The basic element of a compass is a small magnet pivoted on its central point and free to rotate in a horizontal plane. In the terrestrial magnetic field, the magnet, known as a magnetic needle, positions itself with one pole turned towards the magnetic North pole. In some cases the whole circle of the compass turns on a central pivot and the direction is given by a reference mark on the compass housing.

Depending on the uses for which the instrument was intended, different types of compass can be distinguished. The nautical compass was known in China since the 4th century A.D. and improved by sailors from Amalfi between the 12th and 13th centuries. Under the magnetic needle is a circle on which the wind rose is depicted. The geomantic compass is also of Chinese origin, having a magnetic needle indicating South, and has characters, arranged in concentric circles, which summarize the laws of the universe. By means of this instrument practical decisions can be made.

The compass was also used in surveying and as an instrument in mining, to determine the confines of areas containing ore deposits for excavation.

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