THE TRADE DOLLAR'S LINK TO OPIUM TRAFFICKING

In 2020, I was researching an article for The Numismatist debunking the tired myth that the U.S. Trade dollar was an overall failure; it was a success in the Orient for its intended purpose as an instrument of international trade. Nonetheless, while working on that article I discovered two sources that grabbed my interest. They were both from the American Journal of Numismatics, which was published from 1866-1924. I consider the Journal to be among the best published numismatic source material available. Those two sources were the spark for my researching and writing a different article: "Blood Money: America's Role in the Opium Trade" (The Numismatist, May 2023).

I am including the first two paragraphs of "Blood Money" below. Material from the two sources are incorporated into these paragraphs.

It was in late 1875 that a report in a San Francisco newspaper discussed the U.S. Trade dollar's link to opium trafficking. Devised to compete with the Mexican dollar for trade in China, once the coinage arrives there, "it encounters an ignominious fate. The Chinese send it to India for the purchase of opium. They go into the Calcutta Mint and come out as rupees," according to the article.

At the time the report was published, Chinese trade with India for opium exceeded that of all other goods. From 1867 to 1875, China sent a total of 97,440,930 in British pounds, virtually all in silver, to India for the drug. The report continues, "The amount of American silver which annually goes to India from China to pay for opium is immense. A base use for so beautiful a coin as the Trade Dollar, surely." Corroborating evidence is found in the pages of the American Journal of Numismatics (October 1874): "The American Trade Dollars have gained a wide circulation. At the Calcutta mint 223,000 of them have been received during three months of the present year."

What I discovered in my research was that the Chinese were compelled to pay India (in actuality Britain) only silver (coins and sycee bullion) to purchase opium. During the 19th century, the United States supplied China with about 97 percent of its silver via exports (mostly Spanish-American dollars and Mexican Eagle dollars, but also significant amounts of U.S. silver dollars and half dollars).

Therefore, the famous triangular opium trade between China, India, and Britain was in reality a de facto quadrilateral opium trade between U.S., China, India, and Britain. It was de facto because the American silver exports were solely for the purpose of trade, not opium trafficking. However, the triangular opium trade would have been impossible had it not been for U.S. exports of silver coins. E-Sylum readers who are ANA members and would like to read "Blood Money" may find it in the archives of The Numismatist on the ANA website (money.org).

 

 

To read the earlier E-Sylum articles, see:
THE SILVER PANIC OF 1893 (https://www.coinbooks.org/v29/esylum_v29n05a20.html)
LOOSE CHANGE: FEBRUARY 1, 2026 : Bust Half Dollars in the China Trade (https://www.coinbooks.org/v29/esylum_v29n05a26.html)
PRESERVING THAT SPECIAL LIBRARY SCENT (https://www.coinbooks.org/v29/esylum_v29n05a27.html)

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