The Complete History of the US Trade Dollar
Mar 12th 2024
US Trade Dollar
Coin collectors are often fascinated by the U.S. Trade Dollar because of their age and history. These classic coins date back to the late 1860s and 70s, during a time when trade was beginning to increase between China and the United States.
Transportation was evolving, and Americans were enjoying and increasingly purchasing items like tea and silk from China. However, there wasn’t a clear system for the exchange of currency among the different nations.
Today, importers and exporters primarily use the U.S. dollar to complete transactions, but it wasn’t always that way. Chinese business owners used to prefer the Mexican peso because the peso contained more silver content than the standard U.S. dollar.
In an effort to ease the commission fees American business owners had to pay every time they needed to exchange their dollars for pesos, the U.S. trade dollar coin was born.
What Are US Trade Dollars?
U.S. Trade Dollars are a form of American currency. To persuade foreign business owners to prefer American currency over the Mexican peso, the federal government approved the minting of a dollar-sized coin known as the “trade dollar.”
The slightly larger silver coinage was created as a solution for U.S. business owners to save money on fees when trading with Asian business owners. The United States Mint made sure the coins had more silver content than the peso, which made it more attractive.
The plan worked as the Trade Dollar was a success in the eastern region. Chinese business owners preferred the heavier weight of the U.S. Trade Dollar over the Spanish dollar.
When Were Trade Dollars Created?
U.S. Trade Dollars were struck for 12 years from 1873 to 1885. They were only coined for circulation through 1878, but proof coins were offered to coin collectors through 1883.
During the first two years of minting, the United States sent almost all the Trade Dollars abroad to ease trade problems. Shortly after, they granted the silver coins the status of legal tender domestically.
The most popular Trade Dollars were struck in the mid-1870s. In 1879, the U.S. Mint began striking Proof Trader Dollars exclusively, and these collectible issues are quite scarce. The 1885 proof coins are the rarest, with a mintage of merely five pieces.
There are certain dates, particularly the issues from the San Francisco Mint branch from 1875 to 1878, where a large number of uncirculated Trade Dollars survived to the present day. These coins tend to have many contact marks due to being moved around numerous times inside their canvas bags.
What Are Trade Dollars Made Of?
U.S. trade coins were made of 90% silver and 10% copper, weighing a little more than the Mexican peso. They have reeded edges and a diameter of 38.1mm.
The difference in weight was 420 grains versus 412.5 grains. The words 420 GRAINS and 900 FINE are depicted on the coin’s reverse to help convince foreign merchants of the value.
The coin’s obverse depicts Lady Liberty sitting on a bale holding up a branch in her right hand and a ribbon in her other hand with the word LIBERTY inscribed.
The trade coin’s reverse design is of an eagle clutching arrows and a branch with the weight and silver purity below. Above the eagle is a ribbon with E PLURIBUS UNUM inscribed and UNITED STATES OF AMERICA and TRADE DOLLAR surrounding the edges.
How Do They Compare to Trade Dollars From East Asia?
America was not the only country to create its own version of the trade dollar. After China lost the Opium Wars with Britain, Chinese ports were forced open and international trade boomed. Large silver coins from all over the world began arriving on the scene.
The British Trade Dollar was minted from 1895 to 1935 and given legal tender status in the British colonies of Straits Settlements, Hong Kong, and Labuan. The British Dollar was gradually withdrawn from circulation and eventually demonetized in August of 1937. Today, many of these coins have been incorporated into Chinese jewelry.
The Japanese Trade Dollar was issued for a short time between 1875 and 1877 to help make trade easier. The vast majority of these silver coins were minted in 1876 and 1877.
In 1897, Japan introduced the gold standard, and the trade dollars were demonetized and exported as bullion pieces.
They were widely circulated and, therefore, hard to come by today, which has greatly increased their value. Unfortunately, there has been an uptick in counterfeits in recent years. As such, it’s important to have these rare coins evaluated by a coin grading service like NGC or PCGS.
Who Designed the Trade Dollar?
The United States Trade Dollar was designed by William Barber, the U.S. Mint’s fifth chief engraver. Barber was born in London in May of 1807. He later began his career as an engraver for silver plate tableware in the UK. In September 1852, he immigrated to the United States.
