A Greysheet article by Michael Garofalo provides a great summary of the birth, life, and death of the U.S. Trade Dollars, illustrated with some great examples of the coin and patterns for it. Here's an excerpt - see the complete article online for more, and I'd be remiss if I didn't mention one of my favorite numismatic books, The United States Trade Dollar by John Willem.
1872 Amazonian Pattern Dollar
One of the most important developments to come out of the Coinage Act of 1873 was the creation of a United States Trade Dollar silver coin. John Jay Knox, who was the Deputy Comptroller of the Currency, had proposed the idea of a new silver coin for use in Asia. He held discussions with Louis Garnett, who had been both the San Francisco Mint's Assayer and Treasurer. Garnett did not actually want a new legal tender silver coin. What he originally suggested was a disk made of silver or a stamped silver ingot, at a uniform weight and fineness. He wanted to call it a
silver union, as opposed to it becoming yet another silver coin. These disks or ingots would be standardized and without any change or modification. The idea was to initially compete with the Mexican 8 Reales silver coin, which was the current preferred coin by Chinese merchants, and to later supplant it as the preferred medium of exchange in China and Japan.
Chinese and Asian merchants had, for decades, accepted the Mexican 8 Reales coin as the coin of choice. These merchants despised any changes to the design or weight and fineness, as they wouldn't be certain that the change was authorized by the Mexican government or if they were looking at a counterfeit copy. But due to the new reign of Emperor Maximilian, a portrait of the new Emperor was now added and the 8 Reales coin was modified from the old design. These Asian merchants now were rejecting the Mexican 8 Reales silver coins all across the Orient. This provided a great opportunity for a new coin to become the primary coin to circulate in Asia.
During 1872 the U.S. Mint, under the direction of Chief Engraver William Barber, struck numerous pattern coins in anticipation of passage of this coinage bill and the need for a commercial dollar or trade dollar coin. Prior to the legislation being signed into law, the denomination was changed from
Commercial Dollar to
1872 Commercial Dollar pattern
Bailey, Banks, and Biddle, the jewelers and silversmiths headquartered in Philadelphia at that time were also asked to create some possible designs as well. But the Mint and the Secretary of the Treasury preferred the designs that Barber had created.
The Coinage Act of 1873 became law on February 12, 1873 but it was not until July of that year that the actual striking of a Trade Dollar coin commenced. Coins were struck at the Philadelphia, Carson City and San Francisco mints during that inaugural year.
The Mint kept the number of strikings low, in order to determine how well received these coins would be in China. When the first shipment of this new coin arrived in China, official tests and complete assays were conducted by the Chinese government. The results were that this new coin was exactly as described and the Chinese Government issued an official proclamation that the coin is
In 1877, the American consul in Hong Kong provided a report to our Secretary of the Treasury on the reception for the U.S. Trade Dollar. The two leading banks that traded with foreign countries—the Oriental Bank and the Hong Kong Shanghai Banking Corporation stated:
The United States Trade Dollar has been well-received in China and eagerly welcomed in these parts of the country when the true value of the coin is known. It is a legal tender at the ports of Foochow and Canton in China, and also at Saigon and Singapore. Although not legally current in this colony, it is anxiously sought after by the Chinese, and in the bazaars, it is seldom to be purchased.
If proof of the estimation in which the Trade Dollar is held in the south of China, we need only state that the bulk of the direct exchange business between San Francisco and Hong-Kong (which is very considerable) is done in this coin, the natives preferring it to the Mexican dollar!
Mintages grew and more and more coins were being exported to Asia. But by 1874, some Trade Dollars began appearing in American commerce. By 1875, due to the value differences between the United States and China, a number of Trade Dollars were re-imported back to the United States.
Enterprising individuals would buy them at the actual silver value which was now under face value. Unscrupulous employers would buy them at under face and pay some of their employees with one or more Trade Dollars in their pay envelopes.
The experiment worked well as long as these coins were exported, and the price of silver remained stable. As more coins came back to the United States, the value dropped further. Some businesses accepted Trade Dollars so as not to offend their good customers, but they found that they could not deposit these coins at face value in their banks. The Mint stopped producing Trade Dollars for exportation to Asia by 1879 and thereafter only Proof Trade Dollars were struck for collectors.
It wasn't until the Coinage Act of 1965, which restricted the use of .900 fine silver in American dimes, quarters and half dollars that Trade Dollars were again monetized as legal tender silver coins.
To read the complete article, see:
United States Trade Dollars: Born of Need, Died from Greed
Wayne Homren, Editor
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