Question: How were trade dollars actually used?

NowhereMan · April 18, 2007 3:41AM

I have seen many sources with short description of the trade dollar with a statement something like "...they were produced for trade with the far east..."

I'm curious if anyone has a little more detail of who and how these were used? Did a US importer send a bag of these on a ship, and then get back a ship full of goods?

Did the coins make a one way trip east, and then circulate there? Were they used as payment in both directions? Were they considered equal value to one US dollar, or was there some other standard?

Why do we see so many well circulated examples, if they were used in bulk for settling shipments?

I'm just trying to get more insight here. I've never collected these, but have always admired them. In fact, the only one I've ever owned is the circ example currently in my 7070.

Thanks!

Rex

tradedollarnut · April 18, 2007 3:45AM

They were legal tender here in the states for several years - that's why you see circulated examples. But the vast majority of pieces went overseas in trade.

Once shipped to China, they were tested and chopmarked and used in trade in that country. The majority of pieces were sent to India in trade and melted for their silver content.

NowhereMan · April 18, 2007 3:50AM

Thanks!

Are they still legal tender here? If not, is this the only instance of a demonitized US coin?

Rex

flaminio · April 18, 2007 4:04AM

<< <i>Are they still legal tender here? If not, is this the only instance of a demonitized US coin? >>

They were remonetized by the Coinage Act of 1965. Go ahead and spend 'em; it's legal!

cladking · April 18, 2007 7:18AM

My understanding is that these were made to world standards to compete
with the other coins of the time. This would be primarily the Mexican and other
new world 8R's but also the European 5F, 5L etc. These were not as popular
as hoped except in the orient where many were shipped and it's for this reason
that most were minted in San Francisco and Carson City.

They saw very limited circulation in this country (even less than other dollars)
but were used and were used in other countries as well. It's possible some
were diverted to the melting pots to capitalize on their higher weight.

There would also have been some destruction when they were demonetized.

Zoins · April 18, 2007 7:21AM

This was discussed ATS a while back. Wikipedia mentions that at the time the Mexican Peso had more silver than the US Dollar so not only would merchants in China prefer Mexican Pesos but US Merchants did as well. To create a coin that would compete with the Peso, the US made the Trade Dollar with more silver than both the US Dollar and the Mexican Peso to give it a edge in the marketplace. Soon after the US Trade Dollar showed up in China, the Japanese Trade Dollar was created and then followed by the British Trade Dollar two decades later.

Back in the time when International trade depended on coinage bullion value. Pretty cool to think about.

100+ years later, China is again the land of opportunity for Americans.

Question: How were trade dollars actually used?

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