Barber moved to Boston and worked various jobs to utilize his engraving skills. During the Civil War, he worked on gold and silver items for Gorham & Co., which was a competitor of Tiffany & Co.
In 1865, he was able to get a position as an assistant at the Philadelphia Mint branch. He was eventually appointed to the position of Chief Engraver when the current chief, James Longacre, passed away in January of 1869.
The U.S. Trade Dollar was one of the most famous coins Barber ever designed. The trade coin was inspired by the Seated Liberty Dollar and the Britannia.
Where Were United States Trade Dollars Minted?
The U.S. Trade Dollar was minted at the Philadelphia, Carson City, and San Francisco Mint branches.
Business strike trade dollars were last produced in 1878, but the Mint continued to issue proof coins in limited numbers until 1883. It’s not listed in official records, but ten proofs dated 1884 and five proofs dated 1885 were discovered in 1908. However, it is not clear when these silver coins were created.
When Were Trade Dollars Discontinued by the U.S. Mint?
As hoped, the demand for the U.S. Trade Dollar surged over the years. Unfortunately, silver prices began to plummet as U.S. mines in the west were yielding enormous amounts of silver.
The supply and demand dynamics caused the silver coin to fall to an intrinsic value of just 80 cents. As large amounts of the trade coins were flowing back into the country and spent at face value, Congress revoked its status as legal tender in July of 1876.
The U.S. Mint continued to produce trade dollars, but only for exportation. Two years later, the Treasury Secretary ended production. From 1879 onward, proof strikes were issued for collectors, but the last set of 979 proof coins were struck at the U.S. Mint branch in Philadelphia in 1883.
Are Trade Dollars Valuable Now? Face Value vs. Numismatic Value
A U.S. Trade Dollar in average condition might go for a couple hundred dollars if it’s a common date and mintage. However, key dates and error coins will be worth more money.
As of January of 2023, the NGC Price Guide reports that a Trade Dollar from 1876 in the circulated condition is worth somewhere between $95 and $700. On the open market, an 1876 S Silver Dollar in pristine uncirculated condition can sell for as much as $29,000.
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Source:
History of Trade Dollars | PCGS
Trading Dollars Definition | Investopedia
Trade Dollars 1876 ST$1 MS - Coin Explorer | NGC
FAQ
What was the original purchasing power of the US Trade Dollar?
The original purchasing power of the US Trade Dollar, when it was first minted in 1873, was intended to be equivalent to other international silver trade coins of the time, particularly in trade with China. It was slightly heavier than the domestic silver dollar to compete with these foreign trade coins. Its purchasing power in international trade was significant, as it facilitated easier transactions with Asian markets, especially China, where silver was highly valued.
How did the purchasing power of the US Trade Dollar change over time?
The purchasing power of the US Trade Dollar fluctuated significantly over its circulation period, largely due to variations in the silver market and legal tender status changes. Initially, it held strong purchasing power in Asia; however, its value in the U.S. domestic market varied, especially after the Coinage Act of 1873. By 1876, issues like the depreciation of silver caused the trade dollar to lose value, affecting its purchasing power both domestically and internationally until its demonetization.
What factors influenced the purchasing power of the US Trade Dollar?
Several factors influenced the purchasing power of the US Trade Dollar, including its silver content, international silver prices, U.S. legislation, and its acceptance in Asian markets. The Bland-Allison Act of 1878 and the subsequent demonetization of the trade dollar were significant legal factors that affected its domestic value. Internationally, its purchasing power remained relatively strong in Asia due to the high demand for silver.
Can the purchasing power of the US Trade Dollar be compared to modern currency?
Comparing the purchasing power of the US Trade Dollar to modern currency is challenging due to the different economic contexts and the specific role the trade dollar played in international trade. However, numismatists and economists might estimate its value based on the historical silver content and the dollar's relative value over time, offering some insight into its modern equivalent in terms of purchasing power.
How did the purchasing power of the US Trade Dollar impact international trade?
The purchasing power of the US Trade Dollar had a significant impact on international trade, particularly with China and other parts of Asia. Its acceptance and value facilitated smoother transactions and opened new markets for American goods. The trade dollar helped standardize silver trade, making it a crucial tool in the expansion of American economic influence in the late 19th century.
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