A brief history of the United States Trade dollar: a most unusual silver dollar.
The birth of a most unusual silver dollar: the Trade dollar.
The silver dollar minted from 1873 to 1885, known as the Trade dollar, was minted by the United States government expressly to facilitate trade with China and India. Meanwhile, from 1873 to 1878 there were no silver dollars created for general circulation in the United States. Various national and international forces converged so that this happened. The coin received a moderate reception abroad, and when it was finally recognized as legal currency in the United States it was generally reviled. In large part, all this was due to the fluctuating value of silver. However, there were other extenuating circumstances which defined the production of this silver dollar. Let's take a look at the rise and fall of the Trade dollar.
Early conditions make silver more valuable.
As noted earlier in my article about the Seated Liberty silver dollar, one result of the California gold rush of 1848, and also of the Australian gold rush of 1851, was to increase the price of silver. In 1853 the United States government enacted a law that allowed people to take silver bullion to the mint and exchange it for silver dollars. For every $105 worth of silver that you gave the mint, you would receive 100 silver dollars. This law was passed when the price of silver was relatively high and getting higher.
When the United States government made the first silver dollars in 1794, their size and weight were based on Spanish dollars which circulated freely and were recognized as currency by the general populace here. The popularity of the Spanish dollars transcended continental borders and they were embraced overseas, especially in China. The similarity of the nations' silver dollars persisted, but the various types of United States coins never really caught on in China. In fact, by the time 1873 rolled around, an importer of goods from China living in California would pay $115 to receive 100 Spanish dollars because of the taxes involved. The United States coins just weren't being used by the Chinese for trade.
In the meantime, in 1868, the great Comstock silver lode was discovered in Nevada. It was the first of many large deposits of silver to be found in the United States. The silver went to Europe to pay for debts for the Civil War. The silver was sent to China in the form of the ingots, but the Chinese didn't like it as much as they liked the Spanish silver dollars. The mines were just really beginning to open up production, when, in 1871, Germany went to the gold standard. When they did that, they dumped tons and tons of silver on the European market. This created a bottleneck for the silver mines back in the United States. So they seized upon the law from 1853, since the price of silver was still relatively high in 1871. This meant, that over 1 million Seated Liberty dollars were produced in 1871, and again in 1872. The owners of the silver mines were having a field day! They would give the mint silver bullion, and then would receive silver dollars whose value in terms of silver content was more than they had originally given the mint.
Well the United States government wasn't going to stand for that. So in 1873, while the mints were still making silver dollars full tilt, a new law was enacted. The law brought an end to production of silver dollars to be used as currency in the United States. The silver lobbyists were going to take this lying down! So during the same session of Congress, a new law was passed that allowed the mints to make a new silver dollar, the Trade dollar, that was bound for export to China. The law also specified that raw silver could only be turned into Trade dollars or silver bars. The new Trade dollar was slightly larger than earlier silver dollars, and had its weight and fineness (that is its silver content) stamped right on it. Importers of goods from China living in the United States were glad to get their hands on these new Trade dollars. Not only did they forgo the taxes imposed by Mexico on the Spanish dollars, but they could buy 100 of these silver Trade dollars (roughly worth a dollar each) for only $98. Because of these various political and financial forces many millions of Trade dollars were minted each year of its production. In 1877, more than 13 million of them were minted. This is about the same number as all the Liberty Seated silver dollars that were ever made.
A falling silver market.
This gave the silver mine operators something to do with all that silver they were mining. And since the silver was being exported out of the country, the price of silver was kept artificially high here. But in 1876, the price of an ounce of silver dropped substantially below that of a dollar. And so, the coins (weighing approximately an ounce), were suddenly more valuable as money then as silver. A rider on the laws passed in 1873 (to get the Trade dollar minted in the first place), stated that they could be used for domestic payment of five dollars or less. Many of the coins which had not made it overseas, and many being minted in the late 1870's, were then dumped into the United States economy. Quickly the United States government took action and revoked their legal tender status. Nonetheless, unscrupulous employers bought up large quantities of these coins at $.80 on the dollar. Then, they were handed out to employees in the late 1870s; and these poor souls found it hard to redeem these coins that were no longer regarded as being legal currency.
Overseas, the coin was gathering steam in some provinces in northern China, but was passed over in Southern China. The Trade dollar was larger than its United States predecessors; but the Spanish dollar, which was circulating in China already, was larger than the United States silver Trade dollar. Additionally, the Japanese had also introduced their own Trade dollar for use in China at this time. With the fiasco at home, and the less than anticipated enthusiasm abroad, large-scale production of the Trade dollar was halted in 1878. As mentioned before, over 13 million of them were made in 1877, and the same was true in 1878. The following year, in 1879, a total of 1,541 coins were made. They were proof coins to be purchased by collectors. And that was it. So, until its official demise in 1883, less than 2000 coins were made each year, and those only for collectors. It was no longer legal currency, and its star had fallen.
