Ferromagnetic liquids containing 45A diameter tin or antimony coated iron particles dispersed in mercury have been prepared electrolytically. The fluids are found to have a magnetisation which is time dependent when an applied field is abruptly reduced. The characteristic decay time which is of the order of 60s cannot be attributed to magnetisation changes due to small noninteracting particles of 45A diameter but it is consistent with the presence of particle aggregates of 104A diameter. Measurements of sedimentation rates and viscosity are also consistent with the presence of aggregates of 104A diameter. Measurements of the sedimentation rate in a gravitational field show that if the particles are coated with tin and particularly antimony fluid stability is improved and aggregate size reduced. It is suggested that particle aggregation may be prevented by ensuring that the liquid contains a distribution of particles with a median diameter appreciably smaller than 45A and a small standard deviation.