How did Trade dollars stay uncirculated?
Skrill90
Posts: 264 ✭✭✭
Correct me if I'm wrong, but my understanding of trade dollars were they were meant for commerce, sent to Asia and used there, then eventually brought back to the states and quite a few of them were melted.
Its astonishing to me to see an UNC like below. Were many of these preserved or stored?
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Yes- they were created for international commerce as a competitor for the 8Reales. No, they did not all circulate internationally. Many of them circulated domestically. Some big businesses would pay employees in Trade dollars, and would get them for less than $1 thereby making money on that exchange. This is one reason why people hated them.
Secondarily, you are correct - many many of them were melted when the price of silver increased. Also, many other countries either melted them for silver content, or used them as a planchet to create their own dollars.
Minor Variety Trade dollar's with chop marks set:
More Than It's Chopped Up To Be
I would presume that there were bags of them stored in vaults like other coinage and rediscovered after some time.
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They were only in "circulation" for about 5 years and were not popular. As @TradesWithChops said, they were forced upon workers who had to try to find someone else who would accept them. I'd bet that many of the well worn ones were carried as pocket pieces, rather than getting much wear in circulation.
The above reasons, plus, there were always collectors that would salt away a few coins....Cheers, RickO
TDN's Great Grandpappy preserved the finest in his beard
I don't recall ever having seen a foreign coin struck over a U.S. T$ planchet... Got any examples to post?
Im unaware of any way to prove it with an example - sorry! However, history books show that several international mints used trade dollars to strike their own coins. Ill work on a source for that information this weekend.
Minor Variety Trade dollar's with chop marks set:
More Than It's Chopped Up To Be
"Japan started its own trade dollar in 1874 in direct competition with the Americans but used United States coins as a bullion source for its issues. This helped dispose of American surplus silver but accomplished little else. In the 1890s the British also issued a trade dollar and it too used primarily American coins for bullion, but this was long after the American trade dollars had ceased to be issued. Large numbers of United States trade dollars were also melted to manufacture rupees at the Indian mints at Bombay and Calcutta. "
https://www.pcgs.com/books/silver-dollars/Chapter11/9
Minor Variety Trade dollar's with chop marks set:
More Than It's Chopped Up To Be
"Domestic Circulation
The domestic use of trade dollars became more of a problem in 1877 as the decline in the price of silver continued. Factory owners bought the coins at a discount and then paid them out to workers at face value. The workers in turn were forced to take a discount at those stores which would accept them and the storekeepers were victimized when they redeemed them at the few banks accepting trade dollars. Practically everyone discounted the coins although some communities solved the problem in part by setting a fixed value, usually 80 to 85 cents. By late 1877 perhaps as many as 11 million pieces were in the American marketplace."
https://www.pcgs.com/books/silver-dollars/Chapter11/10
Minor Variety Trade dollar's with chop marks set:
More Than It's Chopped Up To Be
Trade dollars were used as bullion for some foreign and US Mints. The coins were redeemed or bought at market bullion pieces, melted, and the metal used for US subsidiary silver manufacture.
People occasionally wrote to the Mint Director asking about sale or exchange of Trade Dollars. The consistent reply was purchase as bullion only with a minimum silver content worth $100. This amounted to about $200 or $300 face depending on market value. US Mints paid full market value for weight of silver content; private specie brokers paid less.
Good and interesting thread here
If that coin blows you away, you should see the PCGS MS68 1875-P Trade Dollar, ex-Rosen. A ludicrously well-preserved coin.
Many Morgans form the 1890s are made of melted trade dollars
11.5$ Southern Dollars, The little “Big Easy” set
If you are looking for a good read on the history of the trade dollar pick a copy of "The United States Trade Dollar" by John M Willem. The book does not cover how UNC Trade Dollars came about. The US Government did not issue any trade dollars for domestic circulation. The unscrupulous businessman taking raw silver to the mint and having trade dollars made and paying their employees with trade dollars is how the coin got into circulation. Most likly the UNC examples came from these trade dollars in circulation.
Here is my gem uncirculated trade dollar...
How rare is this HUB combination? Thanks.