Description of the coin.
The United States mint had a contest of sorts between the chief engraver, William Barber, and a local engraving firm from Philadelphia. A number of pattern coins were cut from the designs entered in the contest, and these were distributed to interested parties so that the mint could select the best design. The final design is attributed to Barber. The obverse of the coin features a depiction of Liberty seated on bales of merchandise, she holds an olive branch out to the left side of the coin (towards China; as on a map the left of the map is to the west). Behind her is a sheaf of wheat; around the rim of the coin are 13 stars representing the 13 original colonies, and beneath her is the date. Stamped on the front of the coin, at the bottom of the bales of merchandise, are the words IN GOD WE TRUST. In her left hand she holds a ribbon which bears the word LIBERTY. The front of the coin is somewhat reminiscent of British coins from the same period.
The reverse of the coin bears an eagle with wings spread, in it's right talon are a bunch of arrows, and in its left talon is an olive branch. Above the Eagle's head is a banner with the words E. PLURIBUS UNIN (out of many one) inscribed on it. Following the arc of the coin, at the top, are the words UNITED STATES OF AMERICA. In a similar manner at the bottom of coin are the words TRADE DOLLAR. The inclusion of the olive branch on the coin, placed as it is so that it is towards the left, is an overture to China. The words 420 GRAINS 900 FINE also appear on the back. This is also in deference to the social and political climate of the times.
Rare varieties of this coin.
Upon inspection of the individual coins from the various dates, there will be noticed small differences; aberrations are more common on this coin that on many others United States currency. However, they do not lend themselves to a significant increase in the price of the coin. Additionally, once the coins got to China, many of them were marked with "chop marks” or stamped with Chinese characters (logograms). This is how merchants marked the coins to show that they were made of silver. Different merchants would make different markings on them. Studies have been done of these indentations, and they may be of interest to a collector, but do not generally increase the value of the coin. In general, these coins are worth in the range of $125 for poorly reserved specimen to in the neighborhood of $3000 for one that's in pristine condition. The exception to this are the proof coins that were minted in 1884 and 1885. These coins were minted after the run had officially ended. In 1884 there were 10 coins made. In 1885 there were only five. These coins were discovered after an employee of the mint died in 1908 and his estate was auctioned off. In November of 2004 the rarer of the two dates (1885) sold for $1 million.
The Trade dollar, not your typical silver dollar.
The Trade dollar (an unusual silver dollar) was minted in the midst of a time of turmoil and financial upheaval. Several tens of millions of them were made. They received a lukewarm reception in their intended market in China; and wreaked havoc on the working man's pocketbook when they were circulated in the states. The Trade dollars would not have been made had it not been for the enormous amounts of silver being discovered in the United States at this time. Jealous of the success of the Spanish dollar in China, United States officials determined that it be worthwhile to try to compete. For the last four years of its official run, it was marketed exclusively to coin collectors. After the mint officially stopped making them in 1883, 10 more were made in 1884, and five were made in 1885.
In my analysis, it was a coin born of greed and fear. The government hoped to make money off of silver in foreign markets, but was afraid to release quantities of silver coins here. I imagine that the motivation of the mint employee who made the 15 coins in 1884 and 1885 was also greed of a sort. It seems certain that the reason that these 15 coins were not found until after his death was fear on his part of being discovered and going to jail. While some of the motives and conditions surrounding the production of this coin aren't the most noble, it has its place in the history of silver dollars. It is a good-looking and weightier than average coin.
I've published articles about all the "true" silver dollars here on hubpages.
The Eisenhower Dollar and the Apollo 11 Space Mission
The Eisenhower dollar, minted from 1971 until 1978, was the last of the over-sized dollars minted in the United States. Unlike its predecessor, the Peace dollar, the Eisenhower dollars made for circulation have no silver in them, but are comprised of the same metals that make up the quarters and half dollars from the same era. There were, however, special coins struck at the San Francisco mint for collectors, made of 40% silver and 60% copper.
The peace dollar emerges from the spirit of optimism.
The Morgan Dollar more than 500 million made!
Minted from 1878 until 1904, and again in 1921, the Morgan Silver Dollar was the result of the Comstock lode. In the late 1850s, there were still lots of people searching the hills of California for gold. A man by the name of Henry Comstock, happened across two other men, the Grosh brothers, as they were in the process of panning for gold.
The Seated Liberty Dollar, when the word "God" first appeared on a silver dollar.
The Gobrecht Silver Dollar, only 1900 ever made!!
The Draped Bust Silver Dollar, made for general circulation until 1804.
The Flowing Hair Silver Dollar, the first U.S. Dollar.
In 1794, two years after Congress had approved the production of silver and gold coins, the first official United States silver dollar was struck at the Philadelphia mint. The law stipulated that the coin containing 371 grains of silver and weigh a total of 416 grains (about an ounce), the difference being made out of copper.