Edit: Looking at some videos, it appears you could get something that looks like regular mercury. I'm wondering how much mercury you would have needed to solubilize a medal. They may also not have had that much on hand, HCl and nitric acid are way easier to find.
At the same time, Mercury use was way more widespread than now in laboratories, so it may have been readily available as well. A number of things were banned or heavily restricted for laboratory use in relatively recent history (80s~90s).
Sure, but if you have a sufficient amount of mercury, that amalgam will remain invisible to the eye as Mercury is not translucent - and you can just write "mercury" on the flash and you can be sure no-one will dare to touch it.
Remember we're talking about 1940. Whoever discovered it might very well take it off the shelf to play with it. ;)
http://en.wikipedia.org/wiki/Amalgam_(chemistry)#Gold_extrac...
http://nevada-outback-gems.com/Reference_pages/Amalgamation....
This however, has to be done in a controlled manner due to the toxicity of mercury, which is also why mercury apparently isn't commonly used to extract gold anymore.
Yes, because mercury vapors can directly transfer to your brain once inhaled and cause neurotoxic damage.
I wouldn't be so sure about that. Out of sight out of mind. But maybe not out of your personal electronics.