Trade Dollar

Trade Dollar

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Trade Dollar

In the 1850 to 1870 period, China welcomed the trade from the West as it could not import, mine or strike enough silver coinage to satisfy the demand. In the United States, the discovery of the Comstock Lode of silver in Nevada in 1859, meant that the price of silver declined dramatically.

But the Coinage Act of 1873 mandated that a coin specially created and intended for Asian trade needed to be created. That coin became the US Trade Dollar. It was legal tender, internationally, all around the world, but especially in Asia. It was accepted in any amount internationally but was legal tender in the United States only in amounts up to $5.00.

The design was modified on both sides to meet US coin requirements. The obverse depicted a seated Miss Liberty facing left. She is seated on bales of merchandise (Cotton, wheat, corn, etc.), holding an olive branch in her right hand and her left hand holds a banner upon which is inscribed “LIBERTY.” There are six six-pointed stars to her left and seven six-pointed stars to her right. The date is below Miss Liberty.

The reverse depicts an American Bald Eagle facing right. A floating banner above the eagle states “E PLURIBUS UNUM” while above the banner are the words “UNITED STATES OF AMERICA.” The eagle holds three arrows in her right talon and an olive branch in her left. Below the eagle is the weight (420 grains) and the fineness (.900 Silver). Below is the denomination “TRADE DOLLAR” at the bottom of this reeded edge coin.

The mints at Philadelphia, Carson City, and the San Francisco all struck coins. The majority of these coins were shipped to China where they began circulating. But as millions more of these coins were struck, many began circulating in the United States. They were not intended for US circulation and many merchants would only accept them at a discounted rate.

The coins produced for circulation were competing with British Trade Dollars and Mexican Eight Reales to satisfy the demand for silver in Asia. The US rationale for minting these coins was the belief that millions of these coins would be accepted at face value and that they would be melted for their silver content. The US would make a profit on the seigniorage (the difference between the face value of a coin and the cost to produce and distribute the coin).

But a number of merchants were still suspicious of these coins and continued to assay them. Many were struck with Chinese character dies, which reflected back to the Chinese merchant who originally accepted them. These marks became known as “Chinese chop marks,” and were accepted to appear on many US trade dollars over the years.

These chop-marked coins are historically important and highly collectible today.

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