The effect of the addition of mercury to a conventional caesium neutralized diode is described. A pronounced Penning effect was found, the mercury 63P1-63D1,, transitions being the most efficient for the volume ionization of caesium atoms. The increased electron scattering due to the introduction of mercury into the diode is to a large extent minimized by the low collision cross section, at 0.17 ev, due to the Ramsauer effect. Consequently, it appears that the performance of the diode operating under arc mode conditions may be significantly improved by the addition of mercury.