty repartees. (Shakespeare: As You Like It.) The original one was Tarlton.
Